[Federal Register Volume 90, Number 138 (Tuesday, July 22, 2025)]
[Notices]
[Pages 34557-34561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-13728]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103487; File No. SR-ICC-2025-007]


Self-Regulatory Organizations; ICE Clear Credit LLC; Order 
Approving Proposed Rule Change Relating to the ICE Clear Credit 
Recovery Plan and the ICE Clear Credit Wind-Down Plan

July 17, 2025.

I. Introduction

    On May 19, 2025, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission''), pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ 
and Rule 19b-4 thereunder,\2\ a proposed rule change (the ``Proposed 
Rule Change'') to revise its (i) Recovery Plan (the ``Recovery Plan''), 
and (ii) the Wind-Down Plan (the ``Wind-Down Plan'') (collectively, the 
``Plans''). The Proposed Rule Change was published for comment in the 
Federal Register on June 4, 2025.\3\ The Commission has not received 
any comments on the Proposed Rule

[[Page 34558]]

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\ Exchange Act Release No. 103151 (May 29, 2025), 90 FR 23744 
(June 4, 2025) (File No. SR-ICC-2025-007) (``Notice ICC-2025-007'').
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II. Description of the Proposed Rule Change

A. Background

    ICC is registered with the Commission as a clearing agency for the 
purpose of clearing CDS contracts.\4\ ICC is a central counterparty, 
which means that it interposes itself as the buyer to every seller and 
the seller to every buyer for transactions in CDS contracts. Because it 
acts as a central counterparty, ICC is a ``covered clearing agency'' as 
defined in Rule 17ad-22(a).\5\ As such, ICC is regulatorily obligated 
to have (i) a recovery plan to address any uncovered loss, liquidity 
shortfall, or capital inadequacy, whether arising from participant 
default or other causes, as necessary to maintain its viability as a 
going concern and to continue its provision of core services and (ii) a 
wind-down plan which describes the tools and strategies for conducting 
an orderly wind-down of ICC.\6\
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    \4\ Capitalized terms not otherwise defined herein have the 
meanings assigned to them in ICC's Clearing Rules or the Treasury 
Policy Plans, as applicable.
    \5\ Rule 17ad-22(a) defines ``covered clearing agency'' as a 
``registered clearing agency that provides the services of a central 
counterparty or central securities depository.'' Rule 17ad-22(a) 
further defines ``central counterparty'' as ``a clearing agency that 
interposes itself between the counterparties to securities 
transactions, acting functionally as the buyer to every seller and 
the seller to every buyer.'' 17 CFR 240.17ad-22(a).
    \6\ Rule 17ad-26(b) defines ``orderly wind-down'' as ``the 
actions of a covered clearing agency to effect the permanent 
cessation, sale, or transfer of one or more of its core services . . 
. in a manner that would not increase the risk of significant 
liquidity, credit, or operational problems spreading among financial 
institutions or markets and thereby threaten the stability of the 
U.S. financial system.''
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    ICC proposes to make changes to the Plans, which include the 
policies and procedures that ICC uses to govern its recovery and wind-
down. ICC has stated that the Proposed Rule Change amends its Plans to 
satisfy the requirements of Rule 17ad-26,\7\ which establishes the 
definitions of ``Recovery'' and ``Orderly wind-down,'' and requires 
that plans for the recovery and orderly wind-down of a covered clearing 
agency, such as ICC, identify and include certain specific elements.\8\ 
In addition to incorporating the required elements, the Proposed Rule 
Change makes conforming updates and technical revisions consistent with 
Rule 17ad-26, including incorporating key terms as defined in the Rule. 
The Proposed Rule Change also amends the Plans to reflect changes ICC 
made to its internal governance last year; remove outdated references; 
and update financial and operational information related to ICC.
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    \7\ 17 CFR 240.17ad-26.
    \8\ See Notice ICC-2025-007, 90 FR at 23745.
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B. Updates To Incorporate New SEC Requirements as to a Covered Clearing 
Agency's Recovery Plan and Wind-Down Plan

