Self-Regulatory Organizations; ICE Clear Europe Limited; Notice and Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to the Investment Management Procedures, 64828-64830 [2022-23234]
Download as PDF
<![CDATA[
64828
Federal Register / Vol. 87, No. 206 / Wednesday, October 26, 2022 / Notices
lotter on DSK11XQN23PROD with NOTICES1
broader financial system. OCC has been
designated as a SIFMU, in part, because
its failure or disruption could increase
the risk of significant liquidity or credit
problems spreading among financial
institutions or markets.45 The
Commission believes that the proposed
changes would support OCC’s ability to
continue providing services to the U.S.
options markets by establishing
multiple backup systems across the
proposed Cloud Infrastructure and an
on-premises backup while also allowing
OCC to quickly set up additional
capacity or applications as necessary.
OCC’s continued operations would, in
turn, help support the stability of the
financial system by reducing the risk of
significant operational problems
spreading among market participants
that rely on OCC’s central role in the
options market.
Accordingly, and for the reasons
stated above, the Commission believes
the changes proposed in the Advance
Notice are consistent with Section
805(b) of the Clearing Supervision
Act.46
B. Consistency With Rule 17Ad–
22(e)(17)(ii) Under the Exchange Act
Rule 17Ad–22(e)(17)(ii) under the
Exchange Act requires that a covered
clearing agency establish, implement,
maintain, and enforce written policies
and procedures reasonably designed to
manage the covered clearing agency’s
operational risks by ensuring that
systems have a high degree of security,
resiliency, operational reliability, and
adequate, scalable capacity.47
As described in Section II.A. above,
OCC proposes to increase the resiliency
of its systems by migrating from two onpremises data centers to two separate,
logically isolated Virtual Private Clouds
with an on-premises backup data center.
As described in Section II.B. above, OCC
proposes to expand its existing physical
and cyber security program with a focus
on: (i) access controls; (ii) data
governance; (iii) configuration
management; and (iv) testing, as well as
the implementation of additional tools
not currently available for use in OCC’s
on-premises data centers. As described
in Section II.C. above, operating in a
Cloud Infrastructure would allow OCC
to quickly scale resources to meet
elevated trade volumes as well as run
risk management processes, such as
backtesting, more quickly than is
currently possible.
45 See
Financial Stability Oversight Council
(‘‘FSOC’’) 2012 Annual Report, Appendix A,
https://home.treasury.gov/system/files/261/here.pdf
(last visited Feb. 17, 2022).
46 12 U.S.C. 5464(b).
47 17 CFR 240.17Ad–22(e)(17)(ii).
VerDate Sep<11>2014
17:37 Oct 25, 2022
Jkt 259001
Accordingly, the Commission believes
that the changes proposed in the
Advance Notice are consistent with
Rule 17Ad–22(e)(17)(ii) under the
Exchange Act.48
IV. Conclusion
It is therefore noticed, pursuant to
Section 806(e)(1)(I) of the Clearing
Supervision Act, that the Commission
does not object to Advance Notice (SR–
OCC–2021–802), as modified by Partial
Amendments No. 1, 2, 3, and 4 and that
OCC is authorized to implement the
proposed change as of the date of this
notice.
By the Commission.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–23230 Filed 10–25–22; 8:45 am]
BILLING CODE P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96118; File No. SR–ICEEU–
2022–019]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice and
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Amendments to the Investment
Management Procedures
October 20, 2022.
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
11, 2022, ICE Clear Europe Limited
(‘‘ICE Clear Europe’’ or the ‘‘Clearing
House’’) 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 change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(1) thereunder,4 such that the
proposed rule change 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 Limited (‘‘ICE Clear
Europe’’ or the ‘‘Clearing House’’)
48 Id.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(1).
2 17
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
proposes to modify its Investment
Management Procedures (the
‘‘Investment Management Procedures’’
or the ‘‘Procedures’’) to clarify certain
permitted investments and related
limits for the Clearing House when
managing cash received from Clearing
Members as margin or from the Clearing
House’s contribution to the guaranty
fund.
