Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change Relating to the ICC Clearing Rules, 33762-33764 [2020-11777]
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33762
Federal Register / Vol. 85, No. 106 / Tuesday, June 2, 2020 / Notices
the Data Center closure would have the
resulting fees waived, and the extension
of the waiver would apply uniformly to
all Users during the period. For the
reasons above, the proposed changes do
not unfairly discriminate between or
among market participants.
In addition, the Exchange believes
that the proposed rule change would
perfect the mechanisms of a free and
open market and a national market
system and, in general, protect investors
and the public interest because it would
allow a User to have work carried out
on its equipment notwithstanding a
Rules 7.1E and 901NY closure without
incurring Hot Hands fees. Accordingly,
the Exchange believes that the requested
extension of the waiver is designed to
perfect the mechanisms of a free and
open market and a national market
system and, in general, protect investors
and the public interest by facilitating
the uninterrupted availability of Users’
equipment.
For all of the above reasons, the
Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,11 the Exchange believes that the
proposed rule change will not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
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Intramarket Competition
The Exchange does not believe that
the proposed change would place any
burden on intramarket competition that
is not necessary or appropriate.
The proposed extension of the waiver
is not designed to affect competition,
but rather to provide relief to Users that,
while a Rules 7.1E and 901NY closure
is in effect, have no option but to use
the Hot Hands service.
The proposed extension of the waiver
would not apply differently to distinct
types or sizes of market participants.
Rather, all Users whose equipment
requires work during the extension of
the Data Center closure would have the
resulting fees waived, and the extension
of the waiver would apply uniformly to
all Users during the period.
Intermarket Competition
The Exchange does not believe that
the proposed change would impose any
burden on intermarket competition that
is not necessary or appropriate.
The Exchange believes that the
proposed change would not affect the
competitive landscape among the
national securities exchanges, as the Hot
Hands service is solely charged within
co-location to existing Users, and would
be temporary.
For the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received 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 is effective
upon filing pursuant to Section
19(b)(3)(A) 12 of the Act and
subparagraph (f)(2) of Rule 19b–4 13
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 14 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:
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–
NYSEAMER–2020–39 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.
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
14 15 U.S.C. 78s(b)(2)(B).
All submissions should refer to File
Number SR–NYSEAMER–2020–39. 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
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–NYSEAMER–2020–39 and
should be submitted on or before June
23, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–11780 Filed 6–1–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88954; File No. SR–ICC–
2020–007]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Order Approving
Proposed Rule Change Relating to the
ICC Clearing Rules
May 27, 2020.
I. Introduction
On April 10, 2020, ICE Clear Credit
LLC (‘‘ICC’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
13 17
11 15
U.S.C. 78f(b)(8).
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CFR 200.30–3(a)(12).
02JNN1
Federal Register / Vol. 85, No. 106 / Tuesday, June 2, 2020 / Notices
19(b)(1) of the Securities Exchange Act
of 1934 (the ‘‘Act’’),1 and Rule 19b–4,2
a proposed rule change to amend
Chapter 2 of the ICC Rules relating to
requirements applicable to ICC’s
Clearing Participants. The proposed rule
change was published for comment in
the Federal Register on April 20, 2020.3
The Commission did not receive
comments regarding the proposed rule
change. For the reasons discussed
below, the Commission is approving the
proposed rule change.
II. Description of the Proposed Rule
Change
As discussed below, the proposed
rule change would amend Chapter 2 of
the ICC Rules, which relates to
requirements applicable to ICC’s
Clearing Participants.
The proposed rule change would
amend ICC Rule 201(b), which sets out
the standards that each of ICC’s Clearing
Participants must meet, to add a new
standard in standard in subparagraph
(xiv). New subparagraph (xiv) would
require that a Clearing Participant
participate in default management
simulations, new technology testing and
other exercises, as notified by ICE Clear
Credit from time to time.
The proposed rule change would also
amend Rule 206(a), which requires that
each Clearing Participant immediately
notify ICC, orally and in writing, upon
the occurrence of certain specified
events. The proposed rule change would
amend Rule 206(a) to delete the
requirement that Clearing Participants
provide notices orally, so that instead
Clearing Participants would only be
required to provide notice in writing.
