Document ID: SEC-2023-0119-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe Ltd.
Posted Date: 2023-01-31T05:00Z

[Federal Register Volume 88, Number 20 (Tuesday, January 31, 2023)]
[Notices]
[Pages 6349-6351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01880]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96749; File No. SR-ICEEU-2023-002]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Amendments to the ICE Clear Europe Delivery Procedures

January 25, 2023.
    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 12, 2023, ICE Clear Europe Limited (``ICE Clear Europe'' or 
the ``Clearing House'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule changes described in 
Items I, II and III below, which Items have been prepared primarily by 
ICE Clear Europe. ICE Clear Europe filed the proposed rule change 
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(4)(ii) 
thereunder,\4\ such that the proposed rule change was immediately 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \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).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    ICE Clear Europe Limited (``ICE Clear Europe'' or the ``Clearing 
House'') proposes to amend its Delivery Procedures (``Delivery 
Procedures'') to make certain clarifications and updates.

II. Clearing Agency'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 such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

(a) Purpose
    The amendments to Part A, which applies to ICE Endex Deliverable EU 
Emissions Contracts, would reflect that, as provided in ICE Endex's 
Circular E22/012,\5\ ICE Endex will delist Aviation Emissions Allowance 
or ``EUAA'' Futures Contracts following the expiry of the December 2022 
contract month and, commencing with the January 2023 contract month, 
EUAAs would become eligible for delivery under the existing ICE Endex 
Carbon Emissions Allowance or ``EUA'' daily and monthly Contracts.\6\ 
Conforming changes would be made in Part A, including to remove 
references to ``ICE Endex EUAA Futures Contracts'' and to reflect that 
EUAAs may be delivered under the delivery specifications applicable to 
the EUA daily and monthly contracts (through an amendment to the term 
Carbon Emission Allowance Contract and related changes in the delivery 
timetable). Certain related drafting amendments would be made in Part A 
to reflect such updates including the removal of related definitions 
and other terms (for example, the removal of the

[[Page 6350]]

