Self-Regulatory Organizations; ICE Clear Europe Limited; Order Approving Proposed Rule Change Relating to Amendments to the ICE Clear Europe Limited Articles of Association, 31648-31649 [2017-14246]

Download as PDF 31648 Federal Register / Vol. 82, No. 129 / Friday, July 7, 2017 / Notices supported the draft amendments,27 and one commenter suggested that the MSRB could easily separate Rule G– 21(e) from the rest of Rule G–21, if necessary.28 Specifically, commenters expressed support for the proposed rule change’s use of hyperlinks, harmonization of Rule G–21(e) with the advertising rules of other financial regulators, and enhanced out-of-state disclosure. The MSRB summarizes the comments received relating to the proposed rule change in the four comment letters by topic below. A. Hyperlinks Fidelity and SIFMA expressed support for the use of hyperlinks to provide more current performance information.29 The MSRB appreciates Fidelity’s and SIFMA’s support for the proposed rule change and their suggestion concerning the expanded use of hyperlinks. The Board anticipates that it will continue to explore the use of hyperlinks in other areas of its rule book. B. Harmonization With Other Financial Regulations FSI supported the proposed rule change’s harmonization with the SEC’s advertising rules applicable to mutual funds.30 C. Out-of-State Disclosure SI supported the enhanced out-ofstate disclosure. SI commented that the ‘‘added detail and clarity’’ will enhance the value of 529 college savings plans for investors and advisors, because the disclosure will assist the reader in more fully understanding what the other benefits may be of investing in a 529 college savings plan offered by the 27 See, e.g., FSI letter at 2. SIFMA letter at 8 (‘‘[t]his section can be easily separated from the rest of the rule, if necessary’’). 29 Specifically, Fidelity stated: We fully support these draft amendments and believe that hyperlinks are a commonly used method of communication, well understood by investors, through which investors can obtain additional details on facts that matter to them. See Fidelity letter at 3. Similarly, SIFMA stated that, ‘‘SIFMA and its members support the ability to use hyperlinks in this rule . . . .’’ See SIFMA letter at 8. 30 Specifically, FSI stated: I. FSI strongly supports efforts to harmonize Rule G–21 with other financial regulations . . . The Proposed Rule also amends Rule G– 21(e) to incorporate the provisions included in the SEC’s amendments to its registered investment company advertising rules. The draft amendments to Rule G–21(e) replace the money market mutual fund disclosure required by current Rule G–21 with a modified version of the money market mutual fund disclosure currently required by SEC rules. See FSI letter at 2. asabaliauskas on DSKBBXCHB2PROD with NOTICES 28 See VerDate Sep<11>2014 22:45 Jul 06, 2017 Jkt 241001 investor’s or the designated beneficiary’s home state.31 III. Date of Effectiveness of the Proposed Rule Change 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 of 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 such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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– MSRB–2017–04 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR–MSRB–2017–04. 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 stated, in part, that: Strategic Insight appreciates the higher level of detail and clarity by expanding the description of ‘‘other benefits’’ to include reference to ‘‘such as financial aid, scholarship funds, and protection from creditors’’ as these are important factors that investors often overlook. By expanding the description, 529s will also be easier to understand which encourages use of the product. Ultimately, the added detail and clarity will enhance the value of 529s for investors and advisors, as they may not have been able to identify what the ‘‘other benefits’’ were referencing previously. See SI letter. PO 00000 31 SI Frm 00101 Fmt 4703 Sfmt 4703 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 MSRB. 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–MSRB– 2017–04 and should be submitted on or before July 28, 2017. For the Commission, pursuant to delegated authority.32 Brent J. Fields, Secretary. [FR Doc. 2017–14240 Filed 7–6–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81068; File No. SR–ICEEU– 2017–007] Self-Regulatory Organizations; ICE Clear Europe Limited; Order Approving Proposed Rule Change Relating to Amendments to the ICE Clear Europe Limited Articles of Association June 30, 2017. I. Introduction On May 2, 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–2017–007) to amend its Articles of Association. The proposed rule change was published for comment in the Federal Register on May 19, 2017.3 The Commission received no comment letters regarding 32 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 34–80674 (May 19, 2017), 82 FR 23080 (May 19, 2017) (SR– ICEEU–2017–007) (the ‘‘Notice’’). 