82 FR 13173 - Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to ICC's End-of-Day Price Discovery Policies and Procedures
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 45 (March 9, 2017)
Federal Register Volume 82, Issue 45 (March 9, 2017)
| Page Range | 13173-13175 | |
| FR Document | 2017-04602 |
[Federal Register Volume 82, Number 45 (Thursday, March 9, 2017)] [Notices] [Pages 13173-13175] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-04602] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80150; File No. SR-ICC-2017-003] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to ICC's End-of-Day Price Discovery Policies and Procedures March 3, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934,\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on February 16, 2017, ICE Clear Credit LLC (``ICC'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change, security-based swap submission, or advance notice 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 proposed rule change, security-based swap submission, or advance notice from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice The principal purpose of the proposed changes is to make changes to the ICC End-of-Day Price Discovery Policies and Procedures (``Pricing Policy'') related to the implementation of ICC's new Clearing Participant (``CP'') direct price submission process. II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice In its filing with the Commission, ICC included statements concerning the purpose of and basis for the proposed rule change, security-based swap submission, or advance notice and discussed any comments it received on the proposed rule change, security-based swap submission, or advance notice. 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. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice ICC proposes revising its Pricing Policy to make changes related to the implementation of ICC's new CP direct price submission process. Currently, ICC uses an intermediary agent to implement functions of its price discovery process. Specifically, under the current process, Clearing Participants submit required prices to the intermediary agent; these prices are then input into ICC's price settlement methodology to determine settlement prices. ICC proposes to enhance its price discovery process to remove the intermediary agent from the price settlement process. In doing so, ICC will require CPs to submit prices directly to the clearinghouse. The prices will continue to be input into ICC's price settlement methodology to determine settlement prices. There are no changes to the price settlement methodology as a result of the changes. The proposed revisions to the Pricing Policy are described in detail as follows. ICC updated the Pricing Policy to note that ICC requires CPs to establish direct connectivity with the clearinghouse and use a FIX API to submit required prices. ICC revised the Pricing Policy to remove references to the intermediary agent and the Valuation Service API (and related message terminology), which will be decommissioned with the launch of the new CP direct price submission process, and to add reference to the new FIX API message terminology, which will be utilized under the new CP direct price submission process. Such changes are reflected throughout the Pricing Policy. ICC has also updated the Pricing Policy to specify that ICC will send the unsolicited FIX API messages directly to each CP. [[Page 13174]] Under the new CP direct price submission process, ICC will consolidate the price discovery process across indices and singles names; as such, new FIX API messages will include information for both Indices and Single Names. Previously, the price discovery process provided files separately for each product type. ICC updated the Submission Requirements set forth in the Pricing Policy to include iTraxx Australia and iTraxx Asia Ex-Japan indices. For both indices, prices must be submitted in spread and either midpoint or bid-offer format. Further, ICC updated the Submission Requirements for CDX.NA.HY and CDX.EM indices to note that prices may be submitted in either price or upfront format; previously, only price format was accepted. ICC has updated the Pricing Policy to reflect the replacement of existing firm trade data files with new FIX API firm trade messages. ICC also made minor changes to the timing of certain steps in the price settlement process; no changes were made to the actual settlement submission windows. ICC also updated the Distribution of End-of-Day Prices process set forth in the Pricing Policy. Under the new CP direct price submission process, ICC will publish separate messages to CPs, listing end-of-day prices for single names and indices. The end-of-day prices provided will not change and will continue to be based on CPs' cleared positions. ICC will continue to publish end-of-day prices for every listed risk sub-factors' most actively traded instrument, and will distribute daily end-of-day prices for all cleared instruments through Markit. Section 17A(b)(3)(F) of the Act \3\ requires, among other things, that the rules of a clearing agency be designed to protect investors and the public interest and to comply with the provisions of the Act and the rules and regulations thereunder. ICC believes that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to ICC, in particular, to Section 17(A)(b)(3)(F),\4\ because ICC believes that the proposed rule changes will assure the prompt and accurate clearance and settlement of securities transactions, derivatives agreements, contracts, and transactions, as the proposed revisions simplify and increase the efficiency of ICC's price discovery process, which includes the determination of settlement prices and firm trades. As such, the proposed changes are designed to promote the prompt and accurate clearance and settlement of securities transactions, derivatives agreements, contracts, and transactions within the meaning of Section 17A(b)(3)(F) of the Act.