Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to EMIR Requirements, 62694-62698 [2014-24775]

Download as PDF 62694 Federal Register / Vol. 79, No. 202 / Monday, October 20, 2014 / Notices A proposed rule change filed under Rule 19b–4(f)(6) 9 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),10 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. NYSE MKT has asked the Commission to waive the 30-day operative delay so that the proposal may become operative on filing. The Commission believes that waiving the 30-day operative delay is consistent with the public interest and investor protection, as it removes references to a rule that has been deleted by NYSE MKT. This change will make NYSE MKT’s rules more accurate. Therefore, the Commission hereby waives the 30day operative delay and designates the proposal effective on filing.11 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change 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. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 12 of the Act to determine whether the proposed rule change should be approved or 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: • 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– NYSEMKT–2014–88 on the subject line. Paper Comments tkelley on DSK3SPTVN1PROD with NOTICES • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. 9 17 CFR 240.19b–4(f)(6). 10 17 CFR 240.19b–4(f)(6)(iii). 11 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 12 15 U.S.C. 78s(b)(2)(B). 16:28 Oct 17, 2014 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Kevin M. O’Neill, Deputy Secretary. The principal purpose of the proposed changes is to make certain further clarifications and amendments to the ICE Clear Europe Clearing Rules (‘‘Rules’’) and procedures (‘‘Procedures’’) in connection with requirements under the European Market Infrastructure Regulation (including regulations and implementing technical standards thereunder, ‘‘EMIR’’) 3 that will apply to ICE Clear Europe. ICE Clear Europe has previously filed with the Commission proposed changes to its Rules, Procedures and certain related policies relating to EMIR implementation and certain other matters (the ‘‘EMIR Rule Submissions’’), which have been approved by the Commission.4 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2014–24871 Filed 10–17–14; 8:45 am] BILLING CODE 8011–01–P Electronic Comments VerDate Sep<11>2014 All submissions should refer to File Number SR–NYSEMKT–2014–88. 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 filing also will be available for inspection and copying at the principal office of NYSE MKT. 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– NYSEMKT–2014–88 and should be submitted on or before November 10, 2014. Jkt 235001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73344; File No. SR–ICEEU– 2014–16] Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to EMIR Requirements October 14, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 on October 1, 2014, ICE Clear Europe Limited (‘‘ICE Clear Europe’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change described in Items I, II and III below, which Items have been prepared primarily by ICE Clear Europe. ICE Clear Europe filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act, and Rules 19b–4(f)(1) and (f)(4)(i) thereunder, so that the proposed rule change was effective upon filing with the Commission. 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 In its filing with the Commission, ICE Clear Europe 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. ICE Clear Europe has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of these statements. 3 Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories, as well as various implementing regulations and technical standards. 4 Securities Exchange Act Release No. 34–72755 (Aug. 4, 2014), 79 FR 46481 (Aug. 8, 2014) (SR– ICEEU–2014–09); Securities Exchange Act Release No. 34–72756 (Aug. 4, 2014) 79 FR 46479 (Aug. 8, 2014) (SR–ICEEU–2014–10); and Securities Exchange Act Release No. 34–72754 (Aug. 4, 2014) 79 FR 46481 (Aug. 8, 2014) (SR–ICEEU–2014–11). E:\FR\FM\20OCN1.SGM 20OCN1 Federal Register / Vol. 79, No. 202 / Monday, October 20, 2014 / Notices tkelley on DSK3SPTVN1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change (a) Purpose ICE Clear Europe submits additional proposed amendments to its Rules and Procedures in connection with its compliance with requirements under EMIR. The proposed amendments principally make certain clarifications to the Rule and Procedures amendments that were adopted pursuant to the EMIR Rule Submissions, as well as certain other clarifying and conforming changes discussed below. As described in more detail in the EMIR Rule Submissions, in order to comply with EMIR, ICE Clear Europe is adopting changes to the structure of customer accounts for cleared transactions to enhance segregation options for customers of Clearing Members. This includes the adoption of an individual client segregation framework for Non-FCM/BD Clearing Members as well as certain modifications relating to the existing, omnibus client segregation model for such Clearing Members. Specifically, the Rules adopted pursuant to the EMIR Rule Submissions establish two new types of individually segregated accounts, Individually Segregated Margin-flow Co-mingled Accounts and Individually Segregated Sponsored Accounts. The Rules also establish multiple new types of omnibus accounts, Segregated Customer Omnibus Accounts (separately for each product: FX, F&O and CDS) and Segregated TTFCA Customer Omnibus Accounts (separately for each product: FX, F&O and CDS) as well as Omnibus Margin-flow Co-mingled Accounts. These new individually segregated and omnibus accounts will be available only to Non-FCM/BD Clearing Members and their customers. For FCM/BD Clearing Members and their customers, individual client segregation is not being offered at this time, and the existing account types and segregation framework (which are required under applicable law) would be maintained. The proposed additional amendments described herein are intended to further implement these requirements, as well as make various other consolidating, conforming and clarifying changes and drafting improvements to the Rules and Procedures. ICE Clear Europe proposes to make amendments to Parts 1, 2, 3, 4, 5, 7, 8, 9, 11, 16, 17 and 19 and the Standard Terms of the Rules and to the CDS Procedures, Clearing Procedures, Finance Procedures, Delivery Procedures, FX Procedures, FX Auction VerDate Sep<11>2014 16:28 Oct 17, 2014 Jkt 235001 Procedures, F&O Auction Procedures, and OTC FX Product Guide.5 The proposed Rule and Procedure amendments are described in detail as follows. In Rules, the definition of ‘‘Applicable Law’’ has been revised to refer explicitly to certain U.S. laws and regulations, including the Commodity Exchange Act, the Exchange Act, CFTC and Commission regulations, and relevant insolvency laws. A new defined term for ‘‘Affected Customers’’ has also been added, in connection with the amendments to Rule 102(g) discussed below. Certain defined terms relating to customer accounts of FCM/BD Clearing Members with respect to futures and options business on non-U.S. markets, specifically ‘‘General Customer Account,’’ ‘‘Non-DCM/Swap’’ and ‘‘Non-DCM/Swap Customer’’ have been revised to clarify the appropriate use of such accounts for relevant transactions in accordance with the CEA and CFTC regulations. The defined term ‘‘Repository’’ has been revised to remove an incorrect requirement that the trade repository for EMIR reporting purposes be specified by the Clearing House. Corresponding changes have also been made in Rules 201(a)(v) and 1901(b)(ii), as well as a change