Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Proposed Rule Change, Security-Based Swap Submission or Advance Notice Relating to Amendments to the ICE Clear Europe Limited Articles of Association, 23080-23083 [2017-10129]

Download as PDF 23080 Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / 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. asabaliauskas on DSK3SPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 16 and subparagraph (f)(6) of Rule 19b–4 thereunder.17 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative for 30 days after the date of its filing. However, Rule 19b– 4(f)(6)(iii) 18 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay so that the proposed rule change will become operative on May 15, 2017. The Exchange stated that the proposed rule change is consistent with the protection of investors and the public interest by immediately eliminating the administrative burden of enforcing an outdated rule and by facilitating compliance with CHX Rules by current and new Participants that are already accustomed to the mandatory trade and clearing anonymity rules and practices of other exchanges. Waiver of the operative delay would allow the Exchange, without delay, to make its trade and clearing anonymity rules consistent with the rules and practices of other exchanges. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest as it will permit CHX to harmonize its trade and clearing rules with those of the other exchanges without delay. Therefore, the Commission designates the proposed rule change to be operative on May 15, 2017.19 16 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 18 17 CFR 240.19b–4(f)(6)(iii). 19 For purposes only of waiving the 30-day operative delay, the Commission also has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 17 17 VerDate Sep<11>2014 19:15 May 18, 2017 Jkt 241001 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CHX–2017–09 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–CHX–2017–09. 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 (http://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 PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CHX– 2017–09, and should be submitted on or before June 9, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–10128 Filed 5–18–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80674; File No. SR–ICEEU– 2017–007] Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Proposed Rule Change, SecurityBased Swap Submission or Advance Notice Relating to Amendments to the ICE Clear Europe Limited Articles of Association May 15, 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 May 2, 2017, ICE Clear Europe Limited (‘‘ICE Clear Europe’’) 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 primarily by ICE Clear Europe. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change, Security-Based Swap Submission, or Advance Notice The principal purpose of the proposed rule change is to modify certain provisions of the ICE Clear Europe Articles of Association. II. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change, Security-Based Swap Submission or Advance Notice In its filing with the Commission, ICE Clear Europe included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the 20 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\19MYN1.SGM 19MYN1 Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices 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. asabaliauskas on DSK3SPTVN1PROD with NOTICES (A) Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change, Security-Based Swap Submission or Advance Notice 1. Purpose The purpose of the changes is to make certain amendments to ICE Clear Europe’s Articles of Association (the ‘‘Articles’’). The amendments are generally intended to update the Articles to reflect the Clearing House’s committee structure, to modify certain matters relating to the term of office of directors and to adopt certain new procedures addressing conflicts of interest of directors, as discussed in more detail herein. In article 1,3 a cross-reference to relevant parts of UK companies regulations has been updated. In article 3, certain definitions have been updated, including to add definitions for key existing committees: The Audit Committee, Board Risk Committee, Compensation Committee and Nominations Committee. The amendments also update the definition of Risk Committee to refer to productspecific Risk Committees (as distinct from the Board Risk Committee). A reference to the former UK Financial Services Authority has been updated to refer to the Bank of England, consistent with changes in the UK regulatory structure. A definition has also been added for the Senior Independent Director, as discussed below. Certain definitional provisions have also been clarified, including to remove unnecessary references to certain extraordinary resolutions. Article 4 has been updated to provide a crossreference to regulations referred to in article 1. Articles 7 and 8 have been revised to remove certain unnecessary distinctions between annual general meetings of members (i.e., shareholders) and extraordinary general meetings of members (given that the clearing house has a single shareholder). A typographical correction is made in article 12. In article 25, the minimum number of directors has been changed from two to six (the maximum of twelve is unchanged, as are the requirements with respect to