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Federal Register / Vol. 86, No. 33 / Monday, February 22, 2021 / Notices A. CDS Procedures The proposed rule change would amend the CDS Procedures definitions to clarify that the term CDS
Committee-Eligible Clearing Members must be approved in accordance with paragraph 5.2 of the Procedures and continue to meet the criteria of such Paragraph. Paragraph 5.2 would thus be amended to specify the requirements for a Clearing Member to be approved to be a CDS Committee-Eligible Clearing Member. Specifically, the Clearing Member would need to meet the following conditions in order to be eligible: a In the event that it has one or more Affiliates that are CDS Clearing Members, it has the longest period of membership of the Clearing House among such Affiliates; b it has a London-based CDS trading desk; and c it is deemed appropriate to be a CDS
Default Committee Member by the Clearing House at its discretion. The amendments to paragraph 5.2 would also be amended to note that the Clearing House would maintain a list of all CDS Committee-Eligible Clearing Members. The procedure for maintaining the CDS Default Committee Participant List including adding CDS
Clearing Members to, removing CDS
Clearing Members from or changing the order of Clearing Members on the CDS
Default Committee Participant List would be determined from time to time by the Clearing House at its discretion.
Certain such matters would be addressed in further detail in the Policy, as discussed below. CDS Clearing Members would be able to provide information of relevance to the Clearing House with respect to their own inclusion or omission or order on the list, but such information would not be binding on the Clearing House.
Additionally, the Procedures would state that ICE Clear Europe may also share the CDS Default Committee Participant List with any other clearing house.
Other amendments to section 5
include proposed amendments to paragraph 5.3, which would add that if a CDS Committee-Eligible Clearing Member considers that it is unable to take part in the CDS Default Committee for the Relevant CDS Default Committee Period for which it is due to take part, it may request to postpone its participation for that period. ICE Clear Europe could, at its discretion, approve such request. As described in Partial Amendment No. 1, an acceptable excuse Procedures, CDS Default Management Policy or the ICE Clear Europe Rulebook, as applicable. The description that follows is excerpted from the Notice.

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would most likely relate to temporary resource constraints at the Clearing Member. For example, if the committee member were already serving on the default committee of another clearing house during the relevant period or if a committee member otherwise had limited staffing resources to commit to the committee during that period, this may be considered satisfactory. ICE
Clear Europe would expect to discuss the particular situation with the Clearing Member in question and would respond to any request for postponement to let the Clearing Member know whether its rationale was satisfactory. Once postponement is approved, the following events would take place: that CDS Committee-Eligible Clearing Member would be identified to take part in the CDS Default Committee for the next Relevant CDS Default Committee Period as one of the three CDS Default Committee Participants;
and one of the next three CDS
Committee-Eligible Clearing Members on the CDS Default Committee Participant List would be selected by the Clearing House at its discretion to take part in the CDS Default Committee during that Relevant CDS Default Committee Period. The CDS Default Committee Participant List would be amended accordingly.
Paragraph 5.4 would be amended to add that if a CDS Clearing Member becomes a defaulter or is suspended or receives a termination notice with respect to its Clearing Membership, it would be removed from the CDS Default Committee Participant List. Paragraphs 5.4 and 5.5 would be amended to clarify that the CDS Default Committee Participant List would be amended to take into account any Clearing Member that becomes or resumes being a CDS
Committee-Eligible Clearing Member or is removed from being a CDS Default Committee Participant because the Clearing House determines that such Clearing Member has a conflict or lacks impartiality.
The amendments in paragraph 5.6
would provide that the Clearing House would give notice that, since CDS
Default Committee Members and CDS
Default Committee Participants act as part of the governance of ICE Clear Europe, such CDS Default Committee Members and CDS Default Committee Participants would take the benefit of all exclusions and limitations of liability available to the Clearing House under the Rules or Applicable Laws. The change is intended to make the exclusions and limitations on liability for such persons consistent with those
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generally applicable to Clearing House governance process.6
The amendments in paragraph 5.8
would provide that CDS Clearing Members agree and acknowledge that each CDS Default Committee Member and CDS Default Committee Participant each a Covered Party would be subject to the provisions of Rule 106
regarding confidentiality of information received and permitted disclosures as if that Covered Party were the Clearing House. Furthermore, each CDS Clearing Member would be required to ensure that each such Covered Party nominated by it would not use any Confidential Material for its own benefit or the benefit of any of its Affiliates and, if so requested by the Clearing House, would execute any documentation specified by the Clearing House acknowledging the same. The procedures that would apply in the event that a Covered Party is served with or otherwise subject to legal process have been removed as unnecessary in light of the referenced provisions of Rule 106. Paragraph 5.9
would be amended to clarify that each CDS Clearing Member agrees that each Covered Party would be responsible for its own costs associated with its service in such position.
The proposal would also make several changes to the CDS Procedures not related to CDS Default Committee participation. Specifically, the rule proposal would also amend paragraph 4.4 of the Procedures, which describes the timing requirements for submitting CDS Trade Particulars, to clarify that with respect to CDS Trade Particulars submitted after 6:00 p.m. on a Business Day or on a day that is not a Business Day, unless a revocation right exists and is exercised or unless otherwise stated in circular, among other existing exceptions, such CDS Trade Particulars would be deemed to have been submitted at 8:00 a.m. on the following Business Day. Furthermore, the Procedures would provide that if the Trade Date specified in the CDS Trade Particulars is not a Business Day, then the relevant CDS Trade Particulars would be rejected. According to ICE
Clear Europe, this reflects current Clearing House practice.7
B. CDS Default Management Policy ICE Clear Europe is proposing to make amendments to its CDS Default Management Policy related to the Default Committee consistent with the CDS Procedures as well as several general clarification amendments to the Policy. First, under the section CDS
6 Notice, 7 Notice,
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86 Federal Register at 170.
86 Federal Register at 169.

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