83 FR 9786 - Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to the ICC Operational Risk Management Framework
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 45 (March 7, 2018)
Federal Register Volume 83, Issue 45 (March 7, 2018)
| Page Range | 9786-9788 | |
| FR Document | 2018-04558 |
[Federal Register Volume 83, Number 45 (Wednesday, March 7, 2018)] [Notices] [Pages 9786-9788] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-04558] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82798; File No. SR-ICC-2018-003] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to the ICC Operational Risk Management Framework March 1, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934,\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on February 23, 2018, ICE Clear Credit LLC (``ICC'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change, security-based swap submission, or advance notice as described in Items I, II and III below, which Items have been prepared by ICC. The Commission is publishing this notice to solicit comments on the proposed rule change, security-based swap submission, or advance notice from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice 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. [[Page 9787]] II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice 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, Security-Based Swap Submission, or Advance Notice 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. (a) Summary of Proposed Changes The ICC Operational Risk Management Framework details ICC's dynamic and independent program of operational risk assessment and oversight, which aims to reduce operational incidents, encourage process and control improvement, bring transparency to operational performance standard monitoring, and fulfill regulatory obligations. ICC proposes changes to its Operational Risk Management Framework to incorporate the Intercontinental Exchange, Inc. (``ICE, Inc.'') Enterprise Risk Management Department into its operational risk management program. ICC proposes to revise the Operational Risk Management Framework to reflect the role of the ICE, Inc. Enterprise Risk Management Department with respect to ICC's operational risk management processes. The ICE, Inc. Enterprise Risk Management Department provides the oversight and framework for identifying, assessing, managing, monitoring and reporting on risk across the ICE, Inc. organization. This department has dedicated resources focused on the various ICE, Inc. business units. Specifically, the ICE, Inc. Enterprise Risk Management Chief Risk Officer for North American Clearing Houses (``ERM'') is assigned responsibility for the ICE, Inc. Enterprise Risk Management Department's coverage of ICC. The ERM in conjunction with the ICC Compliance Committee is responsible for overseeing the management of the Operational Risk Management Framework. Under the revised framework, ICC proposes removing all references to the role of the Operational Risk Manager (``ORM''), who was previously responsible for managing the Operational Risk Management Framework, since the role of the ORM was incorporated into the ICE, Inc. Enterprise Risk Management Department and the ORM is no longer a position at ICC. ICC proposes removing all references to the ORM from the risk assessment process and assigning several of the ORM's responsibilities to the ERM, including the ORM's responsibilities under the operational risk lifecycle components. Under the ``identify'' component, the ERM will identify clearing processes and risk scenarios for evaluation. Under the ``monitor'' component, the ERM will track control enhancements resulting from the risk assessment process. Under the ``mitigate'' component, the ERM will recommend increasing control effectiveness where residual risk could be further mitigated. Under the ``report'' component, the ERM will present operational risk reporting to senior management, committees, and the ICC Board. ICC similarly proposes removing all references to the ORM from the performance objective setting and monitoring process and assigning several of the ORM's responsibilities under the operational risk lifecycle components to ICC Systems Operations and the ERM. Under the ``mitigate'' component, ICC proposes removing reference to the ORM's monitoring process and adding language to describe ICC Systems Operations' incident management and mitigation process and the ERM's role within it. Under the ``report'' component, ICC proposes assigning the ORM's reporting obligations to ICC Systems Operations and the ERM. ICC proposes enhancements within the operational risk focus areas to reflect the removal of the ORM position and make clarifying edits to reflect current practices. ICC, not the ORM, will consider operational risk focus areas which address business concerns, regulation and industry best practices. Under the revised framework, certain functions remain outsourced to ICE, Inc. Further, the proposed enhancements to the ``Business Continuity Planning and Disaster Recovery'' risk focus area eliminate the ORM's responsibilities related to business continuity planning (``BCP'') and disaster recovery (``DR''), including serving as the chair of the ICC BCP and DR Oversight Committee (``BDOC'') and ensuring completion of BCP and DR documentation and testing. ICC also proposes adding language to note that BDOC assists the ICC Compliance Committee with the approval of ICC BCP and DR program documentation. In addition, ICC, not the ORM, will ensure that ICC can recover from a disruption and will collaborate with departments to complete applicable surveys. ICC also proposes revisions to the ``Vendor Assessment'' risk focus area. As the annual review and approval of the critical vendor inventory was re-assigned from the ICC Compliance Committee to BDOC and incorporated into BDOC governance documentation, ICC proposes removing reference to it from the framework. ICC also proposes to note that BDOC, not the ORM, reviews and recommends that the ICC Compliance Committee approve the critical vendor inventory and conducts a service provider risk assessment for each critical vendor. Further, ICC proposes adding procedures with respect to its assessment process for critical vendors. The revised framework describes how critical vendors receive risk rankings that determine the extent of oversight required and lists how often risk assessments for critical vendors are completed. ICC proposes enhancements to the remaining three operational risk focus areas to reflect the removal of the ORM role. The proposed changes to