Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change Relating to the Clearance of Additional Credit Default Swap Contracts, 86399-86400 [2023-27275]
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Federal Register / Vol. 88, No. 238 / Wednesday, December 13, 2023 / Notices
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 the filing also
will be available for inspection and
copying at the principal office of the
Exchange. 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–PHLX–2023–54 and should be
submitted on or before January 3, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.45
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–27274 Filed 12–12–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99115; File No. SR–ICC–
2023–014]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Order Approving
Proposed Rule Change Relating to the
Clearance of Additional Credit Default
Swap Contracts
December 7, 2023.
khammond on DSKJM1Z7X2PROD with NOTICES
I. Introduction
On October 25, 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
clear additional credit default swap
(‘‘CDS’’) contracts. The proposed rule
change was published for comment in
the Federal Register on November 7,
45 17
CFR 200.30–3(a)(12), (59).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
16:54 Dec 12, 2023
Jkt 262001
2023.3 The Commission did not receive
comments regarding the proposed rule
change. For the reasons discussed
below, the Commission is approving the
proposed rule change.
II. Description of the Proposed Rule
Change
ICC is registered with the Commission
as a clearing agency for the purpose of
clearing CDS contracts. Chapter 26 of
ICC’s Rulebook covers the CDS contracts
that ICC clears, with each subchapter of
Chapter 26 defining the characteristics
and additional Rules applicable to the
various specific categories of CDS
contracts that ICC clears. Among other
CDS contracts, ICC currently clears
Standard Emerging Market Sovereign
Single Name CDS (‘‘SES’’) contracts.
The purpose of the proposed rule
change is to amend ICC’s rules to permit
ICC to clear additional SES contracts,
specifically, SES contracts on the
Kingdom of Morocco and the Federal
Republic of Nigeria.
To carry out this change, the proposed
rule change would amend Subchapter
26D of Chapter 26. In Rule 26D–102
(Definitions), ‘‘Eligible SES Reference
Entities,’’ the proposed rule change
would add the Kingdom of Morocco and
the Federal Republic of Nigeria to the
list of specific Eligible SES Reference
Entities to be cleared by ICC.
As discussed below, these additional
SES contracts have terms consistent
with the other SES contracts that ICC is
already clearing. Likewise, to clear these
additional contracts, ICC will be able to
rely on its existing Risk Management
Framework and other policies and
procedures without making any
changes.
III. Discussion and Commission
Findings
Section 19(b)(2)(C) of the Act requires
the Commission to approve a proposed
rule change of a self-regulatory
organization if it finds that the proposed
rule change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
the organization.4 For the reasons given
below, the proposed rule change is
consistent with section 17A(b)(3)(F) of
the Act 5 and Rule 17Ad–22(e)(1)
thereunder.6
3 Self-Regulatory Organizations; ICE Clear Credit
LLC; Notice of Filing of Proposed Rule Change
Relating to the Clearance of Additional Credit
Default Swap Contracts; Exchange Act Release No.
98833 (Nov. 1, 2023), 88 FR 76870 (Nov. 7, 2023)
(File No. SR–ICC–2023–014) (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2)(C).
5 15 U.S.C. 78q–1(b)(3)(F).
6 17 CFR 240.17Ad–22(e)(1).
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
86399
a. Consistency With Section 17A(b)(3)(F)
of the Act
Section 17A(b)(3)(F) of the Act
requires, among other things, that the
rules of ICC be designed to promote the
prompt and accurate clearance and
settlement of securities transactions
and, to the extent applicable, derivative
agreements, contracts, and
transactions.7
The proposed rule change is
consistent with section 17A(b)(3)(F) of
the Act.8 The terms and conditions of
the additional SES contracts proposed
for clearing are substantially similar to
the terms and conditions of the other
contracts listed in Subchapter 26D of
ICC’s Rules, all of which ICC currently
clears, with the key difference being the
underlying reference obligations. The
underlying reference obligations will be
issuances by the Kingdom of Morocco
and the Federal Republic of Nigeria.
A review of the Notice and ICC’s
Rules, policies, and procedures shows
that ICC would be able to clear the
additional SES contracts pursuant to its
existing clearing arrangements and
related financial safeguards, protections,
and risk management procedures.
Furthermore, a review of data on
volume, open interest, and the number
of ICC Clearing Participants (‘‘CPs’’) that
currently trade in the SES contracts, as
well as certain model parameters for the
additional contracts, show that ICC’s
rules, policies, and procedures are
reasonably designed to price and
measure the potential risk presented by
the additional SES contracts, collect
financial resources in proportion to
such risk, and liquidate the additional
contracts in the event of a CP default.
This should help ensure ICC’s ability to
maintain the financial resources it needs
to provide its critical services and
function as a central counterparty,
thereby promoting the prompt and
accurate settlement of the additional
SES contracts and other credit default
swap transactions.
