Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Amendment No. 1 and Partial Amendment No. 2 and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 and Partial Amendment No. 2, Relating to the ICC Default Auction Procedures-Initial Default Auctions, 57164-57167 [2023-17979]
Download as PDF
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57164
Federal Register / Vol. 88, No. 161 / Tuesday, August 22, 2023 / Notices
central counterparty, thereby promoting
the prompt and accurate settlement of
the additional SES and SWES contracts
and other credit default swap
transactions.
Therefore, the Commission finds that
clearance of the additional SES and
SWES contracts would promote the
prompt and accurate clearance and
settlement of securities transactions,
consistent with section 17A(b)(3)(F) of
the Act.9
b. Consistency With Rule 17Ad–22(e)(1)
Rule 17Ad–22(e)(1) requires ICC to
establish, implement, maintain, and
enforce written policies and procedures
reasonably designed to provide for a
well-founded, clear, transparent, and
enforceable legal basis for each aspect of
its activities in all relevant
jurisdictions.10
The Commission believes that the
proposed rule change would help
provide a well-founded, clear,
transparent, and enforceable legal basis
for ICC’s clearance of SES contracts on
Romania and the Socialist Republic of
Vietnam as well as SWES contracts on
the Kingdom of Sweden. By amending
Rule 26D–102 to add both the Socialist
Republic of Vietnam and Romania to the
list of specific Eligible SES Reference
Entities to be cleared by ICC, the
proposed rule change would help to
ensure that ICC can clear SES contracts
on those countries pursuant to its
existing rules in Subchapter 26D.
Likewise, by amending Rule 26I–102 to
add the Kingdom of Sweden to the list
of specific Eligible SWES Reference
Entities to be cleared by ICC, the
proposed rule change would help to
ensure that ICC can clear SWES
contracts on the Kingdom of Sweden
pursuant to its rules in Subchapter 26I.
The Commission believes Subchapter
26D and Subchapter 26I each would
provide a well-founded, clear,
transparent, and enforceable legal basis
for ICC to clear these contracts,
consistent with the requirements of Rule
17Ad–22(e)(1).11
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IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act, and in
particular, with the requirements of
section 17A(b)(3)(F) of the Act 12 and
Rule 17Ad–22(e)(1) thereunder.13
[FR Doc. 2023–17977 Filed 8–21–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–107, OMB Control No.
3235–0116]
Proposed Collection; Comment
Request; Extension: Form 6–K—
Exchange Act Rules 13a–16 and 15d–
16
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Form 6–K (17 CFR 249.306) is a
disclosure document under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) that must be filed by
a foreign private issuer to report
material information promptly after the
occurrence of specified or other
important corporate events that are
disclosed in the foreign private issuer’s
home country. The purpose of Form 6–
K is to ensure that U.S. investors have
access to the same information that
foreign investors do when making
investment decisions. Form 6–K takes
approximately 8.7 hours per response
and is filed by approximately 34,794
issuers annually. We estimate that 75%
of the 8.7 hours per response (6.525
hours) is prepared by the issuer for a
total annual reporting burden of 227,031
hours (6.525 hours per response ×
34,794 responses).
U.S.C. 78s(b)(2).
approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
16 17 CFR 200.30–3(a)(12).
U.S.C. 78q–1(b)(3)(F).
10 17 CFR 240Ad–22(e)(1).
11 17 CFR 240.17Ad–22(e)(1).
12 15 U.S.C. 78q–1(b)(3)(F).
13 17 CFR 240.17Ad–22(e)(1).
16:57 Aug 21, 2023
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Sherry R. Haywood,
Assistant Secretary.
14 15
9 15
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It is therefore ordered pursuant to
section 19(b)(2) of the Act 14 that the
proposed rule change (SR–ICC–2023–
010), be, and hereby is, approved.15
15 In
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Written comments are invited on: (a)
whether this proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden imposed by the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication by October 23, 2023.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Please direct your written comment to
David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov.
Dated: August 17, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–18011 Filed 8–21–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98147; File No. SR–ICC–
2023–009]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Notice of Filing of
Amendment No. 1 and Partial
Amendment No. 2 and Order Granting
Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 1 and Partial
Amendment No. 2, Relating to the ICC
Default Auction Procedures—Initial
Default Auctions
August 16, 2023.