the ``New Products, Processes and Initiatives'' risk focus area remove reference to the ORM's role on the ICC New Initiative Approval Committee, given that the ORM is no longer a position at ICC, and note that the ERM conducts post-implementation reviews of new initiatives. ICC proposes enhancing the ``ICE Information Security'' risk focus area to provide specific reference to the ICE Information Security Department's (``InfoSec Department'') overall governing document and to reflect changes to the membership of the InfoSec Department's governance committee. The proposed changes to the ``Technology Control Functions'' risk focus area note that the ERM, not the ORM, has access to incident management systems and reviews and escalates incidents. ICC also proposes other non-material changes to the framework. ICC updated the appendix to the document to more clearly summarize and appropriately describe the regulatory requirements and industry guidance to which ICC is subject, including U.S. Commodity Futures Trading Commission Regulation 17 CFR 39.18. Minor grammatical and [[Page 9788]] structural changes were also made to the document to enhance readability. (b) Statutory Basis 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 17A(b)(3)(F),\4\ because ICC believes that the proposed rule changes will protect investors and the public interest, as the updates more accurately reflect ICC's operational risk program given the incorporation of the ICE, Inc. Enterprise Risk Management Department into ICC's existing operational risk management processes. 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\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- (B) Clearing Agency'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. (C) Clearing Agency's Statement on Comments on the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice 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, Security-Based Swap Submission, or Advance Notice 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 up to 90 days (i) as the Commission may designate 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, security-based swap submission, or advance notice 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-2018-003 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-2018-003. 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 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, security-based swap submission, or advance notice that are filed with the Commission, and all written communications relating to the proposed rule change, security-based swap submission, or advance notice 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 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-2018-003 and should be submitted on or before March 28, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\8\ --------------------------------------------------------------------------- \8\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-04558 Filed 3-6-18; 8:45 am] BILLING CODE 8011-01-P
![9786 Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices
A proposed rule change filed under At any time within 60 days of the filing also will be available for
Rule 19b–4(f)(6) 48 normally does not filing of such proposed rule change, the inspection and copying at the principal
become operative for 30 days after the Commission summarily may office of the Exchange. All comments
date of the filing. However, pursuant to temporarily suspend such rule change if received will be posted without change.
Rule 19b–4(f)(6)(iii),49 the Commission it appears to the Commission that such Persons submitting comments are
may designate a shorter time if such action is necessary or appropriate in the cautioned that we do not redact or edit
action is consistent with the protection public interest, for the protection of personal identifying information from
of investors and the public interest. In investors, or otherwise in furtherance of comment submissions. You should
its filing with the Commission, IEX has the purposes of the Act. If the submit only information that you wish
asked the Commission to waive the 30- Commission takes such action, the to make available publicly. All
day operative delay so that the proposal Commission shall institute proceedings submissions should refer to File
may become operative immediately under Section 19(b)(2)(B) 52 of the Act to Number SR–IEX–2018–03, and should
upon filing. As noted above, IEX states determine whether the proposed rule be submitted on or before March 28,
that the proposed changes do not change should be approved or 2018.
substantially alter the functionality disapproved. For the Commission, by the Division of
governing the pricing of non-displayed Trading and Markets, pursuant to delegated
orders in the Opening and Closing IV. Solicitation of Comments
authority.53
Auctions and are designed to achieve Interested persons are invited to Eduardo A. Aleman,
IEX’s objective of preserving the submit written data, views, and
Assistant Secretary.
anonymity of non-displayed orders arguments concerning the foregoing,
[FR Doc. 2018–04559 Filed 3–6–18; 8:45 am]
resting on the Continuous Book. In including whether the proposed rule
addition, IEX notes that the proposed BILLING CODE P
change is consistent with the Act.
changes also resolve an inconsistency Comments may be submitted by any of
between the handling of non-displayed the following methods:
SECURITIES AND EXCHANGE
orders and the Exchange’s existing
Electronic Comments COMMISSION
pricing constraints. IEX states that the
waiver of the operative delay will allow • Use the Commission’s internet
IEX to implement the proposed changes comment form (http://www.sec.gov/ [Release No. 34–82798; File No. SR–ICC–
while the Exchange continues industry- rules/sro.shtml); or 2018–003]
wide testing of the technology changes • Send an email to rule-comments@
sec.gov. Please include File Number SR– Self-Regulatory Organizations; ICE
that IEX and its Members are making to
IEX–2018–03 on the subject line. Clear Credit LLC; Notice of Filing of
support the Exchange as a listings
Proposed Rule Change, Security-
market. IEX notes that the proposed Paper Comments Based Swap Submission, or Advance
clarifications regarding the handling of
non-displayed orders will provide • Send paper comments in triplicate Notice Relating to the ICC Operational
to Secretary, Securities and Exchange Risk Management Framework
Members and other market participants
with time to develop, test, and deploy Commission, 100 F Street NE,
March 1, 2018.
any changes necessary to support the Washington, DC 20549–1090.
