Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to the Clearing Rules, Collateral and Haircut Procedures, Collateral and Haircut Policy and Finance Procedures, 68525-68529 [2022-24766]
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Federal Register / Vol. 87, No. 219 / Tuesday, November 15, 2022 / Notices
e.g., permitting electronic submission of
responses.
SECURITIES AND EXCHANGE
COMMISSION
Issued in Washington, DC.
Hilary Duke,
Assistant General Counsel for Regulatory
Affairs, Pension Benefit Guaranty
Corporation.
[Release No. 34–96270; File No. SR–ICEEU–
2022–020]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to
Amendments to the Clearing Rules,
Collateral and Haircut Procedures,
Collateral and Haircut Policy and
Finance Procedures
[FR Doc. 2022–24825 Filed 11–14–22; 8:45 am]
BILLING CODE 7709–02–P
RAILROAD RETIREMENT BOARD
AGENCY:
ACTION:
Railroad Retirement Board.
Notice.
The Railroad Retirement
Board (Board) is announcing the
membership on its Senior Executive
Service Performance Review Board.
SUMMARY:
These appointments are effective
on the date of publication of this notice.
DATES:
Ana
Kocur, General Counsel, Railroad
Retirement Board, 844 North Rush
Street, Chicago, IL 60611–1275, (312)
751–4948.
FOR FURTHER INFORMATION CONTACT:
Under
title 5, chapter 43, subchapter II, section
4314(c)(4) of the United States Code as
added by section 405(a) of the Civil
Service Reform Act of 1978, Public Law
95–454 (5 U.S.C. 4314(c)(4)), the Board
must publish in the Federal Register a
list of persons who may be named to
serve on the Performance Review Board
that oversees the evaluation of
performance appraisals for Senior
Executive Service members of the
Railroad Retirement Board. The
members of the Performance Review
Board are:
SUPPLEMENTARY INFORMATION:
Shawna Weekley
Arturo Cardenas
Keith Sartain
Dated: November 9, 2022.
By Authority of the Board.
Stephanie Hillyard,
Secretary to the Board.
[FR Doc. 2022–24808 Filed 11–14–22; 8:45 am]
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BILLING CODE 7905–01–P
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
31, 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 primarily prepared by ICE
Clear Europe. ICE Clear Europe filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(1) and (f)(4) 4 thereunder, 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’’)
proposes to amend its Clearing Rules
(‘‘Rules’’), Collateral and Haircut
Procedures (‘‘Collateral and Haircut
Procedures’’), Collateral and Haircut
Policy (‘‘Collateral and Haircut Policy’’)
and Finance Procedures (‘‘Finance
Procedures’’) (each of the foregoing a
‘‘Document’’ and together the
‘‘Documents’’) to provide for the
acceptance by the Clearing House of
certain emission allowances provided
by Clearing Members in respect of
original margin requirements for F&O
Contracts for which they are the
underlier.
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
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), (f)(4).
2 17
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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
November 8, 2022.
Appointment to the Senior Executive
Service Performance Review Board
68525
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ICE Clear Europe is proposing to
update the Documents as described
below to provide for the acceptance by
ICE Clear Europe of certain emission
allowances provided by Clearing
Members as Permitted Cover in respect
of original margin requirements for F&O
Contracts for which the allowance is the
relevant deliverable asset. The
amendments make certain other
clarifications to accommodate such
collateral and similar collateral that ICE
Clear Europe may determine to accept
in the future. The amendments related
to acceptance of emissions allowances
are principally set forth in the Finance
Procedures, with certain related and
conforming changes being made in the
Rules and the Collateral and Haircut
Policy and Procedures.
Finance Procedures
The Finance Procedures would
include a new paragraph 9 providing for
the acceptance of Eligible Emission
Allowances as Permitted Cover.
Paragraph 9.1 would provide that such
paragraph does not apply to FCM/BD
Clearing Members (and accordingly
such Clearing Members would not be
permitted to provide Eligible Emission
Allowances as Permitted Cover). Such
paragraph would apply to each
Sponsored Principal (or Sponsor
appointed to make and receive transfers
in respect of Eligible Emission
Allowances as Original Margin on an
Individually Segregated Sponsored
Account) in the same way it would
apply to a Clearing Member. Paragraph
9.2 would set out key definitions,
specifically ‘‘Eligible Emission
Allowances’’ (allowances that ICE Clear
Europe has determined to accept in
respect of Original Margin) and
‘‘Emissions Margin Account’’ (the
Clearing House’s account at a relevant
emissions registry for receipt of Eligible
Emission Allowances as margin).
Eligible Emissions Allowances would
not include allowances delivered to the
Clearing House to physically settle a
Contract.
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Paragraph 9.3 would describe the
circumstances under which Clearing
Members would be permitted to use
Eligible Emission Allowances as
Original Margin. Specifically, Clearing
Members would be able to use Eligible
Emission Allowances only to satisfy
Original Margin requirements for F&O
Contracts in respect of which the
Emission Allowances are the
Deliverable. The Clearing House would
be able to impose limits on the amount
or value of Eligible Emission
Allowances which would be provided
as Original Margin and would
communicate such limits to Clearing
Members from time to time. Eligible
Emission Allowances would be required
to conform to eligibility criteria as set
out by the Clearing House from time to
time. Pursuant to paragraph 9.4,
Clearing Members transferring Emission
Allowances as Original Margin to the
Clearing House would be required to
have executed and delivered the
Emission Allowances Supplement. The
Emission Allowances Supplement is set
forth as Exhibit 3. Paragraph 9.5
provides that Eligible Emission
Allowances would have to be
transferred to ICE Clear Europe’s
Emissions Margin Account in order to
be accepted as Original Margin and all
transfers to and from such account are
to be in accordance with the terms,
conditions and applicable procedures of
the relevant Emissions Registry and
Registry Regulations (as defined in the
Clearing House’s Delivery Procedures).
