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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices
Member has failed to meet a payment obligation or determining whether the Clearing Member is, or is likely to be, in default, would help to ensure that ICE Clear Europes Clearing Members are able to perform their obligations that enable ICE Clear Europe to clear and settle transactions, such as transferring margin and contributing to the Guaranty Fund. Finally, the Commission believes the changes to add a new summary disciplinary process in proposed Rule 1008 to improve and streamline ICE
Clear Europes process for disciplining Clearing Members for specified violations of the Rules and Procedures, such as the late making of a payment or the late making or taking of a delivery, would help to ensure that Clearing Members meet their membership obligations to ICE Clear Europe and thereby help to ensure that ICE Clear Europe is able to clear and settle transactions.
For these reasons, the Commission believes all of the changes to the Rules discussed in Part II.A above would help to ensure that ICE Clear Europe is able to promptly and accurately clear and settle transactions and safeguard securities and funds which are in the custody or control of ICE Clear Europe or for which it is responsible.
Moreover, the Commission believes the changes to the Clearing Procedures discussed in Part II.B above would increase the clarity of the Clearing Procedures by removing references to systems no longer used by ICE Clear Europe. Similarly, the Commission believes that removing the definitions of MFT and ECS, and instead referring to those terms as defined in the Delivery Procedures, would help to ensure that the Clearing Procedures use the correct definitions of those terms, as defined in the Delivery Procedures. The Commission believes that these changes would help to ensure the Clearing Procedures are up-to-date and use correct terms and references, thus decreasing the possibility for error in using and applying the Clearing Procedures, and therefore facilitating the prompt and accurate clearance and settlement of transactions using the Clearing Procedures.
The Commission similarly believes the changes to the Finance Procedures discussed in Part II.C above would help to ensure the Finance Procedures are up-to-date and use correct terms and references. As with the Clearing Procedures, the proposed rule change would remove the definitions of MFT
and ECS, and instead refer to those terms as defined in the Delivery Procedures, thus helping to ensure that the Finance Procedures use the correct
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definitions. Moreover, the Commission believes that removing a reference to the Continuing CDS Rule Provisions, which are no longer in effect, and updating and correcting references to certain ICE
Clear Europe committees throughout the Finance Procedures would help to ensure that the Finance Procedures reflect the current documentation and committees in effect at ICE Clear Europe. Finally, the Commission believes that amending the account requirements for members to reflect that ICE Clear Europe clears both EUR and USD denominated CDS contracts, clarifying the effect of negative rates on payments of interest and price alignment amounts, and clarifying that the additional margin requirement would apply on a Currency Holiday would help to ensure that the Finance Procedures are consistent with ICE Clear Europes operational practices. The Commission believes that these changes would help to ensure the Finance Procedures are up-to-date, clear, and use correct terms and references, thus decreasing the possibility for error in using and applying the Finance Procedures, and therefore facilitating the prompt and accurate clearance and settlement of transactions using the Finance Procedures.
The Commission further believes the changes to the Delivery Procedures discussed in Part II.D above would clarify and update the Delivery Procedures. Specifically, the Commission believes that clarifying the application of current applicable law regarding anti-money laundering and the obligation of Clearing Members to conduct anti-money laundering due diligence would help to ensure the application of relevant and current antimoney laundering obligations to ICE
Clear Europe and Clearing Members.
Similarly, the Commission believes that adding definitions for current ICE Clear Europe technology systems used in the Delivery Procedures ECS, MFT, ICE
FEC, and MPFE, updating references to those technology systems, and removing references to systems no longer in use, like Crystal, would help reduce the possibility for error in using and applying the Delivery Procedures by ensuring they reference the correct and current ICE Clear Europe internal systems. The Commission further believes that amending Part A of the Delivery Procedures to add a reference to the alternative delivery procedure for Emission Contracts, update references to certain defined terms, and revise the process for the Emissions Alternative Delivery Procedure and a Failed Delivery, would help to ensure the
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correct application and operation of the delivery provisions with respect to EU
Emissions Contracts. Moreover, the Commission believes that deleting Part M and related references to those contracts delisted from the relevant exchange, establishing a procedure to address the Sellers non-delivery of securities under a Financials & Softs Gilt Contract in Part U, correcting references to the settlement facilities and relevant settlement details and settlement procedures for Equity Futures/Options Contracts in Part Z, and updating the table in Part FF
regarding the receipt of documents by ICE Clear Europe, would help to ensure the Delivery Procedures reflect the contracts currently cleared by the relevant exchanges and would help to establish effective operational processes for the contracts found in Parts U, Z, and FF. Finally, the Commission believes that making drafting clarifications and typographical corrections throughout the Delivery Procedures would help to reduce the possibility for error in applying the Delivery Procedures. Thus, the Commission believes all of the changes to the Delivery Procedures discussed in Part II.D would clarify and update the Delivery Procedures, thereby facilitating the prompt and accurate clearance and settlement of transactions using the Delivery Procedures.
Similarly, the Commission believes that the proposed changes to the CDS
Procedures discussed in Part II.E above would, in general, promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds in ICE Clear Europes custody or control.
Specifically, the Commission believes that the changes to the CDS Procedures would enhance the flexibility of ICE
Clear Europes operations, benefitting both ICE Clear Europe and Clearing Members. For example, the Commission believes that adding a new paragraph 3.5 to require CDS Clearing Members to provide sign-off via email on weekly cycles by the time specified by ICE Clear Europe would provide a flexible and efficient means for sign-off, via email.
Similarly, the Commission believes that allowing a Clearing Member to designate an Affiliate that is also a CDS
Clearing Member to accept CDS
Contracts in lieu of it for CDS Contracts arising as a result of the existing CDS
end-of-day pricing process and to accept transactions arising out of the existing auction process to be used in the case of self-referencing CDS transactions would give Clearing Members flexibility in determining who is best positioned to
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