Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Accounts Categories for Positions of Clearing Member Affiliates, 30575-30577 [2016-11539]

Download as PDF Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Notices order routing practices, that the degree to which fee changes in this market may impose any burden on competition is extremely limited. The Exchange’s proposal to no longer pay Customer Rebates on options overlying NDX and MNX in any Category does not impose an undue burden on intra-market competition because the Exchange would apply the calculation of Customer rebates and would pay rebates on qualifying orders in a uniform manner. No market participant would be paid a Customer Rebate in options overlying NDX or MNX. All market participants may participate in the Customer Rebate Program. Members would continue to benefit from the inclusion of options overlying NDX and MNX in the total volume to qualify a market participant for a Customer Rebate. Also, the Exchange’s proposal to no longer pay Customer Rebates on options overlying NDX and MNX in any Category does not impose an undue burden on inter-market competition because there is only one other exchange that transacts options overlying NDX and MNX through a contractual agreement with the Exchange. That venue may choose to also not pay rebates on options overlying NDX or MNX. Other venues may not list these proprietary indices. jstallworth on DSK7TPTVN1PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.20 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, 20 15 U.S.C. 78s(b)(3)(A)(ii). VerDate Sep<11>2014 15:32 May 16, 2016 including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–77809; File No. SR–ICEEU– 2016–006] • 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– Phlx–2016–57 on the subject line. Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Accounts Categories for Positions of Clearing Member Affiliates Paper Comments May 11, 2016. • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 28 2016, ICE Clear Europe Limited (‘‘ICE Clear Europe’’ or ‘‘Clearing House’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule changes described in Items I, II and III below, which Items have been prepared by ICE Clear Europe. ICE Clear Europe filed the proposal pursuant to Section 19(b)(3)(A) of the Act,3 and Rule 19b–4(f)(i) 4 thereunder, so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. All submissions should refer to File Number SR–Phlx–2016–57. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. 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–Phlx– 2016–57 and should be submitted on or before June 7, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–11541 Filed 5–16–16; 8:45 am] BILLING CODE 8011–01–P 21 17 Jkt 238001 30575 PO 00000 Fmt 4703 The principal purpose of the proposed changes is to clarify the account categories to be used for positions of affiliates of Clearing Members. 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. 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 such statements. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(4)(i). 2 17 CFR 200.30–3(a)(12). Frm 00061 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Sfmt 4703 E:\FR\FM\17MYN1.SGM 17MYN1 30576 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose ICE Clear Europe submits proposed amendments to its Clearing Procedures to clarify the account categories in which positions of affiliates of Clearing Members are to be maintained, in light of applicable US and EU regulatory requirements. ICE Clear Europe does not propose to amend its Rules in connection with these changes. Under CFTC rules, the positions of an affiliate of an FCM are considered ‘‘proprietary’’ for purposes of segregation requirements and thus cannot be held in a customer account.5 As a result, FCMs, including FCM/BD Clearing Members, have historically carried such positions in their proprietary accounts. However, under the European Market Infrastructure Regulation (‘‘EMIR’’),6 when applicable to ICE Clear Europe, a clearing member will be required to treat an affiliate as a client 7 for various purposes, and accordingly positions of the affiliate should be held in a separate account from the proprietary positions of the clearing member.8 Accordingly, ICE Clear Europe proposes to establish new position-keeping accounts for use by FCM/BD Clearing Members for positions of their affiliates, which will be separate from the clearing member’s own positions (and thus satisfy the EMIR requirement) but at the same time will not be customer accounts for purposes of applicable CFTC requirements. Although it is expected that these accounts will at present be principally relevant to F&O Contracts of affiliates of FCM/BD Clearing Members, the accounts would also be used for CDS 5 See, e.g., 17 CFR 1.3(y), 17 CFR 1.20(e)(2). (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. 