80 FR 50348 - Self-Regulatory Organizations; ICE Clear Europe Limited; Order Approving Proposed Rule Change Relating to Finance Procedures To Add Clearstream Banking as a Triparty Collateral Service Provider
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 160 (August 19, 2015)
Federal Register Volume 80, Issue 160 (August 19, 2015)
| Page Range | 50348-50349 | |
| FR Document | 2015-20420 |
[Federal Register Volume 80, Number 160 (Wednesday, August 19, 2015)] [Notices] [Pages 50348-50349] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-20420] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75692; File No. SR-ICEEU-2015-009] Self-Regulatory Organizations; ICE Clear Europe Limited; Order Approving Proposed Rule Change Relating to Finance Procedures To Add Clearstream Banking as a Triparty Collateral Service Provider August 13, 2015. I. Introduction On May 5, 2015, ICE Clear Europe Limited (``ICE Clear Europe'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ to amend its Finance Procedures in order to facilitate CDS Clearing Members' use of Clearstream Banking as a triparty collateral service provider. The proposed rule change was published for comment in the Federal Register on May 15, 2015.\3\ On June 29, 2015, the Commission extended the time period in which to either approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change to August 13, 2015.\4\ The Commission did not receive comment letters regarding the proposed change. For the reasons discussed below, the Commission is granting approval of the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ Securities Exchange Act Release No. 34-74922 (May 11, 2015), 80 FR 28035 (May 15, 2015) (File No. SR-ICEEU-2015-009). \4\ Securities Exchange Act Release No. 34-75320 (June 29, 2015), 80 FR 38488 (July 6, 2015) (File No. SR-ICEEU-2015-009). --------------------------------------------------------------------------- II. Description of the Proposed Rule Change ICE Clear Europe proposes to modify the Finance Procedures to allow Clearstream Banking to serve as a triparty collateral service provider for initial or original margin provided in respect of all product categories, including CDS Contracts. Clearstream Banking currently serves as a triparty collateral service provider solely for original margin provided in respect of F&O Contracts. Specifically, paragraph 3.1 of the Finance Procedures will be revised to remove the existing restriction that Clearstream Banking may only act as a triparty collateral service provider with respect to Original Margin in respect of F&O Contracts. As a result of such [[Page 50349]] change, Clearstream Banking would be permitted to act as a triparty collateral service provider for initial or original margin in respect of any product category, including the CDS product category. (The other currently authorized triparty collateral service provider, Euroclear Bank, is similarly eligible to act as such for any product category.) A correction would also be made in paragraph 3.20 to provide that the specified instruction deadlines apply to triparty collateral arrangements with both Euroclear Bank and Clearstream Banking. III. Discussion and Commission Findings Section 19(b)(2)(C) of the Act \5\ directs the Commission to approve a proposed rule change of a self-regulatory organization if the Commission finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such self-regulatory organization. Section 17A(b)(3)(F) of the Act \6\ requires, among other things, that the rules of a clearing agency are designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions and assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78s(b)(2)(C). \6\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- The Commission finds that the proposed rule change is consistent with section 17A of the Act \7\ and the rules thereunder applicable to ICE Clear Europe. The proposed rule change will provide Clearing Members with the option to use Clearstream Banking as a triparty collateral service provider with respect to initial and original margin for the CDS (and FX) product categories. According to ICE Clear Europe, the proposed rule change does not otherwise change the substantive terms of the service. Based on ICE Clear Europe's representation regarding its experience with Clearstream Banking as triparty collateral service provider with respect to original margin for the F&O product category, the use of Clearstream Banking can be appropriately extended to other product categories. As such, the Commission believes that the proposed rule change would allow ICE Clear Europe's Clearing Members to use an additional triparty collateral service provider that offers appropriate safeguarding of securities and funds while maintaining ICE Clear Europe's ability to access initial margin when appropriate. The Commission therefore finds that the proposed rule change is 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 assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible, in accordance with section 17A(b)(3)(F) of the Act.\8\ --------------------------------------------------------------------------- \7\ 15 U.S.C. 78q-1. \8\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of section 17A of the Act \9\ and the rules and regulations thereunder. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78q-1. --------------------------------------------------------------------------- It is therefore ordered, pursuant to section 19(b)(2) of the Act,\10\ that the proposed rule change (File No. SR-ICEEU-2015-009) be, and hereby is, approved.\11\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(2). \11\ 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). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\ --------------------------------------------------------------------------- \12\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-20420 Filed 8-18-15; 8:45 am] BILLING CODE 8011-01-P
![50348 Federal Register / Vol. 80, No. 160 / Wednesday, August 19, 2015 / Notices
application. The complete application Subadviser; and (b) the aggregate fees SECURITIES AND EXCHANGE
may be obtained via the Commission’s paid to Subadvisers other than COMMISSION
Web site by searching for the file Affiliated Subadvisers (collectively,
[Release No. 34–75692; File No. SR–ICEEU–
number, or an applicant using the ‘‘Aggregate Fee Disclosure’’). For any 2015–009]
Company name box, at http:// Fund that employs an Affiliated
www.sec.gov/search/search.htm or by Subadviser, the Fund will provide Self-Regulatory Organizations; ICE
calling (202) 551–8090. separate disclosure of any fees paid to Clear Europe Limited; Order Approving
Summary of the Application the Affiliated Subadviser. Proposed Rule Change Relating to
3. Applicants agree that any order Finance Procedures To Add
1. The Adviser will serve as the
granting the requested relief will be Clearstream Banking as a Triparty
investment adviser to the Funds
Collateral Service Provider
pursuant to an investment advisory subject to the terms and conditions
agreement with the Trust (the ‘‘Advisory stated in the Application. Such terms August 13, 2015.
