Self-Regulatory Organizations; ICE Clear Credit LLC; Order Granting Accelerated Approval of Proposed Rule Change to Membership Qualifications, 27529-27530 [2012-11244]

Download as PDF Federal Register / Vol. 77, No. 91 / Thursday, May 10, 2012 / Notices the Commission summarily may temporarily suspend a proposed rule change changing a TAF rate filed pursuant to Section 19(b)(3)(A) of the Act within 60 days of filing ‘‘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].’’ 16 As noted above, FINRA anticipates filing proposed changes to TAF rates (either to increase or to decrease a rate) only when necessary to account for changes in trading volume with the goal of making the TAF revenue-neutral for FINRA (i.e., FINRA aims to receive a substantially similar amount in revenue from the TAF from year to year). The effective date of the proposed rule change will be July 1, 2012. FINRA will announce the effective date of the proposed rule change in a Regulatory Notice. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(5) of the Act,17 which requires, among other things, that FINRA rules provide for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system that FINRA operates or controls. Because of the recent decrease in trading volumes in the equity markets described above, FINRA believes that the proposed rate change to the TAF is now necessary to ensure that FINRA can continue to maintain a robust regulatory program and meet its regulatory obligations effectively while attempting to remain revenue neutral. B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. mstockstill on DSK4VPTVN1PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change 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 (i) 16 15 17 15 U.S.C. 78s–3(b)(3)(C) [sic]. U.S.C. 78o–3(b)(5). VerDate Mar<15>2010 17:18 May 09, 2012 Jkt 226001 as the Commission may designate up to 90 days of such date 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 is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–FINRA–2012–023 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–FINRA–2012–023. 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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing will also be available for inspection and copying at principal office of FINRA. All comments received will be posted without change; the Commission does not edit personal PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 27529 identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR–FINRA– 2012–023 and should be submitted on or before May 31, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–11246 Filed 5–9–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66922; File No. SR–ICC– 2012–05] Self-Regulatory Organizations; ICE Clear Credit LLC; Order Granting Accelerated Approval of Proposed Rule Change to Membership Qualifications May 4, 2012. I. Introduction On April 3, 2012, ICE Clear Credit LLC (‘‘ICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) proposed rule change SR–ICC–2012–05 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal Register on April 12, 2012.3 The Commission received no comment letters regarding the proposal. For the reasons discussed below, the Commission is granting approval of the proposed rule change on an accelerated basis. II. Description The purpose of proposed rule change is to revise Rule 201(b)(ii) to incorporate the Commodity Futures Trading Commission (‘‘CFTC’’) mandated $50,000,000 minimum adjusted net capital requirement for all ICC Clearing Participants. For a Participant that is not a Futures Commission Merchant (‘‘FCM’’) or a Broker-Dealer, there is no standard equivalent to ‘‘adjusted net capital’’ which can be utilized across all 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 34–66766 (April 6, 2012), 77 FR 22019 (April 12, 2012). In its filing with the Commission, ICC included statements concerning the purpose of and basis for the proposed rule change. The text of these statements is incorporated into the discussion of the proposed rule change in Section II below. 