Document ID: SEC-2021-0220-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd.
Posted Date: 2021-02-16T05:00Z

[Federal Register Volume 86, Number 29 (Tuesday, February 16, 2021)]
[Notices]
[Pages 9555-9557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02995]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91091; File No. SR-ICEEU-2021-003]

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.

February 9, 2021.
    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 February 2, 2021, 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 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) \4\ 
thereunder, such that the proposed rule 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

    The principal purpose of the proposed amendments is for ICE Clear 
Europe to amend its Delivery Procedures (the ``Delivery Procedures'') 
to add a new Section 11 and a new Part GG to address delivery relating 
to the ICE Futures Abu Dhabi Murban Crude Oil Futures Contracts (the 
``ICE Murban Crude Oil Futures Contracts'' or the ``Contracts'').\5\
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    \5\ Capitalized terms used but not defined herein have the 
meanings specified in the ICE Clear Europe Clearing Rules (the 
``Rules'').
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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
    ICE Clear Europe is proposing to amend its Delivery Procedures to 
add a new Section 11 and a new Part GG to address delivery relating to 
the ICE Murban Crude Oil Futures Contracts. The Contracts will be 
traded on ICE Futures Abu Dhabi and cleared by ICE Clear Europe.
    New Part GG would set out the delivery specifications and 
procedures for deliveries of Murban crude oil under the ICE Murban 
Crude Oil Futures

[[Page 9556]]

Contract. The amended Delivery Procedures would specify the delivery 
mode (with reference to applicable requirements of the relevant 
delivery terminal in Fujairah, UAE) and delivery loading volume 
tolerances). Consistent with the exchange rules for the Contracts, 
delivery would take place on one or more consecutive Terminal Loading 
Days within the Delivery Range (which range must fall within the 
Delivery Period). The new Part GG would also address requirements as to 
delivery free of encumbrances, and determination of delivery quantity 
and price by reference to exchange rules for the Contract. The 
amendments would also establish certain timing requirements for 
exchange of futures for physical and swap transactions under exchange 
rules.
    New Part GG would provide a detailed delivery timetable, from the 
last trading day of the Contract through final settlement, including 
procedures, deadlines and requirements for nominations or substitutions 
of delivery range and delivery day, loading programme, delivery 
confirmations, delivery margin, invoicing, receipt confirmations, and 
other matters. The procedures would also address invoice calculation 
with respect to the Contract and delivery loading volume tolerances. 
New Part GG would also specify the delivery documentation required of 
Buyers and Sellers.
    New Section 11 of the Delivery Procedures would provide for an 
alternative delivery procedure for the Contracts if the Buyer and 
Seller agree to undertake delivery outside the ICE Futures Abu Dhabi 
Rules (similar to the alternative delivery procedure for other cleared 
F&O Contracts).
(b) Statutory Basis
    Section 17A(b)(3)(F) of the Act \6\ 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 public interest. The proposed 
amendments are designed to facilitate the clearing of a new physically 
settled crude oil futures contract being launched for trading by the 
ICE Futures Abu Dhabi exchange and that will be cleared by ICE Clear 
Europe. The amendments would set out the obligations and roles of the 
Clearing House and the relevant parties for delivery under the 
Contracts, supplementing the existing provisions of the Rules. ICE 
Clear Europe believes that its financial resources, risk management, 
systems and operational arrangements are sufficient to support clearing 
of such Contracts (and to address physical delivery under 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 
as set out in the proposed Delivery Procedures amendments, and the 
protection of investors and the public interest, consistent with the 
requirements of Section 17A(b)(3)(F) of the Act.\7\ (In ICE Clear 
Europe's view, the amendments would not adversely affect the 
safeguarding of funds or securities in the custody or control of the 
clearing agency or for which it is responsible, within the meaning of 
Section 17A(b)(3)(F).\8\)
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    \6\ 15 U.S.C. 78q-1(b)(3)(F).
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
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    In addition, Rule 17Ad-22(e)(10) \9\ requires that each covered 
clearing agency 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 to the Delivery 
Procedures relating to the delivery and settlement of Murban crude oil 
under the Contracts would set out the obligations and roles of Clearing 
Members and the Clearing House. The amendments would also specify the 
mode of delivery and adopt relevant procedures, deadlines and 
documentation requirements for such deliveries, which would facilitate 
identifying, monitoring and managing risks associated with delivery. As 
such, in ICE Clear Europe's view, the amendments are consistent with 
the requirements of Rule 17Ad-22(e)(10).\10\
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    \9\ 17 CFR 240.17Ad-22(e)(10).
    \10\ 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 rule changes would 
have any impact, or impose any burden, on competition not necessary or 
appropriate in furtherance of the purposes of the Act. The changes are 
being proposed in order to update the Delivery Procedures in connection 
with the listing of the Contracts for trading on the ICE Futures Abu 
Dhabi market. ICE Clear Europe believes that the Contracts would 
provide additional opportunities for interested market participants to 
engage in trading activity in the Murban crude oil market. 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 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 amendments have 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 \11\ and paragraph (f) of Rule 19b-4 \12\ 
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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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 rule-comments@sec.gov. Please include 
File Number SR-ICEEU-2021-003 on the subject line.

[[Page 9557]]

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-2021-003. 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-2021-003 and should be 
submitted on or before March 9, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Mathew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-02995 Filed 2-12-21; 8:45 am]
BILLING CODE 8011-01-P