independent directors). The clearing house currently has ten directors; as a result, this amendment is 3 References herein to the numbering of particular articles will be to the articles as amended. VerDate Sep<11>2014 19:15 May 18, 2017 Jkt 241001 not expected to affect current operations of the board. Article 26 has been revised to reflect that selection of replacement or additional directors will be made following recommendation by the Nominations Committee. Article 29 provides for the board to appoint one of its independent directors as Senior Independent Director (and to revoke or termination such appointment at its discretion). The Senior Independent Director will serve as the lead independent director appointed in accordance with the UK Corporate Governance Code 4 as in effect from time to time (to which the clearing house is subject). The amendments make certain changes to the procedures for staggering the retirement or rotation of independent directors. Under revised Articles 31 and 32, at a general meeting to be held each year, the two longest serving independent directors (who are not CDS directors) that have served at least three consecutive years on the board, at the discretion of the Nominations Committee, must retire from office, but may offer themselves for reappointment for a new three year term by the shareholder. An independent director may be so reappointed a maximum of two times for three year terms, unless the clearing house by resolution of its sole shareholder determines otherwise. The provisions for the retirement or rotation of CDS directors are unchanged. The revised retirement procedures do not apply to directors other than independent directors. Various conforming and clarifying changes have been made in article 33, which will provide that a director whose term ends at a general meeting may be reappointed and if not, may retain office until the meeting appoints a replacement (or until the end of the meeting if no replacement is named). In article 34, standards for determining that a director has become incapacitated have been updated. The amendments also reduce from six to three the number of consecutive meetings that a director may miss before being removed on that basis. A new article 37 has been added to state explicitly that the directors will 4 Financial Reporting Council Limited, UK Corporate Governance Code (April 2016). The code sets out a code of conduct and best practices for governance matters for UK companies. Among other matters, the code states that the board should appoint one of the independent non-executive directors as a senior independent director ‘‘to provide a sounding board for the chairman and to serve as an intermediary for the other directors when necessary.’’ The senior independent director should lead meetings of the non-executive directors, at least annually, to evaluate the performance of the Board chairman. PO 00000 Frm 00129 Fmt 4703 Sfmt 4703 23081 appoint the members of the relevant committees, as is current practice, consistent with the terms of reference for those committees, and that the committees will operate in accordance with such terms of reference. Article 43, which addresses delegation of board powers to committees, has been revised to refer explicitly to the Audit Committee, Board Risk Committee, Nominations Committee and Compensation Committee, and such other committees as the board determines may be required. A new article 48 has been added to require independent directors to disclose to the board all other directorships they hold, both prior to appointment and on an ongoing basis. Additional amendments have been made to the provisions of the Articles relating to conflicts of interest (and potential conflicts of interest) of directors to ensure that there is a clear procedure in place to deal with any such conflicts of interest (and potential conflicts of interest), consistent with the provisions of the UK Companies Act 2006. In article 52, the prohibition on a director participating in or voting on a decision in which he or she has an interest is modified (i) to eliminate a restriction that the interest be material and (ii) to provide additional exceptions where ICE Clear Europe by ordinary resolution of the shareholder disapplies the provision of the Articles that would prevent the director from participating in that decision or where the director’s interest cannot reasonably be regarded as likely to give rise to a conflict of interest. A reference to the UK Companies Act 2006 is also corrected, and an unnecessary reference to that act is removed. The amendments also adopt a new article 53, which addresses certain conflicts of interests and potential conflicts of interest of directors that do not arise in relation to a transaction or agreement with ICE Clear Europe (without limiting the obligations of directors under applicable provisions of the UK Companies Act 2006). In the case of such a conflict that arises from the appointment or proposed appointment of a person as a director, the uninterested directors or the shareholder may nonetheless authorize the appointment of the director, and address the relevant situation, on such terms as they determine. In the case of other conflicts, the uninterested directors or the shareholder may choose to permit the relevant situation and the continued performance by the interested director of his or her duties, on such terms as they determine. The