24546 Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Notices 

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

2Securities Exchange Act Release No. 34–66500 

(March 1, 2012), 77 FR 13678 (March 7, 2012). 

3 ICC applies haircuts to US Treasuries to mitigate 

liquidity risk. The haircuts as of April 1, 2012 are: 

1.25% for US Treasuries maturing in less than one 

year, 2.5% for US Treasuries maturing in one to five 

years, 5.0% for US Treasuries maturing in five to 

ten years, and 10.0% for US Treasuries maturing in 

more than ten years (available at: https:// 

www.theice.com/publicdocs/clear_credit/ 

ICE_Clear_Credit_Collateral_Management.pdf). 

4Currently at least 45% of house initial margin 

and the guaranty fund requirements must be posted 

in US dollar cash and the ICC contribution to the 

guaranty fund is in US dollar cash. Additionally, 

ICC requires all members to meet and maintain 

their minimum guaranty fund requirement deposit 

of $20 million in US dollar cash regardless of the 

amount of each member’s total guaranty fund 

requirement. In addition, in the event of immediate 

liquidity needs in the event of a member’s default, 

ICC may borrow (through IntercontinentalExchange, 

Inc.) up to an aggregate principal amount of $100 

million against IntercontinentalExchange, Inc.’s 

senior unsecured revolving credit facility. 

company, except as permitted by the 

order requested hereby. 

4. Notwithstanding sections 17(a) and 

17(d) of the Act, an affiliated person (as 

defined in section 2(a)(3) of the Act) of 

BHBC may engage in a transaction that 

otherwise would be prohibited by these 

sections with BHBC: 

(a) If such proposed transaction is first 

approved by a bankruptcy court on the 

basis that (i) the terms thereof, including 

the consideration to be paid or received, 

are reasonable and fair to BHBC, and (ii) 

the participation of BHBC in the 

proposed transaction will not be on a 

basis less advantageous to BHBC than 

that of other participants; and 

(b) In connection with each such 

transaction, BHBC shall inform the 

bankruptcy court of: (i) The identity of 

all of its affiliated persons who are 

parties to, or have a direct or indirect 

financial interest in, the transaction; (ii) 

the nature of the affiliation; and (iii) the 

financial interests of such persons in the 

transaction. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–9772 Filed 4–23–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting; Notice 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, April 26, 2012 at 2 p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Walter, as duty officer, 

voted to consider the items listed for the 

Closed Meeting in a closed session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, April 

26, 2012 will be: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Other matters relating to enforcement 

proceedings; and 

An opinion. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: The Office of the Secretary at 

(202) 551–5400. 

Dated: April 19, 2012. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–9933 Filed 4–20–12; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66825; File No. SR–ICC– 

2012–01] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Order Approving 

Proposed Rule To Provide That One 

Hundred Percent (100%) of the Initial 

Margin Requirement for Client-Related 

Positions Cleared in a Clearing 

Participant’s Customer Account Origin 

May Be Satisfied by a Clearing 

Participant Utilizing US Treasuries 

April 18, 2012. 

I. Introduction 

On February 17, 2012, ICE Clear 

Credit LLC (‘‘ICC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change SR–ICC–2012–01 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 7, 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 

This rule change will allow clearing 

participants to satisfy the initial marginrelated liquidity requirements for clientrelated positions cleared in a clearing 

participant’s customer account origin by 

posting US Treasuries. 

The proposed rule changes provide 

that one hundred percent (100%) of the 

initial margin requirement for clientrelated positions cleared in a clearing 

participant’s customer account origin 

may be satisfied by the clearing 

participant utilizing US Treasuries.3

The ICC rules currently provide that 

for all accounts at least forty-five 

percent (45%) of initial margin must be 

posted in US dollar cash. The next 

twenty percent (20%) must be posted in 

US dollar cash or US Treasuries. The 

remaining thirty-five percent (35%) 

must be posted in US dollar cash or US 

Treasuries or G7 cash. 

The proposed rules provide that at 

least sixty-five percent (65%) of the 

initial margin requirement for clientrelated positions cleared in a clearing 

participant’s customer account origin 

must be posted in US dollar 

denominated assets (US dollar cash 

and/or US Treasuries) and the 

remaining thirty-five percent (35%) 

must be posted in US dollar cash, US 

Treasuries, or G7 cash. The proposed 

changes will apply only to the initial 

margin liquidity requirements 

associated with the initial margin 

requirement for client-related positions 

cleared in a clearing participant’s 

customer account origin. The proposed 

changes will not apply to the ICC 

liquidity requirements for house initial 

margin and the guaranty fund. 

