29612 Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 91521 

(April 9, 2021), 86 FR 19917 (April 15, 2021). 

4Comments received on the proposed rule change 

are available at: https://www.sec.gov/comments/srcboebzx-2021-024/srcboebzx2021024.htm. 

5 15 U.S.C. 78s(b)(2). 

6 Id. 

7 17 CFR 200.30–3(a)(31). 

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. 

thereunder,2 a proposed rule change to 

list and trade shares of the WisdomTree 

Bitcoin Trust under BZX Rule 

14.11(e)(4), Commodity-Based Trust 

Shares. The proposed rule change was 

published for comment in the Federal 

Register on April 15, 2021.3 The 

Commission has received comments on 

the proposed rule change.4

Section 19(b)(2) of the Act 5 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission shall either 

approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether the proposed rule change 

should be disapproved. The 45th day 

after publication of the notice for this 

proposed rule change is May 30, 2021. 

The Commission is extending this 45- 

day time period. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to take action on the 

proposed rule change so that it has 

sufficient time to consider the proposed 

rule change and the comments received. 

Accordingly, pursuant to Section 

19(b)(2) of the Act,6 the Commission 

designates July 14, 2021, as the date by 

which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–CboeBZX–2021–024). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–11532 Filed 6–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92020; File No. SR–ICEEU– 

2021–010] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Notice of Filing 

of Proposed Rule Change Relating to 

the Clearing Rules, Clearing 

Procedures, Finance Procedures, 

Delivery Procedures, CDS Procedures, 

Membership Procedures, Complaint 

Resolution Procedures and General 

Contract Terms 

May 26, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on May 13, 

2021, ICE Clear Europe Limited (‘‘ICE 

Clear Europe’’ or the ‘‘Clearing House’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule changes described in 

Items I, II and III below, which Items 

have been prepared primarily by ICE 

Clear Europe. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

ICE Clear Europe Limited proposes to 

amend its Clearing Rules (the ‘‘Rules’’) 3

(including to the CDS Standard Terms, 

F&O Standard Terms and FX Standard 

Terms annexed thereto), Clearing 

Procedures, Finance Procedures, 

Delivery Procedures, CDS Procedures, 

Membership Procedures, Complaint 

Resolution Procedures and General 

Contract Terms (collectively, the 

‘‘Amended Documents’’) to make 

various updates and enhancements. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, ICE 

Clear Europe included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. ICE 

Clear Europe has prepared summaries, 

set forth in sections (A), (B), and (C) 

below, of the most significant aspects of 

such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(a) Purpose 

ICE Clear Europe is submitting 

proposed amendments to the Amended 

Documents that are intended to make a 

variety of improvements and changes, 

including to (1) update various Rules 

and procedures to reflect current laws 

and regulations such as those relating to 

post-default porting, capital 

requirements, and anti-money 

laundering requirements, (2) update 

various defined terms, (3) update certain 

product and Clearing Member 

termination rules, (4) update certain 

notice provisions, (5) clarify 

membership criteria and obligations for 

Clearing Members, (6) clarify how open 

contract positions are aggregated and 

netted, (7) update certain systems 

references to reflect current systems and 

delete obsolete references, (8) amend 

and clarify the Complaint Resolution 

Procedures, (9) update various 

provisions of the Delivery Procedures, 

(10) introduce a summary disciplinary 

process and clarify disciplinary 

processes and (11) make various other 

drafting improvements, clarifications 

and updates, in each case as described 

in further detail herein. 

a. Removal of ‘‘Default Portability 

Preference’’ 

Various amendments are proposed to 

remove the process whereby Non-FCM/ 

BD Clearing Members are able to deliver 

a ‘‘Default Portability Preference’’, with 

advance, pre-default, porting 

information to the Clearing House. This 

process and mechanism had been 

developed by ICE Clear Europe as part 

of its default planning processes prior to 

post-crisis legislation such as EMIR 

coming into force. EMIR requires postdefault porting notices to be served as 

a pre-condition to porting, rendering the 

default portability preference structure 

to be of limited assistance. In addition, 

and in practice, ICE Clear Europe did 

not receive many notices of Default 

Portability Preferences. After EMIR, 

other clearing houses did not use or 

ceased to use such notices and potential 

transferee clearing members are often 

unwilling to commit to receive porting 

in advance. As part of default 

management planning and following 

default drills with industry 

participation, it was determined to 

remove this structure from the Rules. 

Various changes will be made to the 

Rules to remove references to predefault Porting Notice and, where 

appropriate, replace these references 


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4See Exchange Act Release No. 34–87275 (File 

No. SR–ICEEU–2019–020) (Oct. 10, 2019), 84 FR 

55649 (Oct. 17, 2019) (changes to definitions using 

the term Market). 

with post-default Porting Notices, as 

discussed herein. 

This proposal results in a number of 

proposed changes. In Rule 101, the 

definition of ‘‘Default Portability 

Preference’’ definition would be 

deleted. The related concept of ‘‘NonTransfer Positions’’ in Rule 101 would 

be deleted as this defined term would 

no longer be used following removal of 

the Default Portability Preference 

concept. A new definition of ‘‘Porting 

Notice’’ (which refers to a post-default 

indication of a porting preference) 

would be introduced in Rule 101, with 

a cross-reference to the existing 

definition of that term in the Standard 

Terms Annex. 

In Rule 904, which addresses 

procedures for post-default transfer of 

contracts and margin, various changes 

are proposed to implement the remove 

of Default Portability Preferences. 

Specifically, changes are proposed to 

Rules 904(g) and 904(j) to remove the 

references to Default Portability 

Preference and instead refer to the 

process around the use of Porting 

Notices. Rule 904(g) would be amended 

to state that consent to become a 

Transferee Clearing Member can only be 

evidenced in a Porting Notice where 

that Clearing Member has countersigned 

the notice or otherwise agreed in 

writing. This clarifies that simply being 

named by a customer as a potential 

Transferee Clearing Member is 

insufficient. The changes proposed at 

Rules 904(m), 904(p), 904(u) and 904(w) 

reflect the deletion of the definition of 

Default Portability Preference. 

Related changes are proposed in Rule 

907(d), which relates to the Clearing 

House’s ability to rely on certain 

information provided to it. References to 

Default Portability Preference and NonTransfer Positions have been deleted. 

Instead, in connection with porting the 

Clearing House will be entitled to rely 

on any information provided to it by a 

defaulter prior to declaration of default 

in respect of Contracts, Customer-CM 

Transactions, Margin and the Accounts 

in which Contracts and Margin were 

recorded or which relate to particular 

Customers or particular groups of 

Customers. This would allow the 

Clearing House to continue to be able to 

act efficiently in default scenarios, and 

be able to rely on more of the relevant 

information available to it in relation to 

the Defaulter. Amendments would also 

clarify that the Clearing House has no 

obligation to inquire of any person as to 

any Porting Notice. 

The CDS Standard Terms (paragraph 

6), F&O Standard Terms (paragraph 6) 

and FX Standard Terms (paragraph 6) 

would be amended to remove references 

to Default Portability Preferences and 

include reference to Porting Notices. 

b. Introducing Consistency to the 

Definitions Relating to Energy 

Transactions 

A series of amendments are proposed 

to certain definitions relating to Energy 

transactions, simplifying and making 

such terms consistent with certain 

amendments previously made to 

definitions for other F&O Products.4

Consistent with such prior 

amendments, in Rule 101, the ‘‘Energy’’ 

definition would be shortened to refer to 

the term ‘‘Market’’ rather than naming 

all specific ICE markets. New 

definitions would be introduced for 

‘‘Energy Matched Transaction’’ 

(referencing an energy transaction 

conducted on a Market) and a revised 

definition of ‘‘Energy Transaction’’ 

would be added (covering an Energy 

Matched Transaction or an Energy Block 

Transaction meeting specified criteria). 

The changes are consistent with the 

approach used in the definitions of 

Financials & Softs Matched Transaction 

and Financials & Softs Transactions. 

The introduction to the General 

Contract Terms would similarly be 

amended to remove references to named 

ICE markets and instead use the more 

generic term ‘‘relevant Market’’. 

c. EFRP (Exchange for Related Position) 

Definition Amendments 

Several changes to the Rules are 

proposed to address more clearly 

exchange for related position 

transactions (referred to as EFRPs) 

under applicable Market rules, 

including to revise defined terms and 

clarify that such transactions are 

available on exchanges for products 

other than soft commodities. 

In Rule 101, a new ‘‘EFRP’’ definition 

would be added, to be defined using a 

similar structure to that for EFP and EFS 

transactions. Also in Rule 101, in the 

‘‘EFS’’ definition would be clarified to 

refer only to exchange for swaps or 

similar transactions under Market Rules 

and to remove an existing reference to 

exchange for related positions, which 

would now be covered by the EFRP 

definition. In the ‘‘Financials & Softs 

Block Transaction’’ definition, reference 

to ‘‘Soft Commodity EFRPs’’ would be 

widened to include all ‘‘EFRP’’s under 

all Market Rules, as Soft Commodity 

EFRPs are specific to ICE Futures 

Europe. This would be in line with the 

definitions for EFP and EFS 

transactions. Accordingly, the ‘‘Soft 

Commodity EFRP’’ definition (which is 

not otherwise used) would be deleted. 

d. Amendments to Product Termination 

Rules 

Rule 105 would be amended to 

shorten the termination period 

(generally from four months to one 

month) for a service withdrawal for a 

product in circumstances in which there 

is no open interest in the relevant Set. 

