Document ID: SEC-2023-0862-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd.
Posted Date: 2023-08-11T04:00Z

[Federal Register Volume 88, Number 154 (Friday, August 11, 2023)]
[Notices]
[Pages 54685-54687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17211]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98072; File No. SR-ICEEU-2023-017]

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

August 7, 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 July 26, 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 Part O of its Delivery Procedures \5\ (for 
Financials and Softs Cocoa Contracts) to provide for use of a new Softs 
Delivery Platform, make certain changes to the delivery timetable and 
delivery documentation, and address certain matters relating to 
allocation and the conversion of lots.
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    \5\ Capitalized terms used but not defined herein have the 
meanings specified in the Delivery Procedures or, if not defined 
therein, the ICE Clear Europe Clearing 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 Part O of its Delivery 
Procedures to amend certain delivery specifications for ICE Futures 
Europe Financials and Softs Cocoa Futures Contracts (``Cocoa 
Contracts'') to reflect the implementation of a new Softs Deliveries 
Platform to be used for deliveries under the Contract. A conforming 
change would also be made in the introductory section of the Delivery 
Procedures. Certain other provisions in Part O relating to the delivery 
timetable and allocation and conversion of lots would also be amended, 
as described herein, in connection with the implementation of the Softs 
Delivery Platform.
    In the General Provisions section of the Delivery Procedures, in 
paragraph 21, references to the new Softs Delivery Platform as the 
electronic system used for making and taking delivery under cocoa 
contracts would be added (alongside the existing Guardian system, which 
will continue to be used for deliveries under coffee contracts). The 
amendments would also remove an incorrect reference to bonds (for which 
neither Guardian nor the new Softs Delivery Platform is used).
    The proposed amendments in Part O of the Delivery Procedures would 
replace relevant references to the Guardian delivery system throughout 
Part O with the new Softs Delivery Platform and otherwise remove 
references to the Guardian delivery system, such that transfers of 
warrants would be made through the Softs Delivery Platform and 
applicable delivery notices and other specified delivery documentation 
relevant to Sellers and Buyers would be provided or made available 
through the Softs Delivery Platform.
    Procedures for allocations of cocoa, including notifications and 
reports relating to allocations would be reorganized and consolidated 
into a single provision for simplicity and clarity. As proposed to be 
revised, reports relating to allocation details would be made available 
to both Sellers and Buyers through the Clearing House MFT system.
    The amendments also update the content of reports made available to 
Seller and Buyer to remove general references to ``delivery details'' 
throughout Part O, as the relevant information is provided in the 
specific referenced reports provided through the Softs Delivery 
Platform. The names of certain reports would also be updated throughout 
Part O, specifically with references to final account sale reports 
changed to account sale reports and references to final invoice reports 
changed to Buyers invoice reports.
    The timing for certain notifications related to the conversion of 
lots would be moved from by 16:00 LPT (in the case of certain 
directions by the Clearing House) and after 16:00 LPT (in the case of 
the availability of conversion details for Sellers), to after 10:00 LPT 
in both scenarios. The amendments would also remove an incorrect 
reference about

[[Page 54686]]

converting bulk delivery units into large delivery units. The 
amendments would change the system used to send Sellers and Buyers 
information relating to LDU Conversion Notices from Guardian to MFT. 
With respect to certain notices to be provided by Sellers in response 
to a direction by the Clearing House to convert bulk or large delivery 
units, references to the use of Guardian (or a successor system) would 
be removed as unnecessary in light of the introduction of the Softs 
Delivery Platform. In the provisions relating to BDU conversion 
notices, the reference in the left column to ``Extension to 
Conversion'' would be deleted, as it is not necessary and does not 
relate to the 16:00 deadline.
    The amendments also update the summary of required delivery 
documentation. Specifically, amendments would clarify that invoices and 
account sales statements would be provided through MFT. References to 
provisional invoices in the case of conversion would be removed as 
unnecessary in light of other reports made available to Buyer and 
Sellers. A reference to warrant delivery instructions report would be 
removed as outdated in light of the manner in which delivery is made 
under the contract.
(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 \6\ and the regulations thereunder applicable to it. In 
particular, Section 17A(b)(3)(F) of the Act \7\ 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 
changes to the Delivery Procedures are designed to revise ICE Clear 
Europe's delivery arrangements relating to Cocoa Contracts to reflect 
the implementation and use of the new Softs Delivery Platform for 
delivery under such contracts. As part of the implementation of the 
Softs Delivery Platform, the delivery timetable and provisions relating 
to allocation and conversion of lots would be amended for clarity, to 
update the systems used for notice and to remove unnecessary 
provisions. Notably, the amendments would replace references to use of 
existing Guardian system with references to use of the Softs Delivery 
Platform or MFT system, as appropriate. In connection with the 
implementation of the Softs Delivery Platform, the amendments revise 
and simplify the process for allocations and conversion of lots by the 
Clearing House and certain related delivery notification and delivery 
documentation requirements. The contracts will otherwise continue to be 
cleared by ICE Clear Europe in the same manner as they are currently. 
In ICE Clear Europe's view, the amendments are thus consistent with the 
prompt and accurate clearance and settlement of cleared contracts and 
the protection of investors and the public interest. (ICE Clear Europe 
would not expect the amendments to affect the safeguarding of 
securities and funds in ICE Clear Europe's custody or control or for 
which it is responsible). Accordingly, the amendments satisfy the 
requirements of Section 17A(b)(3)(F).\8\
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    \6\ 15 U.S.C. 78q-1.
    \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 would clarify the 
delivery specifications for Cocoa Contracts to reference the new Softs 
Delivery Platform. The amendments would also make consistent with the 
new Softs Delivery Platform certain obligations of the Clearing House 
and Buyers and Sellers in the delivery process, including with respect 
to allocations and conversions and related notifications. The 
amendments would not otherwise change the manner in which the contracts 
are cleared or in which delivery is made, as supported by ICE Clear 
Europe's existing financial resources, risk management, systems and 
operational arrangements. The amendments thus clarify the role and 
responsibilities of the Clearing House and Clearing Members with 
respect to delivery. As a result, ICE Clear Europe believes 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 amendments would 
have any impact, or impose any burden, on competition not necessary or 
appropriate in furtherance of the purposes of the Act. The amendments 
are being adopted to update and clarify the delivery specifications in 
the Delivery Procedures in connection with Cocoa Contracts, principally 
with respect to the use of the Softs Delivery Platform. ICE Clear 
Europe does not expect that the proposed changes will adversely affect 
access to clearing or the ability of Clearing Members, their customers 
or other market participants to continue to clear contracts. ICE Clear 
Europe also does not believe the amendments would materially affect the 
cost of clearing or otherwise impact competition among Clearing Members 
or other market participants or limit market participants' choices for 
selecting clearing services. Accordingly, ICE Clear Europe does not 
believe the amendments would impose any burden on competition not 
necessary or 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 written 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.

[[Page 54687]]

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-2023-017 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-2023-017. 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.
    Do not include personal identifiable information in submissions; 
you should submit only information that you wish to make available 
publicly. We may redact in part or withhold entirely from publication 
submitted material that is obscene or subject to copyright protection. 
All submissions should refer to File Number SR-ICEEU-2023-017 and 
should be submitted on or before September 1, 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. 2023-17211 Filed 8-10-23; 8:45 am]
BILLING CODE 8011-01-P