[Federal Register Volume 78, Number 72 (Monday, April 15, 2013)]
[Notices]
[Pages 22350-22353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-08727]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69356; File No. SR-ICC-2013-05]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing and Order Granting Accelerated Approval of a Proposed Rule 
Change, as Modified by Amendment No. 1, Related to Regulatory Reporting 
of Swap Data

April 9, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-4,\2\ notice is hereby given that 
on March 25, 2013, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change, as modified by Amendment No. 1,\3\ and as described in Items I 
and II below, which Items have been substantially prepared by the 
clearing agency. 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.
    \3\ ICC filed Amendment No. 1 to ICC-2013-05 on April 8, 2013. 
In Amendment No. 1, ICC amended Form 19b-4 and Exhibit 1 to include 
references to Commodity Futures Trading Commission Regulation 45.3.
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    ICC proposes to add, in Chapter 2 of the ICC Rules, Rule 211 
(Regulatory Reporting of Swap Data). ICC proposes to add Rule 211 in 
order to implement swap data repository (``SDR'') reporting (``SDR 
Reporting'') consistent with the Commodity Futures Trading Commission 
(``CFTC'') Regulations relating to the regulatory reporting of swap 
data, specifically Part 45 of CFTC Regulations (``Part 45'').\4\ ICC 
currently complies with the CFTC's Regulations relating to the 
regulatory reporting of swap data by reporting to 
IntercontinentalExchange, Inc.'s SDR, selected by ICC. In order to 
codify ICC's practice of reporting relevant Part 45 data to the SDR 
selected by ICC, which is intended to meet ICC's and its Clearing 
Participants' swap data reporting obligations under Part 45, ICC 
proposes to add, in Chapter 2 of the ICC Rules, Rule 211 (Regulatory 
Reporting of Swap Data).
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    \4\ 17 CFR 45.
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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, the clearing agency 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. The clearing agency has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant aspects of such statements.\5\
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    \5\ The Commission has modified the text of the summaries 
prepared by the clearing agency.
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(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    ICC proposes to add, in Chapter 2 of the ICC Rules, Rule 211 in 
order to implement SDR Reporting consistent with CFTC Regulations 
45.3,\6\ 45.4(b),\7\ and 45.9.\8\ Proposed ICC Rule 211 states that for 
the purposes of complying with applicable CFTC rules governing the 
regulatory reporting of swaps, ICC will report all creation and 
continuation data to IntercontinentalExchange, Inc.'s SDR. In addition, 
proposed ICC Rule 211 provides that, upon the request of an ICC 
Clearing Participant that is a counterparty to a swap cleared at ICC, 
ICC shall provide the same creation and continuation data to the SDR 
selected by the Clearing Participant.
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    \6\ 17 CFR 45.3.
    \7\ 17 CFR 45.4(b).
    \8\ 17 CFR 45.9.
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    Proposed Rule 211 is consistent with the CFTC's Regulation 45.3 \9\ 
and 45.4(b),\10\ which requires that creation and continuation data 
must be reported by both the derivatives clearing organization and the 
reporting counterparty. ICC currently complies with the CFTC's 
Regulation 45.3 \11\ and 45.4(b) \12\ by reporting swap data to 
IntercontinentalExchange, Inc.'s SDR selected by ICC. In order to 
codify ICC's practice of reporting relevant Part 45 data to the SDR 
selected by ICC, ICC proposes to add, in Chapter 2 of the ICC Rules, 
Rule 211 (Regulatory Reporting of Swap Data).
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    \9\ 17 CFR 45.3.
    \10\ 17 CFR 45.4(b).
    \11\ 17 CFR 45.3.
    \12\ 17 CFR 45.4(b).
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    The addition of ICC Rule 211 also is in response to swap dealers' 
mandatory compliance with CFTC Regulation 45.3 \13\ and 45.4,\14\ which 
was required by February 28, 2013. ICC believes that proposed ICC Rule 
211 is also consistent