1 15 E:\FR\FM\07JYN1.SGM 07JYN1 Federal Register / Vol. 82, No. 129 / Friday, July 7, 2017 / Notices the proposed change. For the reasons discussed below, the Commission is approving the proposed rule change. asabaliauskas on DSKBBXCHB2PROD with NOTICES II. Description of the Proposed Rule Change As more fully described in the Notice, the proposed rule change seeks to amend the Articles of Association, among other things, to update the Articles to add definitions that reflect ICE Clear Europe’s existing committees, change the minimum number of directors from two to six, provide for selection of replacement or additional directors by the Nominations Committee, make use of a Senior Independent Director appointed in accordance with the UK Corporate Governance Code, stagger the retirement or rotation of independent directors (the provisions for the retirement or rotation of CDS directors will not change), explicitly provide that directors appoint members of relevant committees, which operate under their own terms of reference, require independent directors to disclose to the Board of Directors all other directorships that they hold both prior to appointment and on an ongoing basis, adopt new procedures identifying and addressing conflicts of interest of directors with respect to both transactions with ICE Clear Europe where a director has an interest and matters in the ordinary course in which directors’ interests are affected (i.e., directors affiliated with clearing members), make clarifications to notice waiver requirements, and require a written record of all unanimous or majority decisions of the directors for at least ten years. Additionally, ICE Clear Europe proposed other non-substantive corrections and clarifications to the Articles of Association. For example, various references to persons have been revised to be gender-neutral, and various articles have been renumbered in light of the changes discussed above. III. Discussion and Commission Findings Section 19(b)(2)(C) of the Act 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.4 Section 17A(b)(3)(C) of the Act requires,5 among other things, that the rules of a clearing agency 6 assure a fair U.S.C. 78s(b)(2)(C). U.S.C. 78q–1(b)(3)(C). 6 The ‘‘rules of a clearing agency’’ include its articles of incorporation and bylaws. 15 U.S.C. 78c(a)(27). representation of its participants in the selection of its directors and administration of its affairs. Section 17A(b)(3)(F) of the Act requires,7 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(e)(2) requires that a covered clearing agency 8 shall establish, implement, maintain and enforce written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent; clearly prioritize the safety and efficiency of the covered clearing agency; support the public interest requirements in Section 17A of the Act; establish that the board of directors and senior management have appropriate experience and skills to discharge their duties and responsibilities; specify clear and direct lines of responsibility; and consider the interests of participants’ customers, securities issuers and holders, and other relevant stakeholders of the covered clearing agency.9 The Commission finds that the proposed rule change is consistent with Section 17A of the Act and Rule 17Ad– 22 thereunder. In particular, the Commission finds that the amendments will clarify aspects of ICE Clear Europe’s governance framework and thus, in ICE Clear Europe’s view, facilitate the efficient operation of the clearing house and the prompt and accurate clearance and settlement of transactions. The Commission believes that these amendments are consistent with ICE Clear Europe’s obligation to have governance arrangements that are clear and transparent, prioritize the safety and efficiency of the clearing agency, and support the public interest requirements in Section 17A of the Act and the objectives of owners and participants. Finally, with respect to potential conflicts of interest concerning matters in the ordinary course in which directors’ interests are affected, the Commission believes that this provision is consistent with the requirement that the rules of a clearing agency assure a fair representation of its participants in 4 15 5 15 VerDate Sep<11>2014 20:56 Jul 06, 2017 Jkt 241001 7 15 U.S.C. 78q–1(b)(3)(F). 17 CFR 240.17Ad–22(a)(5) (defining ‘‘covered clearing agency’’). 9 See 17 CFR 240.17Ad–22(e)(2). 8 See PO 00000 Frm 00102 Fmt 4703 Sfmt 9990 31649 the administration of its affairs. ICE Clear Europe has represented that these provisions are not intended to result in the recusal or disqualification of member-affiliated directors as a class,10 but rather could result in recusal on a case-by-case basis depending on the conflict. Further, any recusal is not automatic; rather, ICE Clear Europe’s shareholders or the remaining directors have the ability to determine whether full or limited participation by the interested director is appropriate. Moreover, ICE Clear Europe currently affords members participation in product risk committees and on the Board’s Risk Committee. Relying on these findings and assurances, the Commission believes that the proposed rule change is consistent with Sections 17A(b)(3)(C) and (F) of the Act,11 and Rule 17Ad– 22(e)(2) thereunder.12 IV. Conclusion It is therefore ordered pursuant to Section 19(b)(2) of the Act that the proposed rule change (SR–ICEEU–2017– 007) be, and hereby is, approved.13 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.14 Brent J. Fields, Secretary. [FR Doc. 2017–14246 Filed 7–6–17; 8:45 am] BILLING CODE 8011–01–P 10 In particular, ICE Clear Europe has represented that the recusal provisions in proposed Article 53 of its Shareholder Articles would not prohibit member-affiliated directors from participating in decisions relating to margin levels as a general matter, decisions to clear new contracts, or other similar general matters that are applicable to all members or particular classes of clearing members. 11 15 U.S.C. 78q–1(b)(3)(C) and (F). 12 17 CFR 240.17Ad–22(e)(2). 13 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). 14 17 CFR 200.30–3(a)(12). E:\FR\FM\07JYN1.SGM 07JYN1

