81 FR 16245 - Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change To Revise the ICC Operational Risk Management Framework
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 58 (March 25, 2016)
Federal Register Volume 81, Issue 58 (March 25, 2016)
| Page Range | 16245-16247 | |
| FR Document | 2016-06747 |
[Federal Register Volume 81, Number 58 (Friday, March 25, 2016)] [Notices] [Pages 16245-16247] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-06747] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77413; File No. SR-ICC-2016-003] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change To Revise the ICC Operational Risk Management Framework March 21, 2016. 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 March 10, 2016, ICE Clear Credit LLC (``ICC'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared primarily by ICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The principal purpose of the proposed rule change is to update ICC's Operational Risk Management Framework. These revisions do not require any changes to the ICC Clearing Rules. II. Self-Regulatory Organization'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. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change ICC proposes updates to the ICC Operational Risk Management Framework. ICC believes such revisions will facilitate the prompt and accurate clearance and settlement of securities transactions and derivative agreements, contracts, and transactions for which it is responsible. The proposed revisions are described in detail as follows. The ICC Operational Risk Management Framework details ICC's dynamic and independent program of risk assessment and oversight, managed by the Operational Risk Manager (``ORM''), which aims to reduce operational incidents, encourage process and control improvement, bring transparency to operational performance standard monitoring, and fulfill regulatory obligations. ICC proposes organizational changes to its Operational Risk Management Framework related to its operational risk management processes. ICC has revised the Operational Risk Management Framework to frame its existing operational risk program and processes around an operational risk lifecycle, designed to highlight certain aspects of the processes and present the processes in a more efficient manner. The operational risk lifecycle utilized by ICC has five components: Identify, assess, monitor, mitigate and report. Each of these lifecycle components are first defined generally in the document then applied to each of ICC's two operational risk processes: Risk assessment; and performance objectives setting and monitoring. Specifically, the content for each risk process has been reorganized to fall into each of the operational risk lifecycle components (i.e., identify, assess, monitor, mitigate, and report). For completion purposes, [[Page 16246]] ICC added information regarding the `assess' and `report' component of the risk assessment process. Specifically, ICC assesses each of its risk scenarios to determine the inherent risk rating associated with the occurrence of an event or incident, as well as assess the effectiveness of any relevant risk controls. Further, in the `report' component, ICC clarified that the ORM presents operational risk reporting to an internal committee which includes members of senior management. The responsibilities of the ORM, which were previously listed out in the document, were incorporated into the risk lifecycles. The ORM will continue to provide management and staff with advice and guidance related to the development of controls designed to increase performance and reduce processing risk, as part of the `mitigate' risk lifecycle component. Similarly, the responsibilities of senior management, which were previously listed out in the document, were incorporated into the risk lifecycles. ICC has categorized those aspects of the operational risk management program which do not fall within this lifecycle as ``Operational Risk Focus Areas.'' These risk focus areas include: Business continuity planning and disaster recovery; vendor assessment; new products and initiatives; information security; and technology control functions. ICC has reorganized the order of these risk focus areas to better distinguish which functions may, with oversight by the ORM, be outsourced to Intercontinental Exchange, Inc. (``ICE, Inc.'') or performed by departments dedicated to that particular risk area. ICC has made several clarifying and organizational enhancements to the various risk focus area descriptions. Further, specific details contained within other ICC policies and procedures were removed and described more generally within the Operational Risk Management Framework, in an effort to reduce redundancy amongst ICC policies and procedures. ICC continues to maintain business continuity planning and disaster recovery as two separate programs with separate and distinct components; however, ICC has grouped the description of these programs together for purposes of the Operational Risk Management Framework. ICC enhanced the ``Vendor Assessment'' risk focus area description to note that the ORM is responsible for conducting a service provider risk assessment for critical vendors, and to list the specific steps taken as part of such risk assessment. ICC also enhanced the ``Information Security'' risk focus area description to note that the ICE, Inc. Information Security Department conducts its own risk assessments related to information security and physical security/environmental controls, pursuant to internal policies which are maintained by an ICE, Inc. internal committee. Information regarding the Firm Wide