Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 71493 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(4)(i). 

5See generally FCA Policy Statement No. PS14/ 

9, Review of the Client Assets Regime for 

Investment Business (June 2014). 

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 

offices 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– 

NASDAQ–2014–110, and should be 

submitted on or before December 23, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28316 Filed 12–1–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73690; File No. SR–ICEEU– 

2014–24] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change to Clearing 

Rules Relating to CASS Requirements 

November 25, 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 November 

19, 2014, ICE Clear Europe Limited 

(‘‘ICE Clear Europe’’ or ‘‘Clearing 

House’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change described in 

Items I, II and III below, which Items 

have been primarily prepared by ICE 

Clear Europe. ICE Clear Europe filed the 

proposal pursuant to Section 19(b)(3)(A) 

of the Act,3 and Rule 19b–4(f)(4)(i) 4

thereunder, so that the proposal was 

effective upon filing with the 

Commission. 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 

proposed rule change is to implement 

certain requirements under the U.K. 

client money rules applicable to certain 

classes of customer accounts of Clearing 

Members. 

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 

ICE Clear Europe submits certain 

proposed amendments to its Rules in 

connection with revised client money 

and client asset (collectively, ‘‘client 

money’’) requirements adopted by the 

U.K. Financial Conduct Authority (the 

‘‘FCA’’) in the U.K. Client Asset 

Sourcebook (‘‘CASS’’). Several of the 

revised FCA requirements will come 

into effect as of December 1, 2014, 

including those to which the rule 

changes discussed herein relate.5

Among numerous other changes, 

revised CASS 7.18.4R and 7.18.6R will 

require ICEU Clearing Members that are 

subject to the CASS requirements to 

identify to the Clearing House those 

accounts that contain client money for 

purposes of CASS through the use of a 

specified form of acknowledgment 

letter. Such identification is intended to 

facilitate the proper segregation of client 

money at the Clearing House level. 

ICE Clear Europe’s existing Rules 

establish several categories of customer 

accounts for Non-FCM/BD Clearing 

Members. Certain account categories are 

intended for use with customer property 

subject to the FCA client money 

requirements; other account categories 

are not intended for use with such 

property. For example, the Segregated 

Customer Omnibus Account for F&O, 

Segregated Customer Omnibus Account 

for CDS and Segregated Customer 

Omnibus Account for FX are to be used 

for customers that provide assets to their 

Clearing Members that are subject to the 

FCA client money regime. In addition, 

Individually Segregated Sponsored 

Accounts and Margin-flow Co-mingled 

Accounts may be used for such 

customers. By contrast, Segregated 

TTFCA Customer Omnibus Accounts 

are not to be used for customers whose 

assets are subject to the FCA client 

money regime. To date, the Clearing 

House has identified such accounts for 

purposes of the client money rules 

pursuant to a Circular. The new FCA 

rules require such identification to be 

provided by the Clearing Member in a 

specified form. 

ICE Clear Europe proposes to adopt 

amendments to its Rules that implement 

the CASS acknowledgment letter 

requirement. Since the CASS rules 

themselves do not identify the accounts 

that should be subject to the 

requirement, the proposed amendments 

also specify the account categories for 

which acknowledgment letters should 

(and should not) be provided by 

Clearing Members. Specifically, ICE 

Clear Europe proposes to make 

amendments to Parts 1, 2 and 5 of the 

Rules. The proposed Rule amendments 

are described in detail as follows. 

The relevant portion of Rule 102(q), 

which specifies that certain provisions 

and documents relating to asset and 

account segregation apply to customer 

accounts, has been revised to refer 

specifically to the customer account 

categories for customers whose assets 

are subject to the FCA client money 

requirements (specifically, the 

Segregated Customer Omnibus 

Accounts for F&O, CDS and FX, as well 

as Individually Segregated Sponsored 

Accounts and Margin-flow Co-mingled 

Accounts). In addition, subparagraph 

(viii) thereof has been revised to refer to 

acknowledgement letters delivered to 

the Clearing House under CASS 7.18 

and countersigned by the Clearing 

House (in lieu of the prior Circular 

issued by the Clearing House relating to 

client money arrangements). The 

revisions also clarify that references to 

Rule 102(q) in the Rules and Procedures 

are deemed to include references to 

those provisions and documents 

referred to in subparagraphs (vii) and 

(viii) thereof. 


rljohnson on DSK3VPTVN1PROD with NOTICES
71494 Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 

6 15 U.S.C. 78q–1. 

