Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Amendments to the ICE Clear Europe Clearing Procedures for the Exercise of F&O Options Contracts, 551-553 [2017-28437]
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Federal Register / Vol. 83, No. 3 / Thursday, January 4, 2018 / Notices
ethrower on DSK3G9T082PROD with NOTICES
has represented that notwithstanding
the creation of standard omnibus
indirect accounts for FCM/BD Clearing
Members that will be made available as
position-keeping subaccounts of the
existing customer accounts, the Swap
Customer Account is not currently
available for use by FCM/BD Clearing
Members for customer positions in CDS
Contracts (including CDS Contracts that
are security-based swaps).32 The
Commission relies on these particular
representations and explanations by ICE
Clear Europe. Consequently, the
Commission believes that the proposed
rule changes regarding Indirect Clearing
facilitate ICE Clear Europe’s ability to
comply with regulatory requirements in
the jurisdictions in which it operates,
and help ensure that ICE Clear Europe’s
policies and procedures provide for a
well-founded, clear, transparent, and
enforceable legal basis for each aspect of
its activities in all relevant jurisdictions,
consistent with the requirements of Rule
17Ad–22(e)(1).33
b. Straight-Through Processing
The Commission understands that ICE
Clear Europe is required under relevant
provisions of MiFID II to implement
certain provisions regarding straightthrough processing. The Commission
believes that the proposed rule changes
regarding straight-through processing
will better enable ICE Clear Europe to
ensure that transactions are submitted,
accepted, and cleared without undue
delay. Therefore, the Commission finds
that the proposed rule changes
regarding straight-through processing
promote the prompt and accurate
clearance and settlement of securities
transactions consistent with the
requirements of Section 17A(b)(3)(F) of
the Act.34 Moreover, the Commission
further finds the proposed rule changes
regarding straight-through processing
protect investors and the public interest,
consistent with Section 17A(b)(3)(F) of
the Act 35 because the expeditious
processing of transactions in cleared
derivatives reduces the possibility of
those transactions being disrupted by
intervening events, such as a
technological breakdown or a reduction
in the financial condition of one of the
counterparties. Furthermore, because
the Commission believes that the
proposed rule changes regarding
straight-through process will maintain
the consistency of ICE Clear Europe’s
CDS Procedures with relevant
provisions of MiFID II, the Commission
supra note 16.
CFR 240.17Ad–22(e)(1).
34 15 U.S.C. 78q–1(b)(3)(F).
35 Id.
finds that such proposed changes will
help ensure that ICE Clear Europe’s
policies and procedures provide for a
well-founded, clear, transparent, and
enforceable legal basis for each aspect of
its activities in all relevant jurisdictions,
consistent with Rule 17Ad–22(e)(1).36
c. Other Provisions
With respect to the proposed rule
changes amending ICE Clear Europe’s
Rules to implement new definitions for
‘‘Emission Allowance’’ and ‘‘Emissions
Registry’’, as well as certain related
conforming and clarifying edits, and the
proposed changes to the Clearing
Procedures to rename ICE Clear
Europe’s ‘‘Market Maker Programs’’ as
‘‘Liquidity Provider Programs’’ and to
rename the relevant position keeping
accounts accordingly, the Commission
believes that the proposed rule changes
will better enable ICE Clear Europe to
maintain consistency with the relevant
provisions of MiFID II, thereby helping
to ensure that ICE Clear Europe’s
policies and procedure provide for a
well-founded, clear, transparent, and
enforceable legal basis for each aspect of
its activities in all relevant jurisdictions.
As a result, the Commission finds that
such proposed rule changes are
consistent with the requirements of Rule
17Ad–22(e)(1).37
In its filing, ICE Clear Europe
requested that the Commission grant
accelerated approval of the proposed
rule change pursuant to Section
19(b)(2)(C)(iii) of the Exchange Act.38
Under Section 19(b)(2)(C)(iii) of the
Act,39 the Commission may grant
accelerated approval of a proposed rule
change if the Commission finds good
cause for doing so. ICE Clear Europe
believes that accelerated approval is
warranted because the proposed rule
change is required in order to comply
with the MiFID II requirements, which
go into effect on January 3, 2018.
The Commission finds good cause,
pursuant to Section 19(b)(2)(C)(iii) of
the Act, for approving the proposed rule
change on an accelerated basis, prior to
the 30th day after the date of
publication of notice in the Federal
Register, because the proposed rule
change is required as of January 3, 2018
in order to facilitate ICE Clear Europe’s
efforts to comply with the
aforementioned MiFID II requirements.