All submissions should refer to File Pursuant to Section 19(b)(1) of the
handling of non-displayed orders. The Securities Exchange Act of 1934,1 and
Commission believes that waiver of the Number SR–IEX–2018–03. This file
number should be included on the Rule 19b-4 thereunder,2 notice is hereby
30-day operative delay is consistent given that on February 23, 2018, ICE
with the protection of investors and the subject line if email is used. To help the
Commission process and review your Clear Credit LLC (‘‘ICC’’) filed with the
public interest because the proposed Securities and Exchange Commission
changes to the operation of the Opening comments more efficiently, please use
only one method. The Commission will (‘‘Commission’’) the proposed rule
and Closing Auctions, and in particular change, security-based swap
the treatment of non-displayed orders post all comments on the Commission’s
internet website (http://www.sec.gov/ submission, or advance notice as
resting on the Continuous Book in a described in Items I, II and III below,
manner that preserves the anonymity of rules/sro.shtml). Copies of the
submission, all subsequent which Items have been prepared by ICC.
those orders, are consistent with the The Commission is publishing this
Commission’s prior approval of IEX’s amendments, all written statements
with respect to the proposed rule notice to solicit comments on the
auctions rules and do not raise new or proposed rule change, security-based
novel regulatory issues.50 In addition, change that are filed with the
Commission, and all written swap submission, or advance notice
waiver of the operative delay will from interested persons.
provide IEX and its Members with time communications relating to the
to incorporate the revised functionality proposed rule change between the I. Clearing Agency’s Statement of the
into their testing as they continue to Commission and any person, other than Terms of Substance of the Proposed
prepare for IEX’s functioning as a those that may be withheld from the Rule Change, Security-Based Swap
listings market, which, among other public in accordance with the Submission, or Advance Notice
things, will require IEX to conduct provisions of 5 U.S.C. 552, will be
available for website viewing and The principal purpose of the
Opening and Closing Auctions of IEX-
printing in the Commission’s Public proposed rule change is to update ICC’s
listed securities. Therefore, the
Reference Room, 100 F Street NE, Operational Risk Management
daltland on DSKBBV9HB2PROD with NOTICES
Commission designates the proposed
Washington, DC 20549 on official Framework. These revisions do not
rule change operative upon filing.51
business days between the hours of require any changes to the ICC Clearing
48 17 CFR 240.19b–4(f)(6). 10:00 a.m. and 3:00 p.m. Copies of such Rules.
49 17 CFR 240.19b–4(f)(6)(iii).
50 See supra note 12. 53 17 CFR 200.30–3(a)(12).
rule’s impact on efficiency, competition, and capital
51 For purposes only of waiving the operative formation. See 15 U.S.C. 78c(f). 1 15 U.S.C. 78s(b)(1).
delay, the Commission has considered the proposed 52 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4.
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![9788 Federal Register / Vol. 83, No. 45 / Wednesday, March 7, 2018 / Notices
structural changes were also made to the (C) Clearing Agency’s Statement on change, security-based swap
document to enhance readability. Comments on the Proposed Rule submission, or advance notice that are
Change, Security-Based Swap filed with the Commission, and all
(b) Statutory Basis Submission, or Advance Notice written communications relating to the
Section 17A(b)(3)(F) of the Act 3 Received From Members, Participants or proposed rule change, security-based
requires, among other things, that the Others swap submission, or advance notice
rules of a clearing agency be designed to Written comments relating to the between the Commission and any
proposed rule change have not been person, other than those that may be
protect investors and the public interest
solicited or received. ICC will notify the withheld from the public in accordance
and to comply with the provisions of
Commission of any written comments with the provisions of 5 U.S.C. 552, will
the Act and the rules and regulations
received by ICC. be available for website viewing and
thereunder. ICC believes that the printing in the Commission’s Public
proposed rule changes are consistent III. Date of Effectiveness of the Reference Room, 100 F Street NE,
with the requirements of the Act and the Proposed Rule Change, Security-Based Washington, DC 20549, on official
rules and regulations thereunder Swap Submission, or Advance Notice business days between the hours of
applicable to ICC, in particular, to and Timing for Commission Action 10:00 a.m. and 3:00 p.m. Copies of such
Section 17A(b)(3)(F),4 because ICC filings will also be available for
Within 45 days of the date of
believes that the proposed rule changes inspection and copying at the principal
publication of this notice in the Federal
will protect investors and the public Register or within such longer period office of ICE Clear Credit and on ICE
interest, as the updates more accurately up to 90 days (i) as the Commission may Clear Credit’s website at https://
reflect ICC’s operational risk program designate if it finds such longer period www.theice.com/clear-credit/regulation.
