80 FR 43146 - Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change To Provide for the Clearance of Additional Western European Sovereign Single Names
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 139 (July 21, 2015)
Federal Register Volume 80, Issue 139 (July 21, 2015)
| Page Range | 43146-43148 | |
| FR Document | 2015-17755 |
[Federal Register Volume 80, Number 139 (Tuesday, July 21, 2015)] [Notices] [Pages 43146-43148] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-17755] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75456; File No. SR-ICC-2015-013] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change To Provide for the Clearance of Additional Western European Sovereign Single Names July 15, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on July 6, 2015, ICE Clear Credit LLC (``ICC'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared primarily by ICC. The Commission is publishing this notice to solicit comments on the [[Page 43147]] proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The purpose of the proposed rule change is to adopt rules that will provide the basis for ICC to clear additional credit default swap contracts. ICC currently clears seven SWES Contracts: The Republic of Ireland, the Italian Republic, the Portuguese Republic, the Kingdom of Spain, the Kingdom of Belgium, the Republic of Austria, and the Kingdom of the Netherlands. ICC is proposing to amend Subchapter 26I of its rules to provide for the clearance of additional SWES Contracts, specifically the Federal Republic of Germany, the French Republic, and the United Kingdom of Great Britain and Northern Ireland. The proposed change is dependent on the approval and implementation of the proposed rule change in SR-ICC-2015-009 and therefore, the text of the proposed rule change in Exhibit 5 should be read in conjunction with the proposed rule change in SR-ICC-2015-009.\3\ --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 34-75119 (June 8, 2015), 80 FR 33573 (June 12, 2015) (SR-ICC-2015-009). The text of the proposed rule change for rule filing SR-ICC-2015-009 can also be found on ICC's Web site at https://www.theice.com/clear-credit/regulation. --------------------------------------------------------------------------- II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, ICC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. ICC has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of these statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed rule change is to adopt rules that will provide the basis for ICC to clear additional credit default swap contracts. ICC currently clears seven SWES Contracts: the Republic of Ireland, the Italian Republic, the Portuguese Republic, the Kingdom of Spain, the Kingdom of Belgium, the Republic of Austria, and the Kingdom of the Netherlands. ICC proposes amending Subchapter 26I of its Rules to provide for the clearance of additional SWES Contracts, specifically the Federal Republic of Germany, the French Republic, and the United Kingdom of Great Britain and Northern Ireland. ICC plans to offer these additional SWES Contracts on the 2003 and 2014 ISDA Credit Derivatives Definitions. The addition of these SWES Contracts will benefit the market for credit default swaps by providing market participants the benefits of clearing, including reduction in counterparty risk and safeguarding of margin assets pursuant to clearing house rules. These additional SWES Contracts have terms consistent with the other SWES Contracts approved for clearing at ICC and governed by Subchapter 26I of the ICC Rules, namely the Republic of Ireland, the Italian Republic, the Portuguese Republic, the Kingdom of Spain, the Kingdom of Belgium, the Republic of Austria, and the Kingdom of the Netherlands. Minor revisions to Subchapter 26I (Standard Western European Sovereign (``SWES'') Single Name) are made to provide for clearing the additional SWES Contracts and described as follows. Rule 26I-102 is modified to include the Federal Republic of Germany, the French Republic, and the United Kingdom of Great Britain and Northern Ireland in the list of specific Eligible SWES Reference Entities to be cleared by ICC. Section 17A(b)(3)(F) of the Act \4\ requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions and to comply with the provisions of the Act and the rules and regulations thereunder. These contracts are similar to the SWES Contracts currently cleared by ICC, and the additional SWES Contracts would be cleared pursuant to ICC's clearing arrangements and related financial safeguards, protections and risk management procedures, as modified by the proposed risk enhancements related to General Wrong Way Risk set forth in filing SR-ICC-2015-009.