Additionally, the Commission notes that
the proposed changes do not impede
compliance with relevant U.S. law,
32 See
36 17
33 17
37 Id.
VerDate Sep<11>2014
16:16 Jan 03, 2018
38 15
CFR 240.17Ad–22(e)(1).
U.S.C. 78s(b)(2)(C)(iii).
39 Id.
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551
including Section 17A(b)(3)(F) of the
Act.
V. Conclusion
On the basis of the foregoing, the
Commission finds that the proposal is
consistent with the requirements of the
Act and in particular with the
requirements of Section 17A of the
Act 40 and the rules and regulations
thereunder.
It is therefore ordered pursuant to
Section 19(b)(2) of the Act 41 that the
proposed rule change (SR–ICEEU–2017–
014) be, and hereby is, approved on an
accelerated basis.42
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.43
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–28493 Filed 1–3–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82415; File No. SR–ICEEU–
2017–015]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Relating to
Amendments to the ICE Clear Europe
Clearing Procedures for the Exercise
of F&O Options Contracts
December 28, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
20, 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 primarily
prepared by ICE Clear Europe. ICE Clear
Europe filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act,3 and Rule 19b–4(f)(4)(ii)
thereunder,4 so that the proposal was
immediately effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
40 15
U.S.C. 78q–1.
U.S.C. 78s(b)(2).
42 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).
43 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(4)(ii).
41 15
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552
Federal Register / Vol. 83, No. 3 / Thursday, January 4, 2018 / Notices
comments on the proposed rule change
from interested persons.
Exchange contract specifications so
provide.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change, Security-Based Swap
Submission, or Advance Notice
Exercise Instructions on the Expiration
Date
The principal purpose of the
proposed amendments is to modify
certain provisions of the ICE Clear
Europe Procedures (the ‘‘Procedures’’) 5
applicable to the exercise of F&O option
contracts in order to align the
Procedures with recent changes to ICE
Futures Europe (the ‘‘Exchange’’ or
‘‘IFEU’’) rules for certain energy option
contracts (the ‘‘Affected Contracts’’).6
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
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
(a) Purpose
The purpose of the proposed changes
is to amend certain provisions of the
Procedures applicable to the exercise of
F&O option contracts in order to align
the Procedures with changes to the
Exchange rules for the Affected
Contracts.
The amendments to the Procedures
principally address the following
matters:
Exercise of At-The-Money Options
ethrower on DSK3G9T082PROD with NOTICES
The Procedures are being revised to
contemplate automatic exercise of call
options that are at-the-money on the
expiration date, where the relevant
5 Capitalized terms used but not defined herein
have the meanings specified in the Procedures or
the ICE Clear Europe Clearing Rules.
6 These contracts include ICE Futures West Texas
Intermediate Light Sweet Crude Oil Options
Contract; ICE Futures West Texas Intermediate
Light Sweet Crude Oil (CAD Denominated) Options
Contract; ICE Futures West Texas Intermediate
Light Sweet Crude Oil Weekly Options Contract;
ICE Futures New York Harbour Heating Oil Options
Contract; and ICE Futures New York Harbour
Unleaded Gasoline Blendstock (RBOB) Options
Contract.
VerDate Sep<11>2014
16:16 Jan 03, 2018
Jkt 244001
The Procedures are also being revised
to contemplate that some options cannot
be electively (as opposed to
automatically) exercised or abandoned
on the expiration date, where the
relevant Exchange contract
specifications so provide.
Both sets of changes are intended to
be consistent with the revised contract
specifications for the Affected Contracts,
which will feature automatic exercise of
at-the-money call options and
limitations on elective exercise on the
expiration date.
The amendments to the Procedures
also contain various other updates and
clarifications to option exercise
procedures. The specified changes being
made to the Procedures are as follows:
In paragraph 5.1, a definition of ‘At
The Money’ has been added.
Several provisions have been updated
to change terminology from ‘‘manual
exercise’’ to ‘‘elective exercise’’ and
clarify that elective exercise instructions
or other notices may be submitted
electronically in accordance with
relevant technical specifications in
effect (including via API) as well as
manually via the ICE systems. These
include paragraphs 5.2(b)(i), 5.3(a),
5.3(b), 5.4(a), 5.4(b) and 5.5(c).
