[Federal Register Volume 77, Number 194 (Friday, October 5, 2012)]
[Notices]
[Pages 61042-61044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-24575]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67954; File No. SR-ICC-2012-16]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule Change 
To Revise Rules Related to Clearing Certainty Requirements

October 1, 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

[[Page 61043]]

September 25, 2012, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
changes described in Items I and II below, which Items have been 
prepared primarily by ICC. The Commission is publishing this notice 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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    ICC is in regular communication with representatives of its 
Clearing Participants, as that term is defined in the Rules of ICC (the 
``Rules'') in relation to the operation of clearing processes and 
arrangements. The purpose of the proposed rule changes is to (i) 
implement new clearing certainty requirements consistent with Commodity 
Futures Trading Commission (``CFTC'') Rules 39.12(b)(7) and 23.506, 
which become effective on October 1, 2012, and (ii) consolidate the 
rules in connection with the clearance of house and backloaded trades. 
These changes also seek to improve drafting and cross-references within 
the ICC Rules. All capitalized terms not defined herein are defined in 
the Rules.

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 changes and 
discussed any comments it received on the proposed rule changes. 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.

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

    As noted above, the principal purpose of the proposed rule changes 
is to implement the CFTC's clearing certainty requirements and to 
conform such rules to the new CFTC Rules 39.12(b)(7)(ii) and (iii) and 
Rule 23.506. Specifically, the proposed rule changes affect Part 3 of 
the ICC Rules by addressing the timeframe under which trades must be 
accepted or rejected for clearing under new CFTC rules and 
consolidating the provisions governing the way new trades and 
backloaded trades are submitted to ICC. Finally, certain definitions 
found in Part 1 of the Rules are amended to account for changes in Part 
3. Each of these changes is described in detail as follows.
    In Part 1 of the ICC Rules, the definition of ``Backloaded Trade'' 
has been consolidated to cover trades that are intended to replace and 
backload an existing agreement on terms equivalent to a Contract either 
(i) between two Participants for their own accounts or (ii) to which a 
Non-Participant Party is party, where the relevant Participant is 
acting for such Non-Participant Party.
    The original Rule 301(b), the statement relating to ``Weekly Cycle 
Interdealer Trades'' is deleted and consolidated with the new Rule 
301(c), which covers Backloaded Trades. In addition, the original Rule 
301(f) is deleted and consolidated into the new Rule 301(b). A 
corresponding consolidation is proposed for the original Rules 309(b) 
and Rule 309(c) in order to conform it to the changes made in Rule 301. 
ICC believes that these changes are improvements in operational 
services that are administrative in nature or codify existing 
practices.\3\
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    \3\ The Commission has modified the text of the summaries 
prepared by ICC to reflect information communicated during a phone 
call with Michelle Weiler, Assistant General Counsel, on September 
28, 2012.
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    Under the proposed new Rule 309(d), ICC has incorporated new CFTC 
Rule 39.12(b)(7)(ii), which requires, among other things, that ICC 
accept or reject trades submitted for clearance that are executed 
competitively on or subject to the rules of a designated contract 
market or swap execution facility as soon after execution as would be 
technologically practicable if fully automated systems were used.
    Under the proposed new Rule 309(e), ICC has incorporated the new 
CFTC Rule 39.12(b)(7)(iii), which requires, among other things, that 
ICC accept or reject trades submitted for clearance that are not 
executed competitively on or subject to the rules of a designated 
contract market or swap execution facility as soon after submission for 
clearing as would be technologically practicable if fully automated 
systems were used.
    Finally, under the new proposed Rule 315, ICC has incorporated the 
standards of CFTC Rule 1.74(b) and required that Participants must 
accept or reject each Trade submitted by or for the Participant or its 
customers as quickly as would be technologically practicable if fully 
automated systems were used. Participants would also be required to 
submit such Trades to ICC following such acceptance as quickly as would 
be practicable if fully automated systems were used.
    ICC believes that the proposed rule changes are consistent with the 
purposes and requirements of Section 17A of the Act and the rules and 
regulations thereunder applicable to it. ICC believes that implementing 
the CFTC's clearing certainty requirements will comply with the Act and 
the rules and regulations thereunder.

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 will notify the Commission of any written 
comments received by ICC.

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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml ); or
     Send an email to [email protected]. Please include 
File Number SR-ICC-2012-16 on the subject line.

Paper Comments

     Send paper comments 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-2012-16. 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

[[Page 61044]]

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 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 also will 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/ICEClearCredit_091912a.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-2012-16 
and should be submitted on or before October 26, 2012.

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

    Section 19(b) 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. The Commission finds that the proposed rule change is 
consistent with the requirements of the Act, in particular the 
requirements of Section 17A of the Act, and the rules and regulations 
thereunder applicable to ICC.\5\ Specifically, the Commission finds 
that the proposed rule change is consistent with Section 17A(b)(3)(F) 
of the Act, which requires, among other things, that the rules of a 
registered 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.\6\
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    \4\ 15 U.S.C. 78s(b).
    \5\ 15 U.S.C. 78q-1. In approving this proposed rule change, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
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    In its filing, ICC requested that the Commission approve this 
proposed rule change on an accelerated basis for good cause shown. ICC 
cites as the reason for this request that the rule change is a 
straightforward operational change that is required in order to be in 
compliance with CFTC Rules 39.12(b)(7) on the October 1, 2012 effective 
date of this rule.
    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 derivatives clearing organization registered with the 
CFTC, ICC must amend certain of its rules to comply with CFTC 
Regulation 39.12(b)(7), which becomes effective on October 1, 2012.
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    \7\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-ICC-2012-16) be, and hereby is, 
approved on an accelerated basis.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24575 Filed 10-4-12; 8:45 am]
BILLING CODE 8011-01-P