Document ID: SEC-2020-1173-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd.
Posted Date: 2020-07-24T04:00Z

[Federal Register Volume 85, Number 143 (Friday, July 24, 2020)]
[Notices]
[Pages 44948-44950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16022]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89351; File No. SR-ICEEU-2020-011]

Self-Regulatory Organizations; ICE Clear Europe Limited (``ICE 
Clear Europe''); Notice of Filing and Immediate Effectiveness of 
Proposed Rule Changes Relating to Amendments to Delivery Fees on UK 
Electricity Futures Contracts and Amendments to Clearing Fees of 
Certain Natural Gas Spot and Natural Gas Daily Futures Contracts

July 20, 2020.
    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 15, 2020, ICE Clear Europe Limited (``ICE Clear Europe'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule changes described in Items I, II, and III below, which 
Items have been primarily 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)(2) \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)(2).
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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'') proposes rule 
changes relating to (i) amendments to delivery fees on UK electricity 
futures contracts and (ii) amendments to clearing fees of certain 
natural gas spot and natural gas daily futures contracts. The proposed 
amendments do not involve any changes to the ICE Clear Europe Clearing 
Rules or Procedures.\5\
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    \5\ Capitalized terms used but not defined herein have the 
meanings specified in the ICE Clear Europe Clearing 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. 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
    The purpose of the proposed rule changes is for ICE Clear Europe to 
(i) reduce the delivery fees associated with UK electricity futures to 
better reflect the actual variable cost charged by the transmission 
system operator through Elexon; \6\ and (ii) increase exchange and 
clearing fees in combination with removing the cash settlement and 
delivery charges for a number of natural gas spot and natural gas daily 
futures contracts. Attached as Exhibit 5 is an attachment containing 
tables listing the new fee schedules and a Circular in advance of the 
proposed effective date. The new fees are intended to come into effect 
on 01 August 2020 subject to regulatory approval. The proposed 
revisions to the fees are described in detail as follows.
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    \6\ Elexon is known as the balance and settlement code company 
for the UK electricity market and is responsible for processing 
payments between generators and suppliers after comparing the amount 
they said they would consume with actual volumes (https://www.elexon.co.uk/).
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    The fee currently charged for the delivery of the UK electricity 
futures cleared by ICE Clear Europe (GBP0.00450/MWh) is nine times 
higher than the actual variable costs for the delivery service provided 
by the transmissions system operator through Elexon (GBP0.00050/MWh). 
Accordingly, ICE Clear Europe is proposing to decrease the delivery fee 
for the following products:

----------------------------------------------------------------------------------------------------------------
                                                                              Trading venue
          Product name                Product name              Type              (MIC)          Clearing venue
----------------------------------------------------------------------------------------------------------------
UBL............................  UK Base Electricity     Daily Future.....  IFEU.............  ICEU.
                                  Future (Gregorian).
UPL............................  UK Peak Electricity     Daily Future.....  IFEU.............  ICEU.
                                  Future (Gregorian).
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    Please see fee schedule and proposed change below:

[[Page 44949]]

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           Fee type               Trade type      Current fee    Proposed fee       Currency           UoM
----------------------------------------------------------------------------------------------------------------
Exchange fee.................  EFP/EFS/Block..         0.00050         0.00050  GBP............  MWh.
Clearing fee.................  EFP/EFS/Block..         0.00450         0.00450  GBP............  MWh.
Exchange fee.................  Futures........         0.00150         0.00150  GBP............  MWh.
Clearing fee.................  Futures........         0.00350         0.00350  GBP............  MWh.
Cash settlement..............  ...............             n/a             n/a  GBP............  MWh.
Deliveries...................  ...............        0.00450.         0.00050  GBP............  MWh.
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    The proposed changes to ICE Clear Europe's exchange and clearing 
fees in combination with removing the cash settlement and delivery 
charges will apply to the following products:

----------------------------------------------------------------------------------------------------------------
                                                                              Trading venue
          Product name                Product name              Type              (MIC)          Clearing venue
----------------------------------------------------------------------------------------------------------------
TFE............................  Dutch TTF Gas Daily     Daily Future.....  NDEX.............  ICEU.
                                  Futures.
NBD............................  UK Natural Gas Daily    Daily Future.....  IFEU.............  ICEU.
                                  Future.
EZH............................  Belgian ZTP Gas Spot..  Spot.............  NDXS.............  ICEU.
EZL............................  Belgian ZTPL Gas Spot.  Spot.............  NDXS.............  ICEU.
ETT............................  TTF Gas Spot..........  Spot.............  NDXS.............  ICEU.
ENB............................  UK OCM Gas Spot.......  Spot.............  NDCM.............  ICEU.
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    The proposal, which follows consultation with market participants, 
involves removing the cash settlement and delivery charges for these 
contracts and increasing the exchange and clearing fees (whilst 
maintaining the existing ratio between execution and clearing).
    The table below sets out the current fees:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Current Fees
                                                         -----------------------------------------------------------------------------------------------
               Fees                      Trade type                            NDXS            NDXS            NDCM            NDCM
                                                               NDEX      ----------------------------------------------------------------      IFEU
                                                                               08-18           18-08           08-18           18-08
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                                                           EUR/MWh
                                                         GBPp/therm
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Exchange fee......................  EFP/EFS/Block.......         0.00038             n/a             n/a             n/a             n/a         0.00025
Clearing fee......................  EFP/EFS/Block.......         0.00337             n/a             n/a             n/a             n/a         0.00225
Exchange fee......................  Futures.............         0.00113         0.00113         0.00375         0.00100         0.00300         0.00080
Clearing fee......................  Futures.............         0.00262         0.00262         0.00750         0.00200         0.00600         0.00170
Cash settlement...................  ....................             n/a             n/a             n/a             n/a             n/a         0.00050
Deliveries........................  ....................         0.00200             n/a             n/a             n/a             n/a         0.00500
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    The table below sets out the proposed changes to the fees (with 
changes in italics for ease of review):