interested directors will not be counted in the E:\FR\FM\19MYN1.SGM 19MYN1 23082 Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES quorum for, and will not be allowed to vote on, any decision of the directors on such matters. The uninterested directors may act on such matters even if there are insufficient directors to meet the normal quorum and voting requirements. The resolution adopted by the uninterested directors or the shareholder may, for example, permit the interested directors to vote, exclude the interested directors from all information and discussion about the relevant situation, and/or impose additional duties of confidentiality on the interested directors. The authorization of an interested director situation can be withdrawn or modified at any time. The article also contains requirements on directors to provide notice of potential conflicts and specifies certain other procedures and documentation requirements. In article 55, clarifications are made that a director may not retrospectively waive notice of a meeting more than seven days after the meeting is held. The revised article also clarifies that the chair will not have a second or casting vote (in the case of an equally divided vote) if the chair is not otherwise to be counted for quorum or voting purposes (such as because of a conflict of interest). In revised article 60, the requirements for action by written resolution of directors have been clarified to provide that all directors entitled to vote on the matter (rather than all directors entitled to receive notice of a board meeting) must consent to the action. The recordkeeping requirements in article 63 have been revised to provide that the company must keep a written record of all unanimous or majority decisions of the directors for at least 10 years. Article 69 has been revised to refer to a special rather than extraordinary resolution. Certain other non-substantive corrections and clarifications have been made in the Articles. For example, various references to persons throughout the Articles have been revised to be gender-neutral. Various articles have also been renumbered in light of the changes discussed above, and related cross-references have been updated. 2. Statutory Basis ICE Clear Europe believes that the changes described herein are consistent with the requirements of Section 17A of the Act 5 and the regulations thereunder applicable to it, and in particular are consistent with the prompt and accurate clearance and settlement of securities 5 15 U.S.C. 78q–1. VerDate Sep<11>2014 19:15 May 18, 2017 transactions and, to the extent applicable, derivative agreements, contracts and transactions, the safeguarding of securities and funds in the custody or control of ICE Clear Europe or for which it is responsible and the protection of investors and the public interest, within the meaning of Section 17A(b)(3)(F) of the Act.6 As discussed above, the changes are intended to clarify and update certain aspects of ICE Clear Europe’s Articles, particularly around the committee structure, retirement and rotation of independent directors and conflicts of interest of directors. In ICE Clear Europe’s view, these amendments will enhance the clearing house’s overall governance framework, and thus facilitate the efficient operation of the clearing house and the prompt and accurate clearance and settlement of transactions and the public interest, within the meaning of the Act. For these reasons, the amendments will also promote governance arrangements that are clear and transparent to fulfill the public interests requirements in Section 17A of the Act applicable to clearing agencies, support the objectives of owners and participants and promote the effectiveness of the clearing agency’s risk management procedures, within the meaning of Rule 17Ad–22(d)(8). Furthermore, the amendments will support governance arrangements that fulfill the requirements of Rule 17Ad– 22(e)(2), including that the directors have appropriate experience and skills to discharge their duties and responsibilities, and that the governance arrangements specify clear and direct lines of responsibility. (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others (B) Clearing Agency’s Statement on Burden on Competition Electronic Comments ICE Clear Europe does not believe the proposed changes to the rules would have any impact, or impose any burden, on competition not necessary or appropriate in furtherance of the purpose of the Act. The amendments relate to ICE Clear Europe’s internal governance structure relating to the board of directors and similar matters. ICE Clear Europe does not believe that these changes will impose any additional costs on Clearing Members or other market participants. ICE Clear Europe further does not believe that the amendments will adversely affect access to clearing by Clearing Members or their customers or otherwise adversely affect Clearing Members or market participants or the market for clearing services generally. 6 15 Jkt 241001 PO 00000 U.S.C. 78q–1(b)(3)(F). Frm 00130 Fmt 4703 Sfmt 4703 Written comments relating to the proposed changes to the rules have not been solicited or received. 