reflecting that a Clearing Member or Sponsored Principal may have access to a Repository through means other than being a direct user of the Repository. Rule 102(g) has been revised, in light of requirements of the Bank of England and other regulators, to clarify the manner in which certain Clearing Members are required to offer the individual and omnibus client segregation models under EMIR to their customers. Under the revised rule, and consistent with EMIR, Clearing Members must offer a choice of individual or omnibus client segregation to those customers for which Applicable Laws (in the jurisdiction of establishment of the customer or that apply in the context of activity on a relevant trading platform) do not prevent or prohibit such an account being provided to the customer (such customers are referred to as ‘‘Affected Customers’’). For Clearing Members that are not able under Applicable Laws to offer such accounts to affected customers, the Clearing Member must offer, to the extent possible and practicable under Applicable Laws, to 5 Pursuant to a teleconference with ICE Clear Europe’s external counsel on October 14, 2014, staff in the Division of Trading and Markets has revised this sentence to clarify the scope of the Rules and Procedures being amended as part of the proposed rule change. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 62695 procure such an account for such customer from another Clearing Member (which may be an affiliate). Certain typographical corrections are made in Rules 102(o) and (v). Rule 102(r) has been revised to refer explicitly to ICE Clear Europe’s status under U.S. law as a registered clearing agency and derivatives clearing organization and to add references to other Applicable Laws in addition to certain specified EU and UK requirements. In addition, the final sentence of Rule 102(r), relating to certain potential conflicts of applicable laws, has been removed in connection with discussions with relevant regulators. A typographical correction is also made in Rule 104(d). In Rule 106(a)(ii), an incorrect reference to ‘‘U.S. Sponsored Principal’’ is changed to ‘‘Sponsored Principal’’. A drafting correction is also made in Rule 111(c). A new Rule 110(g) is added that clarifies that ICE Clear Europe may not, pursuant to its authority under existing Rule 110, extend the payment timing in respect of variation margin owed to any Clearing Member beyond the time immediately prior to the commencement of the daily payment cycle for the relevant currency for the next following business day. The amendment is intended to clarify that any extension of time for the Clearing House to make payments of variation margin under Rule 110 is subject to the requirements of CFTC Rule 39.14(b), which requires that a clearing organization must effect a settlement with each clearing member at least once each business day. Cross-references in Rule 202(b) and 208(a) have been corrected. A typographical correction is also made in Rule 202(c)(ii). The introductory language in Rule 302, which addresses mechanics for margin calls and payments, is revised to reflect that margin is to be settled on a net or gross basis depending on the particular type of account, as set forth in more detail in the subsections of Rule 302. In Rule 401(a)(ix), an unnecessary parenthetical is removed for clarity. A drafting clarification is also made in Rule 406(d)(v). Typographical errors are corrected in Rules 502(h) and 503(k). Certain clarifications are made in Rules 504(f) and 506(a)(v) to reflect the fact that under Rule 506(a)(iv), Rule 504(f) does not apply to the Sponsored Principal model. A cross-reference is also corrected in Rule 506(a)(i). In the introductory language to Part 9 of the Rules, and in Rule 906(a), a clarification is made that the relevant default rules and provision are intended E:\FR\FM\20OCN1.SGM 20OCN1 tkelley on DSK3SPTVN1PROD with NOTICES 62696 Federal Register / Vol. 79, No. 202 / Monday, October 20, 2014 / Notices to comply with all relevant Applicable Laws in addition to certain specified EU and UK requirements and to reference certain provisions of US law in addition to EU and UK laws. Rule 906(d) has been revised to clarify that new provisions that contemplate payment of a net sum directly to a Customer under certain circumstances do not apply to Customers of FCM/BD Clearing Members and in any event are subject to requirements of Applicable Law. The provisions of Rule 907(m) have been revised to be consistent with a parallel provision in Rule 904(r)(v). A typographical correction is made in Rule 908(i). In Rule 916, the text of the heading is corrected. Rule 1101(c) and 1102(b) are revised to clarify certain requirements with respect to the Guaranty Funds, in line with the description provided in the EMIR Rule Submissions. Rule 1101(c) is revised to provide that the applicable Guaranty Fund must satisfy, in addition to the specified requirement, such higher default parameters, if any, as may be required by Applicable Laws with respect to financial resource requirements. Amendments to Rule 1102(b) similarly clarify that Guaranty Fund contributions must be calculated in accordance with the requirements of other Applicable Laws in addition to EMIR. In addition, Rule 1103(a) is amended to correct a cross-reference. In Part 19 of the Rules relating to Sponsored Principals, Rule 1901(o) is revised to correct a reference to Rule 1901(b) and (d). A drafting clarification is also made in Rule 1903(d). As discussed in the EMIR Rule Submissions, ICE Clear Europe has not made its new individual and omnibus segregation models, including the Sponsored Principal model, available to FCM/BD Clearing Members or their customers. As a result, certain Rules and Procedures submitted with the EMIR Rule Submissions that referred to a potential U.S. Sponsored Principal model are by their terms not in effect, and could not have been put into effect absent a future rule change. ICE Clear Europe has nonetheless determined to remove such provisions from the Rules and Procedures as a matter of clarity and to avoid any potential confusion as to the availability of such a model. Specifically, ICE Clear Europe has removed Rule 1905 and replaced it with an express provision that FCM/BD Clearing Members will not be permitted to act as Sponsors of Individually Segregated Sponsored Accounts. Accordingly, customers of FCM/BD Clearing Members will not have access to such accounts. In light of the limitations under applicable law on the VerDate Sep<11>2014 16:28 Oct 17, 2014 Jkt 235001 ability of Non-FCM/BD Clearing Members to have customers that are U.S. persons, and as further set forth in a Circular to be published by ICE Clear Europe in connection with these amendments, the revised provision will also continue to restrict U.S. persons from becoming Sponsored Principals. In addition, ICE Clear Europe has removed various other references in the Rules and Procedures to U.S. Sponsored Principals and to FCM/BD Clearing Members acting as Sponsors of Individually Segregated Sponsored Accounts (and similar references), including in the definitions of ‘‘Buying Counterparty,’’ ‘‘Capital,’’ ‘‘Customer,’’ ‘‘Customer Account,’’ ‘‘FCM/BD Customer,’’ ‘‘General Customer,’’ ‘‘Individually Segregated Sponsored Account,’’ ‘‘Mark-to-Market Margin,’’ ‘‘Nominated Customer Bank Account,’’ ‘‘Nominated Proprietary Bank Account,’’ ‘‘Proprietary Margin Account,’’ ‘‘Proprietary Position Account,’’ ‘‘Representative,’’ ‘‘Selling Counterparty,’’ ‘‘U.S. Sponsored Principal’’ and in Rules 207(d), 401(o), 904(o) and (r), 906(d), 1601, 1603 and 1608. In light of these changes, certain distinctions between Non-FCM/BD Clearing Members and FCM/BD Clearing Members in the context of Sponsor activities are