[Federal Register Volume 77, Number 90 (Wednesday, May 9, 2012)]
[Notices]
[Pages 27260-27262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11132]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66918; File No. SR-ICC-2012-08]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule Change 
To Add Margin Collection Requirements for Futures Commission Merchant 
Clearing Participants

May 3, 2012.
    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 April 23, 2012, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I and II below, which Items have been 
prepared primarily by ICC. The Commission is publishing this Notice and 
Order to solicit comments on the proposed rule change from interested 
persons and to approve the proposed rule change on an accelerated 
basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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[[Page 27261]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    ICC proposes to require FCM clearing participants to collect margin 
from their customers in respect of such customers' non-hedge positions 
at a level that is ten percent (10%) greater than ICC's related margin 
requirement with respect to each product and swap portfolio. As 
discussed in more detail in Item II(A) below, ICC published a Circular 
on April 20, 2012 informing its clearing participants of this rule 
change.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, ICC 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 III below. ICC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.\3\
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    \3\ The Commission has modified the text of the summaries 
prepared by ICC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    ICC is registered as a derivatives clearing organization (``DCO'') 
with the Commodity Futures Trading Commission (``CFTC'') and clears 
credit default swap contracts subject to the jurisdiction of the CFTC. 
CFTC Regulation 39.13(g)(8)(ii) provides that a DCO ``shall require its 
clearing members to collect customer initial margin * * *from their 
customers, for non-hedge positions, at a level that is greater than 100 
percent of the derivatives clearing organization's initial margin 
requirements with respect to each product and swap portfolio.''
    As further described in ICC's Circular 2012/008 dated April 20, 
2012, in compliance with CFTC Regulation 39.13(g)(8)(ii), no later than 
the May 7, 2012 effective date, ICC will require FCM clearing 
participants to collect margin from their customers in respect of such 
customers' non-hedge positions, at a level that is ten percent (10%) 
greater than ICC's related margin requirement with respect to each 
product and swap portfolio.
    ICC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act and the rules and regulations 
thereunder applicable to it. ICC believes that its proposed rule will 
help protect investors and the public interest because the requirements 
help safeguard customer funds held at the FCM level.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    ICC does not believe the proposed rule change would have any 
impact, or impose any burden, on competition.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    Written comments relating to the proposed rule change have not been 
solicited or received. ICC represented that it will notify the 
Commission of any written comments it receives.

III. 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 may be submitted by using the 
Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) 
or by sending an email to [email protected]. Please include File 
Number SR-ICC-2012-08 on the subject line.
     Paper comments may be sent in triplicate to Elizabeth M. 
Murphy, Secretary, Securities and Exchange Commission, 100 F Street 
NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-ICC-2012-08. 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 Web site (http://www.sec.gov/rules/sro.shtml). 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 Web site viewing and 
printing in the Commission's Public Reference Section, 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 ICC and 
on ICC's Web site at https://www.theice.com/publicdocs/regulatory_filings/042312_SEC_ICEClearCredit.pdf.
    All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-ICC-2012-08 
and should be submitted on or before May 30, 2012.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    Section 19(b)(2)(C) of the Act \4\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if it 
finds that such proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to such organization. Section 17A(b)(3)(F) of the Act \5\ 
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. Section 17A(b)(3)(F) also 
requires that the rules of a clearing agency be designed to contribute 
to the safeguarding of securities and funds associated with swap 
transactions.\6\
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    \4\ 15 U.S.C. 78s(b)(2)(C).
    \5\ 15 U.S.C. 78q-1(b)(3)(F).
    \6\ Id.
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    The proposed change would allow ICC to require ICC's clearing 
participants to enhance the margin collected from clients for clients' 
non-hedge positions, thereby contributing to the safeguarding of 
securities and funds associated with swap transactions. It should also 
allow ICC to comply with new CFTC regulatory requirements, thereby 
promoting the prompt and accurate clearance and settlement of 
derivative agreements, contracts, and transactions.
    Further, the Commission finds good cause, pursuant to Section 
19(b)(2) of the Act,\7\ for approving the proposed rule change prior to 
the 30th day after the date of publication of notice in the Federal 
Register because as a registered DCO ICC is required to comply with the 
new CFTC regulations by the time they become effective on May 7, 
2012.\8\
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    \7\ 15 U.S.C. 78s(b)(2).
    \8\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).

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[[Page 27262]]

V. Conclusion

    It is therefore ordered, pursuant to 19(b)(2) of the Act,\9\ that 
the proposed rule change (SR-ICC-2012-08) is approved on an accelerated 
basis.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin O'Neill,
Deputy Secretary.
[FR Doc. 2012-11132 Filed 5-8-12; 8:45 am]
BILLING CODE 8011-01-P