Under paragraph 9.6, receipt and release
of Eligible Emission Allowances as
Original Margin would only be available
on business days and working days (as
applicable) as provided by the relevant
Emission Registry, and the Clearing
House is unable to receive transfers of
or release such allowances on nonClearing House business days. Eligible
Emission Allowances would be valued
for margin purposes at an exchange rate
to be determined by the Clearing House
in its discretion from time to time,
pursuant to paragraph 9.7. The Clearing
House is also entitled to modify the list
of Permitted Cover as related to Eligible
Emission Allowances, including by way
of addition or removal of any class of
Eligible Emission Allowances, not
crediting previously transferred Eligible
Emission Allowances or varying
haircuts on Eligible Emission
Allowances at any time, pursuant to
paragraph 9.8.
Paragraphs 9.9–9.13 would establish
procedures for transferring Eligible
Emission Allowances to ICE Clear
Europe as Original Margin. Prior to
effecting such transfer, the Clearing
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Member would be required to provide
details of an Emissions Registry
Account from which it would make the
transfer as well as the contact details of
the person authorized to instruct the
transfer on behalf of such Clearing
Member. The Clearing Member would
also have to submit a transfer request to
the Clearing House via ECS. Transfer of
Eligible Emission Allowances would be
made through the Emission Registry’s
electronic system to the Emissions
Margin Account. The Clearing House
would have the right to not treat such
Eligible Emission Allowances as
Original Margin under specified
circumstances, including if required
information has not been provided to
the Clearing House; any relevant limits
set by the Clearing House are exceeded;
or for any other reason that places or
risks placing the Clearing House under
additional risk or liability. The
amendments would also specify the
times by which Eligible Emissions
Allowances must be received by the
Clearing House in order to be credited,
and state that the relevant record in the
ECS would be adjusted after the
Clearing House’s confirmation of
completion of the relevant transfer in
the Emission Margin Account.
Paragraphs 9.14–9.17 would similarly
establish procedures for release and
return of Eligible Emission Allowances
by the Clearing House. These provisions
apply where a Clearing Member has
surplus collateral with the Clearing
House which it wishes to reduce via a
return to it of Eligible Emission
Allowances. To affect such return, such
Clearing Member would be required to
provide a release request to the Clearing
House using the form specified by the
Clearing House and submit release
instructions to the Clearing House via
ECS. Release instructions submitted
through ECS would be required to be
accepted by the Clearing House before
the Eligible Emissions Allowances are
released to the Clearing Member. The
Clearing House would have the right to
reject release instructions in specified
circumstances, including if: required
information has not been provided to
the Clearing House; any relevant limits
set by the Clearing House are exceeded;
the transfer would result or risks
resulting in an uncovered liability
towards the Clearing House; or for any
other reason that places or risks placing
the Clearing House under additional
risk or liability. The subsection would
also specify the timing for update of the
Clearing House’s records in ECS upon
an accepted request for release and for
the instruction of the relevant Emissions
Registry to release the Eligible Emission
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Allowances. In paragraph 11 of the
Finance Procedures, certain nonsubstantive updates would be made to
distinguish Emission Allowances from
other non-cash collateral.
Rules
The definition of ‘‘Clearing
Membership Agreement’’ would be
updated to include in such definition
Emission Allowances Supplement
referenced above. The amendments
would also add a definition of the
foregoing and provide that ‘‘Emission
Allowances Supplement’’ means an
addendum to a Clearing Membership
Agreement concerning the transfer of
Emission Allowances to and from the
Clearing House as Permitted Cover. An
unrelated clarifying amendment would
also be made to add the term ‘‘Gold
Addendum’’, which would reference the
addendum to a Clearing Membership
Agreement that is currently used by the
Clearing House and Clearing Members
concerning the transfer of gold to and
from the Clearing House as Permitted
Cover in accordance with the existing
Finance Procedures, and to add
appropriate references to the Gold
Addendum in the term Clearing
Membership Agreement and other
relevant terms.
A clarifying amendment would be
made to Rule 502 (Margin) to state that
Permitted Cover is required to be
transferred in accordance with the
Finance Procedures and would only be
recognized by the Clearing House at or
after the times stated in the Finance
Procedures (in order to ensure the Rules
are consistent with the Finance
Procedures). A conforming amendment
would be made to Rule 503(k) (Margin
Calls and Return of Surplus Collateral)
to provide that each Permitted Cover
report would include details of other
asset classes (in addition to securities)
provided as margin. As amended, the
report would thus reflect Emissions
Allowances transferred as margin.
