83 FR 31244 - Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to the Clearance of an Additional Credit Default Swap Contract
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 128 (July 3, 2018)
Federal Register Volume 83, Issue 128 (July 3, 2018)
| Page Range | 31244-31246 | |
| FR Document | 2018-14299 |
[Federal Register Volume 83, Number 128 (Tuesday, July 3, 2018)] [Notices] [Pages 31244-31246] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-14299] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [[Release No. 34-83545; File No. SR-ICC-2018-007] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to the Clearance of an Additional Credit Default Swap Contract June 28, 2018 Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, 15 U.S.C. 78s(b)(1) and Rule 19b-4, 17 CFR 240.19b-4, notice is hereby given that on June 13, 2018, ICE Clear Credit LLC (``ICC'') filed with the Securities and Exchange 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. 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 rule change is to revise the ICC Rulebook (the ``Rules'') to provide for the clearance of an additional Standard Emerging Market Sovereign CDS contract (``EM Contract''). 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 (a) Purpose The purpose of the proposed rule change is to adopt rules that will [[Page 31245]] provide the basis for ICC to clear an additional credit default swap contract. ICC believes the addition of this contract will benefit the market for credit default swaps by providing market participants the benefits of clearing, including reduction in counterparty risk and safeguarding of margin assets pursuant to clearing house rules. Clearing of the additional EM Contract will not require any changes to ICC's Risk Management Framework or other policies and procedures constituting rules within the meaning of the Securities Exchange Act of 1934 (``Act''). ICC proposes amending Subchapter 26D of its Rules to provide for the clearance of the additional EM Contract, namely the Lebanese Republic. This additional EM Contract has terms consistent with the other EM Contracts approved for clearing at ICC and governed by Subchapter 26D of the Rules. Minor revisions to Subchapter 26D (Standard Emerging Market Sovereign (``SES'') Single Name) are made to provide for clearing the additional EM Contract. Specifically, in Rule 26D-102 (Definitions), ``Eligible SES Reference Entities'' is modified to include the Lebanese Republic in the list of specific Eligible SES Reference Entities to be cleared by ICC. (b) Statutory Basis Section 17A(b)(3)(F) of the Act \1\ requires, among other things, that the rules of a clearing agency be 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 comply with the provisions of the Act and the rules and regulations thereunder. The additional EM Contract is similar to the EM Contracts currently cleared by ICC, and will be cleared pursuant to ICC's existing clearing arrangements and related financial safeguards, protections and risk management procedures. Clearing of the additional EM Contract will allow market participants an increased ability to manage risk and ensure the safeguarding of margin assets pursuant to clearing house rules. ICC believes that acceptance of the new EM Contract, on the terms and conditions set out in the Rules, is consistent with the prompt and accurate clearance of and settlement of securities transactions and derivative agreements, contracts and transactions cleared by ICC, the safeguarding of securities and funds in the custody or control of ICC, and the protection of investors and the public interest, within the meaning of Section 17A(b)(3)(F) of the Act.\2\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78q-1(b)(3)(F). \2\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- Clearing of the additional EM Contract will also satisfy the requirements of Rule 17Ad-22.\3\ In particular, in terms of financial resources, ICC will apply its existing initial margin methodology to the additional contract. ICC believes that this model will provide sufficient initial margin requirements to cover its credit exposure to its clearing members from clearing such contract, consistent with the requirements of Rule 17Ad-22(b)(2).\4\ In addition, ICC believes its Guaranty Fund, under its existing methodology, will, together with the required initial margin, provide sufficient financial resources to support the clearing of the additional contract consistent with the requirements of Rule 17Ad-22(b)(3).\5\ ICC also believes that its existing operational and managerial resources will be sufficient for clearing of the additional contract, consistent with the requirements of Rule 17Ad-22(d)(4),\6\ as the new contract is substantially the same from an operational perspective as existing contracts. Similarly, ICC will use its existing settlement procedures and account structures for the new contract, consistent with the requirements of Rule 17Ad- 22(d)(5), (12) and (15) \7\ as to the finality and accuracy of its daily settlement process and avoidance of the risk to ICC of settlement failures. ICC determined to accept the additional EM Contract for clearing in accordance with its governance process, which included review of the contract and related risk management considerations by the ICC Risk Committee and approval by its Board. These governance arrangements are consistent with the requirements of Rule 17Ad- 22(d)(8).\8\ Finally, ICC will apply its existing default management policies and procedures for the additional EM Contract. ICC believes that these procedures allow for it to take timely action to contain losses and liquidity pressures and to continue meeting its obligations in the event of clearing member insolvencies or defaults in respect of the additional single names, in accordance with Rule 17Ad-22(d)(11).