Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 75 

12 15 U.S.C. 78s(b)(3)(A)(ii). 

13 17 CFR 240.19b–4(f)(2). 

14 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. 34–72941 (Nov. 

5, 2014), 79 FR 67213 (Nov. 12, 2014) (File No. SR– 

ICC–2014–14) (order approving rule change to clear 

other Western European sovereign CDS contracts) 

(the ‘‘Prior WES Order’’). 

4 Id. 

fees are only one factor in a total 

platform analysis. Some competitors 

have lower transactions fees and higher 

data fees, and others are vice versa. The 

market for this proprietary information 

is highly competitive and continually 

evolves as products develop and 

change. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments were neither 

solicited nor received. 

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)(ii) of the Act 12 and 

paragraph (f)(2) of Rule 19b–4 

thereunder.13 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– 

MIAX–2014–66 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–MIAX–2014–66. 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 principal 

office of MIAX. 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–MIAX– 

2014–66 and should be submitted on or 

before January 23, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30701 Filed 12–31–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73941; File No. SR–ICC– 

2014–21] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Notice of Filing of 

Proposed Rule Change To Provide for 

the Clearance of Additional Standard 

Western European Sovereign Single 

Names 

December 24, 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 December 

16, 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 purpose of the proposed rule 

change is to adopt rules that will 

provide the basis for ICC to clear 

additional credit default swap (‘‘CDS’’) 

contracts. Specifically, ICC is proposing 

to amend Section 26I of its Rules to 

provide for the clearance of additional 

Standard Western European Sovereign 

CDS contracts (collectively, ‘‘SWES 

Contracts’’). ICC has been approved to 

clear four SWES Contracts: The 

Republic of Ireland, the Italian 

Republic, the Portuguese Republic, and 

the Kingdom of Spain.3 The proposed 

changes to the ICC Rules would provide 

for the clearance of additional SWES 

Contracts, specifically the Kingdom of 

Belgium and the Republic of Austria. 

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 

The purpose of the proposed rule 

change is to adopt rules that will 

provide the basis for ICC to clear 

additional credit default swap contracts. 

ICC has been approved to clear four 

SWES Contracts: The Republic of 

Ireland, the Italian Republic, the 

Portuguese Republic, and the Kingdom 

of Spain.4 ICC proposes amending 

Subchapter 26I of its Rules to provide 

for the clearance of two additional 

SWES Contracts, specifically the 

Kingdom of Belgium and the Republic 

of Austria. These two additional SWES 

Contracts will be offered on the 2003 

and 2014 ISDA Credit Derivatives 

Definitions. The addition of these SWES 

Contracts will benefit the market for 

credit default swaps on Western 

European by providing market 


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76 Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 

5 15 U.S.C. 78q–1(b)(3)(F). 

6 Id. 

7 17 CFR 240.17Ad–22. 

8 17 CFR 240.17Ad–22(b)(2). 

9 17 CFR 240.17Ad–22(b)(3). 

10 17 CFR 240.17Ad–22(d)(4). 

11 17 CFR 240.17Ad–22(d)(5), (12) and (15). 

12 17 CFR 240.17Ad–22(d)(11). 

13 15 U.S.C. 78q–1(b)(3)(F); 17 CFR 240.17Ad– 

22(d)(8). 

14 17 CFR 240.17Ad–22. 

participants the benefits of clearing, 

including reduction in counterparty risk 

and safeguarding of margin assets 

pursuant to clearing house rules. 

Clearing of the additional SWES 

Contracts will not require any changes 

in ICC’s risk management framework 

(including relevant policies) or margin 

model. 

These additional SWES Contracts 

have terms consistent with the other 

SWES Contracts which ICC has been 

approved to clear and which will be 

governed by Subchapter 26I of the ICC 

rules, namely the Republic of Ireland, 

the Italian Republic, the Portuguese 

Republic, and the Kingdom of Spain. 

Minor revisions to Subchapter 26I 

(Standard Western European Sovereign 

(‘‘SWES’’) Single Name) are made to 

provide for clearing the additional 

SWES Contracts and described as 

follows. 

Rule 26I–102 is modified to include 

the Kingdom of Belgium and the 

Republic of Austria in the list of specific 

Eligible SWES Reference Entities to be 

cleared by ICC. 

Additionally, in ICC Rule 26D–102 

(Definitions), the definition of ‘‘Eligible 

SES Reference Entity’’ is modified to 

correct a typographical error and 

correctly identify the reference entity for 

a cleared product as Hungary (as 

opposed to the Republic of Hungary). 

Section 17A(b)(3)(F) of the Act 5

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 

clearance of additional SWES Contracts 

will allow market participants an 

increased ability to manage risk. ICC 

believes that acceptance of these new 

contracts, on the terms and conditions 

set out in the ICC Rules, is consistent 

with the prompt and accurate clearance 

of and settlement of securities 

transactions and derivative agreements, 

contracts and transactions cleared by 

ICC, the safeguarding of securities and 

funds in the custody or control of ICC, 

and the protection of investors and the 

public interest, within the meaning of 

Section 17A(b)(3)(F) of the Act.6

Clearing of the additional SWES 

Contracts will also satisfy the 

requirements of Rule 17Ad–22.7 In 

particular, in terms of financial 

resources, ICC will apply its existing 

margin methodology to the additional 

SWES Contracts. ICC 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).8 In addition, ICC 

believes its Guaranty Fund, under its 

existing methodology, will, together 

with the required margin, provide 

sufficient financial resources to support 

the clearing of the new contracts 

consistent with the requirements of Rule 

17Ad–22(b)(3).9 ICC also believes that 

its existing operational and managerial 

resources will be sufficient for clearing 

of the additional SWES Contracts, 

consistent with the requirements of Rule 

17Ad–22(d)(4),10 as the new contracts 

are similar from an operational 

perspective to existing SWES Contracts. 

