Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2157 

15 15 U.S.C. 78s(b)(3)(A). 

16 17 CFR 240.19b–4(f). 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange, NASDAQ OMX BX, Inc. (‘‘BX’’), 

and The NASDAQ Stock Market (‘‘LLC’’) are selfregulatory organizations (‘‘SROs’’) that are wholly 

owned subsidiaries of The NASDAQ OMX Group, 

Inc. (‘‘NASDAQ OMX’’). The Exchange, NOM (a 

facility of the Exchange [sic]), BX, BX Options (a 

facility of BX), and PSX (a facility of Phlx) (together 

with the Exchange known as the ‘‘NASDAQ 

Markets’’), are independently filing proposals to 

conform their respective Extranet Access Fee rules 

to NASDAQ Rule 7025. 

4Proposed Section XIII is listed in the Table of 

Contents (Preface). 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

Members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 15 and paragraph (f) of Rule 

19b–4 thereunder.16 At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

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– 

EDGA–2014–36 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–EDGA–2014–36. 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 Web site (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 Web site 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 the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–EDGA– 

2014–36, and should be submitted on or 

before February 5, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00527 Filed 1–14–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74022; File No. SR–Phlx– 

2015–04] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Regarding the 

Extranet Access Fee 

January 9, 2015. 

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 January 5, 

2015, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to add new 

Section XIII (Extranet Access Fee) to the 

NASDAQ OMX PHLX LLC Pricing 

Schedule (‘‘Pricing Schedule’’), which 

includes description about the 

applicability of the Extranet Access Fee. 

This will conform the Exchange’s 

Pricing Schedule to that of other 

markets. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

nasdaqomxphlx.cchwallstreet.com/, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposal is to add 

new Section XIII (Extranet Access Fee) 

to the Pricing Schedule, which includes 

description about the applicability of 

the Extranet Access Fee. This will 

conform the Exchange’s Pricing 

Schedule to that of other markets.3

Specifically, the Exchange proposes to 

establish the Extranet Access Fee in 

proposed new Section XIII of the Pricing 

Schedule and indicate that certain nonExchange Customer Premises 

Equipment (‘‘CPE’’) Products shall be 

assessed a monthly access fee of $1,000 

per CPE.4 The Exchange also proposes 

to conform the Extranet Access Fee to 

that of another market, specifically 

NASDAQ Rule 7025, by also indicating 

that if an extranet provider uses 


rljohnson on DSK3VPTVN1PROD with NOTICES
2158 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

5As defined in proposed Section XIII of the 

Pricing Schedule, a ‘‘Customer Premises Equipment 

Configuration’’ means any line, circuit, router 

package, or other technical configuration used by an 

extranet provider to provide a direct access 

connection to Phlx market data feeds to a 

recipient’s site. 

6See Securities Exchange Act Release Nos. 50483 

(October 1, 2004), 69 FR 60448 (October 8, 2004) 

(SR–NASD–2004–118) (establishing the Extranet 

Access Fee on NASDAQ); and 71199 (December 30, 

2013), 79 FR 686 (January 6, 2014) (SR–NASD [sic]– 

2013–159) (notice of filing and immediate 

effectiveness increasing the Extranet Access Fee to 

$1,000). 

7See Securities Exchange Act Release No. 71236 

(January 6, 2014), 79 FR 1906 (January 10, 2014) 

(SR–Phlx–2014–01) (notice of filing and immediate 

effectiveness establishing the Extranet Access Fee 

on PSX, and describing that no fee is charged at the 

time of the filing). The Extranet Access Fee was also 

established on BX. See Securities Exchange Act 

Release Nos. 59615 (March 20, 2009), 74 FR 14604 

(March 31, 2009) (SR–BX–2009–005) (establishing 

the Extranet Access Fee on BX); and 71841 (April 

1, 2014), 79 FR 19129 (April 7, 2014) (SR–BX– 

2014–015) (notice of filing and immediate 

effectiveness and describing that the Extranet 

Access Fee is $750). 

8As noted, Phlx and other NASDAQ Markets are 

independently filing proposals to conform their 

respective Extranet Access Fee. 