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                                                                                                   Proposed Fees
                                                         -----------------------------------------------------------------------------------------------
               Fees                      Trade type                            NDXS            NDXS            NDCM            NDCM
                                                               NDEX      ----------------------------------------------------------------      IFEU
                                                                               08-18           18-08           08-18           18-08
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                                                           EUR/MWh
                                                         GBPp/therm
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Exchange fee......................  EFP/EFS/Block.......         0.00125             n/a             n/a             n/a             n/a         0.00050
Clearing fee......................  EFP/EFS/Block.......         0.01125             n/a             n/a             n/a             n/a         0.00450
Exchange fee......................  Futures.............         0.00417         0.00417         0.00833         0.00167         0.00333         0.00170
Clearing fee......................  Futures.............         0.00833         0.00833         0.01667         0.00333         0.00667         0.00330
Cash settlement...................  ....................             n/a             n/a             n/a             n/a             n/a             n/a
Deliveries........................  ....................             n/a             n/a             n/a             n/a             n/a             n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Please note that the fees on the website are in GBP/lot (=1,000 
therms), whilst the fees in the filing are equal to 1/10 of this as are 
expressed in GBPp (pence)/therm.
(b) Statutory Basis
    ICE Clear Europe believes that the proposed rule changes are 
consistent with the requirements of the Act, including Section 17A of 
the Act \7\ and regulations thereunder applicable to it. ICE Clear 
Europe's fees are imposed at the product level on a per transaction

[[Page 44950]]

basis (as are the applicable Exchange fees). As a result, the fees 
apply equally to all market participants who trade/clear the Contracts. 
ICE Clear Europe believes that the changes in fees provides appropriate 
incentives and rewards to market participants for the use of the 
Clearing House's clearing services for the Contracts. ICE Clear Europe 
believes that the current delivery fee in relation to UK electricity 
contracts could better reflect the actual variable cost charged by the 
transmission system operator through Elexon, and therefore plans to 
reduce the delivery fee. Following consultation with market 
participants, ICE Clear Europe also believes that the current fees in 
relation to the natural gas products should be increased, to properly 
compensate ICE Clear Europe for the risks, costs and expenses of 
clearing the Contracts. ICE Clear Europe believes that the increases in 
the fees are relatively modest in size. ICE Clear Europe has determined 
that the revised fees will provide a more appropriate balance between 
the costs of clearing and expenses incurred by ICE Clear Europe. As 
such, in ICE Clear Europe's view, the amendments are consistent with 
the equitable allocation of reasonable dues, fees and other charges 
among its Clearing Members and other market participants, within the 
meaning of Section 17A(b)(3)(D) of the Act,\8\ and further do not 
unfairly discriminate among such participants in their use of the 
Clearing House, within the meaning of Section 17A(b)(3)(F) of the 
Act.\9\
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    \7\ 15 U.S.C. 78q-1.
    \8\ 15 U.S.C. 78q-1(b)(3)(D). Under this provision, ``[a] 
clearing agency shall not be registered unless the Commission 
determines that--(D) The rules of the clearing agency provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among its participants.''
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Self-Regulatory Organization'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 purpose of the Act. As discussed 
above, because fees are imposed on a per transaction basis at the 
product level, the changes to the fees are applied equally to all those 
market participants who trade and/or clear the Contracts. Although the 
amendments with respect to the natural gas contracts may result in 
higher fees for particular Clearing Members because of the higher fee 
on specific products, ICE Clear Europe believes that the new fees would 
be set at an appropriate level to better reflect the cost that the 
Clearing House takes on by facilitating the relevant clearing services. 
ICE Clear Europe does not believe that the amendments would adversely 
affect the ability of such Clearing Members or other market 
participants generally to access clearing services for the Contracts. 
Further, since the revised fees will apply to all Clearing Members that 
clear the products, ICE Clear Europe believes that the amendments would 
not otherwise affect competition among Clearing Members, adversely 
affect the market for clearing services or limit market participants' 
choices for obtaining clearing services.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    Written comments relating to the proposed changes to the rules have 
not been solicited or received. ICE Clear Europe will notify the 
Commission of any written comments received by ICE Clear Europe.

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) \10\ of the Act 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(2).
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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, 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-2020-011 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-2020-011. 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/notices/Notices.shtml?regulatoryFilings. 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-2020-011 and should be submitted on or before August 14, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-16022 Filed 7-23-20; 8:45 am]
BILLING CODE 8011-01-P