Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to the F&O Guaranty Fund Policy (the “Policy”), Clearing Rules (the “Rules”) and Finance Procedures (“Finance Procedures”), 57513-57516 [2018-24870]
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Federal Register / Vol. 83, No. 221 / Thursday, November 15, 2018 / Notices
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
under Section 19(b)(2)(B) 13 of the Act 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:
khammond on DSK30JT082PROD with NOTICES
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–
NYSEArca–2018–78 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–NYSEArca–2018–78. 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 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 website 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.
Persons submitting comments are
13 15
U.S.C. 78s(b)(2)(B).
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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–NYSEArca–2018–78 and
should be submitted on or before
December 6, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–24868 Filed 11–14–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84556; File No. SR–ICEEU–
2018–011]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to
Amendments to the F&O Guaranty
Fund Policy (the ‘‘Policy’’), Clearing
Rules (the ‘‘Rules’’) and Finance
Procedures (‘‘Finance Procedures’’)
November 8, 2018.
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 October
29, 2018, 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. ICE Clear
Europe filed the proposed rule changes
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
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
ICE Clear Europe proposes to make
certain amendments to the Policy, Rules
and Finance Procedures relating to the
calculation methodology for F&O
Clearing Member contributions, the
minimum size of the F&O Guaranty
14 17
CFR 200.30–3(a)(12).
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).
1 15
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57513
Fund and the review cycle and to make
various drafting clarifications and
improvements.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
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
(a) Purpose
ICE Clear Europe is generally
amending the Policy to address the
following aspects of the F&O Guaranty
Fund: Changing the calculation
methodology for F&O Clearing Member
contributions to incorporate an
uncollateralized stress loss factor (in
addition to a factor based on the
intraday original margin requirement),
in line with the Clearing House
principle of ‘polluter pays’; specifying
the minimum size of the F&O Guaranty
Fund at 2% of the amount of F&O
original margin; and changing the
review cycle for the F&O Guaranty Fund
level from quarterly to every two
months, in line with the F&O Risk
Committee meeting schedule. Various
drafting clarifications and
improvements have also been made, and
certain descriptions in the Policy that
duplicate or describe provisions in other
Rules, ICE Clear Europe Procedures and
policies have been removed as
unnecessary. ICE Clear Europe is also
making corresponding amendments to
the Rules and Finance Procedures to
accommodate the changes being made
to the Policy. Set out below are further
details regarding the specific proposed
amendments.
ICE Clear Europe is proposing to
amend its description of the purposes
and objectives of the Policy to include
a broader statement that the Policy
defines how and how often the F&O
Guaranty Fund is sized, how Clearing
Member contributions are apportioned
and the sizing frequency, as well as that
the Policy also defines stress margin and
its uses, eligible assets covering F&O
Guaranty Fund requirement liabilities,
the default sequence and powers of
assessment. Certain descriptions of the
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Federal Register / Vol. 83, No. 221 / Thursday, November 15, 2018 / Notices
use of F&O Guaranty Fund that
summarize provisions of the Rules have
been removed as unnecessary, and a
cross reference to the Rules has been
added.
The provisions of the Policy relating
to the sizing of the F&O Guaranty Fund
would be amended to remove details
found in other Clearing House policies
and documentation, including the
methodology used to calculate and
allocate the additional guaranty fund
apportionment (‘‘AGA’’) between the
energy and financials & softs segments
of the F&O Guaranty Fund. Detail
regarding the review of the validity of
the stress testing scenario(s) is being
removed, as it is covered by other
existing stress-testing policies. These
changes do not represent a modification
to ICE Clear Europe’s current practices.
The amendments to the Policy also
reflect that the frequency of certain
reviews will be changed from a
quarterly basis to each time the F&O
Risk Committee meets (which is
typically every two months).
Corresponding amendments to the Rules
specify that the Guaranty Fund Period
will be set pursuant to the Finance
Procedures, instead of being a fixed
three month period. The amendments to
the Finance Procedures state that the
start and end dates of Guaranty Fund
Periods will be communicated to F&O
Clearing Members.
The amendments change the deadline
for Clearing Members to deposit
additional funds to comply with an
increased F&O Guaranty Fund
requirement. Specifically, as amended
in section 6.1(i)(iii) of the Finance
Procedures and as set out in the
amended Policy, the deadline has been
reduced from ten business days to five
business days.
