Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the ICE Clear Credit Counterparty Monitoring Procedures

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Published

June 20, 2025

Issuing agencies

Securities and Exchange Commission

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<title>Federal Register, Volume 90 Issue 117 (Friday, June 20, 2025)</title>
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[Federal Register Volume 90, Number 117 (Friday, June 20, 2025)]
[Notices]
[Pages 26399-26401]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-11301]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103273; File No. SR-ICC-2025-009]

Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to the ICE Clear Credit Counterparty Monitoring Procedures

June 16, 2025.
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
June 5, 2025, ICE Clear Credit LLC (``ICE Clear Credit'' or ``ICC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II and III below, which
Items have been primarily prepared by ICC. ICC filed the proposed rule
change pursuant to Section 19(b)(3)(A) \3\ of the Act and paragraph
(f)(1) of Rule 19b-4 \4\ thereunder, 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)(1).
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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 revise the
ICC Counterparty Monitoring Procedures (the ``Counterparty Monitoring
Procedures''). The proposed revisions to the Counterparty Monitoring
Procedures consist of clarification or clean-up changes that ensure
consistency with current practices and related policies and procedures.
These revisions do not require any changes to the ICC Clearing Rules
(the ``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
ICC proposes to update the Counterparty Monitoring Procedures. The
performance of ICC is dependent on the financial stability of its
Clearing Participants and financial services providers.\5\ ICC monitors
these counterparty relationships to ensure its stability and has
documented its policies and practices for monitoring such counterparty
relationships in the Counterparty Monitoring Procedures. ICC proposes
revisions to the Counterparty Monitoring Procedures to make
clarification or clean-up changes to ensure consistency with current
practices and related policies and procedures. ICC believes that such
revisions will facilitate the prompt and accurate clearance and
settlement of securities transactions and derivative agreements,
contracts, and transactions for which it is responsible. ICC proposes
to make such changes effective following Commission approval of the
proposed rule change. The proposed revisions are described in detail as
follows.
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\5\ Financial service providers are the entities to which ICC
has actual or potential credit exposure. See Exchange Act Release
No. 93705 (Dec. 2, 2021), 86 FR 69699 (Dec. 8, 2021) (File No. SR-
ICC-2021-021).
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ICC proposes a clarification to Section 2.E. of the Counterparty
Monitoring Procedures, which describes the responsibilities of the ICC
Operations Department. The ICC Operations Department monitors ICC
counterparty performance, including the operational and settlement
process. Currently, operational detail supporting the clearing cycle is
monitored by ICC Operations Department staff. ICC proposes to clarify
that operational detail supporting the clearing cycle is monitored by
ICC Operations Department staff daily. Such amendment clarifies
existing operational practices set out in the document and does not
represent a change in practice. As stated in Section 2.E., the ICC
Treasury Department monitors money movements between CPs and ICC.\6\
The ICC Operations Department currently monitors such operational
details supporting the clearing cycle on a daily basis.
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\6\ See Exchange Act Release No. 93705 (Dec. 2, 2021), 86 FR
69699 (Dec. 8, 2021) (SR-ICC-2021-021) (requiring that ``the
Operations Department would be responsible for monitoring the
operational and settlement process performance of all
counterparties, and the Treasury Department would be responsible for
monitoring the money movements between Clearing Participants and
ICC.'').
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Further, ICC proposes to remove an outdated reference in Section
3.A. of the Counterparty Monitoring Procedures, which sets out
standards for counterparty relationships. Section 3.A. of the
Counterparty Monitoring Procedures currently provides that decisions
with respect to applications for Clearing House membership are made by
the Board following consultation with the ICC Risk Management
Subcommittee and the ICC Risk Committee. ICC proposes to remove the
reference to the ICC Risk Management Subcommittee, such that decisions
with respect to applications for Clearing House membership will be made
by the Board following consultation with the ICC Risk Committee. ICC
previously filed a proposed rule change to eliminate references to the
ICC Risk Management Subcommittee from its Rules and related policies
and procedures.\7\ ICC proposes a clean-up change to also remove an
outdated reference to the ICC Risk Management Subcommittee from the
Counterparty Monitoring Procedures, as the ICC Risk Management
Subcommittee is no longer in existence. The proposed removal of the
outdated reference would ensure the Counterparty Monitoring Procedures
remain up-to-date and consistent with the ICC Rules and other policies
and procedures. Lastly, ICC proposes to update Section 11. `Revision
History' to include the proposed changes.
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\7\ The ICC Risk Management Subcommittee was tasked with
consulting with the Board and the ICC Risk Committee as to eligible
products, standards for Clearing Participants and approvals or
denials of Clearing Participant applications. In determining to
remove the ICC Risk Management Subcommittee, ICC noted that it was
unnecessary and the relevant consultative and advisory functions
could be performed (and in fact were typically performed as a matter
of practice) by the ICC Risk Committee. Moreover, ICC's newly
established Risk Advisory Working Group supports these consultative
and advisory functions. See Exchange Act Release Nos. 100876 (August
29, 2024), 89 FR 72538 (September 5, 2024) (File No. SR-ICC-2024-
009); 101382 (Oct. 18, 2024), 89 FR 84979 (Oct. 24, 2024) (File No.
SR-ICC-2024-009).

