Document ID: SEC-2015-1383-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe Limited
Posted Date: 2015-08-19T04:00Z

[Federal Register Volume 80, Number 160 (Wednesday, August 19, 2015)]
[Notices]
[Pages 50348-50349]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20420]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75692; File No. SR-ICEEU-2015-009]

Self-Regulatory Organizations; ICE Clear Europe Limited; Order 
Approving Proposed Rule Change Relating to Finance Procedures To Add 
Clearstream Banking as a Triparty Collateral Service Provider

August 13, 2015.

I. Introduction

    On May 5, 2015, ICE Clear Europe Limited (``ICE Clear Europe'') 
filed with the Securities and Exchange Commission (``Commission'') a 
proposed rule change pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ to 
amend its Finance Procedures in order to facilitate CDS Clearing 
Members' use of Clearstream Banking as a triparty collateral service 
provider. The proposed rule change was published for comment in the 
Federal Register on May 15, 2015.\3\ On June 29, 2015, the Commission 
extended the time period in which to either approve, disapprove, or 
institute proceedings to determine whether to disapprove the proposed 
rule change to August 13, 2015.\4\ The Commission did not receive 
comment letters regarding the proposed change. For the reasons 
discussed below, the Commission is granting approval of the proposed 
rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-74922 (May 11, 2015), 
80 FR 28035 (May 15, 2015) (File No. SR-ICEEU-2015-009).
    \4\ Securities Exchange Act Release No. 34-75320 (June 29, 
2015), 80 FR 38488 (July 6, 2015) (File No. SR-ICEEU-2015-009).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    ICE Clear Europe proposes to modify the Finance Procedures to allow 
Clearstream Banking to serve as a triparty collateral service provider 
for initial or original margin provided in respect of all product 
categories, including CDS Contracts. Clearstream Banking currently 
serves as a triparty collateral service provider solely for original 
margin provided in respect of F&O Contracts.
    Specifically, paragraph 3.1 of the Finance Procedures will be 
revised to remove the existing restriction that Clearstream Banking may 
only act as a triparty collateral service provider with respect to 
Original Margin in respect of F&O Contracts. As a result of such

[[Page 50349]]

change, Clearstream Banking would be permitted to act as a triparty 
collateral service provider for initial or original margin in respect 
of any product category, including the CDS product category. (The other 
currently authorized triparty collateral service provider, Euroclear 
Bank, is similarly eligible to act as such for any product category.) A 
correction would also be made in paragraph 3.20 to provide that the 
specified instruction deadlines apply to triparty collateral 
arrangements with both Euroclear Bank and Clearstream Banking.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \5\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if the 
Commission finds that such proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to such self-regulatory organization. Section 17A(b)(3)(F) 
of the Act \6\ requires, among other things, that the rules of a 
clearing agency are designed to promote the prompt and accurate 
clearance and settlement of securities transactions and, to the extent 
applicable, derivative agreements, contracts, and transactions and 
assure the safeguarding of securities and funds which are in the 
custody or control of the clearing agency or for which it is 
responsible.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(2)(C).
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent 
with section 17A of the Act \7\ and the rules thereunder applicable to 
ICE Clear Europe. The proposed rule change will provide Clearing 
Members with the option to use Clearstream Banking as a triparty 
collateral service provider with respect to initial and original margin 
for the CDS (and FX) product categories. According to ICE Clear Europe, 
the proposed rule change does not otherwise change the substantive 
terms of the service. Based on ICE Clear Europe's representation 
regarding its experience with Clearstream Banking as triparty 
collateral service provider with respect to original margin for the F&O 
product category, the use of Clearstream Banking can be appropriately 
extended to other product categories. As such, the Commission believes 
that the proposed rule change would allow ICE Clear Europe's Clearing 
Members to use an additional triparty collateral service provider that 
offers appropriate safeguarding of securities and funds while 
maintaining ICE Clear Europe's ability to access initial margin when 
appropriate. The Commission therefore finds that the proposed rule 
change is designed to promote the prompt and accurate clearance and 
settlement of securities transactions and, to the extent applicable, 
derivative agreements, contracts, and transactions and to assure the 
safeguarding of securities and funds which are in the custody or 
control of the clearing agency or for which it is responsible, in 
accordance with section 17A(b)(3)(F) of the Act.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1.
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of section 17A of the Act \9\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\10\ that the proposed rule change (File No. SR-ICEEU-2015-009) be, 
and hereby is, approved.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).
    \11\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Brent J. Fields,
Secretary.
[FR Doc. 2015-20420 Filed 8-18-15; 8:45 am]
 BILLING CODE 8011-01-P