Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change To Revise Liquidity Thresholds for Euro Denominated Products, 16244-16245 [2017-06440]
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Federal Register / Vol. 82, No. 62 / Monday, April 3, 2017 / Notices
2017.3 The Commission received no
comment letters regarding the proposed
change. For the reasons discussed
below, the Commission is approving the
proposed rule change.
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SUMMARY:
Stanley F. Mires,
Attorney, Federal Compliance.
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80324; File No. SR–ICC–
2017–002]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Order Approving
Proposed Rule Change To Revise
Liquidity Thresholds for Euro
Denominated Products
March 28, 2017.
mstockstill on DSK3G9T082PROD with NOTICES
I. Introduction
On January 27, 2017, ICE Clear Credit
LLC (‘‘ICC’’) 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
(SR–ICC–2017–002) to amend the ICC
Clearing Rules, the ICC Treasury
Operations Policies and Procedures and
the ICC Liquidity Risk Management
Framework to update ICC’s liquidity
thresholds for non-client Euro
denominated products. The proposed
rule change was published for comment
in the Federal Register on February 14,
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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18:32 Mar 31, 2017
Jkt 241001
ICC has proposed changes to
Schedule 401 of its Clearing Rules,
Treasury Operations Policies and
Procedures and Liquidity Risk
Management Framework. The proposed
changes will reduce Clearing
Participants’ Non-Client Initial Margin
and Guaranty Fund Liquidity
Requirements (‘‘Non-Client Liquidity
Requirements’’) for products
denominated in Euros from 65% Euro
cash to 45% Euro cash.4 The proposed
rule change further gives Clearing
Participants the option of posting the
next 20% of Non-Client Liquidity
Requirements for these products in
either Euro or US Dollar cash. The
proposed rule change does not alter
Clearing Participants’ existing ability to
post the final 35% of their Non-Client
Liquidity requirements in US Treasuries
or cash issued by any G7 nation.
III. Discussion and Commission
Findings
[FR Doc. 2017–06425 Filed 3–31–17; 8:45 am]
1 15
II. Description of the Proposed Rule
Change
Section 19(b)(2)(C) of the Act 5 directs
the Commission to approve a proposed
rule change of a self-regulatory
organization if it finds that such
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to such organization. Section
17A(b)(3)(F) of the Act requires,6 among
other things, that the rules of a
registered 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, in general, to protect
investors and the public interest. Rule
17Ad–22(d)(3) 7 requires that a
registered clearing agency shall
establish, implement, maintain, and
enforce written policies and procedures
reasonably designed to hold assets in a
manner that minimizes risk of loss or of
delay in its access to them.
The Commission finds that the
proposed rule change, which adjusts the
amount of Euro cash required in respect
of non-client Euro denominated
products, is consistent with Section 17A
of the Act and Rule 17Ad–22
thereunder. The proposed rule change
should not impact ICC’s access to
liquidity in the event of a clearing
participant’s default. ICC represented
that ‘‘the 45% minimum percentage
requirement is equivalent to the
maximum assumed one day movement
in Initial Margin (assuming a 5-day risk
horizon).’’ 8 Moreover, if additional Euro
cash is needed, ICC asserts that it can
rely on its committed foreign exchange
facility for settled spot dollar-to-Euro
foreign exchange transactions.9
Accordingly, because there is unlikely
to be a diminution in ICC’s ability to
meet its obligations, this proposed rule
change is consistent with the prompt
and accurate clearance and settlement
requirement of Section 17A(b)(3)(F) of
the Act.10
The proposed rule change also is
consistent with the requirements in
Section 17A(b)(3)(F) and Rule 17Ad–
22(d)(3) that assets of a clearinghouse be
safeguarded. As noted above, the
proposed rule change now permits ICC’s
Clearing Participants to post an
additional 20% of their Non-Client
Liquidity Requirements in US Dollars.
ICC in turn has represented that ‘‘to the
extent possible, ICC deposits US Dollar
cash in its account at the Federal
Reserve Bank of Chicago.’’ 11 Thus,
giving ICC’s Clearing Participants the
option to post additional US Dollar
cash, which may result in an increased
amount of funds on deposit with a
Federal Reserve Bank should further
assure the safeguarding of those funds
and minimize the risk of loss or delay
in access to those funds, consistent with
Section 17A(b)(3)(F) of the Act,12 and
Rule 17Ad–22(d)(3).13
IV. Conclusion
It is therefore ordered pursuant to
Section 19(b)(2) of the Act that the
proposed rule change (SR–ICC–2017–
002) be, and hereby is, approved.14
8 Notice,
3 Securities
Exchange Act Release No. 34–79988
(February 8, 2017), 82 FR 10611 (February 14, 2017)
(SR–ICC–2017–002) (‘‘Notice’’).
4 Capitalized terms used in this order, but not
defined herein, have the same meaning as in the
ICC Clearing Rules.
5 15 U.S.C. 78s(b)(2)(C).
6 15 U.S.C. 78q–1(b)(3)(F).
7 17 CFR 240.17Ad–22(d)(3).
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82 FR at 10612.
