Notice2026-22026
Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change Relating to the ICE Clear Credit Recovery Plan and ICE Clear Credit Wind-Down Plan
Primary source
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Published
October 29, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 208 (Thursday, October 29, 2026)</title>
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[Federal Register Volume 91, Number 208 (Thursday, October 29, 2026)]
[Notices]
[Pages 68207-68212]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22026]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106738; File No. SR-ICC-2026-009]
Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change Relating to the ICE Clear Credit
Recovery Plan and ICE Clear Credit Wind-Down Plan
October 26, 2026.
I. Introduction
On August 27, 2026, ICE Clear Credit LLC (``ICC'' or ``ICE Clear
Credit'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'' or the ``Act'') \1\ and Rule
19b-4 thereunder,\2\ a proposed rule change (the ``Proposed Rule
Change'') to revise the ICC Recovery Plan (the ``Recovery Plan'') and
the ICC Wind-Down Plan (the ``Wind-Down Plan'') (collectively, the
``Plans'') to reflect changes that impacted ICC in the past year and to
accommodate ICC's U.S. Treasury clearing service (the ``Treasury
Clearing Service''). The proposed rule change was published for comment
in the Federal Register on September 14, 2026.\3\ The Commission did
not receive comments regarding the proposed rule change. For the
reasons discussed below, the Commission is approving the proposed rule
change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 106308 (Sept. 9, 2026),
91 FR 58208 (Sept. 14, 2026) (File No. SR-ICC-2026-009)
(``Notice'').
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II. Description of the Proposed Rule Change
A. Background
ICC is registered with the Commission as a clearing agency for the
purpose of clearing covered default swap (``CDS'') contracts and for
transactions involving U.S. Treasury securities.\4\ ICC is a central
counterparty (``CCP''), which means that it interposes itself as the
buyer to every seller and the seller to every buyer for transactions in
CDS contracts and U.S. Treasury securities.\5\ Because it acts as a
CCP, ICC is a ``covered clearing agency'' as defined in Rule 17ad-
22(a).\6\ As such, ICC is regulatorily obligated to have plans for (i)
recovery, which must address any uncovered loss, liquidity shortfall,
or capital inadequacy, whether arising from participant default or
other causes, as necessary to maintain its viability as a going concern
and to continue its provision of core services and (ii) wind-down,
which encompasses actions to effect the permanent cessation, sale, or
transfer of one or more of its core services.\7\
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\4\ Capitalized terms not otherwise defined herein have the
meanings assigned to them in the Plans, ICC's CDS Rules, or Treasury
Clearing Rules, as applicable.
\5\ Rule 17ad-22(a) defines ``central counterparty'' as ``a
clearing agency that interposes itself between the counterparties to
securities transactions, acting functionally as the buyer to every
seller and the seller to every buyer.'' 17 CFR 240.17ad-22(a).
\6\ Rule 17ad-22(a) defines ``covered clearing agency'' as a
``registered clearing agency that provides the services of a central
counterparty or central securities depository.'' 17 CFR 240.17ad-
22(a).
\7\ Rule 17ad-22(e)(3)(ii) requires that each covered clearing
agency establish, implement, maintain and enforce written policies
and procedures reasonably designed to, among other things, maintain
a sound risk management framework for comprehensively managing
legal, credit, liquidity, operational, general business, investment,
custody, and other risks that arise in or are borne by the covered
clearing agency, which includes plans for the recovery and orderly
wind-down of the covered clearing agency necessitated by credit
losses, liquidity shortfalls, losses from general business risk, or
any other losses. 17 CFR 240.17ad-22(e)(3)(ii). Further, Rule 17ad-
26(b) defines ``orderly wind-down'' as ``the actions of a covered
clearing agency to effect the permanent cessation, sale, or transfer
of one or more of its core services . . . in a manner that would not
increase the risk of significant liquidity, credit, or operational
problems spreading among financial institutions or markets and
thereby threaten the stability of the U.S. financial system.'' 17
CFR 240.17ad-26.
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ICC proposes to make changes to the Plans, which include the
policies and procedures that ICC uses to govern its recovery and wind-
down.\8\ ICC has stated that the Proposed Rule Change amends the Plans
to reflect changes that impacted ICC in the past year, including its
expansion of clearance and settlement services to cover U.S. Treasury
securities as part of its new Treasury clearing service.\9\ ICC further
stated that the Proposed Rule Change would update and revise the Plans
for clarity and streamlining purposes, and to ensure that the
information provided is current.\10\
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\8\ ICC's Recovery Plan and Wind-Down Plan are contained in
Confidential Exhibits 3 and 5, respectively, of SR-ICC-2026-009. See
generally Notice, 91 FR 58208.