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, Security-Based Swap Submission and Advance Notice and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change or (B) institute proceedings to determine whether the proposed rule change should be disapproved. The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, security-based swap submission or advance notice is consistent with the Act. Comments may be submitted by any of the following methods: • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml) or • Send an email to rule-comments@ sec.gov. Please include File Number SR– ICEEU–2017–007 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–2017–007. 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent E:\FR\FM\19MYN1.SGM 19MYN1 Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices amendments, all written statements with respect to the proposed rule change, security-based swap submission or advance notice that are filed with the Commission, and all written communications relating to the proposed rule change, security-based swap submission or advance notice 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–2017–007 and should be submitted on or before June 9, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–10129 Filed 5–18–17; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80676; File No. SR– PEARL–2017–20] Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule asabaliauskas on DSK3SPTVN1PROD with NOTICES May 15, 2017. Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 1, 2017, MIAX PEARL, LLC (‘‘MIAX PEARL’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 19:15 May 18, 2017 Jkt 241001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to amend the MIAX PEARL Fee Schedule (the ‘‘Fee Schedule’’) to adopt a fee schedule to establish the fees for Industry Members related to the National Market System Plan Governing the Consolidated Audit Trail (the ‘‘CAT NMS Plan’’ or ‘‘Plan’’).3 The text of the proposed rule change is available on the Exchange’s Web site at http://www.miaxoptions.com/rulefilings/pearl, 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P 7 17 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. 1. Purpose Bats BYX Exchange, Inc., Bats BZX Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), Investors’ Exchange LLC, Miami International Securities Exchange, LLC, MIAX PEARL, LLC, NASDAQ BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC,4 3 Unless otherwise specified, capitalized terms used in this fee filing are defined as set forth herein, the CAT Compliance Rule Series or in the CAT NMS Plan. 4 ISE Gemini, LLC, ISE Mercury, LLC and International Securities Exchange, LLC have been renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC, and Nasdaq ISE, LLC, respectively. See Securities Exchange Act Rel. No. 80248 (Mar. 15, 2017), 82 FR 14547 (Mar. 21, 2017); Securities Exchange Act Rel. PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 23083 NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE MKT LLC, NYSE Arca, Inc. and NYSE National, Inc.5 (collectively, the ‘‘Participants’’) filed with the Commission, pursuant to Section 11A of the Exchange Act 6 and Rule 608 of Regulation NMS thereunder,7 the CAT NMS Plan.8 The Participants filed the Plan to comply with Rule 613 of Regulation NMS under the Exchange Act. The Plan was published for comment in the Federal Register on May 17, 2016,9 and approved by the Commission, as modified, on November 15, 2016.10 The Plan is designed to create, implement and maintain a consolidated audit trail (‘‘CAT’’) that would capture customer and order event information for orders in NMS Securities and OTC Equity Securities, across all markets, from the time of order inception through routing, cancellation, modification, or execution in a single consolidated data source. The Plan accomplishes this by creating CAT NMS, LLC (the ‘‘Company’’), of which each Participant is a member, to operate the CAT.11 Under the CAT NMS Plan, the Operating Committee of the Company (‘‘Operating Committee’’) has discretion to establish funding for the Company to operate the CAT, including establishing fees that the Participants will pay, and establishing fees for Industry Members that will be implemented by the Participants (‘‘CAT Fees’’).12 The Participants are required to file with the SEC under Section 19(b) of the Exchange Act any such CAT Fees applicable to Industry Members that the Operating Committee approves.13 Accordingly, the Exchange submits this fee filing to propose the Consolidated Audit Trail Funding Fees, which will require Industry Members that are No. 80326 (Mar. 29, 2017), 82 FR 16460 (Apr. 4, 2017); and Securities Exchange Act Rel. No. 80325 (Mar. 29, 2017), 82 FR 16445 (Apr. 4, 2017). 5 National Stock Exchange, Inc. has been renamed NYSE National, Inc. See Securities Exchange Act Rel. No. 79902 (Jan. 30, 2017), 82 FR 9258 (Feb. 3, 2017). 6 15 U.S.C. 78k–1. 7 17 CFR 242.608. 8 See Letter from the Participants to Brent J. Fields, Secretary, Commission, dated September 30, 2014; and Letter from Participants to Brent J. Fields, Secretary, Commission, dated February 27, 2015. On December 24, 2015, the Participants submitted an amendment to the CAT NMS Plan. See Letter from Participants to Brent J. Fields, Secretary, Commission, dated December 23, 2015. 9 Securities Exchange Act Rel. No. 77724 (Apr. 27, 2016), 81 FR 30614 (May 17, 2016). 10 Securities Exchange Act Rel. No. 79318 (Nov. 15, 2016), 81 FR 84696 (Nov. 23, 2016) (‘‘Approval Order’’). 11 The Plan also serves as the limited liability company agreement for the Company. 12 Section 11.1(b) of the CAT NMS Plan. 13 Id. E:\FR\FM\19MYN1.SGM 19MYN1

