Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Amendment No. 1 and Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to ICC's End-of-Day Price Discovery Policies and Procedures, 26824-26825 [2017-11963]

Download as PDF 26824 Federal Register / Vol. 82, No. 110 / Friday, June 9, 2017 / Notices in connection with the operation of its Retail Liquidity Program, until June 30, 2017. The limited and temporary exemption extended by this Order is subject to modification or revocation if at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Securities Exchange Act of 1934. Responsibility for compliance with any applicable provisions of the Federal securities laws must rest with the persons relying on the exemption that is the subject of this Order. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Robert W. Errett, Deputy Secretary. disapprove the proposed rule change.5 On March 17, 2017, the Commission instituted proceedings under Section 19(b)(2)(B) of the Act,6 to determine whether to approve or disapprove the proposed rule change.7 The Commission received seven comments on the proposed rule change, including responses by the Exchange.8 On June 2, 2017, the Exchange withdrew the proposed rule change (SR–CBOE–2016–082). SECURITIES AND EXCHANGE COMMISSION For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Robert W. Errett, Deputy Secretary. June 5, 2017. [FR Doc. 2017–11964 Filed 6–8–17; 8:45 am] BILLING CODE 8011–01–P [FR Doc. 2017–11965 Filed 6–8–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80859; SR–CBOE–2016– 082] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Withdrawal of a Proposed Rule Change Related to Rules Regarding the Responsibility for Ensuring Compliance With Priority and Allocation Requirements and TradeThrough Prohibitions in Open Outcry Trading mstockstill on DSK30JT082PROD with NOTICES June 5, 2017. On December 1, 2016, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend Exchange rules regarding responsibility for ensuring compliance with open outcry priority and allocation requirements and tradethrough prohibitions. The proposed rule change was published for comment in the Federal Register on December 19, 2016.3 On January 31, 2017, pursuant to Section 19(b)(2) of the Exchange Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to 8 17 CFR 200.30–3(a)(83). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 79540 (December 13, 2016), 81 FR 91967 (‘‘Notice’’). 4 15 U.S.C. 78s(b)(2). 1 15 VerDate Sep<11>2014 19:25 Jun 08, 2017 Jkt 241001 5 See Securities Exchange Act Release No. 79910, 82 FR 9464 (February 6, 2017). The Commission designated March 19, 2017, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. 6 15 U.S.C. 78s(b)(2)(B). 7 See Securities Exchange Act Release No. 80270, 82 FR 14926 (March 23, 2017). 8 See Letters to Brent J. Fields, Secretary, Commission, from: (1) Joan C. Conley, Senior Vice President and Corporate Secretary, Nasdaq, dated December 22, 2016; (2) Steve Crutchfield, Head of Market Structure, CTC Trading Group, LLC; Kevin Coleman, Chief Compliance Officer, Belvedere Trading LLC; Scott Kloin, Chief Compliance Officer, Citadel Securities LLC; Steven Gaston, Chief Compliance Officer, Consolidated Trading LLC; Rob Armour, Chief Compliance Officer, DRW Securities, LLC; John Kinahan, Chief Executive Officer, Group One Trading L.P.; Daniel Overmyer, Chief Compliance Officer, IMC Financial Markets; Steven Gaston, Chief Compliance Officer, Lamberson Capital LLC; and Patrick Hickey, Head of Market Structure, Optiver US LLC, dated February 16, 2017; (3) Joanna Mallers, Secretary, FIA Principal Traders Group, dated April 13, 2017; (4) Steve Crutchfield, Head of Market Structure, CTC Trading Group, LLC; Kevin Coleman, Chief Compliance Officer, Belvedere Trading LLC; Scott Kloin, Chief Compliance Officer, Citadel Securities LLC; Steven Gaston, Chief Compliance Officer, Consolidated Trading LLC; Rob Armour, Chief Compliance Officer, DRW Securities, LLC; John Kinahan, Chief Executive Officer, Group One Trading L.P.; Daniel Overmyer, Chief Compliance Officer, IMC Financial Markets; Steven Gaston, Chief Compliance Officer, Lamberson Capital LLC; and Patrick Hickey, Head of Market Structure, Optiver US LLC, dated April 13, 2017; and (5) Mark E. Gannon, Chief Compliance Officer, Lakeshore Securities, L.P., dated April 13, 2017. See also Letters to Brent J. Fields, Secretary, Commission, from Kyle Edwards, Counsel, CBOE, dated March 14, 2017 and April 27, 2017. The comment letters and CBOE’s responses are available at https://www.sec.gov/comments/srcboe-2016-082/cboe2016082.shtml. 9 17 CFR 200.30–3(a)(12). PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 [Release No. 34–80858; File No. SR–ICC– 2017–003] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Amendment No. 1 and Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Relating to ICC’s End-of-Day Price Discovery Policies and Procedures I. Introduction On February 16, 2017, ICE Clear Credit LLC (‘‘ICC’’ or ‘‘ICE Clear Credit’’) 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– 003) to amend ICC’s End-of-Day Price Discovery Policies and Procedures (‘‘Pricing Policy’’) to implement a new price submission process for Clearing Participants (‘‘CPs’’). The proposed rule change was published for comment in the Federal Register on March 9, 2017.3 The Commission did not receive comments regarding the proposed changes. On April 21, 2017, the Commission extended the period in which to approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change to June 7, 2017.4 On May 25, 2017, ICC filed Amendment No. 1 to the proposal.5 For the reasons discussed below, the Commission is approving the proposed rule changes, as modified by Amendment No. 1. II. Description of the Proposed Rule Change ICC has proposed changes to its Pricing Policy that are designed to implement a new price submission process. As part of its current price submission process, ICC requires CPs to submit certain required price information to an intermediary, which ICC then obtains and uses as part of its 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. Exchange Act Release No. 34–80150 (March 3, 2017), 82 FR 13173 (March 9, 2017) (SR– ICC–2017–003) (‘‘Notice’’). 