[Federal Register Volume 88, Number 219 (Wednesday, November 15, 2023)]
[Notices]
[Pages 78428-78430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25218]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98902; File No. 4-809]


Order Granting ICE Clear Europe Limited's Request To Withdraw 
From Registration as a Clearing Agency

November 9, 2023.

I. Introduction

    On August 10, 2023, ICE Clear Europe Limited (``ICE Clear Europe'') 
filed with the Securities and Exchange Commission (``Commission'') a 
written request (the ``Written Request'') \1\ to withdraw from 
registration as a clearing agency under section 17A of the Securities 
Exchange Act of 1934 (the ``Exchange Act'').\2\ ICE Clear Europe also 
requested the withdrawal of an exemption related to the clearance and 
settlement of certain futures and options contracts.\3\ The Commission 
published notice of ICE Clear Europe's request in the Federal Register 
on September 14, 2023, to solicit comments from interested persons.\4\ 
The Commission received no comments regarding the request. For the 
reasons discussed below, the Commission is granting ICE Clear Europe's 
requests and requiring ICE Clear Europe to retain and produce upon 
request certain records.
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    \1\ See Letter from Hester Serafini, President, ICE Clear 
Europe, to Vanessa Countryman, Secretary, Commission, dated Aug. 10, 
2023.
    \2\ 15 U.S.C. 78q-1.
    \3\ See Notice of Withdrawal Request, infra at note 4, 88 FR at 
63176.
    \4\ Securities Exchange Act Release No. 98339 (Sept. 8, 2023), 
88 FR 63173 (Sept. 14, 2023) (File No. 4-809) (``Notice of 
Withdrawal Request'').
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II. Discussion and Commission Findings

    ICE Clear Europe is registered with the Commission as a clearing 
agency under section 17A of the Exchange Act solely for the purpose of 
clearing

[[Page 78429]]

