[Federal Register Volume 79, Number 115 (Monday, June 16, 2014)]
[Notices]
[Pages 34371-34372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-13933]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72358; File No. SR-ICC-2014-09]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Update 
the ICC Risk Management Framework

June 10, 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 May 30, 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. ICC filed the proposal pursuant to 
Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(1) \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).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of this proposed rule change is to revise the ICC Risk 
Management Framework to clarify language related to ICC's forced 
allocation procedures. This revision does not require any changes to 
the ICC 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 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 revision to ICC's Risk Management Framework is 
intended to clarify language related to ICC's forced allocation 
procedures and to promote consistency between ICC's forced allocation 
procedures as set forth in the ICC Rules and the ICC Risk Management 
Framework.
    ICC believes such revision 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 revision is described in detail as follows.
    Currently, the ICC Risk Management Framework states that, in the 
event of a forced allocation, positions will be allocated to Clearing 
Participants (``CPs'') based on each CP's overall risk profile. Under 
ICC Rule 20-605(c)(vii), ICC, in the event of a failed auction or other 
inability to close-out or transfer relevant positions, may allocate 
positions to Non-Defaulting CPs on a pro rata basis in proportion to 
the size of each CP's required contribution to the Guaranty Fund, as 
relative to the aggregate of all Non-Defaulting CPs' required 
contributions to the Guaranty Fund. ICC proposes revising the ICC Risk 
Management Framework to more closely reflect the forced allocation 
language in ICC Rule 20-605(c)(vii). Specifically, ICC proposes adding 
clarifying language which states that in the event of a forced 
allocation, positions will be allocated to each Non-Defaulting CP on a 
pro rata basis in proportion to the size of each CP's required 
contribution to the Guaranty Fund. ICC believes this update to the ICC 
Risk Management Framework alleviates potential confusion regarding the 
allocation process. This is a clarifying revision, and the changes to 
the ICC Risk Management Framework do not require any operational 
changes.
    Section 17A(b)(3)(F) of the Act \5\ 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 and to comply with the provisions of the Act and the rules 
and regulations thereunder. ICC believes that the proposed revision is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to ICC, in particular, to Section 
17A(b)(3)(F) \6\, because ICC believes that the proposed rule changes 
will facilitate the prompt and accurate settlement of swaps and 
contribute to the safeguarding of securities and funds associated with 
swap transactions which are in the custody or control of ICC or for 
which it is responsible. The revision to the ICC Risk Management 
Framework alleviates potential confusion regarding the allocation 
process. As such, the proposed rule changes will facilitate the prompt 
and accurate settlement of swaps and contribute to the safeguarding of 
customer funds and securities within the control of ICC within the 
meaning of Section 17A(b)(3)(F) \7\ of the Act.
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    \5\ 15 U.S.C. 78q-1(b)(3)(F).
    \6\ Id.
    \7\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    ICC does not believe the proposed revision would have any impact, 
or impose any burden, on competition. The revision to ICC's Risk 
Management Framework regarding forced allocation procedures applies 
uniformly across all CPs. Therefore, ICC does not believe the proposed 
revision 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 Commission of any written 
comments received by ICC.

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) \8\ of the Act and Rule 19b-4(f)(1) \9\ 
thereunder because the update constitutes a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule. Specifically, ICC is updating language 
in the ICC Risk Management Framework to more closely reflect the forced 
allocation procedures set forth in ICC Rule 20-605(c)(vii). At any time 
within

[[Page 34372]]

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.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(1).
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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

     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-2014-09 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-2014-09. 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 ICE Clear Credit 
and on ICE Clear Credit'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-2014-09 
and should be submitted on or before July 7, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary .
[FR Doc. 2014-13933 Filed 6-13-14; 8:45 am]
BILLING CODE 8011-01-P