33220 Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices 

5Rule 206(4)–2(a)(4). 

6Rule 206(4)–2(a)(6). 

7Rule 206(4)–2(b)(4). 

8Rule 206(4)–2(b)(3). 

9Rule 206(4)–2 (b)(6). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Capitalized terms used but not defined herein 

have the meanings specified in the Rules and 

Governance Playbook. 

4Self-Regulatory Organizations; ICE Clear Credit 

LLC; Notice of Filing of Proposed Rule Change 

Relating to the ICC Governance Playbook; Exchange 

Act Release No. 34–94616 (Apr. 6, 2022), 87 FR 

21687 (Apr. 12, 2022) (SR–ICC–2022–003) 

(‘‘Notice’’). 

5The description that follows is substantially 

excerpted from the Notice, 87 FR at 21687–21688. 

funds and securities of which an adviser 

has custody must undergo an annual 

surprise examination by an independent 

public accountant to verify client assets 

pursuant to a written agreement with 

the accountant that specifies certain 

duties.5 Unless client assets are 

maintained by an independent 

custodian (i.e., a custodian that is not 

the adviser itself or a related person), 

the adviser also is required to obtain or 

receive a written report of the internal 

controls relating to the custody of those 

assets from an independent public 

accountant that is registered with and 

subject to regular inspection by the 

Public Company Accounting Oversight 

Board (‘‘PCAOB’’).6

The rule exempts advisers from the 

rule with respect to clients that are 

registered investment companies. 

Advisers to limited partnerships, 

limited liability companies and other 

pooled investment vehicles are excepted 

from the account statement delivery and 

deemed to comply with the annual 

surprise examination requirement if the 

limited partnerships, limited liability 

companies or pooled investment 

vehicles are subject to annual audit by 

an independent public accountant 

registered with, and subject to regular 

inspection by the PCAOB, and the 

audited financial statements are 

distributed to investors in the pools.7

The rule also provides an exception to 

the surprise examination requirement 

for advisers that have custody solely 

because they have authority to deduct 

advisory fees from client accounts,8 and 

advisers that have custody solely 

because a related person holds the 

adviser’s client assets (or has any 

authority to obtain possession of them) 

and the related person is operationally 

independent of the adviser.9

Advisory clients use this information 

to confirm proper handling of their 

accounts. The Commission’s staff uses 

the information obtained through this 

collection in its enforcement, regulatory 

and examination programs. Without the 

information collected under the rule, 

the Commission would be less efficient 

and effective in its programs and clients 

would not have information valuable for 

monitoring an adviser’s handling of 

their accounts. 

The respondents to this information 

collection are investment advisers 

registered with the Commission and 

have custody of clients’ funds or 

securities. We estimate that 8,057 

advisers would be subject to the 

information collection burden under 

rule 206(4)–2. The number of responses 

under rule 206(4)–2 will vary 

considerably depending on the number 

of clients for which an adviser has 

custody of funds or securities, and the 

number of investors in pooled 

investment vehicles that the adviser 

manages. It is estimated that the average 

number of responses annually for each 

respondent would be 6,830, and an 

average time of 0.00524 hour per 

response. The annual aggregate burden 

for all respondents to the requirements 

of rule 206(4)–2 is estimated to be 

288,202 hours. 

The estimated average burden hours 

are made solely for purposes of the 

Paperwork Reduction Act and are not 

derived from a comprehensive or even 

representative survey or study of the 

cost of Commission rules and forms. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimates of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication by August 1, 2022. 

Please direct your written comments 

to David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549; or send an email to: PRA_

Mailbox@sec.gov. 

Dated: May 25, 2022 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11663 Filed 5–31–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94980; File No. SR–ICC– 

2022–003] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Order Approving 

Proposed Rule Change Relating to the 

ICC Governance Playbook 

May 25, 2022. 

I. Introduction 

On April 4, 2022, ICE Clear Credit 

LLC (‘‘ICC’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (the ‘‘Act’’) 1 and Rule 19b–4,2

a proposed rule change to revise the ICC 

Governance Playbook.3 The proposed 

rule change was published for comment 

in the Federal Register on April 12, 

2022.4 The Commission did not receive 

comments regarding the proposed rule 

change. For the reasons discussed 

below, the Commission is approving the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

A. Background 

The ICC Governance Playbook 

consolidates governance arrangements 

set forth in ICC’s Rules, operating 

agreement, and other ICC policies and 

procedures. The Governance Playbook 

contains information regarding the 

governance structure at ICC, including 

the Board, committees, and 

management. 