    ICC proposes to update the Plans due to the adoption of new Rule 
17ad-26.\9\ The new rule broadly covers certain requirements for the 
recovery and orderly wind-down plans of covered clearing agencies. 
ICC's Recovery Plan is designed to maintain its viability as a going 
concern under certain financial conditions that threatens its 
viability, and ICC proposes to amend the plan, specifically Section 
III, entitled ``Regulatory Requirements for the Recovery Plan,'' to 
incorporate a summary describing Rule 17ad-26 and its applicability. In 
addition to the summary, ICC also proposes to add multiple references 
to Rule 17ad-26 throughout the Recovery Plan, where applicable. ICC 
proposes to make the same changes to its Wind-Down Plan.
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    \9\ Covered Clearing Agency Resilience and Recovery and Orderly 
Wind-Down Plans, Exchange Act Release No. 101446 (Oct. 25, 2024), 89 
FR 9100 (Nov. 18, 2024) (File No. S7-10-23).
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    ICC also proposes to add additional language in the Plans to 
identify core services necessary for its viability. Proposed Section 
V.B of the Recovery Plan and proposed Section VII.B.1 of the Wind-Down 
Plan adds language discussing such core services, the availability of 
such services through both internal and external service providers, and 
the staffing roles and functions necessary to support such services, 
both on a daily basis, as well as in the event of a recovery.

C. The Documentation of the Removal and Addition of Groups in the Plans 
in Order To Align With Previously Made Governance Changes

    ICC proposes to make changes to relevant aspects of the Plans 
relating to ICC's Board of Managers and internal committees and groups 
to ensure that certain governance changes made by ICC last year to 
comport with SEC Rules are accurately reflected in the Plans.\10\
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    \10\ See Notice ICC-2025-007, 90 FR at 23745. The proposed 
changes would update the Plans to accurately reflect prior 
governance changes, but would not make additional substantive 
changes to the Plans.
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    For example, to comport with Rule 17ad-25(c), which lays out 
certain requirements for clearing agency board of directors and 
conflict of interests, ICC added a Board level Nominating Committee in 
2024.\11\ To ensure that the new Nominating Committee is reflected in 
the Plans, ICC proposes to add references to the Nominating Committee 
where applicable throughout the Recovery Plan, and to add to the 
Recovery Plan Sub-Section IV.C.3.vi, `Nominating Committee,' which 
would describe the composition of the Committee and the role of the 
Committee, including in evaluating the independence of members of ICC's 
Board.
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    \11\ See Exchange Act Release No. 101820 (Dec. 5, 2024), 89 FR 
99917 (Dec. 11, 2024) (File No. ICC-2024-010).
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    Similarly, ICC proposes to make additional updates to the Plans to 
describe the addition of other groups and committees, or, where 
applicable, their removal.\12\
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    \12\ See Exchange Act Release No. 101382 (Oct. 18, 2024), 89 FR 
84979 (Oct. 24, 2024) (File No. ICC-2024-009) (``Notice ICC-2024-
009'').
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    First, ICC proposes to update the Plans to reflect changes to the 
composition of ICC's Risk Committee, which occurred in 2024, 
specifically as to size and membership. To describe these changes, ICC 
proposes to revise `Management/Governance', Section IV.C of the 
Recovery Plan and IV.B of the Wind-Down Plan.
    ICC also proposes to amend the Plans to reflect the addition of the 
Risk Advisory Group to ICC's governance structure in 2024 by adding 
Sub-Section IV.C.2.ii, `Risk Advisory Working Group,' to the Recovery 
Plan and Section IV.C.2.ii to the Wind-Down Plan. ICC has stated that 
the Risk Advisory Group is required by regulation and is a forum to 
seek risk-based input from a broad array of market participants 
regarding matters that could materially affect the risk profile of 
ICC.\13\ ICC proposes that these amendments to the Plans include 
information regarding the description, role and composition of the 
working group.
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    \13\ See Notice ICC-2025-007, 90 FR at 23745.
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    ICC proposes to amend the Plans to reflect the elimination of the 
Advisory Committee and the Risk Management Subcommittee by removing 
references to those groups from the Plans,\14\ and also to change 
references within the Plans that summarize ICC's current governance 
structure and reflect the changes listed above. For example, ICC 
proposes to revise a chart in Section IV.C of the Recovery Plan and 
Section IV.B of the Wind-Down Plan, titled `Management/Governance,' to 
reflect the addition and removal of these groups.
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    \14\ See Notice ICC-2025-007, 89 FR at 84979.
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    ICC also proposes to make changes to the Plans to reflect non-
policy personnel

