[Federal Register Volume 80, Number 200 (Friday, October 16, 2015)]
[Notices]
[Pages 62593-62594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26325]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76122; File No. SR-ICC-2015-015]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing of Proposed Rule Change Related to the ICC Rule Enforcement 
Process for Missed Submissions

October 9, 2015.
    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 30, 2015, 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 purpose of the proposed changes is to make revisions to the ICC 
Clearing Rules (the ``Rules'') related to the ICC rule enforcement 
process for Missed Submissions.

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

    As part of ICC's end-of-day price discovery process, ICC Clearing 
Participants (``CPs'') are required to submit end-of-day prices for 
specific instruments related to their open interest at ICC, in 
accordance with Rule 404(b) and ICC Procedures. Failure of a CP to 
provide submissions required by ICC pursuant to Rule 404(b) and ICC 
Procedures constitute a Missed Submission. In order to provide 
incentive against Missed Submissions, ICC has adopted a summary 
assessment approach described in Rule 702(e) and Schedule 702 of the 
Rules.
    Currently, under Rule 702(e)(ii)(2), a CP may be eligible for a 
once-in-a-lifetime conditional waiver from such assessments, if one or 
more Missed Submissions are the first instance(s) of a Missed 
Submission for the type of instrument (index or single name) and the CP 
provides adequate explanation of the cause and plans for remedial 
actions.
    Given the increased automation of price submissions, ICC recognizes 
that there may be circumstances, due to technological failures, which 
may result in Missed Submissions. Furthermore, due to the significant 
length of time since the inception of the end-of-day process, many CPs 
have utilized their once-in-a-lifetime waiver. As such, ICC believes it 
is reasonable to provide, under limited circumstances, a conditional 
once-a-year waiver for such Missed Submissions caused by technical 
failures, as described below. Such Rule changes will not affect the 
integrity and effectiveness of the end-of-day price discovery process. 
ICC believes such Rule changes provide a valuable and practical balance 
between the technicalities of the price discovery process and 
appropriate penalization for Missed Submissions.
    The proposed Rule text provides for the replacement of ICC's 
current once-in-a-lifetime waiver for Missed Submissions with a 
conditional once-a-year waiver for Missed Submissions caused by 
technical failures. Under revised Rule 702(e)(ii)(2), a CP would be 
eligible for one waiver per year for single name Missed Submissions, 
and one waiver per year for index Missed Submissions. A CP may request 
such wavier(s) be applied against all Missed Submissions for a given 
instrument class on a given day. A CP would be required to provide 
documentation with a waiver request, explaining that the root-cause of 
the Missed Submission was a technology issue and including a 
remediation plan to fix the cause of the Missed Submission. ICC would 
review and evaluate the waiver request and accept unless it had 
legitimate concerns that the root-cause of the Missed Submission had 
not been adequately identified, was not due to a technical issue, and/
or would not be corrected by the provided remediation plan. ICC would 
maintain its current ability to provide waivers for Missed Submissions 
deemed to be due to extraordinary circumstances outside of a CP's 
control, as set forth in Rule 702(e)(ii)(3). Pending regulatory 
approval, ICC plans to implement these changes on January 1, 2016, and 
apply the once-a-year waiver to the 2016 calendar year, and each 
calendar year going forward. There are no changes to ICC policies and 
procedures as a result of the Rule changes.
    Section 17A(b)(3)(F) of the Act \3\ requires, among other things, 
that the rules of a clearing agency be designed to protect investors 
and the public interest 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),\4\ because ICC believes that the 
proposed rule changes will assure the prompt and accurate clearance and 
settlement of securities transactions, derivatives agreements, 
contracts, and transactions, as the proposed revisions enhance ICC's 
price discovery process, by ensuring a fair and equitable assessment 
structure. As such, the proposed changes are designed to promote the 
prompt and accurate clearance and settlement of securities 
transactions, derivatives agreements, contracts, and transactions

[[Page 62594]]

within the meaning of Section 17A(b)(3)(F) \5\ of the Act.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F).
    \4\ Id.
    \5\ Id.
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    Furthermore, such proposed changes are designed to ensure that CPs 
are appropriately disciplined for violations of ICC's rules, 
specifically Missed Submissions, through an appropriate fining 
structure, in accordance with Section 17A(b)(3)(G).\6\ Finally, such 
proposed rule changes are intended to provide a fair procedure with 
respect to the disciplining of CPs for Missed Submissions, in 
accordance with Section 17A(b)(3)(H).\7\
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    \6\ 15 U.S.C. 78q-1(b)(3)(G).
    \7\ 15 U.S.C. 78q-1(b)(3)(H).
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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 Rule changes related 
to the ICC rule enforcement process for Missed Submissions 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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (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-2015-015 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-2015-015. 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-2015-015 
and should be submitted on or before November 6, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26325 Filed 10-15-15; 8:45 am]
 BILLING CODE 8011-01-P