\9\ See Notice, 91 FR at 58208, 58212. See also Securities
Exchange Act Release No. 104762 (Jan. 30, 2026), 91 FR 5528 (Feb. 2,
2026) (File No. 600-45), granting ICC's application to register as a
clearing agency to provide CCP services for transactions involving
U.S. Treasury securities.
\10\ See Notice, 91 FR at 58208, 58212.
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B. Proposed Changes Common to Both Plans
In general, ICC proposes to incorporate references to the Treasury
clearing service throughout the Plans and distinguish between the
Treasury and CDS clearing services, where applicable. As proposed, both
Plans would clarify that the information provided in the amended
documents is current as of March 6, 2026, unless otherwise stated. ICC
also proposes to add a footnote stating that the Treasury clearing
service has not yet launched, while incorporating Treasury clearing
service-specific information throughout the Plans that is based on the
anticipated launch of the service.
ICC proposes to update the terminology referencing its members.
Under the proposal, ICC Clearing Participants (``Clearing
Participants'' or ``CPs'') would refer to members in the CDS clearing
service and ICC Treasury Participants (``Treasury Participants'' or
``TPs'') would refer to members in the Treasury clearing service. These
changes in terminology, as well as references to the CDS Rules versus
the Treasury Rules, would be extended throughout the Plans.
ICC proposes to update language in the Plans about its role and
scope of critical operation; its financial resources in case of a
member default; and its stress scenarios. ICC proposes to insert a
description of its role as a CCP for the Treasury clearing service, as
well as additional language about its original founding as a CCP for
the CDS market. ICC states that these brief descriptions would
distinguish its existing CDS clearing services and approvals from its
recently approved Treasury clearing services and planned Treasury
clearing activities.\11\ The current Plans describe ICC's CDS clearing
services as its sole critical operation. However, to accommodate the
inclusion of the recent Treasury clearing service, ICC proposes
revisions to clarify that ``clearing services,'' broadly, are its sole
critical operation. Additionally, ICC proposes to use the terms
``General Guaranty Fund'' for the CDS clearing service and ``Treasury
Guaranty Fund'' for the Treasury clearing service. Although stress
scenarios are and would continue to be listed in both Plans, ICC
proposes to incorporate references to the Treasury clearing service and
distinguishing between the Treasury and CDS clearing services, where
applicable. ICC further proposes to specify in both Plans that it
ensures that it is in compliance with all
[[Page 68208]]
regulatory capital requirements at the entity level.
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\11\ See Notice, 91 FR at 58209, 58212.
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Across the Plans, ICC proposes to remove references to withdrawn
regulatory guidance.\12\ ICC states that, despite this regulatory
withdrawal, it would continue to consider the principles underlying
such guidance in its recovery planning.\13\ As such, ICC proposes to
replace references to such guidance with references to ``industry best
practices.''
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\12\ See Commodity Futures Trading Commission, Press Release No.
9120-25 (September 11, 2025), available at <a href="https://www.cftc.gov/PressRoom/PressReleases/9120-25">https://www.cftc.gov/PressRoom/PressReleases/9120-25</a>.
\13\ See Notice, 91 FR at 58209.
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Regarding governance structure, ICC proposes to amend the Plans to
reflect that ICC has a board-level Board Risk Committee \14\ by
revising the existing governance chart to include the Board Risk
Committee and to include a new subsection describing the role and
responsibilities of the Board Risk Committee. This governance chart
likewise would incorporate Treasury clearing service-specific
committees and groups,\15\ and new language would describe their roles
and responsibilities. ICC proposes additional language describing
required prior consultation with the Treasury Risk Committee as to
certain Specified Actions,\16\ including certain matters relating to
the acceptance for clearing of Treasury transactions, modifications to
the Treasury Rules relating to margin and the Treasury Guaranty Fund,
as well as certain recovery-related matters such as commencing reduced
gain distribution or implementing full clearing service termination.
For consistency with CDS and Treasury Rules, ICC also proposes a
clarifying edit to provide that a majority of each Risk Committee
constitutes a quorum for doing business. ICC further proposes to update
terminology throughout the Plans to distinguish between the CDS and
Treasury clearing services, including references to the CDS Risk
Committee versus the Treasury Risk Committee.
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\14\ See generally Securities Exchange Act Release No. 103161
(May 30, 2025), 90 FR 23970 (June 5, 2025) (File No. SR-ICC-2025-
006).
