Notice2026-10368
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change Relating to the Treasury Clearing Rules and Treasury Clearing Service Treasury Operations Policies and Liquidity Risk Management Framework
Primary source
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Published
May 26, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 100 (Tuesday, May 26, 2026)</title>
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[Federal Register Volume 91, Number 100 (Tuesday, May 26, 2026)]
[Notices]
[Pages 30751-30758]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10368]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105526; File No. SR-ICC-2026-002]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing of Proposed Rule Change Relating to the Treasury Clearing Rules
and Treasury Clearing Service Treasury Operations Policies and
Liquidity Risk Management Framework
May 20, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
\1\ and Rule 19b-4,\2\ notice is hereby given that on May 7, 2026, ICE
Clear Credit LLC (``ICC'' or ``ICE Clear Credit'') 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. 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.
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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
certain documentation governing ICC's Treasury clearing service (the
``Treasury Clearing Service''), including the Treasury Clearing Rules
(``Treasury Rules''),\3\ Treasury Clearing Service Liquidity Risk
Management Framework (``LRMF''), and Treasury Clearing Service Treasury
Operations Policies and Procedures (``Treasury Operations Policy'').
The Treasury Rules and the aforementioned policies and procedures are
collectively referred to as the ``Treasury Clearing Service
Documentation'' herein.
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\3\ ICC's Treasury Rules are available on ICC's public website:
<a href="https://www.ice.com/publicdocs/clear_credit/ICE_Clear_Credit_Treasury_Clearing_Rules.pdf">https://www.ice.com/publicdocs/clear_credit/ICE_Clear_Credit_Treasury_Clearing_Rules.pdf</a>.
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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
[[Page 30752]]
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 changes to the Treasury Clearing Service
Documentation. As background, ICC filed an application on Form CA-1
(``Application'') under Section 17A of the Securities Exchange Act of
1934 (the ``Act'') \4\ with the Commission to register as a clearing
agency to provide central counterparty services for transactions
involving U.S. Treasury securities on August 1, 2025. Notice of ICC's
Application was published in the Federal Register on August 21,
2025.\5\ The Application contained the Treasury Rules and certain other
policies and procedures governing the Treasury Clearing Service,
including the LRMF and Treasury Operations Policy. The Commission
issued an order granting ICC's Application for registration as a
clearing agency to provide central counterparty services for
transactions involving U.S. Treasury securities on January 30, 2026.\6\
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\4\ 15 U.S.C. 78q-1.
\5\ See Securities Exchange Act Release No. 103727 (August 18,
2025), 90 FR 40879 (August 21, 2025) (File No. 600-45).
\6\ See Securities Exchange Act Release No. 104762 (January 30,
2026), 91 FR 5528 (February 6, 2026) (File No. 600-45).
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ICC proposes to amend the Treasury Rules and make related changes
to the LRMF and Treasury Operations Policy. These changes generally
respond to industry feedback received on the Treasury Rules,\7\ include
certain clarifying or clean-up amendments, and provide for transitory
provisions in connection with the launch of the Treasury Clearing
Service. ICC believes that such revisions will facilitate the prompt
and accurate clearance and settlement of securities transactions. 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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\7\ See ICC Comment Letter (Dec. 3, 2025), submitted in response
to the Notice of Filing of an Application for Registration as a
Clearing Agency Under Section 17A of the Securities Exchange Act of
1934 (File No. 600-45), available at: <a href="https://www.sec.gov/comments/600-45/60045-681487-2100274.pdf">https://www.sec.gov/comments/600-45/60045-681487-2100274.pdf</a>.
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I. Treasury Rules
ICC proposes changes to its Treasury Rules, as further described
below.
Preamble
ICC proposes adding a transitory provision to the Preamble to
address the period before the Treasury Risk Committee is established.
The proposed amendments provide that, prior to the establishment of the
Treasury Risk Committee, the Board may designate another committee to
perform the functions assigned to the Treasury Risk Committee under the
Treasury Rules.\8\ The proposed language ensures that the functions
otherwise assigned to the Treasury Risk Committee may be carried out
prior to its formal establishment.\9\
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\8\ At its March 2026 meeting, the Board determined that the ICC
Board Risk Committee would perform the functions assigned to the
Treasury Risk Committee under the Treasury Rules, subject to the
approval and completion of all applicable regulatory processes.
\9\ Pursuant to Chapter 5 of the Treasury Rules, the Treasury
Risk Committee includes representatives of Treasury Participants and
representatives of Non-Participant Parties (i.e., customers of
Treasury Participants). At the time of this filing, no such
individuals are available to serve on the Treasury Risk Committee
because the Treasury Clearing Service has not yet launched and has
no members.
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ICC proposes additional clarifying changes to the Preamble. ICC
proposes to clarify that the Treasury Rules do not apply to ICC's
credit default swap clearing business or operations (the ``CDS Clearing
Business'') or to the rights or obligations of persons with respect
thereto, and vice versa. ICC proposes minor edits to replace the
``credit default swap clearing business'' with the ``CDS Clearing
Business'' in the Preamble and throughout the Treasury Rules.
