Notice2022-11678
Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change Relating to the ICC Governance Playbook
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 1, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 105 (Wednesday, June 1, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 105 (Wednesday, June 1, 2022)]
[Notices]
[Pages 33220-33222]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-11678]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94980; File No. SR-ICC-2022-003]
Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change Relating to the ICC Governance Playbook
May 25, 2022.
I. Introduction
On April 4, 2022, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (the ``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'')
\1\ and Rule 19b-4,\2\ a proposed rule change to revise the ICC
Governance Playbook.\3\ The proposed rule change was published for
comment in the Federal Register on April 12, 2022.\4\ The Commission
did not receive comments regarding the proposed rule change. For the
reasons discussed below, the Commission is approving the proposed rule
change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Capitalized terms used but not defined herein have the
meanings specified in the Rules and Governance Playbook.
\4\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Filing of Proposed Rule Change Relating to the ICC Governance
Playbook; Exchange Act Release No. 34-94616 (Apr. 6, 2022), 87 FR
21687 (Apr. 12, 2022) (SR-ICC-2022-003) (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
A. Background
The ICC Governance Playbook consolidates governance arrangements
set forth in ICC's Rules, operating agreement, and other ICC policies
and procedures. The Governance Playbook contains information regarding
the governance structure at ICC, including the Board, committees, and
management.
B. Changes to the Governance Playbook
The proposal would make clarifications and updates regarding the
roles and responsibilities of the ICC Legal Department and internal
committees involved in the governance process.\5\ Specifically, the
proposal would amend Section I of the Governance Playbook, which
describes the purpose of the document, to state that the ICC Legal
Department will review and amend the Governance Playbook as needed when
there are circumstances that may impact the governance procedures of
ICC, such as
[[Page 33221]]
regulatory changes or changes in ICC's structure or practices.
---------------------------------------------------------------------------
\5\ The description that follows is substantially excerpted from
the Notice, 87 FR at 21687-21688.
---------------------------------------------------------------------------
The proposal would also amend Section III.H, which contains
information on disclosures that ICC is required to make to regulators,
Clearing Participants, and the public. ICC maintains a public
Disclosure Framework that describes its material rules, policies, and
procedures regarding its legal, governance, risk management, and
operating framework. The proposal would add additional details on the
process of updating this Disclosure Framework. Specifically, the
proposed rule changes would amend this section to state that the Legal
Department would determine when changes to the Disclosure Framework are
necessary and that it will update the document every two years or more
frequently as necessary. Additionally, the proposal would revise
Section III.H to include regulations applicable to Disclosure Framework
updates, a related change to spell out an abbreviated term for
consistency, and to define what constitutes a material change that
would require a Disclosure Framework update. Finally, the proposal
would revise this section to incorporate procedures for reporting
Disclosure Framework changes pursuant to applicable regulations.
The proposal would also amend Section IV of the Governance
Playbook, which discusses various committees. Specifically, the
proposal would update the description of the membership composition of
the Steering Committee by including amended titles and positions in
order to be consistent with the membership composition set out in the
Steering Committee's charter, and removing outdated information
regarding the Steering Committee's membership from the Governance
Playbook. The Steering Committee continues to review, approve and
oversee the implementation of CDS product launches and initiatives.
Additionally, the proposal would add a section discussing the CDS
Service Review committee, including its description, membership
composition, meeting frequency, and relevant documents. According to
ICC, this is not a new committee. Its purpose is to discuss and review
the status of active ICC initiatives to report on the delivery process
and technology delivery-related activities (e.g., development,
testing), and its proposed addition to the Governance Playbook is for
transparency and completeness in order to ensure that the Governance
Playbook includes all groups relevant to ICC's governance process.\6\
---------------------------------------------------------------------------
\6\ See Notice 87 FR at 21688.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act directs the Commission to approve a
proposed rule change of a self-regulatory organization if it finds that
such proposed rule change is consistent with the requirements of the
Act and the rules and regulations thereunder applicable to such
organization.\7\ For the reasons discussed below, the Commission finds
that the proposed rule change is consistent with Section 17A(b)(3)(F)
of the Act \8\ and Rules 17Ad-22(e)(2)(i) and Rule 17Ad-
22(e)(23)(v).\9\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(2)(C).
\8\ 15 U.S.C. 78q-1(b)(3)(F).
\9\ 17 CFR 240.17Ad-22(e)(2)(i) and 17 CFR 240.17Ad-
22(e)(23)(v).
---------------------------------------------------------------------------
A. Consistency With Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of ICC be designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions.\10\
Based on its review of the record, and for the reasons discussed below,
the Commission believes the proposed changes to the Governance Playbook
are consistent with the promotion of the prompt and accurate clearance
and settlement of transactions at ICC.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
As noted above, the proposed rule change would make clarifications
and updates regarding the roles and responsibilities of the ICC Legal
Department and internal committees involved in its governance
processes. Specifically, the proposal would amend Section I of the
Governance Playbook, which describes the purpose of the document, to
state that ICC's Legal Department will review and amend the Governance
Playbook as needed when there are circumstances that may impact the
governance procedures of ICC, such as regulatory changes or changes in
ICC's structure or practices. Further, as noted above, the proposed
changes would amend Section III.H to include additional details on the
process of updating the public Disclosure Framework and cite related
regulatory requirements for doing so.