Agencies

[Federal Register Volume 82, Number 129 (Friday, July 7, 2017)]
[Notices]
[Pages 31648-31649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14246]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81068; File No. SR-ICEEU-2017-007]


Self-Regulatory Organizations; ICE Clear Europe Limited; Order 
Approving Proposed Rule Change Relating to Amendments to the ICE Clear 
Europe Limited Articles of Association

June 30, 2017.

I. Introduction

    On May 2, 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-2017-007) to amend its Articles of Association. The proposed rule 
change was published for comment in the Federal Register on May 19, 
2017.\3\ The Commission received no comment letters regarding

[[Page 31649]]

the proposed change. For the reasons discussed below, the Commission is 
approving the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-80674 (May 19, 2017), 
82 FR 23080 (May 19, 2017) (SR-ICEEU-2017-007) (the ``Notice'').
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II. Description of the Proposed Rule Change

    As more fully described in the Notice, the proposed rule change 
seeks to amend the Articles of Association, among other things, to 
update the Articles to add definitions that reflect ICE Clear Europe's 
existing committees, change the minimum number of directors from two to 
six, provide for selection of replacement or additional directors by 
the Nominations Committee, make use of a Senior Independent Director 
appointed in accordance with the UK Corporate Governance Code, stagger 
the retirement or rotation of independent directors (the provisions for 
the retirement or rotation of CDS directors will not change), 
explicitly provide that directors appoint members of relevant 
committees, which operate under their own terms of reference, require 
independent directors to disclose to the Board of Directors all other 
directorships that they hold both prior to appointment and on an 
ongoing basis, adopt new procedures identifying and addressing 
conflicts of interest of directors with respect to both transactions 
with ICE Clear Europe where a director has an interest and matters in 
the ordinary course in which directors' interests are affected (i.e., 
directors affiliated with clearing members), make clarifications to 
notice waiver requirements, and require a written record of all 
unanimous or majority decisions of the directors for at least ten 
years. Additionally, ICE Clear Europe proposed other non-substantive 
corrections and clarifications to the Articles of Association. For 
example, various references to persons have been revised to be gender-
neutral, and various articles have been renumbered in light of the 
changes discussed above.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act 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.\4\ Section 17A(b)(3)(C) of the Act requires,\5\ among 
other things, that the rules of a clearing agency \6\ assure a fair 
representation of its participants in the selection of its directors 
and administration of its affairs. Section 17A(b)(3)(F) of the Act 
requires,\7\ 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(e)(2) requires that a covered clearing agency 
\8\ shall establish, implement, maintain and enforce written policies 
and procedures reasonably designed to provide for governance 
arrangements that are clear and transparent; clearly prioritize the 
safety and efficiency of the covered clearing agency; support the 
public interest requirements in Section 17A of the Act; establish that 
the board of directors and senior management have appropriate 
experience and skills to discharge their duties and responsibilities; 
