Document ID: SEC-2019-1058-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd.
Posted Date: 2019-07-25T04:00Z

[Federal Register Volume 84, Number 143 (Thursday, July 25, 2019)]
[Notices]
[Pages 35898-35900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15775]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86418; File No. SR-ICEEU-2019-016]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change, 
Security-Based Swap Submission or Advance Notice Relating to Amendments 
to the ICE Clear Europe Delivery Procedures

July 19, 2019.
    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 11, 2019, 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 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).
    \4\ 17 CFR 240.19b-4(f)(4)(ii).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change, Security-Based Swap Submission, or Advance Notice

    The principal purpose of the proposed amendments is for ICE Clear 
Europe to amend its Delivery Procedures (the ``Delivery Procedures'') 
to add delivery terms relating to the ICE

[[Page 35899]]

Futures Europe New York Harbour Ultra Low Sulphur Diesel Futures 
Contracts (the ``ICE NYH ULSD Futures Contracts'') and the ICE Futures 
Europe New York Harbour Ultra Low Sulphur Heating Oil Futures Contracts 
(the ``NYH ULSHO Futures Contracts'', and collectively, the 
``Contracts'').\5\
---------------------------------------------------------------------------

    \5\ Capitalized terms used but not defined herein have the 
meanings specified in the ICE Clear Europe Clearing Rules (the 
``Rules'').
---------------------------------------------------------------------------

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change, Security-Based Swap Submission or 
Advance Notice

    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, Security-Based Swap Submission or 
Advance Notice

(a) Purpose
    ICE Clear Europe is proposing to amend its Delivery Procedures to 
add a new Section 11 and Part FF regarding delivery procedures relating 
to the Contracts, which will be traded on ICE Futures Europe and 
cleared by ICE Clear Europe.
    Proposed Part FF would set out the delivery specifications and 
procedures for deliveries of fungible 15 ppm ultra low sulphur diesel 
fuel in respect of the ICE NYH ULSD Futures Contract, and fungible 15 
ppm ultra low sulphur heating oil in respect of the ICE NYH ULSHO 
Futures Contract. The amended Delivery Procedures would specify the 
Buyer's delivery options (delivery into Buyer's barge, into Buyer's 
tanker, by inter-tank transfer (where certain conditions are satisfied) 
or by in-tank transfer at the relevant terminal (subject to the terms 
of business of the terminal)). Consistent with the exchange rules for 
the Contracts, delivery will take place on a business day nominated by 
the Buyer (pursuant to a specified delivery nomination form), subject 
to approval or rejection by the Seller, within a five-day delivery 
range agreed by the Seller and Buyer. Proposed Part FF would also 
establish certain timing requirements for exchange of futures for 
physical and swap transactions under exchange rules.
    Proposed Part FF would provide a detailed delivery timetable, from 
the last trading day of the Contracts through final settlement, 
including procedures, deadlines and requirements for nominations of 
delivery range and delivery day, delivery confirmations, invoicing, 
provision of Buyer's and Seller's security, release of security 
following completion of delivery and other matters. The procedures 
would address invoice calculation with respect to the Contracts and 
delivery tolerances. Proposed Part FF would also specify the delivery 
documentation required of Buyers and Sellers.
    Proposed new Section 11 of the Delivery Procedures would further 
specify the alternative delivery procedure for the Contracts if the 
Buyer and Seller agree to undertake delivery outside the ICE Futures 
Europe Rules.
(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 ultra low sulphur diesel futures contract and a new ultra low 
sulphur heating oil futures contract that are being launched for 
trading by the ICE Futures Europe exchange and that will be cleared by 
ICE Clear Europe. The amendments would set out the obligations and 
roles of the Clearing House and the relevant parties for delivery under 
the Contracts, supplementing the existing provisions of the Rules. ICE 
Clear Europe believes that its financial resources, risk management, 
systems and operational arrangements are sufficient to support clearing 
of such Contracts (and to address physical delivery under 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 
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 adversely 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\)
---------------------------------------------------------------------------

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

    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 Contracts 
and ICE Futures Europe exchange rules would set out the obligations and 
roles of Clearing Members and the Clearing House. The amendments would 
also adopt relevant procedures for such deliveries, which would 
facilitate identifying, monitoring and managing risks associated with 
delivery.
---------------------------------------------------------------------------

    \9\ 17 CFR 240.17Ad-22(e)(10).
---------------------------------------------------------------------------

(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 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 Contracts for trading on the ICE Futures Europe 
market. ICE Clear Europe believes that the Contracts would provide 
additional opportunities for interested market participants to engage 
in trading activity in the New York Harbour ultra low sulphur diesel 
and ultra low sulphur heating oil 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.

[[Page 35900]]

(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 
amendments.

III. Date of Effectiveness of the Proposed Rule Change, Security-Based 
Swap Submission and Advance Notice and Timing for Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and paragraph (f) of Rule 19b-4 \11\ 
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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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, security-based swap submission or advance notice 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-2019-016 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-2019-016. 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, security-based 
swap submission or advance notice that are filed with the Commission, 
and all written communications relating to the proposed rule change, 
security-based swap submission or advance notice 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-2019-016 and should be 
submitted on or before August 15, 2019.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-15775 Filed 7-24-19; 8:45 am]
BILLING CODE 8011-01-P