Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to Clearing Fees for ICE Futures Europe Gilt Futures and Options and Euribor Options Contracts

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Published

January 26, 2023

Issuing agencies

Securities and Exchange Commission

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<title>Federal Register, Volume 88 Issue 17 (Thursday, January 26, 2023)</title>
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[Federal Register Volume 88, Number 17 (Thursday, January 26, 2023)]
[Notices]
[Pages 5048-5050]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-01515]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96722; File No. SR-ICEEU-2023-001]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Amendments to Clearing Fees for ICE Futures Europe Gilt Futures and
Options and Euribor Options Contracts

January 20, 2023.
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 January 9, 2023, 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)(2)
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)(2).
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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 changes to certain of its clearing fees for ICE
Futures Europe Gilt Futures and Options and Euribor Options
contracts.\5\
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\5\ Capitalized terms used but not defined herein have the
meanings specified in the ICE Clear Europe Clearing 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 increase certain clearing fees for
ICE Futures Europe (``IFEU'') Gilt Futures and Options and Euribor
Options contracts. The fee changes are intended to provide revenue to
support the further development of IFEU's Gilt markets and bring fees
related to these contracts in line with the fees of other government
bond futures and options traded on other Exchanges. For Euribor
options, the changes would be made to align fees with existing ICE
Clear Europe clearing fees for the underlying Euribor futures.\6\ The
amendments do not otherwise change the terms and conditions of the
relevant contract.
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\6\ IFEU is contemporaneously increasing certain trading fees
relating to these contracts, and is expected to announce such
increases by circular in advance of implementation.
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Fees with respect to the Gilt contracts have not been changed since
2017. The fee increases are intended to align fees for the Gilt
contracts more closely with those of government bond futures and
options traded on other exchanges. In addition, there is only limited
open interest in certain Gilt contracts (particularly the short, medium
and ultra-long contracts). The proposed fee increases (together with
planned increases in trading fees at IFEU) are intended to provide
revenue to support additional business development activity with
respect to these contracts, including funding liquidity provider and
other incentives that may be adopted in the future. In ICE Clear
Europe's experience with similar contracts, such incentives will likely
be needed in order to generate additional market activity and liquidity
in contacts with limited existing open interest.
With respect to Euribor options, the Clearing House proposes to
increase the clearing fees to align with the underlying Euribor futures
contracts. ICE Clear Europe believes that the changes will eliminate an
unnecessary distinction between the cost of trading futures and
options. ICE Clear Europe notes that clearing fees with respect to
these contracts have not changed since ICE Clear Europe commenced
clearing them in 2014.
The fee tables below set forth the proposed clearing fee changes.
The proposed new fees are intended to come into effect on February 1,
2023, subject to regulatory approval. ICE Clear Europe intends,
together with IFEU, to publish a Circular to inform market participants
of the changes in advance of such proposed effective date.
Gilt Futures and Options Proposed Exchange and Clearing Fees
Below is a table showing the existing and proposed clearing fees
and a table showing the proposed amended Exchange and Clearing fees.
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\7\ Clearing fees applicable to deliveries would be unchanged.
Fee information for deliveries is included in the table for
completeness.
\8\ Clearing fees applicable to futures contracts and futures/
basis block transactions would be unchanged. Fee information for
these contracts is included for completeness.

[[Page 5049]]

