Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change Related to ICC's Authority To Use Guaranty Fund and House Initial Margin as an Internal Liquidity Resource, 40796-40798 [2014-16365]

Download as PDF 40796 Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Notices rm/doc-collections/reg-guides/ contactus.html. Suggestions will be considered in future updates and enhancements of the regulatory guide. Dated at Rockville, Maryland, this 8th day of July, 2014. For the Nuclear Regulatory Commission. Harriet Karagiannis, Acting Chief, Regulatory Guide Development Branch, Division of Engineering, Office of Nuclear Regulatory Research. [FR Doc. 2014–16297 Filed 7–11–14; 8:45 am] BILLING CODE 7590–01–P invited on: (a) Whether the proposed collection of information is necessary for the proper performance of OSC functions, including whether the information will have practical utility; (b) the accuracy of OSC’s estimate of the burden of the proposed collections of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. OFFICE OF SPECIAL COUNSEL DATES: Agency Information Collection Activities, Request for Comment FOR FURTHER INFORMATION CONTACT: Comments should be received by August 16, 2014. Office of Special Counsel. First notice. AGENCY: ACTION: In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the U.S. Office of Special Counsel (OSC), plans to request approval from the Office of Management and Budget (OMB) for use of an expanded version of an approved information collection consisting of an electronic customer survey form. OSC is required by law to conduct an annual survey of those who seek its assistance. The information collection is used to carry out that mandate. However, the additional questions for the survey cover a category of complaint, whistleblower disclosures, whose inclusion in the survey is not statutorily required, but rather is being done voluntarily by our agency. The 6 specific questions to be added are: ‘‘Did the agency against which you filed the disclosure inform you about your right to make whistleblower disclosures, and the channels for making such disclosures?’’ ‘‘Did you obtain the action that you wanted from OSC?’’ ‘‘What reason did OSC give for closing your disclosure matter?’’ (Check all that apply.)’’ ‘‘Did you agree with the reason OSC gave for closing your disclosure matter?’’ ‘‘If you answered ‘‘no’’ to the question in number 4 above, could you please elaborate? [below which is a free field text box].’’ ‘‘How would you rate the service provided by OSC in each of the following areas?’’ The current OMB approval for this collection of information [without the new questions for the Disclosure Unit] does not expire until 10/31/2015. Current and former Federal employees, employee representatives, other Federal agencies, state and local government employees, and the general public are invited to comment on this information collection. Comments are mstockstill on DSK4VPTVN1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 19:25 Jul 11, 2014 Jkt 232001 Karl Kammann, Director of Finance, at 1730 M St. NW., Suite 300, Washington, DC 20036, or by facsimile at (202) 254– 3711. OSC is an independent agency responsible for, among other things, (1) investigation of allegations of prohibited personnel practices defined by law at 5 U.S.C. 2302(b), protection of whistleblowers, and certain other illegal employment practices under titles 5 and 38 of the U.S. Code, affecting current or former Federal employees or applicants for employment, and covered state and local government employees; and (2) the interpretation and enforcement of Hatch Act provisions on political activity in chapters 15 and 73 of title 5 of the U.S. Code, and implementing regulations concerning the controlling of paperwork burdens on the public, found at 5 CFR part 1320. Title of Collection: Office of Special Counsel (OSC) Annual Survey; OMB Control Number 3255–0003. OSC is required to conduct an annual survey of individuals who seek its assistance. Section 13 of 103 (1994), codified at 5 U.S.C. 1212 note, states, in part: ‘‘[T]he survey shall—(1) Determine if the individual seeking assistance was fully apprised of their rights; (2) determine whether the individual was successful either at the Office of Special Counsel or the Merit Systems Protection Board; and (3) determine if the individual, whether successful or not, was satisfied with the treatment received from the Office of Special Counsel.’’ The same section also provides that survey results are to be published in OSC’s annual report to Congress. Copies of prior years’ annual reports are available on OSC’s Web site, at https://www.osc.gov/RR_ AnnualReportsToCongress.htm or by calling OSC at (202) 254–3600. SUPPLEMENTARY INFORMATION: PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 The survey form for the collection of information is available for review by calling OSC at (202) 254–3600. Affected Public: Current and former Federal employees, applicants for Federal employment, state and local government employees, and their representatives, and the general public. Respondent’s Obligation: Voluntary. Estimated Annual Number of Survey Form Respondents: 415. Frequency of Survey Form Use: Annual. Estimated Average Amount of Time for a Person to Respond to Survey: 12 minutes. Estimated Annual Survey Burden: 141 hours. This survey form is used to survey current and former Federal employees and applicants for Federal employment who have submitted allegations of possible