7 EMIR Article 2(15). EMIR defines ‘‘client’’ as ‘‘an undertaking with a contractual relationship with a clearing member of a CCP which enables that undertaking to clear its transactions with that CCP,’’ which suggests that an affiliate can be a client of a clearing member. This understanding of a client is supported in other EU legislation such as MiFID (see Directive 2004/39/EC of the European Parliament and of the Council on 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/ EEC), and in UK case law where affiliates have consistently been treated as clients to whom regulatory obligations were owed. See Re Lehman Brothers International (Europe) (in administration) [2012] UKSC 6. 8 EMIR Article 39(4). jstallworth on DSK7TPTVN1PROD with NOTICES 6 Regulation VerDate Sep<11>2014 15:32 May 16, 2016 Jkt 238001 Contracts of such persons, as and when ICE Clear Europe accepts such contracts cleared through FCM/BD Clearing Members. Specifically, ICE Clear Europe proposes to amend paragraph 2.3(b) of the Clearing Procedures to establish new position-keeping accounts, labeled the ‘‘F’’ and ‘‘R’’ accounts, which will be required to be used for all positions of affiliates of FCM/BD Clearing Members. The ‘‘F’’ account will use a gross margin model (for positions in contracts margined on a gross basis under the Rules and Procedures); the ‘‘R’’ account will use a net margin model (for positions in contracts margined on a net basis under the Rules and Procedures). Both accounts will be treated as separate Proprietary Accounts for purposes of the Rules (and accordingly the accounts will not constitute Customer Accounts of the FCM/BD Clearing Member). New paragraph 2.3(f) has been added to provide a definition of ‘‘affiliate’’ for this purpose, based on the relevant definitions of proprietary accounts under CFTC rules. Paragraph 2.3 has also been revised to clarify the treatment of positions of affiliates of Non-FCM/BD Clearing Members. New paragraph 2.3(f) also includes a definition of ‘‘affiliate’’ for this purpose, based on the EMIR definition of ‘‘group.’’ Conforming changes have been made to paragraph 2.3(b)(4) to use such definition. Additional clarifications have been made in paragraph 2.3(b)(5) as to the use by certain Non-FCM/BD Clearing Members of the ‘‘T’’ and ‘‘K’’ accounts (as separate Segregated Customer Omnibus Accounts for F&O or Segregated TTFCA Customer Omnibus Accounts for F&O) and of the ‘‘F’’ and ‘‘R’’ accounts as available for holding positions of their affiliates. Paragraph 2.3(c) has been revised to clarify that the Clearing House may establish additional position-keeping accounts for a Clearing Member to facilitate separate tracking of positions for each exchange nonclearing member for which the Clearing Member provides services. The revisions also clarify the treatment of such position-keeping accounts for exchange members as customer or proprietary, consistent with the requirements of the Rules and Clearing Procedures and applicable law. Amendments to paragraph 3.1(a) of the Clearing Procedures provide for the margining of the ‘‘F’’ and ‘‘R’’ accounts of FCM/BD Clearing members as separate Proprietary Accounts. The summary table following paragraph 3.2 of the Clearing Procedures has been amended to conform to the other PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 changes made in the Clearing Procedures. 2. Statutory Basis ICE Clear Europe believes that the proposed amendments to the Clearing Procedures are consistent with the requirements of Section 17A of the Act 9 and the regulations thereunder applicable to it.10 Section 17A(b)(3)(F) of the Act 11 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, 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 to protect investors and the public interest. The amendments are designed to clarify the treatment of positions of affiliates of Clearing Members in light of applicable legal and regulatory requirements. Specifically, for FCM/BD Clearing Members, the amendments establish separate accounts in which such positions must be held, in a manner that is consistent with both CFTC and EMIR requirements. Such accounts will allow positions of affiliates to be held separately from the Clearing Member’s positions, consistent with the EMIR requirements, but will be treated as Proprietary Accounts under the Rules and Procedures, consistent with CFTC rules. The amendments also clarify the treatment of positions of affiliates of Non-FCM/BD Clearing Members, consistent with EMIR requirements. Overall, in ICE Clear Europe’s view, the amendments will enhance its ability (and that of its Clearing Members) to track positions of Clearing Member affiliates and comply with relevant regulatory obligations. As a result, in ICE Clear Europe’s view, the amendments will promote the prompt and accurate clearance and settlement of derivative transactions, are consistent with the safeguarding of funds and securities in the custody or control of ICE Clear Europe, and generally further the public interest. The amendments are therefore consistent with the requirements of Section 17A(b)(3)(F) of the Act 12 and the regulations thereunder.13 9 15 U.S.C. 78q–1. CFR 240.17Ad–22. 