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

Primary source

Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.

Published

December 29, 2021

Issuing agencies

Securities and Exchange Commission

Full Text

<html>
<head>
<title>Federal Register, Volume 86 Issue 247 (Wednesday, December 29, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Notices]
[Pages 74143-74145]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-28328]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93864; File No. SR-ICEEU-2021-025]

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

December 23, 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 December 16, 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)
thereunder,\4\ 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.
---------------------------------------------------------------------------

\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).
---------------------------------------------------------------------------

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 (``Delivery Procedures'' or
``Procedures'') to add a new Part HH thereto (``Part HH'') to address
new ICE Endex French PEG Natural Gas Futures and ICE Endex French PEG
Natural Gas Daily Futures (each a ``Contract'' and together the
``Contracts''), natural gas futures contracts that will be traded on
ICE Endex and cleared by ICE Clear Europe. The proposed updates would
also make certain conforming changes elsewhere in the Delivery
Procedures.\5\
---------------------------------------------------------------------------

\5\ Capitalized terms used but not defined herein have the
meanings specified in the Delivery Procedures or, if not defined
therein, the ICE Clear Europe Clearing Rules.
---------------------------------------------------------------------------

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 add a new Part HH as well as make
certain conforming changes elsewhere in the Delivery Procedures. Part
HH would apply to the Contracts, which are to be traded on ICE Endex
and cleared at ICE Clear Europe. The amended Delivery Procedures would
provide the delivery specifications and processes related to delivery
under such Contracts.
Delivery under the Contracts would be settled by the transfer of
rights to Natural Gas at the PEG (the title transfer point in the
Transmission System where the Licensed Shipper would exchange daily
quantities of energy with other shippers or with one of the operators
of the Transmission System in France) from a Transferor nominated by
the Seller to the Clearing House and the

[[Page 74144]]

[sic] from the Clearing House to a Transferee nominated by the Buyer.
The amendments would provide that the Clearing Members grant authority
to ICE Clear Europe to make Trade Nominations on their behalf in
connection with deliveries under Contracts. Clearing Members would not
be required to send Trade Nominations themselves. Clearing Members
would also acknowledge that GRTgaz (one of the operators of the
Transmission System in France) may take into consideration the Trade
Nominations made by the Clearing House, and ignore Trade Nominations
sent by Buyers, Sellers, Transferors and Transferees.
The amendments would further specify certain details of the
delivery process for the Contracts including denominations of relevant
quantity, settlement price, relevant time zones, timing of cessation of
trading and certain requirements for exchange of futures for physical
and swap transactions under exchange rules.
The amendments would also address the responsibilities of the
Clearing House and relevant parties for delivery under Contracts, as
well as certain limitations of liability for the Clearing House.
Specifically, the Clearing House would not be responsible for the
performance or non-performance of GRTgaz, including of its obligations
under the GRTgaz Rules. Additionally, neither the Buyer, Seller nor
their Transferees or Transferors would have any claim against the
Clearing House for any loss, damage, cost or expense incurred as a
result of (i) any actions taken by the Clearing House pursuant to the
GRTgaz Rules, or (ii) technical issues, technical measures,
authorisations, limitations, prohibitions, or failures imposed on, the
condition or operation of, or the performance or non-performance of the
Transmission System, GRTgaz and the TRANS@actions Platform ties except
as expressly provided in the ICE Endex Rules. Each of the Buyer, Seller
and their Transferees or Transferors would be required to accept any
consequences arising from Trade Nominations made by the Clearing House
pursuant to Part HH.
The amendments would provide details related to delivery contact
[sic] security, which is the delivery margin to be provided by Buyer
and Seller, and which would take into account the possibility of costs
or charges arising from the balancing regime under the GRTgaz Rules.
The Clearing House would be permitted to alter the calculation of each
of the Buyer's Security and the Seller's Security at any time or make
adjustments in respect of a specific Seller or Buyer.
The amendments would include delivery timetables with detailed
timeframes and descriptions of the delivery processes for delivery
under Contracts, and such timetables would detail, among other
processes, the time for cessation of trading, provision of Buyer's and
Seller's Security, submission of delivery intentions, confirmations of
intent to deliver or receive, nominations of parties to delivery [sic]
or receive, delivery confirmations, invoicing, release of delivery
margin and sales proceeds following completion of delivery, and other
matters. The amendments would also include delivery tables with
detailed times and processes relating to failed delivery under
Contracts. In respect of invoicing, the amendments would detail how
amounts included in invoices prepared by the Clearing House would be
calculated for confirmed deliveries and failed deliveries of each
Contract.
In addition, the amendments would detail the reports produced by
the Clearing House in respect of each Contract and made available to
Buyers and Sellers electronically.
The amendments would also update Section 5.1 of the Delivery
Procedures to include ICE Endex French PEG Natural Gas Futures
Contracts and ICE Endex French PEG Natural Gas Daily Futures Contracts
in the list of contracts under which, subject to delivery obligations,
sellers and buyers can nominate transferors and transferees.
Statutory Basis
ICE Clear Europe believes that the proposed amendments to the
Delivery Procedures are consistent with the requirements of Section 17A
of the Act \6\ and the regulations thereunder applicable to it. In
particular, 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
changes to the Delivery Procedures are designed to establish delivery
procedures relating to ICE ENDEX French PEG Natural Gas Futures
Contracts and ICE Endex French PEG Natural Gas Daily Futures Contracts,
which will be traded on ICE Endex and cleared at ICE Clear Europe. The
amendments would set out the role, responsibilities and liabilities of
the Clearing House, Clearing Members and designated transferors and
transferees in the physical delivery process, in line with Delivery
Procedures for other types of deliverable energy futures contracts.
Contracts providing for delivery under Part HH will be cleared by the
Clearing House in the substantially same manner as other types of
deliverable energy futures contracts, and will be supported by ICE
Clear Europe's existing F&O 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.\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\
---------------------------------------------------------------------------