Chapter 1
ICC proposes amendments to the definitions in Treasury Rule 102.
ICC proposes to identify $20 million as the amount of resources
available to be applied to Custodial Losses \10\ and $10 million as the
amount of resources available to be applied to Investment Losses \11\
pursuant to Treasury Rule 811. The determination of these amounts is
risk-based in light of ICC's potential exposure to such losses and is
based on ICC's experience with the CDS Clearing Business.\12\ ICC
proposes to add defined terms for its Nominating Committee and the
Nominating Committee Charter.\13\ ICC proposes to remove defined terms
related to a Default Committee, which were initially retained from the
CDS Rules, as ICC does not plan to establish a Treasury Default
Committee for the Treasury Clearing Service. U.S. Treasury securities
are distinct in product type and market structure from credit default
swaps and therefore do not require the same default committee framework
that was developed specifically for the credit default swap market. ICC
also proposes to remove certain defined terms that are not used
anywhere in the Treasury Rules. ICC proposes to define the Treasury
Governance Commencement Date, along with related defined terms
(including the Treasury Repo Clearing Deadline and Treasury Clearing
Market Share) \14\ in Treasury Rule 102 to refer to the date of the
first annual Board election that occurs after certain thresholds and
timelines with respect to Treasury Clearing Service revenue and market
share are achieved.\15\
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\10\ Custodial Losses are defined in Treasury Rule 102 with
respect to the Treasury Clearing Service and generally refer to
losses of margin or Treasury Guaranty Fund assets (including
declines in the value thereof) as a result of (i) the insolvency or
failure of a custodian or (ii) the embezzlement or theft of such
assets by any person (other than ICC or its employees or
representatives).
\11\ Investment Losses are defined in Treasury Rule 102 with
respect to the Treasury Clearing Service and generally refer to
losses incurred or suffered by ICC in connection with the default of
the issuer of any investment of margin or Treasury Guaranty Fund
assets by ICC, or the default of the counterparty to any repurchase,
reverse repurchase contract, or similar transaction used to invest
or reinvest such margin or Treasury Guaranty Fund assets. Investment
Losses also includes other losses with respect to such investments,
including from a change in value due to market movements.
\12\ Under CDS Rule 102, ICC identifies $32 million as the
amount of resources available to be applied to Custodial Losses and
$20 million as the amount of resources available to be applied to
Investment Losses pursuant to CDS Rule 811 in respect of the CDS
Clearing Business. The CDS Rules for the CDS Clearing Business are
publicly available at the following: <a href="https://www.ice.com/publicdocs/clear_credit/ICE_Clear_Credit_Rules.pdf">https://www.ice.com/publicdocs/clear_credit/ICE_Clear_Credit_Rules.pdf</a>.
\13\ ICC previously filed a proposed rule change to establish
the Nominating Committee. See Securities Exchange Act Release No.
101820 (December 5, 2024), 89 FR 99917 (December 11, 2024) (File No.
SR-ICC-2024-010). The Nominating Committee would be defined in
Treasury Rule 102 as a committee responsible for evaluating the
independence and fitness of the persons proposed to be designated to
be Managers. The Nominating Committee Charter would be defined in
Treasury Rule 102 as the charter of the Nominating Committee.
\14\ Treasury Repo Clearing Deadline would be defined in
Treasury Rule 102 as the date adopted by the Commission by which all
Eligible Secondary Market Transactions (as defined in Treasury Rule
303) that are repurchase or reverse repurchase agreements must be
cleared by a central counterparty. Treasury Clearing Market Share
would be defined in Treasury Rule 102 as, for a specified period, a
fraction, the numerator of which is the publicly reported aggregate
notional value of the Treasury products cleared by ICC in such
period, and the denominator of which is the publicly reported
aggregate notional value of the Treasury products cleared by all
Treasury central counterparties in such period.
\15\ Such terms are defined in the ICC Operating Agreement that
was included in the Application. See Securities Exchange Act Release
No. 34-103727 (Aug. 18, 2025), 90 FR 40879 (Aug. 21, 2025) (File No.
600-45) (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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[[Page 30753]]
Chapter 2
ICC proposes to amend Treasury Rule 201(c), which currently
provides a non-exclusive list of the types of entities that may be
approved as Treasury Participants (provided that they meet and maintain
the participation standards set out in Treasury Rule 201(b)), and
includes registered broker-dealers, registered investment companies,
banks, insurance companies, or such other person or class of persons
that the Commission may designate as appropriate. ICC proposes to
clarify that Futures Commission Merchants (``FCMs'') and registered
clearing agencies that meet the participation standards in Treasury
Rule 201(b) may also be approved as Treasury Participants.