\9\ --------------------------------------------------------------------------- \3\ 17 CFR 240.17Ad-22. \4\ 17 CFR 240.17Ad-22(b)(2). \5\ 17 CFR 240.17Ad-22(b)(3). \6\ 17 CFR 240.17Ad-22(d)(4). \7\ 17 CFR 240.17Ad-22(d)(5), (12) and (15). \8\ 17 CFR 240.17Ad-22(d)(8). \9\ 17 CFR 240.17Ad-22(d)(11). --------------------------------------------------------------------------- (B) Clearing Agency's Statement on Burden on Competition The additional EM Contract will be available to all ICC participants for clearing. The clearing of this additional EM Contract by ICC does not preclude the offering of the additional EM Contract for clearing by other market participants. Accordingly, ICC does not believe that clearance of the additional EM Contract will impose any burden on competition not necessary or appropriate 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-2018-007 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange [[Page 31246]] Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-ICC-2018-007. 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 website (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 website 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 website at https://www.theice.com/clear-credit/regulation. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ICC-2018-007 and should be submitted on or before July 24, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\ --------------------------------------------------------------------------- \10\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-14299 Filed 7-2-18; 8:45 am] BILLING CODE 8011-01-P
![31244 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices
of the Act and Rule 19b–4(f)(6)(iii) change is consistent with the Act. SECURITIES AND EXCHANGE
thereunder. Comments may be submitted by any of COMMISSION
A proposed rule change filed under the following methods:
Rule 19b–4(f)(6) 9 normally does not [[Release No. 34–83545; File No. SR–ICC–
become operative prior to 30 days after Electronic Comments 2018–007]
the date of the filing.10 However, • Use the Commission’s internet Self-Regulatory Organizations; ICE
pursuant to Rule 19b–4(f)(6)(iii),11 the comment form (http://www.sec.gov/ Clear Credit LLC; Notice of Filing of
Commission may designate a shorter rules/sro.shtml); or Proposed Rule Change, Security-
time if such action is consistent with the Based Swap Submission, or Advance
protection of investors and the public • Send an email to rule-comments@
sec.gov. Please include File Number SR– Notice Relating to the Clearance of an
interest. The Exchange has asked the
ISE–2018–57 on the subject line. Additional Credit Default Swap
Commission to waive the 30-day
Contract
operative delay so that the proposal may Paper Comments
become operative immediately upon June 28, 2018
filing. The Commission believes that • Send paper comments in triplicate Pursuant to Section 19(b)(1) of the
waiving the 30-day operative delay is to Secretary, Securities and Exchange Securities Exchange Act of 1934, 15
consistent with the protection of Commission, 100 F Street NE, U.S.C. 78s(b)(1) and Rule 19b–4, 17 CFR
investors and the public interest Washington, DC 20549–1090. 240.19b–4, notice is hereby given that
because doing so will allow the Pilot on June 13, 2018, ICE Clear Credit LLC
All submissions should refer to File
Program to continue without (‘‘ICC’’) filed with the Securities and
Number SR–ISE–2018–57. This file
interruption in a manner that is Exchange Commission the proposed
number should be included on the
consistent with the Commission’s prior rule change, security-based swap
subject line if email is used. To help the
approval of the extension and expansion submission, or advance notice as
Commission process and review your
of the Pilot Program and will allow the described in Items I, II, and III below,
comments more efficiently, please use
Exchange and the Commission which Items have been prepared
only one method. The Commission will
additional time to analyze the impact of primarily by ICC. The Commission is
post all comments on the Commission’s
the Pilot Program.12 Accordingly, the publishing this notice to solicit
internet website (http://www.sec.gov/
Commission designates the proposed comments on the proposed rule change,
rules/sro.shtml). Copies of the
rule change as operative upon filing security-based swap submission, or
submission, all subsequent
with the Commission.13 advance notice from interested persons.
At any time within 60 days of the amendments, all written statements
filing of such proposed rule change, the with respect to the proposed rule I. Clearing Agency’s Statement of the
Commission summarily may change that are filed with the Terms of Substance of the Proposed
temporarily suspend such rule change if Commission, and all written Rule Change, Security-Based Swap
it appears to the Commission that such communications relating to the Submission, or Advance Notice
action is necessary or appropriate in the proposed rule change between the
The principal purpose of the
public interest, for the protection of Commission and any person, other than
proposed rule change is to revise the
investors, or otherwise in furtherance of those that may be withheld from the
ICC Rulebook (the ‘‘Rules’’) to provide
the purposes of the Act. If the public in accordance with the
for the clearance of an additional
Commission takes such action, the provisions of 5 U.S.C. 552, will be
Standard Emerging Market Sovereign
Commission shall institute proceedings available for website viewing and
CDS contract (‘‘EM Contract’’).