The settlement finality provisions in
Part 12 of the Rules would be amended
to address various matters relating to
Emissions Allowances as Permitted
Cover. In Rule 1201, definitions of
‘‘Emission Allowance Collateral’’
(defined as Permitted Cover in the form
of an Emission Allowance) and a
reference to Emission Allowance
Collateral Transfer Order would be
added. Rule 1202(b) (Transfer Orders
Arising) would be updated to add a
concept of Emission Allowance
Collateral Transfer Order, which would
arise from a request accepted by the
Clearing House to transfer Emission
Allowance Collateral to or from the
Clearing House. The amendments also
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specify in Rule 1202(g) that each
Emission Allowance Collateral Transfer
Order is to apply and have effect in
respect of the Emission Allowance to be
transferred to (or to the order of) the
Clearing House or Clearing Member, in
a manner similar to the treatment of
Collateral Transfer Orders for other
types of non-cash Permitted Cover.
Rule 1202(m) is similarly being
amended to add a new clause (vii) to
address the parties as to which an
Emissions Allowance Collateral
Transfer Order would have effect,
including the relevant Clearing Member,
the Clearing House, the Emissions
Registry and any relevant SFD
Custodian. Subsequent clauses of Rule
1202(m) would be renumbered. In Rule
1202(m)(vi)(A), a clarification would be
made to state that for a Collateral
Transfer Order, the relevant parties
would include a Clearing Member that
is the transferee of the relevant NonCash Collateral. This change does not
represent a change in current practice.
Rule 1203(f) (Transfer Orders
Becoming Irrevocable) would be
updated to clarify that the time at which
a Collateral Transfer Order to a Clearing
Member becomes irrevocable (which
was previously omitted). The change
does not represent a change in current
practice.
Rule 1203(g) would be amended to
state when an Emission Allowance
Collateral Transfer Order for transfer to
each of the Clearing House and the
Clearing Member would become
irrevocable. In respect of an Emission
Allowance Collateral Transfer Order for
transfer to the Clearing House, such
order would become irrevocable at the
earlier of the time when: (i) the Clearing
House accepts in accordance with the
Finance Procedures the relevant transfer
request submitted by the Clearing
Member; (ii) the Clearing House receives
the Emission Allowance into its account
at the Emissions Registry; (iii) any
related order becomes irrevocable
within that other designated system or
Emissions Registry; or (iv) the record of
the Emissions Registry becomes
conclusive evidence of the Clearing
House’s title to the relevant Emission
Allowance under applicable law. In
respect of an Emission Allowance
Collateral Transfer Order for transfer to
the Clearing Member, such order would
become irrevocable when the Clearing
Member receives the Emission
Allowance in circumstances in which
the record of the Emissions Registry
becomes conclusive evidence of the
Clearing Member’s title to that Emission
Allowance under applicable law.
Amendments to Rule 1203(l) would
clarify that Emission Allowance
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19:16 Nov 14, 2022
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Delivery Orders (which relate to transfer
of Emission Allowances for settlement,
rather than as Permitted Cover) for
transfer to the Clearing House become
irrevocable when the record of the
Emissions Registry becomes conclusive
evidence of the Clearing House’s title to
the relevant Emission Allowance under
applicable law. Emission Allowance
Delivery Orders for transfer to the
Clearing Member would become
irrevocable when the Clearing Member
receives the Emission Allowance in
circumstances in which the record of
the Emissions Registry becomes
conclusive evidence of the Clearing
Member’s title to that Emission
Allowance under applicable law.
The amendments would include an
update to Rule 1204(i) (Variations to or
Cancellation of Transfer Orders) to
provide that in addition to Emission
Allowance Delivery Orders, Emission
Allowance Collateral Transfer Orders
would be cancelled immediately and
automatically if, prior to become
irrevocable, an Emissions Registry that
is used by the Clearing House or
Clearing Member becomes subject to
Insolvency or otherwise permanently
ceases operations. Rule 1205(c)
(Termination of Transfer Orders) would
be amended to provide that Emission
Allowance Collateral Transfer Orders
made to the Clearing House would be
satisfied in the same manner as
Collateral Transfer Orders. The
amendments would also add a
clarification to address satisfaction of
Collateral Transfer Orders made to the
Clearing Member (which was previously
omitted and would not result in a
change in practice). The amendments
would also provide that Emission
Allowance Collateral Transfer Orders to
Clearing Members would be satisfied in
the same manner. Non-substantive
updates would be made to the
numbering and section references in the
Rules to account for the inclusion of the
amendments.
Collateral and Haircut Policy
Related amendments would be made
to the Collateral and Haircut Policy to
provide that ICE Clear Europe may
accept the underlier of a given futures
or options contract as Permitted Cover
to cover the margin requirement for
positions in that contract. The
amendment thus address acceptance of
Emission Allowances as cover for
margin requirements for related F&O
Contracts. Eligibility criteria for the
underlier, its haircuts and limits would
take into account the credit market and
liquidity risk of the underlying asset.
Clarifications would be made to
headings and section references to
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68527
distinguish such margin cover from
other types of Permitted Cover.
Collateral and Haircut Procedures
Corresponding changes relating to the
use of the underlier as margin cover
would be made to the Collateral and
Haircut Procedures. The updates in the
Collateral and Haircut Procedures
would further provide the eligibility
criteria that margin cover assets must
meet as follows: (i) such assets are
sufficiently liquid, (ii) the market for
such assets must have sufficient price
history to permit the Clearing House to
analyze the statistical returns of the
assets, (iii) the assets must be capable of
daily revaluation, (iv) the Clearing
House must be capable of managing the
assets operationally, and (v) the assets
must be an Eligible Currency (as set out
in the Rules).
