[Federal Register Volume 79, Number 191 (Thursday, October 2, 2014)]
[Notices]
[Pages 59535-59537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23446]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73231; File No. SR-ICC-2014-15]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Clarify 
the Implementation of the Revised 2014 ISDA Credit Derivatives 
Definitions

September 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 September 19, 2014, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I and II 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)(4)(i) \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.
---------------------------------------------------------------------------

    \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)(4)(i).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The principal purpose of the proposed changes is to amend the ICC 
Clearing Rules (the ``Rules'') in order to make clarifying changes 
related to the implementation of the revised Credit Derivatives 
Definitions, as published by the International Swaps and Derivatives 
Association, Inc. (``ISDA'') on February 21, 2014 (the ``2014 ISDA 
Definitions'') in light of changes in the timing of the industry-wide 
ISDA protocol.

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 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

    On September 5, 2014, the Commission issued an order approving 
ICC's rule filing consisting of proposed amendments to the ICC Rules to 
incorporate references to the 2014 ISDA Definitions (ICC-2014-11).\5\ 
At the time of filing, the planned industry implementation date for the 
2014 ISDA Definitions was September 22, 2014. As has been publicly 
announced by ISDA, following member feedback, the implementation date 
for the conversion of existing transactions to the 2014 ISDA 
Definitions under the ISDA protocol has been delayed until October 6, 
2014. In addition, the industry consensus date for the commencement of 
trading of new transactions based on

[[Page 59536]]

the 2014 ISDA Definitions has similarly been delayed until October 6, 
2014, with the exception of certain European corporate, financial and 
sovereign CDS contracts for which new transactions based on the 2014 
ISDA Definitions may be entered into commencing on September 22, 2014 
(so-called ``protocol excluded transactions''). In an effort to 
maintain consistency across the CDS marketplace, ICC proposes to modify 
its Rules so that the implementation of clearing of contracts using the 
2014 ISDA Definitions at ICC is consistent with this revised schedule.
---------------------------------------------------------------------------

    \5\ Order Approving Proposed Rule Change, as Modified by 
Amendment No. 2 Thereto, to Revise Rules to Provide for the 2014 
ISDA Definitions, Securities Exchange Act Release No. 34-73007 
(September 5, 2014), 79 FR 54331 (September 15, 2014) (SR-ICC-2014-
11).
---------------------------------------------------------------------------

    ICC proposes to amend its rules to change the definition of the 
term ``2003/2014 Changeover Effective Date'' from September 22, 2014 to 
October 6, 2014 (or such later date as may be designated by ICE Clear 
Credit by Circular), in order to remain consistent with the approach 
being taken throughout the CDS market. ICC also proposes to make 
conforming changes throughout the ICC Rules to include reference to 
recently finalized Standard Terms Supplements related to the index 
products cleared by ICC. 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 Rule revisions are described in detail as 
follows.
    In Rule 20-102 (Definitions), the 2003/2014 Changeover Effective 
Date, or the date that ICC will convert converting indices and single 
names to 2014 ISDA Definitions, was changed to October 6, 2014 (or such 
later date as may be designated by ICE Clear Credit by Circular) to 
reflect the delay in the effective date for changes to existing trades 
under the industry protocol, as described above. Additionally, the 
definition of Converting Contracts was revised to correct a grammatical 
typo, revising ``components'' to the singular, ``component.''
    Following initial publication of the 2014 ISDA Definitions, two 
versions of the Standard Terms Supplements referred to in Subchapters 
26A, 26C and 26F were issued. In order to be explicitly clear and avoid 
any potential confusion, ICC has incorporated reference to both the 
``Legacy 2014 Supplement'' and ``New 2014 Supplement,'' together the 
``2014 Supplements'' in the definitions of ``CDX.NA Untranched Terms 
Supplement,'' ``CDX.EM Untranched Terms Supplement'' and ``iTraxx 
Europe Untranched Terms Supplement.'' Reference to such other 
supplements as may be specified for each index is also added to reflect 
ICC's continued intention to be consistent with Standard Terms 
Supplements issued by the industry. Corresponding clarifying changes 
are made throughout Subchapters 26A, 26C and 26F to properly reference 
the 2014 Supplements. Consistent with the approach taken in current 
provisions in the ICC Rules that apply to pre-2014 Standard Terms 
Supplements, the revisions clarify that certain provisions of the new 
referenced standard terms supplements relating to bilateral delivery of 
credit event notices and certain other notices do not apply in the 
context of cleared contracts. Specifically updates are made in ICC 
Rules 26A-316, 26A-317, 26C-316, 26C-317, 26F-316 and 26F-317.
    Section 17A(b)(3)(F) of the Act \6\ 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 rule changes 
are 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),\7\ because ICC believes that the proposed rule changes 
will facilitate the prompt and accurate clearance and settlement of 
swaps. ICC believes the changes proposed herein will provide clarity 
and accommodate for changes required by the industry following the 
approval of ICC-2014-11. As stated in ICC-2014-11, in an effort to 
achieve consistency across the CDS marketplace, ICC's implementation 
plan is intended to be fully consistent with the planned ISDA protocol 
implementation. The conforming and clarifying changes related to the 
revised 2014 ISDA Definitions ensure that ICC's implementation plan is 
fully consistent with the planned ISDA protocol implementation. As 
such, the proposed rule changes will facilitate the prompt and accurate 
clearance and settlement of swaps within the control of ICC within the 
meaning of Section 17A(b)(3)(F) \8\ of the Act.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1(b)(3)(F).
    \7\ Id.
    \8\ Id.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    ICC does not believe the proposed rule changes would have any 
impact, or impose any burden, on competition. The clarifying changes 
related to the revised 2014 ISDA Definitions apply uniformly across all 
market participants. Therefore, ICC does not believe the proposed rule 
changes impose 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) \9\ of the Act and Rule 19b-4(f)(4)(i) \10\ 
thereunder. At any time within 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(4)(i).
---------------------------------------------------------------------------

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-2014-15 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-2014-15. 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/

[[Page 59537]]

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/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-2014-15 
and should be submitted on or before October 23, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23446 Filed 10-1-14; 8:45 am]
BILLING CODE 8011-01-P