Paragraph 5.2(c) has been revised to
provide that the default settings to be
applied for purpose of automatic
exercise will be specified in the contract
terms of the Exchange.
In paragraph 5.3(b), a clarification has
been made that that this section refers
to early exercise only.
In paragraph 5.5(b), amendments have
been made to reflect that Exchange
contract terms may state that automatic
exercise will apply to at-the-money
options, as discussed above.
In paragraph 5.5(d), an unnecessary
statement concerning consequences of
failure to contact the clearing house
regarding exercise difficulties has been
removed.
In paragraph 5.6, text has been added
to include the determination of whether
options are at and out of the money.
Examples in paragraph 5.6(b) have been
removed as unnecessary and outdated
in light of the current changes.
Paragraph 5.7(a) has been amended to
provide that the Exchange contract
terms for a particular option will
determine whether elective exercise
and/or abandon notifications can be
submitted on the relevant expiry date,
as discussed above.
PO 00000
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Fmt 4703
Sfmt 4703
In paragraph 5.7(b), minor changes
have been made to improve and correct
wording and report names.
(b) Statutory Basis
ICE Clear Europe believes that the
proposed amendments are consistent
with the requirements of Section 17A of
the Act 7 and the regulations thereunder
applicable to it, including the standards
under Rule 17Ad–22.8
Section 17A(b)(3)(F) of the Act 9
requires, among other things, that the
rules of a 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, the
safeguarding of securities and funds in
the custody or control of the clearing
agency or for which it is responsible,
and the protection of investors and the
public interest. The proposed
amendments align exercise procedures
for F&O option contracts with recent
changes to relevant Exchange rules, and
make certain other updates to such
procedures. Specifically, the
amendments revise exercise procedures
to permit automatic exercise of at-themoney call options and to provide
limitations on elective exercise on
expiry day, where provided in the
Exchange rules. The changes thus
facilitate prompt and accurate clearance
and settlement of F&O option contracts,
consistent with the relevant exchange
rules.
In addition, Rule 17Ad–22(e)(21) 10
requires that each covered clearing
agency establish, implement, maintain
and enforce written policies and
procedures reasonably designed to be
efficient and effective in meeting the
requirements of its participants and the
markets it serves, among other matters.
As discussed above, the amendments
update exercise procedures with respect
to option contracts to more effectively
meet the requirements of its participants
and the F&O option markets served by
ICE Clear Europe, and align with
particular Exchange rules.
(B) Clearing Agency’s Statement on
Burden on Competition
ICE Clear Europe does not believe the
proposed amendments would have any
impact, or impose any burden, on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. The amendments
modify certain provisions of the
7 15
U.S.C. 78q–1.
CFR 240.17Ad–22.
9 15 U.S.C. 78q–1(b)(3)(F).
10 17 CFR 240.17Ad–22(e)(21)(i) and (iv).
8 17
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Federal Register / Vol. 83, No. 3 / Thursday, January 4, 2018 / Notices
Procedures applicable to the exercise of
options to align the Procedures with
recent changes to the Exchange rules,
and to make certain other clarifications
and updates. ICE Clear Europe does not
believe the amendments would affect
competition among clearing members or
adversely affect the cost of clearing, the
market for clearing services generally or
access to clearing in these products by
clearing members or other market
participants.
(C) Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants or Others
Written comments relating to the
proposed amendments have not been
solicited or received by ICE Clear
Europe. ICE Clear Europe will notify the
Commission of any comments received
with respect to the proposed
amendments.
III. Date of Effectiveness of the
Proposed Rule Change, Security-Based
Swap Submission and Advance Notice
and Timing for Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 11 and Rule 19b–4(f)(4)(ii) 12
thereunder. At any time within 60 days
of the filing of the 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.
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 (https://www.sec.gov/
rules/sro.shtml) or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
ICEEU–2017–015 on the subject line.
All submissions should refer to File
Number SR–ICEEU–2017–015. 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 website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
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 website viewing and
printing in the Commission’s Public
Reference Section, 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 website at https://
www.theice.com/notices/
Notices.shtml?regulatoryFilings.
All comments received will be posted
without change. Persons submitting
comments are cautioned that we do not
redact or edit personal identifying
information from comment submissions.
