[Federal Register Volume 79, Number 62 (Tuesday, April 1, 2014)]
[Notices]
[Pages 18377-18378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-07193]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71810; File No. SR-ICC-2014-02]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing of Proposed Rule Change To Update ICC's Liquidity Thresholds for
Euro Denominated Products
March 26, 2014.
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 March 12, 2014, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared primarily by ICC. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule change is to update ICC's
liquidity thresholds for Euro denominated products.
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 regarding the proposed rule change.
The text of these statements may be examined at the places specified in
Item IV below. ICC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The proposed revisions are intended to update ICC's liquidity
thresholds for Euro denominated products. ICC will require the first
65% of Clearing Participant Non-Client Initial Margin and Guaranty Fund
Liquidity Requirements (``Non-Client Liquidity Requirements'') to be
satisfied with collateral in the currency of the underlying instrument.
Accordingly, ICC proposes updating the liquidity thresholds for Euro
denominated products, listed in Schedule 401 of the ICC Rules, to
require the first 65% of Non-Client Liquidity Requirements for Euro
denominated products to be satisfied with Euro cash.
ICC believes such changes will facilitate the prompt and accurate
clearance and settlement of securities transactions and derivative
agreements, contracts, and transactions for which it is responsible.
The proposed changes are described in detail as follows.
For United States Dollar (``USD'') denominated products, the first
65% of Non-Client Liquidity Requirements must be satisfied with USD
denominated collateral. Specifically, the first 45% of Non-Client
Liquidity Requirements must be posted in USD cash and the next 20% may
be posted in USD denominated assets (USD cash and/or US Treasury
securities). Currently, for Euro denominated products, 45% of Non-
Client Liquidity Requirements must be posted in Euro cash and the next
20% may be posted in Euro cash, USD cash, and/or US Treasury
securities.
ICC proposes to require the first 65% of Non-Client Liquidity
Requirements for both USD and Euro denominated products to be satisfied
with collateral in the currency of the underlying instrument.
Accordingly, ICC is updating its liquidity thresholds for Euro
denominated products so that the first 65% of Non-Client Liquidity
Requirements for Euro denominated products must be satisfied with Euro
cash. This change will increase the Euro cash Non-Client Liquidity
Requirements for Euro denominated products and create more consistent
liquidity requirements across USD and Euro denominated products.
Redundant references to ``US cash'' in Schedule 401 of the ICC
Rules have been removed, as US cash is included in all ``G7 cash''
references.
The ICC Treasury Operations Policies and Procedures have been
updated to reflect the update to ICC's Non-Client Liquidity
Requirements for Euro denominated products. The changes to the Euro
cash Non-Client Liquidity Requirements do not require any operational
changes.
Section 17A(b)(3)(F) of the Act \3\ 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. 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, to Section
17(A)(b)(3)(F),\4\ because ICC believes that the update to its
liquidity thresholds for Euro denominated products 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. This change will increase
available liquidity and make liquidity requirements consistent across
USD and Euro denominated products.
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\3\ 15 U.S.C. 78q-1(b)(3)(F).
\4\ Id.
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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. The proposed update to
ICC's liquidity thresholds for Euro denominated products applies
consistently across all market participants and the implementation of
the proposed liquidity thresholds for Euro denominated products does
not preclude the implementation of similar changes by other market
participants. Therefore, ICC does not believe the update to its
liquidity thresholds for Euro denominated products imposes any burden
on competition that is inappropriate in furtherance of the purposes of
the Act.
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 will notify the
[[Page 18378]]
Commission of any written comments received by ICC.
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 the 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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-ICC-2014-02 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-ICC-2014-02. 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 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 Room, 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/notices/Notices.shtml?regulatoryFilings.
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-2014-02
and should be submitted on or before April 22, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\5\
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\5\ 17 CFR 200.30-3(a)(12).
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07193 Filed 3-31-14; 8:45 am]
BILLING CODE 8011-01-P