I. Introduction
On June 22, 2023, ICE Clear Credit
LLC (‘‘ICC’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to section
19(b)(2) of the Securities Exchange Act
of 1934 (the ‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend the ICC Default Auction
Procedures—Initial Default Auctions
1 15
2 17
E:\FR\FM\22AUN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
22AUN1
Federal Register / Vol. 88, No. 161 / Tuesday, August 22, 2023 / Notices
(‘‘Auction Procedures’’). The proposed
rule change was published for comment
in the Federal Register on July 11,
2023.3 On July 20, 2023, ICC filed
Amendment No. 1 to the proposed rule
change.4 On August 8, 2023, ICC filed
Partial Amendment No. 2 to the
proposed rule change.5 The Commission
did not receive comments regarding the
proposed rule change.
The Commission is publishing this
notice to solicit comments on
Amendment No. 1 and Partial
Amendment No. 2 from interested
persons, and, for the reasons discussed
below, is approving the proposed rule
change, as modified by Amendment No.
1 and Partial Amendment No. 2
(collectively, the ‘‘proposed rule
change’’), on an accelerated basis.
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II. Description of the Proposed Rule
Change
ICC is registered with the Commission
as a clearing agency for the purpose of
clearing Credit Default Swap (‘‘CDS’’)
contracts. ICC clears CDS contracts for
its clearing members, which ICC calls
Clearing Participants.6 In clearing CDS
contracts, ICC is exposed to a variety of
risks, including exposure to losses and
liquidity demands, in situations such as
a Clearing Participant default. One way
ICC protects against such risk is by
ensuring that it has the authority and
operational capacity to take timely
action during a Clearing Participant
default. To minimize impact on nondefaulting Clearing Participants and its
own obligations, ICC established the
Auction Procedures, which document
requirements and processes for holding
an auction in the event of a Clearing
Participant default. The Auction
Procedures are designed to facilitate
liquidation of a defaulting Clearing
Participant’s portfolio through a multilot modified Dutch auction.7
3 Self-Regulatory Organizations; ICE Clear Credit
LLC; Notice of Filing of Proposed Rule Change
Relating to the ICC Default Auction ProceduresInitial Default Auctions; Exchange Act Release No.
97840 (July 5, 2023), 88 FR 44171 (July 11, 2023)
(File No. SR–ICC–2023–009) (‘‘Notice’’).
4 Amendment No. 1 amended and restated in its
entirety the Form 19b–4, Exhibit 1A, and Exhibit 5
to correct a typographical error in the Auction
Procedures. Amendment No. 1 does not change the
purpose or basis of the proposed rule change.
5 Partial Amendment No. 2 replaced and
superseded Amendment No. 1, and amended and
restated in its entirety the Form 19b–4, Exhibit 1A,
and Exhibit 5, in addition to including Exhibit 4,
to correct a typographical error in the Auction
Procedures. Partial Amendment No. 2 does not
change the purpose or basis of the proposed rule
change.
6 Capitalized terms not otherwise defined herein
have the meanings assigned to them in the ICC
Default Auction Procedures—Initial Default
Auctions or the ICC Clearing Rules.
7 Notice, 88 FR at 44171.
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The proposed rule change would
revise the Auction Procedures to (1)
provide an additional exception to ICC’s
minimum bid requirement under
particular conditions, and (2) treat all
Auction Participants 8 as senior bidders
in certain market-dependent
circumstances. These proposed
amendments, as described below, are
intended to incorporate feedback
received from market participants
during ICC’s 2022 default test.9 The
proposed revisions would also better
align ICC’s Auction Procedures with
those of other clearing houses (e.g., LCH
Ltd, LCH SA, and Eurex),10 according to
market participants’ feedback.11
For example, under the proposed rule
change, ICC would be allowed to
determine whether the Minimum Bid
Requirement would apply to an Auction
Participant if the Auction Participant
does not have risk management or other
operational capabilities to clear the
types of contracts involved in a
particular auction,14 or if market
conditions change for certain types of
contracts.15 ICC represents that the
proposed change is designed to disapply
minimum bid requirements where they
might lead to an increase in systemic
risk or be inappropriate or undesirable
in light of ICC’s goal of running a
successful auction.16
A. Additional Exception to Minimum
Bid Requirement
Generally, in the event of an auction
to liquidate a defaulting Clearing
Participant’s portfolio, all nondefaulting Auction Participants are
required to submit minimum bids
(‘‘Minimum Bid Requirement’’).
