[Federal Register Volume 78, Number 222 (Monday, November 18, 2013)]
[Notices]
[Pages 69167-69168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-27474]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70849; File No. SR-ICC-2013-07]
Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change To Provide for the Clearance of Standard
Emerging European and Middle Eastern Sovereign Single Names
November 12, 2013.
I. Introduction
On September 17, 2013, ICE Clear Credit LLC (``ICC'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change SR-ICC-2013-07 pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder.\2\ The proposed rule change was published for comment in
the Federal Register on October 1, 2013.\3\ The Commission did not
receive any comments on the proposed rule change. This order approves
the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Exchange Act Release No. 34-70496 (Sep. 25, 2013), 78 FR
60357 (Oct. 1, 2013) (SR-ICC-2013-07).
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II. Description of the Proposed Rule Change
ICC proposes to adopt rules that will provide the basis for ICC to
clear additional credit default swap contracts. Specifically, ICC is
proposing to amend Section 26D of its Rules to provide for the
clearance of additional Standard Emerging Sovereign Single Name
constituents of the CDX Emerging Markets Index (``SES Contracts'').
Currently, ICC clears four Standard Latin America Sovereign Single Name
constituents of the CDX Emerging Markets Index. The proposed changes to
the ICC Rules would provide for the clearance of Standard Emerging
European and Middle Eastern Sovereign Single Name constituents of the
CDX Emerging Markets Index, specifically the Republic of Turkey and the
Russian Federation (the ``SEEME Contracts''). ICC believes the addition
of the SEEME Contracts will allow market participants an increased
ability to manage risk.
SEEME Contracts have similar terms to the Standard Latin America
Sovereign Single Name constituents of the CDX Emerging Markets Index
currently cleared by ICC and governed by Section 26D of the ICC rules.
Accordingly, the proposed changes to Section 26D of the ICC rules
include the addition of ``Standard Emerging European and Middle Eastern
Sovereign'' as a Transaction Type for SES Contracts and the addition of
the European Region as the CDS Region for SEEME Contracts.
Rule 26D-102 would be modified to indicate the specific Eligible
SES Reference Entities to be cleared by ICC, namely the Federative
Republic of Brazil, the United Mexican States, the Bolivian Republic of
Venezuela, the Argentine Republic, the Republic of Turkey and the
Russian Federation. Rules 26D-303 (SES Contract Adjustments) and 26D-
315 (Terms of the Cleared SES Contract) would be modified to
incorporate SEEME Contracts as a Transaction Type for SES Contracts.
Rule 26D-309 would be modified to state specifically that ICC will not
accept a trade for clearance and settlement if at the time of
submission or acceptance of the trade or at the time of novation the
CDS Participant submitting the trade is domiciled in the country of the
Eligible SES Reference Entity for such SES Contract. Rule 26D-315(b)
also would be modified to indicate that for purposes of the CDS
Committee Rules, for SEEME Contracts the CDS Region is the European
Region.
ICC believes that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to ICC, in particular, Section 17(A)(b)(3)(F) of the Act,\4\
because ICC believes that the clearance of SEEME Contracts will
facilitate the prompt and accurate settlement of securities,
specifically security-based swaps, and contribute to the safeguarding
of securities and funds associated with security-based swap
transactions in ICC's custody or control, or for which ICC is
responsible.
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\4\ 15 U.S.C. 78q-1(b)(3)(F).
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III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act \5\ 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 \6\
requires, among other things, that the rules of a clearing agency are
designed to promote the prompt and accurate clearance and settlement of
securities transactions and to assure the safeguarding of securities
and funds which are in the custody or control of the clearing agency or
for which it is responsible. After careful review, the Commission finds
that the proposed rule change is consistent with these requirements
because the clearance of SEEME Contracts pursuant to ICC's proposal
will promote the prompt and accurate clearance and settlement of
securities transactions, and ICC's proposal, in combination with its
existing rules, policies, and procedures for clearing SES Contracts, is
designed to assure the safeguarding of securities and funds which are
in the custody or control of ICC or for which it is responsible.
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\5\ 15 U.S.C. 78s(b)(2)(C).
\6\ 15 U.S.C. 78q-1(b)(3)(F).
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[[Page 69168]]
IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act and in
particular with the requirements of Section 17A of the Act \7\ and the
rules and regulations thereunder.
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\7\ 15 U.S.C. 78q-1.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-ICC-2013-07) be, and hereby
is, approved.\9\
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\8\ 15 U.S.C. 78s(b)(2).
\9\ 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.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-27474 Filed 11-15-13; 8:45 am]
BILLING CODE 8011-01-P