9 Id.
10 15
U.S.C. 78q–1(b)(3)(F).
82 FR at 10612.
12 15 U.S.C. 78q–1(b)(3)(F).
13 17 U.S.C. 240.17Ad–22(d)(3).
14 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).
11 Notice,
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03APN1
Federal Register / Vol. 82, No. 62 / Monday, April 3, 2017 / Notices
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.15
Brent J. Fields,
Secretary.
[FR Doc. 2017–06440 Filed 3–31–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80321; File No. SR–FINRA–
2017–008]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to the Private
Placement Filer Form Under FINRA
Rules 5122 and 5123
March 28, 2017.
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 March 17,
2017, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.4
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing changes to the
Private Placement Filer Form (‘‘Filer
Form’’) that members complete when
submitting private placement filings
under FINRA Rules 5122 (Private
Placements of Securities Issued by
Members) or 5123 (Private Placements
of Securities). The proposal does not
make any changes to the text of FINRA
rules.
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6). FINRA has given the
Commission written notice of its intent to file the
proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission.
4 The text of the proposed rule change is available
at the principal office of FINRA, on FINRA’s Web
site at https://www.finra.org, and at the
Commission’s Public Reference Room.
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1 15
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Rules 5122 and 5123 require a FINRA
member to file information regarding
private placements in which the
member participates.5 When Rule 5123
became effective on December 3, 2012,6
FINRA required members to use the
Filer Form for filings under both rules.7
Members submit the Filer Form and
relevant offering documents to FINRA
through the FINRA Firm Gateway.8 On
July 1, 2013, FINRA amended Rule 5123
to require members to file the requisite
information ‘‘in a manner prescribed by
FINRA’’ and also began using an
updated version of the Filer Form.9 The
changes proposed herein would further
update the version of the Filer Form that
has been in use since 2013 for filings
made pursuant to Rule 5122 and Rule
5123.
5 Both Rules 5122 and 5123 provide exemptions
from the filing requirement when certain types of
securities are sold or securities are sold to certain
types of investors. See Rules 5122(c) and 5123(b).
6 See Securities Exchange Act Release No. 67157
(June 7, 2012), 77 FR 35457 (June 13, 2012) (Notice
of Filing of Amendments No. 2 and No. 3 and Order
Granting Accelerated Approval of File No. SR–
FINRA–2011–057); Regulatory Notice 12–40
(September 2012).
7 See Regulatory Notice 12–40 (September 2012).
See also Regulatory Notice 13–26 (August 2013);
Securities Exchange Act Release No. 69843 (June
25, 2013), 78 FR 39367 (July 1, 2013) (Notice of
Filing and Immediate Effectiveness of a Proposed
Rule Change Relating to Members’ Filing
Obligations under FINRA Rule 5123 (Private
Placements of Securities) File No. SR–FINRA–
2013–026).
8 FINRA Firm Gateway is an online compliance
tool that provides consolidated access to FINRA
applications and allows members to submit
required filings electronically to meet their
compliance and regulatory obligations.
9 See Securities Exchange Act Release No. 69843
(June 25, 2013), 78 FR 39367 (July 1, 2013) (Notice
of Filing and Immediate Effectiveness of a Proposed
Rule Change Relating to Members’ Filing
Obligations under FINRA Rule 5123 (Private
Placements of Securities) File No. SR–FINRA–
2013–026).
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16245
The Filer Form has three main
components: (1) The ‘‘Participating
Member Information’’ section, which
seeks information about the members
that are selling the private placement;
(2) the ‘‘Issuer Information’’ section,
which captures basic information about
the issuer; and (3) the ‘‘Offering
Information’’ section, which seeks
information about the offering. FINRA
proposes changes to the Filer Form that
will add, clarify and eliminate questions
or other information requested in each
section. Members may respond
‘‘unknown’’ for all new requests for
information. Therefore, the Filer Form,
as proposed to be modified, would not
impose any new obligation on brokerdealers to seek out information that they
do not already have. FINRA describes
these proposed changes below.
The Participating Member section of
the Filer Form would add questions
regarding whether the member making
the filing (‘‘filing member’’) is the
exclusive selling agent in the private
placement and whether there is any
affiliation between the issuer or sponsor
of the private placement with any
member participating in the offering
upon whose behalf the filing member is
submitting the Filer Form. This section
would no longer require the title and
email address for the contact person of
the filing member or the contact name,
title and telephone number for other
members identified in the filing.
The Issuer Information section of the
Filer Form would add a question asking
whether the issuer is a reporting
company. This section would no longer
require the filing member to enter the
name, title and email address of the
issuer’s contact person.
The Offering Information section
would add questions regarding:
• The type of security the issuer is
offering;
• whether the issuer raised capital
within the preceding 12 months from
any source (excluding loans or
investments by affiliates);
• minimum investment amount that
the issuer will accept and whether the
issuer can waive that minimum;
• whether the filing member sold or
will sell the offering to any nonaccredited investors;
• the exemption from the Securities
Act of 1933 that the issuer is relying
upon; 10 and
10 FINRA notes that one of the exemptions listed
on the Filer Form is Rule 505 of Regulation D. The
SEC has recently repealed Rule 505, with a stated
effective date of May 22, 2017, in connection with
its amendments to exemptions to facilitate
intrastate and regional securities offerings. See
Securities Exchange Act Release No. 79161, 81 FR
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03APN1
]]>Agencies
[Federal Register Volume 82, Number 62 (Monday, April 3, 2017)]
[Notices]
[Pages 16244-16245]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06440]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80324; File No. SR-ICC-2017-002]
Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change To Revise Liquidity Thresholds for Euro
Denominated Products
March 28, 2017.
