Document ID: SEC-2014-1038-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe Limited
Posted Date: 2014-06-23T04:00Z

[Federal Register Volume 79, Number 120 (Monday, June 23, 2014)]
[Notices]
[Pages 35604-35605]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14538]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72405; File No. SR-ICEEU-2014-08]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Clearance of New Energy Futures and Options Contracts

June 17, 2014.
    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 June 5, 2014, 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 prepared primarily by ICE Clear Europe. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The principal purpose of the change is to modify certain aspects of 
the ICE Clear Europe Delivery Procedures in connection with the launch 
by the ICE Endex market of three energy futures and options contracts 
that will be cleared by ICE Clear Europe: The German Power Base Load 
Futures Contract, German Power Peak Load Futures Contract, and German 
Power Base Load Option Contract (the ``German Power Contracts'').

II. Self-Regulatory Organization'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 these statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the rule amendments is to modify certain aspects of 
the ICE Clear Europe Delivery Procedures in connection with the launch 
by the ICE Endex market of the German Power Contracts that will be 
cleared by ICE Clear Europe. ICE Clear Europe does not otherwise 
propose to amend its clearing rules or procedures in connection with 
the German Power Contracts.
    The amendments adopt a new Part J of the Delivery Procedures 
applicable to the German Power Contracts in the case of physical 
delivery under a futures contract. The amendments provide, among other 
matters, specifications for delivery of power under a German Power 
Contract through scheduling with the relevant transmission system 
operator (``TSO''), including relevant definitions and a detailed 
delivery timetable for the contracts. The amendments also address 
invoicing and payment for delivery and certain limitations on liability 
of the Clearing House for performance or non-performance by the 
relevant TSO. The amendments provide for calculation by the clearing 
house of buyer's and seller's security to cover delivery obligations 
and related liabilities, costs or charges, as well as procedures to 
address failed deliveries. The revised procedures also outline various 
documentation requirements for the relevant parties.
    In addition, changes are made to paragraph 5.1 of the Delivery 
Procedures to include the German Power Contracts as well as certain 
other natural gas and power futures as contracts for which parties may 
nominate transferors and transferees to make and take delivery. Part H 
of the Delivery Procedures has also been removed as the relevant 
contract moved from trading on the ICE Futures exchange to the ICE 
Endex exchange and is now covered by Part G of the Delivery Procedures.
    ICE Clear Europe believes that the changes described herein are 
consistent with the requirements of Section 17A of the Act \3\ and the 
regulations thereunder applicable to it, including the standards under 
Rule 17Ad-22,\4\ and are consistent with the prompt and accurate 
clearance of 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 
ICE Clear Europe or for which it is responsible and the protection of 
investors and the public interest, within the meaning of Section 
17A(b)(3)(F) of the Act.\5\ The German Power Contracts have similar 
characteristics to other ICE Endex and ICE Futures Europe energy 
contracts currently cleared by ICE Clear Europe, and ICE Clear Europe 
believes that its existing financial resources, risk management, 
systems and operational arrangements are sufficient to support clearing 
of such products (and address physical delivery under such contracts).
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    \3\ 15 U.S.C. 78q-1.
    \4\ 17 CFR 240.17Ad-22.
    \5\ 15 U.S.C. 78q-1(b)(3)(F).
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    Specifically, ICE Clear Europe believes that it will be able to 
manage the risks associated with acceptance of the German Power 
Contracts for clearing and physical delivery in such contracts. The 
German Power Contracts present a similar risk profile to other ICE 
Endex contracts currently cleared by ICE Clear Europe, and ICE Clear 
Europe believes that its existing risk management and margin framework 
is sufficient for purposes of risk management of the German Power 
Contracts and related deliveries.
    Similarly, ICE Clear Europe has established appropriate standards 
for determining the eligibility of contracts submitted to the 
clearinghouse for clearing, and ICE Clear Europe believes that its 
existing systems are appropriately scalable to handle the German Power 
Contracts, which are generally similar from an operational perspective 
to the other ICE Endex power contracts currently cleared by ICE Clear 
Europe.
    For the reasons noted above, ICE Clear Europe believes that the 
proposed rule changes are consistent with the requirements of Section 
17A of the Act \6\ and regulations thereunder applicable to it.
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    \6\ 15 U.S.C. 78q-1.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed changes to the rules 
would have any impact, or impose any burden, on competition not 
necessary or appropriate in furtherance of the Act. ICE Clear Europe is 
adopting the amendments to the Delivery Procedures in connection with 
the listing of new contracts for trading on the ICE Endex market. ICE 
Clear Europe believes that such contracts will provide additional 
opportunities for interested market

[[Page 35605]]

participants to engage in trading activity relating to the German power 
market. ICE Clear Europe does not believe the adoption of related 
Delivery Procedures amendments would adversely affect access to 
clearing for clearing members or their customers, or otherwise 
adversely affect competition in 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 upon filing pursuant 
to Section 19(b)(3)(A) \7\ of the Act and Rule 19b-4(f) \8\ thereunder 
because it effects a change in an existing service of a registered 
clearing agency that primarily affects the clearing operations of the 
clearing agency with respect to products that are not securities, 
including futures that are not security futures, swaps that are not 
security-based swaps or mixed swaps, and forwards that are not security 
forwards, and does not significantly affect any securities clearing 
operations of the clearing agency or any rights or obligations of the 
clearing agency with respect to securities clearing or persons using 
such securities-clearing service. 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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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 rule-comments@sec.gov. Please include 
File Number SR-ICEEU-2014-08 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-2014-08. 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 Web site (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 Web site 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 Web site at https://www.theice.com/notices/Notices.shtml?regulatoryFilings.
    All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-ICEEU-2014-08 
and should be submitted on or before July 14, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-14538 Filed 6-20-14; 8:45 am]
BILLING CODE 8011-01-P