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 proposing to
update the Table of Authorised
Investments and Concentration Limits
for Cash from CMs and from Skin In The
Game (the ‘‘Table’’) in the Procedures to
make certain clarifications that reflect
limitations on investments that can be
made with customer funds provided by
FCM Clearing Members under
applicable law. The amendments reflect
restrictions that ICE Clear Europe
currently observes (and are described
elsewhere in the existing Procedures),
and accordingly will not constitute a
change in practice. Specifically, the
amendment would provide that the
reference in the Table to there being ‘‘no
limit’’ for counterparty concentration in
respect to investments in (i) US
government agency bonds and (ii) UK
government agency bonds, as well as the
15% concentration limit specified for
the purchase of EU government agency
bonds each applies to cash provided by
non-FCM Clearing Members. The
amendments would also state explicitly
in the Table that FCM customer funds
may not be invested in such assets. The
proposed changes reflect limitations
under CFTC regulations.5 Such updates
5 Consistent with ICE Clear Europe’s current
practice, certain limitations in the amendments are
more restrictive than required under CFTC
regulations. For example, investment of FCM
customer funds in U.S. agency securities is not
permitted, as described in the amendments,
although CFTC Rule 1.25(b)(3)(i)(B) would permit
investment in U.S. agency obligations up to a
E:\FR\FM\26OCN1.SGM
26OCN1
Federal Register / Vol. 87, No. 206 / Wednesday, October 26, 2022 / Notices
are intended to provide greater clarity in
the Table as to the permissible
investment of customer cash provided
by Clearing Members and accurately
document existing practices, consistent
with legal requirements.
lotter on DSK11XQN23PROD with NOTICES1
(b) Statutory Basis
ICE Clear Europe believes that the
proposed amendments to the
Investment Management Procedures are
consistent with the requirements of
Section 17A of the Act 6 and the
regulations thereunder applicable to it.
In particular, 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, 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 changes to the
Investment Management Procedures are
designed to reflect the Clearing House’s
practices with respect to the
management of investments, in light of
existing CFTC regulations relating to the
investment of customer funds provided
by FCM Clearing Members. The
amendments would reflect certain
limitations under CFTC Rule 1.25, as
discussed above, on investments of FCM
customer cash in agency securities,
consistent with the Clearing House’s
current practice. The proposed
amendments thus promote the accuracy
and clarity of the Clearing House’s
policies and procedures and are
consistent with the prompt and accurate
clearing and settlement of cleared
contracts. The amendments are thus
also generally consistent with the
protection of investors and the public
interest in the safe operation of the
Clearing House. The updates will also
facilitate management of the cash held
by the Clearing House from Clearing
Members and their customers in
accordance with applicable law, and
thus enhance the safeguarding of
securities and funds in ICE Clear
Europe’s custody or control or for which
it is responsible. Accordingly, the
amendments are consistent with the
requirements of Section 17A(b)(3)(F).8
maximum of 50 percent of the total assets held in
segregation by the futures commission merchant or
derivatives clearing organization. 17 CFR
1.25(b)(3)(i)(B). A footnote referencing this rule
would be included in the Table.
6 15 U.S.C. 78q–1.
7 15 U.S.C. 78q–1(b)(3)(F).
8 15 U.S.C. 78q–1(b)(3)(F).
VerDate Sep<11>2014
17:37 Oct 25, 2022
Jkt 259001
Rule 17A–22(e)(16) requires clearing
agencies to safeguard their own and
their ‘‘participants’ assets, minimize the
risk of loss and delay in access to these
assets, and invest such assets in
instruments with minimal credit,
market and liquidity risks.’’ 9 As
discussed above, the amendments to the
Investment Management Procedures are
intended to more clearly document
investment limitations in connection
with the investment of cash assets
provided by Clearing Members to reflect
current practice and applicable law,
including the requirements of CFTC
regulations. As such, the revised
Investment Management Procedures
will help enable the Clearing House to
safeguard such assets and minimize the
risk of loss from liquidity and
investment risks, consistent with the
requirements of Rule 17Ad–22(e)(16).10
(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 changes are
being proposed in order to update the
Investment Management Procedures to
provide clarifications and additional
details where necessary in order to
reflect existing practices and are not
intended to impose new requirements
on Clearing Members. The terms of
clearing are not otherwise changing. ICE
Clear Europe does not believe that
proposed amendments would adversely
affect competition among Clearing
Members or other market participants or
affect the ability of market participants
to access clearing generally. Therefore,
ICE Clear Europe does not believe the
proposed rule change imposes any
burden on competition that is
inappropriate 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 amendment has 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 rule
change.
9 17
CFR 240.17Ad–22(e)(16).
CFR 240.17Ad–22(e)(16).
10 17
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
64829
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 11 and paragraph (f) of Rule
19b–4 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 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–2022–019 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–2022–019. 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
11 15
12 17
E:\FR\FM\26OCN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
26OCN1
64830
Federal Register / Vol. 87, No. 206 / Wednesday, October 26, 2022 / Notices
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–2022–019
and should be submitted on or before
November 16, 2022.
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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Deputy Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2022–23234 Filed 10–25–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96111; File No. SR–
NYSEARCA–2022–70]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Modify Rule 7.44–E
October 20, 2022.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on October
11, 2022, NYSE Arca, Inc. (‘‘NYSE
Arca’’ 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 self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
lotter on DSK11XQN23PROD with NOTICES1
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to modify
Rule 7.44–E relating to the Retail
Liquidity Program. 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.