In such circumstances, in ICE Clear 

Europe’s view, a longer termination 

period is unnecessary, since no action is 

required by Clearing Members to close 

out their positions. Proposed 

amendments would also clarify that 

where a product termination occurs 

following actions of the relevant 

exchange (e.g., a de-listing), the notice 

period required under the exchange’s 

rules would instead apply and the 

exchange would be responsible for 

providing such notice. 

e. Amendments to the Termination 

Rules for Clearing Members 

Amendments are proposed to Rule 

209(d) to facilitate membership 

terminations in the context of a 

corporate group reorganization where a 

new Clearing Member that is an Affiliate 

will be receiving the terminating 

Clearing Member’s Open Contract 

Positions. The amendment would 

establish an exception to the 

requirement for terminating Clearing 

Members to immediately upon service 

of a Termination Notice pay to the 

Clearing House Assessment 

Contributions equal to three times the 

required relevant guaranty fund 

contribution. In ICE Clear Europe’s 

view, such an exception is warranted 

since all positions would be received by 

an affiliated Clearing Member in good 

standing that would remain liable with 

respect to any obligations arising from 

or related to the holding of such 

positions under the Rules (including as 

to future Assessment Contributions). 

Rule 209(d) would be further 

amended to clarify that references in the 

Clearing Rules to Assessment 

Contributions being called or to 

Guaranty Fund Contributions being 

replenished or applied, where the 

Clearing Member has provided 

Permitted Cover to the Clearing House 

(whether under Rule 209(d) or prior to 

the Clearing Member serving its 

termination notice or the Termination 

Date), would be interpreted as a 

reference to that Permitted Cover being 

applied. The new reference to Permitted 

Cover which has been provided prior to 

the serving of a termination notice or a 

Termination Date would clarify that, as 

is currently intended, the Cover 


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29614 Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices 

provided at that earlier stage could also 

be included as part of, for example, any 

applications of Guaranty Fund by the 

Clearing House under Part 9 or Part 11. 

Further amendments to Rule 209(d) 

would clarify for the avoidance of doubt 

that the following obligations would 

apply to a terminating Clearing Member 

until Open Contract Positions have been 

closed, the Termination Date has passed 

and all Guaranty Fund Contributions 

have been returned under Rule 1102(g): 

Application of Guaranty Fund 

Contributions, application of 

Assessment Contributions (to the extent 

paid under Rule 209(d) or otherwise 

prior to the Termination Date), position 

limits under Part 6, disciplinary actions 

under Part 10 and the declaration and 

consequences of an Event of Default 

under Part 9 of the Rules. This 

amendment is not intended to change 

the current requirements under the 

Rules, but rather to state those 

requirements more clearly in a single 

provision and thereby facilitate the 

Clearing House’s enforcing its rules 

during a termination period. 

The proposed amendments to Rule 

209(d) overall reflect the Clearing 

House’s experience with both default 

planning and recent Clearing Member 

terminations involving group 

reorganizations. 

f. Notice Provisions 

These proposed changes are designed 

to clarify and provide greater flexibility 

as to delivery of notices under the 

Rules. The changes have been informed 

by default simulation planning and in 

particular the requirements around 

default notices under Rule 901, but are 

not limited to that context. Rules 113(a) 

and 113(a)(i) would be amended to 

delete the references to telephone as a 

valid mode of service of notices (since 

this is not supported operationally) and 

to replace it with email. The email 

address last notified to the Clearing 

House by a Clearing Member would 

become an option for service of notices. 

The addition of new Rule 113(a)(ii) 

would clarify that the Clearing House 

may also validly deliver notices to a 

process agent nominated by the Clearing 

Member to act as its agent. Rule 113(e) 

already referred to such agents for 

service of process, and would be 

expanded to explicitly refer to service of 

other contractual notices and 

communications. A further change to 

Rule 113(a) clarifies that delivery in 

accordance with this section would be 

deemed made to the Clearing Member or 

Sponsored Principal (also if made to an 

agent appointed by the Clearing Member 

or Sponsored Principal). 

Rule 113(c) and 113(d) would be 

amended to clarify the precise time 

when effective service is deemed to be 

made for communications by fax, email 

and courier, and that effective service 

and delivery can be achieved outside of 

opening hours on a business day, 

consistent with current operational 

practices. 

Rule 1901(n) is similarly proposed to 

be amended to make clear that process 

agents for Sponsored Principals will act 

as agents for service of process of any 

notice, order or other communication 

under the Rules and the Sponsored 

Principal Agreement. 

To conform to the Rules, amendments 

to paragraph 4.2E of the summary table 

at paragraph 4.2 of the Membership 

Procedures would provide that 

termination of a Clearing Membership 

Agreement or membership as a Clearing 

Member would become effective no less 

than 30 Business Days after the date of 

the Termination Notice Time or 

pursuant to Rule 917(c) instead of no 

less than three months’ advance notice 

if termination is not for cause and 

otherwise as specified in and allowed 

pursuant to the Rules. 

Additionally, updates would be made 

throughout the summary table at 

paragraph 4.2 of the Membership 

Procedures to the email address to 

which Clearing Members should send 

certain notifications. 

g. Clarifying Clearing Membership 

Criteria and Clearing Member 

Obligations 

Rule 201(a)(ix) would be amended to 

reference that under existing Rule 

201(b), the Clearing House may require 

that potential Clearing Members enter 

into additional annexes or agreements to 

the Clearing Membership Agreement in 

order to be, and remain, eligible for 

Clearing Membership. Some such 

annexes have had to be developed to 

cater for local law issues arising in 

certain EU member states as part of 

Clearing Members’ post-Brexit group 

legal structuring. This change would 

clarify the basis in the Rules for the 

Clearing House to require such 

additional documentation to be 

executed, where necessary. 

Rule 202(a)(xxii) would be amended 

to extend the requirement for Clearing 

Members to have competent persons 

accessible to the Clearing House, to also 

include two hours prior to the start of 

the business day. This is consistent with 

current operational practice and is 

necessary to ensure that staff are 

available to process and deal with 

queries in relation to morning margin 

calls. 

New Rule 301(o) would allow the 

Clearing House to request information 

when needed on account balances of 

nominated accounts of the Clearing 

Member at financial institutions, 

including for the purpose of calling on 

available cash where the Clearing 

Member has failed to meet a payment 

obligation or determining whether the 

Clearing Member is or is likely to be in 

default. This change would address 

issues that have arisen in practice where 

payment banks have refused to provide 

such information to the Clearing House. 

This consent, as part of the Rules, 

should promote the sharing of this 

important information. 

h. Greater flexibility in Financial 

Reporting by Clearing Members 

It is proposed that Rule 205(a)(ii) be 

amended to give the Clearing House 

greater flexibility to accept different 

kinds of financial statements (for 

example, semi-annual accounts) from 

Clearing Members as part of their 

financial reporting obligations, in 

circumstances where that Clearing 

Member does not produce a quarterly 

financial statement for its regulators. 

This amendment would also result in a 

conforming change to the summary 

table at paragraph 4.2 of the 

Membership Procedures. 

The amendment would formalize 

current operational practice for those 

Clearing Members who do not draw up 

regulatory quarterly financials and 

means that the basis for accepting such 

reporting would be set forth in the Rules 

rather than pursuant to a separate 

arrangement, increasing transparency. 

In addition, Rule 205(a)(ii) as well as 

the summary table at paragraph 4.2 of 

the Membership Procedures would be 

amended to change the deadline for 

submitting financial statements from 30 

to 45 days after the relevant period so 

that the deadline aligns with other 

regulatory reporting deadlines (for 

example, the FCA deadlines). 

i. Clarifying CDS Contract Formation 

Rule 401(o) would be amended to 

make clear that where a CDS Contract of 

a Non-FCM/BD Clearing Member for a 

customer account arises pursuant to 

Rule 401, a Customer-CM CDS 

Transaction arises between the 

Customer and the Non-FCM/BD 

Clearing Member at the same time as the 

Contract. The current rule does not 

specify the timing of the Customer-CM 

CDS Transaction, and the amendment 

would reflect the equivalent rule for 

F&O in Rule 401(n) and eliminate an 

unintended drafting distinction. 


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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices 29615 

5Exchange Act Release No. 34–88665 (File No. 

SR–ICEEU–2020–003) (Apr. 16, 2020), 85 FR 22892 

(Apr. 23, 2020). 

6Commodity Exchange Act Section 1a(18), 7 

U.S.C. 1a(18). 

7See Section 6(l) of the Act, 15 U.S.C. 78f(l); 

Commodity Exchange Act Section 2(e), 7 U.S.C. 

2(e). 

8As a result of ICE Clear Europe Circular C20/ 

163, this reference to EMIR is to be interpreted as 

including a reference to EMIR as applicable in the 

United Kingdom under the European Union 

(Withdrawal) Act 2018. See Exchange Act Release 

No. 34–90746 (File No. SR–ICEEU–2020–016) (Dec. 

21, 2020), 85 FR 85704 (Dec. 29, 2020). 

j. Clarifying How Open Contract 

Positions Are Aggregated and Netted 

The proposed amendments at Rule 

406(b) and (c) address contractual 

netting for F&O contracts. The proposed 

changes would align the provisions for 

F&O Contracts more closely with the 

corresponding rule on contractual 

netting for CDS contracts in Rule 406(d) 

et seq. 