B. Changes to the Governance Playbook 

The proposal would make 

clarifications and updates regarding the 

roles and responsibilities of the ICC 

Legal Department and internal 

committees involved in the governance 

process.5 Specifically, the proposal 

would amend Section I of the 

Governance Playbook, which describes 

the purpose of the document, to state 

that the ICC Legal Department will 

review and amend the Governance 

Playbook as needed when there are 

circumstances that may impact the 

governance procedures of ICC, such as 


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Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices 33221 

6See Notice 87 FR at 21688. 

7 15 U.S.C. 78s(b)(2)(C). 

8 15 U.S.C. 78q–1(b)(3)(F). 

9 17 CFR 240.17Ad–22(e)(2)(i) and 17 CFR 

240.17Ad–22(e)(23)(v). 

10 15 U.S.C. 78q–1(b)(3)(F). 

regulatory changes or changes in ICC’s 

structure or practices. 

The proposal would also amend 

Section III.H, which contains 

information on disclosures that ICC is 

required to make to regulators, Clearing 

Participants, and the public. ICC 

maintains a public Disclosure 

Framework that describes its material 

rules, policies, and procedures 

regarding its legal, governance, risk 

management, and operating framework. 

The proposal would add additional 

details on the process of updating this 

Disclosure Framework. Specifically, the 

proposed rule changes would amend 

this section to state that the Legal 

Department would determine when 

changes to the Disclosure Framework 

are necessary and that it will update the 

document every two years or more 

frequently as necessary. Additionally, 

the proposal would revise Section III.H 

to include regulations applicable to 

Disclosure Framework updates, a 

related change to spell out an 

abbreviated term for consistency, and to 

define what constitutes a material 

change that would require a Disclosure 

Framework update. Finally, the 

proposal would revise this section to 

incorporate procedures for reporting 

Disclosure Framework changes pursuant 

to applicable regulations. 

The proposal would also amend 

Section IV of the Governance Playbook, 

which discusses various committees. 

Specifically, the proposal would update 

the description of the membership 

composition of the Steering Committee 

by including amended titles and 

positions in order to be consistent with 

the membership composition set out in 

the Steering Committee’s charter, and 

removing outdated information 

regarding the Steering Committee’s 

membership from the Governance 

Playbook. The Steering Committee 

continues to review, approve and 

oversee the implementation of CDS 

product launches and initiatives. 

Additionally, the proposal would add 

a section discussing the CDS Service 

Review committee, including its 

description, membership composition, 

meeting frequency, and relevant 

documents. According to ICC, this is not 

a new committee. Its purpose is to 

discuss and review the status of active 

ICC initiatives to report on the delivery 

process and technology delivery-related 

activities (e.g., development, testing), 

and its proposed addition to the 

Governance Playbook is for 

transparency and completeness in order 

to ensure that the Governance Playbook 

includes all groups relevant to ICC’s 

governance process.6

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act directs 

the Commission to approve a proposed 

rule change of a self-regulatory 

organization if it finds that such 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to such organization.7 For the 

reasons discussed below, the 

Commission finds that the proposed 

rule change is consistent with Section 

17A(b)(3)(F) of the Act 8 and Rules 

17Ad-22(e)(2)(i) and Rule 17Ad– 

22(e)(23)(v).9

A. Consistency With Section 

17A(b)(3)(F) of the Act 

Section 17A(b)(3)(F) of the Act 

requires, among other things, that the 

rules of ICC be designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions 

and, to the extent applicable, derivative 

agreements, contracts, and 

transactions.10 Based on its review of 

the record, and for the reasons 

discussed below, the Commission 

believes the proposed changes to the 

Governance Playbook are consistent 

with the promotion of the prompt and 

accurate clearance and settlement of 

transactions at ICC. 

As noted above, the proposed rule 

change would make clarifications and 

updates regarding the roles and 

responsibilities of the ICC Legal 

Department and internal committees 

involved in its governance processes. 