Finally, the proposed rule change
would amend Rule 206(c), which
requires a Clearing Participant that is a
broker-dealer to notify ICC of, among
other things, any matter of which the
Clearing Participant must notify FINRA
under FINRA Rule 3070. The proposed
rule change would replace ‘‘FINRA Rule
3070’’ with ‘‘FINRA Rule
4530(a)(1)(A),(C),(E) and 4530(b) (or any
similar rules),’’ as FINRA Rule 3070 is
no longer applicable and has been
superseded by FINRA Rule 4530.4
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Self-Regulatory Organizations; ICE Clear Credit
LLC; Notice of Proposed Rule Change Relating to
the ICC Clearing Rules, Exchange Act Release No.
88628 (Apr. 14, 2020); 85 FR 21907 (Apr. 20, 2020)
(SR–ICC–2020–007).
4 FINRA Rule 4530 generally requires that its
members promptly report to FINRA after the
member or an associated person of the member has
been found to have violated any securities or other
rules and regulations of a regulatory body, is named
as a defendant or respondent in any proceeding
brought by a domestic or foreign regulatory body,
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.5 For the
reasons given below, the Commission
finds that the proposed rule change is
consistent with Section 17A(b)(3)(F) of
the Act 6 and Rule 17Ad–22(d)(2).7
A. Consistency With Section
17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act
requires, among other things, that the
rules of ICC be designed to promote the
prompt and accurate clearance and
settlement of securities transactions
and, to the extent applicable, derivative
agreements, contracts, and transactions,
as well as to assure the safeguarding of
securities and funds which are in the
custody or control of ICC or for which
it is responsible.8 By updating the
standards for membership applicable to
Clearing Participants as discussed
above, the proposed rule change should
help to ensure that ICC’s Clearing
Participants participate in default
testing and other testing conducted by
ICC. In addition, the proposed rule
change should help to ensure that all of
ICC’s Clearing Participants are prepared
for, and ready to take actions in
response to, a Clearing Participant
default, thereby helping to improve
ICC’s management of a Clearing
Participant default. Because the
Commission believes that a Clearing
Participant default, if not properly
managed, could cause ICC to incur
losses which could hinder its clearance
and settlement of securities transactions
and safeguarding of securities and funds
in its custody or control, the
Commission believes this aspect of the
proposed rule change should help to
promote the prompt and accurate
clearance and settlement of securities
transactions and assure the safeguarding
of securities and funds in ICC’s custody
and control.
1 15
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or is indicted, or convicted of, or pleads guilty to
any felony or any misdemeanor that involves the
purchase or sale of any security, etc. Further, this
rule also generally requires that each member shall
promptly report to FINRA after the member has
concluded or reasonably should have concluded
that an associated person of the member or the
member itself has violated any securities or other
rules and regulations of a regulatory body.
5 15 U.S.C. 78s(b)(2)(C).
6 15 U.S.C. 78q–1(b)(3)(F).
7 17 CFR 240.17Ad–22(d)(2).
8 15 U.S.C. 78q–1(b)(3)(F).
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33763
Similarly, by eliminating the
requirement for oral notices and
updating the reference to the current
FINRA rulerequiring notification by a
Clearing Participant that is a brokerdealer of violations of regulatory rules
and regulations, the proposed rule
change should help to ensure that ICC
receives notice from a Clearing
Participant of events or situations which
could affect the Clearing Participant’s
ability to satisfy the standards and
obligations applicable to it as a
participant in ICC. The proposed rule
change would allow ICC to respond as
needed to mitigate any potential
negative effects to ICC arising from such
events or situations that could hinder
ICC’s clearance and settlement of
securities transactions and safeguarding
of securities and funds in its custody or
control. Consequently, the Commission
believes this aspect of the proposed rule
change should help to promote the
prompt and accurate clearance and
settlement of securities transactions and
assure the safeguarding of securities and
funds in ICC’s custody and control.
Therefore, the Commission finds that
the proposed rule change should
promote the prompt and accurate
clearance and settlement of securities
transactions and assure the safeguarding
of securities and funds in ICC’s custody
and control, consistent with Section
17A(b)(3)(F) of the Act.9
B. Consistency With Rule 17Ad–22(d)(2)
Rule 17Ad–22(d)(2) requires that ICC
establish, implement, maintain and
enforce written policies and procedures
reasonably designed to require
participants to have sufficient financial
resources and robust operational
capacity to meet obligations arising from
participation in ICC; have procedures in
place to monitor that participation
requirements are met on an ongoing
basis; and have participation
requirements that are objective and
publicly disclosed, and permit fair and
open access.10 The adoption of a new
standard applicable to Clearing
Participants—participation in default
management simulations, new
technology testing and other exercises,
as notified by ICE Clear Credit from time
to time—should establish a
participation requirement that is
objective in that it applies to all Clearing
Participants equally, and is publicly
disclosed, in that it would be part of
ICC’s publicly available rulebook.