no longer relevant (as FCM/BD Clearing Members cannot act as Sponsors), and as a result various references throughout the Rules to a ‘‘Sponsor that is a Non-FCM/BD Clearing Member’’ have been changed to a ‘‘Sponsor’’, including in various definitions in Rule 101 as well as Rules 304, 506, 702, 705, 803, 810, 901, 904, 1704 and 1902. Corresponding changes are also made in the Clearing Procedures, Finance Procedures, CDS Procedures, FX Procedures, F&O Auction Procedures, FX Auction Procedures, OTC FX Product Guide, and Delivery Procedures. In the Standard Terms for the applicable product categories in Exhibits 1–3, the timing for delivery of a Porting Notice under paragraph 6(f) has been extended from 2 hours to 4 hours of the relevant Default Notice being published, as a result of further consultations with the Bank of England. In addition, the use of the defined term Rules is clarified in such exhibits. References to defined terms for variation margin, mark-to-market margin and FX mark-to-market margin have also been corrected for the relevant product categories. Certain additional conforming and other changes are also made to the CDS Procedures. The definition of Acceptance Time is amended to remove an incorrect reference to Sponsored PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 Principals in connection with CDS Contracts arising under Rule 401(a)(x). Consistent with changes to Paragraph 8.2(e) described in the EMIR Rule Submissions, a missing reference to ‘‘Merger Without Assumption’’ is added to conform to changes previously made. In the Clearing Procedures, in paragraph 2.3, clarifications are made to the categories of position-keeping accounts to implement from an operational perspective the new account categories provided for under the revised Rules. In subparagraph(b)(1), the use of the ‘‘N’’ account category is clarified as applying to grossmaintained sub-accounts with no automatic contractual netting that are part of the Proprietary Account, which includes positions of affiliates of FCM/ BD Clearing Members (which are not part of the segregated customer account under the CEA). Revised subparagraph (b)(2) specifies the position-keeping accounts for the customer accounts applicable to FCM/BD Clearing Members. Subparagraph (b)(3) specifies the position-keeping accounts for the customer accounts of Non-FCM/BD Clearing Members regulated by the FCA and to which the FCA client money rules apply. Subparagraph (b)(4) specifies the position-keeping accounts for the customer accounts of other NonFCM/BD Clearing Members. New subparagraph (e) specifies the positionkeeping accounts applicable to Individually Segregated Sponsored Accounts. Conforming changes are also made in paragraphs 2.2 and 2.4. Parallel changes to Paragraphs 3.1 are made to reflect margining for the different categories of customer accounts and related position-keeping accounts. A drafting clarification is made in Paragraph 3.2. Conforming changes to the references to the position-keeping account categories are also made in Table A following Paragraph 3.2. Paragraph 4.2(a) is revised to clarify that account classes (other than those mentioned in Paragraph 4.2(a) as being margined on a net basis) are margined on a gross basis. A typographical correction is made in paragraph 5.1. In the Finance Procedures, a defined term is clarified in paragraph 3.11. An incorrect reference to ‘‘Clearing Members’’ in paragraph 4.4(a)(iv) is removed and a typographical correction is made in paragraph 13.6. In paragraph 15.2, cross-references to subparagraph (g) thereof are corrected. Paragraph 15.4 is revised to make appropriate crossreferences to Rule 209 of the Continuing CDS Rule Provisions. In addition, consistent with EMIR requirements that do not permit ICE Clear Europe to accept letters of credit E:\FR\FM\20OCN1.SGM 20OCN1 Federal Register / Vol. 79, No. 202 / Monday, October 20, 2014 / Notices as margin, paragraph 12 of the Finance Procedures has been deleted. (This change is also consistent with ICE Clear Europe’s current list of Permitted Cover, under which letters of credit are not eligible.) Paragraph 9 of the Finance Procedures, which addressed the use of emissions allowances as Permitted Cover, has also been removed to give effect to EMIR restrictions on the use of such assets for margin. (In this regard, ICE Clear Europe notes that its current list of Permitted Cover imposes a 100% haircut on the value of any emissions allowances used as Permitted Cover. As a result, use of such assets for margin is already effectively precluded under current rules.) In paragraph 8.2 of the Finance Procedures, a reference to certificates of deposit, which are not currently accepted as permitted cover, has also been removed. (b) Statutory Basis ICE Clear Europe believes that the proposed amendments to the Rules and Procedures are consistent with the requirements of Section 17A of the Act 6 and the regulations thereunder applicable to it.7 Section 17A(b)(3)(F) of the Act 8 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. The proposed amendments are principally intended to further implement the Rule and Procedure amendments described in the EMIR Rule Submissions, which in turn are intended to ensure compliance by the Clearing House with the requirements of EMIR and implement new, strengthened options for the segregation and safeguarding of customer funds and property for customers of Non-FCM/BD Clearing Members.9 Specifically, the amendments facilitate the adoption of individual client segregation and new forms of omnibus client segregation for customers of Non-FCM/BD Clearing Members, consistent with the requirements of EMIR. As such, the proposed amendments are part of a set of Rule and Procedure changes that will enhance, and not reduce, the level of customer protection available under the 6 15 U.S.C. 78q–1. CFR 240.17Ad–22. 8 15 U.S.C. 78q–1(b)(3)(F). 9 As discussed herein, certain additional amendments are in the nature of clarifications and drafting improvements to various provisions of the Rules and Procedures, and as such ICE Clear Europe believes that they also promote the prompt and accurate clearance and settlement of securities and derivatives transactions cleared by the Clearing House. tkelley on DSK3SPTVN1PROD with NOTICES 7 17 VerDate Sep<11>2014 16:28 Oct 17, 2014 Jkt 235001 current ICE Clear Europe rules for those Clearing Members and their customers. As such, ICE Clear Europe believes that the proposed changes, together with the related amendments described in the EMIR Rule Submissions, will enhance the safeguarding of securities and funds associated with securities and derivative transactions that are in the custody or control of ICE Clear Europe or for which it is responsible. ICE Clear Europe also believes that the proposed rule changes will enhance the stability of the clearing system, by reducing the risk to market participants of a default by a Clearing Member or other customer. As a result, the proposed changes are, in the Clearing House’s view, consistent with the requirements of Section 17A(b)(3)(F) of the Act.10 B. Self-Regulatory Organization’s Statement on Burden on Competition ICE Clear Europe does not believe the proposed changes to the Rules and Procedures discussed herein would have any adverse impact, or impose any burden, on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed amendments are principally intended to further implement the new segregation models and account classes adopted pursuant to the EMIR Rule Submissions and make certain other conforming changes and clarifications. For the reasons set forth in more detail in the EMIR Rule Submissions, ICE Clear Europe does not believe the proposed amendments set out herein would materially affect access to clearing by Clearing Members or their customers, adversely affect competition among Clearing Members or adversely affect the market for clearing services or limit market participants’ choices for clearing transactions. Although the new segregation models set out in the EMIR Rule Submissions may entail certain additional costs for Clearing Members and their customers, ICE Clear Europe believes that this is the result of the requirement under EMIR to offer such models and in any event is justified by the benefits provided by such models for those who use them. As a result, and as discussed in the EMIR Rule Submissions, ICE Clear Europe does not believe that the proposed amendments to the Procedures will impose any burden on competition not appropriate in furtherance of the purposes of the Act. 10 15 PO 00000 U.S.C. 78q–1(b)(3)(F). Frm 00105 Fmt 4703 Sfmt 4703 62697 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments have not been specifically solicited with respect to the Rule and Procedure changes set out herein. ICE Clear Europe will notify the Commission of any additional written comments received by ICE Clear Europe. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A) of the Act and Rule 19b– 4(f)(1) and (f)(4)(i) 11 thereunder because the changes either constitute a stated policy, practice or interpretation with respect to the meaning, administration or enforcement of an existing rule, within the meaning of Rule 19b–4(f)(1), and/or effect a change in an existing service of a registered clearing agency that does not adversely affect the safeguarding of securities or funds in the custody or control of the clearing agency or for which it is responsible and does not significantly affect the respective rights or obligations of the clearing agency or persons using the service, within the meaning of Rule 19b–4(f)(4)(i). At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change 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. Except as identified below, the changes to the Rules and Procedures set forth herein represent technical corrections and clarifications to the Rules and Procedures submitted to the Commission pursuant to the EMIR Rule Submissions and previously approved by the Commission. In ICE Clear Europe’s view, these fall within rule 19b–4(f)(1) as stated policies, practices or interpretations with respect to the meaning, administration or enforcement of an existing rule. Certain other Rule changes set forth herein fall within Rule 19b–4(f)(4)(i), as they constitute amendments that do not adversely affect the safeguarding of funds or securities or the rights or obligations of the Clearing House and its Clearing Members. In particular, Rule 102(g) has been revised to reflect more clearly the limitations on the segregation options that can be offered by certain Clearing Members under 11 17 E:\FR\FM\20OCN1.SGM CFR 340.19b–4(f)(4)(i)–(ii). 20OCN1 62698 Federal Register / Vol. 79, No. 202 / Monday, October 20, 2014 / Notices applicable law, and does not change the position under the existing rules that the new segregation models are not being offered to FCM/BD Clearing Members or their customers. The revisions to Rule 110(g), which are intended to confirm and make explicit certain existing obligations of the Clearing House under applicable U.S. laws, as such would not adversely affect the rights or obligations of the Clearing House or Clearing Members. The extension of the timing for the Porting Notices is similarly intended to be consistent with the obligations of the Clearing House under EMIR and will not adversely affect the rights or obligations of Clearing Members. With respect to the additional changes to the Finance Procedures discussed above, the removal of the provisions relating to the use of letters of credit and emissions allowances as Permitted Cover is intended to comply with requirements under EMIR and in any event reflects the Clearing House’s current practice. As a result, such changes should not adversely affect the safeguarding of funds or securities or the rights or obligations of Clearing Members. With respect to the removal of references to the potential U.S. Sponsored Principal model, such model was not in effect under the Rules and Procedures, and accordingly such removal will not affect the rights or obligations of the Clearing House or Clearing Members. In ICE Clear Europe’s view, these changes will thus not significantly affect the safeguarding of funds or securities in the custody or control of ICE Clear Europe, or otherwise significantly affect the rights or obligations of the Clearing House and its Clearing Members. 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: All submissions should refer to File Number SR–ICEEU–2014–16. 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 Europe and on ICE Clear Europe’s Web site at https:// www.theice.com/clear-europe/ regulation. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ICEEU–2014–16 and should be submitted on or before November 10, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–24775 Filed 10–17–14; 8:45 am] BILLING CODE 8011–01–P SOCIAL SECURITY ADMINISTRATION tkelley on DSK3SPTVN1PROD with NOTICES Electronic Comments [Docket No. SSA 2014–0033] • 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– ICEEU–2014–16 on the subject line. Privacy Act of 1974, as Amended; Computer Matching Program (SSA/ Department of Labor (DOL))—Match Number 1015 Paper Comments ACTION: • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. VerDate Sep<11>2014 16:28 Oct 17, 2014 Jkt 235001 AGENCY: Social Security Administration (SSA). Notice of a renewal of an existing computer matching program that will expire on November 24, 2014. 12 17 PO 00000 CFR 200.30–3(a)(12). Frm 00106 Fmt 4703 Sfmt 4703 In accordance with the provisions of the Privacy Act, as amended, this notice announces a renewal of an existing computer matching program that we are currently conducting with DOL. DATES: We will file a report of the subject matching program with the Committee on Homeland Security and Governmental Affairs of the Senate; the Committee on Oversight and Government Reform of the House of Representatives; and the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB). The matching program will be effective as indicated below. ADDRESSES: Interested parties may comment on this notice by either telefaxing to (410) 966–0869 or writing to the Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, 617 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235–6401. All comments received will be available for public inspection at this address. FOR FURTHER INFORMATION CONTACT: The Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, as shown above. SUPPLEMENTARY INFORMATION: SUMMARY: A. General The Computer Matching and Privacy Protection Act of 1988 (Pub. L. 100– 503), amended the Privacy Act (5 U.S.C. 552a) by describing the conditions under which computer matching involving the Federal government could be performed and adding certain protections for persons applying for, and receiving, Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101– 508) further amended the Privacy Act regarding protections for such persons. The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, State, or local government records. It requires Federal agencies involved in computer matching programs to: (1) Negotiate written agreements with the other agency or agencies participating in the matching programs; (2) Obtain approval of the matching agreement by the Data Integrity Boards of the participating Federal agencies; (3) Publish notice of the computer matching program in the Federal Register; (4) Furnish detailed reports about matching programs to Congress and OMB; E:\FR\FM\20OCN1.SGM 20OCN1