Specifically, the proposal would amend 

Section I of the Governance Playbook, 

which describes the purpose of the 

document, to state that ICC’s Legal 

Department will review and amend the 

Governance Playbook as needed when 

there are circumstances that may impact 

the governance procedures of ICC, such 

as regulatory changes or changes in 

ICC’s structure or practices. Further, as 

noted above, the proposed changes 

would amend Section III.H to include 

additional details on the process of 

updating the public Disclosure 

Framework and cite related regulatory 

requirements for doing so. 

The Commission believes that the 

changes to sections I and III.H would 

enhance the effectiveness of ICC’s 

governance documents by ensuring that 

users of the Governance Playbook are 

aware of who is responsible for 

reviewing and amending the 

Governance Playbook and the 

circumstances necessitating such 

amendments. Likewise, the Commission 

believes that by including additional 

details on the process of updating the 

Disclosure Framework along with 

citations to related regulatory 

requirements for doing so, the proposed 

rule change would enhance the ability 

of users of the Governance Playbook to 

carry out their duties. The Commission 

believes that this in turn will provide 

clear governance arrangements that 

support ICC’s compliance with relevant 

regulations and procedures, thereby 

helping ICC maintain effective risk 

management processes to promote the 

prompt and accurate clearance of 

settlement and securities transactions 

and derivative agreements, contracts 

and transactions cleared by ICC. 

Additionally, as noted above, the 

proposal would update the membership 

composition of the Steering Committee 

by including amended titles and new 

positions and removing outdated 

information regarding the Steering 

Committee’s membership composition 

from the Governance Playbook. The 

Commission believes that these updates 

help the Board, as well as ICC’s 

management, employees, and members, 

to be updated on the roles and 

responsibilities of ICC officers, 

committees and subcommittees. As 

noted above, the proposal would also 

incorporate into the Governance 

Playbook information (its description, 

membership composition, meeting 

frequency, and relevant documents) 

about a current committee, the CDS 

Service Review committee. The 

Commission believes that by including 

information about an existing governing 

committee in the Governance Playbook, 

the proposal would support ICC’s ability 

to carry out duties related to active ICC 

initiatives. Taken together, the 

Commission believes that these changes 

to committee information could support 

ICC’s ability to manage product 

launches and other active initiatives and 

therefore facilitate ICC’s ability to 

provide clearing services that are 

supported by clear risk management 

processes that promote the prompt and 

accurate clearance of settlement and 

securities transactions and derivative 

agreements, contracts and transactions 

cleared by ICC. 

For the reasons stated above, the 

Commission therefore believes that the 


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33222 Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices 

11 15 U.S.C. 78q–1(b)(3)(F). 

12 17 CFR 240.17Ad–22(e)(2)(i). 

13 Id. 

14 17 CFR 240.17Ad–22(e)(23)(v). 

15 17 CFR 240.17Ad–22(e)(23)(v). 

16 15 U.S.C. 78q–1(b)(3)(F). 

17 17 CFR 240.17Ad–22(e)(2)(i) and (e)(23)(v). 

18 15 U.S.C. 78s(b)(2). 

19 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

20 17 CFR 200.30–3(a)(12). 1See 17 CFR 270.270.12d3–1(c)(3). 

proposed rule change is consistent with 

Section 17A(b)(3)(F) of the Act.11

B. Consistency With Rule 17Ad– 

22(e)(2)(i) 

Rules 17Ad–22(e)(2)(i) requires each 

covered clearing agency to establish, 

implement, maintain, and enforce 

written policies and procedures 

reasonably designed to, as applicable, 

provide for governance arrangements 

that are clear and transparent.12 As 

described above, the proposed changes 

more clearly set out the responsibilities 

of the Legal Department and include 

updates with respect to relevant internal 

individuals and committees involved in 

the governance process. The 

Commission believes that by clearly 

describing the responsibilities of the 

Legal Department, committees, 

subcommittees, and their participants as 

noted above, these proposed changes 

provide for clear and transparent 

governance arrangements to those 

serving on those committees and 

utilizing the Governance Playbook. For 

the reasons stated above, the 

Commission believes the proposed rule 

changes are consistent with Rules 

17Ad–22(e)(2)(i).13

C. Consistency With Rule 17Ad– 

22(e)(23)(v) Under the Act 

Rule 17Ad–22(e)(23)(v) under the Act 

require each covered clearing agency to 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to provide for an 

update of the public disclosure every 

two years, or more frequently following 

changes to the covered clearing agency’s 

system or the environment in which it 

operates to the extent necessary, to 

ensure statements previously provided 

remain accurate in all material 

respects.14

As noted above, the proposed changes 

assign responsibility, reference 

applicable regulations, and include 

additional information and procedures 

regarding maintaining and updating the 

Disclosure Framework in accordance 

with relevant regulations. Specifically, 

the proposed changes would update the 

process by which the ICC Legal 

Department will update the public 

Disclosure Framework every two years 

or more frequently following material 

changes to ICC’s systems or 

environment in which it operates, 

including updates for major decisions of 

the Board with a broad market impact. 