I. Introduction
On January 27, 2017, ICE Clear Credit LLC (``ICC'') 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 (SR-ICC-2017-002)
to amend the ICC Clearing Rules, the ICC Treasury Operations Policies
and Procedures and the ICC Liquidity Risk Management Framework to
update ICC's liquidity thresholds for non-client Euro denominated
products. The proposed rule change was published for comment in the
Federal Register on February 14, 2017.\3\ The Commission received no
comment letters regarding the proposed change. For the reasons
discussed below, the Commission is approving the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 34-79988 (February 8,
2017), 82 FR 10611 (February 14, 2017) (SR-ICC-2017-002)
(``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
ICC has proposed changes to Schedule 401 of its Clearing Rules,
Treasury Operations Policies and Procedures and Liquidity Risk
Management Framework. The proposed changes will reduce Clearing
Participants' Non-Client Initial Margin and Guaranty Fund Liquidity
Requirements (``Non-Client Liquidity Requirements'') for products
denominated in Euros from 65% Euro cash to 45% Euro cash.\4\ The
proposed rule change further gives Clearing Participants the option of
posting the next 20% of Non-Client Liquidity Requirements for these
products in either Euro or US Dollar cash. The proposed rule change
does not alter Clearing Participants' existing ability to post the
final 35% of their Non-Client Liquidity requirements in US Treasuries
or cash issued by any G7 nation.
---------------------------------------------------------------------------
\4\ Capitalized terms used in this order, but not defined
herein, have the same meaning as in the ICC Clearing Rules.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act \5\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to such organization. Section 17A(b)(3)(F) of the Act
requires,\6\ among other things, that the rules of a registered
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, in general, to protect investors and the public
interest. Rule 17Ad-22(d)(3) \7\ requires that a registered clearing
agency shall establish, implement, maintain, and enforce written
policies and procedures reasonably designed to hold assets in a manner
that minimizes risk of loss or of delay in its access to them.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(b)(2)(C).
\6\ 15 U.S.C. 78q-1(b)(3)(F).
\7\ 17 CFR 240.17Ad-22(d)(3).
---------------------------------------------------------------------------
The Commission finds that the proposed rule change, which adjusts
the amount of Euro cash required in respect of non-client Euro
denominated products, is consistent with Section 17A of the Act and
Rule 17Ad-22 thereunder. The proposed rule change should not impact
ICC's access to liquidity in the event of a clearing participant's
default. ICC represented that ``the 45% minimum percentage requirement
is equivalent to the maximum assumed one day movement in Initial Margin
(assuming a 5-day risk horizon).'' \8\ Moreover, if additional Euro
cash is needed, ICC asserts that it can rely on its committed foreign
exchange facility for settled spot dollar-to-Euro foreign exchange
transactions.\9\ Accordingly, because there is unlikely to be a
diminution in ICC's ability to meet its obligations, this proposed rule
change is consistent with the prompt and accurate clearance and
settlement requirement of Section 17A(b)(3)(F) of the Act.\10\
---------------------------------------------------------------------------
\8\ Notice, 82 FR at 10612.
\9\ Id.
\10\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The proposed rule change also is consistent with the requirements
in Section 17A(b)(3)(F) and Rule 17Ad-22(d)(3) that assets of a
clearinghouse be safeguarded. As noted above, the proposed rule change
now permits ICC's Clearing Participants to post an additional 20% of
their Non-Client Liquidity Requirements in US Dollars. ICC in turn has
represented that ``to the extent possible, ICC deposits US Dollar cash
in its account at the Federal Reserve Bank of Chicago.'' \11\ Thus,
giving ICC's Clearing Participants the option to post additional US
Dollar cash, which may result in an increased amount of funds on
deposit with a Federal Reserve Bank should further assure the
safeguarding of those funds and minimize the risk of loss or delay in
access to those funds, consistent with Section 17A(b)(3)(F) of the
Act,\12\ and Rule 17Ad-22(d)(3).\13\
---------------------------------------------------------------------------
\11\ Notice, 82 FR at 10612.
\12\ 15 U.S.C. 78q-1(b)(3)(F).
\13\ 17 U.S.C. 240.17Ad-22(d)(3).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered pursuant to Section 19(b)(2) of the Act
that the proposed rule change (SR-ICC-2017-002) be, and hereby is,
approved.\14\
---------------------------------------------------------------------------
\14\ 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).
[[Page 16245]]
---------------------------------------------------------------------------
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Brent J. Fields,
Secretary.
[FR Doc. 2017-06440 Filed 3-31-17; 8:45 am]
BILLING CODE 8011-01-P