The proposed amendments define the
minimum overall F&O Guaranty Fund
size as 2% of the total F&O original
margin requirement (averaged over the
review period), as compared to the
current minimum which is based on the
fixed ICE Clear Europe initial
contribution to the F&O Guaranty Fund.
The discussion of extraordinary
reviews of the F&O Guaranty Fund is
being amended to remove certain details
relating to actions that will be taken by
the clearing risk department when the
stress testing results are observed to
exceed the level of the relevant F&O
Guaranty Fund segment, as this is
documented in other Clearing House
policies and documentation. The
description instead notes that the amber
and red limits defined as part of the
Board Risk Appetite will potentially
trigger an extraordinary review of the
F&O Guaranty Fund which would be
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Jkt 247001
communicated via the standard process
for review.
The requirements of the Policy
regarding information presented to the
F&O Risk Committee are being
simplified such that the following
information will be presented to the
F&O Risk Committee at each review of
the level of the Fund: Historical daily
stress-testing results from the Members
showing at least the first and second
largest uncollateralized losses; details of
the stress scenario driving the largest
exposures; and any other information
supporting a resizing decision. Certain
more prescriptive information
requirements have been removed, as ICE
Clear Europe believes they are
unnecessary.
The provisions of the Policy relating
to recommendations as to changes in the
overall level of the F&O Guaranty Fund
have been condensed and simplified.
The revised Policy identifies several
factors on which the Clearing House
will base its recommendations on the
level of the Fund (including the level of
uncollateralized losses as compared to
the F&O Guaranty Fund or relevant
segments and the level of stress margin
called for relevant F&O product
categories), rather than describing
specific circumstances under which a
‘no change’ recommendation or a
recommendation to increase a Fund
segment will be made. The Clearing
House believes the more flexible
approach better takes into account the
range of factors that may warrant a
change in the F&O Guaranty Fund level.
In any case, as under the current Policy,
a full explanation of the conclusions
and related data is to be presented to the
F&O Risk Committee and Board Risk
Committee.
As noted above, the amendments alter
the calculation of F&O Clearing Member
contributions to take into account
potential uncollateralized, or stress, loss
as well as the maximum intraday
original margin requirement. The
governing principle with respect to this
determination is that each Clearing
Member’s contribution to each of the
Fund segments should reflect their
relative share of clearing activity as well
as their relative share of
uncollateralized loss. Under the revised
approach, subject to minimum
contribution requirements set out in the
Policy, an F&O Clearing Member’s
relative share of the F&O Guaranty Fund
requirement will be based 40% on its
maximum intraday original margin
requirement and 60% on its
uncollateralized loss. This will be
recalculated at each review (instead of
on a quarterly cycle). This two factor
contribution model is intended to offer
PO 00000
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Fmt 4703
Sfmt 4703
a balanced contribution taking into
account clearing activity and stress
results. Various conforming and
clarifying changes have been made
throughout the Policy. As discussed
above, F&O Clearing Members will have
five (instead of ten) UK business days
from notification to cover any increase
in their F&O Guaranty Fund
requirement. The description of the data
validation process is being deleted (as
the process is documented in other
Clearing House procedures). The
proposed amendments to the Policy also
specify the minimum fund contribution
for an F&O Clearing Member to be the
larger of USD 1 million or the calculated
member’s contribution under the
revised methodology. The
corresponding proposed amendments to
section 14.1(b) of the Finance
Procedures accommodate this change,
by specifying that the Clearing House
will establish from time to time a
minimum fund contribution for an F&O
Clearing Member based on a
methodology adopted by the Clearing
House, of not less than USD 1 million.
The proposed amendments also
remove a description of the manner in
which a drawdown of the F&O Guaranty
Fund is made across the different fund
segments, as that is covered in greater
detail in the existing Rules.
Finally, references to quarterly
reviews of stress test results are being
replaced with references to general
review cycles throughout the Policy and
an appendix with an example of a stress
margin request is being deleted as
unnecessary.
(b) Statutory Basis
ICE Clear Europe believes that the
proposed amendments are consistent
with the requirements of Section 17A of
the Act 5 and the regulations thereunder
applicable to it, including the standards
under Rule 17Ad–22.6 Section
17A(b)(3)(F) of the Act 7 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,
to assure 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 are generally
intended to enhance the F&O Guaranty
Fund allocation methodology to take
into account both original margin
5 15
U.S.C. 78q–1.
