Document ID: SEC-2019-0481-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe Limited
Posted Date: 2019-04-16T04:00Z

[Federal Register Volume 84, Number 73 (Tuesday, April 16, 2019)]
[Notices]
[Pages 15641-15643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07506]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85587; File No. SR-ICEEU-2019-007]

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.

April 10, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\

[[Page 15642]]

notice is hereby given that on March 26, 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)\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)(4).
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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 add delivery terms relating to the ICE Endex Central European 
Gas Hub AG (``CEGH'') Austrian VTP Natural Gas Futures Contracts.\5\
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    \5\ Capitalized terms used but not defined herein have the 
meaning specified in the ICE Clear Europe Clearing Rules (the 
``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 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
    ICE Clear Europe is proposing to amend its Delivery Procedures to 
add a new Part EE regarding delivery procedures relating to a new 
natural gas futures contract, the ICE Endex CEGH Austrian VTP Natural 
Gas Futures Contract (the ``Contract''), that would be traded on ICE 
Endex and cleared by ICE Clear Europe.
    Proposed Part EE would set out the delivery specifications and 
procedures for deliveries under the Contract. Delivery would be 
effected by the transfer of rights to natural gas at the Virtual 
Trading Point (``VTP'') \6\ from a Transferor (nominated by the Seller 
and which may be the Seller) to the Clearing House and from the 
Clearing House (via its nomination agent) to a Transferee (nominated by 
the Buyer and which may be the Buyer) through the input of Trade 
Nominations into the CEGH eletronic system. Under Part EE, Clearing 
Members would authorize the Clearing House to make Trade Nominations on 
their behalf. The amendments would also establish certain timing 
requirements for exchange of futures for physical and swap transactions 
under exchange rules.
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    \6\ This is the virtual trading point as defined in the Austrian 
Natural Gas Act 2011, in respect of a Contract, being a notional 
point in the Austrian Eastern Market Area at which natural gas can 
be traded after injection and before offtake.
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    Proposed Part EE would address certain the responsibilities of the 
Clearing House and relevant parties for delivery under the Contracts, 
supplementing the existing provisions of the Rules. Specifically, the 
Clearing House would not be responsible for the performance of CEGH. 
Further, neither the Buyer nor the Seller, nor their Transferees or 
Transferors, would have any claim against the Clearing House for any 
loss incurred as a result of the condition or operation of the 
Transmission Network unless provided in the ICE Endex Rules.
    Proposed Part EE would address delivery contract security for the 
Buyer and Seller, invoicing with respect to the Contract and certain 
details of the delivery process, including processes relating to a 
failed delivery. Delivery under Contracts would be based on open 
contract positions at the cessation of trading and EFPs and EFSs posted 
up to one hour following the cessation of trading on the last trading 
day for which delivery is specified. The procedures would include a 
detailed timeframe for relevant notices of intent to deliver or 
receive, nominations of Transferors and Transferees, delivery 
confirmations, invoicing, provision of security and release of security 
following completion of delivery and other matters.
    Proposed Part EE would also describe certain reports produced by 
the Clearing House that are made available to Buyers and Sellers and 
their timing.
(b) Statutory Basis
    Section 17A(b)(3)(F) of the Act \7\ 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 natural gas futures contract that is being launched for trading 
by the ICE Endex exchange. The amendments would set out the obligations 
and roles of Clearing Members and the Clearing House. ICE Clear Europe 
believes that its financial resources, risk management, systems and 
operational arrangements are sufficient to support clearing of such 
contract (and to address physical delivery under such contract) and to 
manage the risks associated with such contract. As a result, in ICE 
Clear Europe's view, the amendments would be consistent with the prompt 
and accurate clearance and settlement of the Contract 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.\8\ (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).\9\)
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    \7\ 15 U.S.C. 78q-1(b)(3)(F).
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
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    In addition, Rule 17Ad-22(e)(10) \10\ 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 Contract 
and ICE Endex exchange contract terms would set out the obligations and 
roles of Clearing Members, the Clearing House and CEGH. The amendments 
would also adopt relevant procedures for such deliveries, which would 
facilitate identifying, monitoring and managing risks associated with 
delivery.
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    \10\ 17 CFR 240.17Ad-22(e)(10).
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(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

[[Page 15643]]

purposes of the Act. The changes are being proposed in order to update 
the Delivery Procedures in connection with the listing of the Contract 
for trading on the ICE Endex market. ICE Clear Europe believes that 
such contracts would provide opportunities for interested market 
participants to engage in trading activity in the Austrian VTP Natural 
Gas 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.

(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 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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 [email protected]. Please include 
File Number SR-ICEEU-2019-007 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-2019-007. 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/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-2019-007 and should be 
submitted on or before May 7, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-07506 Filed 4-15-19; 8:45 am]
 BILLING CODE 8011-01-P