security-based swaps (``SBS'').\5\ ICE Clear Europe also is authorized 
as a recognized clearing house under United Kingdom (``UK'') law; \6\ 
recognized as a third-country central counterparty under the European 
Market Infrastructure Regulation; \7\ registered as a derivatives 
clearing organization under the Commodity Exchange Act; \8\ recognized 
as a foreign central counterparty under the Swiss Financial Market 
Infrastructure Act; \9\ and recognized as a remote clearing house in 
the Abu Dhabi Global Market.\10\ ICE Clear Europe provides clearing and 
settlement services for two primary categories of derivative contracts: 
(1) exchange-traded futures and options contracts traded on the ICE 
Futures Europe, ICE Futures U.S., ICE Endex and ICE Futures Abu Dhabi 
markets (the ``F&O Business''); and (2) over-the-counter index and 
single-name credit default swap (``CDS'') contracts (the ``CDS 
Business'').
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    \5\ See 15 U.S.C. 78q-1. Pursuant to section 17A(l) of the 
Exchange Act, ICE Clear Europe became ``deemed registered'' as a 
clearing agency as part of its CDS Business. See Amendment to Rule 
Filing Requirements for Dually-Registered Clearing Agencies, 
Securities Exchange Act Release No. 69284 (Apr. 3, 2013), 78 FR 
21046, 21047 & n.20 (Apr. 9, 2013) (File No. S7-29-11). ``Clearing 
agency'' is defined in section 3(a)(23)(A) of the Exchange Act as, 
in relevant part, ``any person who acts as an intermediary in making 
payments or deliveries or both in connection with transactions in 
securities or who provides facilities for comparison of data 
respecting the terms of settlement of securities transactions, to 
reduce the number of settlements of securities transactions, or for 
the allocation of securities settlement responsibilities.'' 15 
U.S.C. 78c(a)(23)(A).
    \6\ See UK Financial Services and Markets Act of 2000 c. 8, 
available at https://www.legislation.gov.uk/ukpga/2000/8/contents.
    \7\ See Regulation (EU) No 648/2012 of the European Parliament 
and of the Council of 4 July 2012 on OTC derivatives, central 
counterparties and trade repositories.
    \8\ See 7 U.S.C. 7a-1.
    \9\ See Federal Act on Financial Market Infrastructures and 
Market Conduct in Securities and Derivatives Trading of 19 June 
2015.
    \10\ See Abu Dhabi Global Market Financial Services and Markets 
Regulations 2015, available at https://en.adgm.thomsonreuters.com/rulebook/financial-services-and-markets-regulations-2015-0.
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    In June 2022, by circular published on its website, ICE Clear 
Europe publicly announced its intention to terminate its CDS Business 
in 2023, including its clearing of SBS.\11\ In the Written Request 
subsequently filed with the Commission, ICE Clear Europe represented 
that it would no longer accept CDS contracts for clearing after close 
of business on October 26, 2023, and would subsequently terminate and 
settle any open CDS positions.\12\ ICE Clear Europe represented further 
that it would settle all final amounts owed to or by each Clearing 
Member by November 7, 2023, and that it will not seek to engage in 
securities clearing activity relating to security-based swaps in 
reliance on any deemed registered status pursuant to section 17A(l) of 
the Exchange Act.\13\ ICE Clear Europe therefore submitted its request 
for withdrawal of its clearing agency registration pursuant to section 
19(a)(3) of the Exchange Act, which states that a self-regulatory 
organization may ``withdraw from registration by filing a written 
notice of withdrawal with the Commission,'' upon such terms and 
conditions as the Commission, by rule, deems necessary or appropriate 
in the public interest or for the protection of investors.\14\
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    \11\ See Cessation of Clearing of CDS Contracts, Circular C22/
076 (June 30, 2022), available at https://www.theice.com/publicdocs/clear_europe/circulars/C22076.pdf (setting Mar. 31, 2023 as the 
Withdrawal Date); Cessation of Clearing of CDS Contracts: 
Postponement of Withdrawal Date, Circular C22/109 (Sept. 26, 2022), 
available at https://www.theice.com/publicdocs/clear_europe/circulars/C22109.pdf (postponing Withdrawal Date to Oct. 27, 2023 in 
light of suggestions from CDS market participants).
    \12\ See Notice of Withdrawal Request, 88 FR at 63175.
    \13\ See Notice of Withdrawal Request, 88 FR at 63175-76. See 
also 15 U.S.C. 78q-1(l). ICE Clear Europe further represents that if 
an affiliate of ICE Clear Europe seeks to clear SBS or another 
securities product, such affiliate would do so after registering 
with the Commission pursuant to the process set forth in Commission 
Rule 17Ab2-1. See Notice of Withdrawal Request, 88 FR at 63176. See 
also 17 CFR 240.17Ab2-1.
    \14\ See Notice of Withdrawal Request, 88 FR at 63176; see also 
15 U.S.C. 78s(a)(3).
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    ICE Clear Europe also requested the withdrawal of an exemption it 
was previously granted related to the clearance and settlement of 
certain futures and options contracts.\15\ In 2013, the Commission 
exempted ICE Clear Europe from clearing agency registration under 
section 17A(b) of the Exchange Act and Rule 17Ab2-1 \16\ thereunder in 
connection with ICE Clear Europe's clearing of certain futures and 
options contracts on underlying U.S. equity securities (the 
``Securities Product Exemption'').\17\ ICE Clear Europe represents that 
it does not currently clear any equity options or single stock futures 
on U.S. securities,\18\ and that its rules are designed to prohibit ICE 
Clear Europe from clearing futures or options on underlying U.S. 
securities for U.S. persons.\19\ ICE Clear Europe believes that the 
Securities Product Exemption will not be necessary for ICE Clear 
Europe's continued operation of the F&O Business, and therefore has 
requested that the Commission terminate the exemption.\20\
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    \15\ See Notice of Withdrawal Request, 88 FR at 63176.
    \16\ 15 U.S.C. 78q-1(b) and 17 CFR 240.17Ab2-1.
    \17\ See Order Pursuant to section 17A of the Securities 
Exchange Act of 1934 Granting Exemption from the Clearing Agency 
Registration Requirement Under section 17A(b) of the Exchange Act 
for ICE Clear Europe Limited in Connection with its Proposal to 
Clear Contracts Traded on the LIFFE Administration and Management 
Market, Exchange Act Release No. 69872 (June 27, 2013), 78 FR 40220 
(July 3, 2013).
    \18\ See Notice of Withdrawal Request, 88 FR at 63176 n.36.
    \19\ See id.; ICE Clear Europe Rule 207(g).
    \20\ See Notice of Withdrawal Request, 88 FR at 63176.
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    On November 7, 2023, ICE Clear Europe confirmed to the Commission 
that it stopped accepting CDS contracts as of close-of-business on 
October 26, 2023, closed-out all CDS positions on October 27, 2023, 
returned collateral related to CDS positions, and completed final 
settlement of amounts owed to or from members related to ICE Clear 
Europe's CDS Business on November 7, 2023.\21\ It also re-confirmed the 
representations in the Written Request regarding record-keeping, 
record-production, the settlement of existing claims, and the lack of 
potential for future claims against it resulting from its CDS 
Business.\22\
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    \21\ See Letter from Hester Serafini, President, ICE Clear 
Europe, to Vanessa Countryman, Secretary, Securities and Exchange 
Commission, dated Nov. 7, 2023 (``Confirmation Letter'').
    \22\ See Confirmation Letter at 2.
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    Based upon the representations made by ICE Clear Europe to the 
Commission, the Commission has determined that granting ICE Clear 
Europe's requests to (i) withdraw its clearing agency registration and 
(ii) terminate the Securities Product Exemption are appropriate. ICE 
Clear Europe represents it is no longer performing actions that require 
registration as a clearing agency under section 17A of the Exchange Act 
and will not seek to engage in securities clearing activity in reliance 
on any ``deemed registered'' status pursuant to section 17A(l) of the 
Exchange Act.\23\ In addition, ICE Clear Europe has provided specific 
assurances regarding record-keeping, record-production, and both the 
settlement of existing, and lack of potential for future, claims 
against it resulting from its CDS Business. Specifically, ICE Clear 
Europe confirmed that all known claims against it in connection with 
the CDS Business were settled by November 7, 2023, and that ICE Clear 
Europe is not aware of any potential future claims against it in 
connection with the CDS Business.\24\ ICE Clear Europe also confirmed 
that, for a period of five years following its withdrawal from 
registration as a clearing agency, it will retain and maintain all 
documents, books, and

