82 FR 21287 - Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to the CDS End-of-Day Price Discovery Policy
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 86 (May 5, 2017)
Federal Register Volume 82, Issue 86 (May 5, 2017)
| Page Range | 21287-21288 | |
| FR Document | 2017-09060 |
[Federal Register Volume 82, Number 86 (Friday, May 5, 2017)] [Notices] [Pages 21287-21288] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-09060] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80566; File No. SR-ICEEU-2017-003] Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to the CDS End-of-Day Price Discovery Policy May 1, 2017. On March 10, 2017, ICE Clear Europe Limited (``ICE Clear Europe'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change (SR- ICEEU-2017-003) to amend ICE Clear Europe's CDS End-of-Day Price Discovery Policy to implement a new price submission process for Clearing Members. The proposed rule change was published for comment in the Federal Register on March 23, [[Page 21288]] 2017.\3\ The Commission received no comments regarding the proposed changes. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ Securities Exchange Act Release No. 34-80269 (March 17, 2017), 82 FR 14925 (March 23, 2017) (SR-ICEEU-2017-003) (``Notice''). --------------------------------------------------------------------------- Section 19(b)(2) of the Act provides that within 45 days of the publication of the notice of the filing or a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding, or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved.\4\ The 45th day from the publication of the Notice is May 7, 2017. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78s(b)(2). --------------------------------------------------------------------------- The Commission is extending the 45-day time period for Commission action on the proposed rule change. ICE Clear Europe proposes to revise its CDS End-of-Day Price Discovery Policy to implement a new Clearing Member price submission process to remove the intermediary agent through which Clearing Members currently submit required prices, and replace it with a process through which Clearing Members submit prices directly to ICE Clear Europe. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider ICE Clear Europe's proposed rule change and the associated operational risks. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act, extends the period by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR-ICEEU-2017-003) to no later than June 21, 2017. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.\5\ --------------------------------------------------------------------------- \5\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-09060 Filed 5-4-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices 21287
would, and the Commission believes oversight by their prudential regulators Commission believes these changes
that Sponsoring Members are fully and FICC, which helps mitigate risk would promote the prompt and accurate
aware of this outcome and are capable posed by such entities, including the clearance and settlement of securities
of addressing it by passing on any risk addition of new Sponsored Members. transactions by FICC, consistent with
and cost to their Sponsored Members. Second, by expanding the types of Section 17A(b)(3)(F) of the Act.51
The Commission also believes that entities that are eligible to participate
benefits from the expansion would not and thereby benefit from FICC’s V. Conclusion
necessarily fall solely to bank Netting guaranteed settlement, novation, and On the basis of the foregoing, the
Members, but, as FICC explains,46 to all independent risk management, the Commission finds that the Proposed
GSD members, where such members are proposal would help mitigate the risk of Rule Change is consistent with the
counterparties to Sponsoring Members a large scale exit by such firms from the requirements of the Act and in
with new Sponsored Member Trades. U.S. repo market in a stress scenario particular with the requirements of
In addition, the Commission believes and, thus, lower the risk of a liquidity Section 17A of the Act 52 and the rules
that the proposal’s expansion of the drain in such a scenario. Third, by and regulations promulgated
Sponsored Membership program would providing central clearing to a greater thereunder.
make the risk-reducing benefits of number of Sponsored Member Trades, It Is Therefore Ordered, pursuant to
central clearing available to a wider the proposal would enable FICC to Section 19(b)(2) of the Act 53 that
range of entity types. In turn, increased centralize and control the liquidation of proposed rule change SR–FICC–2017–
trading activity through the expanded a greater number of such positions in 003, as modified by Amendment No. 1,
Sponsored Membership program would the event of a Sponsored Member or be, and hereby is, Approved.54
likely (1) lower the risk of diminished Sponsoring Member’s default. Doing so For the Commission, by the Division of
liquidity in the U.S. repo market caused would help protect against the risk that Trading and Markets, pursuant to delegated
by a large scale exit of participants from an uncoordinated liquidation of the authority.55
the market in a stress scenario (through positions by multiple counterparties to Eduardo A. Aleman,
FICC’s guaranty of completion of the defaulting member would cause a Assistant Secretary.
settlement for a greater number of fire sale of positions that negatively
[FR Doc. 2017–09059 Filed 5–4–17; 8:45 am]
eligible transactions); (2) protect against impacts the counterparties, FICC, and
BILLING CODE 8011–01–P
fire sale risk (through FICC’s ability to potentially the broader financial system.