4 Securities Exchange Act Release No. 34–80506 (April 21, 2017), 82 FR 19412 (April 27, 2017). 5 ICE Clear Credit filed Amendment No. 1 to clarify that the implementation date for the proposed rule change will be July 10, 2017, and to note that ICE Clear Credit will issue a circular confirming this timeline in advance of the July 10, 2017 implementation date. Because Amendment No. 1 is a clarifying amendment that does not alter the substance of the propose rule change the Commission is not publishing it for comment. 2 17 3 Securities E:\FR\FM\09JNN1.SGM 09JNN1 Federal Register / Vol. 82, No. 110 / Friday, June 9, 2017 / Notices mstockstill on DSK30JT082PROD with NOTICES price discovery process. The proposed rule changes would eliminate the use of the intermediary in the price submission process and instead require CPs to submit required price information directly to ICC. In order to implement the direct price submission process, ICC proposed to amend its Pricing Policy to (1) require CPs establish direct connectivity with ICC and use a FIX API to provide ICC with the required price information, (2) add references to FIX API terminology, and (3) make revisions reflecting the replacement of existing trade date files with FIX API firm trade messages.6 Moreover, ICC proposed amending the Pricing Policy to note that ICC will send FIX API messages directly to CPs, and removed references to the intermediary and its ‘‘Valuation Service API’’ previously used.7 Although ICC proposed additional minor changes to the timing of various steps in the pricing process, these proposed changes would not affect the actual settlement submission windows.8 In addition to the changes described above, ICC also proposed changes with respect to the format of information required to be submitted by CPs for the iTraxx Australia and iTraxx Asia ExJapan Indices, as well as the CDX.NA.HY and CDS.EM indices. ICC also proposed modifications to the process for distributing end-of-day prices, which will result in ICC publishing to CPs separate messages setting forth end-of-day price information for single name and index CDS.9 III. Discussion and Commission Findings Section 19(b)(2)(C) of the Act directs the Commission to approve a propose 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.10 Section 17A(b)(3)(F) of the Act requires, 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.11 Rule 17Ad–22(d)(4) requires, in relevant part, that a registered clearing agency shall 82 FR at 13173–74. 7 Notice, 82 FR at 13173. 8 Notice, 82 FR at 13174. 9 Id. 10 15 U.S.C. 78s(b)(2)(C). 11 15 U.S.C. 78q–1(b)(3)(F). 19:25 Jun 08, 2017 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act that the proposed rule change (SR–ICC–2017– 6 Notice, VerDate Sep<11>2014 establish, implement, maintain, and enforce written policies and procedures reasonably designed to identify sources of operational risk and minimize them through the development of appropriate systems, controls, and procedures; implement systems that are reliable, resilient and secure, and have adequate, scalable capacity.12 The Commission finds that the proposed rule change, which modifies ICC’s Pricing Policy to implement a direct price submission process for CPs, is consistent with Section 17A of the Act and Rule 17Ad–22 thereunder. The proposed rule change is consistent with the requirements of Section 17A(b)(3)(F) 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. By reducing operational risk the proposed rule changes reduce the likelihood that ICC will be unable to complete its end-of-day price discovery process. Completion of the end-of-day price discovery process is a necessary and essential element in ICC’s clearance and settlement processes. The Commission believes that the proposed changes should enhance ICC’s ability to complete the necessary pricing process effectively and thereby promote the prompt and accurate clearance and settlement of derivative agreements, contracts and transactions consistent with Section 17A(b)(3)(F). For similar reasons, the proposed rule changes are also consistent with Rule 17Ad–22(d)(4) in that they are designed to reduce operational risk outside of ICC’s control.13 The proposed rule changes are intended to reduce ICC’s external operational risk by allowing ICC to control the price submission process through the implementation of systems designed to provide for direct connection and communication with CPs instead of relying on an intermediary to collect price information needed for ICC’s price discovery process. As a result, because ICC will be able to reduce its reliance on intermediaries and thereby reduce operational risk that is outside of its control, the proposed rule changes are consistent with the requirements of Rule 17Ad–22(d)(4). 12 17 CFR 240.17Ad–22(d)(4). 13 Id. Jkt 241001 PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 26825 003), as amended by Amendment No. 1, be, and hereby is, approved.14 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.15 Robert W. Errett, Deputy Secretary. [FR Doc. 2017–11963 Filed 6–8–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80857; File No. SR–CBOE– 2017–044] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Relating to Disaster Recovery June 5, 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 24, 2017, Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The 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 proposes to amend Rule 6.18 relating to disaster recovery. The text of the proposed rule change is available on the Exchange’s Web site (http://www.cboe.com/AboutCBOE/ CBOELegalRegulatoryHome.aspx), at the Exchange’s Office of the Secretary, 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 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). 15 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. E:\FR\FM\09JNN1.SGM 09JNN1