\5\ The additional SWES Contracts will allow market participants an increased ability to manage risk. ICC believes that acceptance of the new contracts, on the terms and conditions set out in the ICC Rules, is consistent with the prompt and accurate clearance of and settlement of securities transactions and derivative agreements, contracts and transactions cleared by ICC, the safeguarding of securities and funds in the custody or control of ICC, and the protection of investors and the public interest, within the meaning of Section 17A(b)(3)(F) of the Act.\6\ --------------------------------------------------------------------------- \4\ 15 U.S.C. 78q-1(b)(3)(F). \5\ Pursuant to a telephone call with ICC's internal counsel on July 14, 2015, staff in the Division of Trading and Markets has modified the text of this sentence to further clarify that the proposed rule change is dependent on the approval and implementation of the proposed rule change in SR-ICC-2015-009. \6\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- Clearing of the additional SWES Contracts will also satisfy the requirements of Rule 17Ad-22.\7\ In particular, in terms of financial resources, ICC would apply its initial margin methodology to the additional contracts (as modified by rule filing SR-ICC-2015-009).\8\ ICC believes that this model would provide sufficient initial margin requirements to cover its credit exposure to its clearing members from clearing such contracts, consistent with the requirements of Rule 17Ad- 22(b)(2).\9\ In addition, ICC believes its Guaranty Fund, under its existing methodology, would, together with the required initial margin, provide sufficient financial resources to support the clearing of the additional contracts consistent with the requirements of Rule 17Ad- 22(b)(3).\10\ ICC also believes that its existing operational and managerial resources will be sufficient for clearing of the additional contracts, consistent with the requirements of Rule 17Ad-22(d)(4),\11\ as the new contracts are substantially the same from an operational perspective as existing contracts. Similarly, ICC will use its existing settlement procedures and account structures for the new contracts, consistent with the requirements of Rule 17Ad-22(d)(5), (12) and (15) \12\ as to the finality and accuracy of its daily settlement process and avoidance of the risk to ICC of settlement failures. ICC determined to accept the additional SWES Contracts for clearing in accordance with its governance process, which included review of the contracts and related risk management considerations by the ICC Risk Committee and approval by its Board. These governance arrangements are consistent with the requirements of Rule [[Page 43148]] 17Ad-22(d)(8).\13\ Finally, ICC will apply its existing default management policies and procedures for the additional SWES Contracts. ICC believes that these procedures allow for it to take timely action to contain losses and liquidity pressures and to continue meeting its obligations in the event of clearing member insolvencies or defaults in respect of the additional single names, in accordance with Rule 17Ad- 22(d)(11).\14\ --------------------------------------------------------------------------- \7\ 17 CFR 240.17Ad-22. \8\ Pursuant to a telephone call with ICC's internal counsel on July 14, 2015, staff in the Division of Trading and Markets has modified the text of this paragraph to further clarify that the proposed rule change is dependent on the approval and implementation of the proposed rule change in SR-ICC-2015-009. \9\ 17 CFR 240.17Ad-22(b)(2). \10\ 17 CFR 240.17Ad-22(b)(3). \11\ 17 CFR 240.17Ad-22(d)(4). \12\ 17 CFR 240.17Ad-22(d)(5), (12) and (15). \13\ 17 CFR 240.17Ad-22(d)(8). \14\ 17 CFR 240.17Ad-22(d)(11). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The additional SWES Contracts will be available to all ICC participants for clearing. The clearing of these additional SWES Contracts by ICC does not preclude the offering of the additional SWES Contracts for clearing by other market participants. Accordingly, ICC does not believe that clearance of the additional SWES Contracts will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments relating to the proposed rule change have not been solicited or received. ICC will notify the Commission of any written comments received by ICC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove the proposed rule change or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-ICC-2015-013 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ICC-2015-013. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Section, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filings will also be available for inspection and copying at the principal office of ICE Clear Credit and on ICE Clear Credit's Web site at https://www.theice.com/clear-credit/regulation. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ICC-2015-013 and should be submitted on or before August 11, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\15\ --------------------------------------------------------------------------- \15\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-17755 Filed 7-20-15; 8:45 am] BILLING CODE 8011-01-P