11 15 U.S.C. 78q–1(b)(3)(F). 12 15 U.S.C. 78q–1(b)(3)(F). 13 17 CFR 240.17Ad–22. 10 17 E:\FR\FM\17MYN1.SGM 17MYN1 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Notices B. Self-Regulatory Organization’s Statement on Burden on Competition ICE Clear Europe does not believe the proposed changes to the Rules 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 intended to clarify the treatment of positions of affiliates of Clearing Member, consistent with applicable legal requirements. ICE Clear Europe does not believe the proposed amendments would adversely affect access to clearing by Clearing Members or their affiliates (or 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 proposed amendments may impose additional compliance costs on Clearing Members, including because of the requirements to hold affiliate positions in separate accounts that are separately margined, ICE Clear Europe believes that such costs reflect, and are appropriate in light of, the legal requirements applicable to such positions. Although the amendments treat affiliate positions of FCM/BD Clearing Members and NonFCM/BD Clearing Members differently in certain respects, in ICE Clear Europe’s view such differences also result from the different legal frameworks applicable to such Clearing Members. As a result, ICE Clear Europe does not believe that the proposed amendments to the Clearing Procedures will impose any burden on competition not appropriate in furtherance of the purposes of the Act. jstallworth on DSK7TPTVN1PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others ICE Clear Europe has not solicited or received any written comments with respect to the proposed changes. ICE Clear Europe will notify the Commission of any 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) 14 of the Act and Rule 19b– 4(f)(4)(i) 15 thereunder. The amendments effect a change in an existing service of a registered clearing agency that does not adversely affect the safeguarding of 14 15 15 17 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(4)(i). VerDate Sep<11>2014 15:32 May 16, 2016 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 its clearing service, within the meaning of Rule 19b– 4(f)(4)(i).16 As noted above, the amendments provide for a separate proprietary account to be used for positions of affiliates of FCM/BD Clearing Members (as opposed to combining such positions in the same account as the Clearing Member’s own positions), in order to be consistent with both CFTC and EMIR requirements. The amendments also provide that such accounts will be margined separately. Certain other clarifications are made with respect to the accounts used for positions of affiliates of Non-FCM/BD Clearing Members. In ICE Clear Europe’s view, these changes will not adversely affect the safeguarding of funds or securities in the custody or control of ICE Clear Europe, from the perspective of Clearing Members or their affiliates or customers. Although the amendments impose certain additional requirements on Clearing Members that carry positions on behalf of their affiliates in terms of the use of a separate account, ICE Clear Europe also believes that the amendments will not significantly affect the rights or obligations of ICE Clear Europe or Clearing Members using its clearing services. As a result, ICE Clear Europe views these amendments as falling within Rule 19b–4(f)(4)(i).17 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml) or • Send an email to rulecomments@sec.gov. Please include File Number SR–ICEEU–2016–006 on the subject line. 16 17 17 17 Jkt 238001 PO 00000 CFR 240.19b–4(f)(4)(i). CFR 240.19b–4(f)(4)(i). Frm 00063 Fmt 4703 Sfmt 9990 30577 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–2016–006. 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#rule-filings. 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–2016–006 and should be submitted on or before June 7, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–11539 Filed 5–16–16; 8:45 am] BILLING CODE 8011–01–P 18 17 E:\FR\FM\17MYN1.SGM CFR 200.30–3(a)(12). 17MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30575-30577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11539]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77809; File No. SR-ICEEU-2016-006]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Accounts Categories for Positions of Clearing Member
Affiliates