9However, the proposed Section XIII language 

does not, because it deals with options, indicate 

that consolidated data includes data disseminated 

by the UTP SIP (as noted in NASDAQ Rule 7025). 

10The Exchange notes that while Section XIII of 

the Pricing Schedule and NASDAQ Rule 7025 each 

contain some language particular to the relevant 

exchange, with this proposal the language of the 

two rules is substantively identical. The Exchange 

notes that the statement that Extranet providers 

shall be assessed a total monthly access fee of 

$1,000 per recipient CPE Configuration is not in 

NASDAQ Rule 7025. 

11The Exchange is filing to assess the $1,000 

Extranet Access Fee on PSX, which is currently 

free. 

12The Exchange will inform extranet providers of 

their reporting responsibilities via its public Web 

site. This will include, as an example, reporting 

CPE usage. 

multiple CPE Configurations 5 to 

provide market data feeds to any 

recipient the monthly fee shall apply to 

each such CPE Configuration; and that 

no Extranet Access Fee will be charged 

for connectivity to market data feeds 

containing only consolidated data. This 

proposal establishes the Extranet Access 

Fee in proposed new Section XIII of the 

Pricing Schedule that is exactly like the 

equivalent fee in NASDAQ Rule 7025. 

The Extranet Access Fee was 

introduced a decade ago on NASDAQ 

Rule 7025 as an equity fee.6 The 

Extranet Access Fee was introduced 

about a year ago on PSX, a facility of the 

Exchange, in Section VIII of the Pricing 

Schedule.7 By this proposal, the 

Exchange not only introduces the 

Extranet Access Fee on Phlx but also 

normalizes its cost and structure to that 

of the equivalent decade-old NASDAQ 

fee.8

Proposed Section XIII of the Pricing 

Schedule indicates the same fee as 

NASDAQ Rule 7025, namely $1,000 per 

CPE Configuration, and adds verbatim 

language from NASDAQ Rule 7025 that 

explains the application of the fee.9 As 

proposed, Section XIII of the Pricing 

Schedule will read as follows: ‘‘Extranet 

providers that establish a connection 

with Phlx to offer direct access 

connectivity to market data feeds shall 

be assessed a monthly access fee of 

$1,000 per recipient Customer Premises 

Equipment (‘‘CPE’’) Configuration. If an 

extranet provider uses multiple CPE 

Configurations to provide market data 

feeds to any recipient, the monthly fee 

shall apply to each such CPE 

Configuration. For purposes of this 

Section XIII, the term ‘‘Customer 

Premises Equipment Configuration’’ 

shall mean any line, circuit, router 

package, or other technical 

configuration used by an extranet 

provider to provide a direct access 

connection to Phlx market data feeds to 

a recipient’s site. No extranet access fee 

will be charged for connectivity to 

market data feeds containing only 

consolidated data. Extranet providers 

that establish a connection with Phlx 

pursuant to this Section XIII of the 

Pricing Schedule as well as a 

connection with PSX pursuant to 

Section VIII of the Pricing Schedule 

shall be assessed a total monthly access 

fee of $1,000 per recipient CPE 

Configuration.’’ The proposal conforms 

Section XIII of the Pricing Schedule to 

NASDAQ Rule 7025, and makes them 

substantively identical.10 The proposal 

also makes it clear that if an extranet 

provider establishes an Extranet 

connection on PSX as well as on Phlx, 

the extranet provider will not need to 

pay a double $1,000 monthly access fee 

per CPE, but rather only one total 

monthly access fee of $1,000 per CPE. 

In addition, as discussed, there is an 

equity market and an options market 

under the Phlx SRO license. This 

proposal currently applies the Extranet 

Access Fee located in Section VIII of the 

Pricing Schedule to members 

transacting an equity business (PSX) 

and would also apply to members 

transacting an options business as 

proposed in Section XIII of the Pricing 

Schedule, conforming these rules with 

NASDAQ Rule 7025.11

The proposed Extranet Access Fee 

will, as on NASDAQ, be used to help 

recoup the Exchange’s costs associated 

with maintaining multiple extranet 

connections with multiple providers. 

