[Federal Register Volume 88, Number 16 (Wednesday, January 25, 2023)]
[Notices]
[Pages 4868-4870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01407]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96707; File No. SR-ICC-2023-001]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
ICC's Fee Schedules

January 19, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
\1\ and Rule 19b-4,\2\ notice is hereby given that on January 5, 2023, 
ICE Clear Credit LLC (``ICC'') filed with the Securities and Exchange 
Commission the proposed rule change as described in Items I, II and III 
below, which Items have been prepared primarily by ICC. ICC filed the 
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and 
Rule 19b-4(f)(2) thereunder,\4\ such that the proposed rule change was 
immediately effective upon filing with the Commission. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The principal purpose of the proposed rule change is to modify 
ICC's fee schedules to implement reduced fees for credit default index 
swaptions (``Index Options'') for the remainder of calendar year 2023. 
These revisions do not require any changes to the ICC Clearing Rules.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, ICC included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. ICC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

(a) Purpose
    The proposed changes are intended to modify ICC's fee schedules to 
implement reduced fees for Index Options for the remainder of calendar 
year 2023.\5\ ICC maintains a Clearing Participant (``CP'') fee 
schedule \6\ and client fee schedule \7\ (collectively, the ``fee 
schedules'') that are publicly available on its website, which ICC 
proposes to update. Clearing fees are due by CPs and clients in 
accordance with the product, amount and currency set out in the fee 
schedules and subject to any incentive program described in the fee 
schedules. The proposed changes to the fee schedules are set forth in 
Exhibit 5A and Exhibit 5B and described in detail as follows. ICC 
proposes to make such changes effective January 5, 2023 (the 
``Effective Date''), subject to the completion of any applicable 
regulatory review process.
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    \5\ Pursuant to an Index Option contract, one party (the 
``Swaption Buyer'') has the right (but not the obligation) to cause 
the other party (the ``Swaption Seller'') to enter into an index 
credit default swap transaction at a pre-determined strike price on 
a specified expiration date on specified terms. In the case of Index 
Options that may be cleared by ICC, the underlying index credit 
default swap is limited to certain CDX and iTraxx index credit 
default swaps that are accepted for clearing by ICC, and which would 
be automatically cleared by ICC upon exercise of the Index Option by 
the Swaption Buyer in accordance with its terms.
    \6\ CP fee details available at: https://www.theice.com/publicdocs/clear_credit/ICE_Clear_Credit_Fees_Clearing_Participant.pdf.
    \7\ Client fee details available at: https://www.theice.com/publicdocs/clear_credit/ICE_Clear_Credit_Fees.pdf. As specified, all 
fees are charged directly to a client's CP.
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    The amended CP fee schedule would reduce Index Option fees to $1.5/
million or [euro]1.5/million for the remainder of calendar year 2023. 
Under the regular CP fee schedule, Index Option fees are $3/million or 
[euro]3/million, subject to an incentive program that provides a tiered 
discount schedule based on U.S. Dollar equivalent, non-discounted Index 
Option fees billed since the start of the year.\8\ ICC also discounted 
CP Index Option fees for a portion of 2022, which expired at the end of 
calendar year 2022.\9\ Under the proposed changes, in addition to 
updating the fee table, ICC would include a footnote to indicate that 
the listed fees of $1.5/million or [euro]1.5/million are applicable 
from the Effective Date through calendar year 2023 and reflect a 
discount from ICC's regular Index Option fees of $3/million or [euro]3/
million. On the first business day of 2024, ICC would remove this 
discount and the listed fees would revert to ICC's regular Index Option 
fees on this schedule dated January 2024.
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    \8\ A description of this incentive program is included in a 
prior filing. SEC Release No. 34-90524 (November 27, 2020) (notice), 
85 FR 78157 (December 3, 2020) (SR-ICC-2020-013).
    \9\ A description of the 2022 CP Index Option fee discount is 
included in prior SEC filing Release No. 34-94330 (February 28, 
2022) (notice), 87 FR 12508 (March 4, 2022) (SR-ICC-2022-001).
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    The amended client fee schedule would reduce Index Option fees to 
$2/million or [euro]2/million for the remainder of calendar year 2023. 
Under the regular client fee schedule, Index Option fees are $4/million 
or [euro]4/million. ICC also discounted client Index Option fees for a 
portion of 2022, which expired at the end of calendar year 2022.\10\ 
Under the proposed changes, in addition to updating the fee table, ICC 
would