The amendments would provide that
the Clearing House would typically use
market pricing convention to determine
the margin cover value calculation as
follows: Cover Value = Nominal * Price
* (1-Haircut). The amendments would
also provide that relative limits for the
use of margin cover would be
established to provide that the Clearing
Member has a balance between the
margin cover and other acceptable
collateral based on a qualitative
assessment of the different types of
margin cover and collateral.
(b) Statutory Basis
ICE Clear Europe believes that
proposed amendments are consistent
with the requirements of Section 17A of
the Act 5 and the regulations thereunder
applicable to it. In particular, Section
17A(b)(3)(F) of the Act 6 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 amendments to the Documents
are intended to permit the Clearing
House to accept Emissions Allowances
as Permitted Cover for F&O Contracts
for which they are the underlier. The
amendments set out the procedures for
accepting such Permitted Cover and for
the transfer of such assets to and from
the Clearing House using the facilities of
the relevant Emissions Register. The
amendments also establish parameters,
5 15
6 15
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(F).
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eligibility criteria, rules and
requirements (as applicable) applicable
to the acceptance of such assets by the
Clearing House as Permitted Cover. ICE
Clear Europe believes Emissions
Allowances are an appropriate form of
Permitted Cover with respect to meeting
the margin obligations for these related
F&O Contracts and would thereby
facilitate its ability to meet its
obligations to Clearing Members in the
event of a default by a Clearing Member.
In ICE Clear Europe’s view, the
amendments hereby promote the
efficient operation and stability of the
Clearing House and the prompt and
accurate clearance and settlement of
cleared contracts. Such enhanced risk
management is also generally consistent
with the protection of investors and the
public interest in the safe operation of
the Clearing House. (ICE Clear Europe
would not expect the adoption of the
amendments to affect materially the
safeguarding of securities and funds in
ICE Clear Europe’s custody or control or
for which it is responsible.)
Accordingly, the amendments to the
Documents satisfy the requirements of
Section 17A(b)(3)(F).7
The proposed amendments to each
Document is also consistent with
relevant provisions of Rule 17Ad–22. 8
Rule 17Ad–22(e)(3)(i) provides that
‘‘[e]ach covered clearing agency shall
establish, implement, maintain and
enforce written policies and procedures
reasonable designed to, as applicable
[. . .] identify, measure, monitor and
manage the range of risks that arise in
or are borne by the covered clearing
agency’’.9 For similar reasons, the
amendments are intended to enhance
the Clearing House’s overall risk
management through margin
requirements for emissions F&O
Contracts. ICE Clear Europe believes
that acceptance of Emission Allowances
as Permitted Cover is appropriate for
these specific F&O Contracts for which
the Emission Allowance is the
underlier, in light of the specific
characteristics and risks of these assets.
In the context of these contracts,
acceptance of the underlying allowances
to cover margin would serve to reduce
the risk to the Clearing House of a
default by a Clearing Member with
respect to such contracts. The
amendments provide appropriate
mechanisms for transfer of such assets
to the account of the Clearing House as
cover for margin, and provide for
appropriate eligibility criteria,
parameters and limits to provide further
7 15
U.S.C. 78q–1(b)(3)(F).
CFR 240.17 Ad–22.
9 17 CFR 240.17 Ad–22(e)(3)(i).
protection to the Clearing House. The
amendments will not otherwise change
the margin model for the relevant
contracts or the amount of initial margin
that is required. In ICE Clear Europe’s
view, as set out above, the amendments
would thus facilitate overall risk
management with respect to the
expansion of assets eligible to accepted
as Permitted Cover, consistent with the
requirements of Rule 17Ad–22(e)(3)(i).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 amendments
are intended to permit the Clearing
House to accept Emissions Allowances
as Permitted Cover for F&O Contracts
for which they are the underlier. The
amendments set out the procedures for
accepting such Permitted Cover and for
the transfer of such assets to and from
the Clearing House using the facilities of
the relevant Emissions Register, as well
as the parameters, eligibility criteria,
rules and requirements (as applicable)
applicable to the acceptance of such
assets by the Clearing House as
Permitted Cover. ICE Clear Europe does
not believe that proposed amendments
would adversely affect competition
among Clearing Members, materially
affect the costs of clearing, adversely the
ability of market participants to access
clearing or the market for clearing
services generally, or otherwise
adversely affect competition in clearing
services. Therefore, ICE Clear Europe
does not believe the proposed rule
change imposes any burden on
competition that is not necessary or
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 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)
8 17
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19:16 Nov 14, 2022
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–2022–020 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–2022–020. 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
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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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–
2022–020 and should be submitted on
or before December 6, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–24766 Filed 11–14–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96275; File No. SR–OCC–
2022–010]
lotter on DSK11XQN23PROD with NOTICES1
Self-Regulatory Organizations; The
Options Clearing Corporation Notice of
Designation of Longer Period for
Commission Action on Proposed Rule
Change by The Options Clearing
Corporation Concerning a Risk
Management Framework and
Corporate Risk Management Policy
such longer period to be appropriate
and publishes its reasons for so finding,
or as to which the self-regulatory
organization consents, the Commission
shall either approve the proposed rule
change, disapprove the proposed rule
change, or institute proceedings to
determine whether the proposed rule
change should be disapproved. The 45th
day after publication of the Notice of
Filing is November 10, 2022. The
Commission is extending this 45-day
time period.
