[Federal Register Volume 87, Number 105 (Wednesday, June 1, 2022)]
[Notices]
[Pages 33220-33222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11678]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94980; File No. SR-ICC-2022-003]


Self-Regulatory Organizations; ICE Clear Credit LLC; Order 
Approving Proposed Rule Change Relating to the ICC Governance Playbook

May 25, 2022.

I. Introduction

    On April 4, 2022, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (the ``Commission''), pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'') 
\1\ and Rule 19b-4,\2\ a proposed rule change to revise the ICC 
Governance Playbook.\3\ The proposed rule change was published for 
comment in the Federal Register on April 12, 2022.\4\ The Commission 
did not receive comments regarding the proposed rule change. For the 
reasons discussed below, the Commission is approving the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Capitalized terms used but not defined herein have the 
meanings specified in the Rules and Governance Playbook.
    \4\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice 
of Filing of Proposed Rule Change Relating to the ICC Governance 
Playbook; Exchange Act Release No. 34-94616 (Apr. 6, 2022), 87 FR 
21687 (Apr. 12, 2022) (SR-ICC-2022-003) (``Notice'').
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II. Description of the Proposed Rule Change

A. Background

    The ICC Governance Playbook consolidates governance arrangements 
set forth in ICC's Rules, operating agreement, and other ICC policies 
and procedures. The Governance Playbook contains information regarding 
the governance structure at ICC, including the Board, committees, and 
management.

B. Changes to the Governance Playbook

    The proposal would make clarifications and updates regarding the 
roles and responsibilities of the ICC Legal Department and internal 
committees involved in the governance process.\5\ Specifically, the 
proposal would amend Section I of the Governance Playbook, which 
describes the purpose of the document, to state that the ICC Legal 
Department will review and amend the Governance Playbook as needed when 
there are circumstances that may impact the governance procedures of 
ICC, such as

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regulatory changes or changes in ICC's structure or practices.
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    \5\ The description that follows is substantially excerpted from 
the Notice, 87 FR at 21687-21688.
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    The proposal would also amend Section III.H, which contains 
information on disclosures that ICC is required to make to regulators, 
Clearing Participants, and the public. ICC maintains a public 
Disclosure Framework that describes its material rules, policies, and 
procedures regarding its legal, governance, risk management, and 
operating framework. The proposal would add additional details on the 
process of updating this Disclosure Framework. Specifically, the 
proposed rule changes would amend this section to state that the Legal 
Department would determine when changes to the Disclosure Framework are 
necessary and that it will update the document every two years or more 
frequently as necessary. Additionally, the proposal would revise 
Section III.H to include regulations applicable to Disclosure Framework 
updates, a related change to spell out an abbreviated term for 
consistency, and to define what constitutes a material change that 
would require a Disclosure Framework update. Finally, the proposal 
would revise this section to incorporate procedures for reporting 
Disclosure Framework changes pursuant to applicable regulations.
    The proposal would also amend Section IV of the Governance 
Playbook, which discusses various committees. Specifically, the 
proposal would update the description of the membership composition of 
the Steering Committee by including amended titles and positions in 
order to be consistent with the membership composition set out in the 
Steering Committee's charter, and removing outdated information 
regarding the Steering Committee's membership from the Governance 
Playbook. The Steering Committee continues to review, approve and 
oversee the implementation of CDS product launches and initiatives.
    Additionally, the proposal would add a section discussing the CDS 
Service Review committee, including its description, membership 
composition, meeting frequency, and relevant documents. According to 
ICC, this is not a new committee. Its purpose is to discuss and review 
the status of active ICC initiatives to report on the delivery process 
and technology delivery-related activities (e.g., development, 
testing), and its proposed addition to the Governance Playbook is for 
transparency and completeness in order to ensure that the Governance 
Playbook includes all groups relevant to ICC's governance process.\6\
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    \6\ See Notice 87 FR at 21688.
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III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to such 
organization.\7\ For the reasons discussed below, the Commission finds 
that the proposed rule change is consistent with Section 17A(b)(3)(F) 
of the Act \8\ and Rules 17Ad-22(e)(2)(i) and Rule 17Ad-
22(e)(23)(v).\9\
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    \7\ 15 U.S.C. 78s(b)(2)(C).
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ 17 CFR 240.17Ad-22(e)(2)(i) and 17 CFR 240.17Ad-
22(e)(23)(v).
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A. Consistency With Section 17A(b)(3)(F) of the Act

