Je veux savoir à propos de…

Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices For these reasons, the Commission finds that the proposed rule change is consistent with Rule 17Ad22e1.52

lotter on DSK11XQN23PROD with NOTICES1

E. Consistency With Rule 17Ad 22e2i Rule 17Ad22e2i requires that ICE Clear Europe establish, implement, maintain, and enforce written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent.53 As noted above, the proposed changes to the Complaint Resolution Procedures would clarify the roles of those investigating complaints, state explicitly that ICE Clear Europe must consider the investigative complaint report and recommendations, and inform the complaining party. The Commission believes that these proposed changes therefore provide for governance arrangements related to the complaint resolution process that are clear and transparent and are consistent with Rule 17Ad22e2i.54
As discussed above, the proposed rule change would also amend and update committee references in Rule 916d to change the term Risk Committee to relevant product risk committee to clarify that there are different product risk committees addressing topics specific to F&O and CDS. The proposed rule change would make similar updates to the CDS Risk Committee and FX Risk Committee references in the Finance Procedures by changing them to CDS
Product Risk Committee and FX
Product Risk Committee, respectively, and also throughout the CDS Procedures where CDS Risk Committee is currently used. The Commission believes that these changes would help to ensure that ICE Clear Europes governance arrangements are clear and transparent by clearly identifying the various product risk committees involved in governance at ICE Clear Europe.
For these reasons, the Commission finds the proposed rule change is consistent with Rule 17Ad22e2i.55
F. Consistency With Rule 17Ad 22e6ii Rule 17Ad22e6ii requires that ICE Clear Europe establish, implement, maintain, and enforce written policies and procedures reasonably designed to cover its credit exposures to its Clearing Members by establishing a risk-based margin system that, at a minimum, among other matters, marks participant CFR 240.17Ad22e1.
CFR 240.17Ad22e2i.
54 17 CFR 240.17Ad22e2i.
55 17 CFR 240.17Ad22e2i.

positions to market and collects margin, including variation margin or equivalent charges if relevant, at least daily and includes the authority and operational capacity to make intraday margin calls in defined circumstances.56 As discussed above, Rule 1603c would be amended to clarify that only original or initial types of Margin payments would be provided in the form of Pledged Collateral, and that such collateral excludes Variation Margin, Mark-to-Market Margin and FX Mark-toMarket Margin, which are provided to or by ICE Clear Europe by outright transfer of cash as a settlement payment.
This proposed change is intended to be consistent with ICE Clear Europes previous amendments to the Rules to clarify that such variation and mark-tomarket margin are settlement payments rather than collateral. Because, as discussed above, ICE Clear Europe inadvertently omitted this proposed amendment from its prior amendments, the Commission believes these changes would facilitate ICE Clear Europes consistent treatment and collection of variation and mark-to-market margin from Clearing Members.
For this reason, the Commission finds the proposed rule change is consistent with Rule 17Ad22e6ii.57
G. Consistency With Rule 17Ad 22e10
Rule 17Ad22e10 requires that ICE
Clear Europe establish, implement, maintain, and enforce written policies and procedures reasonably designed to establish and maintain transparent written standards that state its obligations with respect to the delivery of physical instruments, and establish and maintain operational practices that identify, monitor, and manage the risks associated with such physical deliveries.58 As discussed above, 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 to clarify the process for payment of the EDSP in a physical settlement if the EDSP is a negative number. The Commission believes that these proposed changes would increase the clarity and transparency of the physical settlement process, which in turn would help ICE
Clear Europe avoid the risk of settlement discrepancies associated
52 17
53 17

VerDate Sep<11>2014

17:33 Sep 01, 2021

56 17

CFR 240.17Ad22e6ii.
CFR 240.17Ad22e6ii.
58 17 CFR 240.17Ad22e10.
57 17

Jkt 253001

PO 00000

Frm 00095

Fmt 4703

Sfmt 4703

49381

with the delivery of physical instruments.
As discussed above, the proposed rule change would amend the Delivery Procedures to update various operational practices and to make other updates and drafting improvements.
Specifically, proposed new paragraph 7
would make explicit reference to the alternative delivery procedure for Emission Contracts in the event of a failed delivery, as set out in paragraph 7 Emissions Alternative Delivery Procedure EADP of Part A of the Delivery Procedures ICE Endex Deliverable EU Emissions Contracts.
Amended paragraph 7.3 of Part A would update the manner of settlement of an existing Contract following the entry into an EADP Agreement by a Clearing Member and ICE Clear Europe, so that it would no longer be limited to liquidation on the basis of the Exchange Delivery Settlement Price, but rather, dealt with in the manner specified in the EADP. In addition, amended paragraph 7.5 would provide for a longer time period after a failed delivery for the Clearing Member and ICE Clear Europe to enter into an EADP
Agreement or effect delivery under the EADP before ICE Clear Europe may refer the matter to the relevant exchange or take other reasonable next steps in its discretion. The Commission believes these changes would establish and update transparent written procedures for failed deliveries of Emissions Contracts, and provide greater flexibility for ICE Clear Europe to manage the risks associated with such failed deliveries.
With respect to Financials & Softs Gilt Contracts, the proposed rule change would amend Part U of the Delivery Procedures to add a new paragraph 2
Failed Settlement and Non-Delivery of Stock to establish a procedure to address the Sellers non-delivery of securities under a Financials & Softs Gilt Contract, including the actions ICE
Clear Europe may take to promote settlement in accordance with the contract terms and the requirements of the CREST central securities depository, as well as the express allocation of the costs of such steps to the Clearing Member who failed to make delivery.
Proposed new paragraph 2.1 in amended Part U would establish ICE
Clear Europes procedure to address the Sellers partial delivery of available Gilts and the resulting partial settlement between the Buying Clearing Member and the Selling Clearing Member. The Commission believes these changes in Part U would establish transparent written standards and procedures for handling failed deliveries and partial deliveries of Financials and Softs Gilt
E:FRFM02SEN1.SGM

02SEN1