[[Page 22351]]

with the CFTC's Regulation 45.9,\15\ which provides that swap 
counterparties required by Part 45 to report swap creation or 
continuation data may contract with third-party service providers to 
facilitate reporting. Proposed ICC Rule 211 ensures that ICC, in the 
capacity of a third-party service provider, will be able to report 
required swap creation and continuation data on behalf of ICC's 
Clearing Participants, in compliance with the Clearing Participants' 
reporting obligations under CFTC's swap data reporting Regulations.
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    \13\ 17 CFR 45.3.
    \14\ 17 CFR 45.4.
    \15\ 17 CFR 45.9.
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    ICC believes that proposed ICC Rule 211 is consistent with the 
requirements of Section 17A of the Exchange Act \16\ and the rules and 
regulations thereunder applicable to it. Specifically, ICC believes the 
proposed rule is consistent with Section 17A(b)(3)(F) of the Exchange 
Act,\17\ which 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, to 
assure the safeguarding of securities and funds which are in the 
custody or control of the clearing agency or for which it is 
responsible, and to protect investors and the public interest. As a 
derivatives clearing organization registered with the CFTC, ICC must 
comply with CFTC Regulations, including CFTC Regulation 45.3 \18\ and 
45.4.\19\ ICC believes this proposed rule change will facilitate its 
own and its Clearing Participants' mandatory compliance with CFTC 
Regulation 45.3 \20\ and 45.4.\21\ ICC believes that the proposed rule 
change is consistent with the requirements of the Exchange Act and the 
rules and regulations thereunder applicable to ICC, in particular with 
Section 17A(b)(3)(F), because facilitating clearing members' reporting 
obligations promotes the prompt and accurate clearance and settlement 
of securities transactions and the safeguarding of securities and 
funds, and compliance with the CFTC's regulations facilitates the 
protection of investors and the public interest. In addition, ICC notes 
that the proposed change is limited to ICC's business as a derivatives 
clearing organization and therefore does not significantly affect any 
securities clearing operations of the clearing agency or any related 
rights or obligations of the clearing agency or persons using such 
service. For these reasons, ICC believes the proposed rule is 
consistent with the requirements of Section 17A(b)(3)(F) of the 
Exchange Act.\22\
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    \16\ 15 U.S.C. 78q-1.
    \17\ 15 U.S.C. 78q-1(b)(3)(F).
    \18\ 17 CFR 45.3.
    \19\ 17 CFR 45.4.
    \20\ 17 CFR 45.3.
    \21\ 17 CFR 45.4.
    \22\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Clearing Agency'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) Clearing Agency'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 Exchange 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-2013-05 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-2013-05. 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 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 the filing also will be available 
for inspection and copying at the principal office of ICC.
    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-2013-05 
and should be submitted on or before May 6, 2013.

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

    Section 19(b)(2)(C) of the Exchange Act \23\ 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 Exchange 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 
Exchange Act, in particular, the requirements of Section 17A of the 
Exchange Act, and the rules and regulations thereunder applicable to 
ICC.\24\ Specifically, the Commission finds that the proposed rule 
change is consistent with Section 17A(b)(3)(F) of the Exchange Act,\25\ 
which 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, to assure the safeguarding of 
securities and funds which are in the custody or control of the 
clearing agency or for which it is responsible, and to protect 
investors and the public interest.
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    \23\ 15 U.S.C. 78s(b)(2)(C).
    \24\ 15 U.S.C. 78q-1.
    \25\ 15 U.S.C. 78q-1(b)(3)(F).
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    Based on ICC's representations, the Commission understands that the 
proposed rule change is designed to codify in ICC's Rules the way in 
which ICC intends to comply with certain of the CFTC's swap data 
reporting rules and to facilitate its Clearing Participants' compliance 
with the same. The Commission finds that, by facilitating compliance 
with the swap data reporting requirements of another