[[Page 78430]]

records in accordance with Rules 17a-1(a) and (b) under the Exchange 
Act and will furnish such information upon request in accordance Rule 
17a-1(c) under the Exchange Act.\25\ As noted above, no comments were 
received in response to the published notice of ICE Clear Europe's 
Written Request to withdraw from registration as a clearing agency, 
which included ICE Clear Europe's representations regarding maintenance 
of records and record production, as well as ICE Clear Europe's 
representations regarding any potential for claims associated with its 
clearing agency registration. As further noted above, ICE Clear Europe 
reconfirmed, in writing, the representations made in its Written 
Request.
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    \23\ See Confirmation Letter at 2; 15 U.S.C. 78q-1(l).
    \24\ See Confirmation Letter at 2.
    \25\ See Confirmation Letter at 2.
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III. Conclusion

    It is therefore ordered, pursuant to section 19(a)(3) of the 
Exchange Act,\26\ that:
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    \26\ 15 U.S.C. 78s(a)(3).
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    (1) Effective as of the date of this Order, ICE Clear Europe's 
registration as a clearing agency under section 17A of the Exchange Act 
is withdrawn;
    (2) Effective as of the date of this Order, the exemption under 
section 17A(b) of the Exchange Act in connection with ICE Clear 
Europe's proposal to clear contracts traded on the LIFFE Administration 
and Management Market is terminated; \27\ and
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    \27\ 15 U.S.C. 78q-1(b)
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    (3) For a period of five years from the effective date of 
withdrawal of registration as a clearing agency, ICE Clear Europe will 
maintain all the records required to be maintained pursuant to Rule 
17A-1(a) and (b) which are in ICE Clear Europe's possession and will 
produce such records upon the request of any representative of the 
Commission, in accordance with Commission Rule 17a-1(c).\28\
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    \28\ 17 CFR 240.17a-1(a), (b), and (c).

    By the Commission.
Sherry Haywood,
Assistant Secretary.
[FR Doc. 2023-25218 Filed 11-14-23; 8:45 am]
BILLING CODE 8011-01-P