In order to provide the Commission
with sufficient time to consider the
Proposed Rule Change, the Commission
finds that it is appropriate to designate
a longer period within which to take
action on the Proposed Rule Change.
Accordingly, the Commission,
pursuant to Section 19(b)(2) of the
Exchange Act,6 designates December 25,
2022 as the date by which the
Commission shall either approve,
disapprove, or institute proceedings to
determine whether to disapprove
proposed rule change SR–OCC–2022–
010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
J. Matthew DeLesDernier,
Deputy Secretary.
November 8, 2022.
[FR Doc. 2022–24769 Filed 11–14–22; 8:45 am]
On September 6, 2022, the Options
Clearing Corporation (‘‘OCC’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change SR–OCC–2022–
010 pursuant to Section 19(b) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) 1 and Rule 19b–4 2
thereunder to replace OCC’s current
Risk Management Framework Policy
(‘‘RMFP’’) with two new documents: a
Risk Management Framework (‘‘RMF’’)
as well as a Corporate Risk Management
Policy (‘‘CRMP’’).3 The proposed rule
change was published for public
comment in the Federal Register on
September 26, 2022.4 The Commission
has not received comments regarding
the proposal described in the Proposed
Rule Change.
Section 19(b)(2) of the Exchange Act 5
provides that, within 45 days of the
publication of notice of the filing of a
proposed rule change, or within such
longer period up to 90 days as the
Commission may designate if it finds
BILLING CODE 8011–01–P
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Notice of Filing infra note 4, 87 FR at 58409.
4 Securities Exchange Act Release No. 95842
(Sept. 20, 2022), 87 FR 58409 (Sept. 26, 2022) (File
No. SR–OCC–2022–010) (‘‘Notice of Filing’’).
5 15 U.S.C. 78s(b)(2).
1 15
VerDate Sep<11>2014
19:16 Nov 14, 2022
Jkt 259001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96260; File No. SR–
NYSECHX–2022–24]
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Extending the Expiration
Date of the Temporary Amendments to
Rules 10.9261 and 10.9830.
November 8, 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
28, 2022, the NYSE Chicago, Inc.
(‘‘NYSE Chicago’’ or the ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
68529
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 extending the
expiration date of the temporary
amendments to Rules 10.9261 and
10.9830 as set forth in SR–NYSECHX–
2022–19 from October 31, 2022 to
January 31, 2023, in conformity with
recent changes by the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’).
The proposed rule change would not
make any changes to the text of Rules
10.9261 and 10.9830. 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 extending the
expiration date of the temporary
amendments as set forth in NYSECHX–
2022–19 4 to Rules 10.9261 (Evidence
and Procedure in Hearing) and 10.9830
(Hearing) from October 31, 2022 to
January 31, 2023 to harmonize with
recent changes by FINRA to extend the
expiration of temporary amendments to
its Rules 9261 and 9830. NYSECHX–
2022–19 temporarily granted to the
Chief or Deputy Chief Hearing Officer
the authority to order that hearings be
conducted by video conference if
warranted by the current COVID–19
public health risks posed by in-person
hearings. The proposed rule change
would not make any changes to the text
6 Id.
7 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 95477
(August 11, 2022), 85 FR 50680 (August 17, 2022)
(SR–NYSECHX–2022–19) (‘‘SR–NYSECHX–2022–
19’’).
1 15
PO 00000
Frm 00093
Fmt 4703
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15NON1
]]>Agencies
[Federal Register Volume 87, Number 219 (Tuesday, November 15, 2022)]
[Notices]
[Pages 68525-68529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24766]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96270; File No. SR-ICEEU-2022-020]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Amendments to the Clearing Rules, Collateral and Haircut Procedures,
Collateral and Haircut Policy and Finance Procedures
November 8, 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 31, 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 primarily prepared by
ICE Clear Europe. ICE Clear Europe filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(1) and
(f)(4) \4\ thereunder, 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), (f)(4).
---------------------------------------------------------------------------
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 amend its Clearing Rules (``Rules''), Collateral
and Haircut Procedures (``Collateral and Haircut Procedures''),
Collateral and Haircut Policy (``Collateral and Haircut Policy'') and
Finance Procedures (``Finance Procedures'') (each of the foregoing a
``Document'' and together the ``Documents'') to provide for the
acceptance by the Clearing House of certain emission allowances
provided by Clearing Members in respect of original margin requirements
for F&O Contracts for which they are the underlier.
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 Documents as described
below to provide for the acceptance by ICE Clear Europe of certain
emission allowances provided by Clearing Members as Permitted Cover in
respect of original margin requirements for F&O Contracts for which the
allowance is the relevant deliverable asset. The amendments make
certain other clarifications to accommodate such collateral and similar
collateral that ICE Clear Europe may determine to accept in the future.
The amendments related to acceptance of emissions allowances are
principally set forth in the Finance Procedures, with certain related
and conforming changes being made in the Rules and the Collateral and
Haircut Policy and Procedures.
Finance Procedures
The Finance Procedures would include a new paragraph 9 providing
for the acceptance of Eligible Emission Allowances as Permitted Cover.
Paragraph 9.1 would provide that such paragraph does not apply to FCM/
BD Clearing Members (and accordingly such Clearing Members would not be
permitted to provide Eligible Emission Allowances as Permitted Cover).