[[Page 22352]]

regulator, the proposed rule change is consistent with promoting the 
prompt and accurate clearance and settlement of derivative agreements, 
contracts, and transactions, assuring the safeguarding of securities 
and funds which are in the custody or control of the clearing agency or 
for which it is responsible, and protecting investors and the public 
interest.
    The Commission is mindful of the CFTC's jurisdiction respecting 
swap data reporting and swap data repositories under the Dodd-Frank 
Wall Street Reform and Consumer Protection Act of 2010 (``Dodd-Frank 
Act'').\26\ The proposed rule change, which is limited to ICC's 
business as a derivatives clearing organization and does not 
significantly affect any securities clearing operations of the clearing 
agency or any rights or obligations of the clearing agency with respect 
to securities clearing or persons using such securities-clearing 
service,\27\ applies only to swaps, which are regulated by the CFTC 
under the CEA. In this regard, the Commission notes that section 
5b(c)(2)(N) of the CEA requires that ``[u]nless necessary or 
appropriate to achieve the purposes of [the CEA], a derivatives 
clearing organization shall not--(i) adopt any rule or take any action 
that results in any unreasonable restraint of trade; or (ii) impose any 
material anticompetitive burden.'' \28\ Section 17A(b)(3)(I) of the 
Exchange Act, by contrast, requires that ``[t]he rules of the clearing 
agency do not impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of [the Exchange Act].'' 
\29\ To the extent that the Exchange Act provisions on competition 
apply to swaps-related activity, the Commission finds that the proposed 
rule change does not impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Exchange Act.\30\ In 
making this determination, the Commission is mindful of the CFTC's 
jurisdiction over swap activities, and the Commission could draw a 
different conclusion about a similar proposal if it applied to 
security-based swap activity instead of swap activity.
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    \26\ Public Law 111-203, 124 Stat. 1376 (2010). Title VII of the 
Dodd-Frank Act gives the CFTC regulatory authority over swaps, 
including the authority to adopt rules governing SDRs and swap 
reporting. See, e.g., Pub. L. No. 111-203, Sec.  727. Similarly, 
Title VII gives the SEC regulatory authority over security-based 
swaps and the authority to adopt rules governing security-based swap 
data repositories and security-based swap reporting. See, e.g., Pub. 
L. No. 111-203, Sec.  763(i).
    \27\ Cf. Amendment to Rule Filing Requirements for Dually-
Registered Clearing Agencies, Securities Exchange Act Rel. No. 69284 
(Apr. 3, 2013), 78 FR 21046 (Apr. 9, 2013) (amending the 
Commission's rule filing process in connection with proposed rule 
changes that primarily affect a registered clearing agency's 
clearing operations with respect to products that are not securities 
and that do not significantly affect any securities clearing 
operations or any rights or obligations of the clearing agency with 
respect to securities clearing or persons using such securities 
service; effective 60 days from forthcoming publication in the 
Federal Register).
    \28\ 7 U.S.C. 7a-1(c)(2)(N).
    \29\ 15 U.S.C. 78q-1(b)(3)(I).
    \30\ In approving these proposed rule changes, the Commission 
has considered the proposed rule change's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
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    In its filing, ICC requested that the Commission grant accelerated 
approval of the proposed rule change under Section 19(b)(2)(C)(iii) of 
the Exchange Act.\31\ Under Section 19(b)(2)(C)(iii) of the Exchange 
Act,\32\ the Commission may grant accelerated approval of a proposed 
rule change if the Commission finds good cause for doing so. ICC 
believes that accelerated approval is warranted because the proposed 
rule change will assist swap dealers' mandatory compliance with CFTC 
Regulation 45.3 \33\ and 45.4,\34\ which was required by February 28, 
2013. ICC states that the proposed rule change does not require any 
operational changes, as ICC currently complies with the CFTC's 
Regulations relating to the regulatory reporting of swap data by 
reporting to IntercontinentalExchange, Inc.'s SDR, selected by ICC. ICC 
notes that the proposed change is limited to ICC's business as a 
derivatives clearing organization and therefore does not significantly 
affect any securities clearing operations of the clearing agency or any 
related rights or obligations of the clearing agency or persons using 
such service. ICC has stated that, in its view, the proposed changes do 
not raise any issues that would require a lengthier review process 
under Section 19(b) of the Exchange Act,\35\ and ICC does not believe 
the market would benefit from delaying implementation of the proposed 