Incident Management Program was included in the new `Technology Controls Section.' ICC enhanced the `Technology Control Functions' risk focus area description to note that the ICC Systems Operations team is responsible for executing daily clearing functions within established service expectations and performing incident management. ICC described this incident management process generally within the framework, and removed more detailed aspects of the program which are contained in specific program documentation. General information regarding the development and enforcement of a firm-wide operational risk framework was removed, as the revised framework more clearly lays out in each particular section who is responsible for the development and enforcement of that component of the operational risk management framework. Information regarding the human resource reporting line of the ORM and specific references to titles of documents utilized as part of the risk assessment process were removed. As the Vendor Risk Management policy was retired and encompassed within the Operational Risk Management Framework, reference to the policy was removed from the document. ICC removed internal audit responsibilities from the Operational Risk Management Framework as such responsibilities are contained within internal audit documentation. The overall governance of the Operational Risk Framework has been updated to reflect current practices. Specifically, material amendments are reviewed by the Risk Committee, and approved by the Board. The Board reviews the Operational Risk Management Framework at least annually. Other non-material changes were made to the framework to enhance readability. Previously, ICC included regulatory requirements and industry guidance information within the framework; this information has been moved to a separate appendix to the framework. Further, information regarding Regulation Systems, Compliance, and Integrity has been added for completeness. Certain information regarding governance and governing committees has been resituated to the reporting section of the relevant operational risk lifecycle. Similarly, information regarding the roles and responsibilities of the ORM and senior management has been resituated to the appropriate section the operational risk lifecycle. Section 17A(b)(3)(F) of the Act \3\ requires, among other things, that the rules of a clearing agency be designed to protect investors and the public interest and to comply with the provisions of the Act and the rules and regulations thereunder. ICC believes that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to ICC, in particular, to Section 17(A)(b)(3)(F),\4\ because ICC believes that the proposed rule changes will protect investors and the public interest, as the reorganization of ICC's existing operational risk processes around the operational risk lifecycle promotes readability and efficiency, and alleviates potential confusion throughout the Operational Risk Management Framework. In addition, the proposed revisions are consistent with the relevant requirements of Rule 17Ad- 22.\5\ The changes to the ICC Operational Risk Management Framework further ensure that ICC, through its operational risk program, is able to identify sources of operational risk and minimize them through the development of appropriate systems, control, and procedures. Thus, the changes are reasonably designed to meet the operational risk requirements of Rule 17Ad-22(d)(4).\6\ As such, the proposed changes are designed to promote the prompt and accurate clearance and settlement of securities transactions, derivatives agreements, contracts, and transactions within the meaning of Section 17A(b)(3)(F) \7\ of the Act. --------------------------------------------------------------------------- \3\ 15 U.S.C. 78q-1(b)(3)(F). \4\ Id. \5\ 17 CFR 240.17Ad-22. \6\ 17 CFR 240.17Ad-22(d)(4). \7\ Id. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition ICC does not believe the proposed rule changes would have any impact, or impose any burden, on competition. The ICC Operational Risk Management Framework applies uniformly across all market participants. Therefore, ICC does not believe the proposed rule changes impose any burden on competition that is inappropriate in furtherance of the purposes of the Act. [[Page 16247]] C. Self-Regulatory Organization'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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 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 CommentsUse 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-2016-003 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ICC-2016-003. 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 Web site (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 Web site 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 inspection and copying at the principal office of ICE Clear Credit and on ICE Clear Credit's Web site at https://www.theice.com/clear-credit/regulation. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ICC-2016-003 and should be submitted on or before April 15, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\8\ Brent J. Fields, Secretary. --------------------------------------------------------------------------- \8\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2016-06747 Filed 3-24-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 58 / Friday, March 25, 2016 / Notices 16245
unsolicited written comments from proposed rule change between the Framework. These revisions do not
members or other interested parties. Commission and any person, other than require any changes to the ICC Clearing
those that may be withheld from the Rules.