In particular, the changes would 

address aggregation of open contract 

positions of an F&O Clearing Member in 

addition to netting of such positions, 

and would clarify that the process for 

aggregation or netting takes place via 

contractual novation. 

k. Clarifying How the Clearing House 

May Amend Contract Terms 

It is proposed that Rule 409(a) be 

amended so that the Clearing House can 

evidence its consent to amendments, 

waivers and variations of the Contract 

Terms by way of Circular. This has been 

the usual way of issuing such 

amendments, waivers and variations, 

and would conform the Rules with 

operational practice. 

l. Pledged Collateral Not for Settlement 

Payments 

It is proposed that Rule 1603(c) be 

amended to clarify that only ‘‘original’’ 

or ‘‘initial’’ types of Margin payments be 

provided in the form of Pledged 

Collateral, and that such collateral 

excludes Variation Margin, Mark-toMarket Margin and FX Mark-to-Market 

Margin, which is provided to or by the 

Clearing House by outright transfer of 

cash as a settlement payment. The 

change is intended to be consistent with 

amendments previously made to the 

Rules to clarify that such variation and 

mark-to-market margin are settlement 

payments rather than collateral, and was 

inadvertently omitted from such prior 

amendments.5

m. Hedging Following an Event of 

Default 

Rule 903(c) would be amended to 

clarify that the Clearing House’s right to 

authorize hedging transactions in a 

Default scenario would include 

transactions on a Market, any other 

Exchange or over the counter. The 

amendments would also provide that 

such transactions taking place on an 

exchange which is not a Market, or 

where requested or directed otherwise 

by the Clearing House, need not 

themselves be cleared. These 

amendments come out of default event 

simulations and planning. 

n. Affiliate Cross-Defaults 

It is proposed that Rule 901(a)(iv) be 

amended to clarify that the declaration 

of an Event of Default in respect of one 

Clearing Member is a circumstance in 

which the Clearing House can declare 

an Event of Default in respect of another 

Clearing Member that is a Group 

Company. In the Clearing House’s view, 

this is the effect of Rule 901(a) as it 

stands already, but the Clearing House 

has decided to clarify this expressly in 

light of questions raised in default 

planning exercises. 

o. ‘‘Eligible Contract Participant’’ Status 

Rule 201(a)(xx) would be amended to 

provide that the requirement that a 

Clearing Member be an ‘‘eligible 

contract participant’’ 6 only applies if it 

is to be a CDS Clearing member or an 

FX Clearing member. Such status would 

not be required under U.S. law for a 

Clearing Member that is only an F&O 

Clearing Member. The amendment 

reflects that such status is required 

under applicable U.S. law for persons 

that trade swaps and security-based 

swaps (such as CDS), but not for 

futures.7 Section 10 of the F&O 

Standard Terms would for similar 

reasons be amended to remove a 

requirement that an F&O Clearing 

Member and Customer be an eligible 

contract participant. Rule 1901(b)(xv) 

would also be amended to provide that 

the requirement that a Sponsored 

Principal be an eligible contract 

participant only applies in relation to 

CDS Contracts and FX Contracts. 

p. Corrected Names of Internal Risk 

Committees 

It is proposed that Rule 916(d) be 

amended to change the term ‘‘Risk 

Committee’’ to ‘‘relevant product risk 

committee’’. This reflects that there are 

different product risk committees 

addressing topics specific to F&O and 

CDS which take on this role. The Risk 

Committee established under EMIR has 

different competencies. The changes 

clarify and align the Rules to current 

Clearing House governance processes. 

In the Finance Procedures paragraph 

14(2) and 14(3), reference to the CDS 

Risk Committee and FX Risk Committee 

would be corrected to ‘‘CDS Product 

Risk Committee’’ and ‘‘FX Product Risk 

Committee’’ to reflect the correct 

committee names. The same change 

would be made throughout the CDS 

Procedures where ‘‘CDS Risk 

Committee’’ is currently used. 

q. Amendments to Complaint 

Resolution Procedures 

Various clarifications and 

amendments are proposed throughout 

the Complaint Resolution Procedures. 

Paragraph 1.1 would be amended to 

reframe the Complaint Resolution 

Procedures based on ICE Clear Europe’s 

obligations as a CCP under EMIR.8

Throughout the procedures, the term 

‘‘Complaints Resolution Procedure’’ 

would be replaced with ‘‘Complaint 

Resolution Procedures’’ to correct a 

typographical error and for consistency 

with the term used in Rule 101. 

Paragraph 1.1 would be amended to 

use the defined term ‘‘Person’’ (which is 

defined in Rule 101) rather than 

‘‘person’’. This would be reflected as a 

global change throughout the Complaint 

Resolution Procedures. Further 

amendments in paragraphs 1.1 and 1.2 

would be made to provide for an 

independent ‘‘Commissioner,’’ who is 

responsible for the investigation of 

complaints generally, and for the 

appointment of an ‘‘Investigator’’ to 

investigate a particular complaint. 

Minor drafting updates would be made 

in paragraph 1.3 to improve clarity. 

Additional drafting changes 

throughout the procedures would be 

made to refer where appropriate to 

‘‘Eligible Complaint’’ instead of 

complaint. This would clarify that only 

Eligible Complaints (and not other 

complaints) would be subject to this 

process. As a result, the defined term 

‘‘Complaint’’ has been replaced globally 

by the undefined term ‘‘complaint’’, to 

allow a distinction between complaints 

generally speaking and those that 

qualify as ‘‘Eligible Complaints’’ within 

the scope of the procedures. 

The definition of ‘‘Eligible 

Complaints’’ in paragraph 2.1 would be 

broadened to include complaints against 

any Directors, officers, employees or 

committees (or committee members) of 

the Clearing House, which ICE Clear 

Europe believes is the proper scope for 

the Complaint Resolution Procedures. 

The amendments would also clarify that 

Eligible Complaints may relate to the 

manner in which the Clearing House 

has failed to perform applicable 

regulatory functions. 


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Minor drafting amendments would be 

made in paragraph 2.2 to correct 

typographical errors and use of defined 

terms. 

Paragraph 3.6 would be amended to 

include ‘‘investigation of the’’ before 

‘‘Eligible Complaint’’ for drafting clarity. 

A drafting improvement would be 

made in paragraph 4.1 to clarify that 

acknowledgment of the complaint by 

the Clearing House must be made 

promptly, and in any case within 5 

Business Days of receipt. 

New paragraph 4.2 would be added to 

allow the Clearing House to refer 

complaints to another recognized body 

or authorized person where they 

consider that such entity is entirely or 

partly responsible for the subject matter 

of the complaint. For example, a 

complaint might better be administered 

by an exchange for which the Clearing 

House clears. New paragraph 4.3 would 

be added to set out the process whereby 

the Clearing House would be able to 

refer such a complaint. The 

amendments are intended to clarify 

existing procedures, and avoid a 

situation where the Clearing House 

would be forced to address a duplicative 

complaint or a complaint better handled 

by another entity. 

Paragraph 4.4 would be amended to 

correct minor typographical errors. 

The amendments to paragraph 4.5 

would clarify that the Investigator must 

be an individual who has no personal 

interest or involvement in the matter of 

the Eligible Complaint. The 

amendments to that paragraph would 

also make typographical corrections and 

similar drafting improvements. 

Paragraph 4.7 would be amended to 

make clear that the Investigator would 

not be required to disclose any 

information about the Complainant’s 

identity when drafting their report of 

the Eligible Complaint. This paragraph 

would also be amended to correct minor 

typographical errors and to update 

cross-references. 

Paragraph 4.8 would be amended to 

include delivery disputes and appeals 

in the list of potential ongoing matters 

that could warrant delay in the 

consideration of an Eligible Complaint. 

A similar change would also be made in 

paragraph 4.12. Certain typographical 

errors would also be corrected. 

Paragraph 4.11 would be amended to 

clarify that where the Clearing House 

objects to the referral of a complaint to 

the Commissioner under specified 

circumstances (such that the Clearing 

House can conclude its own 

investigation), it must submit to the 

Commissioner the reasons for that 

determination. Several cross-references 

in the paragraph would also be updated. 

Paragraph 4.12 would be amended to 

expand the list of ongoing matters that 

would justify delay in the 

Commissioner’s consideration of an 

Eligible Complaint to be consistent with 

the list at paragraph 4.8, and also 

reference other processes under Part 10 

of the Rules. 

Paragraph 4.14 would be amended 

with minor non-substantive drafting 

improvements. 

Paragraph 5 would be amended to 

clarify that the Investigator recommends 

rather than takes remedial action 

himself. 

Paragraph 6.3 would be amended to 

add ‘‘appeal process’’ to the list of 

dispute resolution procedures that a 

Complainant cannot use if it requires 

the referral of any Eligible Complaint to 

the Commissioner pursuant to the 

Complaint Resolution Procedures. 

Reference to ‘‘mediation’’ has also been 

deleted (as unnecessary in light of the 

other listed types of dispute resolution). 

Paragraph 7.2 would be amended to 

clarify that the Commissioner does not 

have to continue investigating a 

complaint if the complaint is not an 

Eligible Complaint. Paragraph 7.3 would 

be amended to make clear that the 

Commissioner would only be required 

to produce a final response where the 

complaint is an Eligible Complaint. 

Paragraph 7.6 would be amended to 

ensure that the Commissioner has 

access to all relevant personnel 

(including directors, officers and other 

persons to whom functions have been 

outsourced) that may be needed for the 

purposes of the Eligible Complaint. 

Paragraph 7.8 would be amended to 

obligate the Clearing House to inform 

the Complainant of an alternative 

Commissioner, when one is appointed, 

within five Business Days of the date of 

appointment. 

Paragraph 8.1 would be amended to 

state explicitly that the Clearing House 

is required to consider the 

Commissioner’s report and 

recommendations, in addition to 

informing the Commissioner of any 

proposed steps it would take in 

response to the report and 

recommendations. Certain other nonsubstantive drafting clarifications would 

be made as well. 

Paragraphs 8.2 and 8.3 would be 

amended to correct typographical errors. 

