Document ID: SEC-2022-0300-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Credit, LLC
Posted Date: 2022-03-04T05:00Z

[Federal Register Volume 87, Number 43 (Friday, March 4, 2022)]
[Notices]
[Pages 12508-12510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04567]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94330; File No. SR-ICC-2022-001]

Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
ICC's Fee Schedules

February 28, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on 
February 17, 2022, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission the proposed rule change, as 
described in Items I, II and III below, which Items have been prepared 
primarily by ICC. ICC filed the proposed rule change pursuant to 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ 
such that the proposed rule change was immediately effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The principal purpose of the proposed rule change is to modify 
ICC's fee schedules to implement reduced fees for credit default index 
swaptions (``Index Options'') through calendar year 2022. These 
revisions do not require any changes to the ICC Clearing Rules.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, ICC included statements 
concerning the purpose of and basis for the proposed rule change, 
security-based swap submission, or advance notice and discussed any 
comments it received on the proposed rule change, security-based swap 
submission, or advance notice. The text of these statements may be 
examined at the places specified in Item IV below. ICC has prepared 
summaries, set forth in sections (A), (B), and (C) below, of the most 
significant aspects of these statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

(a) Purpose
    The proposed changes are intended to modify ICC's fee schedules to 
implement reduced fees for Index Options through calendar year 2022.\5\ 
ICC maintains a Clearing Participant (``CP'') fee schedule \6\ and 
client fee schedule \7\ (collectively, the ``fee schedules'') that are 
publicly available on its website, which ICC proposes to update. 
Clearing fees are due by CPs and clients in accordance with the 
product, amount and currency set out in the fee schedules and subject 
to any incentive program described in the fee schedules. The proposed 
changes to the fee schedules are set forth in Exhibit 5A and Exhibit 5B 
and described in detail as follows. ICC proposes to make such changes 
effective March 1, 2022 (the ``Effective Date''), subject to the 
completion of any applicable regulatory review process.
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    \5\ Pursuant to an Index Option, one party (the ``Swaption 
Buyer'') has the right (but
     not the obligation) to cause the other party (the ``Swaption 
Seller'') to enter into an index credit default swap transaction at 
a pre-determined strike price on a specified expiration date on 
specified terms. In the case of Index Options that may be cleared by 
ICC, the underlying index credit default swap is limited to certain 
CDX and iTraxx index credit default swaps that are accepted for 
clearing by ICC, and which would be automatically cleared by ICC 
upon exercise of the Index Option by the Swaption Buyer in 
accordance with its terms.
    \6\ CP fee details available at: https://www.theice.com/publicdocs/clear_credit/ICE_Clear_Credit_Fees_Clearing_Participant.pdf.
    \7\ Client fee details available at: https://www.theice.com/publicdocs/clear_credit/ICE_Clear_Credit_Fees.pdf. As specified, all 
fees are charged directly to a client's CP.
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    The amended CP fee schedule would reduce Index Option fees to $1/
million or [euro]1/million through calendar year 2022. Under the 
current CP fee schedule, Index Option fees are $3/million or [euro]3/
million, subject to an incentive program that provides a tiered 
discount schedule based on U.S. Dollar equivalent, non-discounted Index 
Option fees billed since the start of the year. ICC also offered 
certain other incentive programs that discounted Index Option fees as 
part of the CP fee schedule, which expired at the end of calendar year 
2021 and are removed from Exhibit 5A.\8\ Under the proposed changes, in 
addition to updating the fee table, ICC would include a footnote to 
indicate that the listed fees of $1/million or [euro]1/million are 
applicable from the Effective Date through calendar year 2022 and 
reflect a discount from ICC's regular Index Option fees of $3/million 
or [euro]3/million. On the first business day of 2023, ICC would remove 
this discount and the listed fees would revert to ICC's regular Index 
Option fees on this schedule dated January 2023.
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    \8\ A description of these incentive programs is included in 
prior filings. SEC Release No. 34-90524 (November 27, 2020) 
(notice), 85 FR 78157 (December 3, 2020) (SR-ICC-2020-013); SEC 
Release No. 34-91922 (May 18, 2021) (notice), 86 FR 27938 (May 24, 
2021) (SR-ICC-2021-014).