given the incorporation of the ICE, Inc. to be appropriate and publishes its All comments received will be posted
Enterprise Risk Management reasons for so finding or (ii) as to which without change. Persons submitting
Department into ICC’s existing the self-regulatory organization comments are cautioned that we do not
operational risk management processes. consents, the Commission will: redact or edit personal identifying
In addition, the proposed revisions are (A) By order approve or disapprove information from comment submissions.
consistent with the relevant such proposed rule change, or You should submit only information
requirements of Rule 17Ad–22.5 The (B) institute proceedings to determine that you wish to make available
changes to the ICC Operational Risk whether the proposed rule change publicly. All submissions should refer
Management Framework further ensure should be disapproved. to File Number SR–ICC–2018–003 and
that ICC, through its operational risk should be submitted on or before March
IV. Solicitation of Comments 28, 2018.
program, is able to identify sources of
operational risk and minimize them Interested persons are invited to For the Commission, by the Division of
through the development of appropriate submit written data, views, and Trading and Markets, pursuant to delegated
arguments concerning the foregoing, authority.8
systems, control, and procedures. Thus,
the changes are reasonably designed to including whether the proposed rule Eduardo A. Aleman,
meet the operational risk requirements change, security-based swap Assistant Secretary.
of Rule 17Ad–22(d)(4).6 As such, the submission, or advance notice is [FR Doc. 2018–04558 Filed 3–6–18; 8:45 am]
consistent with the Act. Comments may
proposed changes are designed to BILLING CODE 8011–01–P
be submitted by any of the following
promote the prompt and accurate
methods:
clearance and settlement of securities
Electronic Comments SECURITIES AND EXCHANGE
transactions, derivatives agreements,
COMMISSION
contracts, and transactions within the • Use the Commission’s internet
meaning of Section 17A(b)(3)(F) 7 of the comment form (http://www.sec.gov/ Proposed Collection; Comment
Act. rules/sro.shtml); or Request
(B) Clearing Agency’s Statement on • Send an email to rule-comments@
sec.gov. Please include File Number SR– Upon Written Request, Copies Available
Burden on Competition From: Securities and Exchange
ICC–2018–003 on the subject line.
Commission, Office of FOIA Services,
ICC does not believe the proposed Paper Comments 100 F Street NE, Washington, DC
rule changes would have any impact, or 20549–2736.
impose any burden, on competition. Send paper comments in triplicate to
The ICC Operational Risk Management Secretary, Securities and Exchange Extension:
Framework applies uniformly across all Commission, 100 F Street NE, Rule 22c–2, SEC File No. 270–541, OMB
Washington, DC 20549–1090. Control No. 3235–0620.
market participants. Therefore, ICC does
not believe the proposed rule changes All submissions should refer to File Notice is hereby given that pursuant
impose any burden on competition that Number SR–ICC–2018–003. This file to the Paperwork Reduction Act of 1995
is inappropriate in furtherance of the number should be included on the (44 U.S.C. 3501 et seq.) the Securities
purposes of the Act. subject line if email is used. To help the and Exchange Commission (the
Commission process and review your ‘‘Commission’’) is soliciting comments
comments more efficiently, please use on the collection of information
daltland on DSKBBV9HB2PROD with NOTICES
only one method. The Commission will summarized below. The Commission
post all comments on the Commission’s plans to submit this existing collection
3 15 U.S.C. 78q–1(b)(3)(F). internet website (http://www.sec.gov/ of information to the Office of
4 Id. rules/sro.shtml). Copies of the Management and Budget for extension
5 17 CFR 240.17Ad–22. submission, all subsequent and approval.
6 17 CFR 240.17Ad–22(d)(4). amendments, all written statements
7 15 U.S.C. 78q–1(b)(3)(F). with respect to the proposed rule 8 17 CFR 200.30–3(a)(12).
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Document Created: 2018-03-07 01:27:30
Document Modified: 2018-03-07 01:27:30
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 83 FR 9786 |
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