You should submit only information
that you wish to make available
publicly. All submissions should refer
to File Number SR–ICEEU–2017–015
and should be submitted on or before
January 25, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–28437 Filed 1–3–18; 8:45 am]
ethrower on DSK3G9T082PROD with NOTICES
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(4)(ii).
VerDate Sep<11>2014
16:16 Jan 03, 2018
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Related to
Market Data Fees
December 29, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
15, 2017, Cboe EDGX Exchange, Inc.
(the ‘‘Exchange’’ or ‘‘EDGX’’) 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 Exchange has designated the
proposed rule change as one
establishing or changing a member due,
fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii)
of the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission. 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 filed a proposal to a
mend [sic] the Market Data section of its
fee schedule to lower the Internal
Distribution 5 fees and to adopt per User
fees for the Cboe One Summary Feed.
The text of the proposed rule change
is available at the Exchange’s website at
www.markets.cboe.com, at the principal
office of the Exchange, 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
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 A ‘‘Distributor’’ is defined as ‘‘any entity that
receives the Exchange Market Data product directly
from the Exchange or indirectly through another
entity and then distributes it internally or externally
to a third party.’’ See the Exchange’s fee schedule
available at https://markets.cboe.com/us/equities/
membership/fee_schedule/edgx/. An ‘‘Internal
Distributor’’ is defined as ‘‘a Distributor that
receives the Exchange Market Data product and
then distributes that data to one or more Users
within the Distributor’s own entity.’’ Id.
2 17
13 17
Jkt 244001
[Release No. 34–82424; File No. SR–
CboeEDGX–2017–008]
1 15
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
12 17
SECURITIES AND EXCHANGE
COMMISSION
BILLING CODE 8011–01–P
Paper Comments
11 15
553
PO 00000
CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 83, Number 3 (Thursday, January 4, 2018)]
[Notices]
[Pages 551-553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-28437]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82415; File No. SR-ICEEU-2017-015]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Amendments to the ICE Clear Europe Clearing Procedures for
the Exercise of F&O Options Contracts
December 28, 2017.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 20, 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 primarily prepared by ICE Clear Europe. ICE Clear
Europe filed the proposed rule change pursuant to Section 19(b)(3)(A)
of the Act,\3\ and Rule 19b-4(f)(4)(ii) thereunder,\4\ so that the
proposal was immediately effective upon filing with the Commission. The
Commission is publishing this notice to solicit
[[Page 552]]
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(4)(ii).
---------------------------------------------------------------------------
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 amendments is to modify
certain provisions of the ICE Clear Europe Procedures (the
``Procedures'') \5\ applicable to the exercise of F&O option contracts
in order to align the Procedures with recent changes to ICE Futures
Europe (the ``Exchange'' or ``IFEU'') rules for certain energy option
contracts (the ``Affected Contracts'').\6\
---------------------------------------------------------------------------
\5\ Capitalized terms used but not defined herein have the
meanings specified in the Procedures or the ICE Clear Europe
Clearing Rules.
\6\ These contracts include ICE Futures West Texas Intermediate
Light Sweet Crude Oil Options Contract; ICE Futures West Texas
Intermediate Light Sweet Crude Oil (CAD Denominated) Options
Contract; ICE Futures West Texas Intermediate Light Sweet Crude Oil
Weekly Options Contract; ICE Futures New York Harbour Heating Oil
Options Contract; and ICE Futures New York Harbour Unleaded Gasoline
Blendstock (RBOB) Options Contract.
---------------------------------------------------------------------------
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 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
(a) Purpose
The purpose of the proposed changes is to amend certain provisions
of the Procedures applicable to the exercise of F&O option contracts in
order to align the Procedures with changes to the Exchange rules for
the Affected Contracts.
The amendments to the Procedures principally address the following
matters:
Exercise of At-The-Money Options
The Procedures are being revised to contemplate automatic exercise
of call options that are at-the-money on the expiration date, where the
relevant Exchange contract specifications so provide.
Exercise Instructions on the Expiration Date
The Procedures are also being revised to contemplate that some
options cannot be electively (as opposed to automatically) exercised or
abandoned on the expiration date, where the relevant Exchange contract
specifications so provide.
Both sets of changes are intended to be consistent with the revised
contract specifications for the Affected Contracts, which will feature
automatic exercise of at-the-money call options and limitations on
elective exercise on the expiration date.
The amendments to the Procedures also contain various other updates
and clarifications to option exercise procedures. The specified changes
being made to the Procedures are as follows:
In paragraph 5.1, a definition of `At The Money' has been added.
