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

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September 13, 2021

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Securities and Exchange Commission

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<title>Federal Register, Volume 86 Issue 174 (Monday, September 13, 2021)</title>
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[Federal Register Volume 86, Number 174 (Monday, September 13, 2021)]
[Notices]
[Pages 50917-50919]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-19611]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92883; File No. SR-ICEEU-2021-016]

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

September 7, 2021.
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 August 23, 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.
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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)(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 proposed amendments is for ICE Clear
Europe to make certain amendments to Part EE of its Delivery Procedures
to add provisions relating to delivery of an additional contract, the
ICE Endex Austrian Central European Gas Hub AG (``CEGH'') Virtual
Trading Point (``VTP'') Natural Gas Daily Futures (``ICE Endex VTP
Natural Gas Daily Futures''), that will be traded on the ICE Endex
exchange and cleared at ICE Clear Europe. The amendments also propose
to correct the name of the ICE Endex CEGH Austrian VTP Natural Gas
Futures to ICE Endex Austrian CEGH VTP Natural Gas Futures (``ICE Endex
VTP Natural Gas Futures'') and make certain corresponding updates
throughout Part EE.\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 Part EE of its Delivery
Procedures to add provisions relating to delivery of an additional
contract, the ICE Endex Austrian CEGH VTP Natural Gas Daily Futures
(``ICE Endex VTP Natural Gas Daily Futures''), that will be traded on
the ICE Endex exchange and cleared at ICE Clear Europe. The proposed
amendments also correct the name of the ICE Endex CEGH Austrian VTP
Natural Gas Futures to ICE Endex Austrian CEGH VTP Natural Gas Futures
(``ICE Endex VTP Natural Gas Futures'') and make certain corresponding
updates throughout Part EE.
Proposed amendments to 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 VTP 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

[[Page 50918]]

agent) to a Transferee (nominated by the Buyer and which may be the
Buyer) through the input of Trade Nominations into the CEGH electronic
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.
Proposed amendments to 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.
A definition of ``ICE Endex VTP Natural Gas Daily Futures'' is
being proposed. Where applicable, amendments will be made throughout
Part EE to apply to the ICE Endex VTP Natural Gas Daily Futures in
addition to ICE Endex VTP Natural Gas Futures. The existing defined
term ``ICE Endex VTP Natural Gas'' is being proposed to be changed to
``ICE Endex VTP Natural Gas Futures'' for clarity and to distinguish
that contract from the new daily futures contract. Various other
corrections to the use of defined terms and other typographical and
similar corrections are also being proposed.
Section 3.4 (which describes the price of the Contracts) is being
proposed to be amended to provide that the price at which the Contract
is delivered is the Exchange Delivery Settlement Price for the Delivery
Day of each of the ICE Endex VTP Natural Gas Futures or ICE Endex
Natural Gas Daily Futures in accordance with the ICE Endex Rules
(instead of the Business Day immediately prior to the calendar day on
which the Delivery Month for the ICE Endex VTP Natural Gas Futures
commences). This change is intended to update the Delivery Procedures
to reflect current practice with respect to the ICE Endex VTP Natural
Gas Futures.
Section 3.6 (which describes cessation of trading) is being
proposed to be revised so that such procedures apply to ICE Endex VTP
Natural Gas Daily Futures in addition to ICE Endex VTP Natural Gas
Futures. The description of the cessation of trading is also being
proposed to be revised to clarify that it is consistent with the ICE
Endex Rules. The ICE Endex VTP Natural Gas Daily Futures ceases trading
one business day prior to the Delivery Day.
Section 3.7 (which describes the Exchange for Physicals (EFPs) and
Exchange for Swaps (EFSs)) is being proposed to be amended to specify
that ICE Endex VTP Natural Gas Daily Futures, EFPs and EFSs may be
posted up to thirty minutes following the cessation of trading in
accordance with ICE Endex Rules.
In Section 6 Delivery Timetable, an outdated reference to ICE Endex
Austrian VTP Natural Cas Futures is being proposed to be updated to ICE
Endex VTP Natural Gas Futures.
A new Section 8 is being proposed to be added which includes a
routine delivery timetable, from the last trading day of the Contract
through final settlement, for ICE Endex VTP Natural Gas Daily Futures.
The timetable specifies procedures, deadlines and requirements
submissions of delivery intentions, nominations of Transferors or
Transferees, Conversion and Confirmation Reports, notification files to
the nomination agent, provision of Buyer's and Seller's security, final
confirmation of the delivery report, release of Seller's security and
Buyer's top-up following completion of delivery, payment and invoicing.
A new Section 9 is being proposed to be added which includes a
delivery timetable for failed delivery for ICE Endex VTP Natural Gas
Daily Futures. The timetable specifies the procedures and timing with
respect to calling and releasing additional Seller's Security and/or
Buyer's Security and invoicing, payment and receipt of failed
deliveries. A note is also added that, in the event of a failed
delivery, the Clearing House may retain Buyer's Security and/or
Seller's Security.
A new Section 11.2 is being proposed to be added that provides a
delivery documentation summary with respect to ICE Endex VTP Natural
Gas Daily Futures. The timetable specifies the reports produced by the
Clearing House and made available to Buyers and Sellers electronically,
an explanation of each such report, and when each such report is made
available. A note is also added that provides that such timetable may
be altered at the discretion of the Clearing House.
(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 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.\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\)
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\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).
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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 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 the Central European
Gas Hub (``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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\9\ 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

[[Page 50919]]

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 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.

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.
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 and paragraph (f) of Rule 19b-4 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.

III. 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

<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>) or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#b8cacdd4dd95dbd7d5d5ddd6cccbf8cbdddb96dfd7ce"><span class="__cf_email__" data-cfemail="f88a8d949dd59b9795959d968c8bb88b9d9bd69f978e">[email&#160;protected]</span></a>. Please include
File Number SR-ICEEU-2021-016 on the subject line.

Paper Comments

<bullet> 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-2021-016. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 <a href="https://www.theice.com/clear-europe/regulation">https://www.theice.com/clear-europe/regulation</a>.
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-2021-016 and should be
submitted on or before October 4, 2021.
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\10\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19611 Filed 9-10-21; 8:45 am]
BILLING CODE 8011-01-P

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