81 FR 62228 - Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Certain Default Management Requirements Under Applicable Law
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 174 (September 8, 2016)
Federal Register Volume 81, Issue 174 (September 8, 2016)
| Page Range | 62228-62229 | |
| FR Document | 2016-21646 |
[Federal Register Volume 81, Number 174 (Thursday, September 8, 2016)] [Notices] [Pages 62228-62229] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-21646] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78762; File No. SR-ICEEU-2016-010] Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Certain Default Management Requirements Under Applicable Law September 2, 2016. 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 August 30, 2016, ICE Clear Europe Limited (``ICE Clear Europe'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule changes described in Items I, II and III below, which Items have been prepared primarily by ICE Clear Europe. ICE Clear Europe filed the proposed rule changes pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(4)(i) \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 changes from interested persons. --------------------------------------------------------------------------- \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)(i). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The principal purpose of the proposed changes is to modify the ICE Clear Europe Clearing Rules (``Clearing Rules'') in order to clarify the timing of certain default management procedures in light of requirements under the European Market Infrastructure Regulation (``EMIR'') \5\ and relevant UK law. --------------------------------------------------------------------------- \5\ Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC Derivatives, Central Counterparties and Trade Repositories, as well as various implementing regulations and technical standards. --------------------------------------------------------------------------- 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 changes. 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 The purpose of the rule amendments is to modify the ICE Clear Europe Clearing Rules to clarify the timing of certain default procedures in light of regulatory requirements under EMIR and UK law. In particular, Rule 1604(c), which applies to defaults involving an FCM/BD Clearing Member, has been revised in light of EMIR Article 48(5)-(6) and Paragraph 34(2)(d) of the UK FSMA Recognition Requirements (SI 2001/995).\6\ These provisions require that the clearing house rules explicitly specify a pre-defined transfer period within which a transfer of customer positions carried by a defaulting clearing member to a new clearing member is to take place, if possible (and after which the clearing house would exercise default remedies to close out any such positions not transferred). The amendments to Rule 1604(c) specify that the clearing house will seek to transfer under the Default Portability Rules any customer positions carried by a defaulting FCM/BD Clearing Member within seven calendar days of the default, and if a transfer has not been effected within such period (or the clearing house otherwise deems it necessary for its protection), the clearing house will terminate or liquidate such contracts, subject to applicable law and its default rules. The transfer period is intended to be consistent with the timing set forth in CFTC Rule 190.03 for the transfer of customer positions carried by a defaulting FCM and for the liquidation of such contracts that have not been transferred. The amendments do not otherwise affect the rights or obligations of the clearing house or clearing members in respect of such a default. The amendments are also consistent with the general approach in place for non-FCM/BD Clearing Members in paragraph 6(f) of the applicable Standard Terms Annexes to the Rules. --------------------------------------------------------------------------- \6\ Paragraph 34(2)(d) of the UK Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001 (SI 2001/995), which was added by UK Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (SI 2013/504), Part 4, Paragraph 5(6). Citation has been added by SEC staff and confirmed by ICEEU's outside counsel by telephone on August 31, 2016. --------------------------------------------------------------------------- 2. Statutory Basis ICE Clear Europe believes that the changes described herein are consistent with the requirements of Section 17A of the Act \7\ and the regulations thereunder applicable to it, and are consistent with the prompt and accurate clearance of and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts and transactions, the safeguarding of securities and funds in the custody or control of ICE Clear Europe or for which it is responsible and the protection of investors and the public interest, within the meaning of Section 17A(b)(3)(F) of the Act.