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[[Page 26400]]

(b) Statutory Basis
ICC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \8\ and the regulations
thereunder applicable to it, including the applicable standards under
Rule 17Ad-22.\9\ In particular, Section 17A(b)(3)(F) of the Act \10\
requires that the rule change be designed to promote the prompt and
accurate clearance and settlement of securities transactions and
derivative agreements, contracts and transactions cleared by ICC, to
assure the safeguarding of securities and funds in the custody or
control of ICC or for which it is responsible, and to protect investors
and the public interest.
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\8\ 15 U.S.C. 78q-1.
\9\ 17 CFR 240.17ad-22.
\10\ 15 U.S.C. 78q-1(b)(3)(F).
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As discussed herein, the proposed clarifications regarding the
daily monitoring of operating detail supporting the clearing cycle and
the removal of a reference to the ICC Risk Management Subcommittee
strengthen the Counterparty Monitoring Procedures by keeping the
procedures up to date and correct. ICC believes that having policies
and procedures that clearly and accurately document its counterparty
monitoring responsibilities and management of counterparty credit risk
promote overall risk management and the stability of ICC. Accordingly,
in ICC's view, the proposed rule change is consistent with the prompt
and accurate clearance and settlement of securities transactions,
derivatives agreements, contracts, and transactions, the safeguarding
of securities and funds in the custody or control of ICC or for which
it is responsible, and the protection of investors and the public
interest, within the meaning of Section 17A(b)(3)(F) of the Act.\11\
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\11\ Id.
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The proposed rule change would also satisfy the relevant
requirements of Rule 17Ad-22.\12\ Rule 17Ad-22(e)(2)(i) and (v) \13\
requires each covered clearing agency to establish, implement,
maintain, and enforce written policies and procedures reasonably
designed to provide for governance arrangements that are clear and
transparent and specify clear and direct lines of responsibility. The
Counterparty Monitoring Procedures continue to clearly and
transparently assign, and document responsibility and accountability
associated with counterparty monitoring. The Counterparty Monitoring
Procedures specify how identified issues are escalated and set out the
roles and responsibilities of internal personnel and committees,
including with respect to ongoing counterparty monitoring, review, and
reporting; and on-boarding and withdrawal of counterparties. The
proposed changes clarify ICC Operations Department responsibilities, by
describing the frequency (daily) of monitoring operational detail
supporting the clearing cycle. Further, the proposed removal of the
outdated reference to the ICC Risk Management Subcommittee ensures that
the governance arrangements set out in the Counterparty Monitoring
Procedures are current and correct. As such, in ICC's view, the
proposed rule change ensures that ICC maintains policies and procedures
that are reasonably designed to provide for clear and transparent
governance arrangements and specify clear and direct lines of
responsibility, consistent with Rule 17Ad-22(e)(2)(i) and (v).\14\
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\12\ 17 CFR 240.17ad-22.
\13\ 17 CFR 240.17ad-22(e)(2)(i) and (v).
\14\ Id.
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Rule 17Ad-22(e)(4)(ii) \15\ requires each covered clearing agency
to establish, implement, maintain, and enforce written policies and
procedures reasonably designed to effectively identify, measure,
monitor, and manage its credit exposures to participants and those
arising from its payment, clearing, and settlement processes, including
by maintaining additional financial resources at the minimum to enable
it to cover a wide range of foreseeable stress scenarios that include,
but are not limited to, the default of the two participant families
that would potentially cause the largest aggregate credit exposure for
the covered clearing agency in extreme but plausible market conditions.
The proposed rule change promotes ICC's ability to manage its financial
resources by continuing to ensure that the Counterparty Monitoring
Procedures remain clear, accurate, and up to date, which ensures that
responsible parties carry out their counterparty monitoring duties
appropriately. The amendments thus promote ICC's ability to ensure
financial health and the ability to fulfill obligations by ICC's
counterparties, which promotes and strengthens ICC's own financial
condition and supports ICC's ability to maintain its financial
resources and withstand the pressures of defaults, consistent with the
requirements of Rule 17Ad-22(e)(4)(ii).\16\
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\15\ 17 CFR 240.17ad-22(e)(4)(ii).
\16\ Id.
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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. The proposed changes to
the Counterparty Monitoring Procedures will apply uniformly across all
market participants. ICC does not believe these amendments would affect
the costs of clearing or the ability of market participants to access
clearing as they are limited to clarifications or clean-up changes.
Therefore, ICC does not believe the proposed rule change would impose
any burden on competition that is inappropriate in furtherance of the
purposes of the Act.

Written comments relating to the proposed amendments have not been
solicited or received by ICE Clear Credit. ICE Clear Credit 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

The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 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.

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#7e0c0b121b531d1113131b100a0d3e0d1b1d50191108"><span class="__cf_email__" data-cfemail="453730292068262a2828202b3136053620266b222a33">[email&#160;protected]</span></a>. Please include
file number SR-ICC-2025-009 on the subject line.

Paper Comments

Send paper comments in triplicate to Secretary, Securities and
Exchange

[[Page 26401]]

Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to file number SR-ICC-2025-009. 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 a.m. and 3
p.m. Copies of the filing 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 publicly
available. 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-2025-009 and should
be submitted on or before July 11, 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. 2025-11301 Filed 6-18-25; 8:45 am]
BILLING CODE 8011-01-P

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