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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices is a Group Company, i.e., a parent or a subsidiary entity of such Clearing Member. ICE Clear Europe represents that this proposed clarification addresses questions raised in default planning exercises.23
xv. Eligible Contract Participant Status The proposed rule change would amend Rule 201axx to provide that the requirement for a Clearing Member to be an eligible contract participant 24 only applies if it is to be a CDS Clearing member or an FX
Clearing member. The amendment reflects that such status is required under applicable U.S. law for persons that trade swaps and security-based swaps such as CDS, but not for futures.25 Similarly, the proposed rule change would amend Section 10 of the F&O Standard Terms to remove a requirement that an F&O Clearing Member and Customer be an eligible contract participant. The proposed rule change would also amend Rule 1901bxv and Rule 1901dix to provide that the requirement for a Sponsored Principal to be an eligible contract participant only applies in relation to CDS Contracts and FX
Contracts.
xvi. Corrected Names of Internal Risk Committees The proposed rule change would amend Rule 916d to change the term Risk Committee to relevant product risk committee. ICE Clear Europe represents that this change reflects that there are different product risk committees addressing topics specific to F&O and CDS.26

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xvii. Clarifications Relating to Negative EDSP
The proposed rule change would amend the definition of Exchange Delivery Settlement Price or EDSP in Rule 101 Definitions to clarify, for the avoidance of doubt, that the EDSP can be a positive or negative number, or zero. The proposed rule change would amend Rule 703b Delivery by adding new language to clarify the process for payment obligations if the EDSP is a negative number. In such event, amended Rule 703b would provide that the roles of the Buyer and Seller as set forth in the Rules, Delivery Procedures, Contract Terms, and Market 23 Notice,
86 FR 29615.
Exchange Act Section 1a18, 7
U.S.C. 1a18.
25 See Section 6l of the Act, 15 U.S.C. 78fl;
Commodity Exchange Act Section 2e, 7 U.S.C.
2e.
26 Notice, 86 FR 29615.
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Rules shall be reversed solely in respect of the payment obligation related to that EDSP.
xviii. Prospectus Directive The proposed rule change would amend Rule 1501 Definitions in Part 15 Credit Default Swaps of the Rules to change the definition of Prospectus Directive to Prospectus Regulation, because the EU Prospectus Directive has been repealed and replaced with the Prospectus Regulation. The proposed rule change would also make conforming changes to the following definitions: Offer to the Public, by replacing the obsolete term Prospectus Directive with Prospectus Regulation; Relevant Member State, by using a new defined term Relevant State that would remove the current reference to the Prospectus Directive and add the phrase or the United Kingdom; and Securities, by replacing the current references to the Prospectus Directive with a reference to the Prospectus Regulation. Similarly, the proposed rule change would delete the definition of 2010 PD Amending Directive and references thereto as this directive is also no longer in force.
Additional conforming changes would be made in Rule 1503 to remove obsolete legislative references to the Prospectus Directive.
xix. Updates for Changes to Applicable Anti-Money Laundering Law The proposed rule change would amend Rule 101 Definitions by updating the definition of the term Money Laundering Directive to reflect the implementation of the fifth EU AntiMoney Laundering Directive. The proposed rule change would also add a new definition of Money Laundering Regulations to reference the applicable UK regulations corresponding to that Directive, including after its exit from the European Union.
In Rule 201axxix Clearing Membership Criteria and Rule 1901dxi Attaining status of a Sponsored Principal, the proposed rule change would remove the existing references to simplified due diligence. ICE Clear Europe represents that this change reflects the repeal and restatement of the U.K.s former Money Laundering Regulations 2007 pursuant to the Money Laundering, Terrorist Financing and Transfer of Funds Information on the Payer Regulations 2017, which removed simplified due diligence as the default option for a defined list of entities and replaced it
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with discretionary risk-based levels of due diligence.27
The proposed rule change also would amend Rule 201axxxi to add antimoney laundering laws to the existing list of applicable laws that are required to be acceptable to ICE Clear Europe in the respective jurisdictions of Clearing Members. The proposed rule change would add a new Rule 201axxxiii to require Clearing Members to have adequate policies, procedures, systems, and controls relating to Applicable Laws, including relating to anti-money laundering and the prevention of financial crime. The proposed rule change would make similar amendments to Rules 202axii and 1901m to update references to relevant laws, clarify that the Clearing Member is required to make certain representations and warranties to ICE Clear Europe with respect to the matters in those subsections, require the Clearing Member to have the necessary authority from customers and others to disclose the necessary information about beneficial owners in order to comply with requirements under Applicable Laws, and to retain copies of documents required to be retained under antimoney laundering laws.
Similarly, the proposed rule change would amend Rule 1607 Additional FCM/BD Requirements for Customer Transactions by adding a new clause g to require FCM/BD Customers to obtain the authority from beneficial owners to disclose information necessary for anti-money laundering due diligence to the Clearing Member and ICE Clear Europe. The proposed rule change would add similar new requirements to the CDS Standard Terms in clause 3q, F&O Standard Terms in clause 3r, and FX Standard Terms in clause 3q.
xx. Introduction of a Summary Disciplinary Process and Other Disciplinary Process Updates The proposed rule change would amend the Rules to introduce new Rule 1008, which would provide ICE Clear Europe with the authority to issue a summary fine to a Clearing Member under certain conditions, and to make certain minor drafting improvements to the disciplinary process provisions of the Rules. ICE Clear Europe represents that the new authority to issue a summary fine would be consistent with the authority to issue summary fines provided under the rules of other ICE
exchanges for which ICE Clear Europe provides clearing services. ICE Clear Europe further represents that it intends to introduce a more streamlined 27 Notice,
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86 FR 29617.

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