Chapter 3
ICC proposes to amend the definition of Eligible Secondary Market
Transaction in Treasury Rule 303(a) and to remove certain related
defined terms. Treasury Rule 303(a) requires Treasury Participants to
clear Eligible Secondary Market Transactions from and after the
applicable compliance date. Currently, the definition of Eligible
Secondary Market Transaction in Treasury Rule 303(a) mirrors the
definition set out in Rule 17Ad-22(a).\16\ Treasury Rule 303(a) also
includes additional related defined terms from Rule 17Ad-22(a).\17\ The
proposed amendments would instead provide that the definition of
Eligible Secondary Market Transaction has the meaning specified in Rule
17Ad-22(a) (as interpreted by the Commission and its staff) from time
to time and would remove terms already defined in Rule 17Ad-22(a).\18\
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\16\ 17 CFR 240.17Ad-22(a).
\17\ Id.
\18\ Id.
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ICC also proposes new Treasury Rule 312(c) to emphasize the
separation of the CDS Clearing Business from the Treasury Clearing
Service. Treasury Rule 312(c) would clarify that no person has any
recourse or claim, in respect of any amount or liability relating to
payment or delivery obligations with respect to Contracts or under
these Treasury Rules, to any margin, guaranty fund, ICC contribution,
or other amount or assets held in connection with the CDS Clearing
Business.
ICC proposes additional amendments to Treasury Rule 316 regarding
client-related positions. ICC proposes to revise Treasury Rule 316(e)
to replace duplicative language describing client defaults with a
reference to the defined term ``Client Default'' in Treasury Rule
316(g). ICC proposes to organize Treasury Rule 316(g) into
subparagraphs (i) through (iv) to clarify the treatment of client-
related positions under various circumstances. Treasury Rule 316(g)
currently provides that ICC will manage the close-out of the defaulting
client's positions, unless the Treasury Participant carrying such
positions elects to do so by providing notice to ICC through a
Participant Management Election. In response to industry feedback, ICC
proposes changes such that the Treasury Participant will manage the
close-out of the defaulting client's positions, unless the Treasury
Participant elects to have ICC manage the close-out through an ICC
Management Election. Additional amendments clarify that an ICC
Management Election must be made by providing a written certification
to ICC.
ICC proposes additional clarifications or clean-up changes in
Treasury Rule 316(g). ICC proposes to relocate provisions addressing
the default of a Treasury Participant in Treasury Rule 316(g)(i) to a
standalone provision in Treasury Rule 316(g)(iv) for clarity. ICC
proposes to state that Treasury Rule 316(g)(ii) applies where a
Treasury Participant has not made an ICC Management Election,
consistent with amended Treasury Rule 316(g)(i). Currently, Treasury
Rule 316(g)(ii) applies where a Treasury Participant makes a
Participant Management Election, meaning that the Participant elects to
manage the close-out. As amended, this provision applies where a
Treasury Participant does not make an ICC Management Election,
reflecting a similar outcome that the Treasury Participant will manage
the close-out as the Treasury Participant does not elect for ICC to
manage. Proposed language in Treasury Rule 316(g)(iii) clarifies that a
Treasury Participant may not make an ICC Management Election in the
case of a client default relating to client-related positions
associated with a Net Client IM Account,\19\ consistent with language
in currently effective Treasury Rule 316(g).\20\ ICC proposes deleting
language elsewhere in current Treasury Rule 316 duplicative of proposed
Treasury Rule 316(g)(iii).
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\19\ Net Client IM Account is defined in Treasury Rule 102 as
any account(s) maintained by or on behalf of ICC with respect to a
Treasury Participant for the purposes of holding on a net omnibus
basis Initial Margin posted in respect of client-related positions.
\20\ As noted in Treasury Rule 410(f), ICC has no
responsibility, among other things, for any investment decisions by
a Treasury Participant with respect to assets in the Net Client IM
Account, has no obligation to monitor the value of the assets in the
Net Client IM Account, and has no obligation to inquire into any
instructions or directions with respect to the Net Client IM Account
or the assets therein (including transfers) from a person ICC
believes to be authorized to act on behalf of the appropriate
Treasury Participant.
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ICC also proposes new Treasury Rule 316(h). For the avoidance of
doubt, new Treasury Rule 316 does not preclude a Treasury Participant
from settling a client-related position in accordance with the Treasury
Rules notwithstanding the occurrence of a client default. New Treasury
Rule 316(h) further specifies that, in the case of a client default
with respect to a Non-Participant Party that has established an
Individual Client Direct Settlement Account,\21\ ICC will direct for
settlement to occur to and from the house account of the clearing
Treasury Participant (or as otherwise directed by such Treasury
Participant). This change responds to industry feedback requesting
assurances that cash and securities needed to cover the Non-Participant
Party's reimbursement obligations to the Treasury Participant do not
dissipate.
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\21\ The Individual Client Direct Settlement Account is defined
in Treasury Rule 2201 as a securities account (and related cash
account) established by a Non-Participant Party of a Treasury
Participant for the direct settlement of net settlement obligations
in respect of client-related positions in its Non-Participant Party
portfolio.
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Chapter 4
ICC proposes to amend the definition of Eligible Margin in Treasury
Rule 401(d). Currently, Treasury Rule 401(d) defines Eligible Margin
for purposes of satisfying an Initial Margin requirement to include
dollars or other currencies acceptable to ICC, as specified in Schedule
401. As amended, the definition would include dollars, other assets, or
other currencies. This clarification aligns with Schedule 401, which
allows U.S. Treasuries to be used to satisfy Initial Margin
requirements.
