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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 Section 17Ab3G of the Act.42
C. Consistency With Section 17Ab3H of the Act Section 17Ab3H of the Act 43
requires, among other things, that ICE
Clear Europes rules, in general, provide a fair procedure with respect to the disciplining of participants. As discussed above, the proposed rule change would add a new summary disciplinary process under proposed Rule 1008 for sanctioning Clearing Members that breach certain Rules or Procedures, including by specifying the process by which ICE Clear Europe may impose any of the specified sanctions, the opportunity for a Clearing Member to appeal, the grounds for appeal, and the actions the appeal panel may take i.e., to affirm, vary, or revoke a sanction. The Commission believes these aspects of the proposed rule change would provide a fair procedure for disciplining Clearing Members.
For these reasons, the Commission finds the proposed rule change is consistent with Section 17Ab3H of the Act.44

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D. Consistency With Rule 17Ad22e1
Rule 17Ad22e1 requires that ICE
Clear Europe establish, implement, maintain and enforce written policies and procedures reasonably designed to provide for a well-founded, clear, transparent, and enforceable legal basis for each aspect of its activities in all relevant jurisdictions.45 As discussed above, the proposed amendments to the General Contract Terms would clarify, simplify, and harmonize various aspects of the Rules and Procedures, to be consistent with current operations, remove outdated references, address changes in Markets served, and similar matters. The Commission believes that these proposed changes will enhance the clarity of the legal framework provided by the Rules and Procedures under which ICE Clear Europe operates, and are therefore consistent with Rule 17Ad22e1.46
As noted above, the proposed rule change would reframe the Complaint Resolution Procedures as based on ICE
Clear Europes obligations as a CCP
under EMIR; clarify that only certain kinds of complaints, Eligible Complaints, would be part of the 42 15

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complaint resolution process; broaden the definition of Eligible Complaints to include complaints against any directors, officers, employees or committees; clarify procedural delays and timing in the process; and add the ability to refer complaints to other responsible entities. The Commission believes that these proposed changes express a well-founded, clear, transparent, and enforceable legal basis for how ICE Clear Europe manages complaints and is therefore consistent with Rule 17Ad22e1.47
As discussed above, the proposed rule change would update various definitions and other provisions in the Rules and Procedures to reflect current laws and regulations in the EU and UK
governing anti-money laundering requirements and the requisite levels of due diligence. Proposed new Rule 201xxxiii would require Clearing Members to have adequate policies, procedures, systems, and controls relating to Applicable Laws, including anti-money laundering laws. The proposed rule change would amend Rule 1607 Additional FCM/BD
Requirements for Customer Transactions 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, and add similar new requirements to the Standard Terms exhibits to the Rules.
Similarly, the proposed amendments to the Delivery Procedures would obligate Clearing Members to conduct appropriate anti-money laundering due diligence for any transferors and transferees and provide relevant documentation to ICE Clear Europe and/
or the Clearing Member. The Commission believes that these proposed changes would help to establish and maintain a well-founded legal basis for the Rules and Procedures governing ICE Clear Europes operations under applicable anti-money laundering laws, and are therefore consistent with Rule 17Ad22e1.48
As discussed above, the proposed rule change would amend Rule 201 to clarify the legal basis in the Rules for ICE Clear Europe to require Clearing Members to execute additional documentation in the form of annexes or agreements to the Clearing Membership Agreement in order to be, and remain, eligible for Clearing Membership. As ICE Clear Europe would impose such documentation requirements where necessary to comply with, or address
post-Brexit local law group structuring issues in certain EU member states, the Commission believes these proposed amendments provide a well-founded legal basis for ICE Clear Europe to impose such additional documentation requirements, and are therefore consistent with Rule 17Ad22e1.49
As discussed above, the proposed rule change would amend Rule 201 Clearing Membership Criteria, Rule 1901
Attaining status as a Sponsored Principal, and Section 10 of the F&O
Standard Terms to remove the requirement for Clearing Members, Customers, and Sponsored Principals to be an eligible contract participant if they are engaging solely in F&O
Contracts. As eligible contract participant status is required under applicable U.S. law to trade swaps and security-based swaps, such as CDS, but is not required to trade futures, the Commission believes these proposed amendments provide a well-founded legal basis for ICE Clear Europe to remove such status requirement, and are therefore consistent with Rule 17Ad 22e1.50
As discussed above, the proposed rule change would amend paragraph 3.5a of the Membership Procedures to lower the threshold, from 50% to 25%, at which ICE Clear Europe would require a written undertaking from the Clearing Member to not repay subordinated loans without its consent. As this proposed change would align the Clearing Member capital requirement more closely with Basel III requirements applicable to Clearing Members, the Commission believes these proposed amendments provide a well-founded legal basis for ICE Clear Europe to lower such threshold, and are therefore consistent with Rule 17Ad22e1.51
As discussed above, the proposed rule change would make a number of clarifications and drafting improvements to the Amended Documents to explicitly and correctly reference current law; eliminate discrepancies and inconsistencies;
comply with applicable legal requirements; use consistent terminology; update cross-references and numbering; and correct drafting errors. The Commission believes that these changes, taken as a whole, would help to ensure that the Amended Documents provide for a well-founded, clear, transparent, and enforceable legal basis for each aspect of ICE Clear Europes activities in all relevant jurisdictions.
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