\8\ The changes to the Rules clarify the timing of certain actions to be taken in the management of a default of an FCM/BD Clearing Member, in order to comply with requirements under EMIR and UK law, and do not limit the authority of the clearing house to act under its default management rules for its protection. As such, ICE Clear Europe believes that the changes will generally promote the prompt and accurate clearance and settlement of securities and derivatives transactions, and further the public interest in the safe and effective clearing of such transactions. ICE Clear Europe does not believe the amendments will adversely affect the safeguarding of securities and funds in its custody or control or for which it is responsible. The changes are thus consistent with the requirements of Section 17A of the Act.\9\ --------------------------------------------------------------------------- \7\ 15 U.S.C. 78q-1. \8\ 15 U.S.C. 78q-1(b)(3)(F). \9\ 15 U.S.C. 78q-1. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition ICE Clear Europe does not believe the proposed changes would have any impact, or impose any burden, on [[Page 62229]] competition not necessary or appropriate in furtherance of the purpose of the Act. ICE Clear Europe is adopting amendments to the Clearing Rules to clarify the timing of certain default management procedures in light of regulatory requirements. ICE Clear Europe does not believe that these changes will impose significant additional costs on Clearing Members or other market participants. ICE Clear Europe also does not believe the amendments will adversely affect access to clearing by Clearing Members or their customers or otherwise adversely affect Clearing Members or market participants. In this regard, the changes will apply to all FCM/BD Clearing Members, and accordingly are not expected to affect competition among Clearing Members or in the market for clearing services generally. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others ICE Clear Europe has not solicited or received any written comments with respect to the proposed changes. 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 changes have become effective upon filing pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(4)(i) \11\ thereunder. The amendments effect a change in an existing service of a registered clearing agency that does not adversely affect the safeguarding of securities or funds in the custody or control of the clearing agency or for which it is responsible, and does not significantly affect the respective rights or obligations of the clearing agency or persons using its clearing service, within the meaning of Rule 19b-4(f)(4)(i). As noted above, the amendments clarify the timing of certain default management actions by the clearing house, including the period in which a transfer of customer positions of an FCM/BD Clearing Member will be attempted and after which the clearing house in which the clearing house will exercise default remedies to close out remaining positions. These changes are intended to comply with requirements under EMIR and UK law, and to be consistent with the timing specified in applicable CFTC regulations. The amendments do not otherwise affect the rights or obligations of the clearing house or clearing members. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A). \11\ 17 CFR 240.19b-4(f)(4)(i). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule changes, the Commission summarily may temporarily suspend such rule changes if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule changes are 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-ICEEU-2016-010 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-2016-010. 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 changes that are filed with the Commission, and all written communications relating to the proposed rule changes 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-2016-010 and should be submitted on or before September 29, 2016. 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. 2016-21646 Filed 9-7-16; 8:45 am] BILLING CODE 8011-01-P
![62228 Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices
inspection and copying at the principal in light of requirements under the such period (or the clearing house
office of the Exchange. All comments European Market Infrastructure otherwise deems it necessary for its
received will be posted without change; Regulation (‘‘EMIR’’) 5 and relevant UK protection), the clearing house will
the Commission does not edit personal law. terminate or liquidate such contracts,
identifying information from subject to applicable law and its default
II. Self-Regulatory Organization’s rules. The transfer period is intended to
submissions. You should submit only
Statement of the Purpose of, and be consistent with the timing set forth
information that you wish to make
Statutory Basis for, the Proposed Rule in CFTC Rule 190.03 for the transfer of
available publicly. All submissions
Change customer positions carried by a
should refer to File Number SR–
BatsEDGA–2016–20, and should be In its filing with the Commission, ICE defaulting FCM and for the liquidation
submitted on or before September 29, Clear Europe included statements of such contracts that have not been
2016. concerning the purpose of and basis for transferred. The amendments do not
For the Commission, by the Division of the proposed rule changes. The text of otherwise affect the rights or obligations
Trading and Markets, pursuant to delegated these statements may be examined at of the clearing house or clearing
authority.18 the places specified in Item IV below. members in respect of such a default.