These costs include those associated 

with overhead and technology 

infrastructure, administrative, 

maintenance and operational costs. 

Since the inception of Extranet Access 

there have been numerous network 

infrastructure improvements and 

administrative controls enacted. 

Additionally, the Exchange has 

implemented automated retransmission 

facilities for most of its data clients that 

benefit extranet clients by reducing 

operational costs associated with 

retransmissions. Also, the Exchange is 

currently undergoing a technology 

refresh of the its options trading system, 

which will deploy state-of-the-art 

hardware and software architecture to 

achieve a more efficient and more 

robust infrastructure in support of the 

growing needs of our customers. 

As the number of extranets has 

increased, the management of the 

downstream customers has expanded 

and the Exchange has had to ensure 

appropriate reporting and review 

processes, which has resulted in a 

greater cost burden on the Exchange 

over time. The proposed fee will also 

help to ensure that the Exchange is 

better able to closely review reports and 

uncover reporting errors via audits thus 

minimizing reporting issues.12 The 

network infrastructure has increased in 

order to keep pace with the increased 

number of products, which, in turn, has 

caused an increased administrative 

burden and higher operational costs 

associated with delivery via extranets. 

Thus, subsequent to the proposal 

extranet providers that establish a 

connection with the Exchange to offer 

direct access connectivity to market data 

feeds shall be assessed a monthly access 

fee of $1,000 per CPE Configuration. If, 

as discussed below, an extranet provider 

uses multiple CPE Configurations to 

provide market data feeds to any 

recipient, the monthly fee shall apply to 

each such CPE Configuration. 

The Exchange proposes two new 

descriptions to conform the language of 

Section XIII of the Pricing Schedule to 

that of NASDAQ Rule 7025. 

Specifically, the Exchange proposes to 

indicate that if an extranet provider uses 

multiple CPE Configurations to provide 

market data feeds to any recipient, the 

monthly fee shall apply to each such 

CPE Configuration; and that no extranet 

access fee will be charged for 

connectivity to market data feeds 

containing only consolidated data. 

These proposed descriptions should 

serve to reduce any confusion as to the 

applicability of the Extranet Access Fee. 

Moreover, the descriptions would make 

the Exchange’s Extranet Access Fee in 

Section XIII work the same as the 

equivalent fee in NASDAQ Rule 7025, 

and complete the effort to conform the 

two rules. 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2159 

13 15 U.S.C. 78f. 

14 15 U.S.C. 78f(b)(4). 

15For example, NASDAQ Technology Services, a 

subsidiary of the NASDAQ, pays the applicable 

fee(s) to the Exchange for services covered under 

the Extranet Access Fee. 16 15 U.S.C. 78s(b)(3)(A)(ii). 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,13 in general, and 

with Section 6(b)(4) of the Act,14 in 

particular, in that it provides for the 

equitable allocation of reasonable dues, 

fees and other charges among members 

and issuers and other persons using any 

facility or system which the Exchange 

operates or controls. 

The Exchange believes that its 

proposal to add the Extranet Access Fee 

in Section XIII of the Pricing Schedule, 

and to describe the applicability of the 

Extranet Access Fee and thereby 

conform the fee with the equivalent fee 

on NASDAQ, is consistent with the Act. 

All similarly situated extranet 

providers, including the Exchange 

operating its own extranet, that establish 

an extranet connection with the 

Exchange to access market data feeds 

from the Exchange are subject to the 

same fee structure.15 The fee will help 

the Exchange to offset some of the rising 

overhead and technology infrastructure, 

administrative, maintenance and 

operational costs it incurs in support of 

the service. 

If such costs are covered, the service 

may provide the Exchange with a profit. 

As such, the Exchange believes that the 

proposed fee is reasonable and notes 

that this proposal conforms similarlysituated Extranet Access Fee rules on 

Phlx options, PSX equities, and 

NASDAQ. The extranet costs are 

separate and different from the 

colocation facility that is able to recoup 

these fees by charging for servers within 

the associated data centers. 