\15\ These groups and committees would include the Treasury Risk
Committee, Treasury Operations Working Group, and the Treasury Risk
Working Group. See Notice, 91 FR at 58210. In a footnote, ICC
proposes to explain that such Treasury clearing service-specific
working groups and committees have not yet been formed and may be
convened at the direction of ICC management in connection with the
launch of the Treasury clearing service. Id.
\16\ See Treasury Rule 502.
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With regard to the annual review process for the Recovery Plan and
Wind-Down Plan, the current language specifies that the annual review
and material amendments are presented to the Risk Committee,\17\ which
then makes a recommendation to the Board regarding their approval.
However, under the Proposed Rule Change, this review and any material
amendments instead would be presented to the Board Risk Committee, who
would then make a recommendation to the Board regarding their approval.
As proposed, the CDS and Treasury Risk Committees would continue to
review material matters impacting the Recovery Plan and the Wind-Down
Plan but would no longer be required to conduct a separate review
solely in connection with each Plan.\18\ ICC proposes to specify that
the results of testing of the Recovery Plan and the Wind-Down Plan will
be provided to the Treasury Risk Committee and Board Risk Committee, in
addition to the CDS Risk Committee and Board.
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\17\ Currently, this reference pertains to the CDS Risk
Committee because ICC has yet to establish a Treasury Risk
Committee. See Notice, 91 FR at 58211, n. 28.
\18\ ICC states that these changes aim to streamline the CDS and
Treasury Risk Committees' review processes and remove the potential
for duplicate reviews. See Notice, 91 FR at 58211. However,
specifically as to the Recovery Plan, ICC proposes to add details
about ICC's testing of the Recovery Plan, and to state that ICC may
determine to conduct this Recovery Plan testing separately or
together for the CDS and Treasury clearing services. See Notice, 91
FR at 58211.
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ICC proposes to update the relevant agreement governing certain
services in the list of critical services provided to ICC by affiliates
shown in each Plan. Similar to the existing identification of core
services for the CDS clearing service, ICC proposes to include in the
Plans the core services for the Treasury clearing service, including
the acceptance of new trades, management of positions, production of
risk and banking reports, and movement of funds. Regarding staffing
considerations and specifically as to the roles necessary to support
the core services on a daily basis and in the event of recovery or
wind-down, ICC proposes to state that, in general, all staff in a
functional area provide support for all cleared products and markets at
ICC and personnel are not split between the CDS and Treasury clearing
services. ICC also proposes to clarify that ICC separately holds the
dedicated funds used to meet financial resources requirements for the
CDS clearing service from the Treasury clearing service.
The remaining changes proposed to the Recovery Plan and the Wind-
Down Plan would renumber subsections, correct typographical errors, and
update relevant information to ensure that it is current and accurate.
For example, such changes would include a list of Clearing
Participants; \19\ updated financials; \20\ identification of ICC's
counterparties and contractual agreements; \21\ changes in contact
information for relevant regulatory staff; \22\ projected estimated
recovery and wind-down costs and financial resources to support wind-
down; \23\ and updated stress scenario analyses.\24\
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\19\ Recovery Plan, Sec. IV.B.; Wind-Down Plan, Sec. IV.A. See
Notice, 91 FR at 58211, 58214.
\20\ Recovery Plan, Sec. VIII.B.; Wind-Down Plan, Sec. VII. See
Notice, 91 FR at 58211-212, 58214.
\21\ Recovery Plan, Sec. VI.B.-C.; Wind-Down Plan, Sec. VII.D,
VIII. See Notice, 91 FR at 58211, 58214.
\22\ Recovery Plan, Sec. VII.B.; Wind-Down Plan, Sec. VI.A. Id.
\23\ Recovery Plan, Sec. X.; Wind-Down Plan, Sec. IX. See
Notice, 91 FR at 58212, 58214.
\24\ Sections XIII of the Recovery Plan and Section XI.D. of the
Wind-Down Plan. Id. For a full list of non-substantive changes, see
Notice, 91 FR at 58211-212, 58214
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C. Proposed Changes Specific to the Recovery Plan
ICC proposes to amend its Recovery Plan, the purpose of which is to
describe the actions and steps that would be taken to restore ICC to a
stable and sustainable condition in the event that it came under severe
stress; and to maintain effective arrangements for ensuring losses that
threaten ICC's viability as a going concern are allocated.
