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Managerial Considerations In reviewing ICE Trust’s managerial resources, the Board has considered

carefully the experience of ICE Trust’s proposed management, as well as its planned risk-management systems, operations, and anti-money laundering compliance program. In addition, because ICE Trust proposes to be a CCP, the Board has considered ICE Trust’s plans for managing the counterparty credit risk, operational risk, legal risk, and other risks that CCPs commonly encounter.15 [Footnote 15. ICE Trust has committed that it will provide the Federal Reserve System with a 60-day prior notice of material changes to its rules to provide time for an adequate review by the Federal Reserve System and the opportunity to raise any supervisory or regulatory objections. End footnote 15.]

The most significant risk that a CCP for CDS transactions experiences is counterparty credit risk. The Board has carefully reviewed ICE Trust’s risk-management framework and its ability to measure accurately its exposure to counterparty credit risk. ICE Trust proposes to measure its credit-risk exposures to clearing participants on a daily basis, using a value-at-risk methodology to calculate the appropriate level of margin, and to calculate the margin requirement and collect the required margin collateral from each participant daily. ICE Trust has conducted extensive validation of its models for each of the products it initially intends to clear. The Board also has reviewed independent assessments of ICE Trust’s models. To manage concentration risk, ICE Trust will charge additional margin collateral for positions exceeding pre-set notional thresholds. To address liquidity risk, ICE Trust will ensure that it has ready access to sufficient sources of liquidity to meet its payment obligations on a same-day basis.

The Board also has reviewed ICE Trust’s other mechanisms for controlling counterparty credit risk, including the adequacy of its policies and procedures for identifying any instance of default by a participant and for the orderly close out of a defaulting participant’s positions. The Board has carefully reviewed ICE Trust’s plan to limit investment risk by investing cash margin it receives in certain highly liquid instruments. To address settlement risks associated with participants’ payments of

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