under Section 19(b)(2)(B) 14 of the Act to printing in the Commission’s Public
determine whether the proposed rule Reference Room, 100 F Street NE, II. Clearing Agency’s Statement of the
change should be approved or Washington, DC 20549, on official Purpose of, and Statutory Basis for, the
disapproved. business days between the hours of Proposed Rule Change, Security-Based
10:00 a.m. and 3:00 p.m. Copies of the Swap Submission, or Advance Notice
IV. Solicitation of Comments filing also will be available for In its filing with the Commission, ICC
Interested persons are invited to inspection and copying at the principal included statements concerning the
submit written data, views, and office of the Exchange. All comments purpose of and basis for the proposed
arguments concerning the foregoing, received will be posted without change. rule change, security-based swap
including whether the proposed rule Persons submitting comments are submission, or advance notice and
cautioned that we do not redact or edit discussed any comments it received on
9 17 CFR 240.19b–4(f)(6). personal identifying information from the proposed rule change, security-
10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– comment submissions. You should based swap submission, or advance
4(f)(6)(iii) requires the Exchange to give the submit only information that you wish
Commission written notice of the Exchange’s intent notice. The text of these statements may
to file the proposed rule change along with a brief
to make available publicly. All be examined at the places specified in
description and the text of the proposed rule submissions should refer to File Item IV below. ICC has prepared
change, at least five business days prior to the date Number SR–ISE–2018–57 and should be summaries, set forth in sections (A), (B),
of filing of the proposed rule change, or such submitted on or before July 24, 2018.
shorter time as designated by the Commission. The and (C) below, of the most significant
Exchange has satisfied this pre-filing requirement. For the Commission, by the Division of aspects of these statements.
11 17 CFR 240.19b–4(f)(6)(iii). Trading and Markets, pursuant to delegated
sradovich on DSK3GMQ082PROD with NOTICES
12 See Securities Exchange Act Release No. 61061 authority.15 (A) Clearing Agency’s Statement of the
(November 24, 2009), 74 FR 62857 (December 1, Eduardo A. Aleman,
Purpose of, and Statutory Basis for, the
2009) (SR–NYSEArca–2009–44). Proposed Rule Change, Security-Based
13 For purposes only of waiving the operative Assistant Secretary.
Swap Submission, or Advance Notice
delay for this proposal, the Commission has [FR Doc. 2018–14292 Filed 7–2–18; 8:45 am]
considered the proposed rule’s impact on
BILLING CODE 8011–01–P
(a) Purpose
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). The purpose of the proposed rule
14 15 U.S.C. 78s(b)(2)(B). 15 17 CFR 200.30–3(a)(12). change is to adopt rules that will
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![31246 Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices
Commission, 100 F Street NE, SECURITIES AND EXCHANGE Section 19(b)(2) of the Act 9 provides
Washington, DC 20549–1090. COMMISSION that, after initiating disapproval
proceedings, the Commission shall issue
All submissions should refer to File [Release No. 34–83548; File No. SR–
an order approving or disapproving the
Number SR–ICC–2018–007. This file CboeBZX–2018–001]
proposed rule change not later than 180
number should be included on the days after the date of publication of
Self-Regulatory Organizations; Cboe
subject line if email is used. To help the notice of filing of the proposed rule
BZX Exchange, Inc.; Notice of
Commission process and review your Designation of a Longer Period for change. The Commission may extend
comments more efficiently, please use Commission Action on Proceedings To the period for issuing an order
only one method. The Commission will Determine Whether To Approve or approving or disapproving the proposed
post all comments on the Commission’s Disapprove a Proposed Rule Change rule change, however, by not more than
internet website (http://www.sec.gov/ To List and Trade the Shares of the 60 days if the Commission determines
rules/sro.shtml). Copies of the GraniteShares Bitcoin ETF and the that a longer period is appropriate and
submission, all subsequent GraniteShares Short Bitcoin ETF publishes the reasons for such
amendments, all written statements Under BZX Rule 14.11(f)(4), Trust determination. The proposed rule
with respect to the proposed rule Issued Receipts change was published for notice and
change, security-based swap comment in the Federal Register on
June 28, 2018. January 18, 2018. July 17, 2018, is 180
submission, or advance notice that are
On January 5, 2018, Cboe BZX days from that date, and September 15,
filed with the Commission, and all
Exchange, Inc. (‘‘BZX’’) filed with the 2018, is 240 days from that date.