Currently, Section 2.4 requires Auction
Participants to bid for a minimum
notional amount of contracts for each
auction, the lot determined pro rata
based on its required contribution to the
ICC guaranty fund, subject to certain
exceptions.12 The proposed rule change
would amend the Auction Procedures to
provide an additional exception to the
Minimum Bid Requirement. Under the
proposed exception, the Minimum Bid
Requirement would not apply if ICC
determined that it would be
inappropriate for certain Auction
Participants in light of: (i) the
operational and other capabilities of
such an Auction Participant to clear
contracts in the relevant auction lot, or
(ii) the conditions in the market for the
contracts in the relevant auction lot.13
B. Treatment of Auction Participants as
Senior Bidders
Currently, ICC’s rules specify how
losses from a default auction will be
applied.17 Under such prioritization,
losses would be applied to the collateral
of a member that does not participate in
a default auction before being applied to
other members’ collateral
(‘‘juniorization’’). ICC proposes to
amend the Auction Procedures to allow
ICC to disapply such juniorization
where ICC determines that juniorization
may make it more difficult to run a
successful auction or is otherwise
inappropriate or undesirable for the
particular lot in light of certain market
conditions or circumstances at the time.
In effect, under the proposed rule
change, ICC would be allowed to
determine that juniorization of Lot
Guaranty Fund Contributions and Lot
Assessment Contributions will not
occur, such that all such contributions
will be applied on a pro rata basis rather
than based on the relative
competitiveness of bids made.18
8 Auction Participants are all non-defaulting
Clearing Participants and any Direct Participating
Customer(s), defined as a Clearing Participant’s
customer(s) that ICC has authorized to participate
directly in an ICC default auction pursuant to the
requirements set out in Section 2.6 of the Auction
Procedures. Id. at n.4.
9 Notice, 88 FR at 44171.
10 These three clearing houses have rules and/or
default procedures that, in general, exclude nondefaulting clearing members from mandatory
participation in default auctions where such nondefaulting clearing members do not have exposure
to the products in the default auction portfolio.
Notice, 88 FR at 44172.
11 Notice, 88 FR at 44172.
12 Notice, 88 FR at 44171. For example, a
Minimum Bid Requirement shall not apply to an
Auction Participant for a particular Lot to the extent
it would be in breach of applicable law or ICC
Rules, or the Lot includes Contracts that are
sovereign CDS referencing the country in which the
Auction Participant or its parent company is
domiciled. See ICC Initial Auction Procedure,
Section 2.4.
13 Id.
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III. Discussion and Commission
Findings
Section 19(b)(2)(C) of the Act directs
the Commission to approve a proposed
rule change of a self-regulatory
14 For instance, certain market participants may
not trade, or have the operational, risk management,
or other capacity to trade or otherwise manage
particular products cleared through ICC, such as
index swaptions. In that case, if such a participant
were forced to bid for lots that included these types
of products during the course of the auction, the
participant might acquire products for which it may
not have the ready capability to manage the risk of
its positions, thereby potentially increasing
systemic risk. Id.
15 Notice, 88 FR at 44171–2.
16 Notice, 88 FR at 44172.
17 See Auction Procedures, Section 3.3.
18 Such changes would maintain the incentives
for competitive bidding in a default auction as
Auction Participants still would be incentivized to
protect their guaranty fund deposits and assessment
contributions, and juniorization would be expected
to continue to apply in most circumstances. Notice,
88 FR at 44172.
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organization if it finds that such
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to such organization.19 For
the reasons given below, the
Commission finds that the proposed
rule change is consistent with section
17A(b)(3)(F) of the Act 20 and Rule
17Ad–22(e)(13) 21 thereunder.
A. Consistency With Section
17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act
requires, among other things, that the
rules of ICE Clear Credit ‘‘are designed
to promote the prompt and accurate
clearance and settlement of securities
transactions and, to the extent
applicable, derivative agreements,
contracts, and transactions.’’ 22 Based on
its review of the record, and for the
reasons discussed below, the
Commission believes the proposed
changes to the Auction Procedures are
consistent with the promotion of the
prompt and accurate clearance and
settlement of securities transactions.
The proposed additional exception to
the Minimum Bid Requirement provides
ICC with greater flexibility to administer
a default auction with the appropriate
set of Auction Participants and respond
to changing market conditions
promptly, while maintaining its
clearance and settlement
responsibilities with the least possible
disruption. The proposed amendments
would allow ICC to determine whether
an Auction Participant has the
operational or other capabilities
required to clear contracts in a
particular lot, thus ensuring an
appropriate fit between the Auction
Participants and the types of contracts
involved in the auction. The proposal
would also give ICC the leeway to
respond to changing market forces to
hold a timely default auction that is
responsive to the characteristics and
implications of the contracts in the
relevant auction lot. Similarly, the
proposed revisions to the Auction
Procedures would give ICC the latitude
to disapply the Default Auction Priority
and treat all Auction Participants as
senior bidders in limited circumstances,
thus helping ICC run a successful,
effective, and efficient default auction in
circumstances where the juniorization
of Auction Participants would be
unsuitable for the auction, and
facilitating the prompt and accurate
close-out of the defaulter’s portfolio.
