General rules. (1) Each systemically important derivatives clearing organization and subpart C derivatives clearing organization shall have governance arrangements that:

Are written;

Are clear and transparent;

Place a high priority on the safety and efficiency of the systemically important derivatives clearing organization or subpart C derivatives clearing organization; and

Explicitly support the stability of the broader financial system and other relevant public interest considerations of clearing members, customers of clearing members, and other relevant stakeholders.

The board of directors shall make certain that the systemically important derivatives clearing organization's or subpart C derivatives clearing organization's design, rules, overall strategy, and major decisions appropriately reflect the legitimate interests of clearing members, customers of clearing members, and other relevant stakeholders.

To an extent consistent with other statutory and regulatory requirements on confidentiality and disclosure:

Major decisions of the board of directors should be clearly disclosed to clearing members, other relevant stakeholders, and to the Commission; and

Major decisions of the board of directors having a broad market impact should be clearly disclosed to the public;

Governance arrangements. Each systemically important derivatives clearing organization and subpart C derivatives clearing organization shall have governance arrangements that:

Are clear and documented;

To an extent consistent with other statutory and regulatory requirements on confidentiality and disclosure, are disclosed, as appropriate, to the Commission and to other relevant authorities, to clearing members and to customers of clearing members, to the owners of the systemically important derivatives clearing organization or subpart C derivatives clearing organization, and to the public;

Describe the structure pursuant to which the board of directors, committees, and management operate;

Include clear and direct lines of responsibility and accountability;

Clearly specify the roles and responsibilities of the board of directors and its committees, including the establishment of a clear and documented risk management framework;

Clearly specify the roles and responsibilities of management;

Describe procedures for identifying, addressing, and managing conflicts of interest involving members of the board of directors;

Describe procedures pursuant to which the board of directors oversees the chief risk officer, risk management committee, and material risk decisions;

Assign responsibility and accountability for risk decisions, including in crises and emergencies; and

Assign responsibility for implementing the:

Default rules and procedures required by §§ 39.16 and 39.35;

System safeguard rules and procedures required by §§ 39.18 and 39.34; and

Recovery and wind-down plans required by § 39.39.

Fitness standards for board of directors and management. Each systemically important derivatives clearing organization and subpart C derivatives clearing organization shall maintain policies to make certain that:

The board of directors consists of suitable individuals having appropriate skills and incentives;

The board of directors includes individuals who are not executives, officers or employees of the systemically important derivatives clearing organization or subpart C derivatives clearing organization or an affiliate thereof;

The performance of the board of directors and the performance of individual directors are reviewed on a regular basis;

Managers have the appropriate experience, skills, and integrity necessary to discharge operational and risk management responsibilities; and

Risk management and internal control personnel have sufficient independence, authority, resources, and access to the board of directors so that the operations of the systemically important derivatives clearing organization or subpart C derivatives clearing organization are consistent with the risk management framework established by the board of directors.