![43146 Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices
based on its observation of market changes proposed herein are Internet Web site (http://www.sec.gov/
maker activity, its desire to slowly unattractive to market participants, it is rules/sro.shtml). Copies of the
unwind this program for market makers likely that NASDAQ will lose market submission, all subsequent
generally and is designed to provide the share as a result. Accordingly, NASDAQ amendments, all written statements
greatest improvement in market quality. does not believe that the proposed with respect to the proposed rule
To the extent the Exchange’s estimation changes will impair the ability of change that are filed with the
is incorrect, it may adjust the members or competing order execution Commission, and all written
requirement appropriately. Lastly, the venues to maintain their competitive communications relating to the
Exchange believes that the passive standing in the financial markets. proposed rule change between the
liquidity provisioning benefits provided Commission and any person, other than
by market making to liquidity seeking C. Self-Regulatory Organization’s
those that may be withheld from the
market participants, especially Statement on Comments on the
public in accordance with the
investors, materially outweighs any Proposed Rule Change Received From
provisions of 5 U.S.C. 552, will be
potential harm that may be caused by Members, Participants, or Others
available for Web site viewing and
allowing a market maker to exceed the No written comments were either printing in the Commission’s Public
Order Entry Ratio threshold. solicited or received. Reference Room, 100 F Street NE.,
B. Self-Regulatory Organization’s III. Date of Effectiveness of the Washington, DC 20549 on official
Statement on Burden on Competition Proposed Rule Change and Timing for business days between the hours of
Commission Action 10:00 a.m. and 3:00 p.m. Copies of such
NASDAQ does not believe that the filing also will be available for
proposed rule changes will result in any The foregoing rule change has become inspection and copying at the principal
burden on competition that is not effective pursuant to Section offices of the Exchange. All comments
necessary or appropriate in furtherance 19(b)(3)(A)(ii) of the Act.18 received will be posted without change;
of the purposes of the Act, as At any time within 60 days of the the Commission does not edit personal
amended.17 NASDAQ notes that it filing of the proposed rule change, the identifying information from
operates in a highly competitive market Commission summarily may submissions. You should submit only
in which market participants can temporarily suspend such rule change if information that you wish to make
readily favor competing venues if they it appears to the Commission that such available publicly. All submissions
deem fee levels at a particular venue to action is: (i) Necessary or appropriate in should refer to File Number SR–
be excessive, or rebate opportunities the public interest; (ii) for the protection NASDAQ–2015–081, and should be
available at other venues to be more of investors; or (iii) otherwise in submitted on or before August 11, 2015.
favorable. In such an environment, furtherance of the purposes of the Act.
NASDAQ must continually adjust its If the Commission takes such action, the For the Commission, by the Division of
fees to remain competitive with other Trading and Markets, pursuant to delegated
Commission shall institute proceedings authority.19
exchanges and with alternative trading to determine whether the proposed rule
systems that have been exempted from Robert W. Errett,
should be approved or disapproved.
compliance with the statutory standards Deputy Secretary.
applicable to exchanges. Because IV. Solicitation of Comments [FR Doc. 2015–17757 Filed 7–20–15; 8:45 am]
competitors are free to modify their own Interested persons are invited to BILLING CODE 8011–01–P
fees in response, and because market submit written data, views, and
participants may readily adjust their arguments concerning the foregoing,
order routing practices, NASDAQ including whether the proposed rule SECURITIES AND EXCHANGE
believes that the degree to which fee change is consistent with the Act. COMMISSION
changes in this market may impose any Comments may be submitted by any of [Release No. 34–75456; File No. SR–ICC–
burden on competition is extremely the following methods: 2015–013]
limited.