U.S.C. 78s(b)(2)(C).
U.S.C. 78q–1(b)(3)(F).
21 17 CFR 240.17Ad–22(e)(13).
22 15 U.S.C. 78q–1(b)(3)(F).
As such, the Commission finds that
the proposed rule change is consistent
with section 17A(b)(3)(F) of the Act.23
B. Consistency With Rule 17Ad–
22(e)(13)
Rule 17Ad–22(e)(13) requires ICC to
‘‘establish, implement, maintain, and
enforce written policies and procedures
reasonably designed to [. . .] [e]nsure
the covered clearing agency has the
authority and operational capacity to
take timely action to contain losses and
liquidity demands and continue to meet
its obligations [. . .].’’ 24 Based on its
review of the record, and for the reasons
discussed below, the Commission
believes the proposed changes to the
Auction Procedures are consistent with
the requirements of Rule 17Ad–
22(e)(13).25
The proposed exception to the
Minimum Bid Requirement would
provide ICC the authority to not force a
Clearing Participant to bid on lots
containing contracts that the Clearing
Participant is not equipped to manage
financially or operationally. Excepting
such a Clearing Participant from the
bidding process should reduce the
likelihood of ICC receiving poor quality
bids, thereby improving the auction
process. In foregoing the Minimum Bid
Requirement for Auction Participants
who are not appropriately positioned to
take on certain types of contracts, ICC
would be giving itself the ability to take
steps, in limited circumstances, to
streamline the auction process and limit
potential losses or liquidity demands
resulting from a Clearing Participant’s
default. Similarly, the proposed change
to allow ICC to disapply the
juniorization of certain Clearing
Participants’ guaranty fund
contributions would better align ICC’s
default management practices with its
members’ financial and operational
capacities. Imposing the Minimum Bid
Requirement or incentivizing bidding
through the juniorization process where
a Clearing Participant lacks necessary
financial or operational capabilities
could result in that Clearing Participant
acquiring products whose risks it is not
prepared to manage. The proposed rule
change would allow ICC to protect the
integrity of the default auction and
increase its likelihood of success by
ensuring that the bids received are
provided by members most able to value
and risk manage the defaulter’s
portfolio.
19 15
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23 15
24 17
U.S.C. 78q–1(b)(3)(F).
CFR 240.17Ad–22(e)(13).
25 Id.
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IV. Solicitation of Comments on
Amendment No. 1 and Partial
Amendment No. 2 to the Proposed Rule
Change
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as modified by Amendment No.
1 and Partial Amendment No. 2, 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–
ICC–2023–009 on the subject line.
Paper Comments
• Send paper comments in triplicate
to, Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
All submissions should refer to File
Number SR–ICC–2023–009. 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 Credit and on ICE Clear Credit’s
website at https://www.theice.com/
clear-credit/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–ICC–2023–009 and
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should be submitted on or before
September 12, 2023.
hereby is, approved on an accelerated
basis.31
V. Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 1 and Partial
Amendment No. 2
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Sherry R. Haywood,
Assistant Secretary.
The Commission finds good cause,
pursuant to section 19(b)(2) of the Act,26
to approve the proposed rule change
prior to the 30th day after the date of
publication of notice of the filing of
Amendment No. 1 and Partial
Amendment No. 2 in the Federal
Register. As discussed above,
Amendment No. 1 amended and
restated in its entirety the Form 19b–4,
Exhibit 1A, and Exhibit 5 to correct a
typographical error in the Auction
Procedures, and Partial Amendment No.
2 replaced and superseded Amendment
No. 1, and amended and restated in its
entirety the Form 19b–4, Exhibit 1A,
and Exhibit 5, in addition to including
Exhibit 4, to correct a typographical
error in the Auction Procedures.
Amendment No. 1 and Partial
Amendment No. 2 do not change the
purpose of or basis for the proposed
changes.
For similar reasons as discussed
above, the Commission finds that
Amendment No. 1 and Partial
Amendment No. 2 are consistent with
the requirement that ICC’s rules be
designed to promote the prompt and
accurate clearance and settlement of
securities transactions under section
17A(b)(3)(F) of the Act.27 Accordingly,
the Commission finds good cause to
approve the proposed rule change, as
modified by Amendment No. 1 and
Partial Amendment No. 2, on an
accelerated basis, pursuant to section
19(b)(2) of the Act.28
[FR Doc. 2023–17979 Filed 8–21–23; 8:45 am]
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VI. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change, as modified by Amendment
No. 1 and Partial Amendment No. 2, is
consistent with the requirements of the
Act, and in particular, with the
requirements of section 17A(b)(3)(F) of
the Act, and Rule 17Ad–22(e)(13)
thereunder.29
It is therefore ordered pursuant to
section 19(b)(2) of the Act 30 that the
proposed rule change (SR–ICC–2023–
009), as modified by Amendment No. 1
and Partial Amendment No. 2, be, and
U.S.C. 78s(b)(2).