ICC also proposes to amend Treasury Rule 401(l). Currently,
Treasury Rule 401(l) generally provides that, once settlement of a
transfer of variation payment is final, the fair value of the
outstanding exposures for the relevant contracts will be reset to zero.
Reference to ``outstanding exposures'' and an associated parenthetical
were initially retained from CDS Rule 401(l). ICC proposes revising
this provision to generally state that, once settlement of a transfer
of variation payment is final, the margin requirement for the relevant
contracts is reset to zero, which more accurately reflects the
mechanics of the Treasury market.
ICC proposes additional amendments to Treasury Rule 407, which
applies to client-related positions associated with a Client-Funded
Gross IM Account.\22\
[[Page 30754]]
Currently, Treasury Rule 407(c) provides notice to Treasury
Participants through the Treasury Rules that client-funded gross
collateral is held separately by ICC for the exclusive benefit of the
customers of Treasury Participants, in compliance with Commission
regulations. As amended, Treasury Rule 407(c) would require ICC to
``provide written notice'' outside of the Treasury Rules. ICC further
proposes to amend Treasury Rule 407(g) to reflect additional language
consistent with Rule 15c3-3a, Note H(b)(2)(iv).\23\
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\22\ Client-Funded Gross IM Account is defined in Treasury Rule
102 as any account(s) maintained by or on behalf of ICC with respect
to a Treasury Participant for the purposes of holding on a gross
omnibus basis Initial Margin posted by a Treasury Participant in
respect of client-related positions.
\23\ 17 CFR 240.15c3-3a.
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ICC proposes revising Treasury Rule 409 relating to Hybrid Gross IM
Accounts.\24\ Currently, under Treasury Rule 409, a Treasury
Participant requires each Non-Participant Party whose client-related
positions are associated with a Hybrid Gross IM Account to provide
margin or collateral ``in an amount no less than the applicable client
funded portion determined by [ICC] of the amount of Initial Margin
required on a gross basis by [ICC]'' with respect to the relevant
positions. The remaining portion is provided by the Treasury
Participant itself. ICC proposes to clarify the applicable allocations,
consistent with disclosures provided in the Application.\25\ As
amended, a Treasury Participant requires such Non-Participant Party to
provide margin or collateral in an amount equal to 70% of the Initial
Margin required on a gross basis by ICC with respect to the relevant
positions. The remaining 30% of such aggregate Initial Margin required
on a gross basis will be provided by the Treasury Participant. Such
changes are intended for transparency in the Treasury Rules.
Additionally, ICC proposes to remove Treasury Rule 412, which currently
serves as a placeholder.
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\24\ Hybrid Gross IM Account is defined in Treasury Rule 102 as
an account maintained by or on behalf of ICC with respect to a
Treasury Participant for the purpose of holding on a gross omnibus
basis Initial Margin posted by a Treasury Participant in respect of
client-related positions.
\25\ See Exhibit J to the Application, available at: <a href="https://www.sec.gov/files/icc-ca-1-exhibit-j-narrative.pdf">https://www.sec.gov/files/icc-ca-1-exhibit-j-narrative.pdf</a> (noting that a
Non-Participant Party can contribute 70% (i.e., ``Hybrid'') of its
gross Non-Participant Party Portfolio Initial Margin Requirement).
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Chapter 5
ICC proposes amending Chapter 5 of the Treasury Rules pertaining to
the Treasury Risk Committee. ICC proposes amending Treasury Rule 501 to
capitalize a term to reflect the adoption of a definition for such
term. ICC proposes amending Treasury Rule 502, which lists matters that
require prior consultation with the Treasury Risk Committee. The
proposed revisions add additional matters requiring prior consultation
with the Treasury Risk Committee, including determining the standards
and requirements for initial and continuing Treasury Participant
eligibility and approving or denying Treasury Participant
applications.\26\
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\26\ Such responsibilities are in line with those assigned to
the CDS Risk Committee in CDS Rule 502.
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ICC proposes to amend Treasury Rule 503 regarding the composition
of the Treasury Risk Committee to add transitory provisions to address
the period where ICC is building Treasury Clearing Service membership.
Accordingly, ICC proposes to amend Treasury Rule 503(a)(i) to provide
that the Treasury Risk Committee will consist of up to fourteen members
(rather than fourteen members) and to similarly amend Treasury Rule
503(a)(iv) to specify appointment procedures for up to nine members
(rather than nine members) consisting of Treasury Participant
representatives (the ``Participant Appointees''). ICC proposes to amend
Treasury Rule 503(a)(iii) to remove unnecessary brackets and replace
``Chief Financial Officer'' with ``Chief Operating Officer'', as ICC
does not have a ``Chief Financial Officer'' position but has a Chief
Operating Officer position. ICC proposes to update Treasury Rule
503(a)(iv)(B), which serves as a transitory provision, to specify that
the initial composition of the Participant Appointees will be specified
by the Board in connection with the launch of the Treasury Clearing
Service, rather than by ICC upon commencement of operations of the
Treasury Clearing Service. Such terminology, in ICC's view, is clearer
and more precise. ICC further proposes to amend Treasury Rule
503(a)(iv)(C) to remove brackets that served as a placeholder and to
specify that the composition of the Participant Appointees will be
reconstituted on or before the Treasury Governance Commencement Date.
