[Federal Register Volume 79, Number 202 (Monday, October 20, 2014)]
[Notices]
[Pages 62683-62684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24776]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73347; File No. SR-ICC-2014-16]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing of Proposed Rule Change Related to ICC's Use of House Initial 
Margin as an Internal Liquidity Resource

October 14, 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 October 1, 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 principal purpose of the proposed rule change is to amend ICC 
Clearing Rule 402(j) (``Rule 402(j)'') in order to provide further 
clarity regarding ICC's intention to return any Clearing Participant's 
House Initial Margin used as an internal liquidity resource.

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 August 28, 2014, the Securities Exchange Commission (the 
``Commission'') issued an order approving ICC's rule filing consisting 
of proposed amendments related to ICC's authority to use Guaranty Fund 
and House Initial Margin as an internal liquidity resource (ICC-2014-
08).\3\ ICC proposes changes to Rule 402(j) to provide further clarity 
regarding ICC's intention to return any Clearing Participant House 
Initial Margin used as an internal liquidity resource.
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    \3\ Order Approving Proposed Rule Change Related to ICC's 
Authority to Use Guaranty Fund and House Initial Margin as an 
Internal Liquidity Resource, Securities Exchange Act Release No. 34-
72944 (Aug. 28, 2014), 79 FR 52789 (Sept. 4, 2014) (SR-ICC-2014-08).
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    Under Rule 402(j), ICC may, in connection with a Clearing 
Participant default, (i) exchange House Initial Margin held in the form 
of cash for securities of equivalent value and/or (ii) exchange House 
Initial Margin held in the form of cash in one currency for cash of 
equivalent value in a different currency. ICC proposes adding language 
to clarify that ICC will engage in liquidity exchanges pursuant to Rule 
402(j) on a temporary basis. Further, ICC proposes amending Rule 402(j) 
to state that ICC will reverse any such exchange involving a Clearing 
Participant's Initial Margin in its House Account as soon as 
practicable following the conclusion of the event requiring the 
exchange of a Clearing Participant's Initial Margin for liquidity 
purposes (i.e., as quickly as possible following the conclusion of the 
liquidity event). It is likely that the duration of the liquidity event 
will be significantly shorter than the amount of time necessary to 
complete the default management process for the event which gave rise 
to the liquidity need. ICC also proposes amending Rule 402(j) to delete 
general references to ICC's liquidity policies and procedures and 
instead used the defined term ``ICE Clear Credit Procedures'' found 
throughout the ICC Rules.
    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

[[Page 62684]]

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),\5\ because ICC believes that the proposed 
rule change will assure the prompt and accurate clearance and 
settlement of securities transactions, derivatives agreements, 
contracts, and transactions. The proposed changes to the ICC Rules 
provide additional clarity regarding ICC's intention to return any 
House Initial Margin used as an internal liquidity resource. ICC 
believes the proposed revisions provide further clarity and 
transparency in the ICC Rules. ICC believes clarity and transparency in 
its Rules is of value to the market in order to provide a comprehensive 
understanding of ICC's available liquidity resources and default 
management procedures related to liquidity. As such, the proposed rule 
change is designed to promote the prompt and accurate clearance and 
settlement of securities transactions, derivatives agreements, 
contracts, and transactions 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 rule change would have any 
impact, or impose any burden, on competition. The clarification 
regarding the unwind of the liquidity exchange with respect to a 
Clearing Participant's House Initial Margin applies uniformly across 
all market participants. Therefore, ICC does not believe the proposed 
rule change 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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days of such 
date (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-2014-16 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-2014-16. 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 also will 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-2014-16 
and should be submitted on or before November 10, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-24776 Filed 10-17-14; 8:45 am]
BILLING CODE 8011-01-P