rule changes.
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    \31\ 15 U.S.C. 78s(b)(2)(C)(iii).
    \32\ 15 U.S.C. 78s(b)(2)(C)(iii).
    \33\ 17 CFR 45.3.
    \34\ 17 CFR 45.4.
    \35\ 15 U.S.C. 78s(b).
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    The Commission finds good cause, pursuant to Section 
19(b)(2)(C)(iii) of the Exchange Act,\36\ for approving the proposed 
rule change on an accelerated basis, prior to the 30th day after the 
date of publication of notice in the Federal Register, because (i) the 
proposed rule change is limited to ICC's business as a derivatives 
clearing organization and does not significantly affect any securities 
clearing operations of the clearing agency or any rights or obligations 
of the clearing agency with respect to securities clearing or persons 
using such securities-clearing service; and (ii) the activity relating 
to the non-securities clearing operations of the clearing agency for 
which the clearing agency is seeking approval is subject to regulation 
by another federal regulator.\37\
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    \36\ 15 U.S.C. 78s(b)(2)(C)(iii).
    \37\ See supra note 27.
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    The Commission notes that ICC also has submitted ICC Rule 211 to 
the CFTC for self-certification pursuant to Section 5c(c)(1) of the 
Commodity Exchange Act (``CEA'') \38\ and CFTC Regulation 40.6.\39\ In 
connection with ICC's submission, the CFTC received a petition for the 
stay of ICC's self-certification of ICC Rule 211 from the Depository 
Trust & Clearing Corporation (``DTCC''), in conjunction with DTCC Data 
Repository (U.S.) LLC.\40\ In its submission to the CFTC, ICC also made 
reference to the CFTC's comment files relating to the submission by the 
Chicago Mercantile Exchange Inc. (``CME'') of CME Rule 1001 to the CFTC 
and ``relevant references within the Statement of the [CFTC] granting 
approval of the CME's Rule 1001 submission.'' \41\
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    \38\ 7 U.S.C. 7a-2(c)(5).
    \39\ 17 CFR 40.6.
    \40\ Letter to Ms. Melissa Jurgens, CFTC, from Larry E. 
Thompson, General Counsel, DTCC, dated March 26, 2013, available at 
http://www.cftc.gov/stellent/groups/public/@rulesandproducts/documents/ifdocs/dtcccommentltr032613.pdf.
    \41\ ICC Rule Submission Re: SDR Reporting Rule Certification 
Pursuant to Section 5c(c)(1) of the CEA and [CFTC] Regulation 40.6, 
dated March 22, 2013, available at http://www.cftc.gov/stellent/groups/public/@rulesandproducts/documents/ifdocs/rul032213icc001.pdf.
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    As noted above, in its consideration and approval of the proposed 
rule change, the Commission is mindful of the CFTC's jurisdiction 
respecting swap data reporting and swap data repositories under the 
Dodd-Frank Act.\42\ The Commission's approval of the proposed rule 
change in no way constitutes a determination or finding by the 
Commission that the proposed rule change complies with or is not 
inconsistent with the CEA or the rules and regulation thereunder, which 
are determinations within the purview of the CFTC. The Commission's 
approval is limited to findings under the Exchange Act and the rules 
and regulations thereunder in effect on the date hereof and represents 
neither agreement nor disagreement with the CFTC's analysis and 
determinations in connection with its Statement approving CME Rule 1001 
or other actions to-date respecting CME's or

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ICC's rules relating to swap data reporting. Furthermore, the 
Commission's approval of the proposed rule change in no way limits or 
precludes any future actions by the Commission, including pending 
rulemakings \43\ or proposed rule changes, in connection with security-
based swaps.
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    \42\ See supra note 26.
    \43\ See, e.g., Regulation SBSR--Reporting and Dissemination of 
Security-Based Swap Information, Securities Exchange Act Rel. No. 
63346 (Nov. 19, 2010), 75 FR 75208 (Dec. 2, 2010); Security-Based 
Swap Data Repository Registration, Duties, and Core Principles, 
Securities Exchange Act Release No. 63347 (Nov. 19, 2010), 75 FR 
77306 (Dec. 10, 2010), corrected at 75 FR 79320 (Dec. 20, 2010) and 
76 FR 2287 (Jan. 13, 2011).
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V. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the 
Exchange Act \44\ that the proposed rule change (SR-ICC-2013-05), as 
modified by Amendment No. 1, be, and hereby is, approved on an 
accelerated basis.
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    \44\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\45\
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    \45\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-08727 Filed 4-12-13; 8:45 am]
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