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
17:37 Oct 25, 2022
Jkt 259001
1. Purpose
The Exchange proposes to modify
Rule 7.44–E, which sets forth the
Exchange’s Retail Liquidity Program
(the ‘‘Program’’).4 The purpose of the
Program is to attract retail order flow to
the Exchange and allow such order flow
to receive potential price improvement.
Rule 7.44–E provides for a class of
market participant called Retail
Liquidity Providers (‘‘RLPs’’), and nonRLP ETP Holders are able to provide
potential price improvement to retail
investor orders in the form of a nondisplayed order that is priced better
than the best protected bid or offer,
called a Retail Price Improvement Order
(‘‘RPI Order’’).5 When there is an RPI
Order in a particular security, the
Exchange disseminates an indicator,
known as the Retail Liquidity Identifier,
that such interest exists.6 Retail Member
Organizations (‘‘RMOs’’) can submit a
Retail Order to the Exchange, which
interacts, to the extent possible, with
available contra-side RPI Orders and
4 The Program was established on a pilot basis in
2013 and was approved by the Commission to
operate on a permanent basis in 2019. See
Securities Exchange Act Release No. 87350 (October
18, 2019), 84 FR 57106 (October 24, 2019) (SR–
NYSEArca–2019–63). In connection with the
Commission’s approval of the Program on a pilot
basis, the Commission granted the Exchange’s
request for exemptive relief from Rule 612 of
Regulation NMS, 17 CFR 242.612 (the ‘‘Sub-Penny
Rule’’), which, among other things, prohibits a
national securities exchange from accepting or
ranking orders priced greater than $1.00 per share
in an increment smaller than $0.01. See Securities
Exchange Act Release No. 71176 (December 23,
2013), 78 FR 79524 (December 30, 2013) (SR–
NYSEArca–2013–107). The Exchange notes that the
change proposed in this filing has no substantive
impact under the Sub-Penny Rule and thus does not
require an update or revision to the exemptive relief
previously granted by the Commission.
5 See Rules 7.44–E(a)(1) (defining an RLP) and
7.44–E(a)(4) (defining RPI Order).
6 See Rule 7.44–E(j).
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
then may interact with other liquidity
on the Exchange or elsewhere,
depending on the Retail Order’s
instructions.7 The segmentation in the
Program allows retail order flow to
receive potential price improvement as
a result of their order flow being
deemed more desirable by liquidity
providers. The Program is currently
limited to trades in NYSE Arca-listed
securities and securities traded on the
Exchange pursuant to unlisted trading
privileges (‘‘UTP Securities’’), except for
NYSE-listed securities.8
The Exchange now proposes to
modify Rule 7.44–E to expand the
Program’s availability to all securities
traded on the Exchange. Rule 7.44–
E(a)(4) currently defines an RPI Order as
consisting of ‘‘non-displayed interest in
NYSE Arca-listed securities and UTP
Securities, excluding NYSE-listed (Tape
A) securities, that would trade at prices
better than the PBB or PBO by at least
$0.001 and that is identified as such.’’
To expand the program to permit RPI
Orders in all securities traded on the
Exchange (including NYSE-listed
securities), the Exchange proposes to
modify Rule 7.44–E(a)(4) such that the
rule would provide that an RPI Order is
‘‘non-displayed interest that would
trade at prices better than the PBB or
PBO by at least $0.001 and that is
identified as such.’’
Subject to the effectiveness of this
proposed rule change, the Exchange will
implement this change in the fourth
quarter of 2022 and announce the
implementation date by Trader Update.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act,9
in general, and furthers the objectives of
Section 6(b)(5),10 in particular, because
it is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to, and perfect the
mechanism of, a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The Exchange believes expanding the
Program’s availability to all securities
traded on the Exchange would remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system and, in
7 See Rule 7.44–E(a)(2) (defining RMO); Rules
7.44–E(a)(3) and 7.44–E(k) (describing Retail
Orders).
8 See Rule 7.44–E(a)(4).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
E:\FR\FM\26OCN1.SGM
26OCN1
]]>Agencies
[Federal Register Volume 87, Number 206 (Wednesday, October 26, 2022)]
[Notices]
[Pages 64828-64830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23234]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96118; File No. SR-ICEEU-2022-019]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
and Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Amendments to the Investment Management Procedures
October 20, 2022.
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 11, 2022, ICE Clear Europe Limited (``ICE Clear Europe'' or
the ``Clearing House'') 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 change
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(1)
thereunder,\4\ such that the proposed rule change 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.
---------------------------------------------------------------------------
\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)(1).
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
ICE Clear Europe Limited (``ICE Clear Europe'' or the ``Clearing
House'') proposes to modify its Investment Management Procedures (the
``Investment Management Procedures'' or the ``Procedures'') to clarify
certain permitted investments and related limits for the Clearing House
when managing cash received from Clearing Members as margin or from the
Clearing House's contribution to the guaranty fund.
