[Federal Register Volume 78, Number 222 (Monday, November 18, 2013)]
[Notices]
[Pages 69167-69168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-27474]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70849; File No. SR-ICC-2013-07]


Self-Regulatory Organizations; ICE Clear Credit LLC; Order 
Approving Proposed Rule Change To Provide for the Clearance of Standard 
Emerging European and Middle Eastern Sovereign Single Names

November 12, 2013.

I. Introduction

    On September 17, 2013, ICE Clear Credit LLC (``ICC'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change SR-ICC-2013-07 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder.\2\ The proposed rule change was published for comment in 
the Federal Register on October 1, 2013.\3\ The Commission did not 
receive any comments on the proposed rule change. This order approves 
the proposed rule change.


---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Exchange Act Release No. 34-70496 (Sep. 25, 2013), 78 FR 
60357 (Oct. 1, 2013) (SR-ICC-2013-07).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    ICC proposes to adopt rules that will provide the basis for ICC to 
clear additional credit default swap contracts. Specifically, ICC is 
proposing to amend Section 26D of its Rules to provide for the 
clearance of additional Standard Emerging Sovereign Single Name 
constituents of the CDX Emerging Markets Index (``SES Contracts''). 
Currently, ICC clears four Standard Latin America Sovereign Single Name 
constituents of the CDX Emerging Markets Index. The proposed changes to 
the ICC Rules would provide for the clearance of Standard Emerging 
European and Middle Eastern Sovereign Single Name constituents of the 
CDX Emerging Markets Index, specifically the Republic of Turkey and the 
Russian Federation (the ``SEEME Contracts''). ICC believes the addition 
of the SEEME Contracts will allow market participants an increased 
ability to manage risk.
    SEEME Contracts have similar terms to the Standard Latin America 
Sovereign Single Name constituents of the CDX Emerging Markets Index 
currently cleared by ICC and governed by Section 26D of the ICC rules. 
Accordingly, the proposed changes to Section 26D of the ICC rules 
include the addition of ``Standard Emerging European and Middle Eastern 
Sovereign'' as a Transaction Type for SES Contracts and the addition of 
the European Region as the CDS Region for SEEME Contracts.
    Rule 26D-102 would be modified to indicate the specific Eligible 
SES Reference Entities to be cleared by ICC, namely the Federative 
Republic of Brazil, the United Mexican States, the Bolivian Republic of 
Venezuela, the Argentine Republic, the Republic of Turkey and the 
Russian Federation. Rules 26D-303 (SES Contract Adjustments) and 26D-
315 (Terms of the Cleared SES Contract) would be modified to 
incorporate SEEME Contracts as a Transaction Type for SES Contracts. 
Rule 26D-309 would be modified to state specifically that ICC will not 
accept a trade for clearance and settlement if at the time of 
submission or acceptance of the trade or at the time of novation the 
CDS Participant submitting the trade is domiciled in the country of the 
Eligible SES Reference Entity for such SES Contract. Rule 26D-315(b) 
also would be modified to indicate that for purposes of the CDS 
Committee Rules, for SEEME Contracts the CDS Region is the European 
Region.
    ICC believes that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to ICC, in particular, Section 17(A)(b)(3)(F) of the Act,\4\ 
because ICC believes that the clearance of SEEME Contracts will 
facilitate the prompt and accurate settlement of securities, 
specifically security-based swaps, and contribute to the safeguarding 
of securities and funds associated with security-based swap 
transactions in ICC's custody or control, or for which ICC is 
responsible.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \5\ 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 \6\ 
requires, among other things, that the rules of a clearing agency are 
designed to promote the prompt and accurate clearance and settlement of 
securities transactions and 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. After careful review, the Commission finds 
that the proposed rule change is consistent with these requirements 
because the clearance of SEEME Contracts pursuant to ICC's proposal 
will promote the prompt and accurate clearance and settlement of 
securities transactions, and ICC's proposal, in combination with its 
existing rules, policies, and procedures for clearing SES Contracts, is 
designed to assure the safeguarding of securities and funds which are 
in the custody or control of ICC or for which it is responsible.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(2)(C).
    \6\ 15 U.S.C. 78q-1(b)(3)(F).

---------------------------------------------------------------------------

[[Page 69168]]

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act \7\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-ICC-2013-07) be, and hereby 
is, approved.\9\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 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).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-27474 Filed 11-15-13; 8:45 am]
BILLING CODE 8011-01-P