Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing of Proposed Rule Change Relating to Amendments the Collateral and Haircut Procedures, 41439-41441 [2023-13452]
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Federal Register / Vol. 88, No. 121 / Monday, June 26, 2023 / Notices
change is not intended to make any
substantive change to the definition of
‘‘covered short position’’ within the
BOX Rulebook.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. In this regard
and as indicated above, the Exchange
notes that the rule change is being
proposed to clarify that clearing firms
are not intended to be included within
the scope of BOX Rule 4120. The
Exchange notes that, the proposed
updates are similar in relevant part to
existing rules at NYSE American and
NYSE.19 The proposed rule change does
not impose any burden on competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
The proposed rule change is not
designed to address any competitive
issues but rather to clarify that clearing
firms are not intended to be included
within the scope of BOX Rule 4120. The
Exchange’s proposal to amend BOX
Rule 4120 does not impose an undue
burden on competition as all
Participants that conduct business with
the public would be subject to the
proposed rules.
The proposed rule change is not
designed to address any competitive
issues but rather seeks to clarify that
clearing firms are not intended to be
included within the scope of BOX Rule
4120. The Exchange’s proposal to adopt
proposed IM–4120–1 does not impose
an undue burden on competition as all
Participants that conduct business with
the public would be subject to the
proposed rules.
Technical Amendments
ddrumheller on DSK120RN23PROD with NOTICES1
The Exchange’s proposal to amend
BOX Rule 100(a)(16) to update the cross
references to the rules of the OCC
within the definition of the term
‘‘covered short position’’ is a nonsubstantive amendment.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
(a) This proposed rule change is filed
pursuant to paragraph (A) of section
19(b)(3) of the Exchange Act 20 and Rule
19b–4(f)(6) thereunder.21
(b) This proposed rule change does
not significantly affect the protection of
investors or the public interest, does not
impose any significant burden on
competition, and, by its terms, does not
become operative for 30 days after the
date of the filing, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest.
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. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BOX–2023–02 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–BOX–2023–02. 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, on official business
days between the hours of 10:00 a.m.
and 3:00 p.m., located at 100 F Street
NE, Washington, DC 20549. Copies of
such filing also will be available for
inspection and copying at the principal
office of the Exchange.
All comments received will be posted
without change. Persons submitting
comments are cautioned that we do not
redact or edit personal identifying
information from comment submissions.
You should submit only information
that you wish to make available
publicly.
All submissions should refer to File
Number SR–BOX–2023–02 and should
be submitted on or before July 17, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023–13458 Filed 6–23–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97766; File No. SR–ICEEU–
2023–013]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
of Proposed Rule Change Relating to
Amendments the Collateral and
Haircut Procedures
June 20, 2023.
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 June 9,
2023, 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. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
22 17
20 15
19 See
U.S.C. 78s(b)(3)(A).
21 17 CFR 240.19b–4(f)(6).
supra notes 3 and 11.
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41439
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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41440
Federal Register / Vol. 88, No. 121 / Monday, June 26, 2023 / Notices
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 Collateral and
Haircut Procedures (the ‘‘Collateral and
Haircut Procedures’’ or ‘‘Procedures’’) 3
to modify the type of gold that may be
accepted as collateral.
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) Purpose
ICE Clear Europe is proposing to
revise Appendix A to the Collateral and
Haircut Procedures to modify the
eligibility criteria for accepting gold as
collateral. As revised, to be eligible, gold
would have to be held on an ‘‘allocated’’
basis 4 by the relevant custodian in the
name of the Clearing House.
Specifically, the change would provide
that for the purposes of margin, gold
transferred by a Clearing Member would
first be held in an unallocated account
and in the name of the Clearing House.
Such gold would only be recognized as
Permitted Cover or eligible collateral
when it is transferred from the
unallocated accounts to an allocated
account of the custodian held in the
name of the Clearing House and
thereupon deemed allocated pure gold
bullion of recognized good delivery.
