Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Designation of Longer Period for Commission Action on Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to the CDS End-of-Day Price Discovery Policy, 21287-21288 [2017-09060]
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Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices
would, and the Commission believes
that Sponsoring Members are fully
aware of this outcome and are capable
of addressing it by passing on any risk
and cost to their Sponsored Members.
The Commission also believes that
benefits from the expansion would not
necessarily fall solely to bank Netting
Members, but, as FICC explains,46 to all
GSD members, where such members are
counterparties to Sponsoring Members
with new Sponsored Member Trades.
In addition, the Commission believes
that the proposal’s expansion of the
Sponsored Membership program would
make the risk-reducing benefits of
central clearing available to a wider
range of entity types. In turn, increased
trading activity through the expanded
Sponsored Membership program would
likely (1) lower the risk of diminished
liquidity in the U.S. repo market caused
by a large scale exit of participants from
the market in a stress scenario (through
FICC’s guaranty of completion of
settlement for a greater number of
eligible transactions); (2) protect against
fire sale risk (through FICC’s ability to
centralize and control the liquidation of
a greater portion of a failed
counterparty’s portfolio); and (3)
decrease settlement and operational risk
(by making a greater number of
transactions eligible to be netted and
subject to guaranteed settlement,
novation, and independent risk
management through FICC).
Therefore, the Commission believes
that by removing the RIC requirement
and adjusting the QIB requirement, the
Proposed Rule Change would remove an
impediment to and help perfect the
mechanism of a national system for the
prompt and accurate clearance and
settlement of securities transactions,
consistent with Section 17A(b)(3)(F) of
the Act, cited above.
Section 17A(b)(3)(F) of the Act
requires, in part, that the Rules also be
designed to, in general, to protect
investors and the public interest.47 As
described above, the proposal would
expand the types of entities eligible to
participate in the Sponsored
Membership program as Sponsored
Members. As discussed above, Ronin
argues that such expansion would
increase concentration, settlement, and
leverage risks.48 The Commission does
not find that the proposed expansion
would increase such risks. First,
Sponsoring Members are bank Netting
Members that are subject to extensive
risk management practices and
46 FICC
Letter at 3–4.
U.S.C. 78q–1(b)(3)(F).
48 Ronin Letter I at 1–6; see also Ronin Letter II
at 2.
oversight by their prudential regulators
and FICC, which helps mitigate risk
posed by such entities, including the
addition of new Sponsored Members.
Second, by expanding the types of
entities that are eligible to participate
and thereby benefit from FICC’s
guaranteed settlement, novation, and
independent risk management, the
proposal would help mitigate the risk of
a large scale exit by such firms from the
U.S. repo market in a stress scenario
and, thus, lower the risk of a liquidity
drain in such a scenario. Third, by
providing central clearing to a greater
number of Sponsored Member Trades,
the proposal would enable FICC to
centralize and control the liquidation of
a greater number of such positions in
the event of a Sponsored Member or
Sponsoring Member’s default. Doing so
would help protect against the risk that
an uncoordinated liquidation of the
positions by multiple counterparties to
the defaulting member would cause a
fire sale of positions that negatively
impacts the counterparties, FICC, and
potentially the broader financial system.
Therefore, the Commission believes that
the proposed changes related to the
proposed expansion of Sponsored
Membership eligibility would help
protect investors and the public interest,
in accordance with Section 17A(b)(3)(F)
of the Act.49
Section 17A(b)(3)(F) of the Act
requires, in part, that the Rules also be
designed to promote the prompt and
accurate clearance and settlement of
securities transactions.50 In addition to
the proposed changes related
specifically to the proposed expansion
of entity types eligible to be Sponsored
Members, the Proposed Rule Change
also would make a number of changes
to the Rules that relate to Sponsored
Membership in general, as described
above. These changes are designed to
provide specificity, clarity, and
additional transparency to the Rules by
(i) removing ambiguities in definitions
and other Rule provisions to provide
greater clarity regarding how such
definitions and provisions apply to the
Sponsored Membership program; (ii)
updating Rule provisions to correct
outdated terminology; and (iii)
correcting typographical errors and outof-date cross-references. Collectively,
these changes would ensure that the
relevant Rules remain transparent,
accurate, and clear, which would enable
all stakeholders to better understand
their rights and obligations in
connection with the Sponsored
Membership program. Therefore, the
47 15
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49 Id.