Agencies

[Federal Register Volume 79, Number 202 (Monday, October 20, 2014)]
[Notices]
[Pages 62694-62698]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-24775]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73344; File No. SR-ICEEU-2014-16]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to EMIR Requirements

October 14, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on October 1, 2014, ICE Clear Europe Limited 
(``ICE Clear Europe'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change described in Items 
I, II and III below, which Items have been prepared primarily by ICE 
Clear Europe. ICE Clear Europe filed the proposed rule change pursuant 
to Section 19(b)(3)(A) of the Act, and Rules 19b-4(f)(1) and (f)(4)(i) 
thereunder, so that the proposed rule change was effective upon filing 
with the Commission. 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 changes is to make certain 
further clarifications and amendments to the ICE Clear Europe Clearing 
Rules (``Rules'') and procedures (``Procedures'') in connection with 
requirements under the European Market Infrastructure Regulation 
(including regulations and implementing technical standards thereunder, 
``EMIR'') \3\ that will apply to ICE Clear Europe. ICE Clear Europe has 
previously filed with the Commission proposed changes to its Rules, 
Procedures and certain related policies relating to EMIR implementation 
and certain other matters (the ``EMIR Rule Submissions''), which have 
been approved by the Commission.\4\
---------------------------------------------------------------------------

    \3\ Regulation (EU) No 648/2012 of the European Parliament and 
of the Council of 4 July 2012 on OTC derivatives, central 
counterparties and trade repositories, as well as various 
implementing regulations and technical standards.
    \4\ Securities Exchange Act Release No. 34-72755 (Aug. 4, 2014), 
79 FR 46481 (Aug. 8, 2014) (SR-ICEEU-2014-09); Securities Exchange 
Act Release No. 34-72756 (Aug. 4, 2014) 79 FR 46479 (Aug. 8, 2014) 
(SR-ICEEU-2014-10); and Securities Exchange Act Release No. 34-72754 
(Aug. 4, 2014) 79 FR 46481 (Aug. 8, 2014) (SR-ICEEU-2014-11).
---------------------------------------------------------------------------

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

    In its filing with the Commission, ICE Clear Europe 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. ICE Clear Europe has prepared summaries, 
set forth in sections A, B, and C below, of the most significant 
aspects of these statements.

[[Page 62695]]

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

(a) Purpose
    ICE Clear Europe submits additional proposed amendments to its 
Rules and Procedures in connection with its compliance with 
requirements under EMIR. The proposed amendments principally make 
certain clarifications to the Rule and Procedures amendments that were 
adopted pursuant to the EMIR Rule Submissions, as well as certain other 
clarifying and conforming changes discussed below. As described in more 
detail in the EMIR Rule Submissions, in order to comply with EMIR, ICE 
Clear Europe is adopting changes to the structure of customer accounts 
for cleared transactions to enhance segregation options for customers 
of Clearing Members. This includes the adoption of an individual client 
segregation framework for Non-FCM/BD Clearing Members as well as 
certain modifications relating to the existing, omnibus client 
segregation model for such Clearing Members. Specifically, the Rules 
adopted pursuant to the EMIR Rule Submissions establish two new types 
of individually segregated accounts, Individually Segregated Margin-
flow Co-mingled Accounts and Individually Segregated Sponsored 
Accounts. The Rules also establish multiple new types of omnibus 
accounts, Segregated Customer Omnibus Accounts (separately for each 
product: FX, F&O and CDS) and Segregated TTFCA Customer Omnibus 
Accounts (separately for each product: FX, F&O and CDS) as well as 
Omnibus Margin-flow Co-mingled Accounts. These new individually 
segregated and omnibus accounts will be available only to Non-FCM/BD 
Clearing Members and their customers. For FCM/BD Clearing Members and 
their customers, individual client segregation is not being offered at 
this time, and the existing account types and segregation framework 
(which are required under applicable law) would be maintained.
    The proposed additional amendments described herein are intended to 
further implement these requirements, as well as make various other 
consolidating, conforming and clarifying changes and drafting 
improvements to the Rules and Procedures.
    ICE Clear Europe proposes to make amendments to Parts 1, 2, 3, 4, 
5, 7, 8, 9, 11, 16, 17 and 19 and the Standard Terms of the Rules and 
to the CDS Procedures, Clearing Procedures, Finance Procedures, 
Delivery Procedures, FX Procedures, FX Auction Procedures, F&O Auction 
Procedures, and OTC FX Product Guide.\5\ The proposed Rule and 
Procedure amendments are described in detail as follows.
---------------------------------------------------------------------------

    \5\ Pursuant to a teleconference with ICE Clear Europe's 
external counsel on October 14, 2014, staff in the Division of 
Trading and Markets has revised this sentence to clarify the scope 
of the Rules and Procedures being amended as part of the proposed 
rule change.
---------------------------------------------------------------------------