prohibited personnel practices or other prohibited activity for investigation and possible prosecution by OSC, and whose matter has been closed or otherwise resolved during the prior fiscal year, on their experience at OSC. Specifically, the survey asks questions relating to whether the respondent was: (1) Apprised of his or her rights; (2) successful at the OSC or at the Merit Systems Protection Board; and (3) satisfied with the treatment received at the OSC. Dated: July 8, 2014. Carolyn N. Lerner, Special Counsel. [FR Doc. 2014–16411 Filed 7–11–14; 8:45 am] BILLING CODE P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72556; File No. SR–ICC– 2014–08] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change Related to ICC’s Authority To Use Guaranty Fund and House Initial Margin as an Internal Liquidity Resource July 8, 2014. 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 June 24, 2014, ICE Clear Credit LLC (‘‘ICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared primarily by ICC. 1 15 2 17 E:\FR\FM\14JYN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 14JYN1 Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Notices The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The principal purpose of the proposed rule change is to formalize ICC’s Liquidity Risk Management Framework and to clarify ICC’s authority to use, and to provide details as to how ICC would use, Guaranty Fund and House Initial Margin as an internal liquidity resource. mstockstill on DSK4VPTVN1PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, ICC included statements concerning the purpose of 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 IV below. ICC has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of these statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change ICC proposes to formalize a comprehensive Liquidity Risk Management Framework, including its comprehensive liquidity monitoring program, that describes ICC’s liquidity resources as well as the methodology for testing the sufficiency of these resources. In addition, ICC proposes changes to ICC Clearing Rules 402 and 802 to clarify ICC’s authority to use, and provide details as to how ICC would use, Guaranty Fund and House Initial Margin as an internal liquidity resource. ICC’s Liquidity Risk Management Framework includes a discussion of all resources available to ICC and the order ICC would use these resources if necessary. Additionally, the Liquidity Risk Management Framework contains details about ICC’s comprehensive liquidity testing. Under the Liquidity Risk Management Framework, ICC will use all available resources to meet its liquidity needs when managing one or more Clearing Participant defaults. The liquidity waterfall defines the order, to the extent practicable, that ICC would use its available liquidity resources (‘‘ALR’’) to meet its currency-specific cash payment obligations. ALR consist of the available deposits currently in cash of the VerDate Mar<15>2010 19:25 Jul 11, 2014 Jkt 232001 required denomination, and the cash equivalent of the available deposits in collateral types that ICC can convert to cash, in the required currency of denomination, rapidly enough to meet the relevant, currency-specific payout deadlines. The liquidity waterfall classifies ALR on any given day into four levels. Level One includes the House Initial Margin and Guaranty Fund cash deposits of the defaulting Clearing Participant. Level Two includes Guaranty Fund cash deposits of: (i) ICC; and (ii) non-defaulting Clearing Participants. Level Three includes House Initial Margin cash deposits of the non-defaulting Clearing Participants. Level Four includes ICC’s committed credit facility to access additional cash, and contemplates the establishment of other committed facilities to convert U.S. Treasuries to USD cash. The Liquidity Risk Management Framework also describes the methodology used by ICC to estimate its minimum day-of-default ALR based on its liquidity risk management model. ICC’s Liquidity Risk Management Framework includes two kinds of testing: A historical analysis based on back testing considerations, and a forward-looking analysis based on stress testing. In the historical analysis based on back testing considerations, ICC uses the currency-specific historical profit/ loss associated with cleared portfolios to explore the level of liquid resources required under historical market conditions. In the forward-looking analysis based on stress testing, ICC explores the required level of liquidity resources in forward-looking market conditions by applying a number of liquidity stress scenarios to determine the currency-specific hypothetical profits or losses for each Clearing Participant. ICC’s Liquidity Risk Management Framework provides for the governance of ICC’s liquidity testing, specifically the performance frequency of various testing and the subsequent analysis and reporting of the results. The Liquidity Risk Management Framework details the required governance for amending the liquidity program as well as the procedure for additional risk measures to be taken, as necessary, based upon testing results. Currently, under the ICC Rules, ICC has broad authority to use and invest cash, securities, and other property held in the Guaranty Fund or as Initial Margin. In order to provide clarity and transparency in the ICC Rules regarding the use of House Initial Margin and Guaranty Fund assets as a liquidity PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 