Such paragraph would apply to each Sponsored Principal (or Sponsor
appointed to make and receive transfers in respect of Eligible Emission
Allowances as Original Margin on an Individually Segregated Sponsored
Account) in the same way it would apply to a Clearing Member. Paragraph
9.2 would set out key definitions, specifically ``Eligible Emission
Allowances'' (allowances that ICE Clear Europe has determined to accept
in respect of Original Margin) and ``Emissions Margin Account'' (the
Clearing House's account at a relevant emissions registry for receipt
of Eligible Emission Allowances as margin). Eligible Emissions
Allowances would not include allowances delivered to the Clearing House
to physically settle a Contract.
[[Page 68526]]
Paragraph 9.3 would describe the circumstances under which Clearing
Members would be permitted to use Eligible Emission Allowances as
Original Margin. Specifically, Clearing Members would be able to use
Eligible Emission Allowances only to satisfy Original Margin
requirements for F&O Contracts in respect of which the Emission
Allowances are the Deliverable. The Clearing House would be able to
impose limits on the amount or value of Eligible Emission Allowances
which would be provided as Original Margin and would communicate such
limits to Clearing Members from time to time. Eligible Emission
Allowances would be required to conform to eligibility criteria as set
out by the Clearing House from time to time. Pursuant to paragraph 9.4,
Clearing Members transferring Emission Allowances as Original Margin to
the Clearing House would be required to have executed and delivered the
Emission Allowances Supplement. The Emission Allowances Supplement is
set forth as Exhibit 3. Paragraph 9.5 provides that Eligible Emission
Allowances would have to be transferred to ICE Clear Europe's Emissions
Margin Account in order to be accepted as Original Margin and all
transfers to and from such account are to be in accordance with the
terms, conditions and applicable procedures of the relevant Emissions
Registry and Registry Regulations (as defined in the Clearing House's
Delivery Procedures). Under paragraph 9.6, receipt and release of
Eligible Emission Allowances as Original Margin would only be available
on business days and working days (as applicable) as provided by the
relevant Emission Registry, and the Clearing House is unable to receive
transfers of or release such allowances on non-Clearing House business
days. Eligible Emission Allowances would be valued for margin purposes
at an exchange rate to be determined by the Clearing House in its
discretion from time to time, pursuant to paragraph 9.7. The Clearing
House is also entitled to modify the list of Permitted Cover as related
to Eligible Emission Allowances, including by way of addition or
removal of any class of Eligible Emission Allowances, not crediting
previously transferred Eligible Emission Allowances or varying haircuts
on Eligible Emission Allowances at any time, pursuant to paragraph 9.8.
Paragraphs 9.9-9.13 would establish procedures for transferring
Eligible Emission Allowances to ICE Clear Europe as Original Margin.
Prior to effecting such transfer, the Clearing Member would be required
to provide details of an Emissions Registry Account from which it would
make the transfer as well as the contact details of the person
authorized to instruct the transfer on behalf of such Clearing Member.
The Clearing Member would also have to submit a transfer request to the
Clearing House via ECS. Transfer of Eligible Emission Allowances would
be made through the Emission Registry's electronic system to the
Emissions Margin Account. The Clearing House would have the right to
not treat such Eligible Emission Allowances as Original Margin under
specified circumstances, including if required information has not been
provided to the Clearing House; any relevant limits set by the Clearing
House are exceeded; or for any other reason that places or risks
placing the Clearing House under additional risk or liability. The
amendments would also specify the times by which Eligible Emissions
Allowances must be received by the Clearing House in order to be
credited, and state that the relevant record in the ECS would be
adjusted after the Clearing House's confirmation of completion of the
relevant transfer in the Emission Margin Account.
Paragraphs 9.14-9.17 would similarly establish procedures for
release and return of Eligible Emission Allowances by the Clearing
House. These provisions apply where a Clearing Member has surplus
collateral with the Clearing House which it wishes to reduce via a
return to it of Eligible Emission Allowances. To affect such return,
such Clearing Member would be required to provide a release request to
the Clearing House using the form specified by the Clearing House and
submit release instructions to the Clearing House via ECS. Release
instructions submitted through ECS would be required to be accepted by
the Clearing House before the Eligible Emissions Allowances are
released to the Clearing Member. The Clearing House would have the
right to reject release instructions in specified circumstances,
including if: required information has not been provided to the
Clearing House; any relevant limits set by the Clearing House are
exceeded; the transfer would result or risks resulting in an uncovered
liability towards the Clearing House; or for any other reason that
places or risks placing the Clearing House under additional risk or
liability. The subsection would also specify the timing for update of
the Clearing House's records in ECS upon an accepted request for
release and for the instruction of the relevant Emissions Registry to
release the Eligible Emission Allowances. In paragraph 11 of the
Finance Procedures, certain non-substantive updates would be made to
distinguish Emission Allowances from other non-cash collateral.
Rules
The definition of ``Clearing Membership Agreement'' would be
updated to include in such definition Emission Allowances Supplement
referenced above. The amendments would also add a definition of the
foregoing and provide that ``Emission Allowances Supplement'' means an
addendum to a Clearing Membership Agreement concerning the transfer of
Emission Allowances to and from the Clearing House as Permitted Cover.
An unrelated clarifying amendment would also be made to add the term
``Gold Addendum'', which would reference the addendum to a Clearing
Membership Agreement that is currently used by the Clearing House and
Clearing Members concerning the transfer of gold to and from the
Clearing House as Permitted Cover in accordance with the existing
Finance Procedures, and to add appropriate references to the Gold
Addendum in the term Clearing Membership Agreement and other relevant
terms.