Robert W. Errett, ICE Clear Europe has prepared The amendments are also consistent
Deputy Secretary. summaries, set forth in sections A, B, with the general approach in place for
[FR Doc. 2016–21491 Filed 9–7–16; 8:45 am]
and C below, of the most significant non-FCM/BD Clearing Members in
aspects of such statements. paragraph 6(f) of the applicable
BILLING CODE 8011–01–P
Standard Terms Annexes to the Rules.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and 2. Statutory Basis
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule ICE Clear Europe believes that the
COMMISSION Change changes described herein are consistent
[Release No. 34–78762; File No. SR–ICEEU– 1. Purpose with the requirements of Section 17A of
2016–010] the Act 7 and the regulations thereunder
The purpose of the rule amendments
applicable to it, and are consistent with
Self-Regulatory Organizations; ICE is to modify the ICE Clear Europe
the prompt and accurate clearance of
Clear Europe Limited; Notice of Filing Clearing Rules to clarify the timing of
and settlement of securities transactions
and Immediate Effectiveness of a certain default procedures in light of
and, to the extent applicable, derivative
Proposed Rule Change Relating to regulatory requirements under EMIR
agreements, contracts and transactions,
Certain Default Management and UK law.
the safeguarding of securities and funds
Requirements Under Applicable Law In particular, Rule 1604(c), which
in the custody or control of ICE Clear
applies to defaults involving an FCM/
September 2, 2016. Europe or for which it is responsible
BD Clearing Member, has been revised
Pursuant to Section 19(b)(1) of the and the protection of investors and the
in light of EMIR Article 48(5)–(6) and
Securities Exchange Act of 1934 public interest, within the meaning of
Paragraph 34(2)(d) of the UK FSMA
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Section 17A(b)(3)(F) of the Act.8 The
Recognition Requirements (SI 2001/
notice is hereby given that on August changes to the Rules clarify the timing
995).6 These provisions require that the
30, 2016, ICE Clear Europe Limited of certain actions to be taken in the
clearing house rules explicitly specify a
(‘‘ICE Clear Europe’’) filed with the management of a default of an FCM/BD
pre-defined transfer period within
Securities and Exchange Commission Clearing Member, in order to comply
which a transfer of customer positions
(‘‘Commission’’) the proposed rule with requirements under EMIR and UK
carried by a defaulting clearing member
changes described in Items I, II and III law, and do not limit the authority of
to a new clearing member is to take
below, which Items have been prepared the clearing house to act under its
place, if possible (and after which the
primarily by ICE Clear Europe. ICE Clear default management rules for its
clearing house would exercise default
Europe filed the proposed rule changes protection. As such, ICE Clear Europe
remedies to close out any such positions
pursuant to Section 19(b)(3)(A) of the believes that the changes will generally
not transferred). The amendments to
Act,3 and Rule 19b–4(f)(4)(i) 4 promote the prompt and accurate
Rule 1604(c) specify that the clearing
thereunder, so that the proposal was clearance and settlement of securities
house will seek to transfer under the
effective upon filing with the and derivatives transactions, and further
Default Portability Rules any customer
Commission. The Commission is the public interest in the safe and
positions carried by a defaulting FCM/
publishing this notice to solicit effective clearing of such transactions.
BD Clearing Member within seven
comments on the proposed rule changes ICE Clear Europe does not believe the
calendar days of the default, and if a
from interested persons. amendments will adversely affect the
transfer has not been effected within
safeguarding of securities and funds in
I. Self-Regulatory Organization’s its custody or control or for which it is
5 Regulation (EU) No 648/2012 of the European
Statement of the Terms of Substance of responsible. The changes are thus
Parliament and of the Council of 4 July 2012 on
the Proposed Rule Change OTC Derivatives, Central Counterparties and Trade consistent with the requirements of
The principal purpose of the Repositories, as well as various implementing Section 17A of the Act.9
regulations and technical standards.
proposed changes is to modify the ICE 6 Paragraph 34(2)(d) of the UK Financial Services B. Self-Regulatory Organization’s
Clear Europe Clearing Rules (‘‘Clearing and Markets Act 2000 (Recognition Requirements Statement on Burden on Competition
mstockstill on DSK3G9T082PROD with NOTICES
Rules’’) in order to clarify the timing of for Investment Exchanges and Clearing Houses)
certain default management procedures Regulations 2001 (SI 2001/995), which was added ICE Clear Europe does not believe the
by UK Financial Services and Markets Act 2000 proposed changes would have any
(Over the Counter Derivatives, Central impact, or impose any burden, on
18 17 CFR 200.30–3(a)(12).
