[Federal Register Volume 86, Number 28 (Friday, February 12, 2021)]
[Notices]
[Pages 9404-9406]
[FR Doc No: 2021-02868]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91075; File No. SR-ICC-2020-014]

Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change Relating to the ICC Clearing Participant
Default Management Procedures

February 8, 2021.

Introduction

    On December 22, 2020, 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 to revise its
Clearing Participant (``CP'') Default Management Procedures (the
``Default Management Procedures'').\3\ The proposed rule change was
published for comment in the Federal Register on January 8, 2020.\4\
The Commission did not receive comments on the proposed rule 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\ Capitalized terms used but not defined herein have the
meanings specified in the ICC Clearing Rules (the ``Rules'').
    \4\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Filing of Proposed Rule Change Relating to the ICC Clearing
Participant Default Management Procedures, Exchange Act Release No.
90841 (January 4, 2021), 86 FR 1555 (January 8, 2021) (SR-ICC-2020-
014) (``Notice'').
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II. Description of the Proposed Rule Change

    ICC's proposed rule change would make clarifying changes to the
Default Management Procedures to formalize the process for convening
remote meetings of ICC's CDS Default Committee, and to update certain
procedures for notifications by designated ICC officers as part of its
CP default management process.\5\ This process includes the actions
that ICC takes to determine that a CP is in default and to close-out
the defaulting CP's portfolio.\6\
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    \5\ The description herein is substantially excerpted from the
Notice.
    \6\ See Notice, 86 FR at 1555.
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    Specifically, ICC proposes revisions to Subsection 4.4 (Secure
Trading Facility) of the Default Management Procedures related to
convening the ICC CDS Default Committee, which consists of designated
employees of eligible CPs that have CDS trading experience and are
deemed seconded to ICC to assist with default management and the close-
out process. Currently, Subsection 4.4 provides only for an in-person
meeting of the CDS Default Committee in a private room at ICC's New
York offices (``Secure Trading Facility''). The proposed changes
specify that ICC may convene its CDS Default Committee at the Secure
Trading Facility or remotely by teleconference (``Remote Trader
Consultation'') in the event the Committee is unable to meet in person.
The proposed changes also specify that the ICC Chief Risk Officer
(``CRO'') will decide whether to convene the CDS Default Committee in
person or remotely, and that such decision will depend on the
circumstances at the time of the declaration of the default.
    ICC also proposes updates to Section 6 (Default Declaration).
Currently, Subsection 6.1.5 (CCO Pre-Declaration Initiated Actions)
requires the ICC Chief Compliance Officer (``CCO'') to inform default
contacts at the Commission and the Commodity Futures Trading Commission
(``CFTC'') by telephone of a potential CP default. The proposed changes
to Subsection 6.1.5 would allow the CCO to inform the default contacts
at Commission and the CFTC by telephone or email of a potential
default, and further direct the CCO to inform other regulators of the
potential default as may be required. Amended Subsection 6.4 (Default
Declaration Notification) similarly directs the CCO to notify other
regulators (in addition to the Commission and the CFTC) of a default if
applicable, and replaces the word ``all'' with ``above'' in the phrase
``Upon the CCO confirming all notifications have been completed,'' in
the last paragraph of this subsection.
    The proposed updates to Subsection 6.5.3 (CRO Post-Declaration
Preparation) relate to the CRO's actions to convene the CDS Default
Committee after a declaration of default and to determine whether this
Committee will meet in person or remotely at such post-declaration
phase. If the CRO convenes an in-person CDS Default Committee meeting
at the Secure Trading Facility, the proposed updates to Subsection
6.5.3 clarify that the CRO will work with ICC's Risk Committee and
other ICC staff as required to perform certain specified actions. The
proposed revisions to Subsection 6.5.4 (CCO Post-Declaration Actions)
make clarifications in respect of the notice that the CCO provides to
the compliance personnel of a CDS Default Committee member following a
declaration of a default, including the prospect that the CDS Default
Committee may meet by teleconference.