In addition to the above common changes to both Plans, ICC proposes
to make conforming changes in Section IV., which provides an overview
of key recovery elements. ICC proposes to align language about
membership qualifications with that found in the CDS Rules and Treasury
Rules. ICC proposes to replace ``must'' with ``may'' in the Recovery
Plan for consistency with CDS Rule 201(c), which states that ``the
following categories of persons may be approved by ICE Clear Credit as
Participants'' before listing the categories.\25\ As amended, the
language in the Recovery Plan would state that an entity ``may be one
of the following'' to qualify as a Clearing Participant. Similarly, ICC
proposes to amend language in the Recovery Plan and add a corresponding
footnote to align with recently revised Treasury Rule 201(c),\26\ which
states that to qualify as a Treasury Participant for the Treasury
clearing service, an entity may be one of the following: registered
broker-dealer,
[[Page 68209]]
registered investment company, bank, insurance company, futures
commission merchant, registered clearing agency, or an entity which may
not fall within the above categories, as designated appropriate by the
SEC. ICC further proposes to incorporate information into the Recovery
plan about participation in the Treasury clearing service in accordance
with its Treasury Rules.
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\25\ See CDS Rule 201(c) (emphasis added), available at <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>.
\26\ See generally Securities Exchange Act Release No. 105986
(July 24, 2026), 91 FR 47864 (July 29, 2026) (File No. SR-ICC-2026-
009) (approving the clarification that futures commission merchants
and registered clearing agencies be added to the list of entities
that ICC may approve to be Treasury Participants).
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ICC further proposes to amend Section IV. regarding operational
capacity, financial responsibility and capital requirements, funding
requirements, and collateral management. Under the Proposed Rule
Change, the Recovery Plan would state that the CDS and Treasury
clearing services operate separately in terms of financial resources.
Specifically, the Recovery Plan would state that the CDS clearing
service maintains a separate General Guaranty Fund and calls for and
holds margin payments from Clearing Participants independently of
margin payments called for in connection with the Treasury clearing
service. Similarly, regarding collateral management, ICC proposes to
specify that the Treasury clearing service determines its liquidity
needs separately from the CDS clearing service and maintains separate
liquidity resources. ICC proposes to state the eligible forms of
collateral for Initial Margin and Treasury Guaranty Fund contributions
for the Treasury clearing service as of March 6, 2026, in accordance
with Treasury Rule 401 and Schedule 401 to the Treasury Rules.
Additionally in Section IV., ICC proposes to remove references to
``direct liquidation'' as a hedging and liquidation mechanism in the
context of managing a defaulting CP's portfolio. This removal would
reflect previously approved changes to ICC's Clearing Participant
Default Management Procedures and CDS Rules.\27\ ICC further proposes
to update titles and committee memberships to reflect current committee
composition.
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\27\ See Securities Exchange Act Release No. 103601 (July 31,
2025), 90 FR 37612 (Aug. 5, 2025) (File No. SR-ICC-2025-010).
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In Section VII., which addresses stress scenarios, ICC proposes to
state that whether a member is in default in each clearing service will
be determined independently under the rules of each clearing service,
except when, specifically, should a common member default in a single
clearing service, such event will not automatically lead to a default
declaration of such common member in the other ICC clearing service.
However, as ICC further proposes, the fact the common member has
defaulted in a single clearing service could lead to the determination
that such common member is, in the judgement of ICC, likely to fail to
meet any of its obligations to the other clearing service, which could
be a basis for declaring such common member in default in the other
clearing service. Other proposed minor changes and clarifying edits to
Section VII. include the addition of Treasury Participants to ICC's
existing monitoring mechanisms, and the removal of modifiers from and
an addition of a parenthetical to the list of monitored metrics to
apply to both clearing services.\28\
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\28\ ICC states that such changes do not amend ICC's existing
practices for the CDS clearing service and maintain consistency with
existing policies and procedures. See Notice, 91 FR at 58210.
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Regarding Section VIII., which describes available recovery tools,
ICC proposes to state that the use of these recovery tools is done
separately under the rules of each clearing service.\29\ ICC proposes
to clarify that as each of the CDS and Treasury clearing services are
designed to be independent with their own separate rulebooks,
memberships and default resources, ICC does not expect that a recovery
caused by a participant default in one clearing service will cross over
to cause a recovery scenario in the other service. Under the Proposed
Rule Change, Section VIII. would state that the CDS General Guaranty
Fund and CDS margin assets will not be used to cover losses from a
default in the Treasury clearing service, or vice versa, consistent
with the separate rulebooks for the two clearing services. As proposed,
new language would state that this design minimizes the financial risks
posed by the Treasury clearing service to the CDS clearing service and
vice versa.