Additionally, the Exchange believes that 

the proposed change is equitable and 

not unreasonably discriminatory. The 

monthly fee is assessed uniformly to all 

extranet providers that establish a 

connection with the Exchange to offer 

direct access connectivity to market data 

feeds, and is the same for all at $1,000 

per recipient CPE Configuration. Thus, 

any burden arising from the fees is 

necessary in the interest of promoting 

the equitable allocation of a reasonable 

fee. Moreover, firms make decisions on 

how much and what types of data to 

consume on the basis of the total cost of 

interacting with the Exchange or other 

markets and, of course, the Extranet 

Access Fee is but one factor in a total 

platform analysis. 

Additionally, proposed Section XIII of 

the Pricing Schedule contains 

description stating that if an extranet 

provider uses multiple CPE 

Configurations to provide market data 

feeds to any recipient, the monthly fee 

shall apply to each such CPE 

Configuration; and that no Extranet 

Access Fee will be charged for 

connectivity to market data feeds 

containing only consolidated data. This 

description should serve to reduce any 

confusion as to the applicability of this 

fee. 

The proposal provides for the 

equitable allocation of reasonable dues, 

fees and other charges among members 

and issuers and other persons using any 

facility or system which the Exchange 

operates or controls, and is consistent 

with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

The proposed fees are applied 

uniformly among extranet providers, 

which are not compelled to establish a 

connection with the Exchange to offer 

access connectivity to market data feeds. 

For these reasons, any burden arising 

from the fees is necessary in the interest 

of promoting the equitable allocation of 

a reasonable fee. Additionally, firms 

make decisions on how much and what 

types of data to consume on the basis of 

the total cost of interacting with the 

Exchange or other exchanges and, of 

course, the Extranet Access Fee is but 

one factor in a total platform analysis. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Pursuant to Section 19(b)(3)(A)(ii) of 

the Act,16 the Exchange has designated 

this proposal as establishing or changing 

a due, fee, or other charge imposed by 

the self-regulatory organization on any 

person, whether or not the person is a 

member of the self-regulatory 

organization, which renders the 

proposed rule change effective upon 

filing. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or 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– 

Phlx–2015–04 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–Phlx–2015–04. 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 Web site (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 Web site 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 

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 


rljohnson on DSK3VPTVN1PROD with NOTICES
2160 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–73645 

(Nov. 18, 2014), 79 FR 70251 (Nov. 25, 2014) (SR– 

ICEEU–2014–22). 

4Regulation (EU) No 648/2012 of the European 

Parliament and of the Council of 4 July 2012 on 

OTC derivatives, central counterparties and trade 

repositories. 

available publicly. All submissions 

should refer to File Number SR–Phlx– 

2015–04, and should be submitted on or 

before February 5, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00524 Filed 1–14–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74026; File No. SR–ICEEU– 

2014–22] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Order Approving 

Proposed Rule Change Relating to ICE 

Clear Europe Board Risk Committee 

January 9, 2015. 

I. Introduction 

On November 10, 2014, ICE Clear 

Europe Limited (‘‘ICE Clear Europe’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–ICEEU–2014– 

22 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

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

The proposed rule change was 

published for comment in the Federal 

Register on November 25, 2014.3 The 

Commission did not receive comments 

on the proposed rule change. For the 

reasons discussed below, the 

Commission is approving the proposed 

rule change. 

II. Description of the Proposed Rule 

Change 

ICE Clear Europe is proposing this 

change to establish a risk committee (the 

‘‘Board Risk Committee’’), as described 

in the ICE Clear Europe Board Risk 

Committee Composition and Terms of 

Reference (‘‘Terms of Reference’’), 

which will advise the ICE Clear Europe 

Board (the ‘‘Board’’) on certain clearing 

house-wide risk management matters. 

The establishment of the Board Risk 

Committee is required under Article 28 

of the European Market Infrastructure 

Regulation (‘‘EMIR’’),4 which will apply 

to ICE Clear Europe as an authorized 

central counterparty. 

