Federal Register / Vol. 80, No. 28 / Wednesday, February 11, 2015 / Notices 7661 

12For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

13 15 U.S.C. 78s(b)(2)(B). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 34– 

71920 (April 9, 2014), 79 FR 21331 (April 15, 2015) 

(File No. SR–ICEEU–2014–04) (order approving rule 

changes to clear Western European sovereign CDS 

contracts); Securities Exchange Act Release No. 34– 

73737 (December 4, 2014), 79 FR 73372 (December 

10, 2014) (File No. SR–ICEEU–2014–18) (order 

approving rule changes to clear additional Western 

European sovereign CDS contracts) (the ‘‘Prior WE 

Sovereigns Orders’’). 

compliance is comparable, though not 

identical, to the approach used by the 

New York Stock Exchange. Thus the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. Therefore, the 

Commission hereby waives the 

operative delay and designates the 

proposed rule change operative upon 

filing.12

At any time within 60 days of the 

filing of such 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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 13 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEMKT–2015–09 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–NYSEMKT–2015–09. 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 the 

filing also will be available for 

inspection and copying at the NYSE’s 

principal office and on its Internet Web 

site at www.nyse.com. 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– 

NYSEMKT–2015–09 and should be 

submitted on or before March 4, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–02747 Filed 2–10–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 74213; File No. SR–ICEEU– 

2015–004] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Notice of Filing 

of Proposed Rule Change Relating to 

Additional European Sovereign CDS 

Contracts 

February 5, 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 January 

27, 2015, ICE Clear Europe Limited 

(‘‘ICE Clear Europe’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared primarily by ICE Clear Europe. 

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 principal purpose of the change 

is to provide for the clearance of 

additional CDS contracts that are 

Western European sovereign CDS 

contracts referencing the Kingdom of 

the Netherlands, the Republic of 

Finland, the Kingdom of Sweden and 

the Kingdom of Denmark (the 

‘‘Additional WE Sovereign Contracts’’). 

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 

1. Purpose 

The purpose of the proposed rule 

change is for ICE Clear Europe to offer 

clearing of Western European sovereign 

CDS contracts referencing four 

additional reference entities: the 

Kingdom of the Netherlands, the 

Republic of Finland, the Kingdom of 

Sweden and the Kingdom of Denmark. 

ICE Clear Europe currently clears CDS 

contracts referencing six other Western 

European sovereigns: Ireland, the 

Republic of Italy, the Portuguese 

Republic, the Kingdom of Spain, the 

Kingdom of Belgium and the Republic 

of Austria.3 ICE Clear Europe believes 

clearance of the Additional WE 

Sovereign Contracts will benefit the 

markets for credit default swaps on 

Western European sovereigns by 

offering to market participants the 

benefits of clearing, including reduction 

in counterparty risk and safeguarding of 


tkelley on DSK3SPTVN1PROD with NOTICES
7662 Federal Register / Vol. 80, No. 28 / Wednesday, February 11, 2015 / Notices 

4For a description of previously approved 

changes to ICE Clear Europe’s risk management 

framework to accommodate clearing of Western 

European sovereign CDS contracts, see the Prior WE 

Sovereigns Orders. ICE Clear Europe has performed 

a variety of empirical analyses related to clearing 

of the Additional WE Sovereign Contracts under its 

margin methodology, including back tests and 

stress tests. 

5 15 U.S.C. 78q–1. 

6 17 CFR 240.17Ad–22. 

7 15 U.S.C. 78q–1(b)(3)(F). 

8 17 CFR 240.17Ad–22. 

9 17 CFR 240.17Ad–22(b)(2), (d)(14). 

10 17 CFR 240.17Ad–22(b)(3). 

11 17 CFR 240.17Ad–22(d)(4). 

12 17 CFR 240.17Ad–22(d)(5), (12) and (15). 

13 17 CFR 240.17Ad–22(d)(11). 

14 15 U.S.C. 78q–1(b)(3)(F); 17 CFR 240.17Ad– 

22(d)(8). 

margin assets pursuant to clearing house 

rules. 

The Additional WE Sovereign 

Contracts will constitute ‘‘Non-STEC 

Single Name Contracts’’ for purposes of 

the CDS Procedures and accordingly 

will be governed by Paragraph 10 of the 

CDS Procedures, consistent with 

treatment of the Western European 

sovereign CDS contracts currently 

cleared by ICE Clear Europe. Clearing of 

the Additional WE Sovereign Contracts 

will not require any changes to ICE 

Clear Europe’s existing Clearing Rules 

and Procedures. In addition, clearing of 

the Additional WE Sovereign Contracts 

will not require any changes in ICE 

Clear Europe’s risk management 

framework (including relevant policies) 

or margin model.4

2. Statutory Basis 

ICE Clear Europe believes that 

clearing of the proposed Additional WE 

Sovereign Contracts is consistent with 

the requirements of Section 17A of the 

Act 5 and regulations thereunder 

applicable to it, including the standards 

under Rule 17Ad–22.6 The Additional 

WE Sovereign Contracts are 

substantially similar to the other 

Western European sovereign CDS 

contracts currently cleared by ICE Clear 

Europe. The additional contracts will be 

cleared in the same manner as such 

other Western European sovereign CDS 

contracts, consistent with ICE Clear 

Europe’s existing clearing arrangements 

and related financial safeguards, 

protections, risk management policies 

and procedures, and margin 

methodology (including those 

enhancements for Western European 

sovereign contracts previously adopted 

and approved in the Prior WE 

Sovereigns Orders). In ICE Clear 

Europe’s view, clearing of the 

Additional WE Sovereign CDS 

contracts, under such terms and 

arrangements, is consistent with the 

prompt and accurate clearance of and 

settlement of securities transactions and 

derivative agreements, contracts and 

transactions cleared by ICE Clear 

Europe, the safeguarding of securities 

and funds in the custody or control of 

ICE Clear Europe and the protection of 

investors and the public interest, within 

the meaning of Section 17A(b)(3)(F) of 

the Act.7 Clearing of the Additional WE 

Sovereign Contracts will also satisfy the 

relevant requirements of Rule 17Ad– 

22,8 as discussed below. 

Financial Resources. ICE Clear Europe 

will apply its existing margin 

methodology for Western European 

sovereign CDS contracts to the 

Additional WE Sovereign Contracts. ICE 

Clear Europe believes that this model 

will provide sufficient margin to cover 

its credit exposure to its clearing 

members from clearing such contracts, 

consistent with the requirements of Rule 

17Ad–22(b)(2) and Rule 17Ad– 

22(d)(14).9 In addition, ICE Clear Europe 

believes the CDS Guaranty Fund, under 

its existing methodology, will, together 

with the required margin, provide 

sufficient financial resources to support 

the clearing of Additional WE Sovereign 

Contracts consistent with the 

requirements of Rule 17Ad–22(b)(3).10

Operational Resources. ICE Clear 

Europe will have the operational and 

managerial capacity to clear the 

Additional WE Sovereign Contracts as 

of the commencement of clearing, 

consistent with the requirements of Rule 

17Ad–22(d)(4).11 ICE Clear Europe 

believes that its existing systems used 

for sovereign CDS contracts are 

appropriately scalable to handle the 

clearing of the Additional WE Sovereign 

Contracts. 

Settlement. ICE Clear Europe will use 

its existing settlement procedures 

(including for physical settlements), 

account structures and approved 

financial institutions as used in other 

sovereign CDS clearing for the 

Additional WE Sovereign Contracts. ICE 

Clear Europe believes that clearing of 

the Additional WE Sovereign Contracts 

will therefore be consistent with the 

requirements of Rule 17Ad–22(d)(5), 

(12) and (15).12

Default Procedures. ICE Clear 

Europe’s existing Rules and default 

management policies and procedures for 

CDS will apply to the Additional WE 

Sovereign Contracts. ICE Clear Europe 

believes that the Rules and procedures 

allow for it to take timely action to 

contain losses and liquidity pressures 

and to continue meeting its obligations 

in the event of clearing member 

insolvencies or defaults, including in 

respect of Additional WE Sovereign 

Contracts, in accordance with Rule 

17Ad–22(d)(11).13

Governance. As discussed in further 

detail in the Prior WE Sovereigns 

Orders, although the margin model 

applicable to Western European 

sovereign CDS contracts, including the 

Additional WE Sovereign Contracts, 

may result in clearing members being 

subject to different margin charges 

based on their domicile and correlation 

with the underlying sovereign, ICE Clear 

Europe believes that the margin model 

properly aligns the margin requirements 

to the risks presented by particular 

clearing members. Moreover, the model 

operates without the need for ICE Clear 

Europe (or its management, Board or 

CDS Risk Committee) to exercise 

discretion concerning particular 

clearing members or the margin levels 

applicable to them. As a result, in ICE 

Clear Europe’s view, the clearing of 

such contracts does not result in unfair 

discrimination among clearing members 

within the meaning of Section 

17A(b)(3)(F) of the Act and Rule 17Ad– 

22(d)(8).14

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

ICE Clear Europe does not believe the 

proposed Additional WE Sovereign 

Contracts would have any impact, or 

impose any burden, on competition not 

necessary or appropriate in furtherance 

of the purpose of the Act. ICE Clear 

Europe does not anticipate that its 

commencement of clearing for the 

Additional WE Sovereign Contracts will 

adversely affect the trading market for 

those contracts or for CDS more 

generally. Specifically, allowing 

clearing of the Additional WE Sovereign 

Contracts will provide market 

participants with the additional choice 

to have their transactions in these types 

of contracts cleared, and should 

generally promote the further 

development of the market for these 

contracts. Moreover, ICE Clear Europe 

has established fair and objective 

criteria for eligibility to clear the 

Additional WE Sovereign Contracts, 

consistent with its criteria for other 

cleared CDS. 

Although clearance of Additional WE 

Sovereign Contracts may result in 

higher margin requirements for some 

clearing members as a result of the 

general wrong way risk component of 

the margin model, ICE Clear Europe 

believes that the model properly aligns 

margin requirements to the risks 

presented by such clearing members 

with respect to the Additional WE 

Sovereign Contracts. As a result, ICE 

Clear Europe is of the view that these 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 28 / Wednesday, February 11, 2015 / Notices 7663 

15 17 CFR 240.17Ad–22. 16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 73878 

(December 18, 2014), 79 FR 77579 (‘‘Notice’’). 

4See Notice, supra note 3 at 77579. 

5Proposed BOX Rule 7300(a)(1). 

6Proposed BOX Rule 7300(a)(2). 

7Proposed BOX Rule 7300(d). 

changes are necessary and appropriate 

in furtherance of the purpose of the Act 

and the Commission’s regulations 

thereunder, including the financial 

resources and risk management 

requirements of Rule 17Ad–22.15

Furthermore, ICE Clear Europe does not 

believe that any such increase in margin 

requirements would significantly affect 

the ability of clearing members or other 

market participants to continue to clear 

CDS, consistent with the risk 

management requirements of the 

clearing house, or otherwise limit 

market participants’ choices for 

selecting clearing services. Accordingly 

ICE Clear Europe does not believe that 

clearance of the Additional WE 

Sovereign Contracts will impose any 

burden on competition not necessary or 

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 

acceptance of the Additional WE 

Sovereign Contracts for clearing 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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) by order approve or disapprove 

the proposed rule change or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 rule-comments@

sec.gov. Please include File Number SR– 

ICEEU–2015–004 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–2015–004. 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 also will 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–2015–004 and 

should be submitted on or before March 

4, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–02751 Filed 2–10–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74210; File No. SR–BOX– 

2014–28] 

Self-Regulatory Organizations; BOX 

Options Exchange LLC; Order 

Approving Proposed Rule Change 

Adopt BOX Rule 7300 To Allow the 

Exchange To Trade Preferenced 

Orders 

February 5, 2015. 

I. Introduction 

On December 8, 2014, BOX Options 

Exchange LLC (‘‘BOX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

a proposed rule change pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 to permit BOX 

Options Participants (‘‘Participants’’) to 

submit orders for which a Market Maker 

is designated to receive an Preferred 

allocation on the Exchange 

(‘‘Preferenced Orders’’). The proposed 

rule change was published in the 

Federal Register on December 24, 

2014.3 This order approves the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

As described in more detail below, 

the Exchange proposes to adopt new 

BOX Rule 7300 to establish a program 

that will permit Participants to submit 

Preferenced Orders to Market Makers 

and for Maker Makers to receive 

Preferred allocations on such orders.4

As proposed, a Preferenced Order is any 

order, whether on a single options 

instrument or on a Complex Order 

Strategy, for which a Preferred Market 

Maker is designated with respect to 

such order, upon submission of such 

order to BOX.5 A Preferred Market 

Maker is a Market Maker designated as 

such by a Participant with respect to an 

order submitted by such Participant to 

BOX.6

All order types and designations 

available on BOX will be eligible to be 

entered as Preferenced Orders, except 

for Customer Cross Orders (which do 

not involve market makers) and 

Directed Orders (which relate to BOX’s 

PIP and COPIP matching algorithms).7


tkelley on DSK3SPTVN1PROD with NOTICES