[Federal Register Volume 79, Number 92 (Tuesday, May 13, 2014)]
[Notices]
[Pages 27354-27355]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10897]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72116; File No. SR-ICC-2014-02]
Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change To Update ICC's Liquidity Thresholds for
Euro Denominated Products
May 7, 2014.
I. Introduction
On March 12, 2014, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change SR-ICC-2014-02 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 April 1, 2014.\3\ The Commission received no comment letters
regarding the proposed change. For the reasons discussed below, the
Commission is granting approval of the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 34-71810 (March 26,
2014), 79 FR 18377 (April 1, 2014) (SR-ICC-2014-02).
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II. Description
ICC is proposing to update its liquidity thresholds for Euro
denominated products. Under the proposed changes, 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. ICC notes that for United States Dollar
(``USD'') denominated products, its rules already state that the first
65% of Non-Client Liquidity Requirements must be satisfied with USD
denominated collateral, the first 45% of which must be posted in USD
cash and the next 20% of which 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.
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
[[Page 27355]]
with Euro cash. ICC states that this change is intended to increase the
Euro cash Non-Client Liquidity Requirements for Euro denominated
products and create more consistent liquidity requirements across USD
and Euro denominated products. In addition to updating its rules, ICC
also proposes to update the ICC Treasury Operations Policies and
Procedures to reflect the proposed change in ICC's Non-Client Liquidity
Requirements for Euro denominated products. ICC states that the update
to the ICC Treasury Operations Policies and Procedures will not require
any operational changes.
ICC also proposes to remove redundant references to ``US cash'' in
Schedule 401 of the ICC Rules, as US cash is included in all ``G7
cash'' references.
III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act \4\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if the
Commission finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to such self-regulatory organization. Section 17A(b)(3)(F)
of the Act \5\ 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 the extent
applicable, derivative agreements, contracts, and transactions, 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 and, in general, to protect investors and the public
interest.
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\4\ 15 U.S.C. 78s(b)(2)(C).
\5\ 15 U.S.C. 78q-1(b)(3)(F).
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The Commission finds that the proposed rule change is consistent
with the requirements of Section 17A of the Act.\6\ The proposed change
provides ICC with increased available liquidity and is therefore
consistent with the requirements of Section 17A(b)(3)(F) of the Act \7\
of promoting the prompt and accurate clearance and settlement of
securities transactions and, to the extent applicable, derivatives
agreements, contracts, and transactions, and helping to protect
investors and the public interest.
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\6\ 15 U.S.C. 78q-1.
\7\ 15 U.S.C. 78q-1(b)(3)(F).
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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 \8\ and the
rules and regulations thereunder.
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\8\ 15 U.S.C. 78q-1.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\9\ that the proposed rule change (File No. SR-ICC-2014-02) be, and
hereby is, approved.\10\
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\9\ 15 U.S.C. 78s(b)(2).
\10\ 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.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-10897 Filed 5-12-14; 8:45 am]
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