40797 resource, ICC is proposing to adopt ICC Rules 402(j) and 802(f)(iv). New Rule 402(j) relates to the use of a Clearing Participant House Initial Margin as a liquidity resource. Rule 402(j) clarifies that ICC may generally, in connection with a Clearing Participant default, use any Clearing Participant’s cash, securities or other property (whether or not such Clearing Participant is in default) constituting Initial Margin for its House account from time to time to support liquidity arrangements (including borrowing, repurchase transactions, exchange of Initial Margin for other assets or similar transactions, under which equivalent value is provided for such Initial Margin and such equivalent value will be held as Initial Margin and used or applied by ICC solely for the purposes for which Initial Margin in the House Account may be used) relating to payment obligations of ICC, in a manner consistent with ICC’s liquidity policies and applicable law. ICC may, in connection with a Participant default, (i) exchange House Initial Margin held in the form of cash for securities of equivalent value and/or (ii) exchange House Initial Margin held in the form of cash in one currency for cash of equivalent value in a different currency. New Rule 802(f)(iv) provides additional clarity and transparency regarding ICC’s use of Guaranty Fund assets as a liquidity resource. ICC currently has broad rights to use Guaranty Fund assets under Chapter 8 of the ICC Rulebook (specifically Rules 801 & 802). Proposed Rule 802(f)(iv) provides transparency related to the exercise of such authority by the clearing house. Rule 802(f)(iv) will provide clarity and transparency regarding ICC’s authority to pledge assets in the guaranty fund to secure loans made to the clearing house, including for purposes of default management or to transfer such assets to counterparties under repurchase transactions or similar transactions on terms and conditions deemed necessary or advisable by ICC (including the collateralization thereof) in its sole discretion. Under Rule 802(f)(iv), the proceeds of such borrowings could be used for the same purposes for which guaranty fund assets are authorized to be used under current ICC Rules. Proposed Rule 802(f)(iv) provides that ICC may in connection with a Clearing Participant default (A) exchange cash held in the Guaranty Fund for securities of equivalent value and/or (B) exchange cash in one currency for cash of equivalent value in a different currency, in each case on such terms (including, if applicable, the relevant duration of E:\FR\FM\14JYN1.SGM 14JYN1 40798 Federal Register / Vol. 79, No. 134 / Monday, July 14, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES any such exchange) as ICC may determine in accordance with its liquidity policies and procedures. Section 17A(b)(3)(F) of the Act 3 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. 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. ICC’s Liquidity Risk Management Framework describes ICC’s liquidity resources as well as the methodology for testing the sufficiency of these resources. The proposed changes to the ICC Rules clarify ICC’s authority to use, and provide details as to how ICC would use, Guaranty Fund and House Initial Margin as an internal liquidity resource. ICC believes the proposed revisions provide clarity and transparency in the ICC Rules, consistent with the ICC Liquidity Risk Management Framework regarding the use of House Initial Margin and Guaranty Fund assets as a liquidity resource. ICC believes clarity and transparency in its Rules is of value to the market in order to provide a comprehensive understanding of ICC’s available liquidity resources and default management procedures related to liquidity. In addition, if needed, the available liquidity will allow ICC to meet is liquidity needs when managing one or more Clearing Participant defaults. As such, the proposed rule 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) 5 of the Act. B. Self-Regulatory Organization’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 clarification of ICC’s authority to use Guaranty Fund and House Initial Margin as an internal liquidity resource 3 15 U.S.C. 78q–1(b)(3)(F). 4 Id. 5 Id. VerDate Mar<15>2010 19:25 Jul 11, 2014 Jkt 232001 applies 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. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change 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 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 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 rule-comments@ sec.gov. Please include File Number SR– ICC–2014–08 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–2014–08. 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 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 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 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/notices/ Notices.shtml?regulatoryFilings. 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–2014–08 and should be submitted on or before August 4, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–16365 Filed 7–11–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72561; File No. SR–MIAX– 2014–35] Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule July 8, 2014. Pursuant to the provisions of 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 June 25, 2014, Miami International Securities Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\14JYN1.SGM 14JYN1