III. Date of Effectiveness of the
public in accordance with the
Proposed Rule Change and Timing for II. Self-Regulatory Organization’s
provisions of 5 U.S.C. 552, will be
Commission Action Statement of the Purpose of, and
available for Web site viewing and
The foregoing rule change has become Statutory Basis for, the Proposed Rule
printing in the Commission’s Public
effective pursuant to Section Change
Reference Room, 100 F Street NE.,
19(b)(3)(A)(ii) of the Act,27 and Washington, DC 20549 on official In its filing with the Commission, ICC
subparagraph (f)(2) of Rule 19b–4 business days between the hours of included statements concerning the
thereunder,28 because it establishes a 10:00 a.m. and 3:00 p.m. Copies of such purpose of and basis for the proposed
due, fee, or other charge imposed by ISE filing also will be available for rule change and discussed any
Mercury. inspection and copying at the principal comments it received on the proposed
At any time within 60 days of the office of the Exchange. All comments rule change. The text of these statements
filing of such proposed rule change, the received will be posted without change; may be examined at the places specified
Commission summarily may the Commission does not edit personal in Item IV below. ICC has prepared
temporarily suspend such rule change if identifying information from summaries, set forth in sections A, B,
it appears to the Commission that such submissions. You should submit only and C below, of the most significant
action is necessary or appropriate in the information that you wish to make aspects of these statements.
public interest, for the protection of available publicly. All submissions A. Self-Regulatory Organization’s
investors, or otherwise in furtherance of should refer to File Number SR– Statement of the Purpose of, and
the purposes of the Act. If the ISEMercury–2016–05, and should be Statutory Basis for, the Proposed Rule
Commission takes such action, the submitted on or before April 15, 2016. Change
Commission shall institute proceedings For the Commission, by the Division of
to determine whether the proposed rule ICC proposes updates to the ICC
Trading and Markets, pursuant to delegated
should be approved or disapproved. authority.29
Operational Risk Management
Framework. ICC believes such revisions
IV. Solicitation of Comments Brent J. Fields,
will facilitate the prompt and accurate
Secretary. clearance and settlement of securities
Interested persons are invited to
[FR Doc. 2016–06744 Filed 3–24–16; 8:45 am] transactions and derivative agreements,
submit written data, views, and
arguments concerning the foregoing, BILLING CODE 8011–01–P contracts, and transactions for which it
including whether the proposed rule is responsible. The proposed revisions
change is consistent with the Act. are described in detail as follows.
SECURITIES AND EXCHANGE The ICC Operational Risk
Comments may be submitted by any of COMMISSION
the following methods: Management Framework details ICC’s
[Release No. 34–77413; File No. SR–ICC– dynamic and independent program of
Electronic Comments 2016–003] risk assessment and oversight, managed
• Use the Commission’s Internet by the Operational Risk Manager
comment form (http://www.sec.gov/ Self-Regulatory Organizations; ICE (‘‘ORM’’), which aims to reduce
rules/sro.shtml); or Clear Credit LLC; Notice of Filing of operational incidents, encourage
• Send an email to rule-comments@ Proposed Rule Change To Revise the process and control improvement, bring
sec.gov. Please include File Number SR– ICC Operational Risk Management transparency to operational performance
ISEMercury–2016–05 on the subject Framework standard monitoring, and fulfill
line. March 21, 2016. regulatory obligations. ICC proposes
Pursuant to Section 19(b)(1) of the organizational changes to its
Paper Comments Operational Risk Management
Securities Exchange Act of 1934
• Send paper comments in triplicate (‘‘Act’’) 1 and Rule 19b–4 thereunder 2 Framework related to its operational
to Brent J. Fields, Secretary, Securities notice is hereby given that on March 10, risk management processes.
and Exchange Commission, 100 F Street ICC has revised the Operational Risk
2016, ICE Clear Credit LLC (‘‘ICC’’) filed
NE., Washington, DC 20549–1090. Management Framework to frame its
with the Securities and Exchange
All submissions should refer to File existing operational risk program and
Commission (‘‘Commission’’) the
Number SR–ISEMercury–2016–05. This processes around an operational risk
proposed rule change as described in
file number should be included on the lifecycle, designed to highlight certain
Items I, II, and III below, which Items
subject line if email is used. To help the aspects of the processes and present the
have been prepared primarily by ICC.
