Document ID: SEC-2022-1639-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd.
Posted Date: 2022-12-21T05:00Z

[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Notices]
[Pages 78169-78171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27650]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96503; File No. SR-ICEEU-2022-026]

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

December 15, 2022.
    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 6, 2022, 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) 
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).
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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 Finance Procedures in order to align the 
timing at which monthly interest payments and monthly transaction fees 
are processed.

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

[[Page 78170]]

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 Finance Procedures to 
align the timing for payment of the return on cash margin and Guaranty 
Fund deposits of Clearing Members with that for payment of monthly 
transaction fees. Under existing Finance Procedures paragraph 
6.1(i)(vi), transaction fees are payable through the overnight payment 
call or return by the fifth Business Day after the end of each month. 
ICE Clear Europe is proposing to amend Finance Procedures paragraph 
6.1(i)(iv) to provide that interest on margin and Guaranty Fund 
contributions will be credited by the fifth Business Day after the end 
of each month, rather than the fourth Business Day after the end of 
each month. ICE Clear Europe proposes to implement the change on or 
about December 14, 2022.
    ICE Clear Europe believes that processing interest and transaction 
fees on the same day as part of the same net overnight payment 
calculation will reduce the number and size of overall cash flows and 
thus improve overall payment efficiency. The change will also reduce 
unnecessary potential liquidity demands on the Clearing House and 
Clearing Members to the extent of offsetting interest and transaction 
fees and reduce the risk to the Clearing House of a failure or default 
in payment of transaction fees by a Clearing Member after payment by 
the Clearing House of interest. ICE Clear Europe believes that the 
benefits of improving payment efficiency in this manner will be more 
significant in the current rising interest rate environment, as 
increases in ICE Clear Europe's ICE Deposit Rate have resulted in an 
increase in monthly interest payments due from ICE Clear Europe to 
Clearing Members.
(b) Statutory Basis
    ICE Clear Europe believes that the proposed amendments to the 
Finance Procedures are consistent with the requirements of Section 17A 
\5\ of the Act and the regulations thereunder applicable to it. In 
particular, Section 17A(b)(3)(D) of the Act \6\ requires that ``[t]he 
rules of the clearing agency provide for the equitable allocation of 
reasonable dues, fees and other charges among its participants.'' ICE 
Clear Europe believes that the proposal is a reasonable and appropriate 
change to the timing of payment of return on cash margin and Guaranty 
Fund contributions, in order to enhance overall settlement efficiency. 
This is particularly so, in ICE Clear Europe's view, in light of the 
current interest rate environment which has led to increases in the ICE 
Deposit Rate. The amendment also reduces liquidity demands and reduces 
the risk of a payment failure or default with respect to the payment of 
transaction fees. As such, in ICE Clear Europe's view, the amendments 
are consistent with the equitable allocation of reasonable dues, fees 
and other charges among its Clearing Members and other market 
participants, within the meaning of Section 17A(b)(3)(D) of the Act.\7\
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    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78q-1(b)(3)(D).
    \7\ 15 U.S.C. 78q-1(b)(3)(D).
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    The proposed amendments are also consistent with the requirements 
of Section 17A(b)(3)(F) of the Act which requires, among other things, 
that ``[t]he rules of a clearing agency [. . .] are not designed to 
permit unfair discrimination in the admission of participants or among 
participants in the use of the clearing agency.'' \8\ As noted above, 
the Finance Procedures, as proposed to be amended, would apply to all 
Clearing Members and the amendments would not otherwise the rights or 
obligations of the Clearing House or Clearing Members with respect to 
the payment of transaction fees or the payment of interest on cash 
margin and Guaranty Fund contributions. Section 17A(b)(3)(F) also 
requires that the ``[t]he rules of a clearing agency [. . .] are 
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 or funds which are in the custody or control of the clearing 
agency or for which it is responsible . . . and, in general, to protect 
investors and the public interest.'' \9\ As set forth above, ICE Clear 
Europe believes the amendments will enhance payment efficiency and 
reduce payment risks. As such, the amendments, in ICE Clear Europe's 
view, would be consistent with prompt and accurate clearance and 
settlement, would not adversely affect the safeguarding of securities 
and funds which are in the custody or control of ICE Clear Europe or 
for which it is responsible, and generally would be consistent with the 
public interest in the sound operation of the Clearing House. As a 
result, the amendments are consistent with the requirements of Section 
17A(b)(3)(F) of the Act.\10\
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    \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. 78q-1(b)(3)(F).
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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 Finance Procedures are intended to reduce the number 
of cash flows, improve payment efficiency and to reduce the (low) risk 
of payment failure with respect to transaction fees, by changing the 
interest payment date to be consistent to that of the transaction fee 
payment date. The amendments would not otherwise change the rights or 
obligations of 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 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

[[Page 78171]]

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 [email protected]. Please include 
File Number SR-ICEEU-2022-026 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-2022-026. 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-2022-026 and should be 
submitted on or before January 11, 2023.

    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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27650 Filed 12-20-22; 8:45 am]
BILLING CODE 8011-01-P