ICC proposes similar changes to Treasury Rule 503(a)(v) regarding
the membership of Non-Participant Party representatives (the ``Non-
Participant Appointees'') on the Treasury Risk Committee. As an
additional transitory provision, ICC proposes to specify that up to two
members of the Treasury Risk Committee will be representatives of up to
two selected Non-Participant Parties. ICC also proposes to note that
the initial composition of the Non-Participant Appointees will be
specified by the Board in connection with the launch of the Treasury
Clearing Service. This change is intended to serve as a transitory
provision and to match the language in Treasury Rule 503(a)(iv)(B) with
respect to the initial composition of Participant Appointees. ICC
proposes to correct a typographical error to reference this Treasury
Rule 503(a)(v) in the text. ICC also proposes to remove Treasury Rule
508(d) referencing certain terms defined in the ICC Operating
Agreement, which are proposed to be included in Treasury Rule 102, as
described above.
Chapter 6
ICC proposes clean-up changes to Treasury Rules 611 and 613. ICC
proposes to remove and replace certain terms retained from the CDS
Rules, namely replacing ``swap agreement'' with ``securities contract''
in Treasury Rule 611(b), as these terms are not applicable to the
Treasury Rules. In Treasury Rule 613, ICC also proposes to remove
brackets around the rule and a reference to a specific section of the
Treasury Participant Agreement, which ICC believes is unnecessary as
section numbers may change.
Chapter 8
ICC proposes to amend Treasury Rule 801(a) to change the minimum
required Treasury Participant contribution to the Treasury Guaranty
Fund from $20 million to $10 million (the ``minimum contribution'').
ICC believes that a lower minimum contribution is appropriate at this
stage of the Treasury Clearing Service. Under the proposed amendments,
the Treasury Guaranty Fund would continue to provide adequate funds to
cover losses in accordance with regulatory requirements. The Treasury
Guaranty Fund would also continue to support a significant liquidity
pool in case of liquidity events, while potentially facilitating
broader participation. For the avoidance of doubt, a Treasury
Participant's required contribution to the Treasury Guaranty Fund would
continue to be the greater of the Treasury Participant's proportionate
share of the aggregate Treasury Participant loss exposure (calculated
as the two largest participant loss exposures) and the minimum
contribution. Moreover, ICC would continue to size the Treasury
Guaranty Fund to provide financial resources based on Cover-2
regulatory standards. ICC proposes a related change to Schedule 401 to
the Treasury Rules for consistency to update a reference to the minimum
contribution to the Treasury
[[Page 30755]]
Guaranty Fund to $10 million. Additionally, ICC proposes a clean-up
change to Treasury Rule 801(a) to remove reference to credit spreads,
which was retained from the CDS Rules and is not applicable to the
Treasury Rules. ICC also proposes a clean-up change to Treasury Rule
804 (and throughout the document) to reference the ``Treasury Guaranty
Fund'' in place of the ``Guaranty Fund'' to avoid any confusion between
the Guaranty Fund for the CDS Clearing Business.
ICC proposes to amend Treasury Rule 812. For purposes of Treasury
Rule 812, and as necessary to satisfy its liquidity obligations under
Rule 17Ad-22(e)(7),\27\ ICC may designate a ``Settlement Liquidity
Event'' if (i) on any ICE Settlement Day (A) a settlement payment
failure occurs in respect of one or more Receiving Parties or (B)
delivery failure occurs in respect of one or more Delivering Parties
for which ICC determines to settle the corresponding Settlement Leg 2
under Treasury Rule 2205(c) and (ii) ICC determines that it would have
(or may have) insufficient cash liquidity to complete settlement under
Treasury Rules 2205 or 2206, as appropriate. ICC proposes to amend the
language throughout Treasury Rule 812 to allow ICC to use or borrow
non-cash assets to facilitate settlement. Additionally, in Treasury
Rule 812(b)(v), ICC proposes to specify that it may accept, in lieu of
a substitution of cash, a substitution of securities of a specific
CUSIP requested by ICC from one or more Treasury Participants, which
securities may be used by ICC to effect settlement. Such changes are
generally designed to enhance ICC's ability to meet the requirements of
17Ad-22(e)(7).\28\
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\27\ 17 CFR 240.17Ad-22(e)(7).
\28\ Id.