Moreover, this new participation
standard should allow ICC to test a
Clearing Participant’s operational
9 15
U.S.C. 78q–1(b)(3)(F).
U.S.C. 17Ad–22(d)(2).
10 15
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33764
Federal Register / Vol. 85, No. 106 / Tuesday, June 2, 2020 / Notices
response to a simulated default, thereby
helping to ensure that a Clearing
Participant has robust operational
capacity to meet obligations arising from
participation in ICC. Finally, the
elimination of the requirement for oral
notices and updating of the reference to
the current FINRA rule should help to
ensure that ICC receives notice from a
Clearing Participant of events or
situations which could affect the
Clearing Participant’s ability to satisfy
the standards and obligations applicable
to it as a participant in ICC. Taken
together, the Commission believes that
the proposed rule change should help
ICC to monitor that Clearing
Participants are meeting their
participation requirements on an
ongoing basis. For these reasons, the
Commission finds that the proposed
rule change is consistent with Rule
17Ad–22(d)(2).11
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act, and in
particular, with the requirements of
Section 17A(b)(3)(F) of the Act 12 and
Rules 17Ad–22(d)(2).13
It is therefore ordered pursuant to
Section 19(b)(2) of the Act 14 that the
proposed rule change (SR–ICC–2020–
007), be, and hereby is, approved.15
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–11777 Filed 6–1–20; 8:45 am]
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BILLING CODE 8011–01–P
11 15
U.S.C. 17Ad–22(d)(2).
U.S.C. 78q–1(b)(3)(F).
13 17 CFR 240.17Ad–22(d)(2).
14 15 U.S.C. 78s(b)(2).
15 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).
16 17 CFR 200.30–3(a)(12).
12 15
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–88958; File No. SR–
NYSENAT–2020–18]
Self-Regulatory Organizations; NYSE
National, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Temporary
Waiver of the Co-location Hot Hands
Fee
May 27, 2020.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on May 14,
2020, NYSE National, Inc. (‘‘NYSE
National’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
temporary waiver of the co-location
‘‘Hot Hands’’ fee. The proposed rule
change is available on the Exchange’s
website at www.nyse.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
self-regulatory organization 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 those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to extend of
the temporary waiver of the co1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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location 4 ‘‘Hot Hands’’ fee through the
earlier of the reopening of the Mahwah,
New Jersey data center (‘‘Data Center’’)
or June 30, 2020. The waiver of the Hot
Hands fee is scheduled to expire on May
15, 2020.5
The Exchange is an indirect
subsidiary of Intercontinental Exchange,
Inc. (‘‘ICE’’). Through its ICE Data
Services (‘‘IDS’’) business, ICE operates
the Mahwah, New Jersey data center
(‘‘Data Center’’), from which the
Exchange provides co-location services
to Users.6 Among those services is a
‘‘Hot Hands’’ service, which allows
Users to use on-site Data Center
personnel to maintain User equipment,
support network troubleshooting, rack
and stack a server in a User’s cabinet;
power recycling; and install and
document the fitting of cable in a User’s
cabinet(s).7 The Hot Hands fee is $100
per half hour.
ICE previously announced to Users
that the Data Center would be closed to
third parties for the period from March
16, 2020 through May 15, 2020 (the
‘‘Initial Closure’’), to help avoid the
spread of COVID–19, which could
negatively impact Data Center functions.
Prior to the closure of the Data Center,
the Chief Executive Officer of the
Exchange took the actions required
under NYSE National Rule 7.1 to close
the co-location facility of the Exchange
to third parties.
ICE has now announced to Users that,
because the concerns that led to the
Initial Closure still apply, the closure of
the Data Center will be extended, with
the date of the reopening announced
through a customer notice.
4 The Exchange initially filed rule changes
relating to its co-location services with the
Securities and Exchange Commission
(‘‘Commission’’) in May 2018. See Securities
Exchange Act Release No. 83351 (May 31, 2018), 83
FR 26314 (June 6, 2018) (SR–NYSENAT–2018–07).