U.S.C. 78q–1(b)(3)(F).
28 15 U.S.C. 78s(b)(2).
29 15 U.S.C. 78q–1(b)(3)(F); 17 CFR 240.17Ad–
22(e)(13).
30 15 U.S.C. 78s(b)(2).
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
Data Collection Available for Public
Comments
60-Day notice and request for
comments.
ACTION:
The Small Business
Administration (SBA) intends to request
approval, from the Office of
Management and Budget (OMB) for the
collection of information described
below. The Paperwork Reduction Act
(PRA) of 1995 requires federal agencies
to publish a notice in the Federal
Register concerning each proposed
collection of information before
submission to OMB, and to allow 60
days for public comment in response to
the notice. This notice complies with
that requirement.
DATES: Submit comments on or before
October 23, 2023.
ADDRESSES: Send all comments to Eric
Wall, Senior Loan Officer, Disaster
Policy, Planning & Partnerships, Small
Business Administration, Washington,
DC 20416.
FOR FURTHER INFORMATION CONTACT: Eric
Wall, Senior Loan Officer, Disaster
Policy, Planning & Partnerships
eric.wall@sba.gov 202–205–6739, or
Curtis B. Rich, Agency Clearance
Officer, 202–205–7030, curtis.rich@
sba.gov.
SUPPLEMENTARY INFORMATION: The
Governor of the State U.S. territory or
possession affected by a disaster
submits this information collection to
request that SBA issue a disaster
declaration. The information identifies
the time, place and nature of the
incident and helps SBA to determine
whether the regulatory criteria for a
disaster declaration have been met, and
disaster assistance can be made
available to the affected region.
SUMMARY:
Solicitation of Public Comments
SBA is requesting comments on (a)
Whether the collection of information is
26 15
27 15
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16:57 Aug 21, 2023
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31 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
32 17 CFR 200.30–3(a)(12).
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57167
necessary for the agency to properly
perform its functions; (b) whether the
burden estimates are accurate; (c)
whether there are ways to minimize the
burden, including through the use of
automated techniques or other forms of
information technology; and (d) whether
there are ways to enhance the quality,
utility, and clarity of the information.
Summary of Information Collection
OMB Control Number: 3245–0121.
(1) Title: Governor’s Request for
Disaster Declaration.
Description of Respondents: Disaster
victim’s seeking assistance.
Form Number: N/A.
Total Estimated Annual Responses:
58.
Total Estimated Annual Hour Burden:
1,160.
Curtis Rich,
Agency Clearance Officer.
[FR Doc. 2023–18049 Filed 8–21–23; 8:45 am]
BILLING CODE 8026–09–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
[Docket No. 2013–0259]
Agency Information Collection
Activities: Requests for Comments;
Clearance of Renewed Approval of
Information Collection: Advisory
Circular: Reporting of Laser
Illumination of Aircraft
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice and request for
comments.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, FAA
invites public comments about our
intention to request the Office of
Management and Budget (OMB)
approval renew information collection.
Advisory Circular 70–2B provides
guidance to civilian air crews on the
reporting of laser illumination incidents
and recommended mitigation actions to
be taken in order to ensure continued
safe and orderly flight operations.
DATES: Written comments should be
submitted by September 15, 2023.
ADDRESSES: Please send written
comments:
By Electronic Docket:
www.regulations.gov (Enter docket
number into search field).
By mail: Barbara Hall by email at:
Barbara Hall, Federal Aviation
Administration, ASP–110, 10101
Hillwood Parkway, Fort Worth, TX
76177.
SUMMARY:
E:\FR\FM\22AUN1.SGM
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]]>Agencies
[Federal Register Volume 88, Number 161 (Tuesday, August 22, 2023)]
[Notices]
[Pages 57164-57167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17979]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98147; File No. SR-ICC-2023-009]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing of Amendment No. 1 and Partial Amendment No. 2 and Order
Granting Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1 and Partial Amendment No. 2, Relating to the ICC
Default Auction Procedures--Initial Default Auctions
August 16, 2023.