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Chapter 20
ICC proposes to amend Treasury Rule 20-605(d) regarding a Treasury
Participant default. Under current Treasury Rule 20-605(d)(iii), ICC
may cause open Treasury positions of the defaulter or any portion
thereof or payments owed in respect thereof to be offset against each
other and/or to be settled at the mark-to-market price for such
contracts, or at such other price(s) reflecting the current market. ICC
proposes a clarification to note that, for this purpose, where the
defaulter holds house positions corresponding to and economically
offsetting \29\ the client-related positions in a Non-Participant Party
portfolio, ICC may cause such house positions and client-related
positions to be offset against each other. Pursuant to this amended
Treasury Rule 20-605(d)(iii), such positions would be closed out at
market value in lieu of settlement. The proposed language is intended
as a clarification of the existing language in Treasury Rule 20-
605(d)(iii) relating to offsetting positions. For the avoidance of
doubt, offsetting such positions is limited to the default management
context pursuant to the amended language. ICC also proposes
clarifications in Treasury Rule 20-605(d)(vi) to specify that ICC may
permit the settlement of open Treasury positions of a defaulter to
occur in accordance with their terms and the Treasury Rules
notwithstanding the default, and in Treasury Rule 20-605(h) to
specifically reference Treasury Rule 20-605(d)(iii).
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\29\ E.g., the Treasury Participant has an obligation to deliver
and the client to receive the same security or vice versa.
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Chapter 22
ICC proposes additional amendments to Treasury Rules 2204 and 2205.
ICC proposes amending Treasury Rule 2204(c) to specify that each Non-
Participant Party with an Individual Client Direct Settlement Account
shall enter into an agreement with ICC in the form designated by ICC
from time to time to provide transparency and confirm that a legally
binding agreement with ICC is required in such case. In Treasury Rule
2205(c) and (d), ICC proposes to include references to borrowing, such
that ICC may acquire or ``borrow'' the settling security to reflect an
additional tool available to ICC, and to remove text containing
brackets as a placeholder. Treasury Rule 2205(d) currently begins by
stating that the procedures in Treasury Rule 2205(a) will not apply
where ICC has determined that this Treasury Rule 2205(d) should apply
following a delivery failure that continued for more than ``[ ]''
consecutive ICE Business Days. It is unnecessary to state that the
procedures in Treasury Rule 2205(a) will not apply where a different
rule (Treasury Rule 2205(d)) applies.
II. Additional Changes to Policies and Procedures
ICC proposes related edits to the Treasury Operations Policy and
the LRMF. ICC proposes referencing the Board Risk Committee in Section
X and Appendix 1 of the Treasury Operations Policy to specify matters
subject to Board Risk Committee review.\30\ ICC proposes similar
revisions in the LRMF to specify matters subject to Board Risk
Committee review, including throughout Sections 1 through 4. Additional
edits include updating the minimum contribution to the Treasury
Guaranty Fund by Treasury Participants to $10 million from $20 million
in the Treasury Operations Policy and the LRMF, consistent with the
changes to Treasury Rule 801(a).
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\30\ ICC previously filed a proposed rule change to establish
the Board Risk Committee. See Securities Exchange Act Release No.
103161 (May 30, 2025), 90 FR 23970 (June 5, 2025) (File No. SR-ICC-
2025-006).
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ICC proposes additional clean-up changes to the Treasury Operations
Policy. ICC proposes a change in Section II to remove an outdated
reference to the Treasury Director reporting to the Chief Operating
Officer, as the Treasury Director currently reports to the ICC
President. ICC proposes to consistently refer to the ``Treasury Risk
Committee'' instead of the ``Risk Committee'' or ``Treasury Clearing
Service Risk Committee'' in Section X and Appendix 1. Finally, ICC
proposes to replace references to ``CP'' with ``TP'' throughout the
document, as ``CP'' refers to Clearing Participants for the CDS
Clearing Business and ``TP'' refers to Treasury Participants for the
Treasury Clearing Service.
(b) Statutory Basis
ICC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \31\ and the regulations
thereunder applicable to it, including the applicable standards under
Rule 17Ad-22.\32\ In particular, Section 17A(b)(3)(F) of the Act \33\
requires, among other things, that the rules of a clearing agency be
designed to promote the prompt and accurate clearance and settlement of
securities transactions, to assure the safeguarding of securities and
funds in the custody or control of the clearing agency or for which it
is responsible, and to protect investors and the public interest.
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\31\ 15 U.S.C. 78q-1.
\32\ 17 CFR 240.17Ad-22.
\33\ 15 U.S.C. 78q-1(b)(3)(F).
