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ICE Clear Credit LLC; Notice of Filing of an Application for Registration as a Clearing Agency Under Section 17A of the Securities Exchange Act of 1934

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Published
August 21, 2025

Issuing agencies

Securities and Exchange Commission

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<title>Federal Register, Volume 90 Issue 160 (Thursday, August 21, 2025)</title>
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[Federal Register Volume 90, Number 160 (Thursday, August 21, 2025)]
[Notices]
[Pages 40879-40881]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-15937]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103727; File No. 600-45]


ICE Clear Credit LLC; Notice of Filing of an Application for 
Registration as a Clearing Agency Under Section 17A of the Securities 
Exchange Act of 1934

August 18, 2025.
    On August 1, 2025, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') an application on 
Form CA-1 (``Application'') under Section 17A of the Securities 
Exchange Act of 1934 (``Exchange Act'').\1\ ICC filed the Application 
to register as a clearing agency for the purpose of clearing 
transactions involving U.S. Treasury securities.\2\ Specifically, the 
Application states that ICC is seeking to provide central counterparty 
clearing services to market participants for their secondary cash 
market transactions in U.S. Treasury securities and transactions in 
repurchase and reverse repurchase agreements involving U.S. Treasury 
securities, which ICC refers to as its Treasury Business.\3\ The 
Application provides detailed information regarding how ICC proposes to 
satisfy the requirements of the Exchange Act with respect to its 
Treasury Business. The

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proposed Rules of ICC's Treasury Business are described in Exhibit E 
and included in Annex E-2 to the Application.
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    \1\ 15 U.S.C. 78q-1.
    \2\ Pursuant to Section 17A(l) of the Exchange Act, in 2011, ICC 
was deemed registered with the Commission as a clearing agency 
solely for the purpose of clearing security-based swaps and has been 
operating an ongoing business related to the clearance of credit-
default swaps (``CDS''), which ICC refers to as its CDS Business. 
See 15 U.S.C. 78q-1(l)(1) (``A depository institution or derivative 
clearing organization registered with the Commodity Futures Trading 
Commission under the Commodity Exchange Act that is required to be 
registered as a clearing agency under this section is deemed to be 
registered under this section solely for the purpose of clearing 
security-based swaps . . . .''). Although the Application pertains 
to ICC's request to clear transactions involving U.S. Treasury 
securities, where necessary and appropriate it includes information 
relevant to ICC's existing CDS Business.
    \3\ See Exhibit J. As described in the Application, the Treasury 
Business would be distinct from ICC's existing CDS Business, 
including separate membership requirements, financial risk 
management and default waterfalls, and rulebooks. See id.
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    The Commission is publishing this notice to solicit comments on the 
Application. To grant ICC's request to register as a clearing agency 
for the purpose of clearing transactions involving U.S. Treasury 
securities, the Commission must find that it satisfies the requirements 
of the Exchange Act and the rules and regulations thereunder, including 
the determinations required under Exchange Act Section 17A(b)(3)(A) 
through (I).\4\ Pursuant to Section 17A of the Exchange Act, the 
Commission is directed, having due regard for the public interest, the 
protection of investors, the safeguarding of securities and funds, and 
maintenance of fair competition among brokers and dealers, clearing 
agencies, and transfer agents, to use its authority to: (i) facilitate 
the establishment of a national system for the prompt and accurate 
clearance and settlement of transactions in securities (other than 
exempt securities); and (ii) facilitate the establishment of linked or 
coordinated facilities for clearance and settlement of transactions in 
securities in accordance with the findings and to carry out the 
objectives set forth in Section 17A.\5\ The Commission will consider 
any comments it receives in making its determination about whether to 
grant ICC's request to be registered as a clearing agency for the 
purpose of clearing transactions involving U.S. Treasury securities.
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    \4\ 15 U.S.C. 78q-1(b)(3)(A)-(I).
    \5\ 15 U.S.C. 78q-1(a)(2)(A).
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    The Application provides a description of ICC's ownership structure 
and management. The Application states that ICC is wholly owned by its 
parent company, ICE U.S. Holding Company, L.P.\6\ ICC is a limited 
liability company registered in the state of Delaware.\7\ ICC has a 
Board of Managers, made up of at least five independent managers and 
four managers designated by representatives of ICC's clearing 
members.\8\ ICC's Board of Managers has several committees, including a 
Nominating Committee, Audit Committee, and Risk Committee.\9\
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    \6\ See Exhibit C (narrative description of ownership and 
diagrams of ownership structure).
    \7\ Id.
    \8\ See Annex E-1 (ICC Amended and Restated Operating 
Agreement).
    \9\ See Exhibit A; Annex A-3; Annex A-4; Annex A-5.
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    The Application describes how ICC will clear transactions involving 
U.S. Treasury securities.\10\ The Application states that ICC will 
offer clearing of transactions involving U.S. Treasury securities to 
direct members of ICC, which ICC calls ``Treasury Participants.'' \11\ 
A Treasury Participant is a person who has: (i) been approved by ICC 
for the submission of transactions involving U.S. Treasury securities; 
(ii) entered into an agreement with ICC specifically relating to such 
transactions; and (iii) agreed to abide by ICC's rules and procedures 
related to such transactions. Under those rules, a person that is not a 
Treasury Participant may clear at ICC through a Treasury Participant. 
However, where a Treasury Participant clears a transaction for a non-
participant, the Treasury Participant becomes fully and directly liable 
as principal and not as guarantor or surety for all obligations to ICC 
in respect of such transaction.
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    \10\ Exhibit J also describes how ICC clears transactions 
involving CDS.
    \11\ See Exhibit J.
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    The Application provides information regarding ICC's risk 
management.\12\ In summary, the Application states that ICC will clear 
transactions involving U.S. Treasury securities using a ``contemporary 
clearinghouse risk waterfall design'' \13\ with client segregation, 
collateral protection, and a robust default management framework. For 
example, with respect to counterparty risk management, ICC will impose 
membership standards on Treasury Participants requiring that Treasury 
Participants meet certain fitness, financial, and operational 
standards, and have appropriate regulatory registrations. ICC may 
suspend, revoke, or terminate a Treasury Participant for failing to 
meet these requirements and may impose additional capital, margin, or 
other requirements as needed to protect ICC and other Treasury 
Participants.
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    \12\ See Exhibit J. Exhibit J also describes how ICC manages 
risks associated with its CDS Business.
    \13\ See Exhibit J.
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    With respect to financial risk management, ICC also will require 
Treasury Participants to provide initial margin for their own 
transactions and for transactions of non-participants that they clear. 
In addition, ICC will require Treasury Participants to make variation 
payments due to the change in market value of their open positions and 
the open positions of non-participants that they clear. ICC will offer 
various net or gross margin position accounts that non-participants can 
use to meet these requirements. Finally, ICC will use its existing 
direct settlement model to manage the settlement of payments and 
mitigate risks associated with potential settlement failures.
    The Application also states that ICC will establish and maintain a 
Treasury Guaranty Fund which the Application states ``will be sized to 
provide financial resources based on Cover-2 regulatory standards.'' 
\14\ The guaranty fund for clearing transactions involving U.S. 
Treasury securities will be distinct from ICC's existing guaranty fund 
for clearing transactions involving CDS. Treasury Participants will be 
required to contribute to the Treasury Guaranty Fund, and each Treasury 
Participant's required contribution will be risk-based using stress 
test analyses under extreme but plausible market conditions. The 
Application states that ICC will calculate the amount of a Treasury 
Participant's contribution to the Treasury Guaranty Fund on a net 
exposure basis taking into account a Treasury Participant's own 
transactions and transactions of non-participants that the Treasury 
Participant clears, subject to a $20 million minimum contribution.
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    \14\ See Exhibit J.
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    ICC also will establish and maintain a default management framework 
for clearing transactions involving U.S. Treasury securities, including 
a default resource waterfall, distinct from ICC's existing framework 
and waterfall for clearing transactions involving CDS. In resolving a 
default of a Treasury Participant, ICC may apply the margin and other 
property of the defaulting Treasury Participant within ICC's possession 
or control, as set forth in the default waterfall.
    In addition to counterparty and financial risk management, the 
Application describes ICC's approach to operational resilience, 
availability and disaster recovery, and data backup.\15\
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    \15\ See Exhibit K; Exhibit M.
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    The Application provides information regarding ICC's current and 
proposed fees.\16\ The Application states that ICC's current fees for 
clearing CDS are available on its website, and ICC's fees for clearing 
transactions involving U.S. Treasury securities will be published on 
ICC's website closer to the commencement of operations of that service.
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    \16\ See Exhibit E; Annex E-4; Exhibit Q.
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    ICC's application on Form CA-1, including each exhibit thereto 
referenced above, is available online at <a href="http://www.sec.gov/rules/other/shtml">www.sec.gov/rules/other/shtml</a>. 
Interested persons are invited to submit written data, views, and 
arguments concerning the Application, including whether the Application 
is consistent with the Exchange Act and the rules and regulations 
thereunder applicable to