Several provisions have been updated to change terminology from
``manual exercise'' to ``elective exercise'' and clarify that elective
exercise instructions or other notices may be submitted electronically
in accordance with relevant technical specifications in effect
(including via API) as well as manually via the ICE systems. These
include paragraphs 5.2(b)(i), 5.3(a), 5.3(b), 5.4(a), 5.4(b) and
5.5(c).
Paragraph 5.2(c) has been revised to provide that the default
settings to be applied for purpose of automatic exercise will be
specified in the contract terms of the Exchange.
In paragraph 5.3(b), a clarification has been made that that this
section refers to early exercise only.
In paragraph 5.5(b), amendments have been made to reflect that
Exchange contract terms may state that automatic exercise will apply to
at-the-money options, as discussed above.
In paragraph 5.5(d), an unnecessary statement concerning
consequences of failure to contact the clearing house regarding
exercise difficulties has been removed.
In paragraph 5.6, text has been added to include the determination
of whether options are at and out of the money. Examples in paragraph
5.6(b) have been removed as unnecessary and outdated in light of the
current changes.
Paragraph 5.7(a) has been amended to provide that the Exchange
contract terms for a particular option will determine whether elective
exercise and/or abandon notifications can be submitted on the relevant
expiry date, as discussed above.
In paragraph 5.7(b), minor changes have been made to improve and
correct wording and report names.
(b) Statutory Basis
ICE Clear Europe believes that the proposed amendments are
consistent with the requirements of Section 17A of the Act \7\ and the
regulations thereunder applicable to it, including the standards under
Rule 17Ad-22.\8\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78q-1.
\8\ 17 CFR 240.17Ad-22.
---------------------------------------------------------------------------
Section 17A(b)(3)(F) of the Act \9\ requires, among other things,
that the rules of a 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, the safeguarding of securities and funds in the custody
or control of the clearing agency or for which it is responsible, and
the protection of investors and the public interest. The proposed
amendments align exercise procedures for F&O option contracts with
recent changes to relevant Exchange rules, and make certain other
updates to such procedures. Specifically, the amendments revise
exercise procedures to permit automatic exercise of at-the-money call
options and to provide limitations on elective exercise on expiry day,
where provided in the Exchange rules. The changes thus facilitate
prompt and accurate clearance and settlement of F&O option contracts,
consistent with the relevant exchange rules.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
In addition, Rule 17Ad-22(e)(21) \10\ requires that each covered
clearing agency establish, implement, maintain and enforce written
policies and procedures reasonably designed to be efficient and
effective in meeting the requirements of its participants and the
markets it serves, among other matters. As discussed above, the
amendments update exercise procedures with respect to option contracts
to more effectively meet the requirements of its participants and the
F&O option markets served by ICE Clear Europe, and align with
particular Exchange rules.
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\10\ 17 CFR 240.17Ad-22(e)(21)(i) and (iv).
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(B) Clearing Agency's Statement on Burden on Competition
ICE Clear Europe does not believe the proposed amendments would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purposes of the Act. The amendments
modify certain provisions of the
[[Page 553]]
Procedures applicable to the exercise of options to align the
Procedures with recent changes to the Exchange rules, and to make
certain other clarifications and updates. ICE Clear Europe does not
believe the amendments would affect competition among clearing members
or adversely affect the cost of clearing, the market for clearing
services generally or access to clearing in these products by clearing
members or other market participants.
(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others
Written comments relating to the proposed amendments have not been
solicited or received by ICE Clear Europe. ICE Clear Europe will notify
the Commission of any comments received with respect to the proposed
amendments.
III. Date of Effectiveness of the Proposed Rule Change, Security-Based
Swap Submission and Advance Notice and Timing for Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(4)(ii) \12\ thereunder.
At any time within 60 days of the filing of the 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.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(4)(ii).
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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 (https://www.sec.gov/rules/sro.shtml) or
Send an email to [email protected]. Please include
File Number SR-ICEEU-2017-015 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-2017-015. 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 website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent 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 website viewing and printing in the Commission's Public Reference
Section, 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 website
at https://www.theice.com/notices/Notices.shtml?regulatoryFilings.
All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ICEEU-2017-015 and should be
submitted on or before January 25, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-28437 Filed 1-3-18; 8:45 am]
BILLING CODE 8011-01-P