Agencies

[Federal Register Volume 82, Number 96 (Friday, May 19, 2017)]
[Notices]
[Pages 23080-23083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10129]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80674; File No. SR-ICEEU-2017-007]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Proposed Rule Change, Security-Based Swap Submission or Advance 
Notice Relating to Amendments to the ICE Clear Europe Limited Articles 
of Association

May 15, 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 May 2, 2017, ICE Clear Europe Limited (``ICE Clear Europe'') 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 primarily by ICE Clear Europe. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change, Security-Based Swap Submission, or Advance Notice

    The principal purpose of the proposed rule change is to modify 
certain provisions of the ICE Clear Europe Articles of Association.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change, Security-Based Swap Submission or 
Advance Notice

    In its filing with the Commission, ICE Clear Europe included 
statements concerning the purpose of and basis for the proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of these statements may be examined at the

[[Page 23081]]

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.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change, Security-Based Swap Submission or 
Advance Notice

1. Purpose
    The purpose of the changes is to make certain amendments to ICE 
Clear Europe's Articles of Association (the ``Articles''). The 
amendments are generally intended to update the Articles to reflect the 
Clearing House's committee structure, to modify certain matters 
relating to the term of office of directors and to adopt certain new 
procedures addressing conflicts of interest of directors, as discussed 
in more detail herein.
    In article 1,\3\ a cross-reference to relevant parts of UK 
companies regulations has been updated. In article 3, certain 
definitions have been updated, including to add definitions for key 
existing committees: The Audit Committee, Board Risk Committee, 
Compensation Committee and Nominations Committee. The amendments also 
update the definition of Risk Committee to refer to product-specific 
Risk Committees (as distinct from the Board Risk Committee). A 
reference to the former UK Financial Services Authority has been 
updated to refer to the Bank of England, consistent with changes in the 
UK regulatory structure. A definition has also been added for the 
Senior Independent Director, as discussed below. Certain definitional 
provisions have also been clarified, including to remove unnecessary 
references to certain extraordinary resolutions. Article 4 has been 
updated to provide a cross-reference to regulations referred to in 
article 1.
---------------------------------------------------------------------------

    \3\ References herein to the numbering of particular articles 
will be to the articles as amended.
---------------------------------------------------------------------------

    Articles 7 and 8 have been revised to remove certain unnecessary 
distinctions between annual general meetings of members (i.e., 
shareholders) and extraordinary general meetings of members (given that 
the clearing house has a single shareholder). A typographical 
correction is made in article 12.
    In article 25, the minimum number of directors has been changed 
from two to six (the maximum of twelve is unchanged, as are the 
requirements with respect to independent directors). The clearing house 
currently has ten directors; as a result, this amendment is not 
expected to affect current operations of the board. Article 26 has been 
revised to reflect that selection of replacement or additional 
directors will be made following recommendation by the Nominations 
Committee. Article 29 provides for the board to appoint one of its 
independent directors as Senior Independent Director (and to revoke or 
termination such appointment at its discretion). The Senior Independent 
Director will serve as the lead independent director appointed in 
accordance with the UK Corporate Governance Code \4\ as in effect from 
time to time (to which the clearing house is subject).
---------------------------------------------------------------------------