In this instance, the proposed changes Electronic Comments
Self-Regulatory Organizations; ICE
to the charges assessed and credits • Use the Commission’s Internet Clear Credit LLC; Notice of Filing of
available to member firms for execution comment form (http://www.sec.gov/ Proposed Rule Change To Provide for
of securities in securities of all three rules/sro.shtml); or the Clearance of Additional Western
Tapes do not impose a burden on • Send an email to rule-comments@ European Sovereign Single Names
competition because NASDAQ’s sec.gov. Please include File Number SR–
execution services are completely NASDAQ–2015–081 on the subject line. July 15, 2015.
voluntary and subject to extensive Pursuant to Section 19(b)(1) of the
competition both from other exchanges Paper Comments Securities Exchange Act of 1934
and from off-exchange venues. • Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Excluding market makers from the to Secretary, Securities and Exchange notice is hereby given that on July 6,
Excess Order Fee does not place a Commission, 100 F Street NE., 2015, ICE Clear Credit LLC (‘‘ICC’’) filed
burden on competition because the Washington, DC 20549–1090. with the Securities and Exchange
Exchange has balanced the goal of the All submissions should refer to File Commission (‘‘Commission’’) the
fee with the potential negative impact Number SR–NASDAQ–2015–081. This
asabaliauskas on DSK5VPTVN1PROD with NOTICES
proposed rule change as described in
on market quality and determined that file number should be included on the Items I, II, and III below, which Items
excluding market makers from the fee subject line if email is used. To help the have been prepared primarily by ICC.
will promote better market quality, and Commission process and review your The Commission is publishing this
thereby promote NASDAQ’s comments more efficiently, please use notice to solicit comments on the
competitiveness among exchanges and only one method. The Commission will
other market venues. In sum, if the post all comments on the Commission’s 19 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
17 15 U.S.C. 78f(b)(8). 18 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4.
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![43148 Federal Register / Vol. 80, No. 139 / Tuesday, July 21, 2015 / Notices
17Ad–22(d)(8).13 Finally, ICC will apply Electronic Comments SECURITIES AND EXCHANGE
its existing default management policies COMMISSION
and procedures for the additional SWES • Use the Commission’s Internet
comment form (http://www.sec.gov/ [Release No. 34–75454; File No. SR–MSRB–
Contracts. ICC believes that these 2015–05]
procedures allow for it to take timely rules/sro.shtml); or
action to contain losses and liquidity • Send an email to rule-comments@ Self-Regulatory Organizations;
pressures and to continue meeting its sec.gov. Please include File Number SR– Municipal Securities Rulemaking
obligations in the event of clearing ICC–2015–013 on the subject line. Board; Notice of Filing and Immediate
member insolvencies or defaults in Effectiveness of a Proposed Rule
respect of the additional single names, Paper Comments
Change Consisting of an Amendment
in accordance with Rule 17Ad–
• Send paper comments in triplicate to MSRB Rule G–45, on Reporting of
22(d)(11).14 Information on Municipal Fund
to Secretary, Securities and Exchange
B. Self-Regulatory Organization’s Commission, 100 F Street NE., Securities
Statement on Burden on Competition Washington, DC 20549–1090. July 15, 2015.
The additional SWES Contracts will All submissions should refer to File Pursuant to section 19(b)(1) of the
be available to all ICC participants for Number SR–ICC–2015–013. This file Securities Exchange Act of 1934 (the
clearing. The clearing of these number should be included on the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2
additional SWES Contracts by ICC does subject line if email is used. To help the notice is hereby given that on June 30,
not preclude the offering of the Commission process and review your 2015, the Municipal Securities
additional SWES Contracts for clearing comments more efficiently, please use Rulemaking Board (the ‘‘MSRB’’ or
by other market participants. only one method. The Commission will ‘‘Board’’) filed with the Securities and
Accordingly, ICC does not believe that post all comments on the Commission’s Exchange Commission (the ‘‘SEC’’ or
clearance of the additional SWES Internet Web site (http://www.sec.gov/ ‘‘Commission’’) the proposed rule
Contracts will impose any burden on rules/sro.shtml). Copies of the change as described in Items I and II
competition not necessary or submission, all subsequent below, which Items have been prepared
appropriate in furtherance of the amendments, all written statements by the MSRB. The Commission is
purposes of the Act. with respect to the proposed rule publishing this notice to solicit
