[Federal Register Volume 80, Number 61 (Tuesday, March 31, 2015)]
[Notices]
[Pages 17119-17121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-07258]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74577; File No. SR-ICEEU-2015-006]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to FATCA Requirements
March 25, 2015.
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 13, 2015, ICE Clear Europe Limited (``ICE Clear Europe'' or
``Clearing House'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change described in Items I, II and
III below, which Items have been prepared by ICE Clear Europe. ICE
Clear Europe filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(4)(i) \4\ thereunder, so
that the proposed rule change was effective upon filing with the
Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(4)(i).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The principal purpose of the proposed rule change is to amend the
ICE Clear Europe Finance Procedures in order to address certain
reporting and information requirements relating to Sections 1471
through 1474 of the U.S.
[[Page 17120]]
Internal Revenue Code \5\ and U.S. Treasury regulations and other
guidance thereunder (commonly known as the Foreign Account Tax
Compliance Act, or ``FATCA'') and related provisions under U.K. law and
similar legislation, regulations or guidance enacted in any
jurisdiction which seeks to implement similar tax reporting and/or
withholding tax regimes.
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\5\ 26 U.S.C. 1471-1474.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, ICE Clear Europe 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. ICE Clear Europe 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
(i) Purpose
The purpose of the proposed rule change is for ICE Clear Europe to
adopt amendments to its Finance Procedures in order to clarify certain
informational and tax form requirements applicable to its Clearing
Members in connection with FATCA (and other similar laws).
Specifically, the amendments add a new paragraph 6.1(j) to the Finance
Procedures, which states that Clearing Members are required to provide
to the Clearing House information, and to complete tax forms, as may be
required by the Clearing House in order to comply with its obligations
relating to FATCA, including obligations under intergovernmental
arrangements between U.K. and U.S. authorities with respect to FATCA
compliance and implementing regulations and guidance in the U.K. The
amendments also clarify that ICE Clear Europe's status under FATCA and
such agreements and implementing regulations (including ICE Clear
Europe's registration with the U.S. Internal Revenue Service for a
Global Intermediary Identification Number for FATCA reporting purposes)
is not intended to have any effect on ICE Clear Europe's status for the
purposes of any other applicable law, or any of the rights or
obligations of ICE Clear Europe or any Clearing Member or customer
provided for under the Rules and Procedures and relevant member
agreements.
(ii) Statutory Basis
FATCA was enacted on March 18, 2010, as part of the Hiring
Incentives to Restore Employment Act, and became effective, subject to
transition rules, on January 1, 2013. The U.S. Treasury Department
finalized and issued various implementing regulations (``FATCA
Regulations'') \6\ on January 17, 2013. FATCA's intent is to curb tax
evasion by U.S. citizens and residents through their use of offshore
bank accounts. FATCA generally requires foreign financial institutions
(``FFIs'') \7\ to become ``participating FIs'' by entering into
agreements with the Internal Revenue Service (``IRS''), under which the
FFI is required to report to the IRS information on U.S. persons and
entities that have accounts with the FFI. Failure to enter into such an
agreement would result in withholding taxes on certain payments to the
FFI. As an alternative to FFIs entering into individual agreements with
the IRS, the U.S. Treasury Department provided another means of
complying with FATCA for FFIs which are resident in Non-U.S.
jurisdictions that enter into intergovernmental agreements (``IGAs'')
with the United States. Generally, such a jurisdiction (``FATCA
Partner'') would pass laws to eliminate the conflicts of law issues
that would otherwise make it difficult for FFIs in its jurisdiction to
collect the information required under FATCA and transfer this
information, directly or indirectly, to the United States. An FFI
resident in a FATCA Partner jurisdiction would be required to transmit
FATCA reporting to its local competent tax authority (which in turn
would transmit the information to the IRS), or the FFI would be
authorized or required to transmit FATCA reporting directly to the
IRS.\8\
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\6\ Regulations Relating to Information Reporting by Foreign
Financial Institutions and Withholding on Certain Payments to
Foreign Financial Institutions and Other Foreign Entities, 78 FR
5874 (Apr. 15, 2013).