Paragraph 11 would be amended to 

include the Investigator as a person 

subject to the confidentiality obligations 

with respect to the complaint, and make 

certain drafting clarifications. 

r. Amendments to CDS Procedures 

Relating to List of Eligible Single Name 

Reference Entities 

Paragraph 11.4 would be amended 

such that the Clearing House be 

required to update certain relevant 

information relating to CDS Contracts 

on its website after making certain 

updates relating to Permitted Single 

Name Fixed Rates and Eligible Single 

Name Reference Entities instead of 

giving notice by Circular of such 

actions. 

s. Amendments to CDS Procedures To 

Allow Clearing Members To Nominate 

Affiliates 

Paragraph 4.4(f) of the CDS 

Procedures would be amended to clarify 

that CDS Clearing Members could 

designate an Affiliate that is also a CDS 

Clearing Member to accept CDS 

Contracts in lieu of it for CDS Contracts 

arising as a result of the existing CDS 

end-of-day pricing process pursuant to 

Rule 401(a)(xi). 

A similar same change would be 

made at paragraph 11.5, to allow 

designation of an Affiliate to accept 

transactions arising out of the existing 

auction process to be used in the case 

of self-referencing CDS transactions. 

This reflects existing practice for CDS 

Clearing Members, as documented in 

certain arrangements between the 

Clearing House and certain CDS 

Clearing Members allowing this to take 

place, but was unintentionally omitted 

from the CDS Procedures. 

t. Clarifications to CDS Clearing Member 

Sign Off of Weekly Cycles 

It is proposed that new paragraph 3.5 

be added to the CDS Procedures to 

require CDS Clearing Members to 

provide sign off via email on weekly 

cycles by the time specified by the 

Clearing House. This change would 

document existing operational 

processes. 

u. Adjustments to Clearing Member 

Capital Requirements 

It is proposed that paragraph 3.5(a) of 

the Membership Procedures would be 

amended to lower, from 50% to 25%, 

the portion of a Clearing Member’s 

Capital requirement that may be covered 

by subordinated loans before the 

Clearing House would require a written 

undertaking from the Clearing Member 

to not repay subordinated loans without 

the consent of the Clearing House. This 

change would align the Clearing 

Member capital requirement more 

closely with Basel III requirements. The 

Basel II standard for ‘‘tier 2’’ 

instruments was set at 50% of total 

capital, i.e., Tier 2 capital including 


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certain subordinated debt instruments 

could be of an amount equal to tier 1 

(essentially share capital) (Section B, 

Annex 1a, Basel II). This was changed 

in Basel III (LEX 20.1) to involve greater 

restrictions on the usage of subordinated 

debt in general subject, where 

subordinated debt may be used, to an 

upper limit of 25%. This proposed 

change in capital requirements 

promotes greater consistency with its 

existing operational implementation of 

capital requirements for Clearing 

Members, albeit remaining more liberal 

than Basel III. All of the Clearing 

Members are located in countries which 

have implemented Basel III and this 

change is not considered to be material 

for any of them, whilst at the same time 

making the Clearing House’s capital 

requirements more robust. 

It is further proposed that paragraph 

3.5 of the Membership Procedures 

would be amended to remove 

irrevocable letters of credit as a 

potential method that Clearing Members 

or Sponsored Principals may use to 

satisfy capital requirements. Instead, the 

Clearing House could, at its discretion, 

require a Clearing Member to post 

additional cash or collateral in addition 

to the normal margin requirements 

pursuant to the amendments. 

v. Replacement of Prospectus Directive 

Amendments are proposed to Part 

1501 of the Rules to change the 

definition of ‘‘Prospectus Directive’’ to 

‘‘Prospectus Regulation’’ as the EU 

Prospectus Directive has been repealed 

and replaced with the Prospectus 

Regulation. Conforming changes would 

be made to the definitions of ‘‘Offer to 

the Public’’, ‘‘Relevant Member State’’ 

and ‘‘Securities’’. The definition of 

‘‘2010 PD Amending Directive’’ (and 

references thereto) would be deleted as 

this is also no longer in force. 

Conforming changes would be made in 

Rule 1503 to remove obsolete legislative 

references. 

w. Changes to Clearing Member 

Account Requirements 

Amendments to the Finance 

Procedures in paragraphs 4.1(a)(i) and 

(iv) and 4.4(a)(i) and (iv) are proposed 

to the account requirements for 

members to reflect that ICE Clear Europe 

clears both EUR and USD denominated 

CDS contracts and as such all CDS 

Clearing Members are required to have 

both EUR and USD accounts (and need 

not have a GBP account). 

x. Updates for Changes to Applicable 

Anti-Money Laundering Law 

Amendments are proposed in Rule 

101 to update the definition of ‘‘Money 

Laundering Directive’’ to reflect the 

implementation of the fifth EU AntiMoney Laundering Directive. A 

definition of ‘‘Money Laundering 

Regulations’’ is also proposed to be 

added to the rules to reference the 

applicable UK regulations 

corresponding to that Directive 

(including after its exit from the 

European Union). 

In Rule 201(a)(xxix) and 1901(d)(xi), 

the reference to ‘simplified due 

diligence’ is proposed to be removed. 

This reflects the repeal and restatement 

of the former U.K.’s Money Laundering 

Regulations 2007 pursuant to the Money 

Laundering, Terrorist Financing and 

Transfer of Funds (Information on the 

Payer) Regulations 2017, which 

removed simplified due diligence as the 

default option for a defined list of 

entities and replaced this with a 

discretion on in-scope firms to apply 

risk-based levels of due diligence. 

Rule 201(a)(xxxi) is proposed to be 

amended to include anti-money 

laundering laws to the list of applicable 

laws that are required to be acceptable 

to the Clearing House in a jurisdiction 

for Clearing Members. 

New Rule 201(a)(xxxiii) is proposed 

to be added to require Clearing Members 

to have adequate policies, procedures, 

systems and controls relating to 

Applicable Laws, including relating to 

anti-money laundering and the 

prevention of financial crime. 

Amendments are proposed to Rules 

202(a)(xii) and 1901(m) to update 

relevant references to relevant laws, 

clarify that the Clearing Member is 

required to make certain representations 

and warranties to the Clearing House 

with respect to the matters in those 

subsections, require the Clearing 

Member to have the necessary authority 

from customers and others to disclose 

the necessary information about 

beneficial owners in order to comply 

with requirements under Applicable 

Laws, and to retain copies of documents 

required to be retained under antimoney laundering laws. 

A similar amendment is proposed to 

Rule 1607(g) to require FCM/BD 

Customers to also obtain the authority 

from ‘‘beneficial owners’’ to disclose 

information to the Clearing Member and 

Clearing House necessary for antimoney laundering due diligence. 

Similar amendments are also 

proposed to the CDS Standard Terms 

3(q), F&O Standard Terms 3(r) and FX 

Standard Terms 3(q) to require 

Customers to obtain the necessary 

authority from beneficial owners to 

make disclosure to the Clearing Member 

and Clearing House necessary for antimoney laundering due diligence. 

A new paragraph 1.1(d) of the 

Delivery Procedures would obligate 

Clearing Members to conduct 

appropriate AML due diligence for any 

transferors/transferees and provide 

relevant documentation to the Clearing 

House and/or Clearing Member. The 

amendments at paragraphs 5.4 and 5.5 

of the Delivery Procedures would clarify 

that transferors and transferees that are 

customers would be bound by the F&O 

Standard Terms, including with respect 

to delivery of information, and also 

clarify that transferors/transferees are 

not customers of the Clearing House for 

purposes of relevant anti-money 

laundering laws and other Applicable 

Law. 

y. Amendments To Reflect Updates to 

ICE Clear Europe Systems 

New definitions of ‘‘ECS’’, ‘‘MFT’’, 

‘‘ICE FEC’’ and ‘‘MPFE’’, reflecting 

various existing ICE Clear Europe 

systems, are proposed in the Delivery 

Procedures so that there is consistent 

usage across the Procedures. 

An amendment is proposed to 

Clearing Procedures paragraph 1.1(a) as 

the referenced PTMS/ACT systems are 

legacy systems no longer used by the 

Clearing House, and have been replaced 

with ICE FEC. 

Amendments are proposed to Clearing 

Procedures paragraphs 1.1(f) and 3.1(c) 

to remove the definitions of MFT and 

ECS as these terms would now be 

defined in the Delivery Procedures. 

Similar amendments are proposed to 

Finance Procedures paragraphs 3.10, 

3.11, 3.21 and 4.5 to ensure that the use 

of defined term ‘‘ECS’’ is consistent. 

z. Clarifications Relating to Negative 

EDSP 

The definition of ‘‘Exchange Delivery 

Settlement Price’’ in Rule 101 would be 

amended to clarify, for the avoidance of 

doubt, that the EDSP can be positive, 

negative or zero. 

Rule 703(b) would be revised to 

clarify the process for payment 

obligations if the EDSP is a negative 

number. 

aa. Clarification to the Finance 

Procedures 

Amendments are proposed to 

paragraph 6.1(i)(ix) of the Finance 

Procedures to clarify that the additional 

margin requirement that applies where 

payment of variation or mark-to-market 

margin is made in a currency other than 

the contractual currency would apply 

on a Currency Holiday. This reflects 

current Clearing House practice. 


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bb. Amendments to Delivery Procedures 

Various changes are proposed to the 

Delivery Procedures to update 

provisions to update various operational 

practices and make other drafting 

improvements. 

It is proposed that a new paragraph 7 

be added to the Delivery Procedures to 

reference the alternative delivery 

procedure for Emission Contracts as set 

out in paragraph A.7 of the Delivery 

Procedures. Subsequent paragraphs 

would be renumbered and conforming 

amendments to cross-references would 

be made. 