1 15
Counterparties and Trade Repositories) Regulations
U.S.C. 78s(b)(1). 2013 (SI 2013/504), Part 4, Paragraph 5(6). Citation
2 17 CFR 240.19b–4. 7 15 U.S.C. 78q–1.
has been added by SEC staff and confirmed by
3 15 U.S.C. 78s(b)(3)(A). 8 15 U.S.C. 78q–1(b)(3)(F).
ICEEU’s outside counsel by telephone on August
4 17 CFR 240.19b–4(f)(4)(i). 31, 2016. 9 15 U.S.C. 78q–1.
VerDate Sep<11>2014 19:34 Sep 07, 2016 Jkt 238001 PO 00000 Frm 00157 Fmt 4703 Sfmt 4703 E:\FR\FM\08SEN1.SGM 08SEN1](https://thefederalregister.org/doc/81_FR_62402/page/1.svg)
![Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices 62229
competition not necessary or otherwise affect the rights or obligations All comments received will be posted
appropriate in furtherance of the of the clearing house or clearing without change; the Commission does
purpose of the Act. ICE Clear Europe is members. not edit personal identifying
adopting amendments to the Clearing At any time within 60 days of the information from submissions. You
Rules to clarify the timing of certain filing of the proposed rule changes, the should submit only information that
default management procedures in light Commission summarily may you wish to make available publicly. All
of regulatory requirements. ICE Clear temporarily suspend such rule changes submissions should refer to File
Europe does not believe that these if it appears to the Commission that Number SR–ICEEU–2016–010 and
changes will impose significant such action is necessary or appropriate should be submitted on or before
additional costs on Clearing Members or in the public interest, for the protection September 29, 2016.
other market participants. ICE Clear of investors, or otherwise in furtherance For the Commission, by the Division of
Europe also does not believe the of the purposes of the Act. Trading and Markets, pursuant to delegated
amendments will adversely affect access
IV. Solicitation of Comments authority.12
to clearing by Clearing Members or their
customers or otherwise adversely affect Brent J. Fields,
Interested persons are invited to
Clearing Members or market submit written data, views, and Secretary.
participants. In this regard, the changes arguments concerning the foregoing, [FR Doc. 2016–21646 Filed 9–7–16; 8:45 am]
will apply to all FCM/BD Clearing including whether the proposed rule BILLING CODE 8011–01–P
Members, and accordingly are not changes are consistent with the Act.