\7\ Non-U.S. financial institutions are referred to as ``foreign
financial institutions'' or ``FFIs'' in the FATCA Regulations.
\8\ For a more complete discussion of the background of FATCA,
as well as certain rules and procedures previously adopted by ICE
Clear Europe relating to FATCA compliance, see Exchange Act Release
No. 34-70283 (August 29, 2013), 78 FR 54713 (Sept. 5, 2013) (File
No. SR-ICEEU-2013-08).
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The U.K. has entered into an IGA with the United States, and U.K.
tax authorities have adopted implementing regulations (and related
guidance) with respect to FATCA compliance for U.K. entities.\9\ Under
the U.K. implementing regulations and guidance, central counterparties
such as ICE Clear Europe may be treated as FFIs for purposes of FATCA
compliance. In connection with those regulations, and ICE Clear
Europe's potential obligations under them as a central counterparty,
ICE Clear Europe has proposed the amendments to the Finance Procedures
to require its Clearing Members to provide necessary information and
relevant tax forms to the Clearing House. In addition, for added
clarity and to avoid any potential legal uncertainty arising from the
treatment of central counterparties under the U.K. implementing
regulations for FATCA purposes, the amendments also provide that ICE
Clear Europe's FATCA status is not intended to otherwise affect its
status under other laws, or to affect the rights and obligations of the
Clearing House, its Clearing Members or other market participants.
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\9\ See International Tax Compliance (United States of America)
Regulations 2014 (SI 2014/1506); Implementation of The International
Tax Compliance (United States of America) Regulations 2014, HM
Revenue & Customs Guidance Notes (Aug. 28, 2014).
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ICE Clear Europe believes that the proposed rule change is
consistent with the requirements of Section 17A of the Securities
Exchange Act of 1934 (the ``Act'') \10\ and the regulations thereunder
applicable to it. Section 17A(b)(3)(F) of the Act \11\ 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, 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 to protect investors and the public
interest. Specifically, the proposed rule change is intended to
facilitate compliance by ICE Clear Europe with its potential
obligations under FATCA and under the related implementing regulations
and guidance in the U.K. and thus further the tax compliance goals of
the FATCA regime. In ICE Clear Europe's view, the amendments are
therefore consistent with the protection of investors and the public
interest, and the requirements of Section 17A(b)(3)(F) of the Act.
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\10\ 15 U.S.C. 78q-1.
\11\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Self-Regulatory Organization's Statement on Burden on Competition
ICE Clear Europe does not believe the proposed rule change would
have any impact, or impose any burden, on
[[Page 17121]]
competition not necessary or appropriate in furtherance of the purpose
of the Act. The proposed rule change imposes certain informational
requirements on Clearing Members, in order to ensure that ICE Clear
Europe is in compliance with FATCA and implementing U.K. regulations
and guidance. The amendments would apply to all Clearing Members. ICE
Clear Europe does not believe that the amendments would adversely
affect the ability of Clearing Members or other market participants
generally to engage in cleared transactions or to access clearing,
adversely affect competition among Clearing Members, adversely affect
the market for clearing services or limit market participants' choices
for clearing transactions. To the extent that compliance with the
amendments will result in any additional cost for Clearing Member or
other market participants, ICE Clear Europe believes that such cost
results from the requirements mandated by FATCA and implementing
regulations. As a result, ICE Clear Europe does not believe that the
proposed amendments will impose any burden on competition not
appropriate 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 to the rules
have not been solicited or received. ICE Clear Europe will notify the
Commission of any written comments received by ICE Clear Europe.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective upon filing pursuant
to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(4)(i).\13\ At
any time within 60 days of the filing of the proposed rule change, the
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(4)(i).
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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-ICEEU-2015-006 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-ICEEU-2015-006. 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 ICE Clear Europe
and on ICE Clear Europe's Web site at https://www.theice.com/clear-europe/regulation. 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-
ICEEU-2015-006 and should be submitted on or before April 21, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-07258 Filed 3-30-15; 8:45 am]
BILLING CODE 8011-01P