CFR 240.17Ad–22.
7 15 U.S.C. 78q–1(b)(3)(F).
6 17
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Federal Register / Vol. 83, No. 221 / Thursday, November 15, 2018 / Notices
requirements and potential stress losses
that may exceed normal margin levels.
The amendments also clarify the
minimum size of the F&O Guaranty
Fund, in a manner tied to the original
margin requirements and thus the
overall level of F&O clearing activity.
The amendments further shorten the
deadline under which F&O Clearing
Members must provide additional F&O
Guaranty Fund contributions when
required. The Clearing House believes
that these changes will more
appropriately allocate F&O Guaranty
Fund Contributions among F&O
Clearing Members, further the risk
management of the Clearing House and
more generally promote the prompt and
accurate clearance and settlement of
transactions. The amendments also
streamline the Policy to reduce
redundancies with other Clearing House
policies and the Rules and increase the
review cycle from quarterly to every two
months, consistent with the cycle of
F&O Risk Committee meetings. In ICE
Clear Europe’s view, enhancing the
clarity of the Policy and increasing the
oversight of the Policy through more
frequent reviews is also expected to
better risk management and promote the
prompt and accurate clearance and
settlement of transactions. As a result,
in ICE Clear Europe’s view, the
amendments are consistent with the
requirements of Section 17A(b)(3)(F) of
the Act.
The amendments are also consistent
with relevant requirements of Rule
17Ad–22.8 Rules 17Ad–22(e)(4) 9 and
8 17
CFR 240.17Ad–22.
CFR 240.17Ad–22(e)(4)(i)—(v). The rule
states that ‘‘[e]ach covered clearing agency shall
establish, implement, maintain and enforce written
policies and procedures reasonably designed to, as
applicable:
(4) Effectively identify, measure, monitor, and
manage its credit exposures to participants and
those arising from its payment, clearing, and
settlement processes, including by:
(i) Maintaining sufficient financial resources to
cover its credit exposure to each participant fully
with a high degree of confidence;
(ii) To the extent not already maintained pursuant
to paragraph (e)(4)(i) of this section, for a covered
clearing agency providing central counterparty
services that is either systemically important in
multiple jurisdictions or a clearing agency involved
in activities with a more complex risk profile,
maintaining additional financial resources at the
minimum to enable it to cover a wide range of
foreseeable stress scenarios that include, but are not
limited to, the default of the two participant
families that would potentially cause the largest
aggregate credit exposure for the covered clearing
agency in extreme but plausible market conditions;
(iii) To the extent not already maintained
pursuant to paragraph (e)(4)(i) of this section, for a
covered clearing agency not subject to paragraph
(e)(4)(ii) of this section, maintaining additional
financial resources at the minimum to enable it to
cover a wide range of foreseeable stress scenarios
that include, but are not limited to, the default of
the participant family that would potentially cause
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9 17
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17Ad–22(b)(3) 10 require clearing
agencies to maintain certain financial
resources at specified levels sufficient to
support their clearing operations,
including through the use of guaranty
funds. The amendments will facilitate
compliance with these requirements,
through an enhanced approach to
allocating F&O Guaranty Fund
requirements that takes into account
both clearing activity (as indicated
through original margin levels) and
potential stress losses in extreme but
plausible market conditions. The
revised Policy also contemplates review
of by the F&O Risk Committee of daily
stress testing results showing at least the
first and second largest uncollateralized
losses and details of the stress scenario
driving the largest exposures. Taken
together, the changes will help the
Clearing House ensure that, consistent
with regulatory requirements, the F&O
Guaranty Fund, together with other
financial resources, is sufficient to
enable the Clearing House to cover a
wide range of foreseeable stress
scenarios.