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 proposing to update the Table of Authorised
Investments and Concentration Limits for Cash from CMs and from Skin In
The Game (the ``Table'') in the Procedures to make certain
clarifications that reflect limitations on investments that can be made
with customer funds provided by FCM Clearing Members under applicable
law. The amendments reflect restrictions that ICE Clear Europe
currently observes (and are described elsewhere in the existing
Procedures), and accordingly will not constitute a change in practice.
Specifically, the amendment would provide that the reference in the
Table to there being ``no limit'' for counterparty concentration in
respect to investments in (i) US government agency bonds and (ii) UK
government agency bonds, as well as the 15% concentration limit
specified for the purchase of EU government agency bonds each applies
to cash provided by non-FCM Clearing Members. The amendments would also
state explicitly in the Table that FCM customer funds may not be
invested in such assets. The proposed changes reflect limitations under
CFTC regulations.\5\ Such updates
[[Page 64829]]
are intended to provide greater clarity in the Table as to the
permissible investment of customer cash provided by Clearing Members
and accurately document existing practices, consistent with legal
requirements.
---------------------------------------------------------------------------
\5\ Consistent with ICE Clear Europe's current practice, certain
limitations in the amendments are more restrictive than required
under CFTC regulations. For example, investment of FCM customer
funds in U.S. agency securities is not permitted, as described in
the amendments, although CFTC Rule 1.25(b)(3)(i)(B) would permit
investment in U.S. agency obligations up to a maximum of 50 percent
of the total assets held in segregation by the futures commission
merchant or derivatives clearing organization. 17 CFR
1.25(b)(3)(i)(B). A footnote referencing this rule would be included
in the Table.
---------------------------------------------------------------------------
(b) Statutory Basis
ICE Clear Europe believes that the proposed amendments to the
Investment Management Procedures are consistent with the requirements
of Section 17A of the Act \6\ and the regulations thereunder applicable
to it. In particular, 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, 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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78q-1.
\7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The proposed changes to the Investment Management Procedures are
designed to reflect the Clearing House's practices with respect to the
management of investments, in light of existing CFTC regulations
relating to the investment of customer funds provided by FCM Clearing
Members. The amendments would reflect certain limitations under CFTC
Rule 1.25, as discussed above, on investments of FCM customer cash in
agency securities, consistent with the Clearing House's current
practice. The proposed amendments thus promote the accuracy and clarity
of the Clearing House's policies and procedures and are consistent with
the prompt and accurate clearing and settlement of cleared contracts.
The amendments are thus also generally consistent with the protection
of investors and the public interest in the safe operation of the
Clearing House. The updates will also facilitate management of the cash
held by the Clearing House from Clearing Members and their customers in
accordance with applicable law, and thus enhance the safeguarding of
securities and funds in ICE Clear Europe's custody or control or for
which it is responsible. Accordingly, the amendments are consistent
with the requirements of Section 17A(b)(3)(F).\8\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
Rule 17A-22(e)(16) requires clearing agencies to safeguard their
own and their ``participants' assets, minimize the risk of loss and
delay in access to these assets, and invest such assets in instruments
with minimal credit, market and liquidity risks.'' \9\ As discussed
above, the amendments to the Investment Management Procedures are
intended to more clearly document investment limitations in connection
with the investment of cash assets provided by Clearing Members to
reflect current practice and applicable law, including the requirements
of CFTC regulations. As such, the revised Investment Management
Procedures will help enable the Clearing House to safeguard such assets
and minimize the risk of loss from liquidity and investment risks,
consistent with the requirements of Rule 17Ad-22(e)(16).\10\
---------------------------------------------------------------------------
\9\ 17 CFR 240.17Ad-22(e)(16).
\10\ 17 CFR 240.17Ad-22(e)(16).
---------------------------------------------------------------------------
(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 changes are
being proposed in order to update the Investment Management Procedures
to provide clarifications and additional details where necessary in
order to reflect existing practices and are not intended to impose new
requirements on Clearing Members. The terms of clearing are not
otherwise changing. ICE Clear Europe does not believe that proposed
amendments would adversely affect competition among Clearing Members or
other market participants or affect the ability of market participants
to access clearing generally. Therefore, ICE Clear Europe does not
believe the proposed rule change imposes any burden on competition that
is inappropriate 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 amendment has 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
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 \11\ and paragraph (f) of Rule 19b-4 \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.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
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-2022-019 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-2022-019. 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
[[Page 64830]]
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-2022-019 and should be
submitted on or before November 16, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-23234 Filed 10-25-22; 8:45 am]
BILLING CODE 8011-01-P