    \4\ Financial Reporting Council Limited, UK Corporate Governance 
Code (April 2016). The code sets out a code of conduct and best 
practices for governance matters for UK companies. Among other 
matters, the code states that the board should appoint one of the 
independent non-executive directors as a senior independent director 
``to provide a sounding board for the chairman and to serve as an 
intermediary for the other directors when necessary.'' The senior 
independent director should lead meetings of the non-executive 
directors, at least annually, to evaluate the performance of the 
Board chairman.
---------------------------------------------------------------------------

    The amendments make certain changes to the procedures for 
staggering the retirement or rotation of independent directors. Under 
revised Articles 31 and 32, at a general meeting to be held each year, 
the two longest serving independent directors (who are not CDS 
directors) that have served at least three consecutive years on the 
board, at the discretion of the Nominations Committee, must retire from 
office, but may offer themselves for reappointment for a new three year 
term by the shareholder. An independent director may be so reappointed 
a maximum of two times for three year terms, unless the clearing house 
by resolution of its sole shareholder determines otherwise. The 
provisions for the retirement or rotation of CDS directors are 
unchanged. The revised retirement procedures do not apply to directors 
other than independent directors. Various conforming and clarifying 
changes have been made in article 33, which will provide that a 
director whose term ends at a general meeting may be reappointed and if 
not, may retain office until the meeting appoints a replacement (or 
until the end of the meeting if no replacement is named). In article 
34, standards for determining that a director has become incapacitated 
have been updated. The amendments also reduce from six to three the 
number of consecutive meetings that a director may miss before being 
removed on that basis.
    A new article 37 has been added to state explicitly that the 
directors will appoint the members of the relevant committees, as is 
current practice, consistent with the terms of reference for those 
committees, and that the committees will operate in accordance with 
such terms of reference. Article 43, which addresses delegation of 
board powers to committees, has been revised to refer explicitly to the 
Audit Committee, Board Risk Committee, Nominations Committee and 
Compensation Committee, and such other committees as the board 
determines may be required. A new article 48 has been added to require 
independent directors to disclose to the board all other directorships 
they hold, both prior to appointment and on an ongoing basis.
    Additional amendments have been made to the provisions of the 
Articles relating to conflicts of interest (and potential conflicts of 
interest) of directors to ensure that there is a clear procedure in 
place to deal with any such conflicts of interest (and potential 
conflicts of interest), consistent with the provisions of the UK 
Companies Act 2006. In article 52, the prohibition on a director 
participating in or voting on a decision in which he or she has an 
interest is modified (i) to eliminate a restriction that the interest 
be material and (ii) to provide additional exceptions where ICE Clear 
Europe by ordinary resolution of the shareholder disapplies the 
provision of the Articles that would prevent the director from 
participating in that decision or where the director's interest cannot 
reasonably be regarded as likely to give rise to a conflict of 
interest. A reference to the UK Companies Act 2006 is also corrected, 
and an unnecessary reference to that act is removed.
    The amendments also adopt a new article 53, which addresses certain 
conflicts of interests and potential conflicts of interest of directors 
that do not arise in relation to a transaction or agreement with ICE 
Clear Europe (without limiting the obligations of directors under 
applicable provisions of the UK Companies Act 2006). In the case of 
such a conflict that arises from the appointment or proposed 
appointment of a person as a director, the uninterested directors or 
the shareholder may nonetheless authorize the appointment of the 
director, and address the relevant situation, on such terms as they 
determine. In the case of other conflicts, the uninterested directors 
or the shareholder may choose to permit the relevant situation and the 
continued performance by the interested director of his or her duties, 
on such terms as they determine. The interested directors will not be 
counted in the