Rule 17Ad–22(e)(2) 11 requires
clearing agencies to establish reasonably
designed policies and procedures to
the largest aggregate credit exposure for the covered
clearing agency in extreme but plausible market
conditions;
(iv) Including prefunded financial resources,
exclusive of assessments for additional guaranty
fund contributions or other resources that are not
prefunded, when calculating the financial resources
available to meet the standards under paragraphs
(e)(4)(i) through (iii) of this section, as applicable;
(v) Maintaining the financial resources required
under paragraphs (e)(4)(ii) and (iii) of this section,
as applicable, in combined or separately maintained
clearing or guaranty funds;’’
10 17 CFR 240.17Ad–22(b)(3). The rule states that
‘‘[a] registered clearing agency that performs central
counterparty services shall establish, implement,
maintain and enforce written policies and
procedures reasonably designed to: Maintain
sufficient financial resources to withstand, at a
minimum, a default by the participant family to
which it has the largest exposure in extreme but
plausible market conditions.
11 17 CFR 240.17 Ad–22(e)(2). The rule states that
‘‘[e]ach covered clearing agency shall establish,
implement, maintain and enforce written policies
and procedures reasonably designed to, as
applicable:
(2) Provide for governance arrangements that:
(i) Are clear and transparent
(ii) Clearly prioritize the safety and efficiency of
the covered clearing agency;
(iii) Support the public interest requirements in
Section 17A of the Act (15 U.S.C. 78q–1) applicable
to clearing agencies, and the objectives of owners
and participants;
(iv) Establish that the board of directors and
senior management have appropriate experience
and skills to discharge their duties and
responsibilities;
(v) Specify clear and direct lines of responsibility;
and
(vi) Consider the interests of participants’
customers, securities issuers and holders, and other
relevant stakeholders of the covered clearing
agency.’’
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57515
provide for governance arrangements
that are clear and transparent and
specify clear and direct lines of
responsibility. To facilitate compliance
with this requirement, the proposed
amendments to the Policy more clearly
set out the information that will be
provided to the F&O Risk Committee at
each review of the level of the F&O
Guaranty Fund and the factors that will
be considered in making
recommendations on the appropriate
level of the F&O Guaranty Fund.
(B) Clearing Agency’s Statement on
Burden on Competition
ICE Clear Europe does not believe the
proposed rule changes would have any
impact, or impose any burden, on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. The changes are
being proposed in order to clarify and
enhance the Policy and reduce overlap
with other Clearing House Rules and
policies. The amendments will apply to
all F&O Clearing Members. ICE Clear
Europe does not believe the
amendments will generally affect the
overall cost of clearing for F&O Clearing
Members or other market participants or
otherwise affect access to clearing
generally. The amendments may alter
the allocation of F&O Guaranty Fund
requirements across F&O Clearing
Members, which could increase
requirements for some members, but
such changes are designed to more
appropriately take into account
potential stress losses as well as clearing
activity of such members. In ICE Clear
Europe’s view, such amendments will
enhance the risk management of the
Clearing House and tailor the F&O
Guaranty Fund requirements to the risks
presented by F&O Clearing Members. As
a result, any additional burdens placed
on F&O Clearing Members will be
appropriate in furtherance of that goal.
The amendments will provide a
transparent and objective methodology
for the calculation of F&O Guaranty
Fund requirements, and are not
intended to disadvantage any particular
Clearing Member. As a result, ICE Clear
Europe believes that any impact on
competition is appropriate in
furtherance of the purposes of the Act.
(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
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Federal Register / Vol. 83, No. 221 / Thursday, November 15, 2018 / Notices
with respect to the proposed rule
change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and paragraph (f) of Rule
19b–4 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 is consistent with the Act.
Comments may be submitted by any of
the following methods:
khammond on DSK30JT082PROD with NOTICES
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–2018–011 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–2018–011. 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 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 website 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
VerDate Sep<11>2014
16:53 Nov 14, 2018
Jkt 247001
inspection and copying at the principal
office of ICE Clear Europe and on ICE
Clear Europe’s website at https://
www.theice.com/clear-europe/
regulation.
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–2018–011
and should be submitted on or before
December 6, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
include the following areas as adversely
affected by the disaster.
Primary Counties: Montgomery, Telfair
All other information in the original
declaration remains unchanged.
(Catalog of Federal Domestic Assistance
Number 59008)
James Rivera,
Associate Administrator For Disaster
Assistance.
[FR Doc. 2018–24891 Filed 11–14–18; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
Meeting of the Advisory Committee on
Veterans Business Affairs
U.S. Small Business
Administration (SBA).
ACTION: Notice of open Federal Advisory
Committee Meeting.