Pursuant to the Terms of Reference, 

the role of the Board Risk Committee, 

which will meet at least quarterly and 

report directly to the Board, will be to 

advise the Board so the Board can 

ensure that ICE Clear Europe (i) 

implements and maintains agreed risk 

management procedures, processes, and 

controls, (ii) provides appropriate access 

to its clearing services, and (iii) 

appropriately considers the interests of 

non-clearing members, including with 

respect to account segregation and 

collateral protection. ICE Clear Europe 

states that the Board Risk Committee’s 

activities will relate to all product 

categories cleared at ICE Clear Europe, 

and that they are in addition to ICE 

Clear Europe’s existing product-specific 

risk committees (F&O, CDS and FX). 

Pursuant to its Terms of Reference, 

the Board Risk Committee’s 

responsibilities will include receiving 

and reviewing all recommendations 

from each of the product-specific risk 

committees, reviewing business risk 

mitigation procedures and controls at 

least annually, and overseeing all risks 

facing ICE Clear Europe, including 

counterparty credit risk and noncounterparty credit risks, such as 

operational and liquidity risks. In 

addition, the Terms of Reference 

provide that the Board Risk Committee 

will advise the Board regarding any 

arrangements that may materially 

impact the risk management of ICE 

Clear Europe, such as a significant 

change in its criteria for accepting 

clearing members, clearing in new 

markets, or outsourcing of certain 

functions. 

In accordance with its Terms of 

Reference, the Board Risk Committee 

will be provided with results and 

analysis of back-testing, sensitivity 

testing, stress testing, and reverse stress 

testing for any review of margin models, 

methodologies, and/or the liquidity risk 

management framework. The Board Risk 

Committee’s Terms of Reference also 

provide that the Board Risk Committee 

will consider other issues that may be 

referred to it by the Board and/or 

executive, including the exercise of 

discretion regarding recovery 

arrangements under the Rules. Further, 

the Terms of Reference provide that the 

Board Risk Committee may obtain 

external legal or other independent 

advice and secure the attendance of 

third parties with relevant experience 

and expertise. The Terms of Reference, 

however, clarify that the Board Risk 

Committee’s advice is not required for 

the daily operations of ICE Clear 

Europe. 

The Terms of Reference provide that 

the Board Risk Committee will be 

composed of at least two, and up to 

four, Clearing Member representatives 

and at least two, and up to four, 

customer representatives, in each case 

appointed by the Board Risk Committee 

Chairman following consideration by 

the ICE Clear Europe Nominations 

Committee. Pursuant to the Board Risk 

Committee composition requirements as 

described in the Terms of Reference, the 

Board Risk Committee Chairman will be 

an independent non-executive director 

of ICE Clear Europe appointed by the 

Board and will be a full voting member 

of the committee. In addition, the Terms 

of Reference provide that any member of 

the Board Risk Committee may be 

removed by the Board without cause, 

and that the Board Risk Committee 

composition will be reviewed annually 

to determine whether the committee has 

appropriate representation of Clearing 

Members, customers and independent 

non-executive directors, and 

appropriate representation of expertise 

and experience in relevant risk 

disciplines, including market, credit 

and operational risk. Based on this 

review, the Chairman may, pursuant to 

the Terms of Reference, request the 

resignation of one or more committee 

members and/or appoint one or more 

committee members to achieve such 

appropriate representation. 

Pursuant to the Terms of Reference, 

ICE Clear Europe’s Chief Risk Officer, 

President, and other appropriate staff 

members will attend Board Risk 

Committee meetings in a non-voting 

capacity. Additionally, the Terms of 

Reference provide that the chairs of any 

groups or committees involved in 

developing risk policies and a 

representative from each of the markets 

cleared by ICE Clear Europe will have 

a right to attend, but not vote, at Board 

Risk Committee meetings, and that the 

Board Risk Committee may invite 

external independent experts to attend 

meetings in a non-voting capacity. The 

Terms of Reference requires that a 

quorum will be a minimum of four 

members, one of whom must be a 

customer representative and one of 

whom must be a Clearing Member 

representative, and that the Board Risk 

Committee Chairman will count toward 

the quorum. The Terms of Reference 

stipulates that each Board Risk 

Committee member will have one vote 

and Board Risk Committee decisions 

will be made by a simple majority, 

provided that if the committee is evenly 

divided, the Chairman may cast a 

deciding vote (in addition to the 


rljohnson on DSK3VPTVN1PROD with NOTICES