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As described above, the proposed changes generally respond to
industry feedback received on the Treasury Rules, include certain
clarifying or clean-up amendments, and provide for transitory
provisions in connection with the launch of the Treasury Clearing
Service. For example, the amendments to Treasury Rule 316(g) and (h)
are proposed in response to industry feedback and provide that the
Treasury Participant will manage the close-out of the defaulting
client's positions, unless the Treasury Participant elects to have ICC
manage the close-out and, that upon a client default by a Non-
Participant
[[Page 30756]]
Party with an Individual Client Direct Settlement Account, ICC will
direct for settlement to occur to and from the house account of the
clearing Treasury Participant (or as otherwise directed by such
Treasury Participant). Such changes ensure that the rules clearly and
comprehensively address the circumstances surrounding a client default,
providing additional transparency and certainty to market participants
in respect of such context. Such changes ensure that the Treasury Rules
remain up-to-date and transparent, thereby supporting ICC's ability to
continue to maintain clear and comprehensive rules and procedures that
provide sufficient information to market participants. Additionally,
ICC proposes certain transitory provisions to the Treasury Rules in
connection with the launch of the Treasury Clearing Service, including
to address the period before the Treasury Risk Committee is established
and during which ICC is building its membership in the Treasury
Clearing Service. These transitory provisions ensure that the Treasury
Rules are accurate, transparent, and comprehensive during such period
by addressing the circumstances that are unique to the launch of a new
clearing service. Such changes, along with the proposed clarification
and clean-up changes, further ensure that the Treasury Rules, Treasury
Operations Policy, and LRMF accurately and clearly describe ICC's
Treasury clearing and legal framework and operate as intended at
launch. Accordingly, in ICC's view, the proposed rule change is
designed to promote the prompt and accurate clearance and settlement of
the contracts cleared at 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, within
the meaning of Section 17A(b)(3)(F) of the Act.\34\
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\34\ Id.
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Rule 17Ad-22(e)(1) \35\ requires each covered clearing agency to
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to provide for a well-founded, clear,
transparent, and enforceable legal basis for each aspect of its
activities in all relevant jurisdictions. As described above, the
proposed revisions ensure that the Treasury Rules, Treasury Operations
Policy, and LRMF accurately and clearly describe ICC's Treasury
clearing and legal framework and operate as intended at launch.
Proposed amendments ensure that the Treasury Rules are up-to-date,
clear, transparent, and provide sufficient information to market
participants, including by clarifying in Treasury Rule 201(c) the types
of entities that may be approved as Treasury Participants and
emphasizing in Treasury Rule 312(c) the separation of the CDS Clearing
Business from the Treasury Clearing Service. In addition, the
amendments to Treasury Rule 303(a) are designed to ensure that relevant
terms in the ICC Treasury Rules align with the meanings specified in
Rule 17Ad-22(a) (as interpreted by the Commission and its staff) to
ensure that ICC's Treasury Rules are consistent with the regulatory
framework applicable to ICC as a clearing agency, thereby supporting
the transparency and enforceability of ICC's legal framework. Further,
under amended Treasury Rule 316(g), the Treasury Participant manages
the close-out of the defaulting client's positions, unless the Treasury
Participant elects to have ICC manage the close-out through an ICC
Management Election, and an ICC Management Election must be made by
providing a written certification to ICC. The amended language clearly
sets out the respective responsibilities of ICC and a Treasury
Participant during a close-out. Moreover, a documented written
certification promotes transparency and certainty regarding the default
management process. Such changes thus promote ICC's ability to maintain
a well-founded, clear, transparent, and enforceable legal framework for
each aspect of its default management activities. The Treasury Clearing
Service Documentation would continue to provide for a well-founded,
clear, transparent, and enforceable legal basis for ICC's Treasury
clearing activities, consistent with the requirements of the Rule 17Ad-
22(e)(1).\36\
---------------------------------------------------------------------------
\35\ 17 CFR 240.17Ad-22(e)(1).
\36\ Id.
---------------------------------------------------------------------------
Rule 17Ad-22(e)(2)(i) and (v) \37\ 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 proposed changes to the Treasury
Rules provide for transitory provisions in connection with the launch
of the Treasury Clearing Service, including addressing the period
before the Treasury Risk Committee is established and the period where
ICC is building Treasury Clearing Service membership. Proposed
amendments to the Preamble provide that, prior to the establishment of
the Treasury Risk Committee, the Board may designate another committee
to perform the functions assigned to the Treasury Risk Committee under
the Treasury Rules. Additional changes to the Treasury Clearing Service
Documentation incorporate reference to the Board Risk Committee to
specify matters subject to Board Risk Committee review. Further, the
changes to Treasury Rule 502 add matters requiring prior consultation
with the Treasury Risk Committee, including determining the standards
and requirements for initial and continuing Treasury Participant
eligibility and approving or denying Treasury Participant applications.
The proposed rule change thus ensures that the Treasury Clearing
Service Documentation is up-to-date and clearly assigns and documents
responsibility and accountability for relevant items to stakeholders
such as the Board Risk Committee and the Treasury Risk Committee. As
such, in ICC's view, the proposed rule change continues to ensure 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).\38\
---------------------------------------------------------------------------
\37\ 17 CFR 240.17Ad-22(e)(2)(i) and (v).
\38\ Id.