Various changes would made 

throughout to remove references to the 

legacy ICE System Crystal, and update 

this to refer to ECS, MFT and ICE FEC 

which are the systems now used by the 

Clearing House. Similarly, changes are 

proposed to delete Delivery 

Documentation Summaries and form 

references where ECS has replaced the 

manual submission of forms to the 

Clearing House. These changes are made 

throughout the Delivery Procedures, 

including in relation to ICE Gasoil 

Futures (in Part B), and ICE Futures UK 

Natural Gas Contracts (in Part D), ICE 

Endex TTF Natural Gas Contracts (in 

Part F), ICE Endex Gaspool Natural Gas 

Contracts (in Part G), ICE Endex NCG 

Natural Gas (in Part H), ICE Endex ZTP 

Natural Gas Contracts (in Part I), ICE 

Deliverable US Emissions Contracts (in 

Part N), Financials & Softs White Sugar 

Contracts (in Part Q), Financials & Softs 

Gilt Contract (in Part U) and Equity 

Futures/Options (in Part Z). 

In Part A (ICE Deliverables EU 

Emissions Contracts), references to 

‘‘Account’’, which is no longer a defined 

term in the Delivery Procedures, would 

be corrected to reference the defined 

term, ‘‘Registry Account’’. The defined 

term, ‘‘Contract Date’’, would be 

amended such that it would no longer 

include a Business Day on which the 

Delivery Period commences for those 

trades executed on a Business Day. 

Section 9.3 would be deleted as 

unnecessary as Part A no longer 

references auction contracts. 

Also in Part A, the procedures 

following the entry into an EADP 

Agreement by a Clearing Member and 

the Clearing House would be amended 

such that the existing Contract would no 

longer be liquidated, but instead dealt 

with in the manner specified in the 

EADP. If the existing Contract were to 

be liquidated under the EADP, this 

would be done on the basis of the 

Exchange Delivery Settlement Price. 

Delivery under the EADP Agreement 

would be subject to the requirements set 

out in the entirety of paragraph 7 

instead of just paragraph 7.3. The 

amendments would provide that the 

Clearing Members and Clearing House 

would have a reasonable period of time 

after the Failed Delivery to enter into an 

EADP Agreement or effect delivery 

under EADP instead of only until the 

close of business on the Business Day 

following the day of the Failed Delivery 

before the Clearing House refers the 

matter to the relevant exchange. 

Pursuant to the amendments, the 

Clearing House would also consider 

what reasonable next steps it should 

take. The Clearing House could decide 

to take one of the listed steps, but 

pursuant to the amendments would not 

be limited by the list and would not be 

required to Invoice Back affected 

Contracts. 

Part M (ICE Endex German Power 

Futures) would be deleted as these 

contracts have been delisted from the 

relevant exchange. 

In Part N, outdated references to ICE 

OTC Contracts would be deleted. 

In Part U, new provisions relating to 

failed settlement and non-delivery of 

securities under a Financials & Softs 

Gilt Contract would be added, including 

as to the steps the Clearing House can 

take to promote settlement in 

accordance with the contract terms and 

the requirements of the CREST central 

securities depository and allocation of 

the costs of such steps to the Clearing 

Member that failed to make delivery. 

These changes are intended to reflect 

existing practices and provide 

consistency with provisions of the 

Delivery Procedures for other contracts, 

including Part Z. 

In Part Z, relating to Equity Futures 

and Options, various updates would be 

made to reference the correct settlement 

facilities and relevant settlement details 

and settlement procedures. The 

treatment of corporate events relating to 

underlying securities would be clarified 

through reference to the relevant 

Exchange corporate action policy. 

Provisions dealing with failed deliveries 

and partial deliveries would also be 

clarified, including as to the steps the 

Clearing House may take to facilitate 

delivery, the rights and responsibilities 

of the buying clearing member with 

respect to onward deliveries under other 

contracts and the allocation of costs to 

clearing members. The buying-in 

timetable would also be clarified. Other 

typographical corrections and similar 

drafting clarifications would be made 

throughout Part Z. 

In the first table in Part FF, with 

respect to the receipt of documents by 

the Clearing House, the statement that 

in the event of non-availability of any of 

the listed delivery documents, Seller 

may substitute a letter of indemnity in 

favor of the Buyer would be removed. 

Various other typographical 

corrections and updates to use of 

defined terms and cross-references are 

made throughout the Delivery 

Procedures. 

cc. Introduction of a Summary 

Disciplinary Process and Other 

Disciplinary Process Updates 

Amendments would be made to the 

Rules to introduce a summary fining 

power for the Clearing House (in line 

with other ICE exchanges for which ICE 

Clear Europe provides clearing services) 

and to make certain minor drafting 

improvements to the disciplinary 

process provisions of the Rules. The 

intention behind these provisions is to 

introduce a more streamlined 

sanctioning process for clear-cut and 

minor rules violations, examples of 

which are cited in the rule itself and 

discussed further below, rather than 

having these subject to the formal and 

more cumbersome proceedings of a 

disciplinary committee. 

In Rule 101, the definition of ‘‘Appeal 

Panel’’ would be amended to include 

reference to the new Summary 

Disciplinary Process. Also in Rule 101, 

a new definition of ‘‘Summary 

Disciplinary Process’’ would be 

introduced. 

A minor amendment is proposed to 

Rule 102(j) to refer to new Rule 1008 in 

the context of disciplinary proceedings 

under the Rules. An amendment is 

proposed to Rule 102(p) to clarify that 

Disciplinary Panels, Summary 

Disciplinary Committees and Appeal 

Panels are also able to exercise 

discretion in the same way as the 

Clearing House. 

Amendments are proposed to 1002(i) 

and 1003(b) to make reference to the 

new Summary Disciplinary Process. In 

1005(c), the word ‘‘exclusive’’ would be 

deleted in relation to discretion, as Rule 

102(p) now governs this matter. 

New Rule 1005(g) would be added to 

make clear that Rule 1005 applies as the 

appeal process for the Summary 

Disciplinary Process. 

Proposed Rule 1008 would be 

introduced to set out the new summary 

disciplinary process against a Clearing 

Member, clarifying the situations in 

which these new Rules apply, the 

sanctioning power of the Summary 

Disciplinary Process and the process by 

which the Summary Disciplinary 

Process would be conducted. The 

Summary Disciplinary Process may be 

applied in relation to: The late filing or 

submission of any document, notice or 

information; the late making of any 

payment; any failure to record a 


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Contract in the correct Account; the late 

making or taking of any delivery; any 

breach of Rule 202(a)(xix) (participation 

in default management simulations, 

new technology testing and other 

exercises); any breach of Rule 503(g) 

(the submission of end-of-day prices 

relating to Sets of CDS Contracts 

required of Clearing Members to aid in 

the establishment of Mark-to-Market 

Prices); any breach of a position limit 

under Part 6 of the Rules; any breach of 

any provision of the Rules or Procedures 

considered by the Clearing House to be 

of a factual nature where the Clearing 

House holds sufficient evidence of such 

facts; any breach of any provision of the 

Rules or Procedures considered by the 

Clearing House to be minor in nature; or 

any breach of the Rules or Procedures 

which the Clearing House considered 

would be appropriately addressed by 

the Summary Disciplinary Process. 

Sanctions pursuant to proposed Rule 

1008 would be limited to the following: 

Issuance of a private warning or 

reprimand naming the Clearing Member 

or a Clearing Member Customer, client 

or Representative; a fine of up to 

£50,000; or any combination of the 

foregoing. 

Proposed Rule 1008 would also 

specify the process of imposing any 

sanction, including the notice process 

by the Clearing House, the opportunity 

for a Clearing Member to appeal, the 

grounds for appeal and the actions the 

appeal panel may take (i.e., to affirm, 

vary or revoke a sanction). It would also 

allow the Clearing House to provide 

further guidance by way of Circular in 

relation to the operation of the 

Summary Disciplinary Process. 

dd. Other Proposed Drafting 

Enhancements and Improvements 

A number of other drafting 

enhancements, clarifications and 

improvements are proposed. 

This includes a number of 

amendments to the definitions in Rule 

101. A new definition of ‘‘Acceptance 

Time’’ would be added. The definition 

is consistent with the definitions 

currently in the CDS Procedures and FX 

Procedures, and would be added to the 

Rules for clarity given that the term is 

used in the Rules, e.g., Rule 1204 and 

also in paragraph 10 of Standard Terms 

annexes. 

In the definition of ‘‘Applicable Law’’, 

a reference to ‘‘the FSMA’’ would be 

added. This important piece of UK 

legislation for CCPs, such as ICE Clear 

Europe, was unintentionally omitted 

from the ‘‘Applicable Law’’ definition. 

In the ‘‘Clearing Organisation’’ 

definition, a reference to ‘‘securities 

clearing agency’’ would be added, to 

ensure that the defined term includes 

securities clearing agencies regulated by 

the SEC. 

In the ‘‘Defaulter’’ definition, 

amendments would clarify that the 

defined term refers to a person in 

respect of whom an Event of Default has 

occurred, rather than a person in respect 

of whom a Default Notice has been 

issued. 

A new definition of ‘‘FINRA’’ 

referencing the U.S. Financial Industry 

Regulatory Authority, the self-regulatory 

body of several US clearing members, 

would be added. The term is currently 

used but in the definition of Regulatory 

Authority, but is not defined. 

The definition of ‘‘Original Margin’’ 

would be amended to clarify that 

buyer’s security, seller’s security and 

delivery margin would all be included. 

The ‘‘Regulatory Authority’’ 

definition would also be updated to 

include reference to ‘‘National Futures 

Association’’, a self-regulatory body in 

the U.S. which supervises several 

clearing members. 

The definition of ‘‘Rule Change’’ 

would be amended expressly to include 

changes to the Contract Terms. Rule 

109(b)(vii) and (viii) and 109(k) already 

assume that the definition ‘‘Rule 

Change’’ covers changes to Contract 

Terms, but the definition itself is 

inconsistently narrower. The cross 

reference to Rule 109 would be clarified 

to reflect that it is not the sole provision 

governing the process for Rule Changes. 

