[Federal Register Volume 89, Number 46 (Thursday, March 7, 2024)]
[Notices]
[Pages 16592-16594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04794]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99652; File No. SR-ICC-2024-002)


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

March 1, 2024
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 26, 2024, ICE Clear Credit LLC (``ICE Clear Credit'' or 
``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'') until further notice. 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 ICE Clear Credit's fee 
schedules

[[Page 16593]]

to implement reduced fees for Index Options \5\ until further notice. 
ICE Clear Credit 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 ICE Clear Credit 
proposes to update. Clearing fees are due by CPs in accordance with the 
transaction category (i.e., proprietary CP transactions or transactions 
on behalf of the CP's clients) 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. ICE 
Clear Credit proposes to make such changes effective March 1, 2024, 
following the completion of the applicable regulatory review process 
(the ``Effective Date''). ICE Clear Credit proposes to implement a 50% 
fee discount and to maintain the reduced fees for the clearing of Index 
Options until further action is taken by ICE Clear Credit and the Board 
to remove the reduced fees and return the Index Option fees to their 
regular rates, subject to the completion of all necessary regulatory 
processes. If and when the Board takes such action to return the Index 
Option fees to their regular rates, ICE Clear Credit will provide the 
marketplace 30 calendar days advance notice of the fee change on the 
fee schedules posted on ICE Clear Credit's website, which will indicate 
that the Index Option fees will return to their regular rate and the 
effective date of such change, subject to the completion of all 
necessary regulatory processes.
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    \5\ Pursuant to an Index Option, 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 ICE Clear Credit, the underlying 
index credit default swap is limited to certain CDX and iTraxx index 
credit default swaps that are accepted for clearing by ICE Clear 
Credit, and which would be automatically cleared by ICE Clear Credit 
upon exercise of the Index Option by the Swaption Buyer in 
accordance with its terms.
    \6\ CP fee details available at: https://www.ice.com/publicdocs/clear_credit/ICE_Clear_Credit_Fees_Clearing_Participant.pdf.
    \7\ Client fee details available at: https://www.ice.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 until further notice. Under the current 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\ ICE Clear Credit also 
discounted CP Index Option fees for: (i) a portion of 2021, which 
expired at the end of calendar year 2021; \9\ (ii) a portion of 2022, 
which expired at the end of calendar year 2022; \10\ and (iii) a 
portion of 2023, which expired at the end of calendar year 2023.\11\ 
Under the proposed changes, in addition to updating the fee table, ICE 
Clear Credit would include a footnote to indicate that the listed fees 
of $1.5/million or [euro]1.5/million reflect a discount from ICE Clear 
Credit's regular CP Index Options fees of $3/million or [euro]3/million 
and that such discounted rates are applicable from the Effective Date 
until ICE Clear Credit provides 30 calendar days advance notice on the 
fee schedule posted on ICE Clear Credit's website indicating that the 
CP Index Option fees will return to their regular rate and the 
effective date of such change, subject to the completion of all 
necessary regulatory processes.
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    \8\ SEC Release No. 34-90524 (November 27, 2020) (notice), 85 FR 
78157 (December 3, 2020) (SR-ICC-2020-013).
    \9\ SEC Release No. 34-91922 (May 18, 2021) (notice), 86 FR 
27938 (May 24, 2021) (SR-ICC-2021-014).
    \10\ SEC Release No. 34-94330 (February 28, 2022) (notice), (87 
FR 12508 (March 4, 2022) (SR-ICC-2022-001).
    \11\ SEC Release No. 34-96707 (January 19, 2023) (notice), (88 
FR 4868 (January 25, 2023) (SR-ICC-2023-001).
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    The amended client fee schedule would also reduce Index Option fees 
to $2/million or [euro]2/million until further notice.\12\ Under the 
current client fee schedule, Index Option fees are $4/million or 
[euro]4/million. ICE Clear Credit also discounted client Index Option 
fees for: (i) a portion of 2021, which expired at the end of calendar 
year 2021; \13\ a portion of 2022, which expired at the end of calendar 
year 2022; \14\ and a portion of 2023, which expired at the end of 
calendar year 2023.\15\ Under the proposed changes, in addition to 
updating the fee table, ICE Clear Credit would include a footnote to 
indicate that the listed fees of $2/million or [euro]2/million reflect 
a discount from ICE Clear Credit's regular client Index Option fees of 
$4/million or [euro]4/million and that such discounted rates are 
applicable from the Effective Date until ICE Clear Credit provides 30 
calendar days advance notice on the fee schedule posted on ICE Clear 
Credit's website indicating that the client Index Option fees will 
return to their regular rate and the effective date of such change, 
subject to the completion of all necessary regulatory processes.
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    \12\ The client fee schedule applies to transactions cleared on 
behalf of CP's clients, and the specified fees are directly charged 
to, and collected from, the applicable client's CP.
    \13\ SEC Release No. 34-91922 (May 18, 2021) (notice), 86 FR 
27938 (May 24, 2021) (SR-ICC-2021-014).
    \14\ SEC Release No. 34-94330 (February 28, 2022) (notice), (87 
FR 12508 (March 4, 2022) (SR-ICC-2022-001).
    \15\ SEC Release No. 34-96707 (January 19, 2023) (notice), 88 FR 
4868 (January 25, 2023) (SR-ICC-2023-001).
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(b) Statutory Basis
    ICE Clear Credit believes that the proposed rule change is 
consistent with the requirements of the Act, including Section 17A of 
the Act \16\ 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 ICE Clear Credit under Section 
19(b)(3)(A)(ii) of the Act \17\ and Rule 19b-4(f)(2) \18\ thereunder. 
ICE Clear Credit believes the proposed rule change is consistent with 
the requirements of the Act and the rules and regulations thereunder 
applicable to ICE Clear Credit, in particular, to Section 
17A(b)(3)(D),\19\ 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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    \16\ 15 U.S.C. 78q-1.
    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 17 CFR 240.19b-4(f)(2).
    \19\ 15 U.S.C. 78q-1(b)(3)(D).
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    ICE Clear Credit believes that the proposed discounts in the fee 
schedules have been set at an appropriate level. In determining the 
appropriate discount level, ICE Clear Credit considered factors such as 
volume, revenue, and market participation in the clearing service, 
including based on different fee levels. ICE Clear Credit also 
considered costs and expenses in offering clearing of Index Options, 
taking into account the investments that ICE Clear Credit has made in 
clearing such products and the level of investment and development 
needed for this clearing service at this time. In ICE Clear Credit'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 ICE Clear 
Credit.\20\ Furthermore, the proposed discounts are in line with past 
Index Option incentive programs that ICE Clear Credit offered, which 
similarly reduced Index Option fees without any further action required 
by CPs or the