[[Page 4869]]

indicate in a footnote that the listed fees of $2/million or [euro]2/
million are applicable from the Effective Date through calendar year 
2023 and reflect a discount from ICC's regular Index Option fees of $4/
million or [euro]4/million. On the first business day of 2024, ICC 
would remove this discount and the listed fees would revert to ICC's 
regular Index Option fees on this schedule dated January 2024.
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    \10\ A description of the 2022 client Index Option fee discount 
is included in prior SEC filing Release No. 34-94330 (February 28, 
2022) (notice), 87 FR 12508 (March 4, 2022) (SR-ICC-2022-001).
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(b) Statutory Basis
    ICC believes that the proposed rule change is consistent with the 
requirements of the Act, including Section 17A of the Act \11\ and the 
regulations thereunder applicable to it. More specifically, the 
proposed rule change establishes or changes a member due, fee or other 
charge imposed by ICC under Section 19(b)(3)(A)(ii) of the Act \12\ and 
Rule 19b-4(f)(2) \13\ thereunder. ICC believes the proposed rule change 
is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to ICC, in particular, to Section 
17A(b)(3)(D),\14\ which requires that the rules of the clearing agency 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its participants.
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    \11\ 15 U.S.C. 78q-1.
    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 17 CFR 240.19b-4(f)(2).
    \14\ 15 U.S.C. 78q-1(b)(3)(D).
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    ICC believes that the proposed discounts in the fee schedules have 
been set at an appropriate level. In determining the appropriate 
discount level, ICC considered factors such as volume, revenue, and 
market participation in the clearing service, including based on 
different fee levels. ICC also considered costs and expenses in 
offering clearing of Index Options, taking into account the investments 
that ICC has made in clearing such products and the level of investment 
and development needed for this clearing service at this time. In ICC's 
view, the fees are reasonable as the discounts correspond with 
anticipated volumes, costs and expenses, and revenues, and they 
consider current and past market activity as well as anticipated market 
activity with respect to clearing Index Options at ICC.\15\ 
Furthermore, the proposed discounts are in line with past Index Option 
incentive programs that ICC offered, which similarly temporarily 
reduced Index Option fees without any further action required by CPs or 
clients. Under the proposed changes, the same percentage discount 
(i.e., 50%) from ICC's regular Index Option fees would apply to both 
CPs and clients. These reduced fees are designed to incentivize the 
clearing of Index Options by CPs and clients to grow this clearing 
service.
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    \15\ Supporting detail and additional data, including clearing 
statistics for Index Options is included in confidential Exhibit 3.
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    Moreover, the proposed fee changes will apply equally to all market 
participants clearing Index Options. The reduced fees for Index Options 
for calendar year 2023 apply to all CPs and clients. ICC's fee 
schedules will continue to be transparent and to apply equally to 
market participants clearing indexes, single names, and Index Options 
at ICC. Therefore, the proposed rule change provides for the equitable 
allocation of reasonable dues, fees and other charges among 
participants, within the meaning of Section 17A(b)(3)(D) of the 
Act.\16\ ICC therefore believes that the proposed rule change is 
consistent with the requirements of Section 17A of the Act \17\ and the 
regulations thereunder applicable to it and is appropriately filed 
pursuant to Section 19(b)(3)(A) of the Act \18\ and paragraph (f)(2) of 
Rule 19b-4 \19\ thereunder.
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    \16\ 15 U.S.C. 78q-1(b)(3)(D).
    \17\ 15 U.S.C. 78q-1.
    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f)(2).
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(B) Clearing Agency's Statement on Burden on Competition

    ICC does not believe the proposed rule change would have any 
impact, or impose any burden, on competition not necessary or 
appropriate in furtherance of the purpose of the Act. As discussed 
above, the proposed changes modify ICC's fee schedules to temporarily 
reduce fees for Index Options and will apply uniformly across all 
market participants. The implementation of such changes does not 
preclude other market participants from offering such instruments for 
clearing or offering incentive programs. Moreover, ICC does not believe 
that the amendments would adversely affect the ability of market 
participants to access clearing services. Accordingly, ICC does not 
believe the amendments impose any burden on competition not necessary 
or appropriate in furtherance of the purpose of the Act.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants or Others

    Written comments relating to the proposed rule change have not been 
solicited or received. ICC will notify the Commission of any written 
comments received by ICC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \20\ and paragraph (f) of Rule 19b-4 \21\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-ICC-2023-001 on the subject line.

Paper Comments

    Send paper comments in triplicate to Secretary, Securities and 
Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-ICC-2023-001. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filings will also be available for

[[Page 4870]]

inspection and copying at the principal office of ICE Clear Credit and 
on ICE Clear Credit's website at https://www.theice.com/clear-credit/regulation.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ICC-2023-001 and should be 
submitted on or before February 15, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-01407 Filed 1-24-23; 8:45 am]
BILLING CODE 8011-01-P