Document ID: SEC-2021-1225-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe Ltd.
Posted Date: 2021-09-13T04:00Z

[Federal Register Volume 86, Number 174 (Monday, September 13, 2021)]
[Notices]
[Pages 50917-50919]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19611]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92883; File No. SR-ICEEU-2021-016]

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

September 7, 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 August 23, 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) 
\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 make certain amendments to Part EE of its Delivery Procedures 
to add provisions relating to delivery of an additional contract, the 
ICE Endex Austrian Central European Gas Hub AG (``CEGH'') Virtual 
Trading Point (``VTP'') Natural Gas Daily Futures (``ICE Endex VTP 
Natural Gas Daily Futures''), that will be traded on the ICE Endex 
exchange and cleared at ICE Clear Europe. The amendments also propose 
to correct the name of the ICE Endex CEGH Austrian VTP Natural Gas 
Futures to ICE Endex Austrian CEGH VTP Natural Gas Futures (``ICE Endex 
VTP Natural Gas Futures'') and make certain corresponding updates 
throughout Part EE.\5\
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    \5\ Capitalized terms used but not defined herein have the 
meaning 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 Part EE of its Delivery 
Procedures to add provisions relating to delivery of an additional 
contract, the ICE Endex Austrian CEGH VTP Natural Gas Daily Futures 
(``ICE Endex VTP Natural Gas Daily Futures''), that will be traded on 
the ICE Endex exchange and cleared at ICE Clear Europe. The proposed 
amendments also correct the name of the ICE Endex CEGH Austrian VTP 
Natural Gas Futures to ICE Endex Austrian CEGH VTP Natural Gas Futures 
(``ICE Endex VTP Natural Gas Futures'') and make certain corresponding 
updates throughout Part EE.
    Proposed amendments to Part EE would set out the delivery 
specifications and procedures for deliveries under the Contract. 
Delivery would be effected by the transfer of rights to natural gas at 
the VTP from a Transferor (nominated by the Seller and which may be the 
Seller) to the Clearing House and from the Clearing House (via its 
nomination

[[Page 50918]]

agent) to a Transferee (nominated by the Buyer and which may be the 
Buyer) through the input of Trade Nominations into the CEGH electronic 
system. Under Part EE, Clearing Members would authorize the Clearing 
House to make Trade Nominations on their behalf. The amendments would 
also establish certain timing requirements for exchange of futures for 
physical and swap transactions under exchange rules.
    Proposed amendments to Part EE would address certain the 
responsibilities of the Clearing House and relevant parties for 
delivery under the Contracts, supplementing the existing provisions of 
the Rules. Specifically, the Clearing House would not be responsible 
for the performance of CEGH. Further, neither the Buyer nor the Seller, 
nor their Transferees or Transferors, would have any claim against the 
Clearing House for any loss incurred as a result of the condition or 
operation of the Transmission Network unless provided in the ICE Endex 
Rules.
    A definition of ``ICE Endex VTP Natural Gas Daily Futures'' is 
being proposed. Where applicable, amendments will be made throughout 
Part EE to apply to the ICE Endex VTP Natural Gas Daily Futures in 
addition to ICE Endex VTP Natural Gas Futures. The existing defined 
term ``ICE Endex VTP Natural Gas'' is being proposed to be changed to 
``ICE Endex VTP Natural Gas Futures'' for clarity and to distinguish 
that contract from the new daily futures contract. Various other 
corrections to the use of defined terms and other typographical and 
similar corrections are also being proposed.
    Section 3.4 (which describes the price of the Contracts) is being 
proposed to be amended to provide that the price at which the Contract 
is delivered is the Exchange Delivery Settlement Price for the Delivery 
Day of each of the ICE Endex VTP Natural Gas Futures or ICE Endex 
Natural Gas Daily Futures in accordance with the ICE Endex Rules 
(instead of the Business Day immediately prior to the calendar day on 
which the Delivery Month for the ICE Endex VTP Natural Gas Futures 
commences). This change is intended to update the Delivery Procedures 
to reflect current practice with respect to the ICE Endex VTP Natural 
Gas Futures.
    Section 3.6 (which describes cessation of trading) is being 
proposed to be revised so that such procedures apply to ICE Endex VTP 
Natural Gas Daily Futures in addition to ICE Endex VTP Natural Gas 
Futures. The description of the cessation of trading is also being 
proposed to be revised to clarify that it is consistent with the ICE 
Endex Rules. The ICE Endex VTP Natural Gas Daily Futures ceases trading 
one business day prior to the Delivery Day.
    Section 3.7 (which describes the Exchange for Physicals (EFPs) and 
Exchange for Swaps (EFSs)) is being proposed to be amended to specify 
that ICE Endex VTP Natural Gas Daily Futures, EFPs and EFSs may be 
posted up to thirty minutes following the cessation of trading in 
accordance with ICE Endex Rules.
    In Section 6 Delivery Timetable, an outdated reference to ICE Endex 
Austrian VTP Natural Cas Futures is being proposed to be updated to ICE 
Endex VTP Natural Gas Futures.
    A new Section 8 is being proposed to be added which includes a 
routine delivery timetable, from the last trading day of the Contract 
through final settlement, for ICE Endex VTP Natural Gas Daily Futures. 
The timetable specifies procedures, deadlines and requirements 
submissions of delivery intentions, nominations of Transferors or 
Transferees, Conversion and Confirmation Reports, notification files to 
the nomination agent, provision of Buyer's and Seller's security, final 
confirmation of the delivery report, release of Seller's security and 
Buyer's top-up following completion of delivery, payment and invoicing.
    A new Section 9 is being proposed to be added which includes a 
delivery timetable for failed delivery for ICE Endex VTP Natural Gas 
Daily Futures. The timetable specifies the procedures and timing with 
respect to calling and releasing additional Seller's Security and/or 
Buyer's Security and invoicing, payment and receipt of failed 
deliveries. A note is also added that, in the event of a failed 
delivery, the Clearing House may retain Buyer's Security and/or 
Seller's Security.
    A new Section 11.2 is being proposed to be added that provides a 
delivery documentation summary with respect to ICE Endex VTP Natural 
Gas Daily Futures. The timetable specifies the reports produced by the 
Clearing House and made available to Buyers and Sellers electronically, 
an explanation of each such report, and when each such report is made 
available. A note is also added that provides that such timetable may 
be altered at the discretion of the Clearing House.
(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 natural gas futures contract that is being launched for trading 
by the ICE Endex exchange. The amendments would set out the obligations 
and roles of Clearing Members and the Clearing House. ICE Clear Europe 
believes that its financial resources, risk management, systems and 
operational arrangements are sufficient to support clearing of such 
contract (and to address physical delivery under such contract) and to 
manage the risks associated with such contract. As a result, in ICE 
Clear Europe's view, the amendments would be consistent with the prompt 
and accurate clearance and settlement of the Contract 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 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 under the Contract 
and ICE Endex exchange contract terms would set out the obligations and 
roles of Clearing Members, the Clearing House and the Central European 
Gas Hub (``CEGH''). The amendments would also adopt relevant procedures 
for such deliveries, which would facilitate identifying, monitoring and 
managing risks associated with delivery.
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    \9\ 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

[[Page 50919]]

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 Contract 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 Austrian VTP 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 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.
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 and paragraph (f) of Rule 19b-4 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.

III. 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-2021-016 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-2021-016. 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-2021-016 and should be 
submitted on or before October 4, 2021.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19611 Filed 9-10-21; 8:45 am]
BILLING CODE 8011-01-P