Agencies

[Federal Register Volume 82, Number 110 (Friday, June 9, 2017)]
[Notices]
[Pages 26824-26825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11963]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80858; File No. SR-ICC-2017-003]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing of Amendment No. 1 and Order Approving Proposed Rule Change, as 
Modified by Amendment No. 1 Thereto, Relating to ICC's End-of-Day Price 
Discovery Policies and Procedures

June 5, 2017.

I. Introduction

    On February 16, 2017, ICE Clear Credit LLC (``ICC'' or ``ICE Clear 
Credit'') 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-2017-003) to amend ICC's End-of-Day Price 
Discovery Policies and Procedures (``Pricing Policy'') to implement a 
new price submission process for Clearing Participants (``CPs''). The 
proposed rule change was published for comment in the Federal Register 
on March 9, 2017.\3\ The Commission did not receive comments regarding 
the proposed changes. On April 21, 2017, the Commission extended the 
period in which to approve, disapprove, or institute proceedings to 
determine whether to disapprove the proposed rule change to June 7, 
2017.\4\ On May 25, 2017, ICC filed Amendment No. 1 to the proposal.\5\ 
For the reasons discussed below, the Commission is approving the 
proposed rule changes, as modified by Amendment No. 1.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-80150 (March 3, 
2017), 82 FR 13173 (March 9, 2017) (SR-ICC-2017-003) (``Notice'').
    \4\ Securities Exchange Act Release No. 34-80506 (April 21, 
2017), 82 FR 19412 (April 27, 2017).
    \5\ ICE Clear Credit filed Amendment No. 1 to clarify that the 
implementation date for the proposed rule change will be July 10, 
2017, and to note that ICE Clear Credit will issue a circular 
confirming this timeline in advance of the July 10, 2017 
implementation date. Because Amendment No. 1 is a clarifying 
amendment that does not alter the substance of the propose rule 
change the Commission is not publishing it for comment.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    ICC has proposed changes to its Pricing Policy that are designed to 
implement a new price submission process. As part of its current price 
submission process, ICC requires CPs to submit certain required price 
information to an intermediary, which ICC then obtains and uses as part 
of its

