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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES1

ICE Clear Europe proposes to amend Part E of the summary table at paragraph 4.2 of the Membership Procedures to provide that the termination of a Clearing Membership Agreement or membership as a Clearing Member would become effective no less than 30
Business Days after the date of the Termination Notice Time or pursuant to Rule 917c instead of the current notice period of no less than three months advance notice if termination is not for cause and otherwise as specified in and allowed pursuant to the Rules. This change would make the summary table consistent with current Rule 209.
Finally, throughout the summary table at paragraph 4.2 of the Membership Procedures, the proposed rule change would update the email address to which Clearing Members should send certain notifications.
vii. Clarifying Clearing Membership Criteria and Clearing Member Obligations The proposed rule change would amend Rule 201aix to reference existing Rule 201b, under which ICE
Clear Europe may require that potential Clearing Members enter into additional annexes or agreements to the Clearing Membership Agreement in order to be, and remain, eligible for Clearing Membership. ICE Clear Europe represents that it had to develop certain annexes to cater for local law issues arising in certain EU member states as part of Clearing Members post-Brexit group legal structuring.17 By specifically referencing Rule 201b, the proposed amendments to Rule 201aix would clarify the basis in the Rules for ICE
Clear Europe to require such additional documentation to be executed, where necessary.
The proposed rule change would also amend Rule 202axxii, which currently requires Clearing Members to have competent persons accessible to ICE Clear Europe during opening hours and for two hours immediately after the business day. Under the proposed amendment, Clearing Members would be required to have competent persons accessible to ICE Clear Europe for two hours prior to the start of the business day as well. ICE Clear Europe represents that this change is consistent with current operational practice and necessary to ensure that staff are available to process and deal with questions relating to morning margin calls.18
ICE Clear Europe proposes to add a new Rule 301o that would allow it to 17 Notice, 18 Notice,
86 FR 29614.
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request information on account balances of nominated accounts of the Clearing Member at financial institutions when needed, including for the purpose of calling on available cash where the Clearing Member has failed to meet a payment obligation or determining whether the Clearing Member is, or is likely to be, in default. ICE Clear Europe represents that this change would address issues that have arisen in practice where payment banks have refused to provide such information to ICE Clear Europe.19
viii. Greater Flexibility in Financial Reporting by Clearing Members The proposed rule change would amend Rule 205aii to give ICE Clear Europe greater flexibility to accept different kinds of financial statements for example, semi-annual accounts from Clearing Members as part of their financial reporting obligations, in circumstances where that Clearing Member does not produce a quarterly financial statement for its regulators.
This amendment would also result in a conforming change to Part A of the summary table at paragraph 4.2 of the Membership Procedures. ICE Clear Europe represents that these proposed amendments would formalize current operational practice for those Clearing Members who do not prepare regulatory quarterly financials.20
ix. Clarifying CDS Contract Formation The proposed rule change would amend Rule 401o to clarify that, where a CDS Contract of a Non-FCM/BD
Clearing Member for a customer account arises pursuant to Rule 401, a CustomerCM CDS Transaction arises between the Customer and the Non-FCM/BD
Clearing Member at the same time as the Contract. The current rule does not specify the timing of the Customer-CM
CDS Transaction. The proposed amendment would reflect the equivalent rule for a Customer-CM F&O
Transaction in Rule 401n.
x. Clarifying How Open Contract Positions Are Aggregated and Netted The proposed rule change would amend Rules 406b and c to address contractual netting for F&O contracts by aligning the provisions for F&O
Contracts more closely with the corresponding rule provisions on contractual netting for CDS contracts in Rule 406d, et seq. In particular, the proposed changes would expressly address aggregation of open contract positions of an F&O Clearing Member in 19 Notice, 20 Notice,
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addition to netting of such positions, and would clarify that the process for aggregation or netting takes place via contractual novation.
xi. Clarifying How the Clearing House May Amend Contract Terms The proposed rule change would amend Rule 409a so that ICE Clear Europe can evidence its consent to amendments, waivers, and variations of the Contract Terms by a Circular. ICE
Clear Europe represents that a Circular has been the usual way of issuing such amendments, waivers, and variations, and the proposed change would conform the Rules to operational practice.21
xii. Pledged Collateral Not for Settlement Payments The proposed rule change would amend Rule 1603c to clarify that only original or initial types of Margin payments shall be provided in the form of Pledged Collateral, and that such collateral excludes Variation Margin, Mark-to-Market Margin, and FX Markto-Market Margin, which is provided to or by ICE Clear Europe by outright transfer of cash as a settlement payment.
ICE Clear Europe represents that this proposed change is intended to be consistent with amendments previously made to the Rules to clarify that such variation and mark-to-market margin are settlement payments rather than collateral, and was inadvertently omitted from such prior amendments.22
xiii. Hedging Following an Event of Default The proposed rule change would amend Rule 903c to clarify that ICE
Clear Europes right to authorize hedging transactions in a Default scenario would include transactions on a Market, any other Exchange, or over the counter. The proposed amendments would also provide that such transactions taking place on an exchange which is not a Market, or where requested or directed otherwise by ICE Clear Europe, need not themselves be cleared.
xiv. Affiliate Cross-Defaults The proposed rule change would amend Rule 901aiv to clarify that the declaration of an Event of Default in respect of one Clearing Member is a circumstance in which ICE Clear Europe can declare an Event of Default in respect of another Clearing Member that 21 Notice,
86 FR 29615.
Notice, 86 FR 29615. See also Exchange Act Release No. 3488665 File No. SRICEEU
2020003 Apr. 16, 2020, 85 FR 22892 Apr. 23, 2020.
22 See
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