Self-Regulatory Organizations; ICE Clear Credit LLC; Order Granting Approval of Proposed Rule Change To Revise ICC End-of-Day Price Discovery Policies and Procedures, 73924-73925 [2014-29181]

Download as PDF 73924 Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices 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: 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– NYSEMKT–2014–99 on the subject line. Paper Comments mstockstill on DSK4VPTVN1PROD with NOTICES • 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–NYSEMKT–2014–99. 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 Section, 100 F Street NE., Washington, DC 20549–1090 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing will also be available for inspection and copying at the NYSE’s principal office and on its Internet Web site at www.nyse.com. 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–2014–99 and should be submitted on or before January 2, 2015. VerDate Sep<11>2014 16:57 Dec 11, 2014 Jkt 235001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–29103 Filed 12–11–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73791; File No. SR–Phlx– 2014–66] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change To Adopt New Exchange Rule 1081, Solicitation Mechanism, To Introduce a New Electronic Solicitation Mechanism December 8, 2014. on the proposed rule change. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider and take action on the Exchange’s proposed rule change. Accordingly, pursuant to Section 19(b)(2)(A)(ii)(I) of the Act 5 and for the reasons stated above, the Commission designates January 29, 2015, as the date by which the Commission should either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–Phlx–2014–66). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–29182 Filed 12–11–14; 8:45 am] BILLING CODE 8011–01–P On October 14, 2014, NASDAQ OMX PHLX LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to adopt new Exchange Rule 1081, Solicitation Mechanism, to introduce a new electronic solicitation mechanism pursuant to which a member can electronically submit all-ornone orders of 500 contracts or more (or, in the case of mini options, 5000 contracts or more) the member represents as agent against contra orders the member solicited. The proposed rule change was published for comment in the Federal Register on October 31, 2014.3 The Commission has received no comment letters on the proposal. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether these proposed rule changes should be disapproved. The 45th day for this filing is December 15, 2014. The Commission is extending the 45day time period for Commission action SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73790; File No. SR–ICC– 2014–17] Self-Regulatory Organizations; ICE Clear Credit LLC; Order Granting Approval of Proposed Rule Change To Revise ICC End-of-Day Price Discovery Policies and Procedures December 8, 2014. I. Introduction On October 17, 2014, ICE Clear Credit LLC (‘‘ICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–ICC–2014–17 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal Register on November 3, 2014.3 The Commission received no comment letters regarding the proposed change. For the reasons discussed below, the Commission is granting approval of the proposed rule change. II. Description of the Proposed Rule Change ICC is proposing this change to revise the ICC End-of-Day Price Discovery Policies and Procedures to incorporate enhancements to its price discovery 5 15 14 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 73441 (October 27, 2014), 79 FR 64862. 4 15 U.S.C. 78s(b)(2). PO 00000 Frm 00046 Fmt 4703 Sfmt 4703 U.S.C. 78s(b)(2)(A)(ii)(I). CFR 200.30–3(a)(31). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 34–73451 (Oct. 28, 2014), 79 FR 65280 (Nov. 3, 2014) (SR– ICC–2014–17). 6 17 E:\FR\FM\12DEN1.SGM 12DEN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices process. This revision does not require any changes to the ICC Clearing Rules. According to ICC, it utilizes a ‘‘cross and lock’’ algorithm as part of its price discovery process. As described by ICC, under this algorithm, bids and offers derived from Clearing Participant (‘‘CP’’) submissions are matched by sorting them from highest to lowest and lowest to highest levels, respectively. This sorting process pairs the CP submitting the highest bid price with the CP submitting the lowest offer price, the CP submitting the second highest bid price with the CP submitting the second-lowest offer price, and so on. The algorithm then identifies crossed and/or locked markets. Crossed markets are the Clearing Participant pairs generated by the sorting and ranking process for