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\29\ As in certain previous sections in the Recovery Plan, ICC
also proposes to incorporate references to the Treasury clearing
service and distinguish between the Treasury and CDS clearing
services, where applicable.
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With respect to the tools available to address credit losses in a
participant default scenario, ICC proposes to amend Section VIII. by
specifying that, for the Treasury clearing service, these tools
generally include a declaration of a Treasury Participant default,
communicating the default, and conducting default management actions to
eliminate, settle, reduce, or replace the risk of the defaulter's open
Treasury positions. Other revisions to Section VIII. would add a
subsection describing ICC's ability to run one or more default auctions
to address credit losses in a participant default scenario in the
Treasury clearing service,\30\ and include ICC's financial resources
hierarchy for the Treasury clearing service, in the order of
consumption. ICC proposes to add a description of ICC's Treasury
Guaranty Fund,\31\ specifying which recovery tools are applicable to
each clearing service in accordance with their respective rulebooks,
and making clean-up changes to the overview of initial default auctions
for the CDS clearing service.\32\
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\30\ See Treasury Rule 20-605(d)(v).
\31\ See Treasury Rule 801.
\32\ Such changes include updating examples to align with those
included in the current version of the Default Auction Procedures--
Initial Default Auctions and replacing existing tables and text-
based examples with graphical illustrations to improve formatting
and presentation. See Notice, 91 FR at 58211.
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With respect to tools used to address liquidity shortfalls in
participant and non-participant default scenarios, ICC proposes to
incorporate references to the Treasury clearing service, while
differentiating from the CDS clearing service, where applicable. Under
the Proposed Rule Change, Section VIII. would incorporate references to
the Treasury Clearing Service Liquidity Risk Management Framework
(``LRMF'') and describe the LRMF's objectives and ICC's liquidity
waterfall, as well as include a subsection listing additional liquidity
tools for the Treasury clearing service. ICC proposes to state that it
is likely that a recovery scenario in one clearing service would not
trigger a significant reduction in ICC's employee headcount because the
other clearing service would continue business-as-usual operations.
Also in Section VIII., ICC proposes to remove a duplicate entry in the
insurance coverage table.
As proposed, Section IX. would be amended by removing stale
statements about direct customer participation in governance, since the
CDS and Treasury Risk Committees provide for customer participation.
ICC proposes to update terminology from ``full tear-up'' to ``full
termination'' for consistency with the rulebooks, which use
``termination'' rather than ``tear-up'' when discussing the termination
of clearing.\33\
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\33\ See CDS Rule 810 and Treasury Rule 810.
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D. Proposed Changes Specific to the Wind-Down Plan
ICC proposes to amend its Wind-Down Plan, which establishes how ICC
could be wound-down in an orderly manner in the event the recovery
actions described in the ICC Recovery Plan failed to preserve ICC's
viability as a going concern, but before resolution has been
triggered.\34\
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\34\ The Wind-Down plan also may be used if ICC makes a business
decision to exit all clearing activities. See Notice, 91 FR at
58212.
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[[Page 68210]]
In addition to the above common changes to both Plans, ICC proposes
to amend Section VI., which covers wind-down options that will be used
in the event that the recovery actions described in the Recovery Plan
failed to preserve ICC's viability as a going concern and resolution
has not been triggered. In particular, ICC proposes amendments to its
approach, timeline, resources, considerations and/or potential
impediments of each wind-down option to include the Treasury clearing
service. The wind-down options of transfer, sale and termination
currently apply to the CDS clearing service and would continue to do
so, while extending to the Treasury clearing service under the Proposed
Rule Change. As in the Recovery Plan, references to ``tear-up'' would
be replaced with ``termination.'' \35\
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\35\ See supra n. 32 and accompanying text.
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Regarding all three options of transfer, sale, and termination
described in Section VI., ICC proposes to update the description of
these options to contemplate the transfer or sale of either the CDS
clearing service or the Treasury clearing service, as well as the
transfer or sale of both services. Regarding the transfer and
termination options, ICC proposes to state that if only one clearing
service will be transferred or terminated, ICC will need to continue to
maintain risk, treasury, compliance, and operations teams on a
business-as-usual basis for the remaining clearing service. In the case
of either a transfer or sale, ICC proposes to include language that
already exists for the CDS clearing service and apply it to the
Treasury clearing service, allowing the transfer or sale of Treasury
clearing activities from ICC to an alternative clearing house or
another entity, respectively.\36\ For both the transfer and sale
options, ICC proposes to state that both CDS and Treasury clearing
services will be transferred or sold, ICC anticipates pursuing the
relevant processes in parallel, such that the anticipated timeline will
not be delayed. With respect to the transfer option, ICC proposes
adding a description as to potential impediments or considerations,
specifying that there may be a limited number of potential recipient
clearing houses because such clearing houses would be required to have
all appropriate registrations. With respect to the sale option, ICC
proposes to state that if only one clearing service will be sold, a
service provider may prefer to provide transitional services to the
recipient clearing house for a specified time period. With respect to
the termination option, ICC proposes to define the termination option
to include the termination of open Treasury positions ideally through
orderly close out, and if orderly close out is not achieved, through
the termination of open positions.