I. Introduction
On June 22, 2023, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
section 19(b)(2) of the Securities Exchange Act of 1934 (the ``Act'')
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to amend the
ICC Default Auction Procedures--Initial Default Auctions
[[Page 57165]]
(``Auction Procedures''). The proposed rule change was published for
comment in the Federal Register on July 11, 2023.\3\ On July 20, 2023,
ICC filed Amendment No. 1 to the proposed rule change.\4\ On August 8,
2023, ICC filed Partial Amendment No. 2 to the proposed rule change.\5\
The Commission did not receive comments regarding the proposed rule
change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Filing of Proposed Rule Change Relating to the ICC Default
Auction Procedures-Initial Default Auctions; Exchange Act Release
No. 97840 (July 5, 2023), 88 FR 44171 (July 11, 2023) (File No. SR-
ICC-2023-009) (``Notice'').
\4\ Amendment No. 1 amended and restated in its entirety the
Form 19b-4, Exhibit 1A, and Exhibit 5 to correct a typographical
error in the Auction Procedures. Amendment No. 1 does not change the
purpose or basis of the proposed rule change.
\5\ Partial Amendment No. 2 replaced and superseded Amendment
No. 1, and amended and restated in its entirety the Form 19b-4,
Exhibit 1A, and Exhibit 5, in addition to including Exhibit 4, to
correct a typographical error in the Auction Procedures. Partial
Amendment No. 2 does not change the purpose or basis of the proposed
rule change.
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The Commission is publishing this notice to solicit comments on
Amendment No. 1 and Partial Amendment No. 2 from interested persons,
and, for the reasons discussed below, is approving the proposed rule
change, as modified by Amendment No. 1 and Partial Amendment No. 2
(collectively, the ``proposed rule change''), on an accelerated basis.
II. Description of the Proposed Rule Change
ICC is registered with the Commission as a clearing agency for the
purpose of clearing Credit Default Swap (``CDS'') contracts. ICC clears
CDS contracts for its clearing members, which ICC calls Clearing
Participants.\6\ In clearing CDS contracts, ICC is exposed to a variety
of risks, including exposure to losses and liquidity demands, in
situations such as a Clearing Participant default. One way ICC protects
against such risk is by ensuring that it has the authority and
operational capacity to take timely action during a Clearing
Participant default. To minimize impact on non-defaulting Clearing
Participants and its own obligations, ICC established the Auction
Procedures, which document requirements and processes for holding an
auction in the event of a Clearing Participant default. The Auction
Procedures are designed to facilitate liquidation of a defaulting
Clearing Participant's portfolio through a multi-lot modified Dutch
auction.\7\
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\6\ Capitalized terms not otherwise defined herein have the
meanings assigned to them in the ICC Default Auction Procedures--
Initial Default Auctions or the ICC Clearing Rules.
\7\ Notice, 88 FR at 44171.
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The proposed rule change would revise the Auction Procedures to (1)
provide an additional exception to ICC's minimum bid requirement under
particular conditions, and (2) treat all Auction Participants \8\ as
senior bidders in certain market-dependent circumstances. These
proposed amendments, as described below, are intended to incorporate
feedback received from market participants during ICC's 2022 default
test.\9\ The proposed revisions would also better align ICC's Auction
Procedures with those of other clearing houses (e.g., LCH Ltd, LCH SA,
and Eurex),\10\ according to market participants' feedback.\11\
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\8\ Auction Participants are all non-defaulting Clearing
Participants and any Direct Participating Customer(s), defined as a
Clearing Participant's customer(s) that ICC has authorized to
participate directly in an ICC default auction pursuant to the
requirements set out in Section 2.6 of the Auction Procedures. Id.
at n.4.
\9\ Notice, 88 FR at 44171.
\10\ These three clearing houses have rules and/or default
procedures that, in general, exclude non-defaulting clearing members
from mandatory participation in default auctions where such non-
defaulting clearing members do not have exposure to the products in
the default auction portfolio. Notice, 88 FR at 44172.
\11\ Notice, 88 FR at 44172.
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A. Additional Exception to Minimum Bid Requirement
Generally, in the event of an auction to liquidate a defaulting
Clearing Participant's portfolio, all non-defaulting Auction
Participants are required to submit minimum bids (``Minimum Bid
Requirement''). Currently, Section 2.4 requires Auction Participants to
bid for a minimum notional amount of contracts for each auction, the
lot determined pro rata based on its required contribution to the ICC
guaranty fund, subject to certain exceptions.\12\ The proposed rule
change would amend the Auction Procedures to provide an additional
exception to the Minimum Bid Requirement. Under the proposed exception,
the Minimum Bid Requirement would not apply if ICC determined that it
would be inappropriate for certain Auction Participants in light of:
(i) the operational and other capabilities of such an Auction
Participant to clear contracts in the relevant auction lot, or (ii) the
conditions in the market for the contracts in the relevant auction
lot.\13\ For example, under the proposed rule change, ICC would be
allowed to determine whether the Minimum Bid Requirement would apply to
an Auction Participant if the Auction Participant does not have risk
management or other operational capabilities to clear the types of
contracts involved in a particular auction,\14\ or if market conditions
change for certain types of contracts.\15\ ICC represents that the
proposed change is designed to disapply minimum bid requirements where
they might lead to an increase in systemic risk or be inappropriate or
undesirable in light of ICC's goal of running a successful auction.\16\
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\12\ Notice, 88 FR at 44171. For example, a Minimum Bid
Requirement shall not apply to an Auction Participant for a
particular Lot to the extent it would be in breach of applicable law
or ICC Rules, or the Lot includes Contracts that are sovereign CDS
referencing the country in which the Auction Participant or its
parent company is domiciled. See ICC Initial Auction Procedure,
Section 2.4.
