Document ID: SEC-2021-1821-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd.
Posted Date: 2021-12-29T05:00Z

[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Notices]
[Pages 74143-74145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28328]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93864; File No. SR-ICEEU-2021-025]

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

December 23, 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 December 16, 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)(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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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 (``Delivery Procedures'' or 
``Procedures'') to add a new Part HH thereto (``Part HH'') to address 
new ICE Endex French PEG Natural Gas Futures and ICE Endex French PEG 
Natural Gas Daily Futures (each a ``Contract'' and together the 
``Contracts''), natural gas futures contracts that will be traded on 
ICE Endex and cleared by ICE Clear Europe. The proposed updates would 
also make certain conforming changes elsewhere in the Delivery 
Procedures.\5\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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 add a new Part HH as well as make 
certain conforming changes elsewhere in the Delivery Procedures. Part 
HH would apply to the Contracts, which are to be traded on ICE Endex 
and cleared at ICE Clear Europe. The amended Delivery Procedures would 
provide the delivery specifications and processes related to delivery 
under such Contracts.
    Delivery under the Contracts would be settled by the transfer of 
rights to Natural Gas at the PEG (the title transfer point in the 
Transmission System where the Licensed Shipper would exchange daily 
quantities of energy with other shippers or with one of the operators 
of the Transmission System in France) from a Transferor nominated by 
the Seller to the Clearing House and the

[[Page 74144]]

[sic] from the Clearing House to a Transferee nominated by the Buyer. 
The amendments would provide that the Clearing Members grant authority 
to ICE Clear Europe to make Trade Nominations on their behalf in 
connection with deliveries under Contracts. Clearing Members would not 
be required to send Trade Nominations themselves. Clearing Members 
would also acknowledge that GRTgaz (one of the operators of the 
Transmission System in France) may take into consideration the Trade 
Nominations made by the Clearing House, and ignore Trade Nominations 
sent by Buyers, Sellers, Transferors and Transferees.
    The amendments would further specify certain details of the 
delivery process for the Contracts including denominations of relevant 
quantity, settlement price, relevant time zones, timing of cessation of 
trading and certain requirements for exchange of futures for physical 
and swap transactions under exchange rules.
    The amendments would also address the responsibilities of the 
Clearing House and relevant parties for delivery under Contracts, as 
well as certain limitations of liability for the Clearing House. 
Specifically, the Clearing House would not be responsible for the 
performance or non-performance of GRTgaz, including of its obligations 
under the GRTgaz Rules. Additionally, neither the Buyer, Seller nor 
their Transferees or Transferors would have any claim against the 
Clearing House for any loss, damage, cost or expense incurred as a 
result of (i) any actions taken by the Clearing House pursuant to the 
GRTgaz Rules, or (ii) technical issues, technical measures, 
authorisations, limitations, prohibitions, or failures imposed on, the 
condition or operation of, or the performance or non-performance of the 
Transmission System, GRTgaz and the [email protected] Platform ties except 
as expressly provided in the ICE Endex Rules. Each of the Buyer, Seller 
and their Transferees or Transferors would be required to accept any 
consequences arising from Trade Nominations made by the Clearing House 
pursuant to Part HH.
    The amendments would provide details related to delivery contact 
[sic] security, which is the delivery margin to be provided by Buyer 
and Seller, and which would take into account the possibility of costs 
or charges arising from the balancing regime under the GRTgaz Rules. 
The Clearing House would be permitted to alter the calculation of each 
of the Buyer's Security and the Seller's Security at any time or make 
adjustments in respect of a specific Seller or Buyer.
    The amendments would include delivery timetables with detailed 
timeframes and descriptions of the delivery processes for delivery 
under Contracts, and such timetables would detail, among other 
processes, the time for cessation of trading, provision of Buyer's and 
Seller's Security, submission of delivery intentions, confirmations of 
intent to deliver or receive, nominations of parties to delivery [sic] 
or receive, delivery confirmations, invoicing, release of delivery 
margin and sales proceeds following completion of delivery, and other 
matters. The amendments would also include delivery tables with 
detailed times and processes relating to failed delivery under 
Contracts. In respect of invoicing, the amendments would detail how 
amounts included in invoices prepared by the Clearing House would be 
calculated for confirmed deliveries and failed deliveries of each 
Contract.
    In addition, the amendments would detail the reports produced by 
the Clearing House in respect of each Contract and made available to 
Buyers and Sellers electronically.
    The amendments would also update Section 5.1 of the Delivery 
Procedures to include ICE Endex French PEG Natural Gas Futures 
Contracts and ICE Endex French PEG Natural Gas Daily Futures Contracts 
in the list of contracts under which, subject to delivery obligations, 
sellers and buyers can nominate transferors and transferees.
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 establish delivery 
procedures relating to ICE ENDEX French PEG Natural Gas Futures 
Contracts and ICE Endex French PEG Natural Gas Daily Futures Contracts, 
which will be traded on ICE Endex and cleared at ICE Clear Europe. The 
amendments would set out the role, responsibilities and liabilities of 
the Clearing House, Clearing Members and designated transferors and 
transferees in the physical delivery process, in line with Delivery 
Procedures for other types of deliverable energy futures contracts. 
Contracts providing for delivery under Part HH will be cleared by the 
Clearing House in the substantially same manner as other types of 
deliverable energy futures contracts, and will be supported by ICE 
Clear Europe's existing F&O financial resources, risk management, 
systems and operational arrangements. Accordingly, ICE Clear Europe 
believes that its financial resources, risk management, systems and 
operational arrangements 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, 
and the protection of investors and the public interest consistent with 
the requirements of Section 17A(b)(3)(F) of the Act.\8\ (In ICE Clear 
Europe's view, the amendments would not 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)).\9\
---------------------------------------------------------------------------

    \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).
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    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 reasonably 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 establish a new 
set of procedures applicable to the delivery and settlement of ICE 
ENDEX French PEG Natural Gas Futures Contracts and ICE Endex French PEG 
Natural Gas Daily Futures Contracts. The procedures would address, 
among other matters, delivery specifications for such contracts, the 
obligations and roles of Clearing Members and the Clearing House, 
certain limitations of liability for the Clearing House, and certain 
other documentation and timing matters, consistent with the 
requirements of the Clearing House. Clearance of the

[[Page 74145]]

Contracts would otherwise be 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).\11\
---------------------------------------------------------------------------

    \10\ 17 CFR 240.17Ad-22(e)(10).
    \11\ 17 CFR 240.17Ad-22(e)(10).
---------------------------------------------------------------------------

(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 establish a new 
set of procedures applicable to the delivery and settlement of ICE 
ENDEX French PEG Natural Gas Futures Contracts and ICE Endex French PEG 
Natural Gas Daily Futures Contracts in connection with the listing of 
such contracts for trading on the ICE Endex market. ICE Clear Europe 
believes that such contracts would provide opportunities for interested 
market participants to engage in trading activity in the relevant 
French natural gas 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 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 \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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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 (https://www.sec.gov/rules/sro.shtml) or
     Send an email to [email protected]. Please include 
File Number SR-ICEEU-2021-025 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-2021-025. 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 (https://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-2021-025 and should be 
submitted on or before January 19, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
 [FR Doc. 2021-28328 Filed 12-28-21; 8:45 am]
 BILLING CODE 8011-01-P