[Federal Register Volume 77, Number 248 (Thursday, December 27, 2012)]
[Notices]
[Pages 76325-76326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31128]



[[Page 76325]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68497; File No. SR-ICEEU-2012-12]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to the Acceptance of Letters of Credit or Pass-Through Letters of 
Credit Deposits From Non-Financial Institution Energy Clearing Members

December 20, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on December 19, 2012, ICE Clear Europe Limited (``ICE Clear 
Europe'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change described in Items I, II and 
III, below, which Items have been prepared primarily by ICE Clear 
Europe. ICE Clear Europe filed the proposal pursuant to Section 
19(b)(3)(A)(iii) \3\ of the Act and Rule 19b-4(f)(4)(ii) \4\ 
thereunder, so that the proposal was 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)(iii).
    \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

    The purpose of the proposed rule change is to accept Letters of 
Credit as permitted cover for certain clearing members for cleared 
energy futures. As part of the update to the Permitted Cover, ICE Clear 
Europe will consider new requests to use Letters of Credit or Pass 
through Letters of Credit to meet Initial/Original Margin requirements. 
All capitalized terms not defined herein are defined in the ICE Clear 
Europe Rules.

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 and comments 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 these statements.\5\
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    \5\ The Commission has modified the text of the summaries 
provided by ICE Clear Europe.
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A. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In addition to providing clearing services for credit default 
swaps, ICE Clear Europe also provides clearing services for non-
securities contracts in energy and emissions markets (``Energy Futures 
Products''). ICE Clear Europe is updating the List of Permitted Cover 
and Haircuts \6\ to allow non-financial institution Energy Clearing 
Members to deposit Letters of Credit or Pass-Through Letters of Credit 
to cover Initial/Original Margin requirements for Energy Futures 
Products.\7\
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    \6\ The updated list of Permitted Cover, along with the 
corresponding haircut rates, can be found at the following location: 
https://www.theice.com/publicdocs/clear_europe/list-of-permitted-covers.pdf.
    \7\ Letters of Credit and Pass-Through Letters of Credit are 
subject to concentration limits as described in the list of 
Permitted Cover. See id.
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    The Clearing House will accept three forms of the Letter of Credit:
     Letters of Credit: May be deposited by non-financial 
Energy Clearing Members;
     Pass-Through Letters of Credit: May be deposited by non-
financial institutions that are clients of Energy Clearing Members 
without FCM Clearing Member status; and
     Pass-Through Letters of Credit: May be deposited by non-
financial institutions that are clients of Clearing Members with FCM 
Clearing Member status, from November 28, 2012.
    Both forms of Pass-Through Letters of Credit are transferrable from 
ICE Clear Europe to the Clearing Member making the Clearing Member the 
beneficiary of the proceeds at execution. The Clearing Member will be 
responsible for assessing the wording of the Letter of Credit and only 
consent to its use in case the Letter on Credit is acceptable by the 
Clearing Member as permitted cover and fully compliant with its 
regulatory requirements.
    ICE Clear Europe believes that the proposed change is consistent 
with the requirements of Section 17A of the Act and the regulations 
thereunder applicable to it. Section 17A(b)(3)(F) \8\ of the Act 
requires, among other things, that the rules of a clearing agency be 
designed to protect investors and the public interest. ICE Clear Europe 
believes that allowing non-financial institutions to deposit Letters of 
Credit or Pass-Through Letters of Credit as permitted cover for 
Initial/Original Margin requirements for energy futures products would 
help protect investors and the public interest.
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    \8\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Clearing Agency's Statement on Burden on Competition

    ICE Clear Europe does not believe that the proposed rule change 
would have any impact, or impose any burden, on competition.

C. Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    ICE Clear Europe has not solicited written comments regarding the 
proposed change. ICE Clear Europe will notify the Commission of any 
written comments received by ICE Clear Europe.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(iii) \9\ of the Act and Rule 19b-4(f)(4)(ii) 
\10\ thereunder because it primarily affects the futures clearing 
operations of the clearing agency with respect to futures that are not 
security futures, and does not significantly affect the securities 
clearing operations of the clearing agency or any related rights or 
obligations of the clearing agency or persons using such service. 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.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(4)(ii).
    \11\ 15 U.S.C. 78s(b)(3)(C).
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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 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 No. SR-ICEEU-2012-12 on the subject line.
     Paper comments should be sent in triplicate to Elizabeth 
M. Murphy, Secretary, Securities and Exchange

[[Page 76326]]

Commission, 100 F Street NE., Washington, DC 20549-0609.

All submissions should refer to File Number SR-ICEEU-2012-12. To help 
the Commission process and review your comments more efficiently, 
please use only one method of submission. 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 changes that 
are filed with the Commission, and all written communications relating 
to the proposed rule changes 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 ICE 
Clear Europe, and on ICE Clear Europe's Web site at: https://www.theice.com/publicdocs/regulatory_filings/ICEU_SEC_121912_2012-12.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-ICEEU-2012-12 
and should be submitted on or before January 17, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-31128 Filed 12-26-12; 8:45 am]
BILLING CODE 8011-01-P