[[Page 34559]]

changes to its Board. As ICC has stated, certain Board members were 
replaced by ICC due to varied circumstances, and ICC has proposed 
including those changes within the Plans.\15\ Such personnel changes, 
as outlined by ICC, also include title changes, and the Plans are 
intended to reflect such changes as well.
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    \15\ See Notice ICC-2025-007, 90 FR at 23746.
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D. Terminology and Other Substantive Changes Related to the ORMF

    ICC also proposes to make changes to the Recovery Plan to reflect 
both substantive updates and non-substantive terminology changes that 
ICC made to its Operational Risk Management Framework (``ORMF'') in 
2024.\16\ For example, regarding non-substantive terminology changes, 
ICC proposes renaming Section V of the Recovery Plan from ``Critical 
Services & Providers of Critical Services'' to ``Clearing Services & 
Service Providers,'' and renaming Section VI.C of the Wind-Down Plan 
from ``Continuation of the Critical Operation and Critical Service in 
Wind Down'' to ``Continuation of the Critical Operations and Clearing 
Services in Wind Down'' to be consistent with and reflect changes and 
clarifications previously made to the ORMF.\17\
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    \16\ See Exchange Act Release No. 101819 (Dec. 5, 2024), 89 FR 
99949 (Dec. 11, 2024) (File No. ICC-2024-011).
    \17\ See Notice ICC-2025-007, 90 FR at 23746.
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    Other changes to the Plans proposed by ICC would reflect more 
substantive prior changes to the ORMF. For example, ICC proposes to 
remove a bullet point list of items in Section V.A.2. of the Recovery 
Plan and Section VII.B of the Wind-Down Plan that may be included in 
the risk assessments of third parties providing critical services, and 
to include a bullet point list of items that may be included in the 
risk assessments of external service providers for core services 
(``SPCS'') in new Section V.B of the Recovery Plan and Section V.B.1 of 
the Wind-Down Plan. Additionally, ICC proposes to update a description 
of how ICC identifies and manages its SPCS, both external and internal, 
consistent with the prior changes to its ORMF noted above.
    Similarly, ICC previously updated its internal analysis of various 
contractual agreements with its external service providers. To reflect 
those changes in the Plans, ICC now proposes to update the relevant 
contractual agreements analysis within Section VI of the Recovery Plan, 
titled `Interconnections and Interdependencies,' and within Section 
VIII of the Wind-Down Plan, titled `Contractual Agreements-Impact on 
Wind-Down Plan.'
    Similarly, in 2024 ICC reorganized and consolidated certain of its 
key internal reports to increase efficiency and transparency.\18\ To 
reflect these changes in the Plans, ICC proposes to update `Exhibit 35: 
Key ICC Reports and Descriptions' within Section XII of the Recovery 
Plan to reflect the changes to these reports it made in 2024.
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    \18\ See Exchange Act Release No. 100620 (July 31, 2024), 89 FR 
63997 (Aug. 6, 2024) (File No. SR-ICC-2024-004).
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E. Non-Substantive Informational Updates

    ICC also proposes to make routine informational updates to the 
Plans to ensure that references to certain financial and other data 
remain current and accurate as that data changes or is updated. For 
example, the proposed changes would update certain financial data in 
Section IV.D of the Recovery Plan, such as ICC's revenue, volume, and 
expense data, as well as the balance sheet information reflected in 
Section VIII.B of the Recovery Plan. As another example, ICC would 
update the employee headcounts referenced in the Recovery Plan with 
current headcounts. ICC intends to make identical updates to the 
corresponding sections of the Wind-Down Plan.

