[Federal Register Volume 77, Number 90 (Wednesday, May 9, 2012)]
[Notices]
[Pages 27260-27262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11132]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66918; File No. SR-ICC-2012-08]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing and Order Granting Accelerated Approval of Proposed Rule Change
To Add Margin Collection Requirements for Futures Commission Merchant
Clearing Participants
May 3, 2012.
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 April 23, 2012, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I and II below, which Items have been
prepared primarily by ICC. The Commission is publishing this Notice and
Order to solicit comments on the proposed rule change from interested
persons and to approve the proposed rule change on an accelerated
basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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[[Page 27261]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
ICC proposes to require FCM clearing participants to collect margin
from their customers in respect of such customers' non-hedge positions
at a level that is ten percent (10%) greater than ICC's related margin
requirement with respect to each product and swap portfolio. As
discussed in more detail in Item II(A) below, ICC published a Circular
on April 20, 2012 informing its clearing participants of this rule
change.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, ICC 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 III below. ICC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.\3\
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\3\ The Commission has modified the text of the summaries
prepared by ICC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
ICC is registered as a derivatives clearing organization (``DCO'')
with the Commodity Futures Trading Commission (``CFTC'') and clears
credit default swap contracts subject to the jurisdiction of the CFTC.
CFTC Regulation 39.13(g)(8)(ii) provides that a DCO ``shall require its
clearing members to collect customer initial margin * * *from their
customers, for non-hedge positions, at a level that is greater than 100
percent of the derivatives clearing organization's initial margin
requirements with respect to each product and swap portfolio.''
As further described in ICC's Circular 2012/008 dated April 20,
2012, in compliance with CFTC Regulation 39.13(g)(8)(ii), no later than
the May 7, 2012 effective date, ICC will require FCM clearing
participants to collect margin from their customers in respect of such
customers' non-hedge positions, at a level that is ten percent (10%)
greater than ICC's related margin requirement with respect to each
product and swap portfolio.
ICC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act and the rules and regulations
thereunder applicable to it. ICC believes that its proposed rule will
help protect investors and the public interest because the requirements
help safeguard customer funds held at the FCM level.
(B) Self-Regulatory Organization's Statement on Burden on Competition
ICC does not believe the proposed rule change would have any
impact, or impose any burden, on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
Written comments relating to the proposed rule change have not been
solicited or received. ICC represented that it will notify the
Commission of any written comments it receives.
III. 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 may be submitted by using the
Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml)
or by sending an email to [email protected]. Please include File
Number SR-ICC-2012-08 on the subject line.
Paper comments may be sent in triplicate to Elizabeth M.
Murphy, Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-ICC-2012-08. 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 Web site (http://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 Web site viewing and
printing in the Commission's Public Reference Section, 100 F Street
NE., Washington, DC 20549, on official business days between the hours
of 10:00 a.m. and 3:00 p.m. Copies of such filings will also be
available for inspection and copying at the principal office of ICC and
on ICC's Web site at https://www.theice.com/publicdocs/regulatory_filings/042312_SEC_ICEClearCredit.pdf.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-ICC-2012-08
and should be submitted on or before May 30, 2012.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
Section 19(b)(2)(C) of the Act \4\ directs the Commission to
approve a proposed rule change of a self-regulatory 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. Section 17A(b)(3)(F) of the Act \5\
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. Section 17A(b)(3)(F) also
requires that the rules of a clearing agency be designed to contribute
to the safeguarding of securities and funds associated with swap
transactions.\6\
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\4\ 15 U.S.C. 78s(b)(2)(C).
\5\ 15 U.S.C. 78q-1(b)(3)(F).
\6\ Id.
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The proposed change would allow ICC to require ICC's clearing
participants to enhance the margin collected from clients for clients'
non-hedge positions, thereby contributing to the safeguarding of
securities and funds associated with swap transactions. It should also
allow ICC to comply with new CFTC regulatory requirements, thereby
promoting the prompt and accurate clearance and settlement of
derivative agreements, contracts, and transactions.
Further, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\7\ for approving the proposed rule change prior to
the 30th day after the date of publication of notice in the Federal
Register because as a registered DCO ICC is required to comply with the
new CFTC regulations by the time they become effective on May 7,
2012.\8\
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\7\ 15 U.S.C. 78s(b)(2).
\8\ 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).
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[[Page 27262]]
V. Conclusion
It is therefore ordered, pursuant to 19(b)(2) of the Act,\9\ that
the proposed rule change (SR-ICC-2012-08) is approved on an accelerated
basis.
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\9\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Kevin O'Neill,
Deputy Secretary.
[FR Doc. 2012-11132 Filed 5-8-12; 8:45 am]
BILLING CODE 8011-01-P