    Section 17A(b)(3)(F) of the Act requires, among other things, that 
the rules of ICC be designed to promote the prompt and accurate 
clearance and settlement of securities transactions and, to the extent 
applicable, derivative agreements, contracts, and transactions.\10\ 
Based on its review of the record, and for the reasons discussed below, 
the Commission believes the proposed changes to the Governance Playbook 
are consistent with the promotion of the prompt and accurate clearance 
and settlement of transactions at ICC.
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    \10\ 15 U.S.C. 78q-1(b)(3)(F).
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    As noted above, the proposed rule change would make clarifications 
and updates regarding the roles and responsibilities of the ICC Legal 
Department and internal committees involved in its governance 
processes. Specifically, the proposal would amend Section I of the 
Governance Playbook, which describes the purpose of the document, to 
state that ICC's Legal Department will review and amend the Governance 
Playbook as needed when there are circumstances that may impact the 
governance procedures of ICC, such as regulatory changes or changes in 
ICC's structure or practices. Further, as noted above, the proposed 
changes would amend Section III.H to include additional details on the 
process of updating the public Disclosure Framework and cite related 
regulatory requirements for doing so.
    The Commission believes that the changes to sections I and III.H 
would enhance the effectiveness of ICC's governance documents by 
ensuring that users of the Governance Playbook are aware of who is 
responsible for reviewing and amending the Governance Playbook and the 
circumstances necessitating such amendments. Likewise, the Commission 
believes that by including additional details on the process of 
updating the Disclosure Framework along with citations to related 
regulatory requirements for doing so, the proposed rule change would 
enhance the ability of users of the Governance Playbook to carry out 
their duties. The Commission believes that this in turn will provide 
clear governance arrangements that support ICC's compliance with 
relevant regulations and procedures, thereby helping ICC maintain 
effective risk management processes to promote the prompt and accurate 
clearance of settlement and securities transactions and derivative 
agreements, contracts and transactions cleared by ICC.
    Additionally, as noted above, the proposal would update the 
membership composition of the Steering Committee by including amended 
titles and new positions and removing outdated information regarding 
the Steering Committee's membership composition from the Governance 
Playbook. The Commission believes that these updates help the Board, as 
well as ICC's management, employees, and members, to be updated on the 
roles and responsibilities of ICC officers, committees and 
subcommittees. As noted above, the proposal would also incorporate into 
the Governance Playbook information (its description, membership 
composition, meeting frequency, and relevant documents) about a current 
committee, the CDS Service Review committee. The Commission believes 
that by including information about an existing governing committee in 
the Governance Playbook, the proposal would support ICC's ability to 
carry out duties related to active ICC initiatives. Taken together, the 
Commission believes that these changes to committee information could 
support ICC's ability to manage product launches and other active 
initiatives and therefore facilitate ICC's ability to provide clearing 
services that are supported by clear risk management processes that 
promote the prompt and accurate clearance of settlement and securities 
transactions and derivative agreements, contracts and transactions 
cleared by ICC.
    For the reasons stated above, the Commission therefore believes 
that the

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proposed rule change is consistent with Section 17A(b)(3)(F) of the 
Act.\11\
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    \11\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Consistency With Rule 17Ad-22(e)(2)(i)

    Rules 17Ad-22(e)(2)(i) requires each covered clearing agency to 
establish, implement, maintain, and enforce written policies and 
procedures reasonably designed to, as applicable, provide for 
governance arrangements that are clear and transparent.\12\ As 
described above, the proposed changes more clearly set out the 
responsibilities of the Legal Department and include updates with 
respect to relevant internal individuals and committees involved in the 
governance process. The Commission believes that by clearly describing 
the responsibilities of the Legal Department, committees, 
subcommittees, and their participants as noted above, these proposed 
changes provide for clear and transparent governance arrangements to 
those serving on those committees and utilizing the Governance 
Playbook. For the reasons stated above, the Commission believes the 
proposed rule changes are consistent with Rules 17Ad-22(e)(2)(i).\13\
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    \12\ 17 CFR 240.17Ad-22(e)(2)(i).
    \13\ Id.
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C. Consistency With Rule 17Ad-22(e)(23)(v) Under the Act

    Rule 17Ad-22(e)(23)(v) under the Act require each covered clearing 
agency to establish, implement, maintain and enforce written policies 
and procedures reasonably designed to provide for an update of the 
public disclosure every two years, or more frequently following changes 
to the covered clearing agency's system or the environment in which it 
operates to the extent necessary, to ensure statements previously 
provided remain accurate in all material respects.\14\
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    \14\ 17 CFR 240.17Ad-22(e)(23)(v).
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    As noted above, the proposed changes assign responsibility, 
reference applicable regulations, and include additional information 
and procedures regarding maintaining and updating the Disclosure 
Framework in accordance with relevant regulations. Specifically, the 
proposed changes would update the process by which the ICC Legal 
Department will update the public Disclosure Framework every two years 
or more frequently following material changes to ICC's systems or 
environment in which it operates, including updates for major decisions 
of the Board with a broad market impact. The Commission believes that 
these aspects of the Governance Playbook provide further clarity 
regarding ICC's policies and procedures for making a comprehensive 
public disclosure that is updated every two years or more frequently 
following material changes.
    For these reasons, the Commission believes that the proposed rule 
change is consistent with Rule 17Ad-22(e)(23)(v) under the Act.\15\
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    \15\ 17 CFR 240.17Ad-22(e)(23)(v).
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IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act, 
and in particular, with the requirements of Section 17A(b)(3)(F) of the 
Act \16\ and Rules 17Ad-22(e)(2)(i) and 17Ad-22(e)(23)(v) 
thereunder.\17\
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    \16\ 15 U.S.C. 78q-1(b)(3)(F).
    \17\ 17 CFR 240.17Ad-22(e)(2)(i) and (e)(23)(v).
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    It is therefore ordered pursuant to Section 19(b)(2) of the Act 
\18\ that the proposed rule change (SR-ICC-2022-003), be, and hereby 
is, approved.\19\
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    \18\ 15 U.S.C. 78s(b)(2).
    \19\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-11678 Filed 5-31-22; 8:45 am]
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