AGENCY:
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–24870 Filed 11–14–18; 8:45 am]
BILLING CODE 8011–01–P
The SBA is issuing this notice
to announce the location, date, time,
and agenda for the next meeting of the
Advisory Committee on Veterans
Business Affairs (ACVBA). The meeting
is open to the public.
DATES: Thursday, December 6, 2018,
from 9:00 a.m. to 4:00 p.m. EST.
ADDRESSES: The meeting will be held at
SBA, 409 3rd Street SW, Eisenhower
Conference Room B, Washington, DC
20416, and via webinar.
FOR FURTHER INFORMATION CONTACT: The
meeting is open to the public; however
advance notice of attendance is
requested. To RSVP and confirm
attendance, the general public should
email veteransbusiness@sba.gov with
subject line—‘‘RSVP for 12/6/18
ACVBA Public Meeting.’’
Anyone wishing to make comments to
the ACVBA must contact SBA’s Office
of Veterans Business Development
(OVBD) no later than December 1, 2018
via email veteransbusiness@sba.gov, or
via phone at (202) 205–6773. Comments
for the record will be limited to five
minutes to accommodate as many
participants as possible.
Additionally, special accommodation
requests should also be directed to
OVBD at (202) 205–6773 or
veteransbusiness@sba.gov. For more
information on veteran owned small
business programs, please visit
www.sba.gov/ovbd.
Security instructions: Those attending
the meeting are encouraged to arrive
early to allow for security clearance into
the building. Attendees should use the
main entrance to access SBA
headquarters, at 3rd and D Streets SW.
For security purposes attendees must:
SUMMARY:
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #15788 and #15789;
Georgia Disaster Number GA–00109]
Presidential Declaration Amendment of
a Major Disaster for Public Assistance
Only for the State of Georgia
U.S. Small Business
Administration.
ACTION: Amendment 2.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Georgia (FEMA–4400–DR),
dated 11/01/2018.
Incident: Hurricane Michael.
Incident Period: 10/09/2018 through
10/23/2018.
DATES: Issued on 11/07/2018.
Physical Loan Application Deadline
Date: 12/31/2018.
Economic Injury (EIDL) Loan
Application Deadline Date: 08/02/2019.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: The notice
of the President’s major disaster
declaration for Private Non-Profit
organizations in the State of Georgia,
dated 11/01/2018, is hereby amended to
SUMMARY:
12 17
PO 00000
CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 83, Number 221 (Thursday, November 15, 2018)]
[Notices]
[Pages 57513-57516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24870]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84556; File No. SR-ICEEU-2018-011]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Amendments to the F&O Guaranty Fund Policy (the ``Policy''),
Clearing Rules (the ``Rules'') and Finance Procedures (``Finance
Procedures'')
November 8, 2018.
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 October 29, 2018, 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. ICE Clear
Europe filed the proposed rule changes 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 comments on the
proposed rule change from interested persons.
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\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).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
ICE Clear Europe proposes to make certain amendments to the Policy,
Rules and Finance Procedures relating to the calculation methodology
for F&O Clearing Member contributions, the minimum size of the F&O
Guaranty Fund and the review cycle and to make various drafting
clarifications and improvements.
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
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
(a) Purpose
ICE Clear Europe is generally amending the Policy to address the
following aspects of the F&O Guaranty Fund: Changing the calculation
methodology for F&O Clearing Member contributions to incorporate an
uncollateralized stress loss factor (in addition to a factor based on
the intraday original margin requirement), in line with the Clearing
House principle of `polluter pays'; specifying the minimum size of the
F&O Guaranty Fund at 2% of the amount of F&O original margin; and
changing the review cycle for the F&O Guaranty Fund level from
quarterly to every two months, in line with the F&O Risk Committee
meeting schedule. Various drafting clarifications and improvements have
also been made, and certain descriptions in the Policy that duplicate
or describe provisions in other Rules, ICE Clear Europe Procedures and
policies have been removed as unnecessary. ICE Clear Europe is also
making corresponding amendments to the Rules and Finance Procedures to
accommodate the changes being made to the Policy. Set out below are
further details regarding the specific proposed amendments.
