[Federal Register Volume 79, Number 190 (Wednesday, October 1, 2014)]
[Notices]
[Pages 59340-59341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23315]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73220; File No. SR-ICC-2014-13]


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

September 25, 2014.

I. Introduction

    On July 31, 2014, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change SR-ICC-2014-13 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 August 15, 2014.\3\ The Commission did not receive any comments on 
the proposed rule change.\4\ 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. 34-72802 (Aug.11, 2014), 79 FR 
48280 (Aug. 15, 2014) (SR-ICC-2014-13).
    \4\ On August 18, 2014, ICC filed Amendment No. 1 to the 
proposed rule change. ICC withdrew Amendment No. 1 on August 21, 
2014.
---------------------------------------------------------------------------

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 six SES Contracts: four Standard Latin America 
Sovereign Single Name constituents and two Standard Emerging European 
and Middle Eastern Sovereign Single Name constituents of the CDX 
Emerging Markets Index (the ``SEEME Contracts''). The proposed rule 
change would provide for the clearance of two additional SEEME 
Contracts: the Republic of Hungary and the Republic of South Africa.
    ICC currently clears Series 14-21 of the CDX Emerging Markets 
Index. Of the CDX Emerging Markets Indices cleared by ICC, the Republic 
of Hungary is a constituent of the CDX Emerging Markets Index, Series 
14-18, and the Republic of South Africa is a constituent of the CDX 
Emerging Markets Index, Series 14-21. These two additional SEEME 
Contracts would initially be offered on the 2014 ISDA Credit 
Derivatives Definitions. ICC states that the addition of these SEEME 
Contracts will allow market participants an increased ability to manage 
risk, by providing market participants the ability to offset related 
index positions.
    These additional SEEME Contracts would have terms consistent with 
the other SEEME Contracts currently cleared by ICC and governed by 
Subchapter 26D of the ICC rules, namely the Russian Federation and the 
Republic of Turkey. Minor revisions to Subchapter 26D (Standard 
Emerging Sovereign (``SES'') Single Name) are proposed to provide for 
clearing the additional SEEME Contracts. Rule 26D-102 would be modified 
to include the Republic of Hungary and the Republic of South Africa in 
the list of specific Eligible SES Reference Entities to be cleared by 
ICC. ICC represents that the addition of these products would not 
require any changes to ICC's Risk Management Framework or other 
policies and procedures constituting rules within the meaning of the 
Act. ICC states that, in connection with the clearance of the new 
contracts, it will apply its existing margin and guaranty fund 
methodology, operational and managerial resources, settlement 
procedures and account structures, and default management policies and 
procedures, which, together, it believes will provide sufficient 
financial, operational, and managerial resources to support the 
clearing of the new contracts.

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 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.
---------------------------------------------------------------------------

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

    After careful review, the Commission finds that the proposed rule 
change is consistent with Section 17A of the Act \7\ and the rules 
thereunder applicable to ICC. The proposed rule change will provide for 
clearing of additional SEEME Contracts, which are substantially similar 
to other SEEME Contracts cleared by ICC, and the new contracts will be 
cleared pursuant to ICC's existing clearing arrangements and related 
financial safeguards, protections and risk management framework, 
including policies and procedures. The Commission believes that the 
proposal is therefore consistent with the prompt and accurate clearance 
and settlement of securities transactions and derivative agreements, 
contracts and transactions cleared by ICC, the safeguarding of

[[Page 59341]]

securities and funds in the custody or control of ICC, and the 
protection of investors and the public interest, within the meaning of 
Section 17A(b)(3)(F) of the Act.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1.
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

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 \9\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-ICC-2014-13) be, and hereby 
is, approved.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).
    \11\ 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.\12\
---------------------------------------------------------------------------

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23315 Filed 9-30-14; 8:45 am]
BILLING CODE 8011-01-P