In the definition of ‘‘Segregated 

Customer’’, typographical corrections 

would be made. 

The definitions of ‘‘Transferee’’ and 

‘‘Transferor’’ would be revised to clarify 

that the subject of a transfer or delivery 

is a Deliverable (as defined in the 

Rules). 

Rule 201(a)(v) is proposed to be 

amended to correct an erroneous use of 

the singular ‘‘Contract’’ when the plural 

‘‘Contracts’’ should be used. 

Rules 304(a)(ii)(A), 304(a)(ii)(B) and 

1901(e) would be amended to correctly 

reference the term ‘‘Nominated Bank 

Account’’. 

A clarification is proposed to Rule 

401(g) to reflect that under existing 

practice and as stated and assumed 

elsewhere in the Rules (e.g., Rule 906, 

Clearing Procedures), Clearing Members 

can have multiple Proprietary Position 

Accounts. 

Rule 406(a) would be amended to 

remove an erroneous reference to the 

legacy term ‘‘Clearing Processing 

System’’ and replace it with the correct 

defined term ‘‘ICE System’’. 

Rule 904(b) would be amended to 

correct the use of an incorrect term 

‘‘Market-to-Market Value’’ to the correct 

definition ‘‘Mark-to-Market Price’’. A 

change would similarly be made at Rule 

905(g) to delete a reference to ‘‘Marketto-Market Value’’ as well as the unused 

term Reference Price. 

An amendment is proposed to Rule 

905(b)(ix) to reflect that there may be 

multiple Defaulters rather than just one. 

Amendments to Rule 908(i) would 

correct typographical errors and an 

incorrect cross-reference. 

Rule 908(ii) would be amended to 

reflect that the applicable modifications 

would be set out in the Default Auction 

Procedures as opposed to a Circular. 

In the definition of ‘‘MTM/VM’’ in 

Rule 913(a)(xxxi), amendments would 

be proposed to reflect that MTM/VM is 

transferred to rather than held as a 

deposit by the Clearing House. 

The definition of ‘‘Product 

Termination Amount’’ in Rule 

913(a)(xxxviii) is proposed to be deleted 

as this term is already defined in Rule 

916. 

A minor amendment is proposed to 

Rule 913(a)(lviii) to clarify for the 

avoidance of doubt that amounts 

payable in respect of transfers are 

included in the definition of ‘‘Transfer 

Cost’’. 

A correction would be made to Rule 

915(e) to refer to correctly reference all 

categories of mark-to-market or variation 

margin for all product categories. 

Clarifications would be made to Rule 

916(i) to be clear that Guaranty Fund 

and Assessment contributions due 

pursuant to Rule 916(i) are subject to the 

provisions of Rule 917 (including the 

limitations thereon during a Cooling-off 

Period). 

Rule 918(d) would be clarified to refer 

to any Event of Default rather than 

multiple Events of Default. 

It is proposed to incorporate 

references to Rules 916 and 918 into 

Rule 1102(g) to reflect that these Rules 

are also applicable in certain cases to 

determining the return of Guaranty 

Fund contributions. 

Rule 1901(d)(vi) would be deleted 

because the Council Directive 

referenced by this provision has been 

repealed. Subsequent provisions would 

be renumbered and cross-references in 

other provisions updated. 

A typographical error in the title of 

Part 23 would be corrected. 

Other typographical and similar 

corrections would be made in various 

provisions of the Rules, including 

102(q), 202(a)(xxi), 203(a)(xx) and 

504(c)(vi). 

Part 3(b) of the F&O Standard Terms 

would be amended to more clearly state 

that Customer-CM F&O Transactions 

would arise in accordance with Part 4 

of the Rules. This change would align 


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9 15 U.S.C. 78q–1. 

10 17 CFR 240.17Ad–22. 

11 15 U.S.C. 78q–1(b)(3)(F). 

12 15 U.S.C. 78q–1(b)(3)(F). 

13 15 U.S.C. 78q–1(b)(3)(G). 

14 15 U.S.C. 78q–1(b)(3)(H). 

15 15 U.S.C. 78q–1(b)(3)(G) and (H). 

16 17 CFR 240.17Ad–22. 

17 17 CFR 240.17Ad–22(e)(14) which states that 

‘‘[e]ach covered clearing agency shall establish, 

implement, maintain and enforce written policies 

and procedures reasonably designed to, as 

applicable: (14) Enable, when the covered clearing 

agency provides central counterparty services for 

security-based swaps or engages in activities that 

the Commission has determined to have a more 

complex risk profile, the segregation and portability 

of positions of a participant’s customers and the 

collateral provided to the covered clearing agency 

with respect to those positions and effectively 

protect such positions and related collateral from 

the default or insolvency of that participant.’’ 

18 17 CFR 240.17Ad–22(e)(14). 

19 17 CFR 240.17Ad–22(e)(14). 

20 17 CFR 240.17Ad–22(e)(17)(i) which states that 

‘‘[e]ach covered clearing agency shall establish, 

implement, maintain and enforce written policies 

and procedures reasonably designed to, as 

applicable: (17) Manage the covered clearing 

agency’s operational risks by: (i) Identifying the 

plausible sources of operational risk, both internal 

and external, and mitigating their impact through 

the use of appropriate systems, policies, 

procedures, and controls.’’ 

with the drafting used in the other 

Standard Terms. 

Proposed clarifications would be 

made to Rule 1607(d)(iii), CDS Standard 

Terms 7(iii), F&O Standard Terms 7(iii) 

and FX Standard Terms 7(iii) to refer to 

‘‘Personal Data’’ rather than ‘‘Personal 

Data of its Data Subjects’’. This change 

eliminates unnecessary language. 

A minor change is proposed to 

paragraph 15.4(b) of the Finance 

Procedures to delete an outdated 

reference to the Continuing CDS Rule 

Provisions, which are no longer in 

effect. 

(b) Statutory Basis 

ICE Clear Europe believes that the 

proposed rule changes are consistent 

with the requirements of Section 17A of 

the Act 9 and the regulations thereunder 

applicable to it, including the standards 

under Rule 17Ad–22.10 In particular, 

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

that that rule changes be consistent with 

the prompt and accurate clearance and 

settlement of securities transactions and 

derivative agreements, contracts and 

transactions cleared by ICE Clear 

Europe, the safeguarding of securities 

and funds in the custody or control of 

ICE Clear Europe or for which it is 

responsible, and the protection of 

investors and the public interest.11 As 

discussed herein, the proposed rule 

changes are principally designed to 

clarify various aspects of the Rules and 

Procedures to improve drafting and to 

update the Rules and Procedures to 

ensure consistency with current 

operational practices and processes as 

well as current applicable laws and 

regulations. In ICE Clear Europe’s view, 

these changes would therefore facilitate 

the prompt and accurate clearance and 

settlement of transactions through the 

Clearing House and would generally be 

consistent with the protection of 

investors and the public interest. 

Furthermore, ensuring that the Rules 

and Procedures are clear, including with 

respect to matters such as portability, 

will enhance the safeguarding of 

securities and funds in the custody or 

control of the Clearing House or for 

which it is responsible. As such, ICE 

Clear Europe believes the amendments 

are consistent with the requirements of 

Section 17A(b)(3)(F) of the Act.12

Further, Section 17A(b)(3)(G) of the 

Act 13 requires that clearing agency rules 

provide that its participants shall be 

appropriately disciplined for violations 

of the rules including by fine, censure 

or any other fitting sanction. Section 

17A(b)(3)(H) of the Act 14 requires that 

a clearing agency provide a fair 

procedure with respect to the 

disciplining of participants. The 

addition of the new Summary 

Disciplinary Process would enable the 

Clearing House to impose appropriate 

fines or to censure appropriate parties in 

the event of a rule violation. It would 

also specify the process of imposing any 

sanction, including the notice process 

by the Clearing House, the opportunity 

for a Clearing Member to appeal, the 

grounds for appeal and the actions the 

appeal panel may take (i.e., to affirm, 

vary or revoke a sanction). As such, by 

enabling appropriate disciplining of 

participants and providing a fair 

procedure relating to this process, ICE 

Clear Europe believes the amendments 

are consistent with the requirements of 

Section 17A(b)(3)(G) and (H) of the 

Act.15

The amendments are also consistent 

with the relevant specific requirements 

of Rule 17Ad–22,16 as set forth in the 

following discussion: 

(i) Portability 

Rule 17Ad–22(e)(14) 17 requires that 

clearing agencies maintain policies and 

procedures which enable the 

segregation and portability of customer’s 

positions and collateral. The 

amendments provide greater clarity 

with respect to providing porting 

instructions. The amendments would 

remove the existing process whereby 

Non-FCM/BD Clearing Members may 

deliver a ‘‘Default Portability 

Preference’’, with advance porting 

information, to the Clearing House, an 

option that was rarely used and that has 

proven to be impractical and has been 

superseded by requirements under 

EMIR that post-default porting notices 

be served prior to porting, which 

limited the value of instructions 

provided prior to default. The 

amendments will also clarify the 

process for providing post-default 

porting notices. The amendments will 

thus facilitate the process of post-default 

porting in a manner consistent with 

applicable regulations, including the 

requirements of Rule 17Ad–22(e)(14),18

while avoiding the concerns created by 

the existing process. 

Further, proposed amendments to 

Rule 209(d) would facilitate the process 

of porting positions, pre-default, in the 

context of a corporate group 

reorganization where a new Clearing 

Member that is an Affiliate will be 

receiving the terminating Clearing 

Member’s Open Contract Positions, and 

thereby facilitate the Clearing House’s 

compliance with requirements of Rule 

17Ad–22(e)(14) 19 to enable portability 

of customer positions and collateral. 