\5\ Further, such changes are consistent with Rule 17Ad-22(d)(4),\6\ as the changes will decrease external operational risk, since ICC no longer would rely on the service of an intermediary agent to perform key aspects of its price discovery process. --------------------------------------------------------------------------- \3\ 15 U.S.C. 78q-1(b)(3)(F). \4\ Id. \5\ Id. \6\ 17 CFR 240.17Ad-22(d)(4). --------------------------------------------------------------------------- B. Clearing Agency's Statement on Burden on Competition ICC does not believe the proposed rule changes would have any impact, or impose any burden, on competition. The changes to ICC's price submission process apply uniformly across all market participants. Therefore, ICC does not believe the proposed rule changes impose any burden on competition that is inappropriate in furtherance of the purposes of the Act. C. Clearing Agency's Statement on Comments on the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice 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, Security-Based Swap Submission, or Advance Notice 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 such 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, security-based swap submission, or advance notice 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-2017-003 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-2017-003. 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, security- based swap submission, or advance notice that are filed with the Commission, and all written communications relating to the proposed rule change, security-based swap submission, or advance notice 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 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-2017-003 and should be submitted on or before March 30, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\7\ --------------------------------------------------------------------------- \7\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [[Page 13175]] Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-04602 Filed 3-8-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 45 / Thursday, March 9, 2017 / Notices 13173
consider, pursuant to Rule 19b–4 under office of the Exchange. All comments II. Clearing Agency’s Statement of the
the Act,101 any request for an received will be posted without change; Purpose of, and Statutory Basis for, the
opportunity to make an oral the Commission does not edit personal Proposed Rule Change, Security-Based
presentation.102 identifying information from Swap Submission, or Advance Notice
Interested persons are invited to submissions. You should submit only
submit written data, views, and information that you wish to make In its filing with the Commission, ICC
arguments regarding whether the available publicly. included statements concerning the
proposed rule change, as modified by All submissions should refer to File purpose of and basis for the proposed
Amendment No. 1, should be approved No. SR–NASDAQ–2016–161 and should rule change, security-based swap
or disapproved by March 30, 2017. Any be submitted by March 30, 2017. submission, or advance notice and
person who wishes to file a rebuttal to Rebuttal comments should be submitted discussed any comments it received on
any other person’s submission must file by April 13, 2017. the proposed rule change, security-
that rebuttal by April 13, 2017. based swap submission, or advance
For the Commission, by the Division of notice. The text of these statements may
Comments may be submitted by any of Trading and Markets, pursuant to delegated
the following methods: authority.103
be examined at the places specified in
Item IV below. ICC has prepared
Electronic Comments summaries, set forth in sections A, B,
Eduardo A. Aleman,
• Use the Commission’s Internet and C below, of the most significant
comment form (http://www.sec.gov/ Assistant Secretary.
aspects of these statements.
rules/sro.shtml); or [FR Doc. 2017–04601 Filed 3–8–17; 8:45 am]
• Send an email to rule-comments@ BILLING CODE 8011–01–P A. Clearing Agency’s Statement of the
sec.gov. Please include File No. SR– Purpose of, and Statutory Basis for, the
NASDAQ–2016–161 on the subject line. Proposed Rule Change, Security-Based
SECURITIES AND EXCHANGE Swap Submission, or Advance Notice
Paper Comments COMMISSION
• Send paper comments in triplicate ICC proposes revising its Pricing
to Secretary, Securities and Exchange [Release No. 34–80150; File No. SR–ICC– Policy to make changes related to the
Commission, 100 F Street NE., 2017–003] implementation of ICC’s new CP direct
Washington, DC 20549–1090. price submission process. Currently,
Self-Regulatory Organizations; ICE ICC uses an intermediary agent to
All submissions should refer to File No. Clear Credit LLC; Notice of Proposed implement functions of its price
SR–NASDAQ–2016–161. The file Rule Change, Security-Based Swap discovery process. Specifically, under
number should be included on the Submission, or Advance Notice the current process, Clearing
subject line if email is used. To help the Relating to ICC’s End-of-Day Price Participants submit required prices to
Commission process and review your Discovery Policies and Procedures the intermediary agent; these prices are
comments more efficiently, please use then input into ICC’s price settlement
only one method. The Commission will March 3, 2017. methodology to determine settlement
post all comments on the Commission’s Pursuant to Section 19(b)(1) of the prices. ICC proposes to enhance its price
Internet Web site (http://www.sec.gov/ Securities Exchange Act of 1934,1 and discovery process to remove the
rules/sro.shtml). Copies of the Rule 19b–4 thereunder,2 notice is intermediary agent from the price
submission, all subsequent hereby given that on February 16, 2017, settlement process. In doing so, ICC will
amendments, all written statements ICE Clear Credit LLC (‘‘ICC’’) filed with require CPs to submit prices directly to
with respect to the proposed rule the Securities and Exchange the clearinghouse. The prices will
change that are filed with the Commission (‘‘Commission’’) the continue to be input into ICC’s price
Commission, and all written proposed rule change, security-based settlement methodology to determine
communications relating to the swap submission, or advance notice as settlement prices. There are no changes
proposed rule change between the described in Items I, II, and III below, to the price settlement methodology as
Commission and any person, other than which Items have been prepared a result of the changes. The proposed
those that may be withheld from the primarily by ICC. The Commission is revisions to the Pricing Policy are
public in accordance with the publishing this notice to solicit described in detail as follows.