Commission process and review your processes in a more efficient manner.
The Commission is publishing this
comments more efficiently, please use The operational risk lifecycle utilized by
notice to solicit comments on the
only one method. The Commission will ICC has five components: Identify,
proposed rule change from interested
post all comments on the Commission’s assess, monitor, mitigate and report.
persons.
Internet Web site (http://www.sec.gov/ Each of these lifecycle components are
rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s first defined generally in the document
Statement of the Terms of Substance of then applied to each of ICC’s two
asabaliauskas on DSK3SPTVN1PROD with NOTICES
submission, all subsequent
amendments, all written statements the Proposed Rule Change operational risk processes: Risk
with respect to the proposed rule The principal purpose of the assessment; and performance objectives
change that are filed with the proposed rule change is to update ICC’s setting and monitoring. Specifically, the
Commission, and all written Operational Risk Management content for each risk process has been
communications relating to the reorganized to fall into each of the
29 17 CFR 200.30–3(a)(12). operational risk lifecycle components
27 15 U.S.C. 78s(b)(3)(A)(ii). 1 15 U.S.C. 78s(b)(1). (i.e., identify, assess, monitor, mitigate,
28 17 CFR 240.19b–4(f)(2). 2 17 CFR 240.19b–4. and report). For completion purposes,
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![Federal Register / Vol. 81, No. 58 / Friday, March 25, 2016 / Notices 16247
C. Self-Regulatory Organization’s Commission and any person, other than APPLICANTS: Northern Lights Fund
Statement on Comments on the those that may be withheld from the Trust (the ‘‘Trust’’), a Delaware statutory
Proposed Rule Change Received From public in accordance with the trust registered under the Act as an
Members, Participants or Others provisions of 5 U.S.C. 552, will be open-end management investment
Written comments relating to the available for Web site viewing and company with multiple series, and
printing in the Commission’s Public Princeton Fund Advisors LLC, a
proposed rule change have not been
Reference Room, 100 F Street NE., Delaware limited liability company
solicited or received. ICC will notify the
Washington, DC 20549, on official registered as an investment adviser
Commission of any written comments
business days between the hours of under the Investment Advisers Act of
received by ICC.
10:00 a.m. and 3:00 p.m. Copies of such 1940 (‘‘the ‘‘Adviser,’’ and, collectively
III. Date of Effectiveness of the filings will also be available for with the Trust, the ‘‘Applicants’’).
Proposed Rule Change and Timing for inspection and copying at the principal FILING DATES: The application was filed
Commission Action office of ICE Clear Credit and on ICE March 6, 2014, and amended on August
Within 45 days of the date of Clear Credit’s Web site at https:// 21, 2014, November 10, 2014, November
publication of this notice in the Federal www.theice.com/clear-credit/regulation. 25, 2015, February 19, 2016, February
All comments received will be posted 22, 2016, and March 16, 2016.
Register or within such longer period (i)
without change; the Commission does HEARING OR NOTIFICATION OF HEARING:
as the Commission may designate up to
not edit personal identifying An order granting the application will
90 days of such date if it finds such information from submissions. You
longer period to be appropriate and be issued unless the Commission orders
should submit only information that a hearing. Interested persons may
publishes its reasons for so finding or you wish to make available publicly. All
(ii) as to which the self-regulatory request a hearing by writing to the
submissions should refer to File Commission’s Secretary and serving
organization consents, the Commission Number SR–ICC–2016–003 and should
will: applicants with a copy of the request,
be submitted on or before April 15, personally or by mail. Hearing requests
(A) By order approve or disapprove 2016.
such proposed rule change, or should be received by the Commission
(B) institute proceedings to determine For the Commission, by the Division of by 5:30 p.m. on April 18, 2016, and
Trading and Markets, pursuant to delegated should be accompanied by proof of
whether the proposed rule change
authority.8 service on the applicants, in the form of
should be disapproved.