50 Id.
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21287
Commission believes these changes
would promote the prompt and accurate
clearance and settlement of securities
transactions by FICC, consistent with
Section 17A(b)(3)(F) of the Act.51
V. Conclusion
On the basis of the foregoing, the
Commission finds that the Proposed
Rule Change is consistent with the
requirements of the Act and in
particular with the requirements of
Section 17A of the Act 52 and the rules
and regulations promulgated
thereunder.
It Is Therefore Ordered, pursuant to
Section 19(b)(2) of the Act 53 that
proposed rule change SR–FICC–2017–
003, as modified by Amendment No. 1,
be, and hereby is, Approved.54
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.55
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–09059 Filed 5–4–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80566; File No. SR–ICEEU–
2017–003]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of
Designation of Longer Period for
Commission Action on Proposed Rule
Change, Security-Based Swap
Submission, or Advance Notice
Relating to the CDS End-of-Day Price
Discovery Policy
May 1, 2017.
On March 10, 2017, ICE Clear Europe
Limited (‘‘ICE Clear Europe’’) 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–ICEEU–2017–003) to amend
ICE Clear Europe’s CDS End-of-Day
Price Discovery Policy to implement a
new price submission process for
Clearing Members. The proposed rule
change was published for comment in
the Federal Register on March 23,
51 Id.
52 15
U.S.C. 78q–1.
U.S.C. 78s(b)(2).
54 In approving the proposed rule change, the
Commission considered the proposals’ impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
55 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
53 15
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Federal Register / Vol. 82, No. 86 / Friday, May 5, 2017 / Notices
2017.3 The Commission received no
comments regarding the proposed
changes.
Section 19(b)(2) of the Act provides
that within 45 days of the publication of
the notice of the filing or 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 the proposed rule change
should be disapproved.4 The 45th day
from the publication of the Notice is
May 7, 2017.
The Commission is extending the 45day time period for Commission action
on the proposed rule change. ICE Clear
Europe proposes to revise its CDS Endof-Day Price Discovery Policy to
implement a new Clearing Member
price submission process to remove the
intermediary agent through which
Clearing Members currently submit
required prices, and replace it with a
process through which Clearing
Members submit prices directly to ICE
Clear Europe. 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
ICE Clear Europe’s proposed rule
change and the associated operational
risks.
Accordingly, the Commission,
pursuant to Section 19(b)(2) of the Act,
extends the period by which the
Commission shall either approve or
disapprove, or institute proceedings to
determine whether to disapprove, the
proposed rule change (File No. SR–
ICEEU–2017–003) to no later than June
21, 2017.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.5
Eduardo A. Aleman,
Assistant Secretary.
SRADOVICH on DSK3GMQ082PROD with NOTICES
[FR Doc. 2017–09060 Filed 5–4–17; 8:45 am]
BILLING CODE 8011–01–P
3 Securities Exchange Act Release No. 34–80269
(March 17, 2017), 82 FR 14925 (March 23, 2017)
(SR–ICEEU–2017–003) (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 17 CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80570; File No. SR–MIAX–
2017–16]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing of a Proposed Rule
Change To Amend MIAX Options Rule
515A, MIAX Price Improvement
Mechanism (‘‘PRIME’’) and PRIME
Solicitation Mechanism
May 1, 2017.
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on April 25, 2017, Miami International
Securities Exchange LLC (‘‘MIAX
Options’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I, II, and III below,
which Items have been prepared by the
Exchange. The Commission is
publishing this notice to solicit
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 is filing a proposal to
amend Exchange Rule 515A, MIAX
Price Improvement Mechanism
(‘‘PRIME’’) and PRIME Solicitation
Mechanism.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.miaxoptions.com/rulefilings, at MIAX’s principal office, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00103
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 515A, MIAX Price Improvement
Mechanism (‘‘PRIME’’) and PRIME
Solicitation Mechanism, to amend the
duration of a PRIME Auction. PRIME is
a process by which a Member 3 may
electronically submit for execution
(‘‘Auction’’) an order 4 it represents as
agent (‘‘Agency Order’’) against
principal interest, and/or an Agency
Order against solicited interest
(‘‘Solicitation Auction’’). When the
Exchange receives a properly designated
Agency Order for auction processing, a
Request for Responses (‘‘RFR’’) detailing
the option, side, size, and initiating
price is sent to all subscribers of the
Exchange’s data feeds. Currently, the
Auction and Solicitation Auction period
lasts for 500 milliseconds, unless it is
concluded early.5 The Exchange
proposes to amend Rule 515A(a)(2)(i)(C)
so that the duration of the Auction and
Solicitation Auction shall be a time
period designated by the Exchange,
which shall be no less than 100
milliseconds and no more than 1
second, consistent with the rule of other
exchanges, such as the International
Securities Exchange (‘‘ISE’’), NASDAQ
BX (‘‘BX’’), NASDAQ PHLX (‘‘PHLX’’),
and Chicago Board Options Exchange
(‘‘CBOE’’).6 When approving the change
3 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
4 The term ‘‘order’’ means a firm commitment to
buy or sell option contracts. See Exchange Rule 100.