which the bid price of one Clearing Participant is above the offer price of the matched Clearing Participant. The algorithm identifies locked markets, where the bid and the offer are equal, in a similar fashion. The mid-point of the first non-crossed, nonlocked matched market is, as stated by ICC, the final end-of-day level (with additional steps taken to remove offmarket submissions from influencing the final level). According to ICC, this process captures the market dynamics of trading; however, final pricing levels are ultimately determined by a single bid and a single offer, which results in the ability for one submission to influence the outcome. ICC proposes enhancements to its methodology to improve the consistency of prices and reduce the sensitivity of the final level to a single Clearing Participant’s submission. ICC states that under the new ‘‘cross and lock’’ methodology, the average of the midpoints of all non-crossed, non-locked matched markets that are less than or equal to one bid-offer width is used as the final level (with additional steps taken to remove off-market submissions from influencing the final level). ICC states that, as a result, prices are less sensitive to outlying submissions. ICC also proposes additional language in the ICC End-of-Day Price Discovery Policies and Procedures to clarify existing policies and practices, including, but not limited to, language to clarify the existing pricing methodology’s treatment of identical crossed or locked matched market bids or offers. III. Discussion and Commission Findings Section 19(b)(2)(C) of the Act 4 directs the Commission to approve a proposed rule change of a self-regulatory 4 15 U.S.C. 78s(b)(2)(C). VerDate Sep<11>2014 16:57 Dec 11, 2014 Jkt 235001 organization if the Commission finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such selfregulatory organization. Section 17A(b)(3)(F) of the Act 5 requires, among other things, that the rules of a clearing agency are designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible and, in general, to protect investors and the public interest. The Commission finds that the proposed rule change is consistent with Section 17A of the Act 6 and the rules thereunder applicable to ICC. The revised ICC End-of-Day Price Discovery Policies and Procedures will reduce the sensitivity of the final price level to a single Clearing Participant’s submission, resulting in more consistent day-overday end-of-day levels. The proposed rule change is therefore reasonably expected to provide a pricing methodology to more accurately reflect the market level. As such, the Commission believes that the changes will promote the prompt and accurate settlement of securities and derivatives transactions, and therefore are consistent with the requirements of the Act and the rules and regulations thereunder applicable to ICC, in particular, Section 17(A)(b)(3)(F). IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 7 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (File No. SR–ICC– 2014–17) be, and hereby is, approved.9 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–29181 Filed 12–11–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73781; File No. SR–EDGA– 2014–31] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of EDGA Exchange, Inc. December 8, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 25, 2014, EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) 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 by the Exchange. The Exchange has designated the proposed rule change as one establishing or changing a member due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposed rule change 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 The Exchange filed a proposal to amend the fee schedule applicable to Members 5 of the Exchange pursuant to EDGA Rules 15.1(a) and (c) (‘‘Fee Schedule’’). Changes to the fee schedule pursuant to this proposal are effective upon filing. The text of the proposed rule change is available at the Exchange’s Web site at https://www.directedge.com, at the principal office of the Exchange, and at 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 The term ‘‘Member’’ is defined as ‘‘any registered broker or dealer, or any person associated with a registered broker or dealer, that has been admitted to membership in the Exchange. A Member will have the status of a ‘‘member’’ of the Exchange as that term is defined in Section 3(a)(3) of the Act.’’ See Exchange Rule 1.5(n). 1 15 5 15 U.S.C. 78q–1(b)(3)(F). U.S.C. 78q–1. 7 15 U.S.C. 78q–1. 8 15 U.S.C. 78s(b)(2). 9 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 6 15 PO 00000 Frm 00047 Fmt 4703 Sfmt 4703 73925 E:\FR\FM\12DEN1.SGM 12DEN1