(ii) Operational Risk 

Rule 17Ad–22(e)(17)(i) 20 requires that 

a clearing agency manage its operational 

risks through appropriate policies and 

procedures. The amendments to the 

notices provisions would facilitate 

electronic notice, including for default 

notices under Rule 901 and other 

notices more generally under Rule 113. 

These clarifications better ensure 

appropriate and timely notices will be 

provided, reducing operational risks 

relating to timely receipt of notices. 

Further, proposed amendments to 

Rule 202(a)(xxii) would extend the 

requirement for Clearing Members to 

have competent persons accessible to 

the Clearing House to also include the 

two hours prior to the start of the 

business day, to ensure that operational 

policies are consistent with consistent 

with operational practices and ensures 

that staff are available to process and 

deal with questions in relation to 

morning margin calls. The amendment 

would thus reduce the operational risks 

of not being able to address such calls 

in a timely manner. 

The proposed changes at Rule 301(o) 

enhance the Clearing House’s ability to 

request information when needed on 

account balances, including for the 

purpose of calling on available cash 

where the Clearing Member has failed to 

meet a payment obligation, and are 

expected to reduce operational risks that 

may arise where the Clearing House 

may not otherwise have access to such 

information. 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices 29621 

21 17 CFR 240.17Ad–22(e)(1) which states that 

‘‘[e]ach covered clearing agency shall establish, 

implement, maintain and enforce written policies 

and procedures reasonably designed to, as 

applicable: (1) Provide for a well-founded, clear, 

transparent, and enforceable legal basis for each 

aspect of its activities in all relevant jurisdictions.’’ 

22 17 CFR 240.17Ad–22(e)(1). 

23 17 CFR 240.17Ad–22(e)(6). 

24As discussed above, the amendments are also 

consistent with the approach provided for in 

Exchange Act Release No. 34–88665 (File No. SR– 

ICEEU–2020–003) (Apr. 16, 2020), 85 FR 22892 

(Apr. 23, 2020). 

25 17 CFR 240.17Ad–22(e)(6). 

26 17 CFR 240.17Ad–22(e)(10). 

27 17 CFR 240.17Ad–22(e)(10). 

28 17 CFR 240.17Ad–22(e)(10). 

29 17 CFR 240.17Ad–22(e)(2)(i) which states that 

‘‘[e]ach covered clearing agency shall establish, 

implement, maintain and enforce written policies 

and procedures reasonably designed to, as 

applicable: (2) Provide for governance arrangements 

that: (i) Are clear and transparent;’’. 

(iii) Legal Basis 

Rule 17Ad–22(e)(1) 21 requires that a 

clearing agency provide for a wellfounded legal basis for each aspect of its 

activities in all relevant jurisdictions. 

The amendments to Rule 201(a)(ix) 

would clarify that the Clearing House 

may require that potential Clearing 

Members enter into additional annexes/ 

agreements to the Clearing Membership 

Agreement in accordance with Rule 

201(b) in order to be, and remain, 

eligible for Clearing Membership. The 

Clearing House would expect to impose 

such requirements where necessary to 

comply with or address post-Brexit local 

law group structuring issues, including 

as applicable to its Clearing Members 

located in certain EU member states. 

This change would clarify the legal 

basis under the Rules for the Clearing 

House to require additional 

documentation to be executed, where 

necessary. 

The proposed amendments to Rule 

1901(b)(xv), Rule 1901(d)(ix), Rule 

201(a)(xx) and Section 10 of the F&O 

Standard Terms, which would remove 

the requirement for Clearing Members, 

Customer and Sponsored Principals to 

be ‘‘eligible contract participants’’ if 

they are solely engaging in F&O 

Contracts, is intended to remove an 

unnecessary requirement for such 

Contracts while ensuring that the 

membership requirements remain 

compliant with applicable US laws. 

The amendments to paragraph 3.5(a) 

of the Membership Procedures to lower 

the threshold at which the Clearing 

House will require a written 

undertaking from a Clearing Member to 

not repay subordinated loans will align 

the Rules more closely with Basel III 

requirements applicable to Clearing 

Members. 

The various amendments to address 

applicable anti-money laundering laws 

in the EU and UK, including to address 

requirements to provide necessary 

information for due diligence checks, 

are intended to facilitate compliance by 

the Clearing House, Clearing Members, 

Sponsored Principals and Customers 

with applicable anti-money laundering 

laws. Similarly, amendments to the 

Delivery Procedures would obligate 

Clearing Members to conduct 

appropriate anti-money laundering 

AML due diligence for any transferors/ 

transferees and provide relevant 

documentation to the Clearing House 

and/or Clearing Member. These 

requirements support the well-founded 

basis for the Clearing House’s operation 

under applicable anti-money laundering 

laws. 

Overall, these changes, as well the 

numerous other changes to improve the 

drafting and clarity of the Rules and 

Procedures, are generally consistent 

with establishing a well-founded legal 

framework for the Clearing House’s 

operations, within the meaning of Rule 

17Ad–22(e)(1).22

(iv) Margin 

Rule 17Ad–22(e)(6) require that a 

covered clearing agency establish a riskbased margin system that, among other 

matters, ‘‘[m]arks participant positions 

to market and collects margin, including 

variation margin . . ., at least daily.’’ 23

Rule 1603(c) would be amended to 

clarify that only ‘‘original’’ or ‘‘initial’’ 

types of Margin payments would be 

provided in the form of Pledged 

Collateral, and that such collateral 

excludes Variation Margin, Mark-toMarket Margin and FX Mark-to-Market 

Margin which is provided to or by the 

Clearing House by outright transfer of 

cash as a settlement payment. This 

amendment is consistent with the 

treatment of variation and mark-tomarket margin as settlement 

payments,24 as provided elsewhere in 

the Rules and Procedures, and in ICE 

Clear Europe’s view is consistent with 

the margin framework requirements 

under Rule 17Ad–22(e)(6).25

(v) Settlement and Physical Delivery 

Rule 17Ad–22(e)(10) requires that a 

covered clearing agency ‘‘establish and 

maintain transparent written standards 

that state its obligations with respect to 

the delivery of physical instruments, 

and establish and maintain operational 

practices that identify, monitor, and 

manage the risks associated with such 

physical deliveries.’’ 26 The proposed 

amendment to the definition of 

‘‘Exchange Delivery Settlement Price’’ 

in the Rules will clarify for the 

avoidance of doubt that the EDSP can be 

positive, negative or zero. The 

amendments will also clarify the 

procedure for payment of the EDSP in 

a physical settlement where the EDSP is 

negative. The amendments will thus 

clarify and enhance the settlement 

process in such case, consistent with 

Rule 17Ad–22(e)(10).27

Proposed amendments to the Delivery 

Procedures will clarify other aspects of 

the physical settlement process. 

Proposed new paragraph 7 to the 

Delivery Procedures will contemplate 

an alternative delivery procedure for 

certain Emission Contracts in the event 

of a failed delivery. In Part U, new 

provisions relating to failed settlement 

and non-delivery of securities under a 

Financials & Softs Gilt Contract would 

be added, including as to the steps the 

Clearing House can take to promote 

settlement in accordance with the 

contract terms and the requirements of 

the CREST central securities depository 

and allocation of the costs of such steps 

to the Clearing Member that failed to 

make delivery. Updates to Part Z would 

be made to reference the correct 

settlement facilities and relevant 

settlement details and settlement 

procedures. Part Z provisions dealing 

with failed deliveries and partial 

deliveries would also be clarified. 

Throughout the Delivery Procedures, 

the delivery documentation summaries, 

timetables and other relevant provisions 

will be updated and clarified to reflect 

current operational processes and 

Clearing House systems and to remove 

outdated references and language. 

Taken together, these changes will 

establish and update transparent written 

standards associated with physical 

deliveries, consistent with the 

requirements of Rule 17Ad–22(e)(10).28

(vi) Governance Arrangements 

Rule 17Ad–22(e)(2)(i) 29 requires that 

a clearing agency have governance 

arrangements that are clear and 

transparent. The proposed amendments 

to Rule 916(d) would change ‘‘Risk 

Committee’’ to ‘‘relevant product risk 

committee’’ to reflect the different 

product risk committees addressing 

topics specific to F&O and CDS 

Contracts. Similar changes would be 

made to references to relevant risk 

committees in certain Procedures, as 

discussed above. In ICE Clear Europe’s 

view, these amendments would clarify 

governance descriptions in the Rules 

and Procedures to more clearly and 

accurately reflect established 

arrangements, and are thus consistent 

with Rule 17Ad–22(e)(2)(i). 


jbell on DSKJLSW7X2PROD with NOTICES
29622 Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices 

30 17 CFR 240.17Ad–22(e)(18). 

31 17 CFR 240.17Ad–22(e)(13). 

32 17 CFR 240.17Ad–22(e)(13). 

33 ICE Clear Europe Circular C21/013 (Feb. 2, 

2021). 

(vii) Membership Criteria 

Rule 17Ad–22(e)(18) requires covered 

clearing agencies to establish criteria for 

participation which ensures participants 

have sufficient financial resources and 

robust operational capacity to meet 

obligations arising from participation 

and to monitor compliance.30 Proposed 

amendments would extend the hours 

during which staff are available to 

process and deal with questions in 

relation to morning margin calls, which 

strengthen operational capacity to meet 

obligations arising from participation. 

The amendments would also clarify 

certain requirements as to member 

Capital, including to reference updated 

capital standards and to limit the use of 

certain subordinated debt as capital. 

These amendments are intended to be 

consistent with the requirements of the 

Basel III capital framework applicable to 

most Clearing Members. In ICE Clear 

Europe view, the amendments 

accordingly set appropriate Capital 

requirements for Clearing Members, 

consistent with the requirements of Rule 

17Ad–22(e)(18). 