Therefore, clearance of the additional
SES 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
7 15
U.S.C. 78q–1(b)(3)(F).
U.S.C. 78q–1(b)(3)(F).
9 15 U.S.C. 78q–1(b)(3)(F).
8 15
E:\FR\FM\13DEN1.SGM
13DEN1
86400
Federal Register / Vol. 88, No. 238 / Wednesday, December 13, 2023 / Notices
its activities in all relevant
jurisdictions.10
The proposed rule change would help
provide a well-founded, clear,
transparent, and enforceable legal basis
for ICC’s clearance of SES contracts on
the Kingdom of Morocco and the
Federal Republic of Nigeria. By
amending Rule 26D–102 to add both the
Kingdom of Morocco and the Federal
Republic of Nigeria 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. The revised
Subchapter 26D would provide a wellfounded, clear, transparent, and
enforceable legal basis for ICC to clear
these contracts, consistent with the
requirements of Rule 17Ad–22(e)(1).11
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act, and in
particular, with the requirements of
section 17A(b)(3)(F) of the Act 12 and
Rule 17Ad–22(e)(1) thereunder.13
It is therefore ordered pursuant to
section 19(b)(2) of the Act 14 that the
proposed rule change (SR–ICC–2023–
014), be, and hereby is, approved.15
BILLING CODE 8011–01–P
khammond on DSKJM1Z7X2PROD with NOTICES
CFR 240.17Ad–22(e)(1).
CFR 240.17Ad–22(e)(1).
12 15 U.S.C. 78q–1(b)(3)(F).
13 17 CFR 240.17Ad–22(e)(1).
14 15 U.S.C. 78s(b)(2).
15 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
16 17 CFR 200.30–3(a)(12).
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16:54 Dec 12, 2023
Jkt 262001
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend Its
Fees Schedule
December 7, 2023.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
1, 2023, Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) proposes to amend
its Fee Schedule. The text of the
proposed rule change is in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/ctwo/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
[FR Doc. 2023–27275 Filed 12–12–23; 8:45 am]
11 17
[Release No. 34–99116; File No. SR–C2–
2023–024]
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Sherry R. Haywood,
Assistant Secretary.
10 17
SECURITIES AND EXCHANGE
COMMISSION
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
Exchange 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. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1 15
2 17
PO 00000
Fmt 4703
1. Purpose
The Exchange proposes to amend its
Fee Schedule, effective December 1,
2023.
The Exchange first notes that it
operates in a highly competitive market
in which market participants can
readily direct order flow to competing
venues if they deem fee levels at a
particular venue to be excessive or
incentives to be insufficient. More
specifically, the Exchange is only one of
17 options venues to which market
participants may direct their order flow.
Based on publicly available information,
no single options exchange has more
than approximately 16% of the market
share and currently the Exchange
represents approximately 3% of the
market share.3 Thus, in such a lowconcentrated and highly competitive
market, no single options exchange,
including the Exchange, possesses
significant pricing power in the
execution of option order flow. The
Exchange believes that the ever-shifting
market share among the exchanges from
month to month demonstrates that
market participants can shift order flow
or discontinue to reduce use of certain
categories of products, in response to fee
changes. Accordingly, competitive
forces constrain the Exchange’s
transaction fees, and market participants
can readily trade on competing venues
if they deem pricing levels at those
other venues to be more favorable.
Fee Code Updates
First, the Exchange proposes to
amend the transaction fee for Public
Customer orders in AMC, AMD, AMZN,
HYG, PLTR, TSLA, and XLF that
remove liquidity. Currently, public
customer orders in equity, multiplylisted index, ETF and ETN penny
options classes (except SPY, AAPL,
QQQ, IWM and SLV) that remove
liquidity are assessed a standard
transaction fee of $0.43 per contract and
yield fee code ‘‘PC’’. The Exchange
proposes to remove orders in AMC,
AMD, AMZN, HYG, PLTR, TSLA, and
XLF from fee code PC and, instead,
assess fee code ‘‘SC’’ for Public
Customer orders in AMC, AMD, AMZN,
HYG, PLTR, TSLA, and XLF that
remove liquidity. Fee code SC is
currently appended to Public Customer
orders in SPY, AAPL, QQQ, IWM and
3 See Cboe Global Markets U.S. Options Market
Volume Summary by Month (November 29, 2023),
available at https://markets.cboe.com/us/options/
market_statistics/.
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00086
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Sfmt 4703
E:\FR\FM\13DEN1.SGM
13DEN1
]]>Agencies
[Federal Register Volume 88, Number 238 (Wednesday, December 13, 2023)]
[Notices]
[Pages 86399-86400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27275]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99115; File No. SR-ICC-2023-014]
Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change Relating to the Clearance of Additional
Credit Default Swap Contracts
December 7, 2023.