    In Rules, the definition of ``Applicable Law'' has been revised to 
refer explicitly to certain U.S. laws and regulations, including the 
Commodity Exchange Act, the Exchange Act, CFTC and Commission 
regulations, and relevant insolvency laws. A new defined term for 
``Affected Customers'' has also been added, in connection with the 
amendments to Rule 102(g) discussed below. Certain defined terms 
relating to customer accounts of FCM/BD Clearing Members with respect 
to futures and options business on non-U.S. markets, specifically 
``General Customer Account,'' ``Non-DCM/Swap'' and ``Non-DCM/Swap 
Customer'' have been revised to clarify the appropriate use of such 
accounts for relevant transactions in accordance with the CEA and CFTC 
regulations.
    The defined term ``Repository'' has been revised to remove an 
incorrect requirement that the trade repository for EMIR reporting 
purposes be specified by the Clearing House. Corresponding changes have 
also been made in Rules 201(a)(v) and 1901(b)(ii), as well as a change 
reflecting that a Clearing Member or Sponsored Principal may have 
access to a Repository through means other than being a direct user of 
the Repository.
    Rule 102(g) has been revised, in light of requirements of the Bank 
of England and other regulators, to clarify the manner in which certain 
Clearing Members are required to offer the individual and omnibus 
client segregation models under EMIR to their customers. Under the 
revised rule, and consistent with EMIR, Clearing Members must offer a 
choice of individual or omnibus client segregation to those customers 
for which Applicable Laws (in the jurisdiction of establishment of the 
customer or that apply in the context of activity on a relevant trading 
platform) do not prevent or prohibit such an account being provided to 
the customer (such customers are referred to as ``Affected 
Customers''). For Clearing Members that are not able under Applicable 
Laws to offer such accounts to affected customers, the Clearing Member 
must offer, to the extent possible and practicable under Applicable 
Laws, to procure such an account for such customer from another 
Clearing Member (which may be an affiliate).
    Certain typographical corrections are made in Rules 102(o) and (v). 
Rule 102(r) has been revised to refer explicitly to ICE Clear Europe's 
status under U.S. law as a registered clearing agency and derivatives 
clearing organization and to add references to other Applicable Laws in 
addition to certain specified EU and UK requirements. In addition, the 
final sentence of Rule 102(r), relating to certain potential conflicts 
of applicable laws, has been removed in connection with discussions 
with relevant regulators. A typographical correction is also made in 
Rule 104(d). In Rule 106(a)(ii), an incorrect reference to ``U.S. 
Sponsored Principal'' is changed to ``Sponsored Principal''. A drafting 
correction is also made in Rule 111(c).
    A new Rule 110(g) is added that clarifies that ICE Clear Europe may 
not, pursuant to its authority under existing Rule 110, extend the 
payment timing in respect of variation margin owed to any Clearing 
Member beyond the time immediately prior to the commencement of the 
daily payment cycle for the relevant currency for the next following 
business day. The amendment is intended to clarify that any extension 
of time for the Clearing House to make payments of variation margin 
under Rule 110 is subject to the requirements of CFTC Rule 39.14(b), 
which requires that a clearing organization must effect a settlement 
with each clearing member at least once each business day.
    Cross-references in Rule 202(b) and 208(a) have been corrected. A 
typographical correction is also made in Rule 202(c)(ii).
    The introductory language in Rule 302, which addresses mechanics 
for margin calls and payments, is revised to reflect that margin is to 
be settled on a net or gross basis depending on the particular type of 
account, as set forth in more detail in the subsections of Rule 302.
    In Rule 401(a)(ix), an unnecessary parenthetical is removed for 
clarity. A drafting clarification is also made in Rule 406(d)(v). 
Typographical errors are corrected in Rules 502(h) and 503(k). Certain 
clarifications are made in Rules 504(f) and 506(a)(v) to reflect the 
fact that under Rule 506(a)(iv), Rule 504(f) does not apply to the 
Sponsored Principal model. A cross-reference is also corrected in Rule 
506(a)(i).
    In the introductory language to Part 9 of the Rules, and in Rule 
906(a), a clarification is made that the relevant default rules and 
provision are intended

[[Page 62696]]

