Notice2025-06412
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Modifications to Fee Schedule To Introduce a Client Volume Incentive Program
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
April 16, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 72 (Wednesday, April 16, 2025)</title>
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[Federal Register Volume 90, Number 72 (Wednesday, April 16, 2025)]
[Notices]
[Pages 16036-16038]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-06412]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102809; File No. SR-ICC-2025-004]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Modifications to Fee Schedule To Introduce a Client Volume Incentive
Program
April 10, 2025.
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 March 28, 2025, ICE Clear Credit LLC (``ICE Clear Credit'' or
``ICC'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared primarily by ICC. ICC has
designated this proposal for immediate effectiveness pursuant to
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f) thereunder.\4\ 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).
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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 schedule to introduce a Client Volume Incentive Program.
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 schedule to
introduce a Client Volume Incentive Program. ICC maintains a client fee
schedule \5\ that is publicly available on its website, which ICC
proposes to update in connection with the proposed Client Volume
Incentive Program. Currently, clearing fees applicable to clients of
Clearing Participants are charged in accordance with the product,
amount and currency set out in the client fee schedule and subject to
any incentive programs or fee discounts described in the fee schedule.
The proposed changes to the client fee schedule add a description of
the proposed Client Volume Incentive Program, and such proposed changes
are set forth in Exhibit 5. ICC proposes to make such changes effective
following the applicable regulatory review or approval processes. The
proposed changes are described in detail as follows:
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\5\ Client fee details available at: <a href="https://www.theice.com/publicdocs/clear_credit/ICE_Clear_Credit_Fees.pdf">https://www.theice.com/publicdocs/clear_credit/ICE_Clear_Credit_Fees.pdf</a>. As specified, all
fees are charged directly to a client's Clearing Participant.
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Under the amended client fee schedule, the Client Volume Incentive
Program will apply automatically to all clients of Clearing
Participants, without further action by clients or Clearing
Participants, and provide a tiered discount schedule based on client
fees billed during the calendar year. Specifically, for any client with
annual billed fees across all ICC credit default swap (``CDS'')
instrument categories (i.e., index CDS, single name CDS, and index
option CDS) that exceed U.S. dollar (``USD'') equivalent of $1 million,
such client will be entitled to a fee discount as follows: (i) for
billed annual fees greater than $1 million USD equivalent and less than
or equal to $6.4 million USD equivalent, a progressive discount from 1%
to 90%: the discount percentage increases by 1% for each $60,000 in
billed client fees; \6\ and (ii) for billed annual fees greater than
$6.4 million USD equivalent, a 90% discount. For purposes of
calculating
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annual fees to determine the discount level, the fees of affiliated
clients managed by one and only one specific asset manager may be
aggregated (such that all such clients will be entitled to the same
discount percentage). Such discount will be applied in the form of a
fee rebate paid by ICC. The Client Volume Incentive Program applies to
client clearing activity only, and Clearing Participants are not
eligible to participant in the program.
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\6\ As an example, a client that is billed a total of
$1,120,000.00 in fees would be entitled to a 1% discount for the
first $60,000 in fees over $1 million (or $600) and a 2% discount
for the second $60,000 in fees over $1 million (or $1,200), for a
total discount of $1,800.
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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 \7\ 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 \8\ and
Rule 19b-4(f)(2) \9\ 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),\10\ 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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\7\ 15 U.S.C. 78q-1.
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
\10\ 15 U.S.C. 78q-1(b)(3)(D).
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ICC believes that the proposed volume discount in client fees have
been set at an appropriate level. In determining the appropriate
discount level and program structure, ICC took into account factors
such as client clearing volume, related revenue, costs and expenses,
and the goal of increasing market participation in the clearing
service, including the expected impacts of different fee levels. In
ICC's view, its client fees, after taking into account the discount
under the proposed incentive program, will be reasonable and
appropriate for its business as the discounts take into account
anticipated volumes, costs and expenses, and revenues under each
contract type, and they consider current and past market activity as
well as anticipated market activity with respect to clearing CDS
contracts at ICC. The Client Volume Incentive Program is designed to
encourage the clearing of contracts at ICC by clients while properly
compensating ICC for the risks, costs and expenses of clearing CDS
contracts.
Moreover, the proposed discount will be available to all clients
clearing contracts at ICC, based on their clearing activity. The Client
Volume Incentive Program under the amended client fee schedule
automatically, and without further action by clients or Clearing
Participants, applies to all clients. ICC's fee schedules, including
the proposed incentive program, will continue to be transparent and to
apply equally to market participants clearing indexes, single names,
and index option CDS contracts 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.\11\ ICC therefore believes that the proposed
rule change is consistent with the requirements of Section 17A of the
Act \12\ and the regulations thereunder applicable to it and is
appropriately filed pursuant to Section 19(b)(3)(A) of the Act \13\ and
paragraph (f)(2) of Rule 19b-4 \14\ thereunder.
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\11\ 15 U.S.C. 78q-1(b)(3)(D).
\12\ 15 U.S.C. 78q-1.
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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 client fee schedule to
introduce a Client Volume Incentive Program for clearing all categories
of CDS contracts at ICC and will be available to all clients based on
their clearing activity. The implementation of such changes does not
preclude other market participants from offering similar incentive
programs. Moreover, ICC does not believe that the amendments would
adversely affect the cost of clearing for clients, the ability of
market participants to access clearing services, or the market for
cleared services generally. 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
From Members, Participants or Others
Written comments relating to the proposed rule change have not been
solicited or received. ICE Clear Credit will notify the Commission of
any written comments received by ICE Clear Credit.
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 \16\
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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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules/regulations/self-regulatory-organization-rulemaking</a>);
or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#a9dbdcc5cc84cac6c4c4ccc7dddae9daccca87cec6df"><span class="__cf_email__" data-cfemail="a7d5d2cbc28ac4c8cacac2c9d3d4e7d4c2c489c0c8d1">[email protected]</span></a>. Please include
file number SR-ICC-2025-004 on the subject line.
Paper Comments
Send paper comments in triplicate to Vanessa Countryman, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to file number SR-ICC-2025-004. 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 (<a href="https://www.sec.gov/rules/regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules/regulations/self-regulatory-organization-rulemaking</a>). 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
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a.m. and 3 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 <a href="https://www.ice.com/clear-credit/regulation">https://www.ice.com/clear-credit/regulation</a>.
Do not include personal identifiable information in submissions;
you should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to file number SR-ICC-2025-004 and should
be submitted on or before May 7, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-06412 Filed 4-15-25; 8:45 am]
BILLING CODE 8011-01-P
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