A clarifying amendment would be made to Rule 502 (Margin) to state
that Permitted Cover is required to be transferred in accordance with
the Finance Procedures and would only be recognized by the Clearing
House at or after the times stated in the Finance Procedures (in order
to ensure the Rules are consistent with the Finance Procedures). A
conforming amendment would be made to Rule 503(k) (Margin Calls and
Return of Surplus Collateral) to provide that each Permitted Cover
report would include details of other asset classes (in addition to
securities) provided as margin. As amended, the report would thus
reflect Emissions Allowances transferred as margin.
The settlement finality provisions in Part 12 of the Rules would be
amended to address various matters relating to Emissions Allowances as
Permitted Cover. In Rule 1201, definitions of ``Emission Allowance
Collateral'' (defined as Permitted Cover in the form of an Emission
Allowance) and a reference to Emission Allowance Collateral Transfer
Order would be added. Rule 1202(b) (Transfer Orders Arising) would be
updated to add a concept of Emission Allowance Collateral Transfer
Order, which would arise from a request accepted by the Clearing House
to transfer Emission Allowance Collateral to or from the Clearing
House. The amendments also
[[Page 68527]]
specify in Rule 1202(g) that each Emission Allowance Collateral
Transfer Order is to apply and have effect in respect of the Emission
Allowance to be transferred to (or to the order of) the Clearing House
or Clearing Member, in a manner similar to the treatment of Collateral
Transfer Orders for other types of non-cash Permitted Cover.
Rule 1202(m) is similarly being amended to add a new clause (vii)
to address the parties as to which an Emissions Allowance Collateral
Transfer Order would have effect, including the relevant Clearing
Member, the Clearing House, the Emissions Registry and any relevant SFD
Custodian. Subsequent clauses of Rule 1202(m) would be renumbered. In
Rule 1202(m)(vi)(A), a clarification would be made to state that for a
Collateral Transfer Order, the relevant parties would include a
Clearing Member that is the transferee of the relevant Non-Cash
Collateral. This change does not represent a change in current
practice.
Rule 1203(f) (Transfer Orders Becoming Irrevocable) would be
updated to clarify that the time at which a Collateral Transfer Order
to a Clearing Member becomes irrevocable (which was previously
omitted). The change does not represent a change in current practice.
Rule 1203(g) would be amended to state when an Emission Allowance
Collateral Transfer Order for transfer to each of the Clearing House
and the Clearing Member would become irrevocable. In respect of an
Emission Allowance Collateral Transfer Order for transfer to the
Clearing House, such order would become irrevocable at the earlier of
the time when: (i) the Clearing House accepts in accordance with the
Finance Procedures the relevant transfer request submitted by the
Clearing Member; (ii) the Clearing House receives the Emission
Allowance into its account at the Emissions Registry; (iii) any related
order becomes irrevocable within that other designated system or
Emissions Registry; or (iv) the record of the Emissions Registry
becomes conclusive evidence of the Clearing House's title to the
relevant Emission Allowance under applicable law. In respect of an
Emission Allowance Collateral Transfer Order for transfer to the
Clearing Member, such order would become irrevocable when the Clearing
Member receives the Emission Allowance in circumstances in which the
record of the Emissions Registry becomes conclusive evidence of the
Clearing Member's title to that Emission Allowance under applicable
law.
Amendments to Rule 1203(l) would clarify that Emission Allowance
Delivery Orders (which relate to transfer of Emission Allowances for
settlement, rather than as Permitted Cover) for transfer to the
Clearing House become irrevocable when the record of the Emissions
Registry becomes conclusive evidence of the Clearing House's title to
the relevant Emission Allowance under applicable law. Emission
Allowance Delivery Orders for transfer to the Clearing Member would
become irrevocable when the Clearing Member receives the Emission
Allowance in circumstances in which the record of the Emissions
Registry becomes conclusive evidence of the Clearing Member's title to
that Emission Allowance under applicable law.
The amendments would include an update to Rule 1204(i) (Variations
to or Cancellation of Transfer Orders) to provide that in addition to
Emission Allowance Delivery Orders, Emission Allowance Collateral
Transfer Orders would be cancelled immediately and automatically if,
prior to become irrevocable, an Emissions Registry that is used by the
Clearing House or Clearing Member becomes subject to Insolvency or
otherwise permanently ceases operations. Rule 1205(c) (Termination of
Transfer Orders) would be amended to provide that Emission Allowance
Collateral Transfer Orders made to the Clearing House would be
satisfied in the same manner as Collateral Transfer Orders. The
amendments would also add a clarification to address satisfaction of
Collateral Transfer Orders made to the Clearing Member (which was
previously omitted and would not result in a change in practice). The
amendments would also provide that Emission Allowance Collateral
Transfer Orders to Clearing Members would be satisfied in the same
manner. Non-substantive updates would be made to the numbering and
section references in the Rules to account for the inclusion of the
amendments.
Collateral and Haircut Policy
Related amendments would be made to the Collateral and Haircut
Policy to provide that ICE Clear Europe may accept the underlier of a
given futures or options contract as Permitted Cover to cover the
margin requirement for positions in that contract. The amendment thus
address acceptance of Emission Allowances as cover for margin
requirements for related F&O Contracts. Eligibility criteria for the
underlier, its haircuts and limits would take into account the credit
market and liquidity risk of the underlying asset. Clarifications would
be made to headings and section references to distinguish such margin
cover from other types of Permitted Cover.