The amendments would remove
existing provisions that would permit
unallocated gold to serve as Permitted
Cover or eligible collateral. The
amendment is intended to clarify that
only allocated (as opposed to
unallocated) pure gold bullion is
capable of being accepted as Permitted
(b) Statutory Basis
ICE Clear Europe believes that the
proposed amendments to the Collateral
and Haircut Procedures are consistent
with the requirements of Section 17A of
the Securities Exchange Act of 1934 (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
Procedures are designed to limit gold
that may be accepted as margin to
allocated gold, rather than permitting
unallocated gold. As noted above, the
level of potential interest on the part of
Clearing Members in being able to post
gold (whether in allocated or
unallocated form) as margin has to date
been insufficient to justify the
completion on ICE Clear Europe’s part
of certain operational testing processes
that would be required to support the
full implementation of the process for
accepting gold as Permitted Cover or
eligible collateral, and ICE Clear Europe
3 Capitalized terms used but not defined herein
have the meanings specified in the ICE Clear
Europe Clearing Rules and the Collateral and
Haircut Procedures.
4 Allocated gold held by a custodian is
specifically identified for a particular owner.
Unallocated gold represents a claim against the
relevant custodian for an amount of metal held in
bulk.
5 Commission Delegated Regulation (EU) No. 153/
2013 of 19 December 2012 supplementing
Regulation (EU) No. 648/2012 of the European
Parliament and of the Council with regard to
regulatory technical standards on requirements for
central counterparties, Annex I, Section 3 (the
‘‘EMIR RTS’’).
6 15 U.S.C. 78q–1.
7 15 U.S.C. 78q–1(b)(3)(F).
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
ddrumheller on DSK120RN23PROD with NOTICES1
Cover or eligible collateral, and thereby
better align ICE Clear Europe’s rules
with applicable requirements under the
European Market Infrastructure
Regulation (EMIR) which stipulate that
gold as collateral must be held in
allocated form (only).5 While ICE Clear
Europe’s current rules technically
permit the acceptance of gold as
collateral, ICE Clear Europe has not in
practice accepted gold as collateral, as
the level of potential interest on the part
of Clearing Members has to date been
insufficient to justify the completion on
ICE Clear Europe’s part of certain
operational testing processes that would
be required to support the full
implementation of the process for
accepting gold as Permitted Cover or
eligible collateral. As a result, ICE Clear
Europe does not believe the amendment
would require any Clearing Members to
change their current margin postings.
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therefore does not believe the
amendment will result in a change in
current activity of Clearing Members.
The amendment is intended to ensure
that the Collateral and Haircut
Procedures are better aligned with the
applicable requirements under the EMIR
RTS that gold accepted as margin be in
allocated rather than unallocated form.
As such, the amendments would clarify
the operation of the Clearing House’s
margin framework in accordance with
applicable law, and thereby promote the
stability of the Clearing House and the
prompt and accurate clearance and
settlement of cleared contracts.
Removing the option of unallocated
gold will also not adversely affect the
safeguarding of property in the custody
or control of the Clearing House or for
which it is responsible. The
amendments are for these reasons also
generally consistent with the protection
of investors and the public interest in
the safe operation of the Clearing House.
Accordingly, the amendments satisfy
the requirements of Section
17A(b)(3)(F).8
The amendments to the Collateral and
Haircut Procedures are also consistent
with relevant provisions of Rule 17Ad–
22. Rule 17Ad–22(e)(5) requires the
clearing agency to ‘‘establish,
implement, maintain and enforce
written policies and procedures
reasonably designed to, as applicable
. . . [l]imit the assets it accepts as
collateral to those with low credit,
liquidity, and market risks, and set and
enforce appropriately conservative
haircuts and concentration limits if [it]
requires collateral to manage its or its
participants’ credit exposure. . . .’’ 9
The amendments would require that
any gold posted as margin be in
allocated form, rather than unallocated
form. Limiting margin to allocated gold
(which is generally viewed as being
subject to reduced risks from custodian
failure) is consistent with the
requirement to limit collateral to that
with low credit, liquidity, and market
risks, and accordingly the amendments
would not increase the risk of the
Clearing House from such collateral.
