Document ID: SEC-2021-1536-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe Limited
Posted Date: 2021-11-03T04:00Z

[Federal Register Volume 86, Number 210 (Wednesday, November 3, 2021)]
[Notices]
[Pages 60665-60667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23919]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93443; File No. SR-ICEEU-2021-019]

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

October 28, 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 October 15, 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 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

    (a) The principal purpose of the proposed amendments is for ICE 
Clear Europe to amend its amend Part GG of its Delivery Procedures to 
update certain documentation, timing and other requirements relating 
the delivery under ICE Futures Abu Dhabi Murban Crude Oil Futures 
Contracts (``Murban Crude Oil Futures Contracts'').

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.

[[Page 60666]]

(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 GG of its Delivery 
Procedures to clarify certain delivery specifications relating to 
Murban Crude Oil Futures Contracts. The proposed changes are intended 
to reflect, and be consistent with, the relevant contract terms under 
ICE Futures Abu Dhabi rules (and certain amendments being made 
thereto). Specifically, as described in detail below, the proposed 
amendments would be made to the following sections: (i) The delivery 
timetable in paragraph 3, (ii) the delivery vessel nomination table in 
paragraph 4, and (iii) the delivery documentation summary in paragraph 
5. Other non-substantive typographical and similar corrections would 
also be made.
Delivery Timetable
    The process for Delivery Range Determinations would be amended to 
provide a procedure in which a Buyer may request a change to the agreed 
Delivery Range, subject to the approval of the Clearing House and the 
Terminal Operator in their discretion by a specified time in advance of 
the original and modified Delivery Ranges. Additionally, the changes 
would clarify that the Terminal Operator may agree with the Buyer to 
the early loading of Murban Crude Oil into the Buyer's Vessel provided 
that any such early loading would not take place earlier than the first 
Terminal Loading Day of the delivery month (in addition to the existing 
requirement that early loading not take place earlier than 48 hours 
prior to the first day of the agreed Delivery Range).
    The proposed amendments would also provide that on the Document 
Receipt Day, if the Seller is unable to provide the Clearing House 
(with copy to the Buyer) by the required delivery time with certain 
specified documentation, it would be required to provide a Letter of 
Indemnity in favor of the Buyer and the Buyer would be required to make 
payment against the Letter of Indemnity (instead of the Letter of 
Indemnity being required only if the Buyer elected to make payment 
against it). Further detail would be added regarding the Buyer's 
ability to request that any such Letter of Indemnity be countersigned 
by the Seller's bank, including providing a deadline by which the 
request must be made. The request would also need to specify the 
reasons for such request and may not be based on frivolous or vexatious 
reasons. If no notification is received by the deadline, the Buyer 
would be deemed to have agreed to make payment to the Clearing House 
against the Letter of Indemnity regardless of whether it was 
countersigned by a bank.
    Further, the proposed amendments would provide that in the event 
that the Buyer submits a valid request, the Seller would be required to 
have the Letter of Indemnity countersigned by a bank with a credit 
rating equal or greater than the minimum credit rating score as advised 
by ICE Futures Abu Dhabi, unless the Buyer agrees to an alternative 
bank and notifies the Clearing House by a specified deadline.
Delivery Vessel Nomination Table
    The delivery vessel nomination table would be updated to provide 
that nominations must be received on the fifth calendar day prior to 
the first day of the Delivery Range (instead of the sixth calendar day 
prior), consistent with the exchange rules.
Delivery Documentation Summary
    With respect to the Delivery Confirmation Form, the proposed 
amendments would remove as unnecessary a requirement that such form 
include the tender(s) against which it is given. Conforming formatting 
updates would also be made.
    With respect to the Delivery Range Nomination Form, the proposed 
amendments would add that the Buyer's unique reference would be 
required to be included in such form. Conforming formatting updates 
would also be made.
    With respect to the Vessel Nomination Form, the proposed amendments 
would add that documentary instructions (for example, a bill of lading 
mark-up) would be required to be included in such form. Conforming 
formatting updates would also be made.
(b) Statutory Basis
    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 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 Part GG of the Delivery Procedures are designed to clarify 
delivery procedures relating to Murban Crude Oil Futures Contracts and 
ensure consistency with relevant exchange rules (including amendments 
thereto). The amendments to Part GG would clarify and provide further 
detail with the determination of delivery ranges, indemnity 
requirements and certain other aspects as to the timing and 
documentation required for delivery. The amendments do not otherwise 
change the terms and conditions of Murban Crude Oil Futures Contracts, 
and the contracts will 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).\6\
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    \5\ 15 U.S.C. 78q-1(b)(3)(F).
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
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    In addition, Rule 17Ad-22(e)(10) \7\ 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 certain 
delivery specifications for Murban Crude Oil Futures Contracts relating 
to the determination of delivery ranges, certain indemnity 
requirements, and certain other documentation and timing matters, 
consistent with the requirements of the exchange. 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 appropriately clarify 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).\8\
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    \7\ 17 CFR 240.17Ad-22(e)(10).
    \8\ 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

[[Page 60667]]

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 
Part GG of the Delivery Procedures in connection with Murban Crude Oil 
Futures Contracts, and will not otherwise affect the contract. 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 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 \9\ and paragraph (f) of Rule 19b-4 \10\ 
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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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-2021-019 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-2021-019. 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-2021-019 and should be 
submitted on or before November 24, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-23919 Filed 11-2-21; 8:45 am]
BILLING CODE 8011-01-P