F. Testing of the Plan

    ICC also proposes to update Section IX.B of the Recovery Plan, 
titled `Governance Structure and Controls,' and Section X of the Wind-
Down Plan, titled `Wind-Down Plan Governance,' to provide additional 
details regarding ICC's testing of the Plans. ICC proposes several 
changes, including: clarification that the Plans will be tested at 
least every twelve months, rather than annually; clarification that 
testing of the Recovery Plan will include the participation of Clearing 
Participants and, when practical, other stakeholders; \19\ confirmation 
that its testing of the Recovery Plan will be in addition to ICC's 
annual default management drills and exercises; including that when 
Recovery Plan testing is of a non-default loss scenario, ICC will 
consider whether it is appropriate or practical to have Clearing 
Participants involved in the testing; and adding that ICC will also 
consider including certain other stakeholders in such testing, which 
ICC has stated is regulatorily required.\20\ Additionally, ICC proposes 
to update Section X of the Wind-Down Plan to add the process that 
certain members of ICC, including senior management, the Risk 
Committee, and the Board, must take following the test of a wind-down.
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    \19\ With respect to the Wind-Down Plan, ICC will consider 
whether it is appropriate or practical to have Clearing Participants 
involved in the testing.
    \20\ See Notice ICC-2025-007, 90 FR at 23746.
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G. Administrative Corrections to the Plans

    ICC proposes certain other non-substantive drafting changes and 
improvements to the Plans, such as the correction of typographical 
errors, the re-numbering of sub-sections to reflect the addition and 
deletion of sub-sections as described above, and updating the revision 
history in the Plans.

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 
the proposed rule change is consistent with the requirements of the Act 
and the rules and regulations thereunder applicable to the 
organization.\21\ Under the Commission's Rules of Practice, the 
``burden to demonstrate that a proposed rule change is consistent with 
the Exchange Act and the rules and regulations issued thereunder . . . 
is on the self-regulatory organization [`SRO'] that proposed the rule 
change.'' \22\
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    \21\ 15 U.S.C. 78s(b)(2)(C).
    \22\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR 
201.700(b)(3).
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    The description of a proposed rule change, its purpose and 
operation, its effect, and a legal analysis of its consistency with 
applicable requirements must all be sufficiently detailed and specific 
to support an affirmative Commission finding,\23\ and any failure of an 
SRO to provide this information may result in the Commission not having 
a sufficient basis to make an affirmative finding that a proposed rule 
change is consistent with the Exchange Act and the applicable rules and 
regulations.\24\ Moreover, ``unquestioning reliance'' on an SRO's 
representations in a proposed rule change is not sufficient to justify 
Commission approval of a proposed rule change.\25\
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    \23\ Id.
    \24\ Id.
    \25\ Susquehanna Int'l Group, LLP v. Securities and Exchange 
Commission, 866 F.3d 442, 447 (D.C. Cir. 2017).
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    After carefully considering the Proposed Rule Change, the 
Commission finds that the Proposed Rule Change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to ICC. More

[[Page 34560]]

specifically, for the reasons given below, the Commission finds that 
the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the 
Act,\26\ and Rules 17ad-22(e)(3)(ii),\27\ 17ad-26(a)(1),\28\ and 17ad-
26(a)(8) \29\ thereunder, as described in detail below.
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    \26\ 15 U.S.C. 78q-1(b)(3)(F).
    \27\ 17 CFR 240.17ad-22(e)(3)(ii).
    \28\ 17 CFR 240.17ad-26(a)(1).
    \29\ 17 CFR 240.17ad-26(a)(8).
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A. Consistency With Section 17A(b)(3)(F) of the Act