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Rule 17Ad-22(e)(4)(iii) \39\ 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 participant family that
would potentially cause the largest aggregate credit exposure for the
covered clearing agency in extreme but plausible market conditions. As
described, above ICC believes that a minimum contribution of $10
million to the Treasury Guaranty Fund is appropriate at this stage of
the Treasury Clearing Service. ICC believes that the Treasury Guaranty
Fund would continue to provide adequate funds to cover losses in
accordance with regulatory requirements and that the Treasury Guaranty
Fund would continue to support a significant liquidity pool in case of
liquidity events. For the avoidance of doubt, ICC will continue to size
the Guaranty Fund to provide financial resources based on
[[Page 30757]]
Cover-2 regulatory standards. In addition, ICC proposes amendments to
specify the amounts of ICC resources available to address Custodial
Losses and Investment Losses. These revisions enhance ICC's ability to
manage the risk of certain non-default losses, which supports ICC's
ability to continue to maintain sufficient financial resources to
enable ICC to cover a wide range of foreseeable stress scenarios,
including but not limited to, the default of the participant family
that would potentially cause the largest aggregate credit exposure for
the covered clearing agency in extreme but plausible market conditions.
ICC thus believes the proposed rule change meets the requirements of
Rule 17Ad-22(e)(4)(iii).\40\
---------------------------------------------------------------------------
\39\ 17 CFR 240.17Ad-22(e)(4)(iii).
\40\ Id.
---------------------------------------------------------------------------
Rule 17Ad-22(e)(7)(i) \41\ requires each covered clearing agency to
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to effectively measure, monitor, and
manage the liquidity risk that arises in or is borne by the covered
clearing agency, including measuring, monitoring, and managing its
settlement and funding flows on an ongoing and timely basis, and its
use of intraday liquidity by maintaining sufficient liquid resources at
the minimum in all relevant currencies to effect same-day and, where
appropriate, intraday and multiday settlement of payment obligations
with a high degree of confidence under a wide range of foreseeable
stress scenarios that includes, but is not limited to, the default of
the participant family that would generate the largest aggregate
payment obligation for the covered clearing agency in extreme but
plausible market conditions. As noted above, ICC proposes to amend the
language throughout Treasury Rule 812 to allow ICC to use or borrow
non-cash assets to facilitate settlement. For example, in Treasury Rule
812(b)(v), ICC proposes to specify that it may accept, in lieu of a
substitution of cash, a substitution of securities of a specific CUSIP
requested by ICC from one or more Treasury Participants, which
securities may be used by ICC to effect settlement. Such changes are
generally designed to enhance ICC's ability to meet the requirements of
17Ad-22(e)(7)(i) and promote ICC's ability to ensure that it maintains
sufficient liquid resources in accordance with the requirements of Rule
17Ad-22(e)(7)(i).\42\
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\41\ 17 CFR 240.17Ad-22(e)(7)(i).
\42\ Id.
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Rule 17Ad-22(e)(13) \43\ requires each covered clearing agency to
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to ensure that it has the authority and
operational capacity to take timely action to contain losses and
liquidity demands and continue to meet its obligations by, at a
minimum, requiring its participants and, when practicable, other
stakeholders to participate in the testing and review of its default
procedures, including any close-out procedures, at least annually and
following material changes thereto. The proposed changes to the
Treasury Rules enhance the clarity and transparency of such procedures
by providing additional certainty and clarity on ICC's default
management rules. For example, ICC proposes clarifications to remove
defined terms in Treasury Rule 102 related to a Default Committee, as
ICC does not plan to establish a Treasury Default Committee for the
Treasury Clearing Service. Additionally, as a default management
action, ICC proposes to clarify in Treasury Rule 20-605(d)(iii) that,
where the defaulter holds house positions corresponding to and
economically offsetting the client-related positions in a Non-
Participant Party portfolio, ICC may cause such house positions and
client-related positions to be offset against each other. Further
changes to Treasury Rule 316(g) state that the Treasury Participant
manages the close-out of the defaulting client's positions, unless the
Treasury Participant elects to have ICC manage the close-out through an
ICC Management Election, and an ICC Management Election must be made by
providing a written certification to ICC. Such changes clearly set out
the responsibilities or default management actions of ICC during a
close-out, thereby ensuring that ICC has the authority and operational
capacity to take timely action to contain losses and liquidity demands
and continue to meet its obligations, consistent with the requirements
of Rule 17Ad-22(e)(13).\44\
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\43\ 17 CFR 240.17Ad-22(e)(13).
\44\ 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 not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
changes to the Treasury Clearing Service Documentation will apply
uniformly across all market participants. Certain proposed changes,
including amendments to the minimum contribution to the Treasury
Guaranty Fund and to the types of entities that may be approved as
Treasury Participants, may expand access to clearing to a broader range
of market participants. ICC does not believe these amendments would
otherwise affect the costs of clearing or the ability of market
participants to access clearing. 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.
(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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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#82f0f7eee7afe1edefefe7ecf6f1c2f1e7e1ace5edf4"><span class="__cf_email__" data-cfemail="8bf9fee7eea6e8e4e6e6eee5fff8cbf8eee8a5ece4fd">[email protected]</span></a>. Please include
file number SR-ICC-2026-002 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-2026-002. This file
number should be included on the
[[Page 30758]]
subject line if email is used. 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="https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking</a>). Copies of the filing will 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-2026-002 and should be submitted on or before June 16, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\45\
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\45\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-10368 Filed 5-22-26; 8:45 am]
BILLING CODE 8011-01-P
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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.