7 17 CFR 240.17Ad–22. 

8 15 U.S.C. 78q–1(b)(3)(F). 

9 15 U.S.C. 78q–1(b)(3)(F). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(4)(i). 

In Rule 202(a), which establishes 

ongoing obligations of Clearing 

Members, new subparagraph (xxi) has 

been added. It requires that Clearing 

Members that are subject to CASS 7.18 

deliver to the Clearing House an 

acknowledgment letter in the required 

format for each of its Segregated 

Customer Omnibus Accounts, 

Individually Segregated Sponsored 

Accounts and Margin-flow Co-mingled 

Accounts which are treated by it as 

client transaction accounts under CASS 

7.18. 

In addition, Rule 203(a) has been 

amended to add a new subparagraph 

(xx), which provides that a Clearing 

Member that is subject to CASS 7.18 is 

not permitted to deliver an 

acknowledgment letter in respect of any 

Proprietary Account or Segregated 

TTFCA Customer Omnibus Account, as 

such accounts are not intended to be 

used for customers whose assets are 

subject to the FCA client money regime. 

In Rule 504(c), a new subparagraph 

(vi) has been added with respect to 

Clearing Members that are subject to 

CASS 7.18. Each such Clearing 

Members is deemed to represent that its 

Segregated Customer Omnibus 

Accounts only contain cash where the 

corresponding cash claim or receivable 

in the hands of the Clearing Member is 

treated by the Clearing Member as a 

client money claim or receivable, and 

only contain non-cash assets (resulting 

from a transfer into the Account by the 

Clearing Member) which the Clearing 

Member was entitled to treat as client 

assets prior to their transfer to the 

Clearing House. A similar 

representation applies to Individually 

Segregated Sponsored Accounts and 

Margin-flow Co-mingled Accounts 

which have been designated pursuant to 

a client money acknowledgment letter 

delivered by the Clearing Member. With 

respect to other Customer Accounts and 

Proprietary Accounts, the Clearing 

Member is deemed to represent that 

such accounts do not contain any 

property subject to the client money 

rules (i.e., cash where the corresponding 

cash claim or receivable in the hands of 

the Clearing Member is required to be 

treated as a client money claim, or any 

non-cash assets (resulting from a 

transfer into the account by the Clearing 

Member) which the Clearing Member 

was required to treat as client assets 

prior to their transfer to the Clearing 

House). A conforming change is also 

made in Rule 504(h) to refer to CASS 

acknowledgment letters provided and 

countersigned in accordance with Rule 

102(q). 

A typographical correction is also 

made in Rule 918(a)(viii)(B)(1). 

2. Statutory Basis 

ICE Clear Europe believes that the 

proposed amendment to the Rules and 

Procedures is consistent with the 

requirements of Section 17A of the Act 6

and the regulations thereunder 

applicable to it.7 Section 17A(b)(3)(F) of 

the Act 8 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, to assure the 

safeguarding of securities and funds 

which are in the custody or control of 

the clearing agency or for which it is 

responsible and to protect investors and 

the public interest. The proposed 

amendment is intended to facilitate the 

holding by the Clearing House of 

securities and funds that are subject to 

the U.K. client money regime under the 

CASS rules. Consistent with the existing 

customer account structure established 

in the ICE Clear Europe Rules, securities 

and funds subject to such rules are 

required to be maintained in certain 

categories of Customer Accounts. Under 

the revised CASS regulations, the 

Clearing Member is required to provide 

to the Clearing House an 

acknowledgment letter with respect to 

such assets and accounts. The proposed 

amendment is designed to implement 

this acknowledgment procedure, by 

requiring the proper acknowledgement 

letter for each relevant account category, 

and by prohibiting delivery of such a 

letter with respect to accounts not 

intended to hold client money. As such, 

ICE Clear Europe believes that the 

proposed changes will facilitate 

compliance with the CASS amendments 

and the UK client money requirements 

described above and are therefore 

consistent with the protection of 

investors and the public interest. As a 

result, the proposed changes are, in ICE 

Clear Europe’s view, consistent with the 

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

the Act.9

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

ICE Clear Europe does not believe the 

proposed change to the Rules discussed 

herein would have any adverse impact, 

or impose any burden, on competition 

not necessary or appropriate in 

furtherance of the purposes of the Act. 