provisions of 5 U.S.C. 552, will be comments on the proposed rule change,
available for Web site viewing and security-based swap submission, or ICC updated the Pricing Policy to note
printing in the Commission’s Public advance notice from interested persons. that ICC requires CPs to establish direct
Reference Room, 100 F Street NE., connectivity with the clearinghouse and
Washington, DC 20549, on official I. Clearing Agency’s Statement of the use a FIX API to submit required prices.
business days between the hours of Terms of Substance of the Proposed ICC revised the Pricing Policy to remove
10:00 a.m. and 3:00 p.m. Copies of the Rule Change, Security-Based Swap references to the intermediary agent and
filing also will be available for Submission, or Advance Notice the Valuation Service API (and related
inspection and copying at the principal The principal purpose of the message terminology), which will be
proposed changes is to make changes to decommissioned with the launch of the
101 17 CFR 240.19b–4. the ICC End-of-Day Price Discovery new CP direct price submission process,
and to add reference to the new FIX API
asabaliauskas on DSK3SPTVN1PROD with NOTICES
102 Section 19(b)(2) of the Act, as amended by the Policies and Procedures (‘‘Pricing
Securities Acts Amendments of 1975, Public Law message terminology, which will be
94–29 (June 4, 1975), grants to the Commission Policy’’) related to the implementation
flexibility to determine what type of proceeding— of ICC’s new Clearing Participant (‘‘CP’’) utilized under the new CP direct price
either oral or notice and opportunity for written direct price submission process. submission process. Such changes are
comments—is appropriate for consideration of a reflected throughout the Pricing Policy.
particular proposal by a self-regulatory ICC has also updated the Pricing Policy
103 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
organization. See Securities Acts Amendments of
1975, Senate Comm. on Banking, Housing & Urban 3(a)(57). to specify that ICC will send the
Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 1 15 U.S.C. 78s(b)(1). unsolicited FIX API messages directly to
(1975). 2 17 CFR 240.19b–4. each CP.
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![Federal Register / Vol. 82, No. 45 / Thursday, March 9, 2017 / Notices 13175
A. Self-Regulatory Organization’s per contract over the limit, regardless of
Eduardo A. Aleman, Statement of the Purpose of, and the extent of the violations. Finally, for
Assistant Secretary. Statutory Basis for, the Proposed Rule the seventh or any additional violations
[FR Doc. 2017–04602 Filed 3–8–17; 8:45 am] Change that occur during any such period, the
fine increases to $5 per contract over the
BILLING CODE 8011–01–P 1. Purpose
limit. Notwithstanding the above, the
The purpose of the proposed rule Rule provides that the minimum fine
SECURITIES AND EXCHANGE change is to amend Chapter X, Section that the Exchange shall assess is $100.
COMMISSION 7(a) of the Exchange’s rules (the The Exchange proposes to replace its
‘‘Rules’’), which sets forth the schedule of fines for position limit
[Release No. 34–80155; File No. SR–BX– Exchange’s minor rule violation violations to mirror the schedule of
2017–014] penalties and in particular, penalties for fines that ISE and other exchanges apply
violating Chapter III, Section 7 of the to such violations. The ISE schedule of
Self-Regulatory Organizations;
Rules pertaining to position limits, so position limits fines set forth in ISE
NASDAQ BX, Inc.; Notice of Filing and
that these penalties are consistent with Rule 1614(d) is simpler and, in certain
Immediate Effectiveness of Proposed
those of BX’s sister exchange, the instances, more stringent than the BX
Rule Change To Amend Chapter X,
International Securities Exchange, LLC schedule of fines. It provides that for
Section 7(a) of the Exchange’s Rules
(‘‘ISE’’), as well as other competing any cumulative violations of the ISE
Relating to Minor Rule Violation options exchanges. position limits rule 3 that occur during
Penalties for Position Limit Violations Chapter III, Section 7 of the any rolling two year period, ISE assesses
March 3, 2017. Exchange’s Rules imposes position a fine of $500 for the first offense,
Pursuant to Section 19(b)(1) of the limits for Options Participants in certain $1,000 for the second offense, $2,500 for
Securities Exchange Act of 1934 circumstances. Meanwhile, Chapter X, the third offense, and $5,000 for the
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Section 7(a) of the Rules assesses fines fourth and each subsequent offense. The
notice is hereby given that on February for minor rule violations, including ISE rule is identical to that which
28, 2017, NASDAQ BX, Inc. (‘‘BX’’ or position limits violations, as follows. several other exchanges employ.4 The
‘‘Exchange’’) filed with the Securities First, for violations occurring in proposed rule change conforms the fine
and Exchange Commission (‘‘SEC’’ or customer accounts, Section 7(a)(i) schedule of BX to that of ISE.
