The Futures Industry Association, Inc. (“FIA”) providex ICE Clear Europe (“ICE”) with the comments and recommendations set forth below in response to Circular C14/056 on Proposed Changes to the Clearing Rules (the “Proposed Rules”). The Proposed Rules would establish a mechanism whereby ICE would contribute a fixed amount of its own capital (the “ICE Contribution”) to cover in whole or in part (a) losses resulting from the default of the issuer or counterparty to an investment of clearing members’ guaranty fund contributions or customers’ and clearing members’ initial margin (collectively, “Investment Losses”), and (b) losses that are not Investment Losses and are unrelated to the default of a clearing member (“Non-default Losses”). To the extent that the ICE Contribution is insufficient to cover Investment Losses, ICE proposes to allocate the remaining Investment Losses to its members (each, an “ICE Member” and collectively, “ICE Members”) by an assessment on each ICE Member or by offsetting against ICE’s obligations to return or pay any margin or guaranty fund contribution (“Collateral Offset Obligation”).