The Commission believes that these 

aspects of the Governance Playbook 

provide further clarity regarding ICC’s 

policies and procedures for making a 

comprehensive public disclosure that is 

updated every two years or more 

frequently following material changes. 

For these reasons, the Commission 

believes that the proposed rule change 

is consistent with Rule 17Ad– 

22(e)(23)(v) under the Act.15

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act, and in 

particular, with the requirements of 

Section 17A(b)(3)(F) of the Act 16 and 

Rules 17Ad–22(e)(2)(i) and 17Ad– 

22(e)(23)(v) thereunder.17

It is therefore ordered pursuant to 

Section 19(b)(2) of the Act 18 that the 

proposed rule change (SR–ICC–2022– 

003), be, and hereby is, approved.19

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11678 Filed 5–31–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–504, OMB Control No. 

3235–0561] 

Proposed Collection; Comment 

Request; Extension: Rule 12d3–1 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission (the 

‘‘Commission’’) is soliciting comments 

on the collections of information 

summarized below. The Commission 

plans to submit these existing 

collections of information to the Office 

of Management and Budget (‘‘OMB’’) for 

extension and approval. 

Rule 12d3–1 (17 CFR 270.12d3–1) 

under the Investment Company Act of 

1940 (15 U.S.C. 80a–1 et seq.) 

(‘‘Investment Company Act’’) permits a 

fund to invest up to five percent of its 

assets in securities of an issuer deriving 

more than fifteen percent of its gross 

revenues from securities-related 

businesses (subject to certain 

limitations), notwithstanding the 

general prohibition in Section 12(d)(3) 

of the Investment Company Act of a 

registered investment company (‘‘fund’’) 

and companies controlled by the fund 

purchasing securities issued by a 

registered investment adviser, broker, 

dealer, or underwriter (‘‘securitiesrelated businesses’’). 

A fund may, however, rely on an 

exemption in rule 12d3–1 to acquire 

securities issued by its subadvisers in 

circumstances in which the subadviser 

would have little ability to take 

advantage of the fund, because it is not 

in a position to direct the fund’s 

securities purchases. This exemption in 

rule 12d3–1 is available if: (i) The 

subadviser is not, and is not an affiliated 

person of, an investment adviser that 

provides advice with respect to the 

portion of the fund that is acquiring the 

securities; and (ii) the advisory contracts 

of the subadviser, and any subadviser 

that is advising the purchasing portion 

of the fund, prohibit them from 

consulting with each other concerning 

securities transactions of the fund, and 

limit their responsibility in providing 

advice to providing advice with respect 

to discrete portions of the fund’s 

portfolio.1

Rule 12d3–1 requires funds to amend 

their subadvisory contracts before they 

can rely on rule 12d3–1’s exemption to 

ensure that the subadviser that engages 

in the transaction does not influence the 

fund’s investment decision to engage in 

the transaction. 

Based on an analysis of fund filings, 

Commission staff estimates that 

approximately 285 funds enter into such 

new subadvisory agreements each year, 

and that it will require approximately 3 

attorney hours to draft and execute 

additional clauses in new subadvisory 

contracts in order for funds and 

subadvisers to be able to rely on the 

exemptions in rule 12d3–1. Because 

these additional clauses are identical to 

the clauses that a fund would need to 

insert in their subadvisory contracts to 

rely on rules 10f–3 (17 CFR 270.10f–3), 

17a–10 (17 CFR 270.17a–10), and 17e– 

1 (17 CFR 270.17e–1), and because we 

believe that funds that use one such rule 

generally use all of these rules, we 

apportion this 3 hour time burden 

equally to all four rules. Therefore, we 

estimate that the burden allocated to 

rule 12d3–1 for this contract change 


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