The amendments would not otherwise
change the Clearing House’s current
application of haircuts or concentration
limits for Permitted Cover. As such, the
amendments are consistent with the
requirements of Rule 17Ad–22(e)(5).10
Rule 17Ad–22(e)(1) requires the
clearing agency to ‘‘establish,
implement, maintain and enforce
written policies and procedures
8 15
U.S.C. 78q–1(b)(3)(F).
CFR 240.17Ad–22(e)(5).
10 17 CFR 240.17Ad–22(e)(5).
9 17
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Federal Register / Vol. 88, No. 121 / Monday, June 26, 2023 / Notices
reasonably designed to, as applicable
. . . provide for a well-founded, clear,
transparent and enforceable legal basis
for each aspect of its activities in all
relevant jurisdictions.’’ 11 As noted
above, the amendments are intended to
better align the Collateral and Haircut
Procedures with the requirements of the
EMIR RTS, which limits gold accepted
as margin to gold held in allocated form.
As such, the amendments will support
the Clearing House’s compliance with
applicable law in all relevant
jurisdictions, and therefore are
consistent with the requirements of Rule
17Ad–22(e)(1).12
ddrumheller on DSK120RN23PROD with NOTICES1
(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 being adopted to require that any
gold posted as margin be held in
allocated form, consistent with
applicable law. As noted above, the
level of potential interest on the part of
Clearing Members in being able to post
gold (whether in allocated or
unallocated form) as margin has to date
been insufficient to justify the
completion of ICE Clear Europe’s part of
certain operational testing processes
that would be required to support the
full implementation of the process for
accepting gold as Permitted Cover or
eligible collateral. As a result, ICE Clear
Europe does not believe the
amendments will affect current margin
practices or affect the current costs of
posting margin for Clearing Members.
To the extent that Clearing Members in
the future may seek to post gold as
margin, and to incur additional costs to
do so from the requirement that such
margin be in allocated form, ICE Clear
Europe believes that such costs would
be appropriate in light of the
requirements of the EMIR RTS. ICE
Clear Europe does not believe the
amendments would otherwise affect the
ability to market participants to access
clearing, or the market for clearing
services 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.
11 17
CFR 240.17Ad–22(e)(1).
12 17 CFR 240.17Ad–22(e)(1).
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(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 have not been
solicited or received by ICE Clear
Europe. ICE Clear Europe will notify the
Commission of any written comments
received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) by order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml) or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
ICEEU–2023–013 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–2023–013. 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
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
41441
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
a.m. and 3 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.
Do not include personal identifiable
information in submissions; you should
submit only information that you wish
to make available publicly. We may
redact in part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection. All submissions should refer
to file number SR–ICEEU–2023–013 and
should be submitted on or before July
17, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023–13452 Filed 6–23–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97765; File No. SR–OCC–
2022–012]
Self-Regulatory Organizations;
Options Clearing Corporation; Notice
of Designation of Longer Period for
Commission Action on Proceedings To
Determine Whether To Approve or
Disapprove a Proposed Rule Change
Concerning the Options Clearing
Corporation’s Collateral Haircuts and
Standards for Clearing Banks and
Letters of Credit
June 20, 2023.
On December 5, 2022, the Options
Clearing Corporation (‘‘OCC’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change SR–OCC–2022–
012 (‘‘Proposed Rule Change’’) pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Exchange
Act’’) 1 and Rule 19b–4 thereunder 2 to
change rules, policies, and procedures
regarding collateral haircuts, minimum
standards for clearing banks and letter13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 88, Number 121 (Monday, June 26, 2023)]
[Notices]
[Pages 41439-41441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13452]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97766; File No. SR-ICEEU-2023-013]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing of Proposed Rule Change Relating to Amendments the Collateral
and Haircut Procedures
June 20, 2023.