centralize and control the liquidation of Therefore, the Commission believes that
a greater portion of a failed the proposed changes related to the
SECURITIES AND EXCHANGE
counterparty’s portfolio); and (3) proposed expansion of Sponsored
COMMISSION
decrease settlement and operational risk Membership eligibility would help
(by making a greater number of protect investors and the public interest, [Release No. 34–80566; File No. SR–ICEEU–
transactions eligible to be netted and in accordance with Section 17A(b)(3)(F) 2017–003]
subject to guaranteed settlement, of the Act.49
novation, and independent risk Section 17A(b)(3)(F) of the Act Self-Regulatory Organizations; ICE
management through FICC). requires, in part, that the Rules also be Clear Europe Limited; Notice of
Therefore, the Commission believes designed to promote the prompt and Designation of Longer Period for
that by removing the RIC requirement accurate clearance and settlement of Commission Action on Proposed Rule
and adjusting the QIB requirement, the securities transactions.50 In addition to Change, Security-Based Swap
Proposed Rule Change would remove an the proposed changes related Submission, or Advance Notice
impediment to and help perfect the specifically to the proposed expansion Relating to the CDS End-of-Day Price
mechanism of a national system for the of entity types eligible to be Sponsored Discovery Policy
prompt and accurate clearance and Members, the Proposed Rule Change
also would make a number of changes May 1, 2017.
settlement of securities transactions,
consistent with Section 17A(b)(3)(F) of to the Rules that relate to Sponsored On March 10, 2017, ICE Clear Europe
the Act, cited above. Membership in general, as described Limited (‘‘ICE Clear Europe’’) filed with
Section 17A(b)(3)(F) of the Act above. These changes are designed to the Securities and Exchange
requires, in part, that the Rules also be provide specificity, clarity, and Commission (‘‘Commission’’), pursuant
designed to, in general, to protect additional transparency to the Rules by to Section 19(b)(1) of the Securities
investors and the public interest.47 As (i) removing ambiguities in definitions Exchange Act of 1934 (‘‘Act’’) 1 and Rule
described above, the proposal would and other Rule provisions to provide 19b–4 thereunder,2 a proposed rule
expand the types of entities eligible to greater clarity regarding how such change (SR–ICEEU–2017–003) to amend
participate in the Sponsored definitions and provisions apply to the ICE Clear Europe’s CDS End-of-Day
Membership program as Sponsored Sponsored Membership program; (ii) Price Discovery Policy to implement a
Members. As discussed above, Ronin updating Rule provisions to correct new price submission process for
argues that such expansion would outdated terminology; and (iii) Clearing Members. The proposed rule
increase concentration, settlement, and correcting typographical errors and out- change was published for comment in
leverage risks.48 The Commission does of-date cross-references. Collectively, the Federal Register on March 23,
not find that the proposed expansion these changes would ensure that the
relevant Rules remain transparent,
SRADOVICH on DSK3GMQ082PROD with NOTICES
51 Id.
would increase such risks. First,
Sponsoring Members are bank Netting accurate, and clear, which would enable 52 15 U.S.C. 78q–1.
53 15 U.S.C. 78s(b)(2).
Members that are subject to extensive all stakeholders to better understand
54 In approving the proposed rule change, the
risk management practices and their rights and obligations in
Commission considered the proposals’ impact on
connection with the Sponsored efficiency, competition, and capital formation. 15
46 FICC Letter at 3–4. Membership program. Therefore, the U.S.C. 78c(f).
47 15 55 17 CFR 200.30–3(a)(12).
U.S.C. 78q–1(b)(3)(F).
48 Ronin Letter I at 1–6; see also Ronin Letter II 49 Id. 1 15 U.S.C. 78s(b)(1).
at 2. 50 Id. 2 17 CFR 240.19b–4.
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![21288 Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices
2017.3 The Commission received no SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
comments regarding the proposed COMMISSION Statement of the Purpose of, and
changes. Statutory Basis for, the Proposed Rule
Section 19(b)(2) of the Act provides [Release No. 34–80570; File No. SR–MIAX– Change
that within 45 days of the publication of 2017–16] 1. Purpose
the notice of the filing or a proposed The Exchange proposes to amend
rule change, or within such longer Self-Regulatory Organizations; Miami
Rule 515A, MIAX Price Improvement
period up to 90 days as the Commission International Securities Exchange LLC;
Mechanism (‘‘PRIME’’) and PRIME
may designate if it finds such longer Notice of Filing of a Proposed Rule
Solicitation Mechanism, to amend the
period to be appropriate and publishes Change To Amend MIAX Options Rule
duration of a PRIME Auction. PRIME is
its reasons for so finding, or as to which 515A, MIAX Price Improvement a process by which a Member 3 may
the self-regulatory organization Mechanism (‘‘PRIME’’) and PRIME electronically submit for execution
consents, the Commission shall either Solicitation Mechanism (‘‘Auction’’) an order 4 it represents as
approve the proposed rule change, May 1, 2017. agent (‘‘Agency Order’’) against
disapprove the proposed rule change, or principal interest, and/or an Agency
institute proceedings to determine Pursuant to the provisions of Section Order against solicited interest
whether the proposed rule change 19(b)(1) of the Securities Exchange Act (‘‘Solicitation Auction’’). When the
should be disapproved.4 The 45th day of 1934 (‘‘Act’’) 1 and Rule 19b–4 Exchange receives a properly designated
from the publication of the Notice is thereunder,2 notice is hereby given that Agency Order for auction processing, a
May 7, 2017. on April 25, 2017, Miami International Request for Responses (‘‘RFR’’) detailing
Securities Exchange LLC (‘‘MIAX the option, side, size, and initiating
The Commission is extending the 45- price is sent to all subscribers of the
Options’’ or ‘‘Exchange’’) filed with the
day time period for Commission action Exchange’s data feeds. Currently, the
Securities and Exchange Commission
on the proposed rule change. ICE Clear Auction and Solicitation Auction period
(‘‘Commission’’) a proposed rule change
Europe proposes to revise its CDS End- lasts for 500 milliseconds, unless it is
as described in Items I, II, and III below,
of-Day Price Discovery Policy to concluded early.5 The Exchange
which Items have been prepared by the
implement a new Clearing Member proposes to amend Rule 515A(a)(2)(i)(C)
Exchange. The Commission is
price submission process to remove the so that the duration of the Auction and
publishing this notice to solicit
intermediary agent through which Solicitation Auction shall be a time
comments on the proposed rule change
Clearing Members currently submit period designated by the Exchange,
from interested persons.