\13\ Id.
\14\ For instance, certain market participants may not trade, or
have the operational, risk management, or other capacity to trade or
otherwise manage particular products cleared through ICC, such as
index swaptions. In that case, if such a participant were forced to
bid for lots that included these types of products during the course
of the auction, the participant might acquire products for which it
may not have the ready capability to manage the risk of its
positions, thereby potentially increasing systemic risk. Id.
\15\ Notice, 88 FR at 44171-2.
\16\ Notice, 88 FR at 44172.
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B. Treatment of Auction Participants as Senior Bidders
Currently, ICC's rules specify how losses from a default auction
will be applied.\17\ Under such prioritization, losses would be applied
to the collateral of a member that does not participate in a default
auction before being applied to other members' collateral
(``juniorization''). ICC proposes to amend the Auction Procedures to
allow ICC to disapply such juniorization where ICC determines that
juniorization may make it more difficult to run a successful auction or
is otherwise inappropriate or undesirable for the particular lot in
light of certain market conditions or circumstances at the time. In
effect, under the proposed rule change, ICC would be allowed to
determine that juniorization of Lot Guaranty Fund Contributions and Lot
Assessment Contributions will not occur, such that all such
contributions will be applied on a pro rata basis rather than based on
the relative competitiveness of bids made.\18\
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\17\ See Auction Procedures, Section 3.3.
\18\ Such changes would maintain the incentives for competitive
bidding in a default auction as Auction Participants still would be
incentivized to protect their guaranty fund deposits and assessment
contributions, and juniorization would be expected to continue to
apply in most circumstances. Notice, 88 FR at 44172.
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III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act directs the Commission to approve a
proposed rule change of a self-regulatory
[[Page 57166]]
organization if it finds that such proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to such organization.\19\ For the reasons given
below, the Commission finds that the proposed rule change is consistent
with section 17A(b)(3)(F) of the Act \20\ and Rule 17Ad-22(e)(13) \21\
thereunder.
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\19\ 15 U.S.C. 78s(b)(2)(C).
\20\ 15 U.S.C. 78q-1(b)(3)(F).
\21\ 17 CFR 240.17Ad-22(e)(13).
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A. Consistency With Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of ICE Clear Credit ``are designed to promote the prompt and
accurate clearance and settlement of securities transactions and, to
the extent applicable, derivative agreements, contracts, and
transactions.'' \22\ Based on its review of the record, and for the
reasons discussed below, the Commission believes the proposed changes
to the Auction Procedures are consistent with the promotion of the
prompt and accurate clearance and settlement of securities
transactions.
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\22\ 15 U.S.C. 78q-1(b)(3)(F).
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The proposed additional exception to the Minimum Bid Requirement
provides ICC with greater flexibility to administer a default auction
with the appropriate set of Auction Participants and respond to
changing market conditions promptly, while maintaining its clearance
and settlement responsibilities with the least possible disruption. The
proposed amendments would allow ICC to determine whether an Auction
Participant has the operational or other capabilities required to clear
contracts in a particular lot, thus ensuring an appropriate fit between
the Auction Participants and the types of contracts involved in the
auction. The proposal would also give ICC the leeway to respond to
changing market forces to hold a timely default auction that is
responsive to the characteristics and implications of the contracts in
the relevant auction lot. Similarly, the proposed revisions to the
Auction Procedures would give ICC the latitude to disapply the Default
Auction Priority and treat all Auction Participants as senior bidders
in limited circumstances, thus helping ICC run a successful, effective,
and efficient default auction in circumstances where the juniorization
of Auction Participants would be unsuitable for the auction, and
facilitating the prompt and accurate close-out of the defaulter's
portfolio.
