Notice2022-27650
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to the Finance Procedures
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Published
December 21, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 244 (Wednesday, December 21, 2022)</title>
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[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Notices]
[Pages 78169-78171]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-27650]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96503; File No. SR-ICEEU-2022-026]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Amendments to the Finance Procedures
December 15, 2022.
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 6, 2022, 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)
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.
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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
ICE Clear Europe Limited (``ICE Clear Europe'' or the ``Clearing
House'') proposes to amend its Finance Procedures in order to align the
timing at which monthly interest payments and monthly transaction fees
are processed.
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
[[Page 78170]]
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 Finance Procedures to
align the timing for payment of the return on cash margin and Guaranty
Fund deposits of Clearing Members with that for payment of monthly
transaction fees. Under existing Finance Procedures paragraph
6.1(i)(vi), transaction fees are payable through the overnight payment
call or return by the fifth Business Day after the end of each month.
ICE Clear Europe is proposing to amend Finance Procedures paragraph
6.1(i)(iv) to provide that interest on margin and Guaranty Fund
contributions will be credited by the fifth Business Day after the end
of each month, rather than the fourth Business Day after the end of
each month. ICE Clear Europe proposes to implement the change on or
about December 14, 2022.
ICE Clear Europe believes that processing interest and transaction
fees on the same day as part of the same net overnight payment
calculation will reduce the number and size of overall cash flows and
thus improve overall payment efficiency. The change will also reduce
unnecessary potential liquidity demands on the Clearing House and
Clearing Members to the extent of offsetting interest and transaction
fees and reduce the risk to the Clearing House of a failure or default
in payment of transaction fees by a Clearing Member after payment by
the Clearing House of interest. ICE Clear Europe believes that the
benefits of improving payment efficiency in this manner will be more
significant in the current rising interest rate environment, as
increases in ICE Clear Europe's ICE Deposit Rate have resulted in an
increase in monthly interest payments due from ICE Clear Europe to
Clearing Members.
(b) Statutory Basis
ICE Clear Europe believes that the proposed amendments to the
Finance Procedures are consistent with the requirements of Section 17A
\5\ of the Act and the regulations thereunder applicable to it. In
particular, Section 17A(b)(3)(D) of the Act \6\ requires that ``[t]he
rules of the clearing agency provide for the equitable allocation of
reasonable dues, fees and other charges among its participants.'' ICE
Clear Europe believes that the proposal is a reasonable and appropriate
change to the timing of payment of return on cash margin and Guaranty
Fund contributions, in order to enhance overall settlement efficiency.
This is particularly so, in ICE Clear Europe's view, in light of the
current interest rate environment which has led to increases in the ICE
Deposit Rate. The amendment also reduces liquidity demands and reduces
the risk of a payment failure or default with respect to the payment of
transaction fees. As such, in ICE Clear Europe's view, the amendments
are consistent with the equitable allocation of reasonable dues, fees
and other charges among its Clearing Members and other market
participants, within the meaning of Section 17A(b)(3)(D) of the Act.\7\
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\5\ 15 U.S.C. 78q-1.
\6\ 15 U.S.C. 78q-1(b)(3)(D).
\7\ 15 U.S.C. 78q-1(b)(3)(D).
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The proposed amendments are also consistent with the requirements
of Section 17A(b)(3)(F) of the Act which requires, among other things,
that ``[t]he rules of a clearing agency [. . .] are not designed to
permit unfair discrimination in the admission of participants or among
participants in the use of the clearing agency.'' \8\ As noted above,
the Finance Procedures, as proposed to be amended, would apply to all
Clearing Members and the amendments would not otherwise the rights or
obligations of the Clearing House or Clearing Members with respect to
the payment of transaction fees or the payment of interest on cash
margin and Guaranty Fund contributions. Section 17A(b)(3)(F) also
requires that the ``[t]he rules of a clearing agency [. . .] are
designed to promote the prompt and accurate clearance and settlement of
securities transactions and, to the extent applicable, derivative
agreements, contracts and transactions, to assure the safeguarding of
securities or funds which are in the custody or control of the clearing
agency or for which it is responsible . . . and, in general, to protect
investors and the public interest.'' \9\ As set forth above, ICE Clear
Europe believes the amendments will enhance payment efficiency and
reduce payment risks. As such, the amendments, in ICE Clear Europe's
view, would be consistent with prompt and accurate clearance and
settlement, would not adversely affect the safeguarding of securities
and funds which are in the custody or control of ICE Clear Europe or
for which it is responsible, and generally would be consistent with the
public interest in the sound operation of the Clearing House. As a
result, the amendments are consistent with the requirements of Section
17A(b)(3)(F) of the Act.\10\
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\8\ 15 U.S.C. 78q-1(b)(3)(F).
\9\ 15 U.S.C. 78q-1(b)(3)(F).
\10\ 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 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 Finance Procedures are intended to reduce the number
of cash flows, improve payment efficiency and to reduce the (low) risk
of payment failure with respect to transaction fees, by changing the
interest payment date to be consistent to that of the transaction fee
payment date. The amendments would not otherwise change the rights or
obligations of market participants. 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
[[Page 78171]]
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
<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#6614130a034b05090b0b030812152615030548010910"><span class="__cf_email__" data-cfemail="c2b0b7aea7efa1adafafa7acb6b182b1a7a1eca5adb4">[email protected]</span></a>. Please include
File Number SR-ICEEU-2022-026 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-2022-026. 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-2022-026 and should be
submitted on or before January 11, 2023.
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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27650 Filed 12-20-22; 8:45 am]
BILLING CODE 8011-01-P
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