1 15 E:\FR\FM\10MYN1.SGM 10MYN1 27530 Federal Register / Vol. 77, No. 91 / Thursday, May 10, 2012 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES types of Clearing Participant entities. Therefore, Rule 201(b)(ii)(C) places the burden on the Clearing Participant to demonstrate that its capital exceeds the capital requirement that would be applicable to it if it were an FCM, as determined pursuant to a methodology acceptable to ICC. In addition, in order to promote compliance with the capital adequacy requirements, Rule 201(b)(i) is amended to provide that a Clearing Participant must be regulated for capital adequacy by a competent authority such as the CFTC, SEC, Federal Reserve Board, Office of the Comptroller of the Currency, U.K. Financial Services Authority, or any other regulatory body ICC designates from time to time for this purpose, or is an affiliate of an entity that satisfies the capital adequacy regulatory requirement and is subject to consolidated holding company group supervision. Further, ICC is revising Rule 209 (Risk-Based Capital Requirement) to provide that if at any time and for so long as a Clearing Participant has a required contribution to the ICC General Guaranty Fund that exceeds 25% of its ‘‘excess net capital,’’ ICC may (in addition to imposing the trading activity limitations provided for in ICC Rule 203(b)) require such Clearing Participant to prepay and maintain with ICE Clear Credit an amount up to the Clearing Participant’s assessment obligation. ICC Rule 102, the definitional section of the Rules, has been amended to define ‘‘excess net capital’’ as the amount reported on Form 1–FR–FCM or FOCUS Report or as otherwise reported to the CFTC under CFTC Rule 1.12. For a Participant that is not an FCM or a Broker-Dealer, there is no standard equivalent to ‘‘excess net capital’’ which can be utilized across all types of Clearing Participant entities. Therefore, Rule 102 places the burden on the Clearing Participant to demonstrate that its capital exceeds the capital requirement that would be applicable to it if it were an FCM, as determined pursuant to a methodology acceptable to ICC. ICC believes that its membership qualification changes are in compliance with CFTC Regulations 39.12(a)(2)(ii) and 39.12(a)(2)(iii). III. Discussion Section 19(b)(2)(B) of the Act 4 directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the 4 15 U.S.C. 78s(b)(2)(B). VerDate Mar<15>2010 17:18 May 09, 2012 Jkt 226001 rules and regulations thereunder applicable to such organization. In particular, Section 17A(b)(3)(F) of the Act 5 requires that the rules of the 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. The proposed change would allow ICC to expand the base of potential clearing members by lowering the net capital threshold for membership, thereby promoting the prompt and accurate clearance and settlement of securities transactions, and derivative agreements, contracts, and transactions. Further, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,6 for approving the proposed rule change prior to the 30th day after the date of publication of notice in the Federal Register because as a registered DCO ICC is required to comply with the new CFTC regulations 39.12(a)(2)(ii) and 39.12(a)(2)(iii) by the time they become effective on May 7, 2012. IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (SR–ICC–2012– 05) is approved on an accelerated basis.8 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–11244 Filed 5–9–12; 8:45 am] BILLING CODE 8011–01–P 5 15 U.S.C. 78q–1(b)(3)(F). U.S.C. 78s(b)(2). 7 15 U.S.C. 78s(b)(2). 8 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 9 17 CFR 200.30–3(a)(12). 6 15 PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66914; File No. SR–CME– 2012–16] Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Amend Rules Regarding CDS Clearing Member Obligations and Qualifications May 3, 2012. 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 April 23, 2012, Chicago Mercantile Exchange Inc. (‘‘CME’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change described in Items I and II, below, which items have been prepared substantially by CME. The Commission is publishing this Notice and Order to solicit comments on the proposed rule change from interested persons and to approve the proposed rule change on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CME proposes to amend certain of its rules to comply with pending revisions to the CFTC Regulations. The text of the proposed rule change is available at the CME’s Web site at https:// www.cmegroup.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The self-regulatory organization 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 CME is registered as a derivatives clearing organization with the Commodity Futures Trading Commission (’’CFTC’’) and operates a 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\10MYN1.SGM 10MYN1

