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

January 31, 2023

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Securities and Exchange Commission

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<title>Federal Register, Volume 88 Issue 20 (Tuesday, January 31, 2023)</title>
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[Federal Register Volume 88, Number 20 (Tuesday, January 31, 2023)]
[Notices]
[Pages 6349-6351]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-01880]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96749; File No. SR-ICEEU-2023-002]

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

January 25, 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 12, 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)(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.
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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

ICE Clear Europe Limited (``ICE Clear Europe'' or the ``Clearing
House'') proposes to amend its Delivery Procedures (``Delivery
Procedures'') to make certain clarifications and updates.

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
The amendments to Part A, which applies to ICE Endex Deliverable EU
Emissions Contracts, would reflect that, as provided in ICE Endex's
Circular E22/012,\5\ ICE Endex will delist Aviation Emissions Allowance
or ``EUAA'' Futures Contracts following the expiry of the December 2022
contract month and, commencing with the January 2023 contract month,
EUAAs would become eligible for delivery under the existing ICE Endex
Carbon Emissions Allowance or ``EUA'' daily and monthly Contracts.\6\
Conforming changes would be made in Part A, including to remove
references to ``ICE Endex EUAA Futures Contracts'' and to reflect that
EUAAs may be delivered under the delivery specifications applicable to
the EUA daily and monthly contracts (through an amendment to the term
Carbon Emission Allowance Contract and related changes in the delivery
timetable). Certain related drafting amendments would be made in Part A
to reflect such updates including the removal of related definitions
and other terms (for example, the removal of the

[[Page 6350]]

definitions of ``Allowance Type'' and ``Aviation Emissions Allowance
Contract'') which would no longer be applicable.
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\5\ ICE Endex Circular E22/012 is available at the following
website: <a href="https://www.theice.com/publicdocs/endex/circulars/E22012.pdf">https://www.theice.com/publicdocs/endex/circulars/E22012.pdf</a>.
\6\ Accordingly, the amendments to Part A will become operative
following expiry of the December 2022 contract month.
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The definition for the term ``Communication Link'' would be
included in Part A in place of the cross-reference to the definition
assigned in the ICE Endex Rules. The amendments provide that
``Communication Link'' means the electronic exchange of messages or
notifications by which Buyers and Sellers communicate with the
Registry, and/or by which the Registry communicates with the European
Union Transaction Log which is necessary to facilitate a Transfer
Request. This update is intended to improve clarity. The definition of
``Emissions Directive'' would be amended to include a reference to the
most recent relevant EU directive, Directive 2018/410 of the European
Parliament and of the European Council of 14 March 2018. The amendments
also amend the definition of the term ``Transfer Request'' to mean a
request to affect a transfer of an EUA and/or EUAA submitted by a
Seller to the Registry as required by the Registry Regulations,
relevant applicable law and otherwise in accordance with the ICE Clear
Europe Rules and ICE Endex Rules. Previously, such definition crossed-
referenced a definition of ``Allowance Transfer Request'' which was not
defined in the Delivery Procedures. Separate definitions of ``Aviation
Emissions Allowance Transfer Request'' and ``Carbon Emissions Allowance
Transfer Request'' would be removed as unnecessary given the revised
definition of Transfer Request. Certain other non-substantive drafting
clarifications would be made.
Timing for EFP Reporting
The amendments to Parts D (which apply to ICE Futures UK NBP
Natural Gas Daily Futures), F (which applies to ICE Endex Dutch TTF
Natural Gas Daily Futures), and EE (which applies to ICE Endex Austrian
CEGH VTP Natural Gas Daily Futures) are intended to address
inconsistencies regarding the timing of reporting of Exchange for
Physicals (EFP) and Exchange for Swaps (EFS) transactions related to
certain contracts. The amendments to Part D would correct Section
2.5(b) to state that ICE Futures UK NBP Natural Gas Daily Futures cease
trading at 17:00 hours on the Business Day prior to the Delivery Day,
to be consistent with exchange rules. The amendments to Part D would
provide in Section 2.6 that for ICE Futures UK NBP Natural Gas Daily
Futures, in accordance with the ICE Clear Europe Clearing Rules, EFPs
and EFSs may be posted up to 30 minutes following the cessation of
trading. (The change thus eliminates an inconsistency with exchange
rules.) Such timing update would also be reflected in the delivery
table for the same contracts in Section 5.2. In the delivery timetable
for ICE Endex Dutch TTF Natural Gas Daily Futures in Section 6.2 of
Part F, the amendments would clarify that EFPs and EFS may be posted up
to 30 minutes following the cessation of trading (in order to make the
timetable consistent with paragraph 3.6 of Part F). The amendments
would also update the delivery timetable for ICE Endex Austrian CEGH
VTP Natural Gas Daily Futures in Section 8 of Part EE such that the
time specified in such table reflects the narrative which provides that
EFPs and EFSs may be posted up to 30 minutes following the cessation of
trading.
Changes to Naming Conventions
To apply consistency to the contract names of certain natural gas
futures contracts, the Clearing House would change the name of ``TTF
Natural Gas Futures'' to ``Dutch TTF Natural Gas Futures'', ``TTF
Natural Gas Daily Futures'' to ``Dutch TTF Natural Gas Daily Futures'',
``TTF Natural Gas Working Days Next Week'' to ``Dutch TTF Natural Gas
Working Days Next Week, ``UK Natural Gas Futures'' to ``UK NBP Natural
Gas Futures'', ``UK Natural Gas Daily Futures'' to ``UK NBP Natural Gas
Daily Futures'', ``UK Natural Gas (EUR/MWh) Futures'' to ``UK NBP
Natural Gas (EUR/MWh) Futures'', ``PSV Natural Gas Futures'' to
``Italian PSV Natural Gas'', ``ICE Endex VTP Natural Gas Futures'' and
``CEGH Austrian VTP Natural Gas Futures'' to ``ICE Endex Austrian CEGH
VTP Natural Gas Futures'', ``ICE Endex VTP Natural Gas Daily Future''
to ``ICE Endex Austrian CEGH VTP Natural Gas Daily Futures, and ``ICE
Endex PEG Natural Gas Futures'' to ``ICE Endex French PEG Natural Gas
Futures''. Such changes would be made where relevant in Parts D (which
applies to UK natural gas futures contracts), F (which applies to ICE
Endex Dutch natural gas futures), AA (which applies to Italian natural
gas futures), EE (which applies to Austrian natural gas futures), and
HH (which applies to the French natural gas futures) of the Delivery
Procedures. Paragraphs 5 and 13 of the introductory section to the
Delivery Procedures would also be updated to reflect the name changes.
Delisting of Belgian ZTP Natural Gas Contracts
Part I of the Delivery Procedures (which applied to ICE Endex ZTP
Natural Gas Futures Contracts) would be deleted in its entirety as such
contracts are no longer listed for trading at ICE Endex. Similarly,
Part J would be amended to remove all references to ICE Endex Spot
Market ZTP Natural Gas Spot Contracts and ICE Endex Spot Market ZTPL
Natural Gas Spot Contracts, which are also no longer listed for trading
at ICE Endex. Corresponding changes would be made in paragraph 5 of the
introductory section of the Delivery Procedures and in the Table of
Contents.
Delivery Timetable for Deliverable US Emissions Contracts
The amendments would revise the delivery timetable in Part N (which
applies to ICE Deliverable US Emissions Contracts) to remove
unnecessary provisions in the final row relating to confirmation of
delivery on the Delivery Day. The relevant obligations relating to
confirmation of delivery are already covered in the preceding rows of
the timetable. The remaining language in that row would be removed in
order to avoid any incorrect implication that delivery could be made
following the relevant Delivery Day. The amendments do not change the
terms and conditions of the relevant contract.
Other Updates
Updates to the table of contents and various section headings would
be made to conform to changes described above. A conforming reference
to the ICE Endex Austrian CEGH VTP Natural Gas Daily Futures Contract
would be added in paragraph 5.1 (such reference had previously been
omitted).
(b) 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 \7\ and the regulations thereunder applicable to it. In
particular, Section 17A(b)(3)(F) of the Act \8\ 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