The proposed amendment is intended to 

implement, at the Clearing House level, 

the revised client money requirements 

imposed under the CASS revisions. The 

amendment will thus apply uniformly 

across all Clearing Members that are 

subject to the CASS requirements. The 

additional requirements imposed by the 

rules on such Clearing Members are 

directly based on the CASS 

requirements applicable to them. 

Although the rules only affect Clearing 

Members that are subject to the CASS 

rules, that result follows from the 

particular regulatory status of such 

Clearing Members under applicable 

U.K. law. 

In any event, ICE Clear Europe does 

not believe the proposed amendment set 

out herein would materially affect 

access to clearing by Clearing Members 

or their customers, adversely affect 

competition among Clearing Members 

or adversely affect the market for 

clearing services or limit market 

participants’ choices for clearing 

transactions. Although the proposed 

amendment may impose additional 

compliance costs on certain Clearing 

Members, ICE Clear Europe believes that 

such costs result from the requirements 

imposed by the CASS revisions as 

discussed herein. Such costs also reflect 

the additional client money protections 

that apply under the CASS revisions. As 

a result, ICE Clear Europe does not 

believe that the proposed amendment to 

the Rules will impose any burden on 

competition not 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 have not been 

specifically solicited with respect to the 

Rule change set out herein. ICE Clear 

Europe will notify the Commission of 

any additional written comments 

received by ICE Clear Europe. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A) 10 of the Act and Rule 19b– 

4(f)(4)(i) 11 thereunder because the 

proposed amendment effects a change 

in an existing service of a registered 

clearing agency that does not adversely 

affect the safeguarding of securities or 

funds in the custody or control of the 

clearing agency or for which it is 

responsible and does not significantly 

affect the respective rights or obligations 

of the clearing agency or persons using 

the service, within the meaning of Rule 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 71495 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 ‘‘Operational risk’’ is defined in the ICC 

Operational Risk Management Framework as the 

risk that deficiencies in information systems, 

internal processes, personnel, or disruptions from 

external events will result in the reduction, 

deterioration, or breakdown of services. 

19b–4(f)(4)(i). At any time within 60 

days of the filing of the 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. 

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–2014–24 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–ICEEU–2014–24. 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/clear-europe/

regulation#rule-filings. 

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–ICEEU2014–24 and should 

be submitted on or before December 23, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28322 Filed 12–1–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73684; File No. SR–ICC– 

2014–19] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Notice of Filing of 

Proposed Rule Change to Formalize 

the ICC Operational Risk Management 

Framework 

November 25, 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 November 

18, 2014, ICE Clear Credit LLC (‘‘ICC’’) 

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 ICC. 

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 

proposed rule change is to update and 

formalize ICC’s Operational Risk 

Management Framework. These 

revisions do not require any changes to 

the ICC Clearing Rules (‘‘Rules’’). 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, ICC 

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. ICC 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 

ICC proposes to update and formalize 

the ICC Operational Risk Management 

Framework. 

ICC believes such revisions will 

facilitate the prompt and accurate 

clearance and settlement of securities 

transactions and derivative agreements, 

contracts, and transactions for which it 

is responsible. The proposed revisions 

are described in detail as follows. 

The ICC Operational Risk 

Management Framework is one of 

several documents that establish the ICC 

Risk Management Framework. As a 

central counterparty, ICC occupies an 

important place in the clearing of credit 

default swaps and faces operational 

risks related to the functioning of both 

personnel and systems. The ICC 

Operational Risk Management 

Framework creates a program of risk 

assessment and oversight designed to 

identify, monitor and manage plausible 

sources of operational risk.3 The 

operational risk program established by 

the Operational Risk Management 

Framework includes pro-active risk 

identification and mitigation, along with 

timely management and reporting of 

operational performance measures. The 

program applies to all ICC activities, 

groups, functions and locations and is 

also designed to evaluate and mitigate 

operations risk presented to ICC by its 

partners, related entities, and vendors. 

The Operational Risk Framework 

provides the Operational Risk Manager 

with the full responsibility and 

authority to develop and enforce, in 

consultation with the ICC Board and 

appropriate members of senior 

management, the operational risk 

program. The ICC Board retains 

responsibility for oversight of ICC’s 

operational risk management program. 

The Operational Risk Manager is the 

owner of the Operational Risk 

Management Framework document, and 

the initial document and any material 

amendments require review and 

approval by the appropriate members of 

senior management and the ICC Board. 

The Operational Risk Manager reports to 

the Chief Compliance Officer who 

reports directly to the ICC Board. 


rljohnson on DSK3VPTVN1PROD with NOTICES