    Under Section 17A(b)(3)(F) of the Act, ICC's rules, among other 
things, must be designed to promote the prompt and accurate clearance 
and settlement of securities transactions.\30\ Based on a review of the 
record, and for the reasons discussed below, the Proposed Rule Change 
is consistent with Section 17A(b)(3)(F).\31\
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    \30\ 15 U.S.C. 78q-1(b)(3)(F).
    \31\ See infra Section III.B (Consistency with Rule 17ad-
22(e)(3)(ii) under the Act) and Sections III.C-G (Consistency with 
Rule 17ad-26(a) under the Act).
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    A recovery, wind-down, or business disruption could lead to the 
failure of ICC's business operations, which could, in turn, inhibit the 
safeguarding of securities and funds that ICC controls. Because the 
Recovery Plan and the Wind-Down Plan would facilitate the continuity 
and orderly functioning of ICC's clearing services in the case of a 
recovery, wind-down, or business disruption, the plans help ensure that 
ICC can continue to operate in those situations, and thus continue 
clearing and settling securities transactions. Improving the Plans 
through the updates and changes described above is therefore consistent 
with Section 17A(b)(3)(F).\32\
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    \32\ Id.
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    As noted above, the Proposed Rule Change primarily would update the 
Plans with current information about ICC's internal governance groups 
and committees, finances, and Board. By providing the most current 
information for ICC's Board, internal governance, and finances, the 
proposed rule change will support ICC's ability to monitor its finances 
and compare its regulatory capital. This in turn will help ensure ICC 
has the financial resources to promptly and accurately clear and settle 
transactions during recovery and, if necessary, conduct an orderly 
wind-down.
    The changes proposed by ICC help ensure visibility into and 
transparency of the Plans and into the processes ICC has developed to 
ensure continuity, or an effective wind-down, should certain 
circumstances threaten its viability. Additionally, the updated 
information ensures that the Plans remain current and relevant, and 
thereby effectively serve their intended purpose. Since both the 
transparency and relevancy of the Plans are factors that support the 
Plans ability to help facilitate the continuity and orderly functioning 
of ICC in the case of a recovery or wind-down, those factors help 
ensure ICC it can meet its business obligations in such situations, and 
thus continue clearing and settling securities transactions.
    For these reasons, the Proposed Rule Change is consistent with the 
requirements of Section 17A(b)(3)(F) of the Act.\33\
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    \33\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Consistency With Rule 17ad-22(e)(3)(ii)

    Rule 17ad-22(e)(3)(ii) requires that ICC ``establish implement, 
maintain and enforce written policies and procedures reasonably 
designed to maintain a sound risk management framework for 
comprehensively managing legal, credit, liquidity, operational, general 
business, investment, custody, and other risks that arise in or are 
borne by the covered clearing agency, which includes plans for the 
recovery and orderly wind-down of the covered clearing agency 
necessitated by credit losses, liquidity shortfalls, losses from 
general business risk, or any other losses.\34\
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    \34\ 17 CFR 240.17ad-22(e)(3)(ii).
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    As described above, ICC proposes to make current descriptions of 
its governance structure and align provisions within the Plans with 
each other, ICC's Rules, and other policies. For example, ICC proposes 
changes to reflect the addition and removal of certain groups and 
committees that participate in its internal governance processes, or 
which reflect its current governance structure, such as identifying new 
members of the Board and title changes. Separately, ICC proposes 
several changes to its Plans to provide for internal consistency. 
Further, the proposed changes would update important financial and 
operational information described in the Plans,\35\ and further 
strengthen the Plans with a series of additional corrections, 
clarifications, and updates.\36\
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    \35\ See supra Section II.E.
    \36\ See supra Sections II.E. and II.G.
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    These proposed changes will make the information provided in the 
Plans more accurate and useful, provide a more accurate and usable 
playbook for ICC or source of information for a resolution authority, 
and reduce the risk that the Plans may not contain current information. 
As such, these changes would provide a more up-to-date and useful set 
of information for the relevant authorities to carry out any needed 
recovery and resolution planning more expeditiously.
    Accordingly, the Proposed Rule Change is consistent with the 
requirements of Rule 17ad-22(e)(3)(ii) under the Act.\37\
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    \37\ 17 CFR 240.17ad-22(e)(3)(ii).
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C. Consistency With Rule 17ad-26(a)(1) Under the Act