I. Introduction
On October 25, 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 clear
additional credit default swap (``CDS'') contracts. The proposed rule
change was published for comment in the Federal Register on November 7,
2023.\3\ The Commission did not receive comments regarding the proposed
rule change. For the reasons discussed below, the Commission is
approving the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Filing of Proposed Rule Change Relating to the Clearance of
Additional Credit Default Swap Contracts; Exchange Act Release No.
98833 (Nov. 1, 2023), 88 FR 76870 (Nov. 7, 2023) (File No. SR-ICC-
2023-014) (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
ICC is registered with the Commission as a clearing agency for the
purpose of clearing CDS contracts. Chapter 26 of ICC's Rulebook covers
the CDS contracts that ICC clears, with each subchapter of Chapter 26
defining the characteristics and additional Rules applicable to the
various specific categories of CDS contracts that ICC clears. Among
other CDS contracts, ICC currently clears Standard Emerging Market
Sovereign Single Name CDS (``SES'') contracts.
The purpose of the proposed rule change is to amend ICC's rules to
permit ICC to clear additional SES contracts, specifically, SES
contracts on the Kingdom of Morocco and the Federal Republic of
Nigeria.
To carry out this change, the proposed rule change would amend
Subchapter 26D of Chapter 26. In Rule 26D-102 (Definitions), ``Eligible
SES Reference Entities,'' the proposed rule change would add the
Kingdom of Morocco and the Federal Republic of Nigeria to the list of
specific Eligible SES Reference Entities to be cleared by ICC.
As discussed below, these additional SES contracts have terms
consistent with the other SES contracts that ICC is already clearing.
Likewise, to clear these additional contracts, ICC will be able to rely
on its existing Risk Management Framework and other policies and
procedures without making any changes.
III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act requires the Commission to approve a
proposed rule change of a self-regulatory organization if it finds that
the proposed rule change is consistent with the requirements of the Act
and the rules and regulations thereunder applicable to the
organization.\4\ For the reasons given below, the proposed rule change
is consistent with section 17A(b)(3)(F) of the Act \5\ and Rule 17Ad-
22(e)(1) thereunder.\6\
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(2)(C).
\5\ 15 U.S.C. 78q-1(b)(3)(F).
\6\ 17 CFR 240.17Ad-22(e)(1).
---------------------------------------------------------------------------
a. Consistency With Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of ICC be designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions.\7\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The proposed rule change is consistent with section 17A(b)(3)(F) of
the Act.\8\ The terms and conditions of the additional SES contracts
proposed for clearing are substantially similar to the terms and
conditions of the other contracts listed in Subchapter 26D of ICC's
Rules, all of which ICC currently clears, with the key difference being
the underlying reference obligations. The underlying reference
obligations will be issuances by the Kingdom of Morocco and the Federal
Republic of Nigeria.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
A review of the Notice and ICC's Rules, policies, and procedures
shows that ICC would be able to clear the additional SES contracts
pursuant to its existing clearing arrangements and related financial
safeguards, protections, and risk management procedures. Furthermore, a
review of data on volume, open interest, and the number of ICC Clearing
Participants (``CPs'') that currently trade in the SES contracts, as
well as certain model parameters for the additional contracts, show
that ICC's rules, policies, and procedures are reasonably designed to
price and measure the potential risk presented by the additional SES
contracts, collect financial resources in proportion to such risk, and
liquidate the additional contracts in the event of a CP default. This
should help ensure ICC's ability to maintain the financial resources it
needs to provide its critical services and function as a central
counterparty, thereby promoting the prompt and accurate settlement of
the additional SES contracts and other credit default swap
transactions.
Therefore, clearance of the additional SES contracts would promote
the prompt and accurate clearance and settlement of securities
transactions, consistent with section 17A(b)(3)(F) of the Act.\9\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
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
[[Page 86400]]
its activities in all relevant jurisdictions.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 240.17Ad-22(e)(1).
---------------------------------------------------------------------------
The proposed rule change would help provide a well-founded, clear,
transparent, and enforceable legal basis for ICC's clearance of SES
contracts on the Kingdom of Morocco and the Federal Republic of
Nigeria. By amending Rule 26D-102 to add both the Kingdom of Morocco
and the Federal Republic of Nigeria 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. The revised
Subchapter 26D 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\
---------------------------------------------------------------------------
\11\ 17 CFR 240.17Ad-22(e)(1).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78q-1(b)(3)(F).
\13\ 17 CFR 240.17Ad-22(e)(1).
---------------------------------------------------------------------------
It is therefore ordered pursuant to section 19(b)(2) of the Act
\14\ that the proposed rule change (SR-ICC-2023-014), be, and hereby
is, approved.\15\
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(2).
\15\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27275 Filed 12-12-23; 8:45 am]
BILLING CODE 8011-01-P