(viii) Default Management 

Rule 17Ad–22(e)(13) 31 requires a 

covered clearing agency to ensure that it 

‘‘has the authority and operational 

capacity to take timely action to contain 

losses and liquidity demands’’ in the 

case of default. 

The amendments would, as noted 

above, clarify certain aspects of the 

Clearing House’s default management 

procedures, including the use of postdefault porting notices and the manner 

of delivering default notices. The 

amendments would clarify the ability of 

the Clearing House to use hedging postdefault, and clarify certain aspects of the 

definition of Event of Default, 

particularly in connection with defaults 

of affiliated Clearing Members. A 

number of other drafting improvements 

would be made in the Part 9 of the 

Rules, as discussed above. In ICE Clear 

Europe’s view, these amendments will 

generally enhance the Clearing House’s 

default management procedures and 

facilitate its ability to take timely action 

in the case of a default to contain losses, 

consistent with the requirements of Rule 

17Ad–22(e)(13).32

(B) Clearing Agency’s Statement on 

Burden on Competition 

ICE Clear Europe does not believe the 

proposed amendments would have any 

impact, or impose any burden, on 

competition not necessary or 

appropriate in furtherance of the 

purpose of the Act. The amendments are 

generally intended to improve drafting 

clarity in the Rules and Procedures and 

update various provisions to refer to 

current laws and operational and other 

processes, including with respect to 

such matters as portability, settlement 

and delivery procedures, updated 

system references, anti-money 

laundering procedures and similar 

matters. Overall, ICE Clear Europe does 

not expect the amendments would 

impose any material new obligations on 

Clearing Member. Further, ICE Clear 

Europe does not expect that the 

proposed changes will adversely affect 

access to clearing or the ability of 

Clearing Members, their customers or 

other market participants to continue to 

clear contracts. ICE Clear Europe also 

does not believe the amendments would 

materially affect the cost of clearing or 

otherwise limit market participants’ 

choices for selecting clearing services. 

Accordingly, ICE Clear Europe does not 

believe the amendments would impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purpose of the Act. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants or Others 

ICE Clear Europe conducted a 

consultation with respect to the 

proposed amendments to the Rules set 

forth herein.33 No written comments 

relating to the proposed amendments 

have been received by ICE Clear Europe. 

ICE Clear Europe will notify the 

Commission of any comments received 

with respect to the proposed rule 

change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml) or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

ICEEU–2021–010 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ICEEU–2021–010. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filings will also be available for 

inspection and copying at the principal 

office of ICE Clear Europe and on ICE 

Clear Europe’s website at https://

www.theice.com/clear-europe/ 

regulation. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal identifying 

information from comment submissions. 

You should submit only information 

that you wish to make available 

publicly. All submissions should refer 

to File Number SR–ICEEU–2021–010 

and should be submitted on or before 

June 23, 2021. 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices 29623 

34 17 CFR 200.30–3(a)(12). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–11529 Filed 6–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[License No. 02/02–0695] 

QS Capital Strategies II, L.P.; Notice 

Seeking Exemption Under Section 312 

of the Small Business Investment Act, 

Conflicts of Interest 

Notice is hereby given that QS Capital 

Strategies II, L.P., 527 Madison Avenue, 

11th Floor, New York, NY 10022, a 

Federal Licensee under the Small 

Business Investment Act of 1958, as 

amended (‘‘the Act’’), in connection 

with the financing of a small concerns, 

has sought an exemption under Section 

312 of the Act and Section 107.730, 

Financings which Constitute Conflicts 

of Interest of the Small Business 

Administration (‘‘SBA’’) Rules and 

Regulations (13 CFR 107.730). QS 

Capital Strategies II, L.P. is proposing to 

provide financing to BrandMuscle, Inc. 

to support the Company’s growth. 

The proposed transaction is brought 

within the purview of § 107.730 of the 

Regulations because QS Capital 

Strategies, L.P., an Associate of QS 

Capital Strategies II, L.P., by virtue of 

Common Control as defined at § 107.50, 

holds a debt investment in 

BrandMuscle, Inc. and the proposed 

transaction would discharge an 

obligation to an Associate. 

Therefore, the proposed transaction is 

considered self-deal pursuant to 13 CFR 

107.730 and requires a regulatory 

exemption. Notice is hereby given that 

any interested person may submit 

written comments on the transaction 

within fifteen days of the date of this 

publication to Associate Administrator 

for Investment, U.S. Small Business 

Administration, 409 Third Street SW, 

Washington, DC 20416. 

Thomas Morris, 

Acting Associate Administrator, Director, 

Office of SBIC Liquidation, Office of 

Investment and Innovation. 

[FR Doc. 2021–11503 Filed 6–1–21; 8:45 am] 

BILLING CODE P 

SURFACE TRANSPORTATION BOARD 

[Docket No. FD 36519] 

Gulf & Ship Island Railroad LLC— 

Lease and Operation Exemption—Rail 

Line of Harrison County Development 

Commission at or Near Gulfport, 

Harrison County, MS 

Gulf & Ship Island Railroad LLC 

(GSIR), a noncarrier, has filed a verified 

notice of exemption under 49 CFR 

1150.31 to lease from the Harrison 

County Development Commission, 

acting with the Harrison County Board 

of Supervisors (the County), and operate 

approximately five miles of industrial 

lead tracks known as the Seaway Lead, 

extending between a point 

approximately 800 feet east of U.S. 

Highway 49 on the Seaway Lead and the 

end of the Seaway Lead at Bernard 

Bayou Industrial Park, at or near 

Gulfport, in Harrison County, Miss. (the 

Line). 

This transaction is related to a 

concurrently filed verified notice of 

exemption in Chicago, Rock Island & 

Pacific Railroad LLC—Continuance in 

Control Exemption—Gulf & Ship Island 

Railroad LLC, Docket No. FD 36420, in 

which Chicago Rock Island & Pacific 

LLC seeks to continue in control of GSIR 

upon GSIR’s becoming a Class III rail 

carrier. 

GSIR states that it has reached an 

agreement with the County pursuant to 

which GSIR will lease the Line from the 

County and operate it. GSIR further 

states that the proposed transaction does 

not involve any provision or agreement 

that would limit GSIR’s future 

interchange of traffic on the Line with 

a third-party connecting carrier. 

GSIR certifies that its projected 

annual revenues as a result of this 

transaction will not result in GSIR’s 

becoming a Class II or Class I rail 

carrier. GSIR further certifies that its 

projected annual revenue will not 

exceed $5 million. 

The transaction may be consummated 

on or after June 16, 2021, the effective 

date of the exemption (30 days after the 

verified notice was filed). 

If the verified notice contains false or 

misleading information, the exemption 

is void ab initio. Petitions to revoke the 

exemption under 49 U.S.C. 10502(d) 

may be filed at any time. The filing of 

a petition to revoke will not 

automatically stay the effectiveness of 

the exemption. Petitions for stay must 

be filed no later than June 9, 2021 (at 

least seven days before the exemption 

becomes effective). 

All pleadings, referring to Docket No. 

FD 36519, should be filed with the 

Surface Transportation Board via efiling on the Board’s website. In 

addition, a copy of each pleading must 

be served on GSIR’s representative, 

Thomas F. McFarland, Thomas F. 

McFarland, P.C., 2230 Marston Lane, 

Flossmoor, IL 60422–1336. 

According to GSIR, this action is 

categorically excluded from 

environmental review under 49 CFR 

1105.6(c) and from historic reporting 

requirements under 49 CFR 1105.8(b). 

Board decisions and notices are 

available at www.stb.gov. 

Decided: May 27, 2021. 

By the Board, Scott M. Zimmerman, Acting 

Director, Office of Proceedings. 

Brendetta Jones, 

Clearance Clerk. 

[FR Doc. 2021–11589 Filed 6–1–21; 8:45 am] 

BILLING CODE 4915–01–P 

SURFACE TRANSPORTATION BOARD 

[Docket No. FD 36472; Docket No. FD 36472 

(Sub-No. 1); Docket No. FD 36472 (Sub-No. 

2); Docket No. FD 36472 (Sub-No. 3); Docket 

No. FD 36472 (Sub-No. 4); Docket No. FD 

36472 (Sub-No. 5); Docket No. AB 1312X] 

CSX Corporation and CSX 

Transportation, Inc., et al.—Control 

and Merger—Pan Am Systems, Inc., 

Pan Am Railways, Inc., Boston and 

Maine Corporation, Maine Central 

Railroad Company, Northern Railroad, 

Pan Am Southern LLC, Portland 

Terminal Company, Springfield 

Terminal Railway Company, Stony 

Brook Railroad Company, and Vermont 

& Massachusetts Railroad Company; 

Norfolk Southern Railway—Trackage 

Rights Exemption—CSX 

Transportation, Inc.; Norfolk Southern 

Railway—Trackage Rights 

Exemption—Providence & Worcester 

Railroad; Norfolk Southern Railway— 

Trackage Rights Exemption—Boston & 

Maine Corp.; Norfolk Southern 

Railway—Trackage Rights 

Exemption—Pan Am Southern LLC; 

Pittsburg & Shawmut Railroad— 

Operation Exemption—Pan Am 

Southern LLC; SMS Rail Lines of New 

York, LLC—Discontinuance 

Exemption—in Albany County, N.Y. 

AGENCY: Surface Transportation Board. 

ACTION: Decision No. 3 in STB Finance 

Docket No. 36472 et al.; notice of 

rejection of application. 

SUMMARY: The Board rejects as 

incomplete an application seeking 

approval for CSX Corporation (CSXC), 

CSX Transportation, Inc. (CSXT), and 

747 Merger Sub 2, Inc., to acquire 

control of seven rail carriers owned by 

Pan Am Systems, Inc. (Systems), and 

Pan Am Railways, Inc. (PAR), and to 


jbell on DSKJLSW7X2PROD with NOTICES