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 June 9, 2023, 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. 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.
---------------------------------------------------------------------------
[[Page 41440]]
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 Collateral and Haircut Procedures (the
``Collateral and Haircut Procedures'' or ``Procedures'') \3\ to modify
the type of gold that may be accepted as collateral.
---------------------------------------------------------------------------
\3\ Capitalized terms used but not defined herein have the
meanings specified in the ICE Clear Europe Clearing Rules and the
Collateral and Haircut Procedures.
---------------------------------------------------------------------------
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 revise Appendix A to the
Collateral and Haircut Procedures to modify the eligibility criteria
for accepting gold as collateral. As revised, to be eligible, gold
would have to be held on an ``allocated'' basis \4\ by the relevant
custodian in the name of the Clearing House. Specifically, the change
would provide that for the purposes of margin, gold transferred by a
Clearing Member would first be held in an unallocated account and in
the name of the Clearing House. Such gold would only be recognized as
Permitted Cover or eligible collateral when it is transferred from the
unallocated accounts to an allocated account of the custodian held in
the name of the Clearing House and thereupon deemed allocated pure gold
bullion of recognized good delivery.
---------------------------------------------------------------------------
\4\ Allocated gold held by a custodian is specifically
identified for a particular owner. Unallocated gold represents a
claim against the relevant custodian for an amount of metal held in
bulk.
---------------------------------------------------------------------------
The amendments would remove existing provisions that would permit
unallocated gold to serve as Permitted Cover or eligible collateral.
The amendment is intended to clarify that only allocated (as opposed to
unallocated) pure gold bullion is capable of being accepted as
Permitted Cover or eligible collateral, and thereby better align ICE
Clear Europe's rules with applicable requirements under the European
Market Infrastructure Regulation (EMIR) which stipulate that gold as
collateral must be held in allocated form (only).\5\ While ICE Clear
Europe's current rules technically permit the acceptance of gold as
collateral, ICE Clear Europe has not in practice accepted gold as
collateral, as the level of potential interest on the part of Clearing
Members has to date been insufficient to justify the completion on ICE
Clear Europe's part of certain operational testing processes that would
be required to support the full implementation of the process for
accepting gold as Permitted Cover or eligible collateral. As a result,
ICE Clear Europe does not believe the amendment would require any
Clearing Members to change their current margin postings.
---------------------------------------------------------------------------
\5\ Commission Delegated Regulation (EU) No. 153/2013 of 19
December 2012 supplementing Regulation (EU) No. 648/2012 of the
European Parliament and of the Council with regard to regulatory
technical standards on requirements for central counterparties,
Annex I, Section 3 (the ``EMIR RTS'').
---------------------------------------------------------------------------
(b) Statutory Basis
ICE Clear Europe believes that the proposed amendments to the
Collateral and Haircut Procedures are consistent with the requirements
of Section 17A of the Securities Exchange Act of 1934 (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 Procedures are designed to limit gold
that may be accepted as margin to allocated gold, rather than
permitting unallocated gold. As noted above, the level of potential
interest on the part of Clearing Members in being able to post gold
(whether in allocated or unallocated form) as margin has to date been
insufficient to justify the completion on ICE Clear Europe's part of
certain operational testing processes that would be required to support
the full implementation of the process for accepting gold as Permitted
Cover or eligible collateral, and ICE Clear Europe therefore does not
believe the amendment will result in a change in current activity of
Clearing Members. The amendment is intended to ensure that the
Collateral and Haircut Procedures are better aligned with the
applicable requirements under the EMIR RTS that gold accepted as margin
be in allocated rather than unallocated form. As such, the amendments
would clarify the operation of the Clearing House's margin framework in
accordance with applicable law, and thereby promote the stability of
the Clearing House and the prompt and accurate clearance and settlement
of cleared contracts. Removing the option of unallocated gold will also
not adversely affect the safeguarding of property in the custody or
control of the Clearing House or for which it is responsible. The
amendments are for these reasons also generally consistent with the
protection of investors and the public interest in the safe operation
of the Clearing House. Accordingly, the amendments satisfy the
requirements of Section 17A(b)(3)(F).\8\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The amendments to the Collateral and Haircut Procedures are also
consistent with relevant provisions of Rule 17Ad-22. Rule 17Ad-22(e)(5)
requires the clearing agency to ``establish, implement, maintain and
enforce written policies and procedures reasonably designed to, as
applicable . . . [l]imit the assets it accepts as collateral to those
with low credit, liquidity, and market risks, and set and enforce
appropriately conservative haircuts and concentration limits if [it]
requires collateral to manage its or its participants' credit exposure.
