[Federal Register Volume 80, Number 62 (Wednesday, April 1, 2015)]
[Notices]
[Pages 17538-17540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-07367]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74593; File No. SR-ICC-2015-003]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, to Provide for
the Clearance of Additional Standard Emerging Market Sovereign Single
Names
March 26, 2015.
I. Introduction
On January 23, 2015 ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change SR-ICC-2015-003 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 February 9, 2015.\3\ The Commission did not receive any comments. On
March 25, 2015, ICC filed Amendment No. 1 to the proposed rule
change.\4\ The Commission is publishing this notice to solicit comments
on Amendment No. 1 from interested persons and is approving the
proposed rule change, as modified by Amendment No. 1, on an accelerated
basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 34-74192 (Feb. 3, 2015),
80 FR 7070 (Feb. 9, 2015) (File No. SR-ICC-2015-003) (hereinafter
referred to as the ``Initial Rule Filing'').
\4\ ICC filed Amendment No. 1 to remove Ukraine from the list of
proposed additional Standard Emerging Market Sovereign single-name
constituents of the CDX Emerging Markets Index set forth in the
Initial Rule Filing, as further described below.
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II. Description of the Proposed Rule Change
A. Description of the Initial Rule Filing
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 Subchapter 26D-102 of its rules to provide for the
clearance of additional Standard Emerging Market Sovereign single-name
constituents of the CDX Emerging Markets Index (collectively, ``SES
Contracts''). Currently, ICC is approved to clear eight SES Contracts:
the Federative Republic of Brazil, the United Mexican States, the
Bolivarian Republic of Venezuela, the Argentine Republic, the Republic
of Turkey, the Russian Federation, the Republic of Hungary, and the
Republic of South Africa.\5\ The proposed change to the ICC Rules would
provide for the clearance of five additional SES Contracts: the
Republic of Chile, the Republic of Peru, the Republic of Colombia,
Ukraine, and the Republic of Poland (``Additional SES Contracts'').
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\5\ See Securities Exchange Act Release No. 34-65588 (Oct. 18,
2011), 76 FR 65763 (Oct. 24, 2011) (File No. SR-ICC-2011-01) (order
approving rule change to clear SES Contracts referencing the
Federative Republic of Brazil, the United Mexican States, the
Bolivian Republic of Venezuela, and the Argentine Republic);
Securities Exchange Act Release No. 34-70849 (Nov. 12, 2013), 78 FR
69167 (Nov. 18, 2013) (File No. SR-ICC-2013-07) (order approving
rule change to clear SES Contracts referencing the Republic of
Turkey and the Russian Federation); and Securities Exchange Act
Release No. 34-73220 (Sep. 25, 2014), 79 FR 59340 (Oct. 1, 2014)
(File No. SR-ICC-2014-13) (order approving rule change to clear SES
Contracts referencing the Republic of Hungary and the Republic of
South Africa).
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ICC believes that the addition of these SES Contracts will benefit
the market for emerging market credit default swaps by providing market
participants the benefits of clearing, including reduction in
counterparty risk and safeguarding of margin assets pursuant to
clearing house rules. ICC states that the Additional SES Contracts will
be offered on the 2014 ISDA Credit Derivatives Definitions and have
terms consistent with the other SES Contracts approved for clearing at
ICC and governed by Subchapter 26D of the ICC rules. According to ICC,
the clearing of the Additional SES Contracts will not require any
changes to ICC's Risk Management Framework or other
[[Page 17539]]
policies and procedures constituting rules within the meaning of the
Act. ICC states that, in connection with the clearance of the new
contracts, it will apply its existing margin and guaranty fund
methodology, operational and managerial resources, settlement
procedures and account structures, and default management policies and
procedures, which, together, it believes will provide sufficient
financial, operational, and managerial resources to support the
clearing of the new contracts.