Agencies

[Federal Register Volume 79, Number 134 (Monday, July 14, 2014)]
[Notices]
[Pages 40796-40798]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-16365]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72556; File No. SR-ICC-2014-08]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing of Proposed Rule Change Related to ICC's Authority To Use 
Guaranty Fund and House Initial Margin as an Internal Liquidity 
Resource

July 8, 2014.
    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 June 24, 2014, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared primarily by ICC.

[[Page 40797]]

The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The principal purpose of the proposed rule change is to formalize 
ICC's Liquidity Risk Management Framework and to clarify ICC's 
authority to use, and to provide details as to how ICC would use, 
Guaranty Fund and House Initial Margin as an internal liquidity 
resource.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, ICC included statements 
concerning the purpose of 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 IV below. ICC has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of these statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    ICC proposes to formalize a comprehensive Liquidity Risk Management 
Framework, including its comprehensive liquidity monitoring program, 
that describes ICC's liquidity resources as well as the methodology for 
testing the sufficiency of these resources. In addition, ICC proposes 
changes to ICC Clearing Rules 402 and 802 to clarify ICC's authority to 
use, and provide details as to how ICC would use, Guaranty Fund and 
House Initial Margin as an internal liquidity resource.
    ICC's Liquidity Risk Management Framework includes a discussion of 
all resources available to ICC and the order ICC would use these 
resources if necessary. Additionally, the Liquidity Risk Management 
Framework contains details about ICC's comprehensive liquidity testing.
    Under the Liquidity Risk Management Framework, ICC will use all 
available resources to meet its liquidity needs when managing one or 
more Clearing Participant defaults. The liquidity waterfall defines the 
order, to the extent practicable, that ICC would use its available 
liquidity resources (``ALR'') to meet its currency-specific cash 
payment obligations. ALR consist of the available deposits currently in 
cash of the required denomination, and the cash equivalent of the 
available deposits in collateral types that ICC can convert to cash, in 
the required currency of denomination, rapidly enough to meet the 
relevant, currency-specific payout deadlines. The liquidity waterfall 
classifies ALR on any given day into four levels. Level One includes 
the House Initial Margin and Guaranty Fund cash deposits of the 
defaulting Clearing Participant. Level Two includes Guaranty Fund cash 
deposits of: (i) ICC; and (ii) non-defaulting Clearing Participants. 
Level Three includes House Initial Margin cash deposits of the non-
defaulting Clearing Participants. Level Four includes ICC's committed 
credit facility to access additional cash, and contemplates the 
establishment of other committed facilities to convert U.S. Treasuries 
to USD cash. The Liquidity Risk Management Framework also describes the 
methodology used by ICC to estimate its minimum day-of-default ALR 
based on its liquidity risk management model.
    ICC's Liquidity Risk Management Framework includes two kinds of 
testing: A historical analysis based on back testing considerations, 
and a forward-looking analysis based on stress testing. In the 
historical analysis based on back testing considerations, ICC uses the 
currency-specific historical profit/loss associated with cleared 
portfolios to explore the level of liquid resources required under 
historical market conditions. In the forward-looking analysis based on 
stress testing, ICC explores the required level of liquidity resources 
in forward-looking market conditions by applying a number of liquidity 
stress scenarios to determine the currency-specific hypothetical 
profits or losses for each Clearing Participant.
    ICC's Liquidity Risk Management Framework provides for the 
governance of ICC's liquidity testing, specifically the performance 
frequency of various testing and the subsequent analysis and reporting 
of the results. The Liquidity Risk Management Framework details the 
required governance for amending the liquidity program as well as the 
procedure for additional risk measures to be taken, as necessary, based 
upon testing results.
    Currently, under the ICC Rules, ICC has broad authority to use and 
invest cash, securities, and other property held in the Guaranty Fund 
or as Initial Margin. In order to provide clarity and transparency in 
the ICC Rules regarding the use of House Initial Margin and Guaranty 
Fund assets as a liquidity resource, ICC is proposing to adopt ICC 
Rules 402(j) and 802(f)(iv).
    New Rule 402(j) relates to the use of a Clearing Participant House 
Initial Margin as a liquidity resource. Rule 402(j) clarifies that ICC 
may generally, in connection with a Clearing Participant default, use 
any Clearing Participant's cash, securities or other property (whether 
or not such Clearing Participant is in default) constituting Initial 
Margin for its House account from time to time to support liquidity 
arrangements (including borrowing, repurchase transactions, exchange of 
Initial Margin for other assets or similar transactions, under which 
equivalent value is provided for such Initial Margin and such 
equivalent value will be held as Initial Margin and used or applied by 
ICC solely for the purposes for which Initial Margin in the House 
Account may be used) relating to payment obligations of ICC, in a 
manner consistent with ICC's liquidity policies and applicable law. ICC 
may, in connection with a Participant default, (i) exchange House 
Initial Margin held in the form of cash for securities of equivalent 
value and/or (ii) exchange House Initial Margin held in the form of 
cash in one currency for cash of equivalent value in a different 
currency.
    New Rule 802(f)(iv) provides additional clarity and transparency 
regarding ICC's use of Guaranty Fund assets as a liquidity resource. 
ICC currently has broad rights to use Guaranty Fund assets under 
Chapter 8 of the ICC Rulebook (specifically Rules 801 & 802). Proposed 
Rule 802(f)(iv) provides transparency related to the exercise of such 
authority by the clearing house. Rule 802(f)(iv) will provide clarity 
and transparency regarding ICC's authority to pledge assets in the 
guaranty fund to secure loans made to the clearing house, including for 
purposes of default management or to transfer such assets to 
counterparties under repurchase transactions or similar transactions on 
terms and conditions deemed necessary or advisable by ICC (including 
the collateralization thereof) in its sole discretion. Under Rule 
802(f)(iv), the proceeds of such borrowings could be used for the same 
purposes for which guaranty fund assets are authorized to be used under 
current ICC Rules. Proposed Rule 802(f)(iv) provides that ICC may in 
connection with a Clearing Participant default (A) exchange cash held 
in the Guaranty Fund for securities of equivalent value and/or (B) 
exchange cash in one currency for cash of equivalent value in a 
different currency, in each case on such terms (including, if 
applicable, the relevant duration of