    Rule 17ad-26(a)(1) requires ICC's plans for recovery and orderly-
wind down to ``identify and describe the covered clearing agency's core 
payment, clearing, and settlement services and address how the covered 
clearing agency would continue to provide such core services in the 
event of a recovery and during an orderly wind-down, including by 
identifying the staffing roles necessary to support such core services; 
and analyzing how such staffing roles necessary to support such core 
services would continue in the event of a recovery and during an 
orderly wind-down.'' \38\ Based on a review of the record, and for the 
reasons discussed below, ICC's proposed rule change is consistent with 
Rule 17ad-26(a)(1).
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    \38\ 17 CFR 240.17ad-26(a)(1).
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    As described above, ICC's proposed changes identify staffing roles 
necessary to support core services. Staffing roles do not refer to 
specific personnel or employees, but instead to positions, roles, and 
personnel functions that are necessary for the continuation of core 
services. ICC's proposed changes list key staffing roles necessary for 
ICC to continue providing its core services in the event of a recovery 
or wind-down. The Proposed Rule Change also analyzes how staffing roles 
necessary to support core services would continue in the event of a 
recovery and during an orderly wind-down. For example, ICC proposes to 
add text to the Plans indicating that ICC's Management may need to 
utilize cross training or retention bonuses to address reduced staffing 
to ensure the continuation of core services.
    Accordingly, the Proposed Rule Change is consistent with the 
requirements of Rule 17ad-26(a)(1).\39\
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    \39\ Id.
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D. Consistency With Rule 17ad-26(a)(8) Under the Act

    Rule 17ad-26(a)(8), in part, requires ICC's Plans for recovery and 
orderly wind-down to ``include procedures for testing the covered 
clearing agency's ability to implement the recovery and

[[Page 34561]]

orderly wind-down plans at least every 12 months, including by 
requiring the covered clearing agency's participants and when 
practicable other stakeholders to participate in the testing of its 
plans; . . . providing for reporting the results of such testing to the 
covered clearing agency's board of directors and senior management; and 
specifying the procedures for, as appropriate, amending the plans to 
address the results of such testing.'' \40\ Based on a review of the 
record, and for the reasons discussed below, ICC's proposed rule change 
is consistent with Rule 17ad-26(a)(8).
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    \40\ 17 CFR 240.17ad-26(a)(8).
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    As described above, ICC proposes to add language to the Plans 
requiring testing of ICC's ability to implement the plan at least every 
12 months and clarifying that such testing will include the 
participation of Clearing Participants and, when practical, other 
stakeholders. Furthermore, the proposed changes would confirm that 
ICC's testing of the Recovery Plan would be in addition to ICC's annual 
default management drills and exercises and would specify that, when 
Recovery Plan testing is of a non-default loss scenario, ICC would 
consider whether it is appropriate or practical to have Clearing 
Participants involved in the testing. The proposed changes would also 
specify that ICC would consider including certain other stakeholders in 
such testing, which ICC has stated is regulatorily required. Finally, 
the Proposed Rule Change describes how ICC's Risk Committee and Board 
consider the results and recommendations from such testing.
    Accordingly, the Proposed Rule Change is consistent with the 
requirements of Rule 17ad-26(a)(8).\41\
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    \41\ 17 CFR 240.17ad-26(a)(8).
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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, Section 17A(b)(3)(F) of the Act,\42\ and Rules 17ad-
22(e)(3)(ii),\43\ 17ad-26(a)(1),\44\ and 17ad-26(a)(8).\45\
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    \42\ 15 U.S.C. 78q-1(b)(3)(F).
    \43\ 17 CFR 240.17ad-22(e)(3)(ii).
    \44\ 17 CFR 240.17ad-26(a)(1).
    \45\ 17 CFR 240.17ad-26(a)(8).
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    It is therefore ordered pursuant to Section 19(b)(2) of the Act 
that the proposed rule change (SR-ICC-2025-007) be, and hereby is, 
approved.\46\
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    \46\ In approving the proposed rule change, the Commission 
considered the proposal's impacts 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.\47\
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    \47\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-13728 Filed 7-21-25; 8:45 am]
BILLING CODE 8011-01-P