Brent J. Fields, an affidavit or, for lawyers, a certificate
IV. Solicitation of Comments Secretary. of service. Pursuant to Rule 0–5 under
Interested persons are invited to [FR Doc. 2016–06747 Filed 3–24–16; 8:45 am] the Act, hearing requests should state
submit written data, views, and BILLING CODE 8011–01–P the nature of the writer’s interest, any
arguments concerning the foregoing, facts bearing upon the desirability of a
including whether the proposed rule hearing on the matter, the reason for the
change is consistent with the Act. SECURITIES AND EXCHANGE request, and the issues contested.
Comments may be submitted by any of COMMISSION Persons who wish to be notified of a
the following methods: [Investment Company Act Release No. hearing may request notification by
32032; 812–14285] writing to the Commission’s Secretary.
Electronic Comments
ADDRESSES: Secretary, U.S. Securities
• Use the Commission’s Internet Northern Lights Fund Trust and and Exchange Commission, 100 F Street
comment form (http://www.sec.gov/ Princeton Fund Advisors, LLC; Notice NE., Washington, DC 20549–1090.
rules/sro.shtml); or of Application Applicants: Trust: James P. Ash, Esq.,
• Send an email to rule-comments@ Gemini Fund Services LLC, 80 Arkay
March 21, 2016.
sec.gov. Please include File Number SR– Drive, Suite 110, Hauppage, NY 11788
AGENCY: Securities and Exchange
ICC–2016–003 on the subject line. and Adviser: Princeton Fund Advisors,
Commission (‘‘Commission’’).
Paper Comments LLC, 1125 17th Street, Suite 1400,
ACTION: Notice of an application under
Denver, CO 80202.
Send paper comments in triplicate to Section 6(c) of the Investment Company
FOR FURTHER INFORMATION CONTACT: Jean
Secretary, Securities and Exchange Act of 1940 (‘‘Act’’) for an exemption
E. Minarick, Senior Counsel, at (202)
Commission, 100 F Street NE., from Section 15(a) of the Act and Rule
551–6811, or Daniele Marchesani,
Washington, DC 20549–1090. 18f–2 under the Act, as well as from
Branch Chief, at (202) 551–6821
certain disclosure requirements in Rule
All submissions should refer to File (Division of Investment Management,
20a–1 under the Act, Item 19(a)(3) of
Number SR–ICC–2016–003. This file Chief Counsel’s Office).
Form N–1A, Items 22(c)(1)(ii),
number should be included on the SUPPLEMENTARY INFORMATION: The
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of
subject line if email is used. To help the following is a summary of the
Schedule 14A under the Securities
Commission process and review your application. The complete application
Exchange Act of 1934, and Sections 6–
comments more efficiently, please use may be obtained via the Commission’s
07(2)(a), (b), and (c) of Regulation S–X
only one method. The Commission will Web site by searching for the file
(‘‘Disclosure Requirements’’). The
post all comments on the Commission’s number, or an applicant using the
requested exemption would permit an
Internet Web site (http://www.sec.gov/
asabaliauskas on DSK3SPTVN1PROD with NOTICES
investment adviser to hire and replace Company name box, at http://
rules/sro.shtml). Copies of the www.sec.gov/search/search.htm or by
certain sub-advisers without
submission, all subsequent calling (202) 551–8090.
shareholder approval and grant relief
amendments, all written statements
from the Disclosure Requirements as Summary of the Application
with respect to the proposed rule
they relate to fees paid to the sub-
change that are filed with the 1. The Adviser will serve as the
advisers.
Commission, and all written investment adviser to the Funds
communications relating to the pursuant to an investment advisory
proposed rule change between the 8 17 CFR 200.30–3(a)(12). agreement with the Trust (the ‘‘Advisory
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Document Created: 2018-02-02 15:17:32
Document Modified: 2018-02-02 15:17:32
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| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 81 FR 16245 |
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