change that are filed with the comments on the proposed rule change
C. Self-Regulatory Organization’s from interested persons.
Statement on Comments on the Commission, and all written
Proposed Rule Change Received From communications relating to the I. Self-Regulatory Organization’s
Members, Participants or Others proposed rule change between the Statement of the Terms of Substance of
Commission and any person, other than the Proposed Rule Change
Written comments relating to the those that may be withheld from the
proposed rule change have not been The MSRB filed with the Commission
public in accordance with the a proposed rule change consisting of an
solicited or received. ICC will notify the provisions of 5 U.S.C. 552, will be
Commission of any written comments amendment to MSRB Rule G–45, on
available for Web site viewing and reporting of information on municipal
received by ICC. printing in the Commission’s Public fund securities (‘‘proposed rule
III. Date of Effectiveness of the Reference Section, 100 F Street NE., change’’). The proposed rule change
Proposed Rule Change and Timing for Washington, DC 20549, on official would delay by 60 days, until October
Commission Action business days between the hours of 28, 2015, the date on which the first
10:00 a.m. and 3:00 p.m. Copies of such submissions must be made pursuant to
Within 45 days of the date of
filings will also be available for Rule G–45. The first submissions on
publication of this notice in the Federal
inspection and copying at the principal Form G–45 currently are due August 29,
Register or within such longer period
up to 90 days (i) as the Commission may office of ICE Clear Credit and on ICE 2015. The MSRB proposes an immediate
designate if it finds such longer period Clear Credit’s Web site at https:// effectiveness for the proposed rule
to be appropriate and publishes its www.theice.com/clear-credit/regulation. change. The proposed rule change
reasons for so finding or (ii) as to which All comments received will be posted would extend by 60 days the due date
the self-regulatory organization without change; the Commission does under a previously approved rule for the
consents, the Commission will: not edit personal identifying first submissions on Form G–45.
information from submissions. You The text of the proposed rule change
(A) by order approve or disapprove is available on the MSRB’s Web site at
the proposed rule change or should submit only information that
www.msrb.org/Rules-and-
(B) institute proceedings to determine you wish to make available publicly. All
Interpretations/SEC-Filings/2015-
whether the proposed rule change submissions should refer to File
Filings.aspx, at the MSRB’s principal
should be disapproved. Number SR–ICC–2015–013 and should
office, and at the Commission’s Public
be submitted on or before August 11,
IV. Solicitation of Comments Reference Room.
2015.
Interested persons are invited to II. Self-Regulatory Organization’s
For the Commission, by the Division of
submit written data, views, and Statement of the Purpose of, and
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Trading and Markets, pursuant to delegated
arguments concerning the foregoing, authority.15
Statutory Basis for, the Proposed Rule
including whether the proposed rule Change
Robert W. Errett,
change is consistent with the Act. In its filing with the Commission, the
Comments may be submitted by any of Deputy Secretary.
MSRB included statements concerning
the following methods: [FR Doc. 2015–17755 Filed 7–20–15; 8:45 am]
the purpose of and basis for the
BILLING CODE 8011–01–P
13 17 CFR 240.17Ad–22(d)(8). 1 15 U.S.C. 78s(b)(1).
14 17 CFR 240.17Ad–22(d)(11). 15 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.
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Document Created: 2018-02-23 09:22:56
Document Modified: 2018-02-23 09:22:56
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 80 FR 43146 |
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