    ICC also proposes changes to Section 7 (CDS Default Committee
Consultation). The proposed changes reference ICC's ability to convene
the CDS Default Committee remotely. Amended Subsection 7.1 (Convening a
CDS Default Committee Meeting) formalizes the process for convening a
CDS Default Committee for Remote Trader Consultation, including the
procedure for the CRO to request that ICC's Risk Department will
provide the notice via email to CDS Default Committee members and what
information is included in the notice. The changes also specify the
particular email contents and other actions that would be taken for
convening the CDS Default Committee at the Secure Trading Facility or
by Remote Trader Consultation, respectively, or by either means.
Amended Subsection 7.3 (Initial CDS Default Committee Meeting)
specifies that ICC's provision of access to the cleared portfolios of
defaulting CPs are conducted where technologically practicable during
the initial CDS Default Committee meeting. Current Subsection 7.3 does
not contain the phrase ``where technologically practicable.'' In
addition, amended Subsection 7.3 makes minor grammatical updates,
including adding a parenthetical and updating the sentence structure
for clarity.

III. 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
presenting it.\7\ For the reasons given below, the Commission finds
that the proposed rule change is consistent with Section 17A(b)(3)(F)
of the Act \8\ and Rules 17Ad-22(e)(2)(i), (e)(2)(v), and (e)(13)
thereunder.\9\
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    \7\ 15 U.S.C. 78s(b)(2)(C).
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ 17 CFR 240.17Ad-22(e)(2)(i), (e)(2)(v), and (e)(13).
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A. Consistency With Section 17A(b)(3)(F) of the Act

    Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of ICC be designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions, to
assure the safeguarding of securities and funds which are in the
custody or control of ICC or for which it is responsible, and, in
general, to protect investors and the public interest.\10\
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    \10\ 15 U.S.C. 78q-1(b)(3)(F).
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    The Commission believes that, by clarifying ICC's process for
convening remote meetings of its CDS Default Committee and updating its
default notification procedures to regulators and CP trading and
compliance personnel, the proposed rule change should enhance ICC's
ability to manage the risks associated with a CP default and the timely
close-out of the defaulter's CDS portfolio. Specifically, the
Commission believes that, by including explicit authorization and
instructions for the CRO to convene the CDS Default Committee for
Remote Trader Consultation via teleconference if circumstances prevent
the CDS Default Committee from meeting in person, the proposed rule
change would enhance the ability of ICC to respond promptly to the
risks posed by a given CP default situation and would provide
particular processes for addressing a default via a Remote Trader
Consultation. Likewise, the Commission believes that, by including
updated notification procedures related to a CP default, ICC's relevant
stakeholders, such as the CDS Default Committee members, CP trading and
compliance personnel, and regulators, would be better informed of the
status of a CP default situation, thus facilitating their ability to
participate in the default management process as needed and provide
prompt and responsive feedback.
    Therefore, the Commission believes that the proposed rule change
generally should provide ICC with enhanced clarity, efficiency and
flexibility in how it manages and responds to the risks of CP defaults,
which in turn should help ICC maintain its resilience in the event of a
default. By improving ICC's ability to manage a CP default, the
Commission believes that the proposed rule change should also improve
ICC's ability to avoid losses that could result from a CP default. The
Commission further believes that such losses, if not properly managed,
could hinder ICC's ability to continue operations and therefore clear
and settle securities transactions and safeguard securities and funds
in its custody or control. Therefore, for these reasons, the Commission
finds that the proposed rule change should promote the prompt and
accurate clearance and settlement of securities transactions and assure
the safeguarding of securities and funds in ICC's custody and control,
consistent with the Section 17A(b)(3)(F) of the Act.\11\
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    \11\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Consistency With Rules 17Ad-22(e)(2)(i) and (v)