definitions of ``Allowance Type'' and ``Aviation Emissions Allowance 
Contract'') which would no longer be applicable.
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    \5\ ICE Endex Circular E22/012 is available at the following 
website: https://www.theice.com/publicdocs/endex/circulars/E22012.pdf.
    \6\ Accordingly, the amendments to Part A will become operative 
following expiry of the December 2022 contract month.
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    The definition for the term ``Communication Link'' would be 
included in Part A in place of the cross-reference to the definition 
assigned in the ICE Endex Rules. The amendments provide that 
``Communication Link'' means the electronic exchange of messages or 
notifications by which Buyers and Sellers communicate with the 
Registry, and/or by which the Registry communicates with the European 
Union Transaction Log which is necessary to facilitate a Transfer 
Request. This update is intended to improve clarity. The definition of 
``Emissions Directive'' would be amended to include a reference to the 
most recent relevant EU directive, Directive 2018/410 of the European 
Parliament and of the European Council of 14 March 2018. The amendments 
also amend the definition of the term ``Transfer Request'' to mean a 
request to affect a transfer of an EUA and/or EUAA submitted by a 
Seller to the Registry as required by the Registry Regulations, 
relevant applicable law and otherwise in accordance with the ICE Clear 
Europe Rules and ICE Endex Rules. Previously, such definition crossed-
referenced a definition of ``Allowance Transfer Request'' which was not 
defined in the Delivery Procedures. Separate definitions of ``Aviation 
Emissions Allowance Transfer Request'' and ``Carbon Emissions Allowance 
Transfer Request'' would be removed as unnecessary given the revised 
definition of Transfer Request. Certain other non-substantive drafting 
clarifications would be made.
Timing for EFP Reporting
    The amendments to Parts D (which apply to ICE Futures UK NBP 
Natural Gas Daily Futures), F (which applies to ICE Endex Dutch TTF 
Natural Gas Daily Futures), and EE (which applies to ICE Endex Austrian 
CEGH VTP Natural Gas Daily Futures) are intended to address 
inconsistencies regarding the timing of reporting of Exchange for 
Physicals (EFP) and Exchange for Swaps (EFS) transactions related to 
certain contracts. The amendments to Part D would correct Section 
2.5(b) to state that ICE Futures UK NBP Natural Gas Daily Futures cease 
trading at 17:00 hours on the Business Day prior to the Delivery Day, 
to be consistent with exchange rules. The amendments to Part D would 
provide in Section 2.6 that for ICE Futures UK NBP Natural Gas Daily 
Futures, in accordance with the ICE Clear Europe Clearing Rules, EFPs 
and EFSs may be posted up to 30 minutes following the cessation of 
trading. (The change thus eliminates an inconsistency with exchange 
rules.) Such timing update would also be reflected in the delivery 
table for the same contracts in Section 5.2. In the delivery timetable 
for ICE Endex Dutch TTF Natural Gas Daily Futures in Section 6.2 of 
Part F, the amendments would clarify that EFPs and EFS may be posted up 
to 30 minutes following the cessation of trading (in order to make the 
timetable consistent with paragraph 3.6 of Part F). The amendments 
would also update the delivery timetable for ICE Endex Austrian CEGH 
VTP Natural Gas Daily Futures in Section 8 of Part EE such that the 
time specified in such table reflects the narrative which provides that 
EFPs and EFSs may be posted up to 30 minutes following the cessation of 
trading.
Changes to Naming Conventions
    To apply consistency to the contract names of certain natural gas 
futures contracts, the Clearing House would change the name of ``TTF 
Natural Gas Futures'' to ``Dutch TTF Natural Gas Futures'', ``TTF 
Natural Gas Daily Futures'' to ``Dutch TTF Natural Gas Daily Futures'', 
``TTF Natural Gas Working Days Next Week'' to ``Dutch TTF Natural Gas 
Working Days Next Week, ``UK Natural Gas Futures'' to ``UK NBP Natural 
Gas Futures'', ``UK Natural Gas Daily Futures'' to ``UK NBP Natural Gas 
Daily Futures'', ``UK Natural Gas (EUR/MWh) Futures'' to ``UK NBP 
Natural Gas (EUR/MWh) Futures'', ``PSV Natural Gas Futures'' to 
``Italian PSV Natural Gas'', ``ICE Endex VTP Natural Gas Futures'' and 
``CEGH Austrian VTP Natural Gas Futures'' to ``ICE Endex Austrian CEGH 
VTP Natural Gas Futures'', ``ICE Endex VTP Natural Gas Daily Future'' 
to ``ICE Endex Austrian CEGH VTP Natural Gas Daily Futures, and ``ICE 
Endex PEG Natural Gas Futures'' to ``ICE Endex French PEG Natural Gas 
Futures''. Such changes would be made where relevant in Parts D (which 
applies to UK natural gas futures contracts), F (which applies to ICE 
Endex Dutch natural gas futures), AA (which applies to Italian natural 
gas futures), EE (which applies to Austrian natural gas futures), and 
HH (which applies to the French natural gas futures) of the Delivery 
Procedures. Paragraphs 5 and 13 of the introductory section to the 
Delivery Procedures would also be updated to reflect the name changes.
Delisting of Belgian ZTP Natural Gas Contracts
    Part I of the Delivery Procedures (which applied to ICE Endex ZTP 
Natural Gas Futures Contracts) would be deleted in its entirety as such 
contracts are no longer listed for trading at ICE Endex. Similarly, 
Part J would be amended to remove all references to ICE Endex Spot 
Market ZTP Natural Gas Spot Contracts and ICE Endex Spot Market ZTPL 
Natural Gas Spot Contracts, which are also no longer listed for trading 
at ICE Endex. Corresponding changes would be made in paragraph 5 of the 
introductory section of the Delivery Procedures and in the Table of 
Contents.
Delivery Timetable for Deliverable US Emissions Contracts
    The amendments would revise the delivery timetable in Part N (which 
applies to ICE Deliverable US Emissions Contracts) to remove 
unnecessary provisions in the final row relating to confirmation of 
delivery on the Delivery Day. The relevant obligations relating to 
confirmation of delivery are already covered in the preceding rows of 
the timetable. The remaining language in that row would be removed in 
order to avoid any incorrect implication that delivery could be made 
following the relevant Delivery Day. The amendments do not change the 
terms and conditions of the relevant contract.
Other Updates
    Updates to the table of contents and various section headings would 
be made to conform to changes described above. A conforming reference 
to the ICE Endex Austrian CEGH VTP Natural Gas Daily Futures Contract 
would be added in paragraph 5.1 (such reference had previously been 
omitted).
(b) Statutory Basis
    ICE Clear Europe believes that the proposed amendments to the 
Delivery Procedures are consistent with the requirements of Section 17A 
of the Act \7\ and the regulations thereunder applicable to it. In 
particular, 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, the safeguarding of securities and funds in the custody 
or control of the clearing agency or for which it is responsible, and 
the protection of investors and the

