[Federal Register Volume 79, Number 154 (Monday, August 11, 2014)]
[Notices]
[Pages 46896-46898]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18878]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72762; File No. SR-ICC-2014-12]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule Change 
To Revise the ICC Treasury Policies and Procedures

August 5, 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 July 21, 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 
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.
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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 revise the ICC 
Treasury Policies and Procedures to correct an error in order to 
properly describe ICC's policy regarding permitted counterparties to 
ICC's repurchase agreement transactions (``Repo Transactions'').\3\ 
This revision does not require any changes to the ICC Clearing Rules.
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    \3\ Generally, Repo Transactions are the purchase or sale of 
U.S. Treasury securities with the simultaneous agreement to sell or 
buy back the securities with the same counterparty on the next 
business day.
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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 on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III 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 Treasury Policies and Procedures is 
intended to correct an error in order to properly describe ICC's policy 
regarding permitted counterparties to ICC's Repo Transactions.
    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 Treasury Policies and Procedures state that ICC 
may not enter in Repo Transactions with counterparties that are 
affiliates of ICC Clearing Participants. This statement contains an 
error, and does not accurately reflect ICC's policy in regards to 
prohibited repo counterparties. Such provision in the ICC Treasury 
Policies and Procedures was intended to prohibit the use of affiliates 
of ICC as repo counterparties, consistent with the prohibition 
contained in CFTC Regulation 1.25(d)(3), which states, in

[[Page 46897]]

relevant part, ``A . . . derivatives clearing organization shall not 
enter into an agreement to repurchase or resell with a counterparty 
that is an affiliate of the . . . derivatives clearing organization.'' 
However, ICC's policy language inadvertently included the phrase 
``affiliates of ICE Clear Credit Clearing Participants'' rather than 
the proper language ``affiliates of ICE Clear Credit.'' ICC proposes 
revising the ICC Treasury Policies and Procedures to accurately reflect 
ICC's policy in regards to prohibited repo counterparties. ICC proposes 
amending the policy to clarify that ICC prohibits the use of repo 
counterparties that are affiliates of ICC, rather than affiliates of 
ICC Clearing Participants. This revision to the Treasury Policies and 
Procedures does not require any operational changes.
    Section 17A(b)(3)(F) of the Act \4\ 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),\5\ 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 Treasury Policies and 
Procedures corrects an error in order to properly describe ICC's policy 
regarding permitted counterparties to ICC's Repo Transactions. 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) \6\ of the Act.
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    \4\ 15 U.S.C. 78q-1(b)(3)(F).
    \5\ Id.
    \6\ 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 Treasury 
Policies and Procedures to correct an error in order to properly 
describe ICC's policy regarding permitted counterparties to ICC's Repo 
Transactions 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. 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-2014-12 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-2014-12. 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 and on ICC's 
Web site at https://www.theice.com/clear-credit/regulation.
    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-2014-12 
and should be submitted on or before September 2, 2014.

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

    Section 19(b)(2)(C) of the Act \7\ 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 \8\ 
requires, among other things, that the rules of a registered 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, in 
general, to protect investors and the public interest.
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    \7\ 15 U.S.C. 78s(b)(2)(C).
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
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    The Commission finds that the proposed revision to ICC's Treasury 
Policies and Procedures is consistent with the requirements of the Act, 
in particular the requirements of Section 17A(b)(3)(F) of the Act,\9\ 
and the rules and regulations thereunder applicable to ICC. As 
currently written, ICC's Treasury Policies and Procedures prohibit ICC 
from engaging in Repo Transactions, including reverse Repo 
Transactions, with affiliates of ICC Clearing Participants. The 
proposed rule change would allow ICC to engage additional repo 
counterparties and, therefore, expand its capacity to manage its cash 
deposits pursuant to its cash management program. The Commission finds 
that the proposed rule change promotes the prompt and accurate 
clearance and settlement of securities transactions and, to the extent 
applicable, derivative agreements, contracts, and transactions, and is 
consistent with the requirement of

[[Page 46898]]

safeguarding securities and funds in the custody or control of the 
clearing agency or for which it is responsible in Section 17A(b)(3)(F) 
of the Act.
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    \9\ Id. 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).
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    ICC has requested that the Commission approve the proposed rule 
change on an accelerated basis for good cause shown. ICC states that, 
as a result of recent contractions in the repo marketplace that have 
decreased its capacity to engage in reverse Repo Transactions, it has a 
pressing need to timely engage additional reverse repo counterparties 
so it has sufficient repo counterparty relationships and transaction 
capacity to collateralize its cash deposits pursuant to its cash 
management program. ICC further represented that maintaining sufficient 
repo counterparty relationships and transaction capacity is critical 
for risk mitigation purposes, and delaying the effectiveness of this 
proposed rule change may result in ICC being unable to timely secure 
additional repo counterparties. The Commission finds good cause, 
pursuant to Section 19(b)(2)(C)(iii) of the Act,\10\ for approving the 
proposed rule change on an accelerated basis.
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    \10\ 15 U.S.C. 78s(b)(2)(C)(iii).
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V. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the Act 
that the proposed rule change (SR-ICC-2014-12) be, and hereby is, 
approved on an accelerated basis.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-18878 Filed 8-8-14; 8:45 am]
BILLING CODE 8011-01-P