5 A PRIME and PRIME Solicitation Auction will
conclude at the sooner of (1) Upon receipt by the
System of an unrelated order (in the same option
as the Agency Order) on the opposite side of the
market from the RFR responses, that is marketable
against either the NBBO, the initiating price, or the
RFR responses; (2) Upon receipt by the System of
an unrelated order (in the same option as the
Agency Order) on the same side of the market as
the RFR responses, that is marketable against the
NBBO; (3) Upon receipt by the System of an
unrelated limit order (in the same option as the
Agency Order) on the opposite of the market from
the Agency Order that improves any RFR response;
(4) Any time an RFR response matches the NBBO
on the opposite side of the market from the RFR
responses; (5) Any time there is a quote lock in the
subject option on the Exchange pursuant to Rule
1402; or (6) Any time there is a trading halt in the
option on the Exchange. See Exchange Rule 515A.
6 See Securities Exchange Act Release Nos. 79733
(January 4, 2017), 82 FR 3055 (January 10, 2017)
(SR–ISE–2016–26); 76301 (October 29, 2015), 80 FR
68347 (November 4, 2015) (SR–BX–2015–032);
77557 (April 7, 2016), 81 FR 21935 (April 13, 2016)
(SR–PHLX–2016–40); and 80421 (April 10, 2017),
82 FR 18048 (April 14, 2017) (SR–CBOE–2017–
029). The Commission notes that CBOE’s proposed
E:\FR\FM\05MYN1.SGM
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Agencies
[Federal Register Volume 82, Number 86 (Friday, May 5, 2017)]
[Notices]
[Pages 21287-21288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09060]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80566; File No. SR-ICEEU-2017-003]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Designation of Longer Period for Commission Action on Proposed Rule
Change, Security-Based Swap Submission, or Advance Notice Relating to
the CDS End-of-Day Price Discovery Policy
May 1, 2017.
On March 10, 2017, ICE Clear Europe Limited (``ICE Clear Europe'')
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-
ICEEU-2017-003) to amend ICE Clear Europe's CDS End-of-Day Price
Discovery Policy to implement a new price submission process for
Clearing Members. The proposed rule change was published for comment in
the Federal Register on March 23,
[[Page 21288]]
2017.\3\ The Commission received no comments regarding the proposed
changes.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 34-80269 (March 17,
2017), 82 FR 14925 (March 23, 2017) (SR-ICEEU-2017-003)
(``Notice'').
---------------------------------------------------------------------------
Section 19(b)(2) of the Act provides that within 45 days of the
publication of the notice of the filing or 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 the proposed rule change should be disapproved.\4\
The 45th day from the publication of the Notice is May 7, 2017.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
The Commission is extending the 45-day time period for Commission
action on the proposed rule change. ICE Clear Europe proposes to revise
its CDS End-of-Day Price Discovery Policy to implement a new Clearing
Member price submission process to remove the intermediary agent
through which Clearing Members currently submit required prices, and
replace it with a process through which Clearing Members submit prices
directly to ICE Clear Europe. 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 ICE
Clear Europe's proposed rule change and the associated operational
risks.
Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act, extends the period by which the Commission shall either approve or
disapprove, or institute proceedings to determine whether to
disapprove, the proposed rule change (File No. SR-ICEEU-2017-003) to no
later than June 21, 2017.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\5\
---------------------------------------------------------------------------
\5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09060 Filed 5-4-17; 8:45 am]
BILLING CODE 8011-01-P