The proposed rule changes are 

intended to facilitate client-related 

clearing. Customers of ICC’s clearing 

participants have indicated that the 

current US dollar cash liquidity 

requirement is too restrictive and serves 

as a barrier to clearing. The proposed 

rule changes are consistent with the 

recently promulgated CFTC regulation 

39.11(e)(1) that provides that the CFTC’s 

‘‘cash’’ liquidity requirement includes 

US Treasury obligations. ICC routinely 

monitors its potential liquidity needs 

and reevaluates its liquidity 

requirements to ensure that it has 

sufficient intraday liquidity to manage 

cash payments in the event of a member 

default.4

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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Notices 24547 

5 15 U.S.C. 78s(b)(2)(B). 

6 15 U.S.C. 78q–1(b)(3)(F). 

7 15 U.S.C. 78q–1. 

8 15 U.S.C. 78s(b)(2). 

9 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). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

III. Discussion 

Section 19(b)(2)(B) of the Act 5 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 6 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. 

The proposed rule change is intended 

to facilitate client-related clearing. 

Because the proposed rule change will 

expand the use of US Treasuries for the 

initial margin requirement for clientrelated positions cleared in a clearing 

participant’s customer account origin, it 

will help remove certain barriers to 

client-related clearing, 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 7

and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (File No. SR–ICC– 

2012–01) be, and hereby is, approved.9

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–9769 Filed 4–23–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66827; File No. SR–ISE– 

2012–26] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing of Proposed Rule 

Change To List and Trade Option 

Contracts Overlying 10 Shares of a 

Security 

April 18, 2012. 

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 April 9, 

2012, International Securities Exchange, 

LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to list and 

trade option contracts overlying 10 

shares of a security (‘‘Mini Options’’). 

The text of the proposed rule change is 

available on the Exchange’s Internet 

Web site at http://www.ise.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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. 

The self-regulatory organization has 

prepared summaries, set forth in 

sections A, B and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Pursuant to ISE Rule 502, the 

Exchange currently lists and trades 

standardized options contracts on a 

number of equities and ExchangeTraded Fund Shares (‘‘ETFs’’), each 

with a unit of trading of 100 shares. The 

purpose of this proposed rule change is 

to expand investors’ choices by listing 

and trading option contracts on a select 

number of high-priced and actively 

traded securities, each with a unit of 

trading ten times lower than those of the 

regular sized option contracts, or 10 

shares. Specifically, the Exchange 

proposes to adopt Supplementary 

Material .12(a) to ISE Rule 504, which 

states that after an option class on a 

stock or Exchange-Traded Fund Share 

with a 100 share deliverable has been 

approved for listing and trading on the 

Exchange, series of option contracts 

with a 10 share deliverable on that stock 

or Exchange-Traded Fund Share may be 

listed for all expirations opened for 

trading on the Exchange. The Exchange 

further proposes that Mini Options may 

only be listed on stocks and ExchangeTraded Fund Shares that meet the 

following criteria, at the time of listing: 

(a) The industry average daily options 

volume over the previous three calendar 

months is at least 10,000 contracts, and 

(b) the price of the underlying security 

is at least $150. 

The Exchange notes that as a result of 

the proposed listing criteria, only a 

handful of securities, ones that have 

significant options liquidity, will be 

eligible to have Mini Options listed on 

them. Specifically, pursuant to the 

listing criteria established by the 

Exchange for Mini Options, the 

following securities currently qualify to 

have Mini Options listed: Apple, Inc., 

(AAPL), SPDR Gold Trust (GLD), 

Google, Inc. (GOOG), Amazon, Inc. 

(AMZN), International Business 

Machines (IBM), and Priceline.com, Inc. 

(PCLN). The Exchange believes that 

Mini Options will appeal to retail 

investors who may not currently be able 

to participate in the trading of options 

on such high priced securities. 

Except for the difference in the 

deliverable of shares, the proposed Mini 

Options would have the same terms and 

contract characteristics as regular sized 

equity and ETF options, including 

exercise style. All existing Exchange 

rules applicable to options on equities 

and ETFs would apply to Mini Options, 

except with respect to position and 

exercise limits and hedge exemptions to 

those position limits, which would be 

tailored for the smaller size. Pursuant to 

proposed amendments to Rule 412, 

position limits applicable to the regular 

sized option contract will also apply to 

the Mini Options on the same 

underlying security, with 10 Mini 

Option contracts counting as one regular 

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