Document ID: SEC-2014-1590-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: ICE Clear Europe Ltd.
Posted Date: 2014-09-23T04:00Z

[Federal Register Volume 79, Number 184 (Tuesday, September 23, 2014)]
[Notices]
[Pages 56840-56842]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-22541]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73128; File No. SR-ICEEU-2014-14]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to ICE Clear Europe Delivery Procedures

September 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 September 2, 2014, ICE Clear Europe Limited (``ICE Clear Europe'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared primarily by ICE Clear Europe. ICE Clear Europe 
filed the proposal pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ 
and Rule 19b-4(f)(4)(ii) \4\ thereunder so that the proposal was 
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)(iii).
    \4\ 17 CFR 240.19b-4(f)(4)(ii).
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I. Clearing Agency'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 
settlement of certain European energy futures contracts that are 
currently cleared by ICE Clear Europe, namely: ICE UK Base Electricity 
Futures Contract, ICE UK Peak Electricity Futures Contract, ICE UK 
Natural Gas Futures, ICE Endex TTF Natural Gas Base Load Futures, ICE 
Endex TTF Natural Gas WDNW Futures, ICE Endex German Gaspool Natural 
Gas Futures, ICE Endex German NCG Natural Gas Futures, ICE Endex Dutch 
Power Base Load Futures, ICE Endex Dutch Power Base Load Week Futures, 
ICE Endex Dutch Power Peak Load (7-23) Futures, ICE Endex Dutch Power 
Peak Load (8-20) Futures, ICE Endex Belgian Power Base Load Futures and 
ICE Endex German Power Futures (the ``Relevant Futures Contracts'').

[[Page 56841]]

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

(1) Purpose
    The purpose of the rule amendments is to modify certain aspects of 
the ICE Clear Europe Delivery Procedures in connection with the 
settlement of the Relevant Futures Contracts. As set forth below, 
substantially the same changes are made for each Relevant Futures 
Contract. The changes are made in each of Parts C through J of the 
Delivery Procedures, which are the subchapters relating to the Relevant 
Futures Contracts. ICE Clear Europe does not otherwise propose to amend 
its clearing rules or procedures in connection with the Relevant 
Futures Contracts.
    The amendments are generally designed to provide for daily 
settlement of payments owed with respect to deliveries made, and to 
make related changes in the invoicing process. The settlement timetable 
in section 5 of each relevant Part has been revised so that payment 
takes place by 9:00 a.m. London time (or 10:00 a.m. Central European 
Time, as applicable) on the business day following the Delivery Day 
(``D+1'') for deliveries made on that Delivery Day (instead of the 19th 
business day for the natural gas contracts and the 10th business day 
for the power contracts following the end of the month of delivery, as 
under the existing Delivery Procedures). Thus, Buyers make contract 
payment via their nominated accounts, and Sellers receive payment, in 
respect of deliveries for the preceding Delivery Day. In addition, as 
modified, on D+1 Seller's Security for the actual delivered amount is 
released and ICE Clear Europe releases the `Buyer's Default Top-up' 
portion of the Buyer's Security on confirmed deliveries. Procedures for 
dealing with failed deliveries are not changed.
    In each relevant Part, the amendments adopt a new definition of 
``Invoice Period,'' which is defined as the period beginning at the 
start of the day on which the last invoice was issued, up to the end of 
the day prior to the date of the current invoice and includes all 
payments made from the Buyer to the Seller in respect of completed 
deliveries. The relevant Parts have also been modified to provide that 
the Invoice and Account Sale Report, which gives details of all 
deliveries made during the Invoice Period, will available made by 9:00 
a.m. London time (or 10:00 a.m. Central European Time, as applicable) 
on the day following the Invoice Period.
    In addition, conforming changes are made in certain Parts to use 
the defined term ``Exchange Delivery Settlement Price'' and its 
abbreviation ``EDSP'' instead of ``Market Delivery Settlement Price'' 
and ``MDSP,'' respectively.
    In Part J of the Delivery Procedures, text relating to the Clearing 
House's ability to retain Buyer's Security and/or Seller's Security in 
the case of a delivery failure, which was inadvertently omitted from a 
prior filing, has been reinserted. The revised provision is consistent 
with the treatment of delivery failures under the other Parts of the 
Delivery Procedures.
 (2) Statutory Basis
    ICE Clear Europe believes that the changes described herein are 
consistent with the requirements of Section 17A of the Act \5\ and the 
regulations thereunder applicable to it, including the standards under 
Rule 17Ad-22,\6\ 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.\7\ The amended Delivery Procedures, together 
with the existing ICE Clear Europe rules, provide the mechanism for 
physical settlement of the Relevant Futures Contracts, specify the 
rights, obligations and duties of the clearing members and the Clearing 
House in connection therewith, and permit the Clearing House to manage 
the delivery risk with respect to such contracts. In particular, the 
amendments to the Delivery Procedures revise the timing of payment to 
be more closely aligned with deliveries made under the Relevant Futures 
Contracts. ICE Clear Europe thus believes that the proposed rule change 
is consistent with the requirements of Section 17A of the Act and 
regulations thereunder applicable to it, including Rule 17Ad-22(d)(15).
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    \5\ 15 U.S.C. 78q-1.
    \6\ 17 CFR 240.17Ad-22.
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Clearing Agency'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 principally in order 
to revise the timing of payment to be more closely aligned with 
deliveries made under the Relevant Futures Contracts. ICE Clear Europe 
does not believe the adoption of these changes would adversely affect 
access to clearing for clearing members or their customers, otherwise 
adversely affect competition in clearing services, or materially affect 
the cost of clearing for clearing members or their customers.

(C) Clearing Agency'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)(ii) of the Act,\8\ and Rule 19b-4(f)(2) \9\ 
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

[[Page 56842]]

investors, or otherwise in furtherance of the purposes of the Act.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 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 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-2014-14 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-2014-14. 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/clear-europe/regulation.
    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-2014-14 
and should be submitted on or before October 14, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
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    \10\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2014-22541 Filed 9-22-14; 8:45 am]
BILLING CODE 8011-01-P