ICE Clear Europe is proposing to amend its description of the
purposes and objectives of the Policy to include a broader statement
that the Policy defines how and how often the F&O Guaranty Fund is
sized, how Clearing Member contributions are apportioned and the sizing
frequency, as well as that the Policy also defines stress margin and
its uses, eligible assets covering F&O Guaranty Fund requirement
liabilities, the default sequence and powers of assessment. Certain
descriptions of the
[[Page 57514]]
use of F&O Guaranty Fund that summarize provisions of the Rules have
been removed as unnecessary, and a cross reference to the Rules has
been added.
The provisions of the Policy relating to the sizing of the F&O
Guaranty Fund would be amended to remove details found in other
Clearing House policies and documentation, including the methodology
used to calculate and allocate the additional guaranty fund
apportionment (``AGA'') between the energy and financials & softs
segments of the F&O Guaranty Fund. Detail regarding the review of the
validity of the stress testing scenario(s) is being removed, as it is
covered by other existing stress-testing policies. These changes do not
represent a modification to ICE Clear Europe's current practices.
The amendments to the Policy also reflect that the frequency of
certain reviews will be changed from a quarterly basis to each time the
F&O Risk Committee meets (which is typically every two months).
Corresponding amendments to the Rules specify that the Guaranty Fund
Period will be set pursuant to the Finance Procedures, instead of being
a fixed three month period. The amendments to the Finance Procedures
state that the start and end dates of Guaranty Fund Periods will be
communicated to F&O Clearing Members.
The amendments change the deadline for Clearing Members to deposit
additional funds to comply with an increased F&O Guaranty Fund
requirement. Specifically, as amended in section 6.1(i)(iii) of the
Finance Procedures and as set out in the amended Policy, the deadline
has been reduced from ten business days to five business days.
The proposed amendments define the minimum overall F&O Guaranty
Fund size as 2% of the total F&O original margin requirement (averaged
over the review period), as compared to the current minimum which is
based on the fixed ICE Clear Europe initial contribution to the F&O
Guaranty Fund.
The discussion of extraordinary reviews of the F&O Guaranty Fund is
being amended to remove certain details relating to actions that will
be taken by the clearing risk department when the stress testing
results are observed to exceed the level of the relevant F&O Guaranty
Fund segment, as this is documented in other Clearing House policies
and documentation. The description instead notes that the amber and red
limits defined as part of the Board Risk Appetite will potentially
trigger an extraordinary review of the F&O Guaranty Fund which would be
communicated via the standard process for review.
The requirements of the Policy regarding information presented to
the F&O Risk Committee are being simplified such that the following
information will be presented to the F&O Risk Committee at each review
of the level of the Fund: Historical daily stress-testing results from
the Members showing at least the first and second largest
uncollateralized losses; details of the stress scenario driving the
largest exposures; and any other information supporting a resizing
decision. Certain more prescriptive information requirements have been
removed, as ICE Clear Europe believes they are unnecessary.
The provisions of the Policy relating to recommendations as to
changes in the overall level of the F&O Guaranty Fund have been
condensed and simplified. The revised Policy identifies several factors
on which the Clearing House will base its recommendations on the level
of the Fund (including the level of uncollateralized losses as compared
to the F&O Guaranty Fund or relevant segments and the level of stress
margin called for relevant F&O product categories), rather than
describing specific circumstances under which a `no change'
recommendation or a recommendation to increase a Fund segment will be
made. The Clearing House believes the more flexible approach better
takes into account the range of factors that may warrant a change in
the F&O Guaranty Fund level. In any case, as under the current Policy,
a full explanation of the conclusions and related data is to be
presented to the F&O Risk Committee and Board Risk Committee.
As noted above, the amendments alter the calculation of F&O
Clearing Member contributions to take into account potential
uncollateralized, or stress, loss as well as the maximum intraday
original margin requirement. The governing principle with respect to
this determination is that each Clearing Member's contribution to each
of the Fund segments should reflect their relative share of clearing
activity as well as their relative share of uncollateralized loss.
Under the revised approach, subject to minimum contribution
requirements set out in the Policy, an F&O Clearing Member's relative
share of the F&O Guaranty Fund requirement will be based 40% on its
maximum intraday original margin requirement and 60% on its
uncollateralized loss. This will be recalculated at each review
(instead of on a quarterly cycle). This two factor contribution model
is intended to offer a balanced contribution taking into account
clearing activity and stress results. Various conforming and clarifying
changes have been made throughout the Policy. As discussed above, F&O
Clearing Members will have five (instead of ten) UK business days from
notification to cover any increase in their F&O Guaranty Fund
requirement. The description of the data validation process is being
deleted (as the process is documented in other Clearing House
procedures). The proposed amendments to the Policy also specify the
minimum fund contribution for an F&O Clearing Member to be the larger
of USD 1 million or the calculated member's contribution under the
revised methodology. The corresponding proposed amendments to section
14.1(b) of the Finance Procedures accommodate this change, by
specifying that the Clearing House will establish from time to time a
minimum fund contribution for an F&O Clearing Member based on a
methodology adopted by the Clearing House, of not less than USD 1
million.