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clearing agencies (e.g., Exchange Act Rules 17Ad-22, 17Ad-25, 17Ad-26, 
and Regulation Systems Compliance and Integrity, among others).\17\
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    \17\ See 17 CFR 240.17ad-22 (``Rule 17Ad-22''); 240.17ad-25 
(``Rule 17Ad-25''); 240.17ad-26 (``Rule 17Ad-26''); 17 CFR 242.1000 
through 242.1007 (``Regulation Systems Compliance and Integrity'').
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    Comments may be submitted by any of the following methods:

Electronic Comments

    <bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/other.shtml">http://www.sec.gov/rules/other.shtml</a>); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#6d1f180108400e0200000803191e2d1e080e430a021b"><span class="__cf_email__" data-cfemail="4230372e276f212d2f2f272c3631023127216c252d34">[email&#160;protected]</span></a>. Please include 
File Number 600-45 on the subject line.

Paper Comments

    <bullet> Send paper comments to Vanessa A. Countryman, Secretary, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549-1090. All submissions should refer to File Number 600-45.
    To help the Commission process and review your comments more 
efficiently, please use only one method of submission. The Commission 
will post all comments on the Commission's internet website (<a href="http://www.sec.gov/rules/other.shtml">http://www.sec.gov/rules/other.shtml</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 600-45 and should be 
submitted on or before October 6, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(16).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2025-15937 Filed 8-20-25; 8:45 am]
BILLING CODE 8011-01-P


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