Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments Part O of Its Delivery Procedures

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Published

August 11, 2023

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Securities and Exchange Commission

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<title>Federal Register, Volume 88 Issue 154 (Friday, August 11, 2023)</title>
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[Federal Register Volume 88, Number 154 (Friday, August 11, 2023)]
[Notices]
[Pages 54685-54687]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-17211]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98072; File No. SR-ICEEU-2023-017]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Amendments Part O of Its Delivery Procedures

August 7, 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 July 26, 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 Part O of its Delivery Procedures \5\ (for
Financials and Softs Cocoa Contracts) to provide for use of a new Softs
Delivery Platform, make certain changes to the delivery timetable and
delivery documentation, and address certain matters relating to
allocation and the conversion of lots.
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\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.
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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 amend Part O of its Delivery
Procedures to amend certain delivery specifications for ICE Futures
Europe Financials and Softs Cocoa Futures Contracts (``Cocoa
Contracts'') to reflect the implementation of a new Softs Deliveries
Platform to be used for deliveries under the Contract. A conforming
change would also be made in the introductory section of the Delivery
Procedures. Certain other provisions in Part O relating to the delivery
timetable and allocation and conversion of lots would also be amended,
as described herein, in connection with the implementation of the Softs
Delivery Platform.
In the General Provisions section of the Delivery Procedures, in
paragraph 21, references to the new Softs Delivery Platform as the
electronic system used for making and taking delivery under cocoa
contracts would be added (alongside the existing Guardian system, which
will continue to be used for deliveries under coffee contracts). The
amendments would also remove an incorrect reference to bonds (for which
neither Guardian nor the new Softs Delivery Platform is used).
The proposed amendments in Part O of the Delivery Procedures would
replace relevant references to the Guardian delivery system throughout
Part O with the new Softs Delivery Platform and otherwise remove
references to the Guardian delivery system, such that transfers of
warrants would be made through the Softs Delivery Platform and
applicable delivery notices and other specified delivery documentation
relevant to Sellers and Buyers would be provided or made available
through the Softs Delivery Platform.
Procedures for allocations of cocoa, including notifications and
reports relating to allocations would be reorganized and consolidated
into a single provision for simplicity and clarity. As proposed to be
revised, reports relating to allocation details would be made available
to both Sellers and Buyers through the Clearing House MFT system.
The amendments also update the content of reports made available to
Seller and Buyer to remove general references to ``delivery details''
throughout Part O, as the relevant information is provided in the
specific referenced reports provided through the Softs Delivery
Platform. The names of certain reports would also be updated throughout
Part O, specifically with references to final account sale reports
changed to account sale reports and references to final invoice reports
changed to Buyers invoice reports.
The timing for certain notifications related to the conversion of
lots would be moved from by 16:00 LPT (in the case of certain
directions by the Clearing House) and after 16:00 LPT (in the case of
the availability of conversion details for Sellers), to after 10:00 LPT
in both scenarios. The amendments would also remove an incorrect
reference about

[[Page 54686]]

converting bulk delivery units into large delivery units. The
amendments would change the system used to send Sellers and Buyers
information relating to LDU Conversion Notices from Guardian to MFT.
With respect to certain notices to be provided by Sellers in response
to a direction by the Clearing House to convert bulk or large delivery
units, references to the use of Guardian (or a successor system) would
be removed as unnecessary in light of the introduction of the Softs
Delivery Platform. In the provisions relating to BDU conversion
notices, the reference in the left column to ``Extension to
Conversion'' would be deleted, as it is not necessary and does not
relate to the 16:00 deadline.
The amendments also update the summary of required delivery
documentation. Specifically, amendments would clarify that invoices and
account sales statements would be provided through MFT. References to
provisional invoices in the case of conversion would be removed as
unnecessary in light of other reports made available to Buyer and
Sellers. A reference to warrant delivery instructions report would be
removed as outdated in light of the manner in which delivery is made
under the contract.
(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 revise ICE Clear
Europe's delivery arrangements relating to Cocoa Contracts to reflect
the implementation and use of the new Softs Delivery Platform for
delivery under such contracts. As part of the implementation of the
Softs Delivery Platform, the delivery timetable and provisions relating
to allocation and conversion of lots would be amended for clarity, to
update the systems used for notice and to remove unnecessary
provisions. Notably, the amendments would replace references to use of
existing Guardian system with references to use of the Softs Delivery
Platform or MFT system, as appropriate. In connection with the
implementation of the Softs Delivery Platform, the amendments revise
and simplify the process for allocations and conversion of lots by the
Clearing House and certain related delivery notification and delivery
documentation requirements. The contracts will otherwise continue to be
cleared by ICE Clear Europe in the same manner as they are currently.
In ICE Clear Europe's view, the amendments are thus consistent with the
prompt and accurate clearance and settlement of cleared contracts and
the protection of investors and the public interest. (ICE Clear Europe
would not expect the amendments to affect the safeguarding of
securities and funds in ICE Clear Europe's custody or control or for
which it is responsible). Accordingly, the amendments satisfy the
requirements of Section 17A(b)(3)(F).\8\
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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).
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In addition, Rule 17Ad-22(e)(10) \9\ requires that each covered
clearing agency ``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 clarify the
delivery specifications for Cocoa Contracts to reference the new Softs
Delivery Platform. The amendments would also make consistent with the
new Softs Delivery Platform certain obligations of the Clearing House
and Buyers and Sellers in the delivery process, including with respect
to allocations and conversions and related notifications. The
amendments would not otherwise change the manner in which the contracts
are cleared or in which delivery is made, as supported by ICE Clear
Europe's existing financial resources, risk management, systems and
operational arrangements. The amendments thus clarify the role and
responsibilities of the Clearing House and Clearing Members with
respect to delivery. As a result, ICE Clear Europe believes the
amendments are consistent with the requirements of Rule 17Ad-
22(e)(10).\10\
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\9\ 17 CFR 240.17Ad-22(e)(10).
\10\ 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 amendments
are being adopted to update and clarify the delivery specifications in
the Delivery Procedures in connection with Cocoa Contracts, principally
with respect to the use of the Softs Delivery Platform. ICE Clear
Europe does not expect that the proposed changes will adversely affect
access to clearing or the ability of Clearing Members, their customers
or other market participants to continue to clear contracts. ICE Clear
Europe also does not believe the amendments would materially affect the
cost of clearing or otherwise impact competition among Clearing Members
or other market participants or limit market participants' choices for
selecting clearing services. Accordingly, ICE Clear Europe does not
believe the amendments would impose any burden on competition not
necessary or 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 written 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 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.

[[Page 54687]]

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#0270776e672f616d6f6f676c7671427167612c656d74"><span class="__cf_email__" data-cfemail="e092958c85cd838f8d8d858e9493a0938583ce878f96">[email&#160;protected]</span></a>. Please include
File Number SR-ICEEU-2023-017 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-2023-017. 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>.
Do not include personal identifiable information in submissions;
you should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to File Number SR-ICEEU-2023-017 and
should be submitted on or before September 1, 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. 2023-17211 Filed 8-10-23; 8:45 am]
BILLING CODE 8011-01-P

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