As such, the Commission finds that the proposed rule change is
consistent with section 17A(b)(3)(F) of the Act.\23\
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\23\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Consistency With Rule 17Ad-22(e)(13)
Rule 17Ad-22(e)(13) requires ICC to ``establish, implement,
maintain, and enforce written policies and procedures reasonably
designed to [. . .] [e]nsure the covered clearing agency has the
authority and operational capacity to take timely action to contain
losses and liquidity demands and continue to meet its obligations [. .
.].'' \24\ Based on its review of the record, and for the reasons
discussed below, the Commission believes the proposed changes to the
Auction Procedures are consistent with the requirements of Rule 17Ad-
22(e)(13).\25\
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\24\ 17 CFR 240.17Ad-22(e)(13).
\25\ Id.
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The proposed exception to the Minimum Bid Requirement would provide
ICC the authority to not force a Clearing Participant to bid on lots
containing contracts that the Clearing Participant is not equipped to
manage financially or operationally. Excepting such a Clearing
Participant from the bidding process should reduce the likelihood of
ICC receiving poor quality bids, thereby improving the auction process.
In foregoing the Minimum Bid Requirement for Auction Participants who
are not appropriately positioned to take on certain types of contracts,
ICC would be giving itself the ability to take steps, in limited
circumstances, to streamline the auction process and limit potential
losses or liquidity demands resulting from a Clearing Participant's
default. Similarly, the proposed change to allow ICC to disapply the
juniorization of certain Clearing Participants' guaranty fund
contributions would better align ICC's default management practices
with its members' financial and operational capacities. Imposing the
Minimum Bid Requirement or incentivizing bidding through the
juniorization process where a Clearing Participant lacks necessary
financial or operational capabilities could result in that Clearing
Participant acquiring products whose risks it is not prepared to
manage. The proposed rule change would allow ICC to protect the
integrity of the default auction and increase its likelihood of success
by ensuring that the bids received are provided by members most able to
value and risk manage the defaulter's portfolio.
IV. Solicitation of Comments on Amendment No. 1 and Partial Amendment
No. 2 to the Proposed Rule Change
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 1 and Partial Amendment No. 2, 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-ICC-2023-009 on the subject line.
Paper Comments
Send paper comments in triplicate to, Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549.
All submissions should refer to File Number SR-ICC-2023-009. 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 Credit and on ICE Clear
Credit's website at https://www.theice.com/clear-credit/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-ICC-2023-009 and
[[Page 57167]]
should be submitted on or before September 12, 2023.
V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1 and Partial Amendment No. 2
The Commission finds good cause, pursuant to section 19(b)(2) of
the Act,\26\ to approve the proposed rule change prior to the 30th day
after the date of publication of notice of the filing of Amendment No.
1 and Partial Amendment No. 2 in the Federal Register. As discussed
above, Amendment No. 1 amended and restated in its entirety the Form
19b-4, Exhibit 1A, and Exhibit 5 to correct a typographical error in
the Auction Procedures, and Partial Amendment No. 2 replaced and
superseded Amendment No. 1, and amended and restated in its entirety
the Form 19b-4, Exhibit 1A, and Exhibit 5, in addition to including
Exhibit 4, to correct a typographical error in the Auction Procedures.
Amendment No. 1 and Partial Amendment No. 2 do not change the purpose
of or basis for the proposed changes.
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\26\ 15 U.S.C. 78s(b)(2).
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For similar reasons as discussed above, the Commission finds that
Amendment No. 1 and Partial Amendment No. 2 are consistent with the
requirement that ICC's rules be designed to promote the prompt and
accurate clearance and settlement of securities transactions under
section 17A(b)(3)(F) of the Act.\27\ Accordingly, the Commission finds
good cause to approve the proposed rule change, as modified by
Amendment No. 1 and Partial Amendment No. 2, on an accelerated basis,
pursuant to section 19(b)(2) of the Act.\28\
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\27\ 15 U.S.C. 78q-1(b)(3)(F).
\28\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change, as modified by Amendment No. 1 and Partial
Amendment No. 2, is consistent with the requirements of the Act, and in
particular, with the requirements of section 17A(b)(3)(F) of the Act,
and Rule 17Ad-22(e)(13) thereunder.\29\
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\29\ 15 U.S.C. 78q-1(b)(3)(F); 17 CFR 240.17Ad-22(e)(13).
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It is therefore ordered pursuant to section 19(b)(2) of the Act
\30\ that the proposed rule change (SR-ICC-2023-009), as modified by
Amendment No. 1 and Partial Amendment No. 2, be, and hereby is,
approved on an accelerated basis.\31\
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\30\ 15 U.S.C. 78s(b)(2).
\31\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
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\32\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-17979 Filed 8-21-23; 8:45 am]
BILLING CODE 8011-01-P