‘‘Commission’’) the proposed rule assesses fines based upon the
cumulative number of violations that 2. Statutory Basis
change as described in Items I and II
below, which Items have been prepared occur over the course of a two year The Exchange believes that its
by the Exchange. The Commission is rolling period. For the first six proposal is consistent with Section 6(b)
publishing this notice to solicit violations that occur during any such of the Act,5 in general, and furthers the
period, an Option Participant will either objectives of Section 6(b)(5) of the Act,6
comments on the proposed rule change
be issued a letter of caution (to the in particular, in that it is designed to
from interested persons.
extent that the violations are up to five prevent fraudulent and manipulative
I. Self-Regulatory Organization’s percent in excess of applicable limits) or acts and practices, to promote just and
Statement of the Terms of Substance of assessed $1 per contract (to the extent equitable principles of trade, to remove
the Proposed Rule Change that the violations are more than five impediments to and perfect the
The Exchange proposes to amend percent in excess of applicable limits). mechanisms of a free and open market
Chapter X, Section 7(a) of the For the seventh through twelfth and a national market system and, in
Exchange’s Rules, as described in violations that occur during any such general, to protect investors and the
further detail below. period, the fine is $1 per contract over public interest.
The text of the proposed rule change the limit, regardless of the extent of the The Exchange believes that its
is available on the Exchange’s Web site violations. Finally, for the thirteenth or proposed Rule change will be more
at http://nasdaqbx.cchwallstreet.com/, any additional violations that occur effective than the existing Rule in
at the principal office of the Exchange, during any such period, the fine preventing manipulative acts and
and at the Commission’s Public increases to $5 per contract over the practices and protecting investors
Reference Room. limit. Notwithstanding the above, the because under the proposed Rule, the
Rule provides that the minimum fine Exchange will immediately impose a
II. Self-Regulatory Organization’s that the Exchange shall assess is $100. fine upon an Options Participant that
Statement of the Purpose of, and Second, for violations that occur in violates its position limits, and it will
Statutory Basis for, the Proposed Rule the accounts of Options Participants do so regardless of the extent of the
Change (i.e., proprietary accounts and accounts
In its filing with the Commission, the of other Options Participants), Section 3 ISE Rule 1614(d)(1) counts as a single violation,
Exchange included statements 7(a)(ii) again assesses fines based upon provided that such a violation is inadvertent: (i) A
the cumulative number of violations 1 trade date overage; (ii) a consecutive string of
concerning the purpose of and basis for trade date overage violations where the position
the proposed rule change and discussed that occur over the course of a two year does not change or where a steady reduction in the
any comments it received on the rolling period. For the first three overage occurs; or (iii) a consecutive string of trade
proposed rule change. The text of these violations that occur in any such period, date overage violations resulting from other
an Option Participant will either be mitigating circumstances.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
statements may be examined at the 4 See BATS BZX Exchange, Inc. Rule 25.3(a); C2
places specified in Item IV below. The assessed a letter of caution (to the extent Options Exchange Rule Chapter 17 (incorporating
Exchange has prepared summaries, set that the violations are up to five percent by reference CBOE Rule 17.50(g)(1)); see also NYSE
forth in sections A, B, and C below, of in excess of applicable limits) or $1 per Arca, Inc. Rule 10.12(k)(i)(21) (imposing fines of
contract (to the extent that the violations $1,000, $2,500, and $5,000 for the first, second, and
the most significant aspects of such third violations, respectively while omitting
statements. are more than five percent in excess of corresponding verbiage that defines the nature of a
applicable limits). For the fourth single violation subject to a fine).
1 15 U.S.C. 78s(b)(1). through the sixth violations that occur 5 15 U.S.C. 78f(b).
2 17 CFR 240.19b–4. during any such period, the fine is $1 6 15 U.S.C. 78f(b)(5).
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Document Created: 2017-03-09 04:59:03
Document Modified: 2017-03-09 04:59:03
| 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 | 82 FR 13173 |
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