Similarly, ICC will use its existing 

settlement procedures and account 

structures for the new contracts, 

consistent with the requirements of Rule 

17Ad–22(d)(5), (12) and (15) 11 as to the 

finality and accuracy of its daily 

settlement process and avoidance of the 

risk to ICC of settlement failures. 

Finally, ICC will apply its existing 

default management policies and 

procedures for the new contracts. ICC 

believes that these 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 in respect of the additional 

SWES Contracts, in accordance with 

Rule 17Ad–22(d)(11).12

As discussed in further detail in the 

Prior WES Order, although the margin 

model applicable to SWES Contracts, 

including the additional SWES 

Contracts, may result in Clearing 

Participants being subject to different 

margin charges based on their domicile 

and correlation with the underlying 

sovereign, ICC believes that the margin 

model properly aligns the margin 

requirements to the risks presented by 

particular Clearing Participants. 

Moreover, the model operates without 

the need for ICC (or its management, 

Board or Risk Committee) to exercise 

discretion concerning particular 

Clearing Participants or the margin 

levels applicable to them. As a result, in 

ICC’s view, the clearing of such 

contracts does not result in unfair 

discrimination among Clearing 

Participants within the meaning of 

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

17Ad–22(d)(8).13

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The additional SWES Contracts will 

be available to all ICC Participants for 

clearing. The clearing of these 

additional SWES Contracts by ICC does 

not preclude the offering of the 

additional SWES Contracts for clearing 

by other market participants. 

Although clearance of additional 

SWES Contracts may result in higher 

margin requirements for some Clearing 

Participants as a result of the general 

wrong way risk component of the 

margin model, ICC believes that the 

model properly aligns margin 

requirements to the risks presented by 

such clearing members with respect to 

the additional SWES Contracts. As a 

result, ICC 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–22.14

Furthermore, ICC does not believe that 

any such increase in margin 

requirements would significantly affect 

the ability of Clearing Participants 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, 

ICC does not believe that clearance of 

the additional SWES 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 

proposed rule change have not been 

solicited or received. ICC will notify the 

Commission of any written comments 

received by ICC. 

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 


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Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 77 

15 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)(ii). 

5Pursuant to a teleconference with CME’s 

counsel on December 19, 2014, staff in the Division 

of Trading and Markets has modified this sentence 

to insert references to the Agreement’s execution 

and implementation date. 

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– 

ICC–2014–21 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–ICC–2014–21. 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 Credit and on ICE 

Clear Credit’s Web site at https://

www.theice.com/clear-credit/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–ICC–2014–21 and should 

be submitted on or before January 23, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30700 Filed 12–31–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73937; File No. SR–CME– 

2014–18] 

Self-Regulatory Organizations; 

Chicago Mercantile Exchange Inc.; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change Regarding Certain Contractual 

Arrangements That Apply to its Overthe-Counter Credit Default Swap 

Clearing Offering 

December 24, 2014. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule 

19b–4 thereunder,2 notice is hereby 

given that on December 15, 2014, 

Chicago Mercantile Exchange Inc. 

(‘‘CME’’) filed with the Securities and 

Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change described in Items I, II and III, 

below, which Items have been primarily 

prepared by CME. CME filed the 

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

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

thereunder,4 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 

CME is proposing to make certain 

revenue sharing and governance 

changes related to certain contractual 

arrangements that apply to its over-thecounter credit default swap (‘‘OTC 

CDS’’) clearing offering. CME entered 

into this arrangement (the ‘‘Agreement’’) 

with a group of clearing members on 

June 30, 2012 and the proposed rule 

change has been implemented by CME 

since June 30, 2012.5

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

CME included statements concerning 

the purpose 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. CME 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 

CME is registered as a derivatives 

clearing organization with the 

Commodity Futures Trading 

Commission (‘‘CFTC’’) and operates a 

substantial business clearing futures and 

swaps contracts subject to the 

jurisdiction of the CFTC. CME is filing 

this proposed rule change with respect 

to the Agreement made with various 

third-party financial institutions 

(‘‘DFMs’’) relating to its OTC CDS 

clearing business. The Agreement 

incentivized the DFMs to support CME’s 

initial development of its OTC CDS 

clearing infrastructure and is designed 

to ensure that the DFMs continue their 

demonstrated commitment to CME’s 

ongoing CDS clearing efforts. The 

existing DFMs were selected based on 

their support in CME’s development of 

its clearing initiative, ability to provide 

liquidity, their client clearing and risk 

management expertise, as well as their 

willingness to test and generally support 

centralized clearing in CDS Contracts on 

an on-going basis. CME may invite other 

firms to join the Agreement in the future 

so long as such firms are among the top 

CDS clearing members by notional 

amount of CDS Contracts submitted to 

the Clearing House during any sixmonth period through June 2015 or are 

approved by a majority of the thenexisting DFMs. 

In summary, under the Agreement, 

the DFMs that satisfy their obligations 

under the Agreement will receive a 

portion of the clearing revenues and 

market data revenues generated in 

connection with CME’s clearing of 

certain specified CDS Contracts, will be 


asabaliauskas on DSK5VPTVN1PROD with NOTICES