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\36\ Such a transfer or sale would include open positions. See
Notice, 91 FR at 58213.
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In Section VIII., ICC proposes to incorporate references to the
Treasury clearing service in the description of contractual
arrangements in the context of continuation of services during wind-
down, while distinguishing it from the CDS clearing service and
identifying which arrangements are applicable to each clearing service.
Specifically, ICC proposes to make conforming changes to the
description of the relevant contractual provisions and to analysis of
the potential impact that such provisions would have on wind-down
implementation.\37\
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\37\ An example of such impact is the effect of a counterparty's
termination of an agreement on a non-impacted clearing service. See
Notice, 91 FR at 58213.
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Lastly, ICC proposes updating Section XI. regarding certain
clearing process charts in Section XI.B and C. ICC proposes to specify
that these charts reflect the CDS clearing service, as the Treasury
clearing service has not yet launched. Accordingly, Treasury clearing
process charts would not be included at this time, and this section
will need to be updated in a future filing.
III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act requires the Commission to approve a
proposed rule change of a self-regulatory organization if it finds that
the proposed rule change is consistent with the requirements of the Act
and the rules and regulations thereunder applicable to the
organization.\38\ Under the Commission's Rules of Practice, the
``burden to demonstrate that a proposed rule change is consistent with
the Exchange Act and the rules and regulations issued thereunder . . .
is on the self-regulatory organization [`SRO'] that proposed the rule
change.'' \39\
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\38\ 15 U.S.C. 78s(b)(2)(C).
\39\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR
201.700(b)(3).
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The description of a proposed rule change, its purpose and
operation, its effect, and a legal analysis of its consistency with
applicable requirements must all be sufficiently detailed and specific
to support an affirmative Commission finding,\40\ and any failure of an
SRO to provide this information may result in the Commission not having
a sufficient basis to make an affirmative finding that a proposed rule
change is consistent with the Exchange Act and the applicable rules and
regulations.\41\ Moreover, ``unquestioning reliance'' on an SRO's
representations in a proposed rule change is not sufficient to justify
Commission approval of a proposed rule change.\42\
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\40\ Id.
\41\ Id.
\42\ Susquehanna Int'l Group, LLP v. Securities and Exchange
Commission, 866 F.3d 442, 447 (D.C. Cir. 2017).
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After carefully considering the proposed rule change, the
Commission finds that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to ICC. More specifically, for the reasons given below, the
Commission finds that the proposed rule change is consistent with
Section 17A(b)(3)(F) of the Act,\43\ and Rules 17ad-22(e)(3), 17ad-
26(a)(1), 17ad-26(a)(8), and 17ad-26(a)(9) under the Act.\44\
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\43\ 15 U.S.C. 78q-1(b)(3)(F).
\44\ 17 CFR 240.17ad-22(e)(3), 17 CFR 240.17ad-26(a)(1), 17 CFR
240.17ad-26(a)(8), and 17 CFR 240.17ad-26(a)(9).
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A. Consistency With Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of ICC be designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions.\45\
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\45\ 15 U.S.C. 78q-1(b)(3)(F).
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A recovery, wind-down, or business disruption could lead to the
failure of ICC's business operations in the CDS and Treasury clearing
spaces, which could, in turn, inhibit the prompt and accurate clearance
and settlement of transactions at ICC. Because the Recovery Plan and
the Wind-Down Plan would facilitate the continuity and orderly
functioning of ICC's clearing services in the case of a business
disruption severe enough to necessitate recovery or wind-down, the
Plans help ensure that ICC can continue to operate in those situations,
and thus continue clearing and settling securities transactions in CDS
and U.S. Treasury markets.