------------------------------------------------------------------------
Existing Proposed new
clearing fee clearing fee
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Contract--Short, Medium, Long and Ultra-
Long Gilts:
Futures Contracts................... 0.20 0.24
Futures Basis/Block................. 0.20 0.24
Futures Block with Delayed 0.34 0.36
Publication........................
Deliveries.......................... 2.50 \7\ 2.50
Options Contracts (Long Gilt only).. 0.20 0.24
Options Block (Long Gilt only)...... 0.20 0.24
Options Block with Delayed 0.34 0.36
Publication (Long Gilt only).......
Option Exercise (Long Gilt only).... 0.20 0.33
Contract--Euribor[supreg]:
Futures Contracts................... 0.20 \8\ 0.20
Futures Basis/Block................. 0.20 0.20
Futures Block with Delayed 0.34 0.36
Publication........................
Cash Settlement..................... 0.25 0.28
Options Contracts................... 0.18 0.20
Options Block....................... 0.18 0.20
Options Block with Delayed 0.34 0.36
Publication........................
Option Exercise..................... 0.25 0.28
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(b) Statutory Basis
ICE Clear Europe believes that the proposed rule changes are
consistent with the requirements of the Act, including Section 17A of
the Act \9\ and regulations thereunder applicable to it. In particular,
Section 17A(b)(3)(D) of the Act \10\ 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 its clearing fees, as proposed to be amended, would be
reasonable and appropriate for the relevant Contracts. ICE Clear
Europe's fees are imposed at the product level on a per transaction
basis (as are the applicable Exchange fees), and would be generally
applicable to market participants trading in the contracts. As set
forth above, ICE Clear Europe is proposing to increase clearing fees
for the relevant Gilt contracts in order to support further development
of trading and liquidity in those contracts, in light of the lack of
current open interest. ICE Clear Europe believes the higher fees will
facilitate funding of liquidity and other incentives that will support
the contract. The amended fees will also be consistent with the fees
applicable to government bond futures contracts traded at other
exchanges. ICE Clear Europe has determined that the increased fees
would provide an appropriate balance between the costs of clearing for
market participants and the expenses incurred by ICE Clear Europe in
offering clearing of the relevant contracts, and permit greater support
by ICE Clear Europe of clearing such products. 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.\11\
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\9\ 15 U.S.C. 78q-1.
\10\ 15 U.S.C. 78q-1(b)(3)(D).
\11\ 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 \12\ 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.''
As noted above, the fees, as proposed to be amended, would apply on a
per transaction and would apply to market participants generally.
Although ICE Clear Europe may use revenue from additional fees to
support liquidity and other incentive arrangements for Gilt contracts,
ICE Clear Europe believes that any such incentives that may be adopted
will be appropriately tailored to support additional trading and
liquidity in the contracts. As a result, the amendments would not
result in any unfair discrimination among Clearing Members in their use
of the Clearing House, within the meaning of Section 17A(b)(3)(F) of
the Act.\13\
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\12\ 15 U.S.C. 78q-1(b)(3)(F).
\13\ 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 rule changes would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purpose of the Act. Although ICE
Clear Europe is increasing certain clearing fees, as set forth herein,
it believes such changes are appropriate to reflect the costs and
expenses incurred by the Clearing House in clearing the relevant
Contracts and are consistent with other contracts cleared at the
Clearing House and similar contracts cleared on other venues. The
amendments would also support appropriate liquidity and other incentive
arrangements to further develop trading. ICE Clear Europe does not
believe that the amendments would adversely affect the ability of
Clearing Members or other market participants generally to access
clearing services for the Contracts. Further, since the revised fees
will be the base rate applicable to all Clearing Members and market
participants that clear the products, ICE Clear Europe believes that
the amendments would not otherwise affect competition among Clearing
Members, adversely affect the market for clearing services or limit
market participants' choices for obtaining clearing services. As a
result, ICE Clear Europe does not believe the amendments would have any
impact or impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.

Written comments relating to the proposed amendment has 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)

[[Page 5050]]

of the Act \14\ and paragraph (f) of Rule 19b-4 \15\ 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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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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#483a3d242d652b2725252d263c3b083b2d2b662f273e"><span class="__cf_email__" data-cfemail="ef9d9a838ac28c8082828a819b9caf9c8a8cc1888099">[email&#160;protected]</span></a>. Please include
File Number SR-ICEEU-2023-001 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-2023-001. 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-2023-001 and should be
submitted on or before February 16, 2023.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-01515 Filed 1-25-23; 8:45 am]
BILLING CODE 8011-01-P

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