Agreement’’).1 The Adviser will provide and conditions provide for, among other
the Funds with continuous and I. Introduction
safeguards, appropriate disclosure to
comprehensive investment management Fund shareholders and notification On May 5, 2015, ICE Clear Europe
services subject to the supervision of, about subadvisory changes and Limited (‘‘ICE Clear Europe’’) filed with
and policies established by, each Fund’s enhanced Board oversight to protect the the Securities and Exchange
board of trustees (‘‘Board’’). The interests of the Funds’ shareholders. Commission (‘‘Commission’’) a
Advisory Agreement permits the proposed rule change pursuant to
Adviser, subject to the approval of the 4. Section 6(c) of the Act provides that section 19(b)(1) of the Securities
Board, to delegate to one or more the Commission may exempt any Exchange Act of 1934 (‘‘Act’’),1 and
subadvisers (each, a ‘‘Subadviser’’ and person, security, or transaction or any Rule 19b–4 thereunder,2 to amend its
collectively, the ‘‘Subadvisers’’) the class or classes of persons, securities, or Finance Procedures in order to facilitate
responsibility to provide the day-to-day transactions from any provisions of the CDS Clearing Members’ use of
portfolio investment management of Act, or any rule thereunder, if such Clearstream Banking as a triparty
each Fund, subject to the supervision relief is necessary or appropriate in the collateral service provider. The
and direction of the Adviser. The public interest and consistent with the proposed rule change was published for
primary responsibility for managing the protection of investors and purposes comment in the Federal Register on
Funds will remain vested in the fairly intended by the policy and May 15, 2015.3 On June 29, 2015, the
Adviser. The Adviser will hire, provisions of the Act. Applicants Commission extended the time period
evaluate, allocate assets to and oversee believe that the requested relief meets in which to either approve, disapprove,
the Subadvisers, including determining this standard because, as further or institute proceedings to determine
whether a Subadviser should be explained in the Application, the whether to disapprove the proposed
terminated, at all times subject to the Advisory Agreements will remain rule change to August 13, 2015.4 The
authority of the Board. subject to shareholder approval, while Commission did not receive comment
2. Applicants request an exemption to letters regarding the proposed change.
the role of the Subadvisers is
permit the Adviser, subject to Board For the reasons discussed below, the
approval, to hire certain Subadvisers substantially similar to that of
individual portfolio managers, so that Commission is granting approval of the
pursuant to Subadvisory Agreements proposed rule change.
and materially amend existing requiring shareholder approval of
Subadvisory Agreements without Subadvisory Agreements would impose II. Description of the Proposed Rule
obtaining the shareholder approval unnecessary delays and expenses on the Change
required under section 15(a) of the Act Funds. Applicants believe that the ICE Clear Europe proposes to modify
and rule 18f–2 under the Act.2 requested relief from the Disclosure the Finance Procedures to allow
Applicants also seek an exemption from Requirements meets this standard Clearstream Banking to serve as a
the Disclosure Requirements to permit a because it will improve the Adviser’s triparty collateral service provider for
Fund to disclose (as both a dollar ability to negotiate fees paid to the initial or original margin provided in
amount and a percentage of the Fund’s Subadvisers that are more advantageous respect of all product categories,
net assets): (a) The aggregate fees paid for the Funds. including CDS Contracts. Clearstream
to the Adviser and any Affiliated Banking currently serves as a triparty
For the Commission, by the Division of
Investment Management, under delegated collateral service provider solely for
1 Applicants request relief with respect to any
authority. original margin provided in respect of
future series of the Trust and other existing or
future registered open-end management company or
F&O Contracts.