\6\ 15 U.S.C. 78q-1.
\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).
---------------------------------------------------------------------------

In addition, Rule 17Ad-22(e)(10) \10\ provides that ``[e]ach
covered clearing agency shall establish, implement, maintain and
enforce written policies and procedures reasonably designed to, as
applicable [. . .] 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 establish a new
set of procedures applicable to the delivery and settlement of ICE
ENDEX French PEG Natural Gas Futures Contracts and ICE Endex French PEG
Natural Gas Daily Futures Contracts. The procedures would address,
among other matters, delivery specifications for such contracts, the
obligations and roles of Clearing Members and the Clearing House,
certain limitations of liability for the Clearing House, and certain
other documentation and timing matters, consistent with the
requirements of the Clearing House. Clearance of the

[[Page 74145]]

Contracts would otherwise be supported by ICE Clear Europe's existing
financial resources, risk management, systems and operational
arrangements. The amendments thus appropriately clarify the role and
responsibilities of the Clearing House and Clearing Members with
respect to physical delivery. As a result, ICE Clear Europe believes
the amendments are consistent with the requirements of Rule 17Ad-
22(e)(10).\11\
---------------------------------------------------------------------------

\10\ 17 CFR 240.17Ad-22(e)(10).
\11\ 17 CFR 240.17Ad-22(e)(10).
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

ICE Clear Europe does not believe the proposed amendments would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
amendments to the Delivery Procedures are intended to establish a new
set of procedures applicable to the delivery and settlement of ICE
ENDEX French PEG Natural Gas Futures Contracts and ICE Endex French PEG
Natural Gas Daily Futures Contracts in connection with the listing of
such contracts 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 relevant
French 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 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.

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 \12\ and paragraph (f) of Rule 19b-4 \13\
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.
---------------------------------------------------------------------------

\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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

<bullet> Use the Commission's Internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>) or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#8cfef9e0e9a1efe3e1e1e9e2f8ffccffe9efa2ebe3fa"><span class="__cf_email__" data-cfemail="245651484109474b4949414a5057645741470a434b52">[email&#160;protected]</span></a>. Please include
File Number SR-ICEEU-2021-025 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-2021-025. 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="https://www.sec.gov/rules/sro.shtml">https://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-2021-025 and should be
submitted on or before January 19, 2022.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2021-28328 Filed 12-28-21; 8:45 am]
BILLING CODE 8011-01-P

</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>

View on FederalRegister.gov →Plain-text source

Indexed from Federal Register on December 29, 2021.

This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.