60 Day Notice

33222

Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices

proposed rule change is consistent with
Section 17A(b)(3)(F) of the Act.11

jspears on DSK121TN23PROD with NOTICES1

B. Consistency With Rule 17Ad–
22(e)(2)(i)
Rules 17Ad–22(e)(2)(i) requires each
covered clearing agency to establish,
implement, maintain, and enforce
written policies and procedures
reasonably designed to, as applicable,
provide for governance arrangements
that are clear and transparent.12 As
described above, the proposed changes
more clearly set out the responsibilities
of the Legal Department and include
updates with respect to relevant internal
individuals and committees involved in
the governance process. The
Commission believes that by clearly
describing the responsibilities of the
Legal Department, committees,
subcommittees, and their participants as
noted above, these proposed changes
provide for clear and transparent
governance arrangements to those
serving on those committees and
utilizing the Governance Playbook. For
the reasons stated above, the
Commission believes the proposed rule
changes are consistent with Rules
17Ad–22(e)(2)(i).13
C. Consistency With Rule 17Ad–
22(e)(23)(v) Under the Act
Rule 17Ad–22(e)(23)(v) under the Act
require each covered clearing agency to
establish, implement, maintain and
enforce written policies and procedures
reasonably designed to provide for an
update of the public disclosure every
two years, or more frequently following
changes to the covered clearing agency’s
system or the environment in which it
operates to the extent necessary, to
ensure statements previously provided
remain accurate in all material
respects.14
As noted above, the proposed changes
assign responsibility, reference
applicable regulations, and include
additional information and procedures
regarding maintaining and updating the
Disclosure Framework in accordance
with relevant regulations. Specifically,
the proposed changes would update the
process by which the ICC Legal
Department will update the public
Disclosure Framework every two years
or more frequently following material
changes to ICC’s systems or
environment in which it operates,
including updates for major decisions of
the Board with a broad market impact.
The Commission believes that these
11 15
12 17

U.S.C. 78q–1(b)(3)(F).
CFR 240.17Ad–22(e)(2)(i).

13 Id.
14 17

CFR 240.17Ad–22(e)(23)(v).

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aspects of the Governance Playbook
provide further clarity regarding ICC’s
policies and procedures for making a
comprehensive public disclosure that is
updated every two years or more
frequently following material changes.
For these reasons, the Commission
believes that the proposed rule change
is consistent with Rule 17Ad–
22(e)(23)(v) under the Act.15
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 16 and
Rules 17Ad–22(e)(2)(i) and 17Ad–
22(e)(23)(v) thereunder.17
It is therefore ordered pursuant to
Section 19(b)(2) of the Act 18 that the
proposed rule change (SR–ICC–2022–
003), be, and hereby is, approved.19
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–11678 Filed 5–31–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–504, OMB Control No.
3235–0561]

Proposed Collection; Comment
Request; Extension: Rule 12d3–1
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collections of information
summarized below. The Commission
plans to submit these existing
collections of information to the Office
of Management and Budget (‘‘OMB’’) for
extension and approval.
Rule 12d3–1 (17 CFR 270.12d3–1)
under the Investment Company Act of
1940 (15 U.S.C. 80a–1 et seq.)
15 17

CFR 240.17Ad–22(e)(23)(v).
U.S.C. 78q–1(b)(3)(F).
17 17 CFR 240.17Ad–22(e)(2)(i) and (e)(23)(v).
18 15 U.S.C. 78s(b)(2).
19 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).
20 17 CFR 200.30–3(a)(12).
16 15

