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Federal Register / Vol. 86, No. 117 / Tuesday, June 22, 2021 / Notices
allows for the cost of ICE Trade Vault to be fair and equal for reporting parties whether they choose to report directly to ICE Trade Vault or via a third party reporter.119 Additionally, according to ICE Trade Vault, clearing agency fees vary from other users due to the unique requirements necessary to support this type of customer; ICE Trade Vault must build out a separate custom interfaces and purchase and maintain additional hardware necessary to support the high volume of trades submitted to the SDR
by the clearing agency; as a result, the minimum fee outlined in the ICE Trade Vault pricing schedule reflects the costs incurred by ICE Trade Vault to purchase the necessary hardware and software and the cost to build out the SDR
system; in addition, the clearing agency fees also reflect the additional ongoing support and maintenance costs for this type of high volume user.120 According to ICE Trade Vault, all fees within the schedule, including the monthly per $1MM notional, are cost based to ensure ICE Trade Vault may operate with a minimum margin while allowing for a reasonable cost to its customers, given the expected volume of trades it expects to receive as an SDR.121
ICE Trade Vault will assess a Repository Fee upon its acceptance of any trade message for an SBS
transaction.122 For both cleared and uncleared/bilateral transactions, the Repository Fee rates will be $1.35 per $1/MM Notional. For cleared SBS, the Repository Fee will be charged to the clearing agency that cleared the SBS
and, for uncleared or bilateral SBS
transactions, the fee will be charged to the user which submitted the record as a counterparty or execution agent.
For transactions submitted directly by a clearing agency user, clearing agency users will have a minimum monthly invoice per user of $10,000, and the invoice will be the greater of i the total of all Repository Fees incurred by user or ii $10,000.123 If a clearing agency user does not have any submittals in a given month but does have open positions, the $10,000 will be charged as a minimum maintenance fee in the place of any Repository Fees. If a clearing agency user does not have any submittals in a given month and does not have any open positions then no fees will be charged.
For transactions submitted directly by a counterparty user, the minimum 119 See
id.
id.
121 See id.
122 See ICE Trade Vault Security-Based Swap Data Repository Service and Pricing Schedule, Ex. M.2.
123 See id.
120 See
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monthly invoice per user will be $375.124 In a given month, each user represented as a counterparty shall be invoiced the greater of i the total of all Repository Fees incurred by user or ii $375. If the user does not have any submittals in a given month but does have open positions on SBS in the ICE
Trade Vault Service, the $375 will be charged as a minimum maintenance fee in the place of any Repository Fees. If the user does not have any submittals in a given month and does not have any open positions then no fees will be charged.
When an execution agent submits an SBS transaction on behalf of the counterparty and is listed as the execution agent, the execution agent will be charged the Repository Fee not the underlying funds, accounts or other principals.125 When an execution agent submits an SBS transaction where the execution agent is acting as the counterparty, it will be charged the Repository Fee. The minimum monthly invoice for an execution agent will be a total of $375, including all transactions in which the executing agent is acting on behalf of a counterparty or acting as its own counterparty.
For transactions submitted by third party reporters, third party reporters will only be charged a Repository Fee for those transactions they report on behalf of non-users of ICE Trade Vault.126 Each non-user on whose behalf the third party reporter submits the transaction will have an invoice created as if it were a user, and will be invoiced the greater of i the total of all Repository Fees incurred by non-user or ii $200. If the non-user does not have any submittals by the third party reporter in a given month but does have open positions, $200 will be charged as a minimum maintenance fee in the place of any Repository Fees. If the nonuser does not have any submittals by the third party reporter in a given month and does not have any open positions then no fees will be charged. The details regarding the Repository Fees incurred or the minimum monthly amount for each non-user will be detailed on the third-party reporters invoice and summed across all non-users to determine the total amount charged to any one third party reporter. ICE Trade Vault will solely provide invoices to the third party reporter for trades reported on behalf of the non-user and will not issue an invoice directly to any nonusers.
124 See
id.
id.
126 See id.
125 See
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2. Discussion Section 13n7A of the Exchange Act prohibits an SDR unless necessary or appropriate to achieve the purposes of the Exchange Act from: i Adopting any rule or taking any action that results in any unreasonable restraint of trade; or ii imposing any material anticompetitive burden on the trading, clearing, or reporting of transactions.127
Rule 13n4c1i under the Exchange Act also requires an SDR to ensure that any dues, fees, or other charges that it imposes, and any discounts or rebates that it offers, are fair and reasonable and not unreasonably discriminatory.128 It also requires that such dues, fees, other charges, discounts, or rebates be applied consistently across all similarly situated users of the SDRs services.129 In discussing the fee provisions of the SDR
Rules, the Commission stated that it would take a flexible approach in evaluating the fairness and reasonableness of an SDRs fees and charges on a case-by-case basis, recognizing that there may be instances in which an SDR could charge different users different prices for the same or similar services.130
The Commission received no comments applicable to these requirements. ICE Trade Vault states that all of the fees it charges, including the Repository Fee, are cost based to ensure ICE Trade Vault may operate with a minimum margin while allowing for a reasonable cost to its customers, given the expected volume of trades ICE
Trade Vault expects to receive as an SDR. The fees include a fixed component and a variable component that increases with the usage of SDR
services. Such a fee structure is generally in line with the economics of recordkeeping services for securitybased swaps, which involve a fixed cost investment and marginal costs of operation.131 In addition, ICE Trade Vaults approach to fees would be consistent across CFTC and Commission reporting requirements, and, as a general matter, the Commission believes it is reasonable for ICE Trade Vault to establish similar fees where its 127 15

U.S.C. 78mn7A.
CFR 240.13n3c1i.

128 17
129 Id.

130 See SDR Adopting Release, supra note 7, at 14479. In making this statement, however, the Commission also noted that charging different users different prices for the same or similar services cannot be unreasonably discriminatory.
131 See generally Regulation SBSR Adopting Release, 81 FR at 53551 stating that the provision of recordkeeping services for security-based swaps involves a predominantly fixed cost investment with low marginal costs of operation.

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