written communications relating to the
Securities and Exchange Commission The Commission finds it appropriate
proposed rule change, security-based (‘‘Commission’’), pursuant to Section
swap submission, or advance notice to designate a longer period within
19(b)(1) of the Securities Exchange Act which to issue an order approving or
between the Commission and any of 1934 (‘‘Act’’) 1 and Rule 19b–4 disapproving the proposed rule change
person, other than those that may be thereunder,2 a proposed rule change to so that it has sufficient time to consider
withheld from the public in accordance list and trade the shares of the this proposed rule change. Accordingly,
with the provisions of 5 U.S.C. 552, will GraniteShares Bitcoin ETF and the the Commission, pursuant to Section
be available for website viewing and GraniteShares Short Bitcoin ETF under 19(b)(2) of the Act,10 designates
printing in the Commission’s Public BZX Rule 14.11(f)(4). The proposed rule September 15, 2018, as the date by
Reference Room, 100 F Street NE, change was published for comment in which the Commission shall either
Washington, DC 20549, on official the Federal Register on January 18, approve or disapprove the proposed
business days between the hours of 2018.3 On February 22, 2018, pursuant rule change (File No. SR–CboeBZX–
10:00 a.m. and 3:00 p.m. Copies of such to Section 19(b)(2) of the Act,4 the 2018–001).
filings will also be available for Commission designated a longer period
within which to approve the proposed For the Commission, by the Division of
inspection and copying at the principal Trading and Markets, pursuant to delegated
office of ICE Clear Credit and on ICE rule change, disapprove the proposed authority.11
Clear Credit’s website at https:// rule change, or institute proceedings to
Eduardo A. Aleman,
www.theice.com/clear-credit/regulation. determine whether to disapprove the
Assistant Secretary.
proposed rule change.5 On April 5,
All comments received will be posted 2018, the Commission instituted [FR Doc. 2018–14302 Filed 7–2–18; 8:45 am]
without change. Persons submitting proceedings under BILLING CODE 8011–01–P
comments are cautioned that we do not Section 19(b)(2)(B) of the Act 6 to
redact or edit personal identifying determine whether to approve or
information from comment submissions. disapprove the proposed rule change.7 SMALL BUSINESS ADMINISTRATION
You should submit only information The Commission has received eight
that you wish to make available comments on the proposed rule Interest Rates
publicly. All submissions should refer change.8 The Small Business Administration
to File Number SR–ICC–2018–007 and publishes an interest rate called the
1 15
U.S.C.78s(b)(1).
should be submitted on or before July optional ‘‘peg’’ rate (13 CFR 120.214) on
2 17
CFR 240.19b 4.
24, 2018. 3 See Securities Exchange Act Release No. 82484
a quarterly basis. This rate is a weighted
For the Commission, by the Division of (Jan. 11, 2018), 83 FR 2704 (Jan. 18, 2018). average cost of money to the
Trading and Markets, pursuant to delegated 4 15 U.S.C. 78s(b)(2). government for maturities similar to the
authority.10
5 See Securities Exchange Act Release No. 82759 average SBA direct loan. This rate may
(Feb. 22, 2018), 83 FR 8719 (Feb. 28, 2018). be used as a base rate for guaranteed
Eduardo A. Aleman, 6 15 U.S.C. 78s(b)(2)(B).
fluctuating interest rate SBA loans. This
Assistant Secretary. 7 See Securities Exchange Act Release No. 82995
rate will be 2.875 percent for the July–
[FR Doc. 2018–14299 Filed 7–2–18; 8:45 am] (Apr. 5, 2018), 83 FR 15425 (Apr. 10, 2018).
Specifically, the Commission instituted proceedings September quarter of FY 2018.
BILLING CODE 8011–01–P to allow for additional analysis of the proposed rule Pursuant to 13 CFR 120.921(b), the
change’s consistency with Section 6(b)(5) of the maximum legal interest rate for any
Act, which requires, among other things, that the third party lender’s commercial loan
rules of a national securities exchange be ‘‘designed
to prevent fraudulent and manipulative acts and
sradovich on DSK3GMQ082PROD with NOTICES
practices, to promote just and equitable principles Hruska, Managing Director, and Trevor Wagener,
of trade,’’ and ‘‘to protect investors and the public Consultant, NERA Economic Consulting (May 18,
interest.’’ See id. at 15426 (citing 15 U.S.C. 2018). All comments on the proposed rule change
78f(b)(5)). are available on the Commission’s website at:
8 See Letters from Anita Desai (Apr. 6, 2018); Ed https://www.sec.gov/comments/sr-cboebzx-2018-
Kaleda (Apr. 6, 2018); Don Krohn (Apr. 7, 2018); 001/cboebzx2018001.htm.
9 15 U.S.C. 78s(b)(2).
Adam Malkin (Apr. 8, 2018); Shravan Kumar (Apr.
10 Id.
11, 2018); David Barnwell (Apr. 12, 2018); Louise
10 17 CFR 200.30–3(a)(12). Fitzgerald (Apr. 18, 2018); and Sharon Brown- 11 17 CFR 200.30–3(a)(57).
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Document Created: 2018-07-02 23:56:07
Document Modified: 2018-07-02 23:56:07
| 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 | 83 FR 31244 |
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