Document ID: SEC-2021-1308-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe, Ltd.
Posted Date: 2021-09-27T04:00Z

[Federal Register Volume 86, Number 184 (Monday, September 27, 2021)]
[Notices]
[Pages 53355-53358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20817]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93095; File No. SR-ICEEU-2021-017]

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

September 21, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 53356]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 15, 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.
---------------------------------------------------------------------------

    \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 (the ``Delivery Procedures'') 
relating to German natural gas futures contracts traded on the ICE 
Endex market in connection with the merger of two existing natural gas 
market areas in Germany, operated by NetConnect Germany GmbH & Co. and 
NetConnect Germany Management GmbH (together ``NCG'') and GASPOOL 
Balancing Services GmbH (``GASPOOL''), with the resulting combined 
market area to be called the `Trading Hub Europe' (``THE''). The German 
market area merger is currently planned to take effect on October 1, 
2021 (at which time the amendments discussed herein would take effect).

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
    In connection with the merger of the market areas of the German gas 
transmission system operators with GASPOOL and NCG, ICE Clear Europe is 
proposing certain amendments to its Delivery Procedures relating to 
German natural gas futures contracts traded on ICE Endex, in order to 
be consistent with related changes made by the exchange and to give 
effect to the German market merger. As has been announced by ICE 
Endex,\5\ the existing German GASPOOL Natural Gas Futures Contract will 
cease to be listed with the September 2021 contract month, and the 
existing German NCG Natural Gas Futures Contract will continue to trade 
on ICE Endex and will be renamed the German THE Natural Gas Futures 
Contract. Accordingly, ICE Clear Europe is proposing to delete the 
content of Part G of the Delivery Procedures (relating to the ICE Endex 
GASPOOL Natural Gas Futures Contracts) and replace it with ``[NOT 
USED]''. The amendments would also remove the reference to ICE Endex 
GASPOOL Natural Gas Futures Contracts in section 5.1. ICE Clear Europe 
is also proposing to amend Part H of its Delivery Procedures to reflect 
the change of the contract name to ICE Endex German THE Natural Gas 
Futures instead of ICE Endex NCG Natural Gas Futures Contracts and make 
certain other amendments related to the merger of market areas as 
discussed herein. All references to ICE Endex NCG Natural Gas Futures 
Contracts in the Delivery Procedures would be replaced with references 
to ICE Endex German THE Natural Gas Futures Contracts and references to 
NCG Rules would be replaced with references to THE Rules.
---------------------------------------------------------------------------

    \5\ See ICE Endex Circulars E21/026, E20/039 and E21/014, 
available at https://www.theice.com/endex/circulars.
---------------------------------------------------------------------------

    In connection with the above, multiple additional conforming 
amendments would be made throughout Part H to reference relevant THE 
terms, documents and systems reflecting the combined German gas market 
operation. Specifically, references to the term ``NCG'' would be 
deleted and replaced with the term ``THE'', which would be defined 
specifically to be Trading Hub Europe GmbH domiciled in Ratingen and 
Berlin, the operator of the market area cooperation between all gas 
network owners in Germany known as ``THE'' or any successor thereto.
    References to the term, ``NCG's Communication Facilities'' would be 
replaced with references to ``THE's Communication Facilities''. This 
term would reference THE's electronic facility, which includes any 
electronic facility which enables the submission of a Trade Nomination 
to THE through the portal, any web-based communication channel 
including the related functionality and connected systems provided by 
THE, ``Communications Systems'' within the meaning of the THE Rules, 
and access to information concerning the submitted Trade Nominations, 
and any successor system thereto.
    The term, ``THE Balancing Group Contract'', which means the THE's 
Balancing Group Contract Terms and Conditions, would be added.
    The term, ``THE Rules'', would replace the term ``NetConnect 
Germany (NCG) Rules'', and would mean the Electricity and Gas Supply 
Act, the Gas Network Access rules and THE Balancing Group Contract, and 
any manuals, procedures, practices and directions of THE supporting its 
operation.
    A new Section 3.2 would be added to state explicitly that the 
Transmission System, THE and THE's Communication Facilities constitute 
``Delivery Facilities'' for the purposes of Rule 101 of the Rules. The 
limitations on liability would also be expanded and clarified to 
provide that neither the Buyer nor the Seller nor their Transferees or 
Transferors would have any claim against the Clearing House for losses 
resulting from (a) actions taken by the Clearing House pursuant to the 
THE Rules or (b) technical issues, the condition or operation of or the 
performance of the Transmission System, THE or THE's Communication 
Facilities except as otherwise expressly provided in the ICE Endex 
Rules (expanding upon more limited references in the current procedure 
to the Transmission System or NCG).
    The Delivery Timetable for routine deliveries set out in section 5 
would be updated such that the submission of delivery intentions for 
the ICE Endex German THE Natural Gas Futures and the nomination of the 
Transferor/Transferee must be made by 11:30 CET instead of 13:00 CET.
    A note would also be added stating that the delivery timetables for 
routine and failed deliveries could be altered without notice at the 
discretion of the Clearing House, consistent with other existing 
provisions of Parts G and H, and clarifying that such modifications 
could be made in the event of technical issues or other conditions 
relating to THE, among other reasons.

[[Page 53357]]

(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 intended to update the Delivery Procedures to reflect 
changes in the trading of natural gas futures contracts on ICE Endex in 
light of the merger of the market areas of the German gas transmission 
system operators with GASPOOL and NCG. The resulting ICE Endex German 
THE Natural Gas Futures Contract will continue to be cleared by the 
Clearing House in the substantially same manner as the current NCG 
contract, with modifications to reflect the merger of the underlying 
gas market, and will be supported by ICE Clear Europe's existing 
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.\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\)
---------------------------------------------------------------------------

    \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 would incorporate into 
the Delivery Procedures the amendments necessary to address the merger 
of the market areas of the German gas transmission system operators 
with GASPOOL and NCG into THE. The resulting ICE Endex German THE 
Futures Contract will continue to be cleared in substantially the same 
manner as the current NCG contract, supported by ICE Clear Europe's 
existing financial resources, risk management, systems and operational 
arrangements. The amendments would also remove Part G and related 
references related to the GASPOOL contracts that will no longer be 
traded on ICE Endex as a result of the underlying market merger. As a 
result, ICE Clear Europe believes the amendments are consistent with 
the requirements of Rule 17Ad-22(e)(10).\10\
---------------------------------------------------------------------------

    \9\ 17 CFR 240.17Ad-22(e)(10).
    \10\ 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 merger of the market areas of the German gas transmission 
system operators with GASPOOL and NCG. The terms of clearing are not 
otherwise changing. 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 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 \11\ and paragraph (f) of Rule 19b-4 \12\ 
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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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-2021-017 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-2021-017. 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://

[[Page 53358]]

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-2021-017 and should be 
submitted on or before October 18, 2021.
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20817 Filed 9-24-21; 8:45 am]
BILLING CODE 8011-01-P