[[Page 16594]]

CPs clients. Under the proposed changes, the same discounted rate 
(i.e., 50%) from ICE Clear Credit's regular Index Option fees would 
apply to both CP proprietary transactions and transactions cleared on 
behalf of the CP's clients. These reduced fees are designed to 
incentivize the clearing of Index Options by CPs and the CPs clients to 
grow this clearing service.
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    \20\ 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 
will be effective until further notice and shall apply to all CPs. ICE 
Clear Credit's fee schedules will continue to be transparent and to 
apply equally to market participants clearing indexes, single names, 
and Index Options at ICE Clear Credit. 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.\21\ ICE Clear Credit therefore believes that 
the proposed rule change is consistent with the requirements of Section 
17A of the Act \22\ and the regulations thereunder applicable to it and 
is appropriately filed pursuant to Section 19(b)(3)(A) of the Act \23\ 
and paragraph (f)(2) of Rule 19b-4 \24\ thereunder.
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    \21\ 15 U.S.C. 78q-1(b)(3)(D).
    \22\ 15 U.S.C. 78q-1.
    \23\ 15 U.S.C. 78s(b)(3)(A).
    \24\ 17 CFR 240.19b-4(f)(2).
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(B) Clearing Agency's Statement on Burden on Competition

    ICE Clear Credit does not believe the proposed rule change would 
have any impact, or impose any burden, on competition. As discussed 
above, the proposed changes modify ICE Clear Credit's fee schedules to 
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. ICE Clear Credit does not 
believe these amendments would affect the costs of clearing or the 
ability of market participants to access clearing. Therefore, ICE Clear 
Credit does not believe the proposed rule change imposes any burden on 
competition that is inappropriate in furtherance of the purposes 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. ICE Clear Credit will notify the Commission of 
any written comments received by ICE Clear Credit.

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 \25\ and paragraph (f) of Rule 19b-4 \26\ 
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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    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-ICC-2024-002 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-2024-002. 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 (https://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 
a.m. and 3 p.m. Copies of such filings will also be available for 
inspection and copying at the principal office of ICE Clear Credit and 
on ICE Clear Credit's website at https://www.ice.com/clear-credit/regulation.
    Do not include personal identifiable information in submissions; 
you should submit only information that you wish to make available 
publicly. We may redact in part or withhold entirely from publication 
submitted material that is obscene or subject to copyright protection. 
All submissions should refer to file number SR-ICC-2024-002 and should 
be submitted on or before March 28, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-04794 Filed 3-6-24; 8:45 am]
BILLING CODE 8011-01-P