. . .'' \9\ The amendments would require that any gold posted as margin
be in allocated form, rather than unallocated form. Limiting margin to
allocated gold (which is generally viewed as being subject to reduced
risks from custodian failure) is consistent with the requirement to
limit collateral to that with low credit, liquidity, and market risks,
and accordingly the amendments would not increase the risk of the
Clearing House from such collateral. The amendments would not otherwise
change the Clearing House's current application of haircuts or
concentration limits for Permitted Cover. As such, the amendments are
consistent with the requirements of Rule 17Ad-22(e)(5).\10\
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\9\ 17 CFR 240.17Ad-22(e)(5).
\10\ 17 CFR 240.17Ad-22(e)(5).
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Rule 17Ad-22(e)(1) requires the clearing agency to ``establish,
implement, maintain and enforce written policies and procedures
[[Page 41441]]
reasonably designed to, as applicable . . . provide for a well-founded,
clear, transparent and enforceable legal basis for each aspect of its
activities in all relevant jurisdictions.'' \11\ As noted above, the
amendments are intended to better align the Collateral and Haircut
Procedures with the requirements of the EMIR RTS, which limits gold
accepted as margin to gold held in allocated form. As such, the
amendments will support the Clearing House's compliance with applicable
law in all relevant jurisdictions, and therefore are consistent with
the requirements of Rule 17Ad-22(e)(1).\12\
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\11\ 17 CFR 240.17Ad-22(e)(1).
\12\ 17 CFR 240.17Ad-22(e)(1).
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(B) Clearing Agency's Statement on Burden on Competition
ICE Clear Europe does not believe the proposed amendments would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purposes of the Act. The amendments
are being adopted to require that any gold posted as margin be held in
allocated form, consistent with applicable law. As noted above, the
level of potential interest on the part of Clearing Members in being
able to post gold (whether in allocated or unallocated form) as margin
has to date been insufficient to justify the completion of ICE Clear
Europe's part of certain operational testing processes that would be
required to support the full implementation of the process for
accepting gold as Permitted Cover or eligible collateral. As a result,
ICE Clear Europe does not believe the amendments will affect current
margin practices or affect the current costs of posting margin for
Clearing Members. To the extent that Clearing Members in the future may
seek to post gold as margin, and to incur additional costs to do so
from the requirement that such margin be in allocated form, ICE Clear
Europe believes that such costs would be appropriate in light of the
requirements of the EMIR RTS. ICE Clear Europe does not believe the
amendments would otherwise affect the ability to market participants to
access clearing, or the market for clearing services 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 have not been
solicited or received by ICE Clear Europe. ICE Clear Europe will notify
the Commission of any written comments received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml) or
Send an email to [email protected]. Please include
file number SR-ICEEU-2023-013 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-2023-013. 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
a.m. and 3 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.
Do not include personal identifiable information in submissions;
you should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to file number SR-ICEEU-2023-013 and
should be submitted on or before July 17, 2023.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-13452 Filed 6-23-23; 8:45 am]
BILLING CODE 8011-01-P
