Notice2021-20817
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
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Published
September 27, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 184 (Monday, September 27, 2021)</title>
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[Federal Register Volume 86, Number 184 (Monday, September 27, 2021)]
[Notices]
[Pages 53355-53358]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-20817]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93095; File No. SR-ICEEU-2021-017]
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
September 21, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 53356]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 15, 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 amend its Delivery Procedures (the ``Delivery Procedures'')
relating to German natural gas futures contracts traded on the ICE
Endex market in connection with the merger of two existing natural gas
market areas in Germany, operated by NetConnect Germany GmbH & Co. and
NetConnect Germany Management GmbH (together ``NCG'') and GASPOOL
Balancing Services GmbH (``GASPOOL''), with the resulting combined
market area to be called the `Trading Hub Europe' (``THE''). The German
market area merger is currently planned to take effect on October 1,
2021 (at which time the amendments discussed herein would take effect).
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
In connection with the merger of the market areas of the German gas
transmission system operators with GASPOOL and NCG, ICE Clear Europe is
proposing certain amendments to its Delivery Procedures relating to
German natural gas futures contracts traded on ICE Endex, in order to
be consistent with related changes made by the exchange and to give
effect to the German market merger. As has been announced by ICE
Endex,\5\ the existing German GASPOOL Natural Gas Futures Contract will
cease to be listed with the September 2021 contract month, and the
existing German NCG Natural Gas Futures Contract will continue to trade
on ICE Endex and will be renamed the German THE Natural Gas Futures
Contract. Accordingly, ICE Clear Europe is proposing to delete the
content of Part G of the Delivery Procedures (relating to the ICE Endex
GASPOOL Natural Gas Futures Contracts) and replace it with ``[NOT
USED]''. The amendments would also remove the reference to ICE Endex
GASPOOL Natural Gas Futures Contracts in section 5.1. ICE Clear Europe
is also proposing to amend Part H of its Delivery Procedures to reflect
the change of the contract name to ICE Endex German THE Natural Gas
Futures instead of ICE Endex NCG Natural Gas Futures Contracts and make
certain other amendments related to the merger of market areas as
discussed herein. All references to ICE Endex NCG Natural Gas Futures
Contracts in the Delivery Procedures would be replaced with references
to ICE Endex German THE Natural Gas Futures Contracts and references to
NCG Rules would be replaced with references to THE Rules.
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\5\ See ICE Endex Circulars E21/026, E20/039 and E21/014,
available at <a href="https://www.theice.com/endex/circulars">https://www.theice.com/endex/circulars</a>.
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In connection with the above, multiple additional conforming
amendments would be made throughout Part H to reference relevant THE
terms, documents and systems reflecting the combined German gas market
operation. Specifically, references to the term ``NCG'' would be
deleted and replaced with the term ``THE'', which would be defined
specifically to be Trading Hub Europe GmbH domiciled in Ratingen and
Berlin, the operator of the market area cooperation between all gas
network owners in Germany known as ``THE'' or any successor thereto.
References to the term, ``NCG's Communication Facilities'' would be
replaced with references to ``THE's Communication Facilities''. This
term would reference THE's electronic facility, which includes any
electronic facility which enables the submission of a Trade Nomination
to THE through the portal, any web-based communication channel
including the related functionality and connected systems provided by
THE, ``Communications Systems'' within the meaning of the THE Rules,
and access to information concerning the submitted Trade Nominations,
and any successor system thereto.
The term, ``THE Balancing Group Contract'', which means the THE's
Balancing Group Contract Terms and Conditions, would be added.
The term, ``THE Rules'', would replace the term ``NetConnect
Germany (NCG) Rules'', and would mean the Electricity and Gas Supply
Act, the Gas Network Access rules and THE Balancing Group Contract, and
any manuals, procedures, practices and directions of THE supporting its
operation.
A new Section 3.2 would be added to state explicitly that the
Transmission System, THE and THE's Communication Facilities constitute
``Delivery Facilities'' for the purposes of Rule 101 of the Rules. The
limitations on liability would also be expanded and clarified to
provide that neither the Buyer nor the Seller nor their Transferees or
Transferors would have any claim against the Clearing House for losses
resulting from (a) actions taken by the Clearing House pursuant to the
THE Rules or (b) technical issues, the condition or operation of or the
performance of the Transmission System, THE or THE's Communication
Facilities except as otherwise expressly provided in the ICE Endex
Rules (expanding upon more limited references in the current procedure
to the Transmission System or NCG).
The Delivery Timetable for routine deliveries set out in section 5
would be updated such that the submission of delivery intentions for
the ICE Endex German THE Natural Gas Futures and the nomination of the
Transferor/Transferee must be made by 11:30 CET instead of 13:00 CET.
A note would also be added stating that the delivery timetables for
routine and failed deliveries could be altered without notice at the
discretion of the Clearing House, consistent with other existing
provisions of Parts G and H, and clarifying that such modifications
could be made in the event of technical issues or other conditions
relating to THE, among other reasons.
[[Page 53357]]
(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 intended to update the Delivery Procedures to reflect
changes in the trading of natural gas futures contracts on ICE Endex in
light of the merger of the market areas of the German gas transmission
system operators with GASPOOL and NCG. The resulting ICE Endex German
THE Natural Gas Futures Contract will continue to be cleared by the
Clearing House in the substantially same manner as the current NCG
contract, with modifications to reflect the merger of the underlying
gas market, and will be supported by ICE Clear Europe's existing
financial resources, risk management, systems and operational
arrangements. Accordingly, ICE Clear Europe believes that its financial
resources, risk management, systems and operational arrangements are
sufficient to support clearing of such contracts and to manage the
risks associated with such contracts. As a result, in ICE Clear
Europe's view, the amendments would be consistent with the prompt and
accurate clearance and settlement of the contracts, 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 would incorporate into
the Delivery Procedures the amendments necessary to address the merger
of the market areas of the German gas transmission system operators
with GASPOOL and NCG into THE. The resulting ICE Endex German THE
Futures Contract will continue to be cleared in substantially the same
manner as the current NCG contract, supported by ICE Clear Europe's
existing financial resources, risk management, systems and operational
arrangements. The amendments would also remove Part G and related
references related to the GASPOOL contracts that will no longer be
traded on ICE Endex as a result of the underlying market merger. As a
result, ICE Clear Europe believes the amendments are consistent with
the requirements of Rule 17Ad-22(e)(10).\10\
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\9\ 17 CFR 240.17Ad-22(e)(10).
\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 purposes of the Act. The changes are
being proposed in order to update the Delivery Procedures in connection
with the merger of the market areas of the German gas transmission
system operators with GASPOOL and NCG. The terms of clearing are not
otherwise changing. 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 the
new 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
rule change.
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, security-based swap submission or advance notice 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#f082859c95dd939f9d9d959e8483b0839593de979f86"><span class="__cf_email__" data-cfemail="5f2d2a333a723c3032323a312b2c1f2c3a3c71383029">[email protected]</span></a>. Please include
File Number SR-ICEEU-2021-017 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-2021-017. 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 https://
[[Page 53358]]
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-2021-017 and should be
submitted on or before October 18, 2021.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20817 Filed 9-24-21; 8:45 am]
BILLING CODE 8011-01-P
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