Brent J. Fields,
series thereof that: (a) Is advised by the Adviser, Specifically, paragraph 3.1 of the
including any entity controlling, controlled by or Secretary. Finance Procedures will be revised to
under common control with the Adviser or its [FR Doc. 2015–20412 Filed 8–18–15; 8:45 am] remove the existing restriction that
successors (included in the term ‘‘Adviser’’); (b)
uses the manager of managers structure described
BILLING CODE 8011–01–P Clearstream Banking may only act as a
in the application; and (c) complies with the terms triparty collateral service provider with
and conditions of the application (any such series, respect to Original Margin in respect of
a ‘‘Fund’’ and collectively, the ‘‘Funds’’). For F&O Contracts. As a result of such
purposes of the requested order, ‘‘successor’’ is
limited to an entity that results from a
tkelley on DSK3SPTVN1PROD with NOTICES
1 15 U.S.C. 78s(b)(1).
reorganization into another jurisdiction or a change
2 17 CFR 240.19b–4.
in the type of business organization.
2 The requested relief will not extend to any 3 Securities Exchange Act Release No. 34–74922
Subadviser that is an affiliated person, as defined (May 11, 2015), 80 FR 28035 (May 15, 2015) (File
in section 2(a)(3) of the Act, of a Fund or the No. SR–ICEEU–2015–009).
Adviser, other than by reason of serving as a 4 Securities Exchange Act Release No. 34–75320
subadviser to one or more of the Funds (‘‘Affiliated (June 29, 2015), 80 FR 38488 (July 6, 2015) (File No.
Subadviser’’). SR–ICEEU–2015–009).
VerDate Sep<11>2014 19:14 Aug 18, 2015 Jkt 235001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\19AUN1.SGM 19AUN1](https://thefederalregister.org/doc/80_FR_50508/page/1.svg)
![Federal Register / Vol. 80, No. 160 / Wednesday, August 19, 2015 / Notices 50349
change, Clearstream Banking would be while maintaining ICE Clear Europe’s APPLICANTS: ALPS ETMF Trust (the
permitted to act as a triparty collateral ability to access initial margin when ‘‘Trust’’), ALPS Advisors, Inc. (the
service provider for initial or original appropriate. The Commission therefore ‘‘Adviser’’) and ALPS Distributors, Inc.,
margin in respect of any product finds that the proposed rule change is and ALPS Portfolio Solutions
category, including the CDS product designed to promote the prompt and Distributor, Inc. (each, a ‘‘Distributor’’).
category. (The other currently accurate clearance and settlement of SUMMARY: Applicants request an order
authorized triparty collateral service securities transactions and, to the extent (‘‘Order’’) that permits: (a) Actively
provider, Euroclear Bank, is similarly applicable, derivative agreements, managed series of certain open-end
eligible to act as such for any product contracts, and transactions and to assure management investment companies to
category.) A correction would also be the safeguarding of securities and funds issue shares (‘‘Shares’’) redeemable in
made in paragraph 3.20 to provide that which are in the custody or control of large aggregations only (‘‘Creation
the specified instruction deadlines the clearing agency or for which it is Units’’); (b) secondary market
apply to triparty collateral arrangements responsible, in accordance with section transactions in Shares to occur at the
with both Euroclear Bank and 17A(b)(3)(F) of the Act.8 next-determined net asset value plus or
Clearstream Banking. minus a market-determined premium or
IV. Conclusion discount that may vary during the
III. Discussion and Commission trading day; (c) certain series to pay
On the basis of the foregoing, the
Findings redemption proceeds, under certain
Commission finds that the proposal is
Section 19(b)(2)(C) of the Act 5 directs consistent with the requirements of the circumstances, more than seven days
the Commission to approve a proposed Act and in particular with the from the tender of Shares for
rule change of a self-regulatory requirements of section 17A of the Act 9 redemption; (d) certain affiliated
organization if the Commission finds and the rules and regulations persons of the series to deposit
that such proposed rule change is thereunder. securities into, and receive securities
consistent with the requirements of the It is therefore ordered, pursuant to from, the series in connection with the
Act and the rules and regulations section 19(b)(2) of the Act,10 that the purchase and redemption of Creation
thereunder applicable to such self- proposed rule change (File No. SR– Units; (e) certain registered management
regulatory organization. Section ICEEU–2015–009) be, and hereby is, investment companies and unit
17A(b)(3)(F) of the Act 6 requires, among approved.11 investment trusts outside of the same
other things, that the rules of a clearing For the Commission, by the Division of group of investment companies as the
agency are designed to promote the Trading and Markets, pursuant to delegated series to acquire Shares; and (f) certain
prompt and accurate clearance and authority.12 series to create and redeem Shares in
settlement of securities transactions Brent J. Fields, kind in a master-feeder structure. The
and, to the extent applicable, derivative Secretary. Order would incorporate by reference
agreements, contracts, and transactions terms and conditions of a previous order
[FR Doc. 2015–20420 Filed 8–18–15; 8:45 am]
and assure the safeguarding of securities granting the same relief sought by
BILLING CODE 8011–01–P
and funds which are in the custody or applicants, as that order may be
control of the clearing agency or for amended from time to time (‘‘Reference
which it is responsible. SECURITIES AND EXCHANGE Order’’).1
The Commission finds that the FILING DATES: The application was filed
COMMISSION
proposed rule change is consistent with on July 21, 2015.