to comply with all relevant Applicable Laws in addition to certain 
specified EU and UK requirements and to reference certain provisions of 
US law in addition to EU and UK laws. Rule 906(d) has been revised to 
clarify that new provisions that contemplate payment of a net sum 
directly to a Customer under certain circumstances do not apply to 
Customers of FCM/BD Clearing Members and in any event are subject to 
requirements of Applicable Law. The provisions of Rule 907(m) have been 
revised to be consistent with a parallel provision in Rule 904(r)(v). A 
typographical correction is made in Rule 908(i). In Rule 916, the text 
of the heading is corrected.
    Rule 1101(c) and 1102(b) are revised to clarify certain 
requirements with respect to the Guaranty Funds, in line with the 
description provided in the EMIR Rule Submissions. Rule 1101(c) is 
revised to provide that the applicable Guaranty Fund must satisfy, in 
addition to the specified requirement, such higher default parameters, 
if any, as may be required by Applicable Laws with respect to financial 
resource requirements. Amendments to Rule 1102(b) similarly clarify 
that Guaranty Fund contributions must be calculated in accordance with 
the requirements of other Applicable Laws in addition to EMIR. In 
addition, Rule 1103(a) is amended to correct a cross-reference.
    In Part 19 of the Rules relating to Sponsored Principals, Rule 
1901(o) is revised to correct a reference to Rule 1901(b) and (d). A 
drafting clarification is also made in Rule 1903(d).
    As discussed in the EMIR Rule Submissions, ICE Clear Europe has not 
made its new individual and omnibus segregation models, including the 
Sponsored Principal model, available to FCM/BD Clearing Members or 
their customers. As a result, certain Rules and Procedures submitted 
with the EMIR Rule Submissions that referred to a potential U.S. 
Sponsored Principal model are by their terms not in effect, and could 
not have been put into effect absent a future rule change. ICE Clear 
Europe has nonetheless determined to remove such provisions from the 
Rules and Procedures as a matter of clarity and to avoid any potential 
confusion as to the availability of such a model. Specifically, ICE 
Clear Europe has removed Rule 1905 and replaced it with an express 
provision that FCM/BD Clearing Members will not be permitted to act as 
Sponsors of Individually Segregated Sponsored Accounts. Accordingly, 
customers of FCM/BD Clearing Members will not have access to such 
accounts. In light of the limitations under applicable law on the 
ability of Non-FCM/BD Clearing Members to have customers that are U.S. 
persons, and as further set forth in a Circular to be published by ICE 
Clear Europe in connection with these amendments, the revised provision 
will also continue to restrict U.S. persons from becoming Sponsored 
Principals. In addition, ICE Clear Europe has removed various other 
references in the Rules and Procedures to U.S. Sponsored Principals and 
to FCM/BD Clearing Members acting as Sponsors of Individually 
Segregated Sponsored Accounts (and similar references), including in 
the definitions of ``Buying Counterparty,'' ``Capital,'' ``Customer,'' 
``Customer Account,'' ``FCM/BD Customer,'' ``General Customer,'' 
``Individually Segregated Sponsored Account,'' ``Mark-to-Market 
Margin,'' ``Nominated Customer Bank Account,'' ``Nominated Proprietary 
Bank Account,'' ``Proprietary Margin Account,'' ``Proprietary Position 
Account,'' ``Representative,'' ``Selling Counterparty,'' ``U.S. 
Sponsored Principal'' and in Rules 207(d), 401(o), 904(o) and (r), 
906(d), 1601, 1603 and 1608. In light of these changes, certain 
distinctions between Non-FCM/BD Clearing Members and FCM/BD Clearing 
Members in the context of Sponsor activities are no longer relevant (as 
FCM/BD Clearing Members cannot act as Sponsors), and as a result 
various references throughout the Rules to a ``Sponsor that is a Non-
FCM/BD Clearing Member'' have been changed to a ``Sponsor'', including 
in various definitions in Rule 101 as well as Rules 304, 506, 702, 705, 
803, 810, 901, 904, 1704 and 1902. Corresponding changes are also made 
in the Clearing Procedures, Finance Procedures, CDS Procedures, FX 
Procedures, F&O Auction Procedures, FX Auction Procedures, OTC FX 
Product Guide, and Delivery Procedures.
    In the Standard Terms for the applicable product categories in 
Exhibits 1-3, the timing for delivery of a Porting Notice under 
paragraph 6(f) has been extended from 2 hours to 4 hours of the 
relevant Default Notice being published, as a result of further 
consultations with the Bank of England. In addition, the use of the 
defined term Rules is clarified in such exhibits. References to defined 
terms for variation margin, mark-to-market margin and FX mark-to-market 
margin have also been corrected for the relevant product categories.
    Certain additional conforming and other changes are also made to 
the CDS Procedures. The definition of Acceptance Time is amended to 
remove an incorrect reference to Sponsored Principals in connection 
with CDS Contracts arising under Rule 401(a)(x). Consistent with 
changes to Paragraph 8.2(e) described in the EMIR Rule Submissions, a 
missing reference to ``Merger Without Assumption'' is added to conform 
to changes previously made.
    In the Clearing Procedures, in paragraph 2.3, clarifications are 
made to the categories of position-keeping accounts to implement from 
an operational perspective the new account categories provided for 
under the revised Rules. In subparagraph(b)(1), the use of the ``N'' 
account category is clarified as applying to gross-maintained sub-
accounts with no automatic contractual netting that are part of the 
Proprietary Account, which includes positions of affiliates of FCM/BD 
Clearing Members (which are not part of the segregated customer account 
under the CEA). Revised subparagraph (b)(2) specifies the position-
keeping accounts for the customer accounts applicable to FCM/BD 
Clearing Members. Subparagraph (b)(3) specifies the position-keeping 
accounts for the customer accounts of Non-FCM/BD Clearing Members 
regulated by the FCA and to which the FCA client money rules apply. 
Subparagraph (b)(4) specifies the position-keeping accounts for the 
customer accounts of other Non-FCM/BD Clearing Members. New 
subparagraph (e) specifies the position-keeping accounts applicable to 
Individually Segregated Sponsored Accounts. Conforming changes are also 
made in paragraphs 2.2 and 2.4. Parallel changes to Paragraphs 3.1 are 
made to reflect margining for the different categories of customer 
accounts and related position-keeping accounts. A drafting 
clarification is made in Paragraph 3.2. Conforming changes to the 
references to the position-keeping account categories are also made in 
Table A following Paragraph 3.2. Paragraph 4.2(a) is revised to clarify 
that account classes (other than those mentioned in Paragraph 4.2(a) as 
being margined on a net basis) are margined on a gross basis. A 
typographical correction is made in paragraph 5.1.
    In the Finance Procedures, a defined term is clarified in paragraph 
3.11. An incorrect reference to ``Clearing Members'' in paragraph 
4.4(a)(iv) is removed and a typographical correction is made in 
paragraph 13.6. In paragraph 15.2, cross-references to subparagraph (g) 
thereof are corrected. Paragraph 15.4 is revised to make appropriate 
cross-references to Rule 209 of the Continuing CDS Rule Provisions.
    In addition, consistent with EMIR requirements that do not permit 
ICE Clear Europe to accept letters of credit

[[Page 62697]]