Collateral and Haircut Procedures
Corresponding changes relating to the use of the underlier as
margin cover would be made to the Collateral and Haircut Procedures.
The updates in the Collateral and Haircut Procedures would further
provide the eligibility criteria that margin cover assets must meet as
follows: (i) such assets are sufficiently liquid, (ii) the market for
such assets must have sufficient price history to permit the Clearing
House to analyze the statistical returns of the assets, (iii) the
assets must be capable of daily revaluation, (iv) the Clearing House
must be capable of managing the assets operationally, and (v) the
assets must be an Eligible Currency (as set out in the Rules).
The amendments would provide that the Clearing House would
typically use market pricing convention to determine the margin cover
value calculation as follows: Cover Value = Nominal * Price * (1-
Haircut). The amendments would also provide that relative limits for
the use of margin cover would be established to provide that the
Clearing Member has a balance between the margin cover and other
acceptable collateral based on a qualitative assessment of the
different types of margin cover and collateral.
(b) Statutory Basis
ICE Clear Europe believes that proposed amendments are consistent
with the requirements of Section 17A of the Act \5\ and the regulations
thereunder applicable to it. In particular, Section 17A(b)(3)(F) of the
Act \6\ 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.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78q-1.
\6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The amendments to the Documents are intended to permit the Clearing
House to accept Emissions Allowances as Permitted Cover for F&O
Contracts for which they are the underlier. The amendments set out the
procedures for accepting such Permitted Cover and for the transfer of
such assets to and from the Clearing House using the facilities of the
relevant Emissions Register. The amendments also establish parameters,
[[Page 68528]]
eligibility criteria, rules and requirements (as applicable) applicable
to the acceptance of such assets by the Clearing House as Permitted
Cover. ICE Clear Europe believes Emissions Allowances are an
appropriate form of Permitted Cover with respect to meeting the margin
obligations for these related F&O Contracts and would thereby
facilitate its ability to meet its obligations to Clearing Members in
the event of a default by a Clearing Member. In ICE Clear Europe's
view, the amendments hereby promote the efficient operation and
stability of the Clearing House and the prompt and accurate clearance
and settlement of cleared contracts. Such enhanced risk management is
also generally consistent with the protection of investors and the
public interest in the safe operation of the Clearing House. (ICE Clear
Europe would not expect the adoption of the amendments to affect
materially the safeguarding of securities and funds in ICE Clear
Europe's custody or control or for which it is responsible.)
Accordingly, the amendments to the Documents satisfy the requirements
of Section 17A(b)(3)(F).\7\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The proposed amendments to each Document is also consistent with
relevant provisions of Rule 17Ad-22. \8\ Rule 17Ad-22(e)(3)(i) provides
that ``[e]ach covered clearing agency shall establish, implement,
maintain and enforce written policies and procedures reasonable
designed to, as applicable [. . .] identify, measure, monitor and
manage the range of risks that arise in or are borne by the covered
clearing agency''.\9\ For similar reasons, the amendments are intended
to enhance the Clearing House's overall risk management through margin
requirements for emissions F&O Contracts. ICE Clear Europe believes
that acceptance of Emission Allowances as Permitted Cover is
appropriate for these specific F&O Contracts for which the Emission
Allowance is the underlier, in light of the specific characteristics
and risks of these assets. In the context of these contracts,
acceptance of the underlying allowances to cover margin would serve to
reduce the risk to the Clearing House of a default by a Clearing Member
with respect to such contracts. The amendments provide appropriate
mechanisms for transfer of such assets to the account of the Clearing
House as cover for margin, and provide for appropriate eligibility
criteria, parameters and limits to provide further protection to the
Clearing House. The amendments will not otherwise change the margin
model for the relevant contracts or the amount of initial margin that
is required. In ICE Clear Europe's view, as set out above, the
amendments would thus facilitate overall risk management with respect
to the expansion of assets eligible to accepted as Permitted Cover,
consistent with the requirements of Rule 17Ad-22(e)(3)(i).\10\
---------------------------------------------------------------------------
\8\ 17 CFR 240.17 Ad-22.
\9\ 17 CFR 240.17 Ad-22(e)(3)(i).
\10\ 17 CFR 240.17 Ad-22(e)(3)(i).
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
ICE Clear Europe does not believe the proposed amendments would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purposes of the Act. The amendments
are intended to permit the Clearing House to accept Emissions
Allowances as Permitted Cover for F&O Contracts for which they are the
underlier. The amendments set out the procedures for accepting such
Permitted Cover and for the transfer of such assets to and from the
Clearing House using the facilities of the relevant Emissions Register,
as well as the parameters, eligibility criteria, rules and requirements
(as applicable) applicable to the acceptance of such assets by the
Clearing House as Permitted Cover. ICE Clear Europe does not believe
that proposed amendments would adversely affect competition among
Clearing Members, materially affect the costs of clearing, adversely
the ability of market participants to access clearing or the market for
clearing services generally, or otherwise adversely affect competition
in clearing services. Therefore, ICE Clear Europe does not believe the
proposed rule change imposes any burden on competition that is not
necessary or 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 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-2022-020 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-2022-020. 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
[[Page 68529]]
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-2022-020 and should be submitted on or before December 6,
2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-24766 Filed 11-14-22; 8:45 am]
BILLING CODE 8011-01-P