May 11, 2016.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 28 2016, ICE Clear Europe Limited (``ICE Clear Europe'' or
``Clearing House'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule changes described in Items I, II and
III below, which Items have been prepared by ICE Clear Europe. ICE
Clear Europe filed the proposal pursuant to Section 19(b)(3)(A) of the
Act,\3\ and Rule 19b-4(f)(i) \4\ thereunder, so that the proposal was
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(4)(i).
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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 clarify the
account categories to be used for positions of affiliates of Clearing
Members.

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. 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 such statements.

[[Page 30576]]

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

1. Purpose
ICE Clear Europe submits proposed amendments to its Clearing
Procedures to clarify the account categories in which positions of
affiliates of Clearing Members are to be maintained, in light of
applicable US and EU regulatory requirements. ICE Clear Europe does not
propose to amend its Rules in connection with these changes.
Under CFTC rules, the positions of an affiliate of an FCM are
considered ``proprietary'' for purposes of segregation requirements and
thus cannot be held in a customer account.\5\ As a result, FCMs,
including FCM/BD Clearing Members, have historically carried such
positions in their proprietary accounts. However, under the European
Market Infrastructure Regulation (``EMIR''),\6\ when applicable to ICE
Clear Europe, a clearing member will be required to treat an affiliate
as a client \7\ for various purposes, and accordingly positions of the
affiliate should be held in a separate account from the proprietary
positions of the clearing member.\8\ Accordingly, ICE Clear Europe
proposes to establish new position-keeping accounts for use by FCM/BD
Clearing Members for positions of their affiliates, which will be
separate from the clearing member's own positions (and thus satisfy the
EMIR requirement) but at the same time will not be customer accounts
for purposes of applicable CFTC requirements. Although it is expected
that these accounts will at present be principally relevant to F&O
Contracts of affiliates of FCM/BD Clearing Members, the accounts would
also be used for CDS Contracts of such persons, as and when ICE Clear
Europe accepts such contracts cleared through FCM/BD Clearing Members.
---------------------------------------------------------------------------

\5\ See, e.g., 17 CFR 1.3(y), 17 CFR 1.20(e)(2).
\6\ 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.
\7\ EMIR Article 2(15). EMIR defines ``client'' as ``an
undertaking with a contractual relationship with a clearing member
of a CCP which enables that undertaking to clear its transactions
with that CCP,'' which suggests that an affiliate can be a client of
a clearing member. This understanding of a client is supported in
other EU legislation such as MiFID (see Directive 2004/39/EC of the
European Parliament and of the Council on 21 April 2004 on markets
in financial instruments amending Council Directives 85/611/EEC and
93/6/EEC and Directive 2000/12/EC of the European Parliament and of
the Council and repealing Council Directive 93/22/EEC), and in UK
case law where affiliates have consistently been treated as clients
to whom regulatory obligations were owed. See Re Lehman Brothers
International (Europe) (in administration) [2012] UKSC 6.
\8\ EMIR Article 39(4).
---------------------------------------------------------------------------

Specifically, ICE Clear Europe proposes to amend paragraph 2.3(b)
of the Clearing Procedures to establish new position-keeping accounts,
labeled the ``F'' and ``R'' accounts, which will be required to be used
for all positions of affiliates of FCM/BD Clearing Members. The ``F''
account will use a gross margin model (for positions in contracts
margined on a gross basis under the Rules and Procedures); the ``R''
account will use a net margin model (for positions in contracts
margined on a net basis under the Rules and Procedures). Both accounts
will be treated as separate Proprietary Accounts for purposes of the
Rules (and accordingly the accounts will not constitute Customer
Accounts of the FCM/BD Clearing Member). New paragraph 2.3(f) has been
added to provide a definition of ``affiliate'' for this purpose, based
on the relevant definitions of proprietary accounts under CFTC rules.
Paragraph 2.3 has also been revised to clarify the treatment of
positions of affiliates of Non-FCM/BD Clearing Members. New paragraph
2.3(f) also includes a definition of ``affiliate'' for this purpose,
based on the EMIR definition of ``group.'' Conforming changes have been
made to paragraph 2.3(b)(4) to use such definition. Additional
clarifications have been made in paragraph 2.3(b)(5) as to the use by
certain Non-FCM/BD Clearing Members of the ``T'' and ``K'' accounts (as
separate Segregated Customer Omnibus Accounts for F&O or Segregated
TTFCA Customer Omnibus Accounts for F&O) and of the ``F'' and ``R''
accounts as available for holding positions of their affiliates.
Paragraph 2.3(c) has been revised to clarify that the Clearing House
may establish additional position-keeping accounts for a Clearing
Member to facilitate separate tracking of positions for each exchange
non-clearing member for which the Clearing Member provides services.
The revisions also clarify the treatment of such position-keeping
accounts for exchange members as customer or proprietary, consistent
with the requirements of the Rules and Clearing Procedures and
applicable law.
Amendments to paragraph 3.1(a) of the Clearing Procedures provide
for the margining of the ``F'' and ``R'' accounts of FCM/BD Clearing
members as separate Proprietary Accounts. The summary table following
paragraph 3.2 of the Clearing Procedures has been amended to conform to
the other changes made in the Clearing Procedures.
2. Statutory Basis
ICE Clear Europe believes that the proposed amendments to the
Clearing Procedures are consistent with the requirements of Section 17A
of the Act \9\ and the regulations thereunder applicable to it.\10\
Section 17A(b)(3)(F) of the Act \11\ 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, 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 to protect investors and the public interest.
---------------------------------------------------------------------------