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(‘‘Investment Company Act’’) permits a
fund to invest up to five percent of its
assets in securities of an issuer deriving
more than fifteen percent of its gross
revenues from securities-related
businesses (subject to certain
limitations), notwithstanding the
general prohibition in Section 12(d)(3)
of the Investment Company Act of a
registered investment company (‘‘fund’’)
and companies controlled by the fund
purchasing securities issued by a
registered investment adviser, broker,
dealer, or underwriter (‘‘securitiesrelated businesses’’).
A fund may, however, rely on an
exemption in rule 12d3–1 to acquire
securities issued by its subadvisers in
circumstances in which the subadviser
would have little ability to take
advantage of the fund, because it is not
in a position to direct the fund’s
securities purchases. This exemption in
rule 12d3–1 is available if: (i) The
subadviser is not, and is not an affiliated
person of, an investment adviser that
provides advice with respect to the
portion of the fund that is acquiring the
securities; and (ii) the advisory contracts
of the subadviser, and any subadviser
that is advising the purchasing portion
of the fund, prohibit them from
consulting with each other concerning
securities transactions of the fund, and
limit their responsibility in providing
advice to providing advice with respect
to discrete portions of the fund’s
portfolio.1
Rule 12d3–1 requires funds to amend
their subadvisory contracts before they
can rely on rule 12d3–1’s exemption to
ensure that the subadviser that engages
in the transaction does not influence the
fund’s investment decision to engage in
the transaction.
Based on an analysis of fund filings,
Commission staff estimates that
approximately 285 funds enter into such
new subadvisory agreements each year,
and that it will require approximately 3
attorney hours to draft and execute
additional clauses in new subadvisory
contracts in order for funds and
subadvisers to be able to rely on the
exemptions in rule 12d3–1. Because
these additional clauses are identical to
the clauses that a fund would need to
insert in their subadvisory contracts to
rely on rules 10f–3 (17 CFR 270.10f–3),
17a–10 (17 CFR 270.17a–10), and 17e–
1 (17 CFR 270.17e–1), and because we
believe that funds that use one such rule
generally use all of these rules, we
apportion this 3 hour time burden
equally to all four rules. Therefore, we
estimate that the burden allocated to
rule 12d3–1 for this contract change
1 See

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17 CFR 270.270.12d3–1(c)(3).

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Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices
would be 0.75 hours. Assuming that all
285 funds that enter into new
subadvisory contracts each year make
the modification to their contract
required by the rule, we estimate that
the rule’s contract modification
requirement will result in 214 burden
hours annually.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication by August 1, 2022.
Please direct your written comments
to David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O John
Pezzullo, 100 F Street NE, Washington,
DC 20549; or send an email to: PRA_
[email protected].
Dated: May 25, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94983; File No. SR–ICC–
2022–004]

Self-Regulatory Organizations; ICE
Clear Credit LLC; Order Approving
Proposed Rule Change Relating to the
ICC Recovery Plan and the ICC WindDown Plan
May 25, 2022.
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A. Background
As a ‘‘covered clearing agency,’’ 4 ICC
is required to, among other things,
‘‘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 winddown of the covered clearing agency
necessitated by credit losses, liquidity
shortfalls, losses from general business
risk, or any other losses.’’ 5 The
Commission has previously clarified
that it believes that such recovery and
wind-down plans are ‘‘rules’’ within the
meaning of Exchange Act Section 19(b)
and Rule 19b–4 thereunder because
such plans would constitute changes to
a stated policy, practice, or
interpretation of a covered clearing
agency.6 Accordingly, a covered
clearing agency, such as ICC, is required
to file its plans for recovery and orderly
wind-down with the Commission.7
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Self-Regulatory Organizations; ICE Clear Credit
LLC; Notice of Filing of Proposed Rule Change
Relating to the ICC Recovery Plan and the ICC
Wind-Down Plan, Exchange Act Release No. 94650
(Apr. 8, 2022); 87 FR 22276 (Apr. 14, 2022) (File
No. SR–ICC–2022–004) (‘‘Notice’’).
4 The term ‘‘covered clearing agency’’ is defined
in Rule 17Ad–22(a)(5), 17 CFR 240.17Ad–22(a)(5).
ICC became subject to the requirements in Rule
17Ad–22(e) with the amendment to the definition
of the term ‘‘covered clearing agency.’’ See
Definition of ‘‘Covered Clearing Agency,’’ Exchange
Act Release No. 88616 (Apr. 9, 2020), 85 FR 28853
(May 14, 2020) (File No. S7–23–16).
5 17 CFR 240.17Ad–22(e)(3)(ii).
6 Standards for Covered Clearing Agencies,
Exchange Act Release No. 78961 (Sep. 28, 2016), 81
FR 70786, 70809 (Oct. 13, 2016) (File No. S7–03–
14).
7 ICC became a ‘‘covered clearing agency’’
following a change in the definition of the term in
Rule 17Ad–22(a)(5). The previous definition of
‘‘covered clearing agency’’ in Rule 17Ad–22(a)(5)
stated that ‘‘covered clearing agency’’ means a
designated clearing agency or a clearing agency
involved in activities with a more complex risk
profile for which the Commodity Futures Trading
2 17

