[Federal Register Volume 80, Number 98 (Thursday, May 21, 2015)]
[Notices]
[Page 29357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12282]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74974; File No. SR-ICC-2015-008]


Self-Regulatory Organizations; ICE Clear Credit LLC; Order 
Approving Proposed Rule Change Related to Settlement Finality

May 15, 2015.

I. Introduction

    On April 1, 2015, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ to provide additional 
clarity regarding settlement finality with respect to Mark-to-Market 
Margin. The proposed rule change was published for comment in the 
Federal Register on April 14, 2015.\3\ The Commission did not receive 
comments regarding the proposed change. For the reasons discussed 
below, the Commission is granting approval of the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-74676 (Apr. 8, 2015), 
80 FR 20047 (Apr. 14, 2015) (SR-ICC-2015-008).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    ICC proposes revising ICC Clearing Rule 401 (``Rule 401'') in order 
to provide additional clarity regarding settlement finality with 
respect to Mark-to-Market Margin (as defined in ICC Rule 401). 
Specifically, the proposed rule change would add new subsections (k) 
and (l) to Rule 401. ICC states that the new subsections are not 
intended to change any current ICC practices; rather, such changes are 
intended to provide additional clarity regarding settlement finality 
with respect to Mark-to-Market Margin. All capitalized terms not 
defined herein are defined in the ICC Rules.
    ICC proposes adding language in Rule 401(k) to clarify that each 
Transfer of Mark-to-Market Margin shall constitute a settlement (within 
the meaning of U.S. Commodity Futures Trading Commission Rule 39.14 
\4\) and shall be final as of the time ICC's accounts are debited or 
credited with the relevant payment. Further, ICC proposes adding 
language in Rule 401(l) to state that once settlement of a Transfer of 
Mark-to-Market Margin in respect of the Margin Requirements for a Mark-
to-Market Margin Category is final, the fair value of the outstanding 
exposures for the relevant Contracts in that Mark-to-Market Margin 
Category (taking into account the Margin provided in respect of such 
Margin Requirement) will be reset to zero. ICC states that such 
additional language is consistent with ICC's current practices and is 
intended to provide further clarity regarding ICC's settlement cycle.
---------------------------------------------------------------------------

    \4\ 17 CFR 39.14.
---------------------------------------------------------------------------

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 the 
Commission finds that such proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to such self-regulatory 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.
---------------------------------------------------------------------------

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

    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 would provide additional clarity and 
transparency regarding ICC's settlement cycle, specifically with regard 
to the time at which Transfers of Mark-to-Market Margin are final and 
the time at which the fair value of the outstanding exposures for 
relevant Contracts in a Mark-to-Market Margin Category is reset to 
zero. The Commission therefore finds that the proposed rule change is 
designed to promote the prompt and accurate clearance and settlement of 
securities transactions and, to the extent applicable, derivative 
agreements, contracts, and transactions in accordance with 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 (File No. SR-ICC-2015-008) 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).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12282 Filed 5-20-15; 8:45 am]
BILLING CODE 8011-01-P