Agencies

[Federal Register Volume 77, Number 91 (Thursday, May 10, 2012)]
[Notices]
[Pages 27529-27530]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11244]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66922; File No. SR-ICC-2012-05]


Self-Regulatory Organizations; ICE Clear Credit LLC; Order 
Granting Accelerated Approval of Proposed Rule Change to Membership 
Qualifications

May 4, 2012.

I. Introduction

    On April 3, 2012, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') proposed rule 
change SR-ICC-2012-05 pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder.\2\ The 
proposed rule change was published for comment in the Federal Register 
on April 12, 2012.\3\ The Commission received no comment letters 
regarding the proposal. For the reasons discussed below, the Commission 
is granting approval of the proposed rule change on an accelerated 
basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-66766 (April 6, 
2012), 77 FR 22019 (April 12, 2012). In its filing with the 
Commission, ICC included statements concerning the purpose of and 
basis for the proposed rule change. The text of these statements is 
incorporated into the discussion of the proposed rule change in 
Section II below.
---------------------------------------------------------------------------

II. Description

    The purpose of proposed rule change is to revise Rule 201(b)(ii) to 
incorporate the Commodity Futures Trading Commission (``CFTC'') 
mandated $50,000,000 minimum adjusted net capital requirement for all 
ICC Clearing Participants. For a Participant that is not a Futures 
Commission Merchant (``FCM'') or a Broker-Dealer, there is no standard 
equivalent to ``adjusted net capital'' which can be utilized across all

[[Page 27530]]

types of Clearing Participant entities. Therefore, Rule 201(b)(ii)(C) 
places the burden on the Clearing Participant to demonstrate that its 
capital exceeds the capital requirement that would be applicable to it 
if it were an FCM, as determined pursuant to a methodology acceptable 
to ICC.
    In addition, in order to promote compliance with the capital 
adequacy requirements, Rule 201(b)(i) is amended to provide that a 
Clearing Participant must be regulated for capital adequacy by a 
competent authority such as the CFTC, SEC, Federal Reserve Board, 
Office of the Comptroller of the Currency, U.K. Financial Services 
Authority, or any other regulatory body ICC designates from time to 
time for this purpose, or is an affiliate of an entity that satisfies 
the capital adequacy regulatory requirement and is subject to 
consolidated holding company group supervision.
    Further, ICC is revising Rule 209 (Risk-Based Capital Requirement) 
to provide that if at any time and for so long as a Clearing 
Participant has a required contribution to the ICC General Guaranty 
Fund that exceeds 25% of its ``excess net capital,'' ICC may (in 
addition to imposing the trading activity limitations provided for in 
ICC Rule 203(b)) require such Clearing Participant to prepay and 
maintain with ICE Clear Credit an amount up to the Clearing 
Participant's assessment obligation. ICC Rule 102, the definitional 
section of the Rules, has been amended to define ``excess net capital'' 
as the amount reported on Form 1-FR-FCM or FOCUS Report or as otherwise 
reported to the CFTC under CFTC Rule 1.12. For a Participant that is 
not an FCM or a Broker-Dealer, there is no standard equivalent to 
``excess net capital'' which can be utilized across all types of 
Clearing Participant entities. Therefore, Rule 102 places the burden on 
the Clearing Participant to demonstrate that its capital exceeds the 
capital requirement that would be applicable to it if it were an FCM, 
as determined pursuant to a methodology acceptable to ICC.
    ICC believes that its membership qualification changes are in 
compliance with CFTC Regulations 39.12(a)(2)(ii) and 39.12(a)(2)(iii).

III. Discussion

    Section 19(b)(2)(B) of the Act \4\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if it 
finds that such proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to such organization. In particular, Section 17A(b)(3)(F) of 
the Act \5\ requires that the rules of the 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(2)(B).
    \5\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The proposed change would allow ICC to expand the base of potential 
clearing members by lowering the net capital threshold for membership, 
thereby promoting the prompt and accurate clearance and settlement of 
securities transactions, and derivative agreements, contracts, and 
transactions.
    Further, the Commission finds good cause, pursuant to Section 
19(b)(2) of the Act,\6\ for approving the proposed rule change prior to 
the 30th day after the date of publication of notice in the Federal 
Register because as a registered DCO ICC is required to comply with the 
new CFTC regulations 39.12(a)(2)(ii) and 39.12(a)(2)(iii) by the time 
they become effective on May 7, 2012.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act and the 
rules and regulations thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-ICC-2012-05) is approved on 
an accelerated basis.\8\
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    \7\ 15 U.S.C. 78s(b)(2).
    \8\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-11244 Filed 5-9-12; 8:45 am]
BILLING CODE 8011-01-P
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