25522 Federal Register / Vol. 77, No. 83 / Monday, April 30, 2012 / Notices 

1 15 U.S.C. 78s(b)(1). 

2Securities Exchange Act Release No. 34–66517 

(March 6, 2012), 77 FR 14578 (March 12, 2012). 

3The Initial Payment is an obligation by either 

counterparty to make an upfront payment 

established at the time the contract is executed. See 

ICE Clear Credit Clearing Rules, Section 301(b). 

4 15 U.S.C. 78s(b)(2)(B). 

5 15 U.S.C. 78q–1(b)(3)(F). 

6 15 U.S.C. 78q–1. 

7 15 U.S.C. 78s(b)(2). 

8 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). 

9 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 15822 

(March 12, 2012), 77 FR 15822 (March 16, 2012). 

contact: The Office of the Secretary at 

(202) 551–5400. 

Dated: April 26, 2012 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–10512 Filed 4–26–12; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66853; File No. SR–ICC– 

2012–02] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Order Approving 

Proposed Rule Change to Provide for 

a T+1 Settlement of the Initial Payment 

Related to the CDS Contracts Cleared 

by ICE Clear Credit LLC 

April 24, 2012. 

I. Introduction 

On March 1, 2012, ICE Clear Credit 

LLC (‘‘ICC’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change SR–ICC–2012–02 pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’).1 The 

proposed rule change was published for 

comment in the Federal Register on 

March 12, 2012.2 The Commission 

received no comment letters. For the 

reasons discussed below, the 

Commission is granting approval of the 

proposed rule change. 

II. Description 

ICC proposed rule amendments that 

were intended to modify the terms of 

each of the various CDS Contracts 

cleared by ICC (CDX.NA Untranched 

Contracts, Standard North American 

Corporate (‘‘SNAC’’) Single Name 

Contracts and Standard Emerging 

Sovereign (‘‘SES’’) Single Name 

Contracts) to make the Initial Payment 3

date the first business day immediately 

following the trade date, provided that 

with respect to CDS Contracts that are 

accepted for clearing after the trade 

date, the Initial Payment date will be the 

date that is the first business day 

following the date when the CDS 

Contract is accepted for clearing. The 

Initial Payment under a CDS Contract is 

established at the time the contract is 

executed and may be payable from 

either the protection buyer to the 

protection seller or vice versa. Under 

the current ICC Rules (by way of the 

incorporated ISDA Credit Derivatives 

Definitions), and consistent with 

practice in the market for uncleared 

credit default swaps, the Initial Payment 

is required to be made on the third 

business day following the trade date 

(the execution date). ICC proposed to 

add the definition of Initial Payment 

Date to its Clearing Rules to provide 

instead that the Initial Payment is to be 

made on the first business day following 

the trade date (or, if the transaction is 

accepted for clearing after the trade 

date, the Initial Payment is to be made 

on the first business day following the 

date of acceptance for clearing). ICC 

believes that this change from ‘‘T+3’’ 

settlement to ‘‘T+1’’ settlement for the 

Initial Payment will facilitate customerrelated clearing. In addition, this change 

will improve margin efficiency (as 

margin requirements will no longer 

need to take into account the additional 

risk from a T+3 as opposed to a T+1 

settlement rule). 

The other proposed changes in the 

ICC Rules reflect updates to crossreferences and defined terms and 

similar drafting clarifications, and do 

not affect the substance of the ICC Rules 

or cleared products. 

III. Discussion 

Section 19(b)(2)(B) of the Act 4 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 5 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. 

Because the proposed rule change 

will accelerate the Initial Payment date, 

it will improve margin efficiency (as 

margin requirements will no longer 

need to take into account the additional 

risk from a T+3 as opposed to a T+1 

settlement rule) thereby promoting the 

prompt and accurate clearance and 

settlement of derivative agreements, 

contracts, and transactions, and 

therefore is consistent with the 

requirements of Section 17A(b)(3)(F) of 

the Act. 

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 6

and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,7 that the 

proposed rule change (File No. SR–ICC– 

2012–02) be, and hereby is, approved.8

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–10307 Filed 4–27–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66856; File No. SR–FICC– 

2012–02] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Approving Proposed Rule Change 

Relating To Remove Functionality in 

the Government Securities Division’s 

Rules That Is No Longer Utilized by 

Participants 

April 25, 2012. 

I. Introduction 

On February 29, 2012, the Fixed 

Income Clearing Corporation (‘‘FICC’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–FICC–2012– 

02 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 2 thereunder. 

The proposed rule change was 

published for comment in the Federal 

Register on March 16, 2012.3 The 

Commission received no comment 

letters on the proposed rule change. 

This order approves the proposed rule 

change. 

II. Description 

This rule change revises certain rules 

of the Government Securities Division 

(‘‘GSD’’) to eliminate references to 

functions or classifications that are 

either technologically obsolete or no 

longer utilized by GSD’s participants. 

mstockstill on DSK4VPTVN1PROD with NOTICES