[Federal Register Volume 82, Number 45 (Thursday, March 9, 2017)]
[Notices]
[Pages 13173-13175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04602]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80150; File No. SR-ICC-2017-003]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Proposed Rule Change, Security-Based Swap Submission, or Advance Notice
Relating to ICC's End-of-Day Price Discovery Policies and Procedures
March 3, 2017.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on
February 16, 2017, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change, security-based swap submission, or advance notice 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, security-based swap submission, or advance
notice 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. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change, Security-Based Swap Submission, or Advance Notice
The principal purpose of the proposed changes is to make changes to
the ICC End-of-Day Price Discovery Policies and Procedures (``Pricing
Policy'') related to the implementation of ICC's new Clearing
Participant (``CP'') direct price submission process.
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change, Security-Based Swap Submission, or
Advance Notice
In its filing with the Commission, ICC included statements
concerning the purpose of and basis for the proposed rule change,
security-based swap submission, or advance notice and discussed any
comments it received on the proposed rule change, security-based swap
submission, or advance notice. 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. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change, Security-Based Swap Submission, or
Advance Notice
ICC proposes revising its Pricing Policy to make changes related to
the implementation of ICC's new CP direct price submission process.
Currently, ICC uses an intermediary agent to implement functions of its
price discovery process. Specifically, under the current process,
Clearing Participants submit required prices to the intermediary agent;
these prices are then input into ICC's price settlement methodology to
determine settlement prices. ICC proposes to enhance its price
discovery process to remove the intermediary agent from the price
settlement process. In doing so, ICC will require CPs to submit prices
directly to the clearinghouse. The prices will continue to be input
into ICC's price settlement methodology to determine settlement prices.
There are no changes to the price settlement methodology as a result of
the changes. The proposed revisions to the Pricing Policy are described
in detail as follows.
ICC updated the Pricing Policy to note that ICC requires CPs to
establish direct connectivity with the clearinghouse and use a FIX API
to submit required prices. ICC revised the Pricing Policy to remove
references to the intermediary agent and the Valuation Service API (and
related message terminology), which will be decommissioned with the
launch of the new CP direct price submission process, and to add
reference to the new FIX API message terminology, which will be
utilized under the new CP direct price submission