as margin, paragraph 12 of the Finance Procedures has been deleted. 
(This change is also consistent with ICE Clear Europe's current list of 
Permitted Cover, under which letters of credit are not eligible.) 
Paragraph 9 of the Finance Procedures, which addressed the use of 
emissions allowances as Permitted Cover, has also been removed to give 
effect to EMIR restrictions on the use of such assets for margin. (In 
this regard, ICE Clear Europe notes that its current list of Permitted 
Cover imposes a 100% haircut on the value of any emissions allowances 
used as Permitted Cover. As a result, use of such assets for margin is 
already effectively precluded under current rules.) In paragraph 8.2 of 
the Finance Procedures, a reference to certificates of deposit, which 
are not currently accepted as permitted cover, has also been removed.
(b) Statutory Basis
    ICE Clear Europe believes that the proposed amendments to the Rules 
and Procedures are consistent with the requirements of Section 17A of 
the Act \6\ and the regulations thereunder applicable to it.\7\ Section 
17A(b)(3)(F) of the Act \8\ 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. The proposed amendments are principally intended to 
further implement the Rule and Procedure amendments described in the 
EMIR Rule Submissions, which in turn are intended to ensure compliance 
by the Clearing House with the requirements of EMIR and implement new, 
strengthened options for the segregation and safeguarding of customer 
funds and property for customers of Non-FCM/BD Clearing Members.\9\ 
Specifically, the amendments facilitate the adoption of individual 
client segregation and new forms of omnibus client segregation for 
customers of Non-FCM/BD Clearing Members, consistent with the 
requirements of EMIR. As such, the proposed amendments are part of a 
set of Rule and Procedure changes that will enhance, and not reduce, 
the level of customer protection available under the current ICE Clear 
Europe rules for those Clearing Members and their customers. As such, 
ICE Clear Europe believes that the proposed changes, together with the 
related amendments described in the EMIR Rule Submissions, will enhance 
the safeguarding of securities and funds associated with securities and 
derivative transactions that are in the custody or control of ICE Clear 
Europe or for which it is responsible. ICE Clear Europe also believes 
that the proposed rule changes will enhance the stability of the 
clearing system, by reducing the risk to market participants of a 
default by a Clearing Member or other customer. As a result, the 
proposed changes are, in the Clearing House's view, consistent with the 
requirements of Section 17A(b)(3)(F) of the Act.\10\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1.
    \7\ 17 CFR 240.17Ad-22.
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ As discussed herein, certain additional amendments are in 
the nature of clarifications and drafting improvements to various 
provisions of the Rules and Procedures, and as such ICE Clear Europe 
believes that they also promote the prompt and accurate clearance 
and settlement of securities and derivatives transactions cleared by 
the Clearing House.
    \10\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed changes to the Rules 
and Procedures discussed herein would have any adverse impact, or 
impose any burden, on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed amendments are 
principally intended to further implement the new segregation models 
and account classes adopted pursuant to the EMIR Rule Submissions and 
make certain other conforming changes and clarifications.
    For the reasons set forth in more detail in the EMIR Rule 
Submissions, ICE Clear Europe does not believe the proposed amendments 
set out herein would materially affect access to clearing by Clearing 
Members or their customers, adversely affect competition among Clearing 
Members or adversely affect the market for clearing services or limit 
market participants' choices for clearing transactions. Although the 
new segregation models set out in the EMIR Rule Submissions may entail 
certain additional costs for Clearing Members and their customers, ICE 
Clear Europe believes that this is the result of the requirement under 
EMIR to offer such models and in any event is justified by the benefits 
provided by such models for those who use them. As a result, and as 
discussed in the EMIR Rule Submissions, ICE Clear Europe does not 
believe that the proposed amendments to the Procedures will impose any 
burden on competition not appropriate 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 have not been specifically solicited with respect 
to the Rule and Procedure changes set out herein. ICE Clear Europe will 
notify the Commission of any additional written comments received by 
ICE Clear Europe.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(1) and (f)(4)(i) 
\11\ thereunder because the changes either constitute a stated policy, 
practice or interpretation with respect to the meaning, administration 
or enforcement of an existing rule, within the meaning of Rule 19b-
4(f)(1), and/or effect a change in an existing service of a registered 
clearing agency that does not adversely affect the safeguarding of 
securities or funds in the custody or control of the clearing agency or 
for which it is responsible and does not significantly affect the 
respective rights or obligations of the clearing agency or persons 
using the service, within the meaning of Rule 19b-4(f)(4)(i). At any 
time within 60 days of the filing of the proposed rule change, the 
Commission summarily may temporarily suspend such rule change 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.
---------------------------------------------------------------------------

    \11\ 17 CFR 340.19b-4(f)(4)(i)-(ii).
---------------------------------------------------------------------------

    Except as identified below, the changes to the Rules and Procedures 
set forth herein represent technical corrections and clarifications to 
the Rules and Procedures submitted to the Commission pursuant to the 
EMIR Rule Submissions and previously approved by the Commission. In ICE 
Clear Europe's view, these fall within rule 19b-4(f)(1) as stated 
policies, practices or interpretations with respect to the meaning, 
administration or enforcement of an existing rule.
    Certain other Rule changes set forth herein fall within Rule 19b-
4(f)(4)(i), as they constitute amendments that do not adversely affect 
the safeguarding of funds or securities or the rights or obligations of 
the Clearing House and its Clearing Members. In particular, Rule 102(g) 
has been revised to reflect more clearly the limitations on the 
segregation options that can be offered by certain Clearing Members 
under

[[Page 62698]]

applicable law, and does not change the position under the existing 
rules that the new segregation models are not being offered to FCM/BD 
Clearing Members or their customers. The revisions to Rule 110(g), 
which are intended to confirm and make explicit certain existing 
obligations of the Clearing House under applicable U.S. laws, as such 
would not adversely affect the rights or obligations of the Clearing 
House or Clearing Members. The extension of the timing for the Porting 
Notices is similarly intended to be consistent with the obligations of 
the Clearing House under EMIR and will not adversely affect the rights 
or obligations of Clearing Members.
    With respect to the additional changes to the Finance Procedures 
discussed above, the removal of the provisions relating to the use of 
letters of credit and emissions allowances as Permitted Cover is 
intended to comply with requirements under EMIR and in any event 
reflects the Clearing House's current practice. As a result, such 
changes should not adversely affect the safeguarding of funds or 
securities or the rights or obligations of Clearing Members. With 
respect to the removal of references to the potential U.S. Sponsored 
Principal model, such model was not in effect under the Rules and 
Procedures, and accordingly such removal will not affect the rights or 
obligations of the Clearing House or Clearing Members. In ICE Clear 
Europe's view, these changes will thus not significantly affect the 
safeguarding of funds or securities in the custody or control of ICE 
Clear Europe, or otherwise significantly affect the rights or 
obligations of the Clearing House and its Clearing Members.

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-ICEEU-2014-16 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-ICEEU-2014-16. 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 Europe 
and on ICE Clear Europe's Web site at https://www.theice.com/clear-europe/regulation.
    All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-ICEEU-2014-16 
and should be submitted on or before November 10, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-24775 Filed 10-17-14; 8:45 am]
BILLING CODE 8011-01-P
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