80 FR 65269 - Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Clearing Services for European Natural Gas Spot Contracts

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 206 (October 26, 2015)

[Federal Register Volume 80, Number 206 (Monday, October 26, 2015)]
[Notices]
[Pages 65269-65271]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-27067]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76196; File No. SR-ICEEU-2015-017]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Clearing Services for European Natural Gas Spot Contracts

October 20, 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 October 9, 2015, ICE Clear Europe Limited (``ICE Clear Europe'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change described in Items I, II and III below, which 
Items have been primarily prepared by ICE Clear Europe. ICE Clear 
Europe filed the proposal pursuant to section 19(b)(3)(A) of the 
Act,\3\ and Rule 19b-4(f)(4)(ii) \4\ thereunder, so that the proposal 
was effective upon filing with the Commission. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(4)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The principal purpose of the rule change is to amend certain 
provisions of the ICE Clear Europe rules and procedures that address 
clearing services for European natural gas spot contracts.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, ICE Clear Europe included 
statements concerning the purpose of and basis for the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. ICE Clear Europe has prepared summaries, 
set forth in sections A, B and C below, of the most significant aspects 
of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    ICE Clear Europe has agreed to act as the clearing organization for 
certain natural gas spot contracts (the ``Natural Gas Spot Contracts'') 
traded on the ICE Endex Gas B.V. (``ICE Endex Continental'') and ICE 
Endex Gas Spot Ltd. (``ICE Endex UK'') markets and has previously 
adopted amendments to its Rules and Procedures with respect to the 
clearing of such contracts.\5\ ICE Clear Europe is proposing to adopt 
certain additional amendments to its Rules and Procedures with respect 
to the clearing of the Natural Gas Spot Contracts to clarify certain 
delivery procedures and related arrangements, including with respect to 
the interaction with relevant gas delivery facilities and systems. 
These amendments reflect input from Clearing Members and other market 
participants with respect to the Natural Gas Spot Contracts. ICE Clear

[[Page 65270]]