5 See Securities Exchange Act Release Nos. 88399
(March 17, 2020), 85 FR 16428 (March 23, 2020)
(SR–NYSENAT–2020–10), and 88521 (March 31,
2020), 85 FR 19194 (April 6, 2020) (SR–NYSENAT–
2020–14).
6 For purposes of the Exchange’s co-location
services, a ‘‘User’’ means any market participant
that requests to receive co-location services directly
from the Exchange. See 83 FR 26314, supra note 4,
at note 9. As specified in the Exchange’s Price List,
a User that incurs co-location fees for a particular
co-location service pursuant thereto would not be
subject to co-location fees for the same co-location
service charged by the Exchange’s affiliates the New
York Stock Exchange LLC (‘‘NYSE’’), NYSE
American LLC (‘‘NYSE American’’), NYSE Arca,
Inc. (‘‘NYSE Arca’’), and NYSE Chicago, Inc.
(‘‘NYSE Chicago’’ and together, the ‘‘Affiliate
SROs’’). See id. at note 11. Each Affiliate SRO has
submitted substantially the same proposed rule
change to propose the changes described herein.
See SR–NYSE–2020–44, SR–NYSEAmer–2020–39,
SR–NYSEArca–2020–47, and SR–NYSECHX–2020–
15.
7 See 83 FR 26314, supra note 4.
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]]>Agencies
[Federal Register Volume 85, Number 106 (Tuesday, June 2, 2020)]
[Notices]
[Pages 33762-33764]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11777]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88954; File No. SR-ICC-2020-007]
Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change Relating to the ICC Clearing Rules
May 27, 2020.
I. Introduction
On April 10, 2020, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section
[[Page 33763]]
19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and
Rule 19b-4,\2\ a proposed rule change to amend Chapter 2 of the ICC
Rules relating to requirements applicable to ICC's Clearing
Participants. The proposed rule change was published for comment in the
Federal Register on April 20, 2020.\3\ The Commission did not receive
comments regarding the proposed rule change. For the reasons discussed
below, the Commission is approving the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Proposed Rule Change Relating to the ICC Clearing Rules, Exchange
Act Release No. 88628 (Apr. 14, 2020); 85 FR 21907 (Apr. 20, 2020)
(SR-ICC-2020-007).
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
As discussed below, the proposed rule change would amend Chapter 2
of the ICC Rules, which relates to requirements applicable to ICC's
Clearing Participants.
The proposed rule change would amend ICC Rule 201(b), which sets
out the standards that each of ICC's Clearing Participants must meet,
to add a new standard in standard in subparagraph (xiv). New
subparagraph (xiv) would require that a Clearing Participant
participate in default management simulations, new technology testing
and other exercises, as notified by ICE Clear Credit from time to time.
The proposed rule change would also amend Rule 206(a), which
requires that each Clearing Participant immediately notify ICC, orally
and in writing, upon the occurrence of certain specified events. The
proposed rule change would amend Rule 206(a) to delete the requirement
that Clearing Participants provide notices orally, so that instead
Clearing Participants would only be required to provide notice in
writing.
Finally, the proposed rule change would amend Rule 206(c), which
requires a Clearing Participant that is a broker-dealer to notify ICC
of, among other things, any matter of which the Clearing Participant
must notify FINRA under FINRA Rule 3070. The proposed rule change would
replace ``FINRA Rule 3070'' with ``FINRA Rule 4530(a)(1)(A),(C),(E) and
4530(b) (or any similar rules),'' as FINRA Rule 3070 is no longer
applicable and has been superseded by FINRA Rule 4530.\4\
---------------------------------------------------------------------------
\4\ FINRA Rule 4530 generally requires that its members promptly
report to FINRA after the member or an associated person of the
member has been found to have violated any securities or other rules
and regulations of a regulatory body, is named as a defendant or
respondent in any proceeding brought by a domestic or foreign
regulatory body, or is indicted, or convicted of, or pleads guilty
to any felony or any misdemeanor that involves the purchase or sale
of any security, etc. Further, this rule also generally requires
that each member shall promptly report to FINRA after the member has
concluded or reasonably should have concluded that an associated
person of the member or the member itself has violated any
securities or other rules and regulations of a regulatory body.
---------------------------------------------------------------------------
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.\5\ For the reasons given below, the Commission finds that
the proposed rule change is consistent with Section 17A(b)(3)(F) of the
Act \6\ and Rule 17Ad-22(d)(2).\7\
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(b)(2)(C).
\6\ 15 U.S.C. 78q-1(b)(3)(F).