required prices, and replace it with a which shall be no less than 100
process through which Clearing I. Self-Regulatory Organization’s milliseconds and no more than 1
Members submit prices directly to ICE Statement of the Terms of Substance of second, consistent with the rule of other
Clear Europe. The Commission finds the Proposed Rule Change exchanges, such as the International
that it is appropriate to designate a Securities Exchange (‘‘ISE’’), NASDAQ
longer period within which to take The Exchange is filing a proposal to BX (‘‘BX’’), NASDAQ PHLX (‘‘PHLX’’),
action on the proposed rule change so amend Exchange Rule 515A, MIAX and Chicago Board Options Exchange
that it has sufficient time to consider Price Improvement Mechanism (‘‘CBOE’’).6 When approving the change
ICE Clear Europe’s proposed rule (‘‘PRIME’’) and PRIME Solicitation
change and the associated operational Mechanism. 3 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
risks. The text of the proposed rule change associated with a Trading Permit. Members are
Accordingly, the Commission, is available on the Exchange’s Web site deemed ‘‘members’’ under the Exchange Act. See
at http://www.miaxoptions.com/rule- Exchange Rule 100.
pursuant to Section 19(b)(2) of the Act, 4 The term ‘‘order’’ means a firm commitment to
extends the period by which the filings, at MIAX’s principal office, and
buy or sell option contracts. See Exchange Rule 100.
Commission shall either approve or at the Commission’s Public Reference 5 A PRIME and PRIME Solicitation Auction will
disapprove, or institute proceedings to Room. conclude at the sooner of (1) Upon receipt by the
System of an unrelated order (in the same option
determine whether to disapprove, the II. Self-Regulatory Organization’s as the Agency Order) on the opposite side of the
proposed rule change (File No. SR– Statement of the Purpose of, and market from the RFR responses, that is marketable
ICEEU–2017–003) to no later than June against either the NBBO, the initiating price, or the
Statutory Basis for, the Proposed Rule RFR responses; (2) Upon receipt by the System of
21, 2017. Change an unrelated order (in the same option as the
For the Commission by the Division of Agency Order) on the same side of the market as
In its filing with the Commission, the the RFR responses, that is marketable against the
Trading and Markets, pursuant to delegated NBBO; (3) Upon receipt by the System of an
authority.5
Exchange included statements
unrelated limit order (in the same option as the
concerning the purpose of and basis for Agency Order) on the opposite of the market from
Eduardo A. Aleman,
the proposed rule change and discussed the Agency Order that improves any RFR response;
Assistant Secretary. any comments it received on the (4) Any time an RFR response matches the NBBO
[FR Doc. 2017–09060 Filed 5–4–17; 8:45 am] proposed rule change. The text of these on the opposite side of the market from the RFR
responses; (5) Any time there is a quote lock in the
BILLING CODE 8011–01–P statements may be examined at the subject option on the Exchange pursuant to Rule
SRADOVICH on DSK3GMQ082PROD with NOTICES
places specified in Item IV below. The 1402; or (6) Any time there is a trading halt in the
Exchange has prepared summaries, set option on the Exchange. See Exchange Rule 515A.
6 See Securities Exchange Act Release Nos. 79733
forth in sections A, B, and C below, of (January 4, 2017), 82 FR 3055 (January 10, 2017)
3 Securities Exchange Act Release No. 34–80269
the most significant aspects of such (SR–ISE–2016–26); 76301 (October 29, 2015), 80 FR
(March 17, 2017), 82 FR 14925 (March 23, 2017) statements. 68347 (November 4, 2015) (SR–BX–2015–032);
77557 (April 7, 2016), 81 FR 21935 (April 13, 2016)
(SR–ICEEU–2017–003) (‘‘Notice’’).
(SR–PHLX–2016–40); and 80421 (April 10, 2017),
4 15 U.S.C. 78s(b)(2). 1 15 U.S.C. 78s(b)(1). 82 FR 18048 (April 14, 2017) (SR–CBOE–2017–
5 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. 029). The Commission notes that CBOE’s proposed
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Document Created: 2018-11-08 08:40:03
Document Modified: 2018-11-08 08:40:03
| 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 | 82 FR 21287 |
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