[Federal Register Volume 79, Number 62 (Tuesday, April 1, 2014)]
[Notices]
[Pages 18377-18378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-07193]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71810; File No. SR-ICC-2014-02]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing of Proposed Rule Change To Update ICC's Liquidity Thresholds for 
Euro Denominated Products

March 26, 2014.
    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 March 12, 2014, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II, and III 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.
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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

    The purpose of the proposed rule change is to update ICC's 
liquidity thresholds for Euro denominated products.

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 regarding the proposed rule change. 
The text of these statements may be examined at the places specified in 
Item IV 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

    The proposed revisions are intended to update ICC's liquidity 
thresholds for Euro denominated products. ICC will require the first 
65% of Clearing Participant Non-Client Initial Margin and Guaranty Fund 
Liquidity Requirements (``Non-Client Liquidity Requirements'') to be 
satisfied with collateral in the currency of the underlying instrument. 
Accordingly, ICC proposes updating the liquidity thresholds for Euro 
denominated products, listed in Schedule 401 of the ICC Rules, to 
require the first 65% of Non-Client Liquidity Requirements for Euro 
denominated products to be satisfied with Euro cash.
    ICC believes such changes will facilitate the prompt and accurate 
clearance and settlement of securities transactions and derivative 
agreements, contracts, and transactions for which it is responsible. 
The proposed changes are described in detail as follows.
    For United States Dollar (``USD'') denominated products, the first 
65% of Non-Client Liquidity Requirements must be satisfied with USD 
denominated collateral. Specifically, the first 45% of Non-Client 
Liquidity Requirements must be posted in USD cash and the next 20% may 
be posted in USD denominated assets (USD cash and/or US Treasury 
securities). Currently, for Euro denominated products, 45% of Non-
Client Liquidity Requirements must be posted in Euro cash and the next 
20% may be posted in Euro cash, USD cash, and/or US Treasury 
securities.
    ICC proposes to require the first 65% of Non-Client Liquidity 
Requirements for both USD and Euro denominated products to be satisfied 
with collateral in the currency of the underlying instrument. 
Accordingly, ICC is updating its liquidity thresholds for Euro 
denominated products so that the first 65% of Non-Client Liquidity 
Requirements for Euro denominated products must be satisfied with Euro 
cash. This change will increase the Euro cash Non-Client Liquidity 
Requirements for Euro denominated products and create more consistent 
liquidity requirements across USD and Euro denominated products.
    Redundant references to ``US cash'' in Schedule 401 of the ICC 
Rules have been removed, as US cash is included in all ``G7 cash'' 
references.
    The ICC Treasury Operations Policies and Procedures have been 
updated to reflect the update to ICC's Non-Client Liquidity 
Requirements for Euro denominated products. The changes to the Euro 
cash Non-Client Liquidity Requirements do not require any operational 
changes.
    Section 17A(b)(3)(F) of the Act \3\ 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. 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, to Section 
17(A)(b)(3)(F),\4\ because ICC believes that the update to its 
liquidity thresholds for Euro denominated products 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. This change will increase 
available liquidity and make liquidity requirements consistent across 
USD and Euro denominated products.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F).
    \4\ Id.
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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. The proposed update to 
ICC's liquidity thresholds for Euro denominated products applies 
consistently across all market participants and the implementation of 
the proposed liquidity thresholds for Euro denominated products does 
not preclude the implementation of similar changes by other market 
participants. Therefore, ICC does not believe the update to its 
liquidity thresholds for Euro denominated products imposes any burden 
on competition that is inappropriate in furtherance of the purposes of 
the Act.

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

[[Page 18378]]

Commission of any written comments received by ICC.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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

     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-2014-02 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-ICC-2014-02. 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 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/notices/Notices.shtml?regulatoryFilings.
    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-2014-02 
and should be submitted on or before April 22, 2014.
    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07193 Filed 3-31-14; 8:45 am]
BILLING CODE 8011-01-P