\7\ 17 CFR 240.17Ad-22(d)(2).
---------------------------------------------------------------------------
A. Consistency With Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of ICC be designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions, as well
as to assure the safeguarding of securities and funds which are in the
custody or control of ICC or for which it is responsible.\8\ By
updating the standards for membership applicable to Clearing
Participants as discussed above, the proposed rule change should help
to ensure that ICC's Clearing Participants participate in default
testing and other testing conducted by ICC. In addition, the proposed
rule change should help to ensure that all of ICC's Clearing
Participants are prepared for, and ready to take actions in response
to, a Clearing Participant default, thereby helping to improve ICC's
management of a Clearing Participant default. Because the Commission
believes that a Clearing Participant default, if not properly managed,
could cause ICC to incur losses which could hinder its clearance and
settlement of securities transactions and safeguarding of securities
and funds in its custody or control, the Commission believes this
aspect of the proposed rule change should help to promote the prompt
and accurate clearance and settlement of securities transactions and
assure the safeguarding of securities and funds in ICC's custody and
control.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
Similarly, by eliminating the requirement for oral notices and
updating the reference to the current FINRA rulerequiring notification
by a Clearing Participant that is a broker-dealer of violations of
regulatory rules and regulations, the proposed rule change should help
to ensure that ICC receives notice from a Clearing Participant of
events or situations which could affect the Clearing Participant's
ability to satisfy the standards and obligations applicable to it as a
participant in ICC. The proposed rule change would allow ICC to respond
as needed to mitigate any potential negative effects to ICC arising
from such events or situations that could hinder ICC's clearance and
settlement of securities transactions and safeguarding of securities
and funds in its custody or control. Consequently, the Commission
believes this aspect of the proposed rule change should help to promote
the prompt and accurate clearance and settlement of securities
transactions and assure the safeguarding of securities and funds in
ICC's custody and control.
Therefore, the Commission finds that the proposed rule change
should promote the prompt and accurate clearance and settlement of
securities transactions and assure the safeguarding of securities and
funds in ICC's custody and control, consistent with Section
17A(b)(3)(F) of the Act.\9\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Consistency With Rule 17Ad-22(d)(2)
Rule 17Ad-22(d)(2) requires that ICC establish, implement, maintain
and enforce written policies and procedures reasonably designed to
require participants to have sufficient financial resources and robust
operational capacity to meet obligations arising from participation in
ICC; have procedures in place to monitor that participation
requirements are met on an ongoing basis; and have participation
requirements that are objective and publicly disclosed, and permit fair
and open access.\10\ The adoption of a new standard applicable to
Clearing Participants--participation in default management simulations,
new technology testing and other exercises, as notified by ICE Clear
Credit from time to time--should establish a participation requirement
that is objective in that it applies to all Clearing Participants
equally, and is publicly disclosed, in that it would be part of ICC's
publicly available rulebook. Moreover, this new participation standard
should allow ICC to test a Clearing Participant's operational
[[Page 33764]]
response to a simulated default, thereby helping to ensure that a
Clearing Participant has robust operational capacity to meet
obligations arising from participation in ICC. Finally, the elimination
of the requirement for oral notices and updating of the reference to
the current FINRA rule should help to ensure that ICC receives notice
from a Clearing Participant of events or situations which could affect
the Clearing Participant's ability to satisfy the standards and
obligations applicable to it as a participant in ICC. Taken together,
the Commission believes that the proposed rule change should help ICC
to monitor that Clearing Participants are meeting their participation
requirements on an ongoing basis. For these reasons, the Commission
finds that the proposed rule change is consistent with Rule 17Ad-
22(d)(2).\11\
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\10\ 15 U.S.C. 17Ad-22(d)(2).
\11\ 15 U.S.C. 17Ad-22(d)(2).
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IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act,
and in particular, with the requirements of Section 17A(b)(3)(F) of the
Act \12\ and Rules 17Ad-22(d)(2).\13\
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\12\ 15 U.S.C. 78q-1(b)(3)(F).
\13\ 17 CFR 240.17Ad-22(d)(2).
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It is therefore ordered pursuant to Section 19(b)(2) of the Act
\14\ that the proposed rule change (SR-ICC-2020-007), be, and hereby
is, approved.\15\
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\14\ 15 U.S.C. 78s(b)(2).
\15\ 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.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-11777 Filed 6-1-20; 8:45 am]
BILLING CODE 8011-01-P
