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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices For these reasons, the Commission finds the proposed rule change is consistent with Rule 17Ad22e14.63

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J. Consistency With Rule 17Ad 22e17i Rule 17Ad22e17i requires that ICE Clear Europe establish, implement, maintain, and enforce written policies and procedures reasonably designed to manage its operational risks by identifying the plausible sources of operational risk, both internal and external, and mitigating their impact through the use of appropriate systems, policies, procedures, and controls.64 As discussed above, the proposed rule change would amend the provisions for delivery of notices in various Rules as part of ICE Clear Europes default simulation planning. The proposed amendments would generally replace telephone with email delivery, and clarify the delivery to nominated process agents, as well as the timing for effective service and delivery of notices.
The Commission believes these changes would help to improve the efficiencies in the delivery of notices, which in turn would help ICE Clear Europe manage the related operational risks associated with the delivery and receipt of notices in case of a Clearing Member default or termination, among other operational scenarios.
The Commission believes that the proposed amendment to Rule 202
Obligations of Clearing Members to require Clearing Members to have competent staff representatives accessible to ICE Clear Europe for two hours before the start of the business day would help ICE Clear Europe ensure that its operational policies are consistent with its operational practices for appropriately managing the risks associated with Clearing Members meeting time-sensitive morning margin calls.
The Commission believes that the proposed addition of new Rule 301o, which would allow ICE Clear Europe to request information when needed on account balances of nominated accounts of the Clearing Member at financial institutions, 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, would help ICE
Clear Europe reduce operational risks that have arisen in practice when payment banks have refused to provide such information to ICE Clear Europe.
CFR 240.17Ad22e14.
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The Commission believes that the proposed new definitions of ICE Clear Europes operational systems in the Delivery Procedures and updated references to such systems throughout the Amended Documents would help ICE Clear Europe manage operational risks by upgrading legacy systems and ensuring that all internal and external stakeholders are aware of the new systems and their basic operational purposes and functionalities.
As discussed above, the proposed rule change would make various amendments to certain Rules to ensure clear and consistent operational practices for Contracts. Amended Rule 401o would clarify that a CustomerCM CDS Transaction arises at the same time as the Contract for consistency with the equivalent rule for a CustomerCM F&O Transaction. Amended Rule 406 would clarify how open contract positions in F&O Contracts are netted and aggregated. Amended Rule 409
would clarify that ICE Clear Europe may evidence its consent to amendments, waivers, and variations of Contract Terms by issuing a Circular. The Commission believes these changes would help ICE Clear Europe reduce operational risks by formalizing appropriate and consistent operational practices related to the Contracts it clears.
Finally, the Commission believes the proposed amendments to Rule 105a to shorten the termination period for ICE
Clear Europes service withdrawal as a clearing house for any product where there is no open interest in the relevant Set, and to clarify that the relevant exchanges notice period and notification responsibility would apply to a product termination that follows actions by the exchange, such as a delisting, would help ICE Clear Europe manage and mitigate both internal and external sources of operational risks associated with product terminations.
For these reasons, the Commission finds the proposed rule change is consistent with Rule 17Ad 22e17i.65
K. Consistency With Rule 17Ad 22e18
Rule 17Ad22e18 requires that ICE
Clear Europe establish, implement, maintain, and enforce written policies and procedures reasonably designed to establish objective, risk-based, and publicly disclosed criteria for participation, which permit fair and open access by direct and, where relevant, indirect participants and other financial market utilities, require
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participants to have sufficient financial resources and robust operational capacity to meet obligations arising from participation, and monitor compliance with such participation requirements on an ongoing basis.66
The Commission believes that the changes to the Membership Procedures discussed above would establish objective, risk-based, and publicly disclosed criteria for participation, by updating the definition of Clearing Member Capital and related requirements applicable to Clearing Members to align with the Basel III
standard. Similarly, the Commission believes that changing the deadline for submitting financial statements from 30
to 45 days; allowing ICE Clear Europe to accept different kinds of financial statements from Clearing Members as part of their financial reporting obligations; and providing that 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, would establish objective, risk-based, and publicly disclosed criteria for participation, by setting forth clear deadlines and standards applicable to Clearing Members. Finally, the Commission believes that adding a new paragraph 3.5 to the CDS Procedures to require Clearing Members to provide sign-off via email on weekly cycles by the time specified by ICE Clear Europe would establish an objective, risk-based, and publicly disclosed requirement upon Clearing Members. Therefore, the Commission finds these aspects of the proposed rule change are consistent with Rule 17Ad22e18.67
Finally, the Commission believes that the proposed amendment to Rule 202
Obligations of Clearing Members to require Clearing Members to have competent staff representatives accessible to ICE Clear Europe for two hours before the start of the business day would help ICE Clear Europe ensure that its participants have sufficient financial resources and operational capacity to meet their morning margin call obligations.
For these reasons, the Commission finds the proposed rule change is consistent with Rule 17Ad22e18.68
IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change, as modified by Partial 66 17

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