\9\ 15 U.S.C. 78q-1.
\10\ 17 CFR 240.17Ad-22.
\11\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

The amendments are designed to clarify the treatment of positions
of affiliates of Clearing Members in light of applicable legal and
regulatory requirements. Specifically, for FCM/BD Clearing Members, the
amendments establish separate accounts in which such positions must be
held, in a manner that is consistent with both CFTC and EMIR
requirements. Such accounts will allow positions of affiliates to be
held separately from the Clearing Member's positions, consistent with
the EMIR requirements, but will be treated as Proprietary Accounts
under the Rules and Procedures, consistent with CFTC rules. The
amendments also clarify the treatment of positions of affiliates of
Non-FCM/BD Clearing Members, consistent with EMIR requirements.
Overall, in ICE Clear Europe's view, the amendments will enhance its
ability (and that of its Clearing Members) to track positions of
Clearing Member affiliates and comply with relevant regulatory
obligations. As a result, in ICE Clear Europe's view, the amendments
will promote the prompt and accurate clearance and settlement of
derivative transactions, are consistent with the safeguarding of funds
and securities in the custody or control of ICE Clear Europe, and
generally further the public interest. The amendments are therefore
consistent with the requirements of Section 17A(b)(3)(F) of the Act
\12\ and the regulations thereunder.\13\
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\12\ 15 U.S.C. 78q-1(b)(3)(F).
\13\ 17 CFR 240.17Ad-22.

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[[Page 30577]]

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

ICE Clear Europe does not believe the proposed changes to the Rules
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 intended to clarify
the treatment of positions of affiliates of Clearing Member, consistent
with applicable legal requirements. ICE Clear Europe does not believe
the proposed amendments would adversely affect access to clearing by
Clearing Members or their affiliates (or 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 proposed amendments may impose additional
compliance costs on Clearing Members, including because of the
requirements to hold affiliate positions in separate accounts that are
separately margined, ICE Clear Europe believes that such costs reflect,
and are appropriate in light of, the legal requirements applicable to
such positions. Although the amendments treat affiliate positions of
FCM/BD Clearing Members and Non-FCM/BD Clearing Members differently in
certain respects, in ICE Clear Europe's view such differences also
result from the different legal frameworks applicable to such Clearing
Members. As a result, ICE Clear Europe does not believe that the
proposed amendments to the Clearing 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

ICE Clear Europe has not solicited or received any written comments
with respect to the proposed changes. ICE Clear Europe will notify the
Commission of any 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) \14\ of the Act and Rule 19b-4(f)(4)(i) \15\
thereunder. The amendments 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 its clearing service, within the
meaning of Rule 19b-4(f)(4)(i).\16\ As noted above, the amendments
provide for a separate proprietary account to be used for positions of
affiliates of FCM/BD Clearing Members (as opposed to combining such
positions in the same account as the Clearing Member's own positions),
in order to be consistent with both CFTC and EMIR requirements. The
amendments also provide that such accounts will be margined separately.
Certain other clarifications are made with respect to the accounts used
for positions of affiliates of Non-FCM/BD Clearing Members. In ICE
Clear Europe's view, these changes will not adversely affect the
safeguarding of funds or securities in the custody or control of ICE
Clear Europe, from the perspective of Clearing Members or their
affiliates or customers. Although the amendments impose certain
additional requirements on Clearing Members that carry positions on
behalf of their affiliates in terms of the use of a separate account,
ICE Clear Europe also believes that the amendments will not
significantly affect the rights or obligations of ICE Clear Europe or
Clearing Members using its clearing services. As a result, ICE Clear
Europe views these amendments as falling within Rule 19b-
4(f)(4)(i).\17\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(4)(i).
\16\ 17 CFR 240.19b-4(f)(4)(i).
\17\ 17 CFR 240.19b-4(f)(4)(i).
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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.

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-2016-006 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-2016-006. 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#rule-filings.
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-2016-006
and should be submitted on or before June 7, 2016.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11539 Filed 5-16-16; 8:45 am]
BILLING CODE 8011-01-P

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