Agencies

[Federal Register Volume 79, Number 239 (Friday, December 12, 2014)]
[Notices]
[Pages 73924-73925]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29181]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73790; File No. SR-ICC-2014-17]


Self-Regulatory Organizations; ICE Clear Credit LLC; Order 
Granting Approval of Proposed Rule Change To Revise ICC End-of-Day 
Price Discovery Policies and Procedures

December 8, 2014.

I. Introduction

    On October 17, 2014, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change SR-ICC-2014-17 pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder.\2\ The 
proposed rule change was published for comment in the Federal Register 
on November 3, 2014.\3\ The Commission received no comment letters 
regarding the proposed change. For the reasons discussed below, the 
Commission is granting approval of the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-73451 (Oct. 28, 
2014), 79 FR 65280 (Nov. 3, 2014) (SR-ICC-2014-17).
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II. Description of the Proposed Rule Change

    ICC is proposing this change to revise the ICC End-of-Day Price 
Discovery Policies and Procedures to incorporate enhancements to its 
price discovery

[[Page 73925]]

process. This revision does not require any changes to the ICC Clearing 
Rules.
    According to ICC, it utilizes a ``cross and lock'' algorithm as 
part of its price discovery process. As described by ICC, under this 
algorithm, bids and offers derived from Clearing Participant (``CP'') 
submissions are matched by sorting them from highest to lowest and 
lowest to highest levels, respectively. This sorting process pairs the 
CP submitting the highest bid price with the CP submitting the lowest 
offer price, the CP submitting the second highest bid price with the CP 
submitting the second-lowest offer price, and so on. The algorithm then 
identifies crossed and/or locked markets. Crossed markets are the 
Clearing Participant pairs generated by the sorting and ranking process 
for which the bid price of one Clearing Participant is above the offer 
price of the matched Clearing Participant. The algorithm identifies 
locked markets, where the bid and the offer are equal, in a similar 
fashion. The mid-point of the first non-crossed, non-locked matched 
market is, as stated by ICC, the final end-of-day level (with 
additional steps taken to remove off-market submissions from 
influencing the final level). According to ICC, this process captures 
the market dynamics of trading; however, final pricing levels are 
ultimately determined by a single bid and a single offer, which results 
in the ability for one submission to influence the outcome.
    ICC proposes enhancements to its methodology to improve the 
consistency of prices and reduce the sensitivity of the final level to 
a single Clearing Participant's submission. ICC states that under the 
new ``cross and lock'' methodology, the average of the mid-points of 
all non-crossed, non-locked matched markets that are less than or equal 
to one bid-offer width is used as the final level (with additional 
steps taken to remove off-market submissions from influencing the final 
level). ICC states that, as a result, prices are less sensitive to 
outlying submissions. ICC also proposes additional language in the ICC 
End-of-Day Price Discovery Policies and Procedures to clarify existing 
policies and practices, including, but not limited to, language to 
clarify the existing pricing methodology's treatment of identical 
crossed or locked matched market bids or offers.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \4\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if the 
Commission finds that such proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to such self-regulatory organization. Section 17A(b)(3)(F) 
of the Act \5\ requires, among other things, that the rules of a 
clearing agency are designed to promote the prompt and accurate 
clearance and settlement of securities transactions and, to the extent 
applicable, derivative agreements, contracts, and transactions, to 
assure the safeguarding of securities and funds which are in the 
custody or control of the clearing agency or for which it is 
responsible and, in general, to protect investors and the public 
interest.
---------------------------------------------------------------------------

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

    The Commission finds that the proposed rule change is consistent 
with Section 17A of the Act \6\ and the rules thereunder applicable to 
ICC. The revised ICC End-of-Day Price Discovery Policies and Procedures 
will reduce the sensitivity of the final price level to a single 
Clearing Participant's submission, resulting in more consistent day-
over-day end-of-day levels. The proposed rule change is therefore 
reasonably expected to provide a pricing methodology to more accurately 
reflect the market level. As such, the Commission believes that the 
changes will promote the prompt and accurate settlement of securities 
and derivatives transactions, and therefore are consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to ICC, in particular, Section 17(A)(b)(3)(F).
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act \7\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (File No. SR-ICC-2014-17) be, and 
hereby is, approved.\9\
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29181 Filed 12-11-14; 8:45 am]
BILLING CODE 8011-01-P
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