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[[Page 12509]]

    The amended client fee schedule would also reduce Index Option fees 
to $1/million or [euro]1/million through calendar year 2022. Under the 
current client fee schedule, Index Option fees are $4/million or 
[euro]4/million. ICC also offered an incentive program that discounted 
Index Option fees as part of the client fee schedule, which expired at 
the end of calendar year 2021 and is removed from Exhibit 5B.\9\ Under 
the proposed changes, in addition to updating the fee table, ICC would 
indicate in a footnote that the listed fees of $1/million or [euro]1/
million are applicable from the Effective Date through calendar year 
2022 and reflect a discount from ICC's regular Index Option fees of $4/
million or [euro]4/million. On the first business day of 2023, ICC 
would remove this discount and the listed fees would revert to ICC's 
regular Index Option fees on this schedule dated January 2023.
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    \9\ A description of this incentive program is included in a 
prior filing. SEC Release No. 34-91922 (May 18, 2021) (notice), 86 
FR 27938 (May 24, 2021) (SR ICC-2021-014).
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(b) Statutory Basis
    ICC believes that the proposed rule change is consistent with the 
requirements of the Act, including Section 17A of the Act \10\ and the 
regulations thereunder applicable to it. More specifically, the 
proposed rule change establishes or changes a member due, fee or other 
charge imposed by ICC under Section 19(b)(3)(A)(ii) of the Act \11\ and 
Rule 19b-4(f)(2) \12\ thereunder. ICC believes the proposed rule change 
is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to ICC, in particular, to Section 
17A(b)(3)(D),\13\ which requires that the rules of the clearing agency 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its participants.
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    \10\ 15 U.S.C. 78q-1.
    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
    \13\ 15 U.S.C. 78q-1(b)(3)(D).
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    ICC believes that the proposed discounts in the fee schedules have 
been set at an appropriate level. In determining the appropriate 
discount level, ICC considered factors such as volume, revenue, and 
market participation in the clearing service, including based on 
different fee levels. ICC also considered costs and expenses in 
offering clearing of Index Options, taking into account the investments 
that ICC has made in clearing such products and the level of investment 
and development needed for this clearing service at this time. In ICC's 
view, the fees are reasonable as the discounts correspond with 
anticipated volumes, costs and expenses, and revenues, and they 
consider current and past market activity as well as anticipated market 
activity with respect to clearing Index Options at ICC.\14\ 
Furthermore, the proposed discounts are in line with past Index Option 
incentive programs that ICC offered, which similarly temporarily 
reduced Index Option fees without any further action required by CPs or 
clients. Under the proposed changes, the same discounted rate would 
apply to both CPs and clients. These reduced fees are designed to 
incentivize the clearing of Index Options by CPs and clients to grow 
this clearing service.
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    \14\ Supporting detail and additional data, including clearing 
statistics for Index Options is included in confidential Exhibit 3.
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    Moreover, the proposed fee changes will apply equally to all market 
participants clearing Index Options. The reduced fees for Index Options 
through calendar year 2022 apply to all CPs and clients. ICC's fee 
schedules will continue to be transparent and to apply equally to 
market participants clearing indexes, single names, and Index Options 
at ICC. Therefore, the proposed rule change provides for the equitable 
allocation of reasonable dues, fees and other charges among 
participants, within the meaning of Section 17A(b)(3)(D) of the 
Act.\15\ ICC therefore believes that the proposed rule change is 
consistent with the requirements of Section 17A of the Act \16\ and the 
regulations thereunder applicable to it and is appropriately filed 
pursuant to Section 19(b)(3)(A) of the Act \17\ and paragraph (f)(2) of 
Rule 19b-4 \18\ thereunder.
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    \15\ 15 U.S.C. 78q-1(b)(3)(D).
    \16\ 15 U.S.C. 78q-1.
    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(2).
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(B) Clearing Agency's Statement on Burden on Competition

    ICC does not believe the proposed rule change would have any 
impact, or impose any burden, on competition not necessary or 
appropriate in furtherance of the purpose of the Act. As discussed 
above, the proposed changes modify ICC's fee schedules to temporarily 
reduce fees for Index Options and will apply uniformly across all 
market participants. The implementation of such changes does not 
preclude other market participants from offering such instruments for 
clearing or offering incentive programs. Moreover, ICC does not believe 
that the amendments would adversely affect the ability of market 
participants to access clearing services. Accordingly, ICC does not 
believe the amendments 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

    Written comments relating to the proposed rule change have not been 
solicited or received. ICC will notify the Commission of any written 
comments received by ICC.

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 \19\ and paragraph (f) of Rule 19b-4 \20\ 
thereunder. 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.
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(2).
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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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-ICC-2022-001 on the subject line.

Paper Comments

    Send paper comments in triplicate to Secretary, Securities and 
Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-ICC-2022-001. 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 (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule

[[Page 12510]]

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 Credit and on ICE Clear Credit's website 
at https://www.theice.com/clear-credit/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-ICC-2022-001 and should be 
submitted on or before March 25, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-04567 Filed 3-3-22; 8:45 am]
BILLING CODE 8011-01-P