[Federal Register Volume 80, Number 199 (Thursday, October 15, 2015)]
[Notices]
[Pages 62120-62121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26152]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76111; File No. SR-ICC-2015-013]


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

October 8, 2015.

I. Introduction

    On July 6, 2015, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission''), pursuant to 
section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 62121]]

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change (SR-
ICC-2015-013) to provide the basis for ICC to clear additional Standard 
Western European Sovereign credit default swap contracts (``SWES 
Contracts''). The proposed rule change was published for comment in the 
Federal Register on July 21, 2015.\3\ The Commission did not receive 
comments on the proposed rule change. On September 3, 2015, the 
Commission extended the time period in which to either approve, 
disapprove, or institute proceedings to determine whether to disapprove 
the proposed rule change to October 19, 2015.\4\ For the reasons 
discussed below, the Commission is approving the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-75456 (July 15, 
2015), 80 FR 43146 (July 21, 2015) (SR-ICC-2015-013).
    \4\ Securities Exchange Act Release No. 34-75836 (September 3, 
2015), 80 FR 54627 (September 10, 2015) (SR-ICC-2015-013).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The purpose of the proposed rule change is to adopt rules that will 
provide the basis for ICC to clear additional SWES Contracts. ICC 
currently clears seven SWES Contracts: The Republic of Ireland, the 
Italian Republic, the Portuguese Republic, the Kingdom of Spain, the 
Kingdom of Belgium, the Republic of Austria, and the Kingdom of the 
Netherlands. ICC proposes to revise subchapter 26I (Standard Western 
European Sovereign (``SWES'') Single Name) of its Rules to provide for 
the clearance of the additional SWES Contracts by modifying Rule 26I-
102 to include the Federal Republic of Germany, the French Republic, 
and the United Kingdom of Great Britain and Northern Ireland in the 
list of specific Eligible SWES Reference Entities to be cleared by ICC. 
ICC plans to offer these additional SWES Contracts on the 2003 and 2014 
ISDA Credit Derivatives Definitions. ICC stated in its filing that 
these additional SWES Contracts have terms consistent with the other 
SWES Contracts approved for clearing at ICC and governed by subchapter 
26I of the ICC Rules, namely the Republic of Ireland, the Italian 
Republic, the Portuguese Republic, the Kingdom of Spain, the Kingdom of 
Belgium, the Republic of Austria, and the Kingdom of the Netherlands.
    In addition, ICC stated in its filing that the proposed change is 
dependent on the approval and implementation of the proposed rule 
change in SR-ICC-2015-009 and therefore, the text of the proposed rule 
change in Exhibit 5 should be read in conjunction with the proposed 
rule change in SR-ICC-2015-009.\5\
---------------------------------------------------------------------------

    \5\ In SR-ICC-2015-009, ICC proposed to revise its Risk 
Management Framework to extend its General Wrong Way Risk (``GWWR'') 
framework to the portfolio level. The new GWWR methodology is 
designed to account for the potential accumulation of portfolio 
Wrong Way Risk (``WWR'') through Risk Factor specific WWR exposures 
arising from the clearance of credit default swaps referencing 
sovereign and banking sector names. The Commission approved the 
proposed rule change SR-ICC-2015-009 on September 10, 2015. See 
Securities Exchange Act Release No. 34-75887 (September 10, 2015), 
80 FR 55672 (September 16, 2015) (SR-ICC-2015-009).
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \6\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if the 
Commission finds that the 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 \7\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2)(C).
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent 
with the requirements of section 17A of the Act \8\ and the rules and 
regulations thereunder applicable to ICC. The proposed rule change 
would provide for the clearing of additional SWES Contracts referencing 
Federal Republic of Germany, the French Republic, and the United 
Kingdom of Great Britain and Northern Ireland, which are similar to the 
other SWES Contracts currently cleared by ICC. ICC would clear the 
additional SWES Contracts using ICC's existing clearing arrangements 
and related financial safeguards, protections and risk management 
procedures, including the portfolio-level GWWR methodology approved in 
SR-ICC-2015-009, which is designed to account for the potential 
accumulation of uncollateralized portfolio WWR exposures arising from 
the clearance of sovereign and banking sector Risk Factors at ICC.\9\ 
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, and 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1.
    \9\ See supra note 5.
---------------------------------------------------------------------------

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 \10\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\11\ that the proposed rule change (File No. SR-ICC-2015-013) be, 
and hereby is, approved.\12\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2).
    \12\ 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.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26152 Filed 10-14-15; 8:45 am]
 BILLING CODE 8011-01-P