Europe also proposes to adopt certain other conforming and clarifying 
changes, as discussed herein. ICE Clear Europe submits revisions to 
Parts 1, 7 and 22 of its Rules and Parts D, E, J and N of the Delivery 
Procedures.
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    \5\ Exchange Act Release No. 34-75170 (June 15, 2015) (File No. 
SR-ICEEU-2015-011), 80 FR 35418 (June 19, 2015) (the ``Initial Spot 
Contract Filing'').
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    In the Rules, the revisions to definitions in parts 1 and 22 
correct cross-references to certain definitions in the ICE Endex 
Continental market rules. In Rule 106(a), a clarification is made that 
disclosures of information may be made by ICE Clear Europe pursuant to 
obligations imposed on a Market under relevant gas delivery system 
rules. In Rule 703, which relates to settlement of physically settled 
futures contracts, Rule 703(h) is modified to clarify ICE Clear 
Europe's ability to require cash settlement (as may be provided in the 
relevant Delivery Procedures) where grounds for declaring an Event of 
Default or Force Majeure Event have occurred with respect to a Clearing 
Member, but without actually declaring an Event of Default. This 
approach reflects practices for gas and other relevant markets.
    In part D of the Delivery Procedures, which relates to delivery of 
ICE Futures UK Natural Gas Daily Futures Contracts, clarifications have 
been made to the timing of certain requirements, including the deadline 
for submission of certain documentation.
    In part E of the Delivery Procedures, various definitions relating 
to different types of ICE Endex UK natural gas spot contracts have been 
added or clarified. In addition, delivery responsibilities of 
transferors and transferees, and related delivery procedures, for the 
different types of ICE Endex UK spot contracts have been further 
specified. The amendments in particular address modifications the 
transferor or transferee (as applicable) may make to the amount of gas 
to be delivered to or offtaken from the relevant system, and provide 
that ICE Clear Europe is not responsible for such modifications. The 
amendments also correct an incorrect reference to ICE Clear Europe as 
making certain trade nominations with respect to gas delivery.
    In part J of the Delivery Procedures, which relates to delivery of 
ICE Endex Continental gas spot contract, the amendments provide that 
ICE Endex Continental will submit trade nominations on behalf of ICE 
Clear Europe and Clearing Members, as applicable, with respect to gas 
deliveries. The amendments also clarify the applicable responsibilities 
of the nominated transferor and transferee with respect to delivery.
    In part N of the Delivery Procedures (relating to U.S. Emissions 
contracts), relevant terminology has been changed from ``Position Day'' 
and ``Notice Day'' to ``Notice Day'' and ``Delivery Instruction Day'' 
to conform to relevant exchange rules.
2. Statutory Basis
    ICE Clear Europe believes that the proposed rule change is 
consistent with the requirements of section 17A of the Act \6\ and the 
regulations thereunder applicable to it, including the standards under 
Rule 17Ad-22,\7\ and in particular are consistent with the prompt and 
accurate clearance and settlement of securities transactions and 
derivative agreements, contracts and transactions cleared by ICE Clear 
Europe, the safeguarding of securities and funds in the custody or 
control of ICE Clear Europe and the protection of investors and the 
public interest, within the meaning of section 17A(b)(3)(F) of the 
Act.\8\ Specifically, the amendments will further specify certain 
arrangements related to delivery of Natural Gas Spot Contracts cleared 
by ICE Clear Europe, as well as make certain other clarifying and 
conforming changes. As discussed in the Initial Spot Contract Filing, 
the Natural Gas Spot Contracts are spot contracts in natural gas 
commodities that underlie natural gas futures and options contracts 
traded on the ICE Endex markets and cleared by ICE Clear Europe, and 
present a similar risk profile to other ICE Endex contracts currently 
cleared by ICE Clear Europe. As a result, in ICE Clear Europe's view, 
its existing financial safeguards and resources, risk management, 
systems and operational arrangements are sufficient to support clearing 
of such products (and address physical delivery under such products). 
The proposed amendments are intended to make additional clarifying 
changes to support clearing of the Natural Gas Soot [sic] Contracts, 
consistent with these resources, systems and arrangements. The 
amendments in particular address certain aspects of the delivery under 
such contracts, and clarify certain default management arrangements 
applicable to such contracts, as discussed above. The other changes set 
forth in the proposed rules herein are similarly of a clarifying and 
conforming nature. As such, in ICE Clear Europe's view, the amendments 
are consistent with the prompt and accurate clearance and settlement of 
securities and derivative agreements, contracts and transactions, 
within the meaning of the Act.
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    \6\ 15 U.S.C. 78q-1.
    \7\ 17 CFR 240.17Ad-22.
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed rule and procedure 
changes would have any impact, or impose any burden, on competition not 
necessary or appropriate in furtherance of the purpose of the Act. As 
discussed in the Initial Spot Contract Filing, ICE Clear Europe does 
not believe that clearing of the Natural Gas Spot Contracts, or the 
changes to the clearing arrangements made in the proposed amendments to 
the Rules and Procedures, would adversely affect access to clearing for 
clearing members or their customers or other market participants, or 
materially and adversely affect the cost of clearing for market 
participants. Similarly, ICE Clear Europe does not believe the proposed 
change would otherwise adversely affect competition among clearing 
members or for clearing services generally.

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 changes to the rules have 
not been solicited or received. ICE Clear Europe will notify the 
Commission of any written comments received by ICE Clear Europe.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to section 19(b)(3)(A) \9\ of the Act and Rule 19b-4(f)(4)(ii) \10\ 
thereunder because it effects a change in an existing service of a 
registered clearing agency that primarily affects the clearing 
operations of the clearing agency with respect to products that are not 
securities, including futures that are not security futures, swaps that 
are not security-based swaps or mixed swaps, and forwards that are not 
security forwards, and does not significantly affect any securities 
clearing operations of the clearing agency or any rights or obligations 
of the clearing agency with respect to securities clearing or persons 
using such securities-clearing service. At any time within 60 days of 
the filing of the proposed rule change, the Commission summarily may 
temporarily suspend such rule change if it appears to the Commission 
that such action is

[[Page 65271]]

necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(4)(ii).
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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 Comments

     Use 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-ICEEU-2015-017 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-ICEEU-2015-017. 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 Room, 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 Europe 
and on ICE Clear Europe's Web site at https://www.theice.com/clear-europe/regulation#rule-filings.
    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-ICEEU-2015-017 
and should be submitted on or before November 16, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-27067 Filed 10-23-15; 8:45 am]
 BILLING CODE 8011-01-P