section 17A of the Act 7 and the rules [Investment Company Act Release No.
HEARING OR NOTIFICATION OF HEARING: An
thereunder applicable to ICE Clear 31759; 812–14517]
order granting the requested relief will
Europe. The proposed rule change will be issued unless the Commission orders
provide Clearing Members with the ALPS ETMF Trust, et al.; Notice of
Application a hearing. Interested persons may
option to use Clearstream Banking as a request a hearing by writing to the
triparty collateral service provider with August 13, 2015. Commission’s Secretary and serving
respect to initial and original margin for AGENCY: Securities and Exchange applicants with a copy of the request,
the CDS (and FX) product categories. Commission (‘‘Commission’’). personally or by mail. Hearing requests
According to ICE Clear Europe, the ACTION: Notice of an application for an should be received by the Commission
proposed rule change does not order under section 6(c) of the by 5:30 p.m. on September 8, 2015, and
otherwise change the substantive terms Investment Company Act of 1940 should be accompanied by proof of
of the service. Based on ICE Clear (‘‘Act’’) for an exemption from sections service on applicants, in the form of an
Europe’s representation regarding its 2(a)(32), 5(a)(1), 22(d) and 22(e) of the affidavit or, for lawyers, a certificate of
experience with Clearstream Banking as Act and rule 22c–1 under the Act, under service. Pursuant to rule 0–5 under the
triparty collateral service provider with sections 6(c) and 17(b) of the Act for an Act, hearing requests should state the
respect to original margin for the F&O exemption from sections 17(a)(1) and nature of the writer’s interest, any facts
product category, the use of Clearstream (a)(2) of the Act, and under section bearing upon the desirability of a
Banking can be appropriately extended 12(d)(1)(J) of the Act for an exemption hearing on the matter, the reason for the
to other product categories. As such, the from sections 12(d)(1)(A) and (B) of the request, and the issues contested.
Commission believes that the proposed Act. Persons who wish to be notified of a
rule change would allow ICE Clear hearing may request notification by
Europe’s Clearing Members to use an writing to the Commission’s Secretary.
tkelley on DSK3SPTVN1PROD with NOTICES
8 15 U.S.C. 78q–1(b)(3)(F).
additional triparty collateral service ADDRESSES: The Commission: Brent J.
9 15 U.S.C. 78q–1.
provider that offers appropriate 10 15 U.S.C. 78s(b)(2). Fields, Secretary, U.S. Securities and
safeguarding of securities and funds 11 In approving the proposed rule change, the Exchange Commission, 100 F Street NE.,
Commission considered the proposal’s impact on
5 15 U.S.C. 78s(b)(2)(C). efficiency, competition and capital formation. 15 1 Eaton Vance Management, et al., Investment
6 15 U.S.C. 78q–1(b)(3)(F). U.S.C. 78c(f). Company Act Rel. Nos. 31333 (Nov. 6, 2014)
7 15 U.S.C. 78q–1. 12 17 CFR 200.30–3(a)(12). (notice) and 31361 (Dec. 2, 2014) (order).
VerDate Sep<11>2014 19:14 Aug 18, 2015 Jkt 235001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\19AUN1.SGM 19AUN1](https://thefederalregister.org/doc/80_FR_50508/page/2.svg)
Document Created: 2015-12-15 11:58:23
Document Modified: 2015-12-15 11:58:23
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 50348 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR