Document ID: SEC-2023-0136-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd.
Posted Date: 2023-02-08T05:00Z

[Federal Register Volume 88, Number 26 (Wednesday, February 8, 2023)]
[Notices]
[Pages 8323-8325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02604]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96791; File No. SR-ICEEU-2023-003]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Amendments to Part N1 of the Delivery Procedures

February 2, 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 January 20, 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) \3\ of the Act and Rule 19b-4(f)(4)(ii) 
\4\ thereunder, 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 N1 of its Delivery Procedures 
(``Delivery Procedures'' or ``Procedures'') to update the delivery 
timetable for ICE Deliverable US Emissions 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.

(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 N1 of the Delivery 
Procedures which applies to ICE Deliverable US Emissions Contracts (i) 
for which physical delivery is specified as being ``Applicable'' in the 
relevant Contract Terms, (ii) which go to physical delivery on the 
expiry date; and (iii) to which the Clearing House will announce by 
Circular that Part N1 specifically applies (such contracts ``ICE 
Deliverable US Emissions Contracts'').\5\ The Clearing House is 
proposing to amend the delivery timetable to remove extraneous and 
unnecessary provisions in the final row relating to the relevant 
parties' obligations on the Delivery Day. The relevant delivery and 
payment obligations are already covered in the preceding rows of the 
timetable. Specifically, the provisions in the final row relating to 
final payment to the Seller are already addressed in the row titled 
``Payment to Seller.'' Similarly, the provisions in the final row 
relating to the return of Seller's Delivery Margin are addressed in the 
row titled ``Payment to Seller.'' The amendment would also remove an 
inconsistency between the deleted provision and the deadline for 
delivery of Allowances as set forth in the row titled ``Seller's 
Delivery to the Clearing House.'' The amendments would additionally 
remove a statement in the final row relating to the treatment of 
deliveries after the specified deadline as being deemed received on the 
next business day. ICE Clear Europe believes that this statement was 
unnecessary and could have been read to imply that a late delivery was 
acceptable, which is not consistent with the deadline set forth in the 
row titled ``Seller's Delivery to the Clearing House'' and current 
Clearing House practice. The amendments do not

[[Page 8324]]

otherwise change the terms and conditions of the relevant contract.
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    \5\ Part N1 of the Delivery Procedures (as filed pursuant to 
filing SR-ICEEU-2021-023, Exchange Act Release No. 34-93764 (Dec. 
13, 2021), 86 FR 71692 (Dec. 17, 2021)) will not be operative until 
the Effective Date referenced below. Part N1, as amended by the 
proposed amendment set forth herein, will come into effect on or 
about 23 February 2023, with the specific effective date announced 
at least one week in advance through ICE Clear Europe Circular (the 
``Effective Date'').
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(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 clarify the 
obligations of the relevant parties for the Delivery Day in the 
delivery timetable under Part N1. The amendments will not change the 
manner in which ICE Deliverable US Emissions Contracts delivered 
through a Clearing House Registry Account under Part N1, once it 
becomes operative in accordance with this filing, will be cleared by 
the Clearing House. Accordingly, ICE Clear Europe believes that the 
Delivery Procedures, as amended, 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\)
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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).
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
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    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 reasonable 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 amend the 
delivery specifications for ICE Deliverable US Emissions Contracts to 
clarify the obligations for the Delivery Day and remove extraneous 
provisions. 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\
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    \10\ 17 CFR 240.17Ad-22(e)(10).
    \11\ 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 proposed 
amendments to the Delivery Procedures are intended to make certain 
clarifications to the delivery timetable procedures applicable to the 
settlement of ICE Deliverable US Emissions Contracts. The amendments 
would not change the 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 amendment has 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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-2023-003 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-2023-003. 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.

[[Page 8325]]

You should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-ICEEU-2023-003 
and should be submitted on or before March 1, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-02604 Filed 2-7-23; 8:45 am]
BILLING CODE 8011-01-P