[[Page 23082]]

quorum for, and will not be allowed to vote on, any decision of the 
directors on such matters. The uninterested directors may act on such 
matters even if there are insufficient directors to meet the normal 
quorum and voting requirements. The resolution adopted by the 
uninterested directors or the shareholder may, for example, permit the 
interested directors to vote, exclude the interested directors from all 
information and discussion about the relevant situation, and/or impose 
additional duties of confidentiality on the interested directors. The 
authorization of an interested director situation can be withdrawn or 
modified at any time. The article also contains requirements on 
directors to provide notice of potential conflicts and specifies 
certain other procedures and documentation requirements.
    In article 55, clarifications are made that a director may not 
retrospectively waive notice of a meeting more than seven days after 
the meeting is held. The revised article also clarifies that the chair 
will not have a second or casting vote (in the case of an equally 
divided vote) if the chair is not otherwise to be counted for quorum or 
voting purposes (such as because of a conflict of interest). In revised 
article 60, the requirements for action by written resolution of 
directors have been clarified to provide that all directors entitled to 
vote on the matter (rather than all directors entitled to receive 
notice of a board meeting) must consent to the action.
    The recordkeeping requirements in article 63 have been revised to 
provide that the company must keep a written record of all unanimous or 
majority decisions of the directors for at least 10 years. Article 69 
has been revised to refer to a special rather than extraordinary 
resolution.
    Certain other non-substantive corrections and clarifications have 
been made in the Articles. For example, various references to persons 
throughout the Articles have been revised to be gender-neutral. Various 
articles have also been renumbered in light of the changes discussed 
above, and related cross-references have been updated.
2. Statutory Basis
    ICE Clear Europe believes that the changes described herein are 
consistent with the requirements of Section 17A of the Act \5\ and the 
regulations thereunder applicable to it, and in particular are 
consistent with the prompt and accurate clearance and settlement of 
securities transactions and, to the extent applicable, derivative 
agreements, contracts and transactions, the safeguarding of securities 
and funds in the custody or control of ICE Clear Europe or for which it 
is responsible and the protection of investors and the public interest, 
within the meaning of Section 17A(b)(3)(F) of the Act.\6\ As discussed 
above, the changes are intended to clarify and update certain aspects 
of ICE Clear Europe's Articles, particularly around the committee 
structure, retirement and rotation of independent directors and 
conflicts of interest of directors. In ICE Clear Europe's view, these 
amendments will enhance the clearing house's overall governance 
framework, and thus facilitate the efficient operation of the clearing 
house and the prompt and accurate clearance and settlement of 
transactions and the public interest, within the meaning of the Act. 
For these reasons, the amendments will also promote governance 
arrangements that are clear and transparent to fulfill the public 
interests requirements in Section 17A of the Act applicable to clearing 
agencies, support the objectives of owners and participants and promote 
the effectiveness of the clearing agency's risk management procedures, 
within the meaning of Rule 17Ad-22(d)(8). Furthermore, the amendments 
will support governance arrangements that fulfill the requirements of 
Rule 17Ad-22(e)(2), including that the directors have appropriate 
experience and skills to discharge their duties and responsibilities, 
and that the governance arrangements specify clear and direct lines of 
responsibility.
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    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed changes to the rules 
would have any impact, or impose any burden, on competition not 
necessary or appropriate in furtherance of the purpose of the Act. The 
amendments relate to ICE Clear Europe's internal governance structure 
relating to the board of directors and similar matters. ICE Clear 
Europe does not believe that these changes will impose any additional 
costs on Clearing Members or other market participants. ICE Clear 
Europe further does not believe that the amendments will adversely 
affect access to clearing by Clearing Members or their customers or 
otherwise adversely affect Clearing Members or market participants or 
the market for clearing services generally.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants or Others

    Written comments relating to the proposed changes to the rules have 
not been solicited or received. 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, Security-Based 
Swap Submission and Advance Notice and Timing for Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.
    The proposal shall not take effect until all regulatory actions 
required with respect to the proposal are completed.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, security-based swap submission or advance notice is consistent 
with the Act. Comments may be submitted by any of the following 
methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ICEEU-2017-007 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-2017-007. 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent

[[Page 23083]]

amendments, all written statements with respect to the proposed rule 
change, security-based swap submission or advance notice that are filed 
with the Commission, and all written communications relating to the 
proposed rule change, security-based swap submission or advance notice 
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-2017-007 
and should be submitted on or before June 9, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-10129 Filed 5-18-17; 8:45 am]
 BILLING CODE 8011-01-P