The proposed amendments also remove a description of the manner in
which a drawdown of the F&O Guaranty Fund is made across the different
fund segments, as that is covered in greater detail in the existing
Rules.
Finally, references to quarterly reviews of stress test results are
being replaced with references to general review cycles throughout the
Policy and an appendix with an example of a stress margin request is
being deleted as unnecessary.
(b) Statutory Basis
ICE Clear Europe believes that the proposed amendments are
consistent with the requirements of Section 17A of the Act \5\ and the
regulations thereunder applicable to it, including the standards under
Rule 17Ad-22.\6\ Section 17A(b)(3)(F) of the Act \7\ 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, to assure 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 are generally intended to enhance the
F&O Guaranty Fund allocation methodology to take into account both
original margin
[[Page 57515]]
requirements and potential stress losses that may exceed normal margin
levels. The amendments also clarify the minimum size of the F&O
Guaranty Fund, in a manner tied to the original margin requirements and
thus the overall level of F&O clearing activity. The amendments further
shorten the deadline under which F&O Clearing Members must provide
additional F&O Guaranty Fund contributions when required. The Clearing
House believes that these changes will more appropriately allocate F&O
Guaranty Fund Contributions among F&O Clearing Members, further the
risk management of the Clearing House and more generally promote the
prompt and accurate clearance and settlement of transactions. The
amendments also streamline the Policy to reduce redundancies with other
Clearing House policies and the Rules and increase the review cycle
from quarterly to every two months, consistent with the cycle of F&O
Risk Committee meetings. In ICE Clear Europe's view, enhancing the
clarity of the Policy and increasing the oversight of the Policy
through more frequent reviews is also expected to better risk
management and promote the prompt and accurate clearance and settlement
of transactions. As a result, in ICE Clear Europe's view, the
amendments are consistent with the requirements of Section 17A(b)(3)(F)
of the Act.
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\5\ 15 U.S.C. 78q-1.
\6\ 17 CFR 240.17Ad-22.
\7\ 15 U.S.C. 78q-1(b)(3)(F).
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The amendments are also consistent with relevant requirements of
Rule 17Ad-22.\8\ Rules 17Ad-22(e)(4) \9\ and 17Ad-22(b)(3) \10\ require
clearing agencies to maintain certain financial resources at specified
levels sufficient to support their clearing operations, including
through the use of guaranty funds. The amendments will facilitate
compliance with these requirements, through an enhanced approach to
allocating F&O Guaranty Fund requirements that takes into account both
clearing activity (as indicated through original margin levels) and
potential stress losses in extreme but plausible market conditions. The
revised Policy also contemplates review of by the F&O Risk Committee of
daily stress testing results showing at least the first and second
largest uncollateralized losses and details of the stress scenario
driving the largest exposures. Taken together, the changes will help
the Clearing House ensure that, consistent with regulatory
requirements, the F&O Guaranty Fund, together with other financial
resources, is sufficient to enable the Clearing House to cover a wide
range of foreseeable stress scenarios.
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\8\ 17 CFR 240.17Ad-22.