expected to affect competition among Comments may be submitted by any of
Clearing Members or in the market for the following methods: SECURITIES AND EXCHANGE
clearing services generally. COMMISSION
Electronic Comments
C. Self-Regulatory Organization’s
Statement on Comments on the • Use the Commission’s Internet [Release No. 34–78738; File No. SR–
Proposed Rule Change Received From comment form (http://www.sec.gov/ NASDAQ–2016–103]
Members, Participants or Others rules/sro.shtml) or
• Send an email to rule-comments@ Self-Regulatory Organizations; The
ICE Clear Europe has not solicited or sec.gov. Please include File Number SR– NASDAQ Stock Market LLC; Order
received any written comments with ICEEU–2016–010 on the subject line. Granting Approval of Proposed Rule
respect to the proposed changes. ICE Change, as Modified by Amendment
Clear Europe will notify the Paper Comments No. 1 Thereto, To List and Trade
Commission of any written comments • Send paper comments in triplicate Exchange-Traded Managed Funds
received by ICE Clear Europe. to Secretary, Securities and Exchange
Commission, 100 F Street NE., August 31, 2016.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for Washington, DC 20549–1090. I. Introduction
Commission Action All submissions should refer to File
The foregoing rule changes have Number SR–ICEEU–2016–010. This file On July 13, 2016, The NASDAQ Stock
become effective upon filing pursuant to number should be included on the Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
Section 19(b)(3)(A) of the Act 10 and subject line if email is used. To help the filed with the Securities and Exchange
Commission process and review your Commission (‘‘Commission’’), pursuant
Rule 19b–4(f)(4)(i) 11 thereunder. The
comments more efficiently, please use to section 19(b)(1) of the Securities
amendments effect a change in an
only one method. The Commission will Exchange Act of 1934 (‘‘Act’’) 1 and Rule
existing service of a registered clearing
agency that does not adversely affect the post all comments on the Commission’s 19b–4 thereunder,2 a proposed rule
safeguarding of securities or funds in Internet Web site (http://www.sec.gov/ change to list and trade the common
the custody or control of the clearing rules/sro.shtml). Copies of the shares (‘‘Shares’’) of the following
agency or for which it is responsible, submission, all subsequent Exchange-Traded Managed Funds: Ivy
and does not significantly affect the amendments, all written statements Focused Growth NextShares; Ivy
respective rights or obligations of the with respect to the proposed rule Focused Value NextShares; and Ivy
clearing agency or persons using its changes that are filed with the Energy NextShares (individually,
clearing service, within the meaning of Commission, and all written ‘‘Fund,’’ and collectively, ‘‘Funds’’). On
Rule 19b–4(f)(4)(i). As noted above, the communications relating to the July 14, 2016, the Exchange filed
amendments clarify the timing of proposed rule changes between the Amendment No. 1 to the proposed rule
certain default management actions by Commission and any person, other than change.3 The proposed rule change, as
the clearing house, including the period those that may be withheld from the modified by Amendment No. 1 thereto,
in which a transfer of customer public in accordance with the was published for comment in the
positions of an FCM/BD Clearing provisions of 5 U.S.C. 552, will be Federal Register on July 27, 2016.4 The
Member will be attempted and after available for Web site viewing and Commission received no comments on
which the clearing house in which the printing in the Commission’s Public the proposed rule change. This order
clearing house will exercise default Reference Room, 100 F Street NE., grants approval of the proposed rule
remedies to close out remaining Washington, DC 20549, on official change, as modified by Amendment No.
business days between the hours of 1 thereto.
mstockstill on DSK3G9T082PROD with NOTICES
positions. These changes are intended to
comply with requirements under EMIR 10:00 a.m. and 3:00 p.m. Copies of such
12 17 CFR 200.30–3(a)(12).
and UK law, and to be consistent with filings will also be available for
1 15 U.S.C. 78s(b)(1).
the timing specified in applicable CFTC inspection and copying at the principal 2 17 CFR 240.19b–4.
regulations. The amendments do not office of ICE Clear Europe and on ICE 3 Amendment No. 1 amended and replaced the
Clear Europe’s Web site at https:// proposed rule change in its entirety.
10 15 U.S.C. 78s(b)(3)(A). www.theice.com/clear-europe/ 4 See Securities Exchange Act Release No. 78385
11 17 CFR 240.19b–4(f)(4)(i). regulation#rule-filings. (Jul. 21, 2016), 81 FR 49341 (‘‘Notice’’).
VerDate Sep<11>2014 19:34 Sep 07, 2016 Jkt 238001 PO 00000 Frm 00158 Fmt 4703 Sfmt 4703 E:\FR\FM\08SEN1.SGM 08SEN1](https://thefederalregister.org/doc/81_FR_62402/page/2.svg)
Document Created: 2018-02-09 13:13:03
Document Modified: 2018-02-09 13:13:03
| 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 | 81 FR 62228 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR