Federal Register / Vol. 79, No. 213 / Tuesday, November 4, 2014 / Notices 65443 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 34–71920 (Apr. 

9, 2014) (File No. SR–ICEEU–2014–04); 79 FR 

21331 (Apr. 15, 2015) (order approving rule changes 

to clear other Western European sovereign CDS 

contracts) (the ‘‘Prior WE Sovereigns Order’’). 

to the benefit of investors and the 

marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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 (i) 

as the Commission may designate up to 

90 days of such date 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– 

NYSEArca–2014–120 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–NYSEArca–2014–120. 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 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. 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– 

NYSEArca–2014–120, and should be 

submitted on or before November 25, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26125 Filed 11–3–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73459; File No. SR–ICEEU– 

2014–18] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Notice of Filling 

of Proposed Rule Change To Provide 

for the Clearance of Additional 

Sovereign Contracts 

October 29, 2014. 

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 October 

20, 2014, ICE Clear Europe Limited 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed changes 

to the rules as described in Items I, II, 

and III below, which Items have been 

primarily prepared by ICE Clear Europe. 

The Commission is publishing this 

notice to solicit comments on the 

proposed changes to the rules 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 

Belgium and the Republic of Austria 

(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 

proposing the Additional WE Sovereign 

Contracts. 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 

The purpose of the proposed rule 

change is for ICE Clear Europe to offer 

clearing of Western European sovereign 

CDS contracts referencing two 

additional reference entities, the 

Kingdom of Belgium and the Republic 

of Austria. ICE Clear Europe currently 

clears CDS contracts referencing four 

other Western European sovereigns: 

Ireland, the Republic of Italy, the 

Portuguese Republic and the Kingdom 

of Spain.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 

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 


rmajette on DSK3VPTVN1PROD with NOTICES
65444 Federal Register / Vol. 79, No. 213 / Tuesday, November 4, 2014 / 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 Order. 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). 

15 17 CFR 240.17Ad–22. 

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 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 Order). 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 Order, 

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 

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 


rmajette on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 213 / Tuesday, November 4, 2014 / Notices 65445 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange notes that this proposal is only 

intended to be effective until the joint efforts by the 

exchanges to create uniform trade nullification and 

adjustment rules are approved and in effect. Once 

the uniform rule has been approved and is effective, 

the Exchange will amend its rules appropriately. 

4The Exchange notes that, as proposed, Rule 6.19 

[sic] will only apply to trades that were executed 

on the Exchange and, as such, any orders that were 

either fully or partially routed to, or executed, on 

another Exchange will not be subject to the 

Proposed Rule 531. 

5See Securities Exchange Act Release No. 72970 

(September 3, 2014), 79 FR 53498 (September 9, 

2014) (SR–CBOE–2014–066). 

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–2014–18 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–2014–18. 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 will also 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/notices/

Notices.shtml?regulatoryFilings. 

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–2014–18 and 

should be submitted on or before 

November 25, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26120 Filed 11–3–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73463; File No. SR–MIAX– 

2014–54] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Add Exchange Rule 531, 

Trade Nullification and Price 

Adjustment Procedure 

October 29, 2014. 

Pursuant to the provisions of 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 October 20, 2014, Miami 

International Securities Exchange LLC 

(‘‘MIAX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. 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 the Substance 

of the Proposed Rule Change 

The Exchange is filing a proposal to 

add Rule 531, Trade Nullification and 

Price Adjustment Procedure. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.miaxoptions.com/filter/ 

wotitle/rule_filing, at MIAX’s principal 

office, 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 

Exchange 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 

Exchange 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 

The Exchange proposes to add Rule 

531, Trade Nullification and Price 

Adjustment Procedure.3 As proposed, 

Rule 531 will allow for transactions to 

be nullified if both parties to the 

transaction agree to the nullification and 

allow the price of transaction [sic] and 

authorized by the Exchange.4 The 

proposal is based upon a recent filing of 

another options exchange.5

The Exchange proposes to add Rule 

531, ‘‘Trade Nullification and Price 

Adjustment Procedure,’’ which would: 

(a) Allow for any trades on the Exchange 


rmajette on DSK3VPTVN1PROD with NOTICES