The Commission believes that the changes to sections I and III.H
would enhance the effectiveness of ICC's governance documents by
ensuring that users of the Governance Playbook are aware of who is
responsible for reviewing and amending the Governance Playbook and the
circumstances necessitating such amendments. Likewise, the Commission
believes that by including additional details on the process of
updating the Disclosure Framework along with citations to related
regulatory requirements for doing so, the proposed rule change would
enhance the ability of users of the Governance Playbook to carry out
their duties. The Commission believes that this in turn will provide
clear governance arrangements that support ICC's compliance with
relevant regulations and procedures, thereby helping ICC maintain
effective risk management processes to promote the prompt and accurate
clearance of settlement and securities transactions and derivative
agreements, contracts and transactions cleared by ICC.
Additionally, as noted above, the proposal would update the
membership composition of the Steering Committee by including amended
titles and new positions and removing outdated information regarding
the Steering Committee's membership composition from the Governance
Playbook. The Commission believes that these updates help the Board, as
well as ICC's management, employees, and members, to be updated on the
roles and responsibilities of ICC officers, committees and
subcommittees. As noted above, the proposal would also incorporate into
the Governance Playbook information (its description, membership
composition, meeting frequency, and relevant documents) about a current
committee, the CDS Service Review committee. The Commission believes
that by including information about an existing governing committee in
the Governance Playbook, the proposal would support ICC's ability to
carry out duties related to active ICC initiatives. Taken together, the
Commission believes that these changes to committee information could
support ICC's ability to manage product launches and other active
initiatives and therefore facilitate ICC's ability to provide clearing
services that are supported by clear risk management processes that
promote the prompt and accurate clearance of settlement and securities
transactions and derivative agreements, contracts and transactions
cleared by ICC.
For the reasons stated above, the Commission therefore believes
that the
[[Page 33222]]
proposed rule change is consistent with Section 17A(b)(3)(F) of the
Act.\11\
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
B. Consistency With Rule 17Ad-22(e)(2)(i)
Rules 17Ad-22(e)(2)(i) requires each covered clearing agency to
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to, as applicable, provide for
governance arrangements that are clear and transparent.\12\ As
described above, the proposed changes more clearly set out the
responsibilities of the Legal Department and include updates with
respect to relevant internal individuals and committees involved in the
governance process. The Commission believes that by clearly describing
the responsibilities of the Legal Department, committees,
subcommittees, and their participants as noted above, these proposed
changes provide for clear and transparent governance arrangements to
those serving on those committees and utilizing the Governance
Playbook. For the reasons stated above, the Commission believes the
proposed rule changes are consistent with Rules 17Ad-22(e)(2)(i).\13\
---------------------------------------------------------------------------
\12\ 17 CFR 240.17Ad-22(e)(2)(i).
\13\ Id.
---------------------------------------------------------------------------
C. Consistency With Rule 17Ad-22(e)(23)(v) Under the Act
Rule 17Ad-22(e)(23)(v) under the Act require each covered clearing
agency to establish, implement, maintain and enforce written policies
and procedures reasonably designed to provide for an update of the
public disclosure every two years, or more frequently following changes
to the covered clearing agency's system or the environment in which it
operates to the extent necessary, to ensure statements previously
provided remain accurate in all material respects.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 240.17Ad-22(e)(23)(v).
---------------------------------------------------------------------------
As noted above, the proposed changes assign responsibility,
reference applicable regulations, and include additional information
and procedures regarding maintaining and updating the Disclosure
Framework in accordance with relevant regulations. Specifically, the
proposed changes would update the process by which the ICC Legal
Department will update the public Disclosure Framework every two years
or more frequently following material changes to ICC's systems or
environment in which it operates, including updates for major decisions
of the Board with a broad market impact. The Commission believes that
these aspects of the Governance Playbook provide further clarity
regarding ICC's policies and procedures for making a comprehensive
public disclosure that is updated every two years or more frequently
following material changes.
For these reasons, the Commission believes that the proposed rule
change is consistent with Rule 17Ad-22(e)(23)(v) under the Act.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 240.17Ad-22(e)(23)(v).
---------------------------------------------------------------------------
IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act,
and in particular, with the requirements of Section 17A(b)(3)(F) of the
Act \16\ and Rules 17Ad-22(e)(2)(i) and 17Ad-22(e)(23)(v)
thereunder.\17\
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78q-1(b)(3)(F).
\17\ 17 CFR 240.17Ad-22(e)(2)(i) and (e)(23)(v).
---------------------------------------------------------------------------
It is therefore ordered pursuant to Section 19(b)(2) of the Act
\18\ that the proposed rule change (SR-ICC-2022-003), be, and hereby
is, approved.\19\
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78s(b)(2).
\19\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-11678 Filed 5-31-22; 8:45 am]
BILLING CODE 8011-01-P
</pre></body>
</html>Indexed from Federal Register on June 1, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.