[[Page 6351]]

public interest. The proposed changes are intended to make a number of 
updates and clarifications to the Delivery Procedures for physically 
settled F&O Contracts. The amendments remove from the Delivery 
Procedures certain contracts that have been delisted by the relevant 
exchange. The amendments also clarify the deadline for submission of 
EFPs, EFSs for certain contracts and update relevant naming 
conventions, and remove duplicative information, among other 
clarifications and drafting updates. The amendments would not otherwise 
affect the manner in which such contracts are cleared and settled. 
Accordingly, ICE Clear Europe believes that the Delivery Procedures, as 
amended, are sufficient to support clearing of such contracts and to 
manage the risks associated with such contracts. As a result, in ICE 
Clear Europe's view, the amendments would be consistent with the prompt 
and accurate clearance and settlement of the contracts, the 
safeguarding of funds or securities in the custody or control of the 
clearing agency or for which it is responsible, and the protection of 
investors and the public interest, consistent with the requirements of 
Section 17A(b)(3)(F) of the Act.\9\
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    \7\ 15 U.S.C. 78q-1.
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
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    In addition, Rule 17Ad-22(e)(10) \10\ provides that ``[e]ach 
covered clearing agency shall establish, implement, maintain and 
enforce written policies and procedures reasonable designed to, as 
applicable [. . .] establish and maintain transparent written standards 
that state its obligations with respect to the delivery of physical 
instruments, and establish and maintain operational practices that 
identify, monitor and manage the risks associated with such physical 
deliveries.'' As discussed above, the amendments would amend the 
delivery specifications to make certain updates and clarifications, and 
to remove provisions relating to delisted contracts. As amended, the 
Delivery Procedures appropriately set out the role and responsibilities 
of the Clearing House and Clearing Members with respect to physical 
delivery. As a result, ICE Clear Europe believes the amendments are 
consistent with the requirements of Rule 17Ad-22(e)(10).\11\
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    \10\ 17 CFR 240.17Ad-22(e)(10).
    \11\ 17 CFR 240.17Ad-22(e)(10).
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(B) Clearing Agency's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed amendments would 
have any impact, or impose any burden, on competition not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
amendments to the Delivery Procedures are intended to clarify certain 
delivery procedures in respect of certain physically settled energy 
contracts. The amendments would not materially change the rights or 
obligations of Clearing Members or other market participants. ICE Clear 
Europe does not believe the amendments would adversely affect 
competition among Clearing Members, materially affect the cost of 
clearing, adversely affect access to clearing in the new contracts for 
Clearing Members or their customers, or otherwise adversely affect 
competition in clearing services. Accordingly, ICE Clear Europe does 
not believe that the amendments would impose any impact or burden on 
competition that is not appropriate in furtherance of the purpose of 
the Act.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants or Others

    Written comments relating to the proposed amendment has not been 
solicited or received by ICE Clear Europe. ICE Clear Europe will notify 
the Commission of any comments received with respect to the proposed 
rule change.

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) of the Act \12\ and paragraph (f) of Rule 19b-4 \13\ 
thereunder. 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
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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 [email protected]. Please include 
File Number SR-ICEEU-2023-002 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-2023-002. 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 website (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 website 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 website at https://www.theice.com/clear-europe/regulation.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ICEEU-2023-002 and should be 
submitted on or before February 21, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-01880 Filed 1-30-23; 8:45 am]
BILLING CODE 8011-01-P