[[Page 40798]]

any such exchange) as ICC may determine in accordance with its 
liquidity policies and procedures.
    Section 17A(b)(3)(F) of the Act \3\ 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. 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. ICC's Liquidity Risk Management Framework describes ICC's 
liquidity resources as well as the methodology for testing the 
sufficiency of these resources. The proposed changes to the ICC Rules 
clarify ICC's authority to use, and provide details as to how ICC would 
use, Guaranty Fund and House Initial Margin as an internal liquidity 
resource. ICC believes the proposed revisions provide clarity and 
transparency in the ICC Rules, consistent with the ICC Liquidity Risk 
Management Framework regarding the use of House Initial Margin and 
Guaranty Fund assets as a liquidity resource. ICC believes clarity and 
transparency in its Rules is of value to the market in order to provide 
a comprehensive understanding of ICC's available liquidity resources 
and default management procedures related to liquidity. In addition, if 
needed, the available liquidity will allow ICC to meet is liquidity 
needs when managing one or more Clearing Participant defaults. As such, 
the proposed rule 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) \5\ of the Act.
---------------------------------------------------------------------------

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

B. Self-Regulatory Organization'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 clarification of 
ICC's authority to use Guaranty Fund and House Initial Margin as an 
internal liquidity resource applies 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. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change 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 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 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 rule-comments@sec.gov. Please include 
File Number SR-ICC-2014-08 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-2014-08. 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 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/notices/Notices.shtml?regulatoryFilings.
    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-2014-08 
and should be submitted on or before August 4, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-16365 Filed 7-11-14; 8:45 am]
BILLING CODE 8011-01-P
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