As noted above, the Proposed Rule Change primarily would update the
Plans with current information by incorporating references to the
recently established Treasury clearing service throughout the Plans and
distinguishing between the Treasury and CDS clearing services, where
applicable. The
[[Page 68211]]
Proposed Rule Change also would incorporate into the Plans current
information about, among other things, internal governance groups and
committees, finances, references to industry best practices rather than
withdrawn regulatory guidance, the annual review process and testing of
the Plans, contractual arrangements, and recovery tools and wind-down
options. By providing the most current information about the
incorporation of the Treasury clearing services and other key topics,
the Proposed Rule Change will support ICC's ability to monitor its
finances, assess its Plans annually under the appropriate governance,
and evaluate its regulatory capital. This in turn will help ensure ICC
has the financial resources to promptly and accurately clear and settle
transactions during recovery and, if necessary, conduct an orderly
wind-down.
Additionally, these proposed changes help ensure visibility into
and transparency of the Plans and into the processes ICC has developed
to ensure continuity, or an effective wind-down, should certain
circumstances threaten its viability. The updated information ensures
that the Plans remain current and relevant, and thereby effectively
serve their intended purpose. Since both the transparency and relevancy
of the Plans are factors that support the Plans' ability to help
facilitate the continuity and orderly functioning of ICC in the case of
a recovery or winddown, those factors help ensure ICC can meet its
business obligations in such situations, and thus continue clearing and
settling securities transactions.
Accordingly, the Proposed Rule Change promotes the prompt and
accurate clearance and settlement of transactions at ICC, consistent
with Section 17A(b)(3)(F) of the Act.\46\
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\46\ Id.
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B. Consistency With Rule 17ad-22(e)(3) Under the Act
Rule 17ad-22(e)(3)(ii) requires that ICC establish, implement,
maintain and enforce written policies and procedures reasonably
designed to, among other things, maintain a sound risk management
framework for comprehensively managing legal, credit, liquidity,
operational, general business, investment, custody, and other risks
that arise in or are borne by the covered clearing agency, which
includes plans for the recovery and orderly wind-down of the covered
clearing agency necessitated by credit losses, liquidity shortfalls,
losses from general business risk, or any other losses.\47\
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\47\ 17 CFR 240.17ad-22(e)(3)(ii).
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As described above, ICC proposes to update its Recovery Plan and
Wind-Down Plan to include provisions pertaining to the newly
established Treasury clearing service and distinguish recovery and
wind-down operations from those applicable to the CDS service, where
applicable. As proposed, the Plans would align many provisions
regarding governance, financials, contractual arrangements, review
processes of Plans, and terminology. Under the Proposed Rule Change,
the Recovery Plan would clarify key recovery elements, such as by
stating that the CDS and Treasury clearing services operate separately
in terms of financial resources. The proposed changes to the Recovery
Plan also would address stress scenarios, including by clarifying that,
generally, the determination as to whether a member is in default in
each clearing service will be determined independently. The Recovery
Plan also would be updated to include current descriptions of available
recovery tools, other tools available to address credit losses in a
participant default scenario, and tools used to address liquidity
shortfalls in participant and non-participant default scenarios.
Likewise, under the Proposed Rule Change, the Wind-Down Plan would
update ICC's approach, timeline, resources, considerations and/or
potential impediments of each wind-down option to include the Treasury
clearing service, while retaining the wind-down options of transfer,
sale and termination that currently apply to the CDS clearing service.
The Wind-Down Plan, as proposed, also would incorporate references to
the Treasury clearing service in the description of contractual
arrangements in the context of continuation of services during wind-
down, while distinguishing it from the CDS clearing service and
identifying which arrangements are applicable to each clearing service.
Overall, the Plans, as proposed, would align not only to each other,
but also with applicable CDS Rules and Treasury Rules.
These proposed changes reduce the risk that the Plans may not
contain current information and provide a more accurate and useful
playbook for ICC in case of recovery and/or orderly wind-down. Thus,
these proposed changes should improve ICC's ability to conduct a
recovery and/or orderly wind-down using the Plans.
Accordingly, the Proposed Rule Change is consistent with the
requirements of Rule 17ad-22(e)(3)(ii) under the Act.\48\
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\48\ Id.
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C. Consistency With Rule 17ad-26(a)(1) Under the Act
Rule 17ad-26(a)(1)(i)-(ii) requires ICC's plans for recovery and
orderly-wind down to identify and describe ICC's core payment,
clearing, and settlement services and address how ICC would continue to
provide such core services in the event of a recovery and during an
orderly wind-down, including by identifying the staffing roles
necessary to support such core services; and analyzing how such
staffing roles necessary to support such core services would continue
in the event of a recovery and during an orderly winddown.\49\
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\49\ 17 CFR 240.17ad-26(a)(1)(i)-(ii).