[[Page 6351]]

public interest. The proposed changes are intended to make a number of
updates and clarifications to the Delivery Procedures for physically
settled F&O Contracts. The amendments remove from the Delivery
Procedures certain contracts that have been delisted by the relevant
exchange. The amendments also clarify the deadline for submission of
EFPs, EFSs for certain contracts and update relevant naming
conventions, and remove duplicative information, among other
clarifications and drafting updates. The amendments would not otherwise
affect the manner in which such contracts are cleared and settled.
Accordingly, ICE Clear Europe believes that the Delivery Procedures, as
amended, 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, the
safeguarding of funds or securities in the custody or control of the
clearing agency or for which it is responsible, and the protection of
investors and the public interest, consistent with the requirements of
Section 17A(b)(3)(F) of the Act.\9\
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\7\ 15 U.S.C. 78q-1.
\8\ 15 U.S.C. 78q-1(b)(3)(F).
\9\ 15 U.S.C. 78q-1(b)(3)(F).
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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 reasonable 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 amend the
delivery specifications to make certain updates and clarifications, and
to remove provisions relating to delisted contracts. As amended, the
Delivery Procedures appropriately set out 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\
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\10\ 17 CFR 240.17Ad-22(e)(10).
\11\ 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 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 clarify certain
delivery procedures in respect of certain physically settled energy
contracts. The amendments would not materially change the rights or
obligations of Clearing Members or other 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.

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) 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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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#fc8e899099d19f9391919992888fbc8f999fd29b938a"><span class="__cf_email__" data-cfemail="8dfff8e1e8a0eee2e0e0e8e3f9fecdfee8eea3eae2fb">[email&#160;protected]</span></a>. Please include
File Number SR-ICEEU-2023-002 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-2023-002. 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-2023-002 and should be
submitted on or before February 21, 2023.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-01880 Filed 1-30-23; 8:45 am]
BILLING CODE 8011-01-P

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