Notice2023-02604
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to Part N1 of the Delivery Procedures
Primary source
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Published
February 8, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 26 (Wednesday, February 8, 2023)</title>
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[Federal Register Volume 88, Number 26 (Wednesday, February 8, 2023)]
[Notices]
[Pages 8323-8325]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-02604]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96791; File No. SR-ICEEU-2023-003]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Amendments to Part N1 of the Delivery Procedures
February 2, 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 20, 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) \3\ of the Act and Rule 19b-4(f)(4)(ii)
\4\ thereunder, 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 Part N1 of its Delivery Procedures
(``Delivery Procedures'' or ``Procedures'') to update the delivery
timetable for ICE Deliverable US Emissions Contracts.
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 amend Part N1 of the Delivery
Procedures which applies to ICE Deliverable US Emissions Contracts (i)
for which physical delivery is specified as being ``Applicable'' in the
relevant Contract Terms, (ii) which go to physical delivery on the
expiry date; and (iii) to which the Clearing House will announce by
Circular that Part N1 specifically applies (such contracts ``ICE
Deliverable US Emissions Contracts'').\5\ The Clearing House is
proposing to amend the delivery timetable to remove extraneous and
unnecessary provisions in the final row relating to the relevant
parties' obligations on the Delivery Day. The relevant delivery and
payment obligations are already covered in the preceding rows of the
timetable. Specifically, the provisions in the final row relating to
final payment to the Seller are already addressed in the row titled
``Payment to Seller.'' Similarly, the provisions in the final row
relating to the return of Seller's Delivery Margin are addressed in the
row titled ``Payment to Seller.'' The amendment would also remove an
inconsistency between the deleted provision and the deadline for
delivery of Allowances as set forth in the row titled ``Seller's
Delivery to the Clearing House.'' The amendments would additionally
remove a statement in the final row relating to the treatment of
deliveries after the specified deadline as being deemed received on the
next business day. ICE Clear Europe believes that this statement was
unnecessary and could have been read to imply that a late delivery was
acceptable, which is not consistent with the deadline set forth in the
row titled ``Seller's Delivery to the Clearing House'' and current
Clearing House practice. The amendments do not
[[Page 8324]]
otherwise change the terms and conditions of the relevant contract.
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\5\ Part N1 of the Delivery Procedures (as filed pursuant to
filing SR-ICEEU-2021-023, Exchange Act Release No. 34-93764 (Dec.
13, 2021), 86 FR 71692 (Dec. 17, 2021)) will not be operative until
the Effective Date referenced below. Part N1, as amended by the
proposed amendment set forth herein, will come into effect on or
about 23 February 2023, with the specific effective date announced
at least one week in advance through ICE Clear Europe Circular (the
``Effective Date'').
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(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 \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 clarify the
obligations of the relevant parties for the Delivery Day in the
delivery timetable under Part N1. The amendments will not change the
manner in which ICE Deliverable US Emissions Contracts delivered
through a Clearing House Registry Account under Part N1, once it
becomes operative in accordance with this filing, will be cleared by
the Clearing House. 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, 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\)
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\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).
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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 for ICE Deliverable US Emissions Contracts to
clarify the obligations for the Delivery Day and remove extraneous
provisions. 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\
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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 make certain
clarifications to the delivery timetable procedures applicable to the
settlement of ICE Deliverable US Emissions Contracts. The amendments
would not change the 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 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#acded9c0c981cfc3c1c1c9c2d8dfecdfc9cf82cbc3da"><span class="__cf_email__" data-cfemail="f082859c95dd939f9d9d959e8483b0839593de979f86">[email protected]</span></a>. Please include
File Number SR-ICEEU-2023-003 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-2023-003. 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.
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You should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-ICEEU-2023-003
and should be submitted on or before March 1, 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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-02604 Filed 2-7-23; 8:45 am]
BILLING CODE 8011-01-P
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