[[Page 26825]]

price discovery process. The proposed rule changes would eliminate the 
use of the intermediary in the price submission process and instead 
require CPs to submit required price information directly to ICC. In 
order to implement the direct price submission process, ICC proposed to 
amend its Pricing Policy to (1) require CPs establish direct 
connectivity with ICC and use a FIX API to provide ICC with the 
required price information, (2) add references to FIX API terminology, 
and (3) make revisions reflecting the replacement of existing trade 
date files with FIX API firm trade messages.\6\ Moreover, ICC proposed 
amending the Pricing Policy to note that ICC will send FIX API messages 
directly to CPs, and removed references to the intermediary and its 
``Valuation Service API'' previously used.\7\ Although ICC proposed 
additional minor changes to the timing of various steps in the pricing 
process, these proposed changes would not affect the actual settlement 
submission windows.\8\
---------------------------------------------------------------------------

    \6\ Notice, 82 FR at 13173-74.
    \7\ Notice, 82 FR at 13173.
    \8\ Notice, 82 FR at 13174.
---------------------------------------------------------------------------

    In addition to the changes described above, ICC also proposed 
changes with respect to the format of information required to be 
submitted by CPs for the iTraxx Australia and iTraxx Asia Ex-Japan 
Indices, as well as the CDX.NA.HY and CDS.EM indices. ICC also proposed 
modifications to the process for distributing end-of-day prices, which 
will result in ICC publishing to CPs separate messages setting forth 
end-of-day price information for single name and index CDS.\9\
---------------------------------------------------------------------------

    \9\ Id.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act directs the Commission to approve a 
propose 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.\10\ Section 17A(b)(3)(F) of the Act requires, 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.\11\ Rule 17Ad-22(d)(4) requires, in 
relevant part, that a registered clearing agency shall establish, 
implement, maintain, and enforce written policies and procedures 
reasonably designed to identify sources of operational risk and 
minimize them through the development of appropriate systems, controls, 
and procedures; implement systems that are reliable, resilient and 
secure, and have adequate, scalable capacity.\12\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2)(C).
    \11\ 15 U.S.C. 78q-1(b)(3)(F).
    \12\ 17 CFR 240.17Ad-22(d)(4).
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change, which modifies 
ICC's Pricing Policy to implement a direct price submission process for 
CPs, is consistent with Section 17A of the Act and Rule 17Ad-22 
thereunder. The proposed rule change is consistent with the 
requirements of Section 17A(b)(3)(F) 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. By 
reducing operational risk the proposed rule changes reduce the 
likelihood that ICC will be unable to complete its end-of-day price 
discovery process. Completion of the end-of-day price discovery process 
is a necessary and essential element in ICC's clearance and settlement 
processes. The Commission believes that the proposed changes should 
enhance ICC's ability to complete the necessary pricing process 
effectively and thereby promote the prompt and accurate clearance and 
settlement of derivative agreements, contracts and transactions 
consistent with Section 17A(b)(3)(F).
    For similar reasons, the proposed rule changes are also consistent 
with Rule 17Ad-22(d)(4) in that they are designed to reduce operational 
risk outside of ICC's control.\13\ The proposed rule changes are 
intended to reduce ICC's external operational risk by allowing ICC to 
control the price submission process through the implementation of 
systems designed to provide for direct connection and communication 
with CPs instead of relying on an intermediary to collect price 
information needed for ICC's price discovery process. As a result, 
because ICC will be able to reduce its reliance on intermediaries and 
thereby reduce operational risk that is outside of its control, the 
proposed rule changes are consistent with the requirements of Rule 
17Ad-22(d)(4).
---------------------------------------------------------------------------

    \13\ Id.
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
that the proposed rule change (SR-ICC-2017-003), as amended by 
Amendment No. 1, 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).
    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-11963 Filed 6-8-17; 8:45 am]
 BILLING CODE 8011-01-P