specify clear and direct lines of responsibility; and consider the 
interests of participants' customers, securities issuers and holders, 
and other relevant stakeholders of the covered clearing agency.\9\
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    \4\ 15 U.S.C. 78s(b)(2)(C).
    \5\ 15 U.S.C. 78q-1(b)(3)(C).
    \6\ The ``rules of a clearing agency'' include its articles of 
incorporation and bylaws. 15 U.S.C. 78c(a)(27).
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
    \8\ See 17 CFR 240.17Ad-22(a)(5) (defining ``covered clearing 
agency'').
    \9\ See 17 CFR 240.17Ad-22(e)(2).
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    The Commission finds that the proposed rule change is consistent 
with Section 17A of the Act and Rule 17Ad-22 thereunder. In particular, 
the Commission finds that the amendments will clarify aspects of ICE 
Clear Europe's governance framework and thus, in ICE Clear Europe's 
view, facilitate the efficient operation of the clearing house and the 
prompt and accurate clearance and settlement of transactions. The 
Commission believes that these amendments are consistent with ICE Clear 
Europe's obligation to have governance arrangements that are clear and 
transparent, prioritize the safety and efficiency of the clearing 
agency, and support the public interest requirements in Section 17A of 
the Act and the objectives of owners and participants. Finally, with 
respect to potential conflicts of interest concerning matters in the 
ordinary course in which directors' interests are affected, the 
Commission believes that this provision is consistent with the 
requirement that the rules of a clearing agency assure a fair 
representation of its participants in the administration of its 
affairs. ICE Clear Europe has represented that these provisions are not 
intended to result in the recusal or disqualification of member-
affiliated directors as a class,\10\ but rather could result in recusal 
on a case-by-case basis depending on the conflict. Further, any recusal 
is not automatic; rather, ICE Clear Europe's shareholders or the 
remaining directors have the ability to determine whether full or 
limited participation by the interested director is appropriate. 
Moreover, ICE Clear Europe currently affords members participation in 
product risk committees and on the Board's Risk Committee.
---------------------------------------------------------------------------

    \10\ In particular, ICE Clear Europe has represented that the 
recusal provisions in proposed Article 53 of its Shareholder 
Articles would not prohibit member-affiliated directors from 
participating in decisions relating to margin levels as a general 
matter, decisions to clear new contracts, or other similar general 
matters that are applicable to all members or particular classes of 
clearing members.
---------------------------------------------------------------------------

    Relying on these findings and assurances, the Commission believes 
that the proposed rule change is consistent with Sections 17A(b)(3)(C) 
and (F) of the Act,\11\ and Rule 17Ad-22(e)(2) thereunder.\12\
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    \11\ 15 U.S.C. 78q-1(b)(3)(C) and (F).
    \12\ 17 CFR 240.17Ad-22(e)(2).
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IV. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the Act 
that the proposed rule change (SR-ICEEU-2017-007) be, and hereby is, 
approved.\13\
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    \13\ 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).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-14246 Filed 7-6-17; 8:45 am]
 BILLING CODE 8011-01-P