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As described above, ICC's proposed changes identify staffing roles
necessary to support core services of the CDS clearing service and the
Treasury Clearing service. Regarding staffing considerations and
specifically as to the roles necessary to support the core services on
a daily basis and in the event of recovery or wind-down, ICC proposes
to state in both Plans that, in general, all staff in a functional area
provide support for all cleared products and markets at ICC and
personnel are not split between the CDS and Treasury clearing services.
Additionally, these staffing roles do not refer to specific personnel
or employees, but instead to positions, roles, and personnel functions
that are necessary for the continuation of core services. By confirming
that all staff in a functional area are not split between the CDS and
Treasury clearing services, and thus existing staff in the CDS service
support the core services of the Treasury clearing service, these
changes would identify the staffing roles necessary to support core
services for the Treasury clearing and how those would continue in the
event of a recovery and during an orderly winddown.
Therefore, the Proposed Rule Change is consistent with the
requirements of Rule17ad-26(a)(1)(i)-(ii) under the Act.\50\
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\50\ Id.
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D. Consistency With Rule 17ad-26(a)(8) Under the Act
Rule 17ad-26(a)(8)(iii) requires ICC's plans for recovery and
orderly wind-down to include procedures for testing ICC's ability to
implement the recovery and orderly wind-down plans at least every 12
months, including by, among other things, providing for reporting the
results of such testing to ICC's board of directors and senior
management.\51\
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\51\ 17 CFR 240.17ad-26(a)(8)(iii).
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[[Page 68212]]
As described above, under the Proposed Rule Change, the results of
testing of the Plans will be provided to the Treasury Risk Committee
and Board Risk Committee, in addition to the CDS Risk Committee and
Board. This would accommodate the splitting off of the separate CDS
Risk Committee and the Treasury Risk Committees for consistency with
the CDS Rules and Treasury Rules. The CDS and Treasury Risk Committees
would continue to review material matters impacting the Recovery Plan
and the Wind-Down Plan but would no longer be required to conduct a
separate review solely in connection with each Plan. ICC further
proposes to specify that the results of testing of the Plans will be
provided to the Treasury Risk Committee and Board Risk Committee, in
addition to the CDS Risk Committee and Board, thus providing for
reporting the results of such testing to ICC's board of directors and
senior management.
Therefore, the Proposed Rule Change is consistent with the
requirements of Rule 17ad-26(a)(8)(iii) under the Act.\52\
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\52\ Id.
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D. Consistency With Rule 17ad-26(a)(9) Under the Act
Rule 17ad-26(a)(9) requires ICC's plans for recovery and orderly
wind-down to include procedures requiring review and approval of the
Plans by the ICC's Board at least every 12 months or following material
changes to ICC's operations that would significantly affect the
viability or execution of the plans, with such review informed, as
appropriate, by ICC's testing of the plans.\53\
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\53\ 17 CFR 240.17ad-26(a)(9).
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As proposed, the annual review process of the Plans would be
extended to incorporate references to Treasury clearing service and
Treasury Rules, and distinguish between the Treasury and CDS clearing
services and respective rulebooks. Additionally, the Proposed Rule
Change would update the governance process to include that the annual
review of the Plans and any material amendments to them would be
presented to the Board Risk Committee, who would then make a
recommendation to the Board regarding their approval. As such, the
Plans would continue to include procedures requiring review and
approval of the Plans by ICC's Board at least every 12 months or
following material changes to ICC's operations that would significantly
affect the viability or execution of the Plans, but would encompass as
part of those operations ICC's newly established Treasury clearing
service and changes to risk committees.
Therefore, the Proposed Rule Change is consistent with the
requirements of Rule 17ad-26(a)(9) under the Act.\54\
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\54\ Id.
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IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act,
and in particular, with the requirements of Section 17A(b)(3)(F) of the
Act,\55\ and Rules 17ad-22(e)(3), 17ad-26(a)(1), 17ad-26(a)(8), and
17ad-26(a)(9) \56\ thereunder.
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\55\ 15 U.S.C. 78q-1(b)(3)(F).
\56\ 17 CFR 240.17ad-22(e)(3), 17 CFR 240.17ad-26(a)(1), (8),
and (9).
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It is therefore ordered pursuant to Section 19(b)(2) of the Act
\57\ that the proposed rule change (SR-ICC-2026-009) be, and hereby is,
approved.\58\
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\57\ 15 U.S.C. 78s(b)(2).
\58\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\59\
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\59\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22026 Filed 10-28-26; 8:45 am]
BILLING CODE 8011-01-P
</pre></body>
</html>Indexed from Federal Register on October 29, 2026.
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