\9\ 17 CFR 240.17Ad-22(e)(4)(i)--(v). The rule states that
``[e]ach covered clearing agency shall establish, implement,
maintain and enforce written policies and procedures reasonably
designed to, as applicable:
(4) Effectively identify, measure, monitor, and manage its
credit exposures to participants and those arising from its payment,
clearing, and settlement processes, including by:
(i) Maintaining sufficient financial resources to cover its
credit exposure to each participant fully with a high degree of
confidence;
(ii) To the extent not already maintained pursuant to paragraph
(e)(4)(i) of this section, for a covered clearing agency providing
central counterparty services that is either systemically important
in multiple jurisdictions or a clearing agency involved in
activities with a more complex risk profile, maintaining additional
financial resources at the minimum to enable it to cover a wide
range of foreseeable stress scenarios that include, but are not
limited to, the default of the two participant families that would
potentially cause the largest aggregate credit exposure for the
covered clearing agency in extreme but plausible market conditions;
(iii) To the extent not already maintained pursuant to paragraph
(e)(4)(i) of this section, for a covered clearing agency not subject
to paragraph (e)(4)(ii) of this section, maintaining additional
financial resources at the minimum to enable it to cover a wide
range of foreseeable stress scenarios that include, but are not
limited to, the default of the participant family that would
potentially cause the largest aggregate credit exposure for the
covered clearing agency in extreme but plausible market conditions;
(iv) Including prefunded financial resources, exclusive of
assessments for additional guaranty fund contributions or other
resources that are not prefunded, when calculating the financial
resources available to meet the standards under paragraphs (e)(4)(i)
through (iii) of this section, as applicable;
(v) Maintaining the financial resources required under
paragraphs (e)(4)(ii) and (iii) of this section, as applicable, in
combined or separately maintained clearing or guaranty funds;''
\10\ 17 CFR 240.17Ad-22(b)(3). The rule states that ``[a]
registered clearing agency that performs central counterparty
services shall establish, implement, maintain and enforce written
policies and procedures reasonably designed to: Maintain sufficient
financial resources to withstand, at a minimum, a default by the
participant family to which it has the largest exposure in extreme
but plausible market conditions.
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Rule 17Ad-22(e)(2) \11\ requires clearing agencies to establish
reasonably designed policies and procedures to provide for governance
arrangements that are clear and transparent and specify clear and
direct lines of responsibility. To facilitate compliance with this
requirement, the proposed amendments to the Policy more clearly set out
the information that will be provided to the F&O Risk Committee at each
review of the level of the F&O Guaranty Fund and the factors that will
be considered in making recommendations on the appropriate level of the
F&O Guaranty Fund.
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\11\ 17 CFR 240.17 Ad-22(e)(2). The rule states that ``[e]ach
covered clearing agency shall establish, implement, maintain and
enforce written policies and procedures reasonably designed to, as
applicable:
(2) Provide for governance arrangements that:
(i) Are clear and transparent
(ii) Clearly prioritize the safety and efficiency of the covered
clearing agency;
(iii) Support the public interest requirements in Section 17A of
the Act (15 U.S.C. 78q-1) applicable to clearing agencies, and the
objectives of owners and participants;
(iv) Establish that the board of directors and senior management
have appropriate experience and skills to discharge their duties and
responsibilities;
(v) Specify clear and direct lines of responsibility; and
(vi) Consider the interests of participants' customers,
securities issuers and holders, and other relevant stakeholders of
the covered clearing agency.''
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(B) Clearing Agency's Statement on Burden on Competition
ICE Clear Europe does not believe the proposed rule changes would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purposes of the Act. The changes are
being proposed in order to clarify and enhance the Policy and reduce
overlap with other Clearing House Rules and policies. The amendments
will apply to all F&O Clearing Members. ICE Clear Europe does not
believe the amendments will generally affect the overall cost of
clearing for F&O Clearing Members or other market participants or
otherwise affect access to clearing generally. The amendments may alter
the allocation of F&O Guaranty Fund requirements across F&O Clearing
Members, which could increase requirements for some members, but such
changes are designed to more appropriately take into account potential
stress losses as well as clearing activity of such members. In ICE
Clear Europe's view, such amendments will enhance the risk management
of the Clearing House and tailor the F&O Guaranty Fund requirements to
the risks presented by F&O Clearing Members. As a result, any
additional burdens placed on F&O Clearing Members will be appropriate
in furtherance of that goal. The amendments will provide a transparent
and objective methodology for the calculation of F&O Guaranty Fund
requirements, and are not intended to disadvantage any particular
Clearing Member. As a result, ICE Clear Europe believes that any impact
on competition is appropriate in furtherance of the purposes of the
Act.
(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
[[Page 57516]]
with respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 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 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-2018-011 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-2018-011. 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 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 website 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 website at https://www.theice.com/clear-europe/regulation.
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-2018-011 and should be
submitted on or before December 6, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-24870 Filed 11-14-18; 8:45 am]
BILLING CODE 8011-01-P