B. Description of Amendment No. 1
On March 25, 2015, ICC filed Amendment No. 1 to the proposed rule
change. The purpose of the proposed rule change in Amendment No. 1 is
to modify the list of proposed contracts set forth in the Initial Rule
Filing. Specifically, ICC proposes removing Ukraine from the proposed
list of contracts. Therefore, the proposed rule change, as amended,
seeks approval for the clearance of the Republic of Chile, the Republic
of Peru, the Republic of Columbia, and the Republic of Poland. ICC
states that Amendment No. 1 does not significantly change the purpose
of, and statutory basis for, the proposed rule change. ICC believes the
proposed rule change, as modified by Amendment No. 1, remains
consistent with the promotion of the prompt and accurate clearance and
settlement of securities transactions and, to the extent applicable,
derivatives agreements, contracts, and transactions, the safeguarding
of securities and funds in the custody or control of ICC or for which
it is responsible, and the protection of investors and the public
interest, within the meaning of Section 17A(b)(3)(F) of the Act, as
described in the Initial Rule Filing.
III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act \6\ 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 \7\ 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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\6\ 15 U.S.C. 78s(b)(2)(C).
\7\ 15 U.S.C. 78q-1(b)(3)(F).
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The Commission finds that clearing of the Additional SES Contracts,
as modified by Amendment No. 1, is consistent with the requirements of
Section 17A of the Act \8\ and regulations thereunder applicable to it,
including the standards under Rule 17Ad-22.\9\ The proposed rule change
will provide for clearing of Additional SES Contracts, as modified by
Amendment No. 1, which are similar to the other SES contracts currently
cleared by ICC, in the same manner as other SES Contracts already
cleared by ICC. Specifically, the Commission believes that ICC's
proposal to clear the new contracts pursuant to ICC's existing margin
and guaranty fund methodology, operational and managerial procedures,
settlement procedures and default management policies is designed to
promote the prompt and accurate clearance and settlement of securities
transactions and derivative agreements, contracts and transactions
cleared by ICC, to assure the safeguarding of securities and funds in
the custody or control of ICC, and to protect investors and the public
interest, consistent with Section 17A(b)(3)(F) of the Act.\10\
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\8\ 15 U.S.C. 78q-1.
\9\ 17 CFR 240.17Ad-22.
\10\ 15 U.S.C. 78q-1(b)(3)(F).
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IV. Accelerated Approval of Proposed Rule Change as Modified by
Amendment No. 1
As discussed above, ICC submitted Amendment No. 1 to the proposed
rule change to removing Ukraine from the proposed list of the
Additional SES Contracts. The Commission believes that the modification
by Amendment No. 1 to the Initial Rule Filing is consistent with the
safeguarding of securities and funds in the custody or control of ICC
or for which it is responsible, and the protection of investors and the
public interest, within the meaning of Section 17A(b)(3)(F) of the Act
\11\. Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2)(C)(iii) of the Act \12\, to approve the proposed rule change,
as modified by Amendment No. 1, prior to the thirtieth day after the
date of publication of notice of Amendment No. 1 in the Federal
Register.
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\11\ 15 U.S.C. 78q-1(b)(3)(F).
\12\ 15 U.S.C. 78s(b)(2)(C)(iii).
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V. Solicitation of Comments on Amendment No. 1
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether Amendment No. 1
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 No. SR-ICC-2015-003 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC, 21049-1090.
All submissions should refer to File Number SR-ICC-2015-003. 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 or 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of ICC and on ICC's Web
site at https://www.theice.com/clear-credit/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-ICC-2015-003 and
should be submitted on or before April 22, 2015.
VI. Conclusion
On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the
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Act and in particular with the requirements of Section 17A of the Act
\13\ and the rules and regulations thereunder.
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\13\ 15 U.S.C. 78q-1.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\14\ that the proposed rule change (SR-ICC-2015-003), as modified
by Amendment No. 1, be, and hereby is, approved on an accelerated
basis.\15\
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\14\ 15 U.S.C. 78s(b)(2).
\15\ 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.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-07367 Filed 3-31-15; 8:45 am]
BILLING CODE 8011-01-P