    Rules 17Ad-22(e)(2)(i) and (v) require, in relevant part, that ICC
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to provide for governance arrangements
that are clear and transparent and that specify clear and direct lines
of responsibility.\12\
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    \12\ 17 CFR 240.17Ad-22(e)(2)(i) and (v).
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    The Commission believes that the proposed rule change's revisions
to assign clear and updated responsibilities to the CRO and CCO during
each phase of the default declaration process in the Default Management
Procedures provide for governance arrangements that are clear and
transparent and that specify clear and direct lines of responsibility.
Specifically, the proposed rule change would update and clarify the
CCO's pre-declaration, default declaration, and post-declaration
notification responsibilities, so that information is imparted to all
relevant stakeholders. Further, the proposed rule change would update
and clarify the CRO's post-declaration responsibilities, including
documenting the CRO's decision-making authority and actions for
convening the CDS Default Committee at either an in-person meeting at
the Secure Trading Facility or via Remote Trader Consultation by
teleconference, depending on the circumstances at the time of the
default declaration. In the Commission's view, including these
responsibilities should ensure that the relevant stakeholders have
clear and transparent information on their respective roles and
responsibilities at each phase of the default management process.
Accordingly, the Commission believes that the proposed revisions to the
Default Management Procedures are reasonably designed to provide for
governance arrangements that are clear and transparent and that specify
clear and direct lines of responsibility, consistent with Rules 17Ad-
22(e)(2)(i) and (v).\13\
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    \13\ 17 CFR 240.17Ad-22(e)(2)(i) and (v).
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C. Consistency With Rule 17Ad-22(e)(13)

    Rule 17Ad-22(e)(13) requires ICC to establish, implement, maintain
and enforce written policies and procedures reasonably designed to
ensure that it has the authority and operational capacity to take
timely action to contain losses and liquidity demands and continue to
meet its obligations by, at a minimum, requiring its participants and,
when practicable, other stakeholders to

participate in the testing and review of its default procedures,
including any close-out procedure, at least annually and following
material changes thereto.
    By amending the Default Management Procedures to document and
formalize the procedures for convening the CDS Default Committee
remotely by teleconference, the proposed rule change would promote
ICC's ability to efficiently and safely manage its close-out process
when the CDS Default Committee cannot meet in person, which would help
to ensure that ICC has the authority and operational capacity to take
timely action to contain losses and liquidity demands and continue to
meet its obligations in the event of default. In addition, the
Commission believes the proposed updates and clarification changes to
the default notification procedures would ensure that ICC's relevant
stakeholders stay informed throughout the default management process
and enable them to provide responsive feedback that may also help ICC
to take timely action to contain losses and liquidity demands while
meeting its obligations. For these reasons, the Commission finds that
the proposed rule change is consistent with Rule 17Ad-22(e)(13).\14\
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    \14\ 17 CFR 240.17Ad-22(e)(13).
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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, with the requirements of Section 17A(b)(3)(F) of the
Act \15\ and Rules 17Ad-22(e)(2)(i), (e)(2)(v), and (e)(13)
thereunder.\16\
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    \15\ 15 U.S.C. 78q-1(b)(3)(F).
    \16\ 17 CFR 240.17Ad-22(e)(2)(i), (e)(2)(v), and (e)(13).
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    It is therefore ordered pursuant to Section 19(b)(2) of the Act
\17\ that the proposed rule change (SR-ICC-2020-014) be, and hereby is,
approved.\18\
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    \17\ 15 U.S.C. 78s(b)(2).
    \18\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-02868 Filed 2-11-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 54 (Tuesday, March 21, 2023)]
[Notices]
[Page 16965]
[FR Doc No: 2023-05660]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 1893-083]

CRP NH Garvin Falls, LLC, CRP NH Hooksett, LLC, CRP NH Amoskeag,
LLC; Notice of Effectiveness of Withdrawal of Application for Amendment
of License

    On September 27, 2022, CRP NH Garvin Falls, LLC; CRP NH Hooksett,
LLC; and CRP NH Amoskeag, LLC (licensees) filed an application for
amendment of license for the 29.9-megawatt Merrimack River
Hydroelectric Project No. 1893. On February 23, 2023, the licensees
filed a request to withdraw their application.
    No motion in opposition to the request for withdrawal has been
filed, and the Commission has taken no action to disallow the
withdrawal. Pursuant to Rule 216(b) of the Commission's Rules of
Practice and Procedure,\1\ the withdrawal of the application became
effective on March 10, 2023, and this proceeding is hereby terminated.
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    \1\ 18 CFR 385.216(b) (2021).

    Dated: March 14, 2023.
Kimberly D. Bose,
Secretary.
[FR Doc. 2023-05660 Filed 3-20-23; 8:45 am]
BILLING CODE 6717-01-P