BILLING CODE 8011–01–P

I. Introduction
On April 1, 2022, CE Clear Credit LCC
(‘‘ICC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the

22:08 May 31, 2022

II. Description of the Proposed Rule
Change

1 15

[FR Doc. 2022–11662 Filed 5–31–22; 8:45 am]

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‘‘Act’’),1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend the ICC
Recovery Plan and the ICC Wind-Down
Plan (collectively, the ‘‘Plans’’). The
proposed rule change was published for
comment in the Federal Register on
April 14, 2022.3 The Commission did
not receive comments regarding the
proposed rule change. For the reasons
discussed below, the Commission is
approving the proposed rule change.

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33223

Recovery and Wind-Down Plans have
been in place at ICC for a number of
years and approved by the Commission
on May 10, 2021 for the first time since
becoming a ‘‘covered clearing agency’’
under the definition in Rule 17Ad–
22(a)(5).8
B. Recovery Plan
The proposed rule change would
make general updates to ensure that the
information in the Recovery Plan is
current and relates to changes that
impacted ICC in the past year.9 The
Recovery Plan would be updated to
specify that the information provided is
current as of December 31, 2021, unless
otherwise stated.
The proposed rule change would
make the following updates related to
ICC’s ownership and operations:
• In Section II.A, add one additional
entity to the list of companies owned by
ICC’s parent.
• In Section IV.A, adds iTraxx Index
Swaptions as an example of the Index
Swaptions products for which ICC
provides clearing services.
• In Section IV.D, updates numbers
for ICC’s revenues, volumes, and
expenses and includes those for Index
Swaptions.
• In Section VI.A, updates locations
of facilities and personnel headcount
and functions.
• In Section X, updates the projected
recovery and wind-down costs and
regulatory capital.
• In Section XI, updates ICC’s and
ICE Group’s financial statements.
• In Section XIII, updates the
percentages held by financial services
providers of clearing participant cash
and collateral.
The proposed rule change would also
revise Section IV.C.1 to reflect (i) the
change of the Board size from eleven to
nine managers, consistent with the
Commission is not the Supervisory Agency as
defined in Section 803(8) of the Payment, Clearing
and Settlement Supervision Act of 2010 (12 U.S.C.
5461 et seq.). Under this definition, ICC was not a
covered clearing agency. Under the revised
definition, ‘‘covered clearing agency’’ means a
registered clearing agency that provides the services
of a central counterparty or central securities
depository. Under the revised definition, ICC is a
covered clearing agency. See Definition of ‘‘Covered
Clearing Agency’’, Exchange Act Release No. 88616
(Apr. 9, 2020), 85 FR 28853, 28854–55 (May 14,
2020) (File No. S7–23–16).
8 Self-Regulatory Organizations; ICE Clear Credit
LLC; Order Approving Proposed Rule Change
Relating to the ICC Recovery Plan and the ICC
Wind-Down Plan, Exchange Act Release No. 91806
(May 10, 2021), 86 FR 26561 (May 14, 2021) (File
No. SR–ICC–2021–005).
9 The descriptions of the Recovery and WindDown Plans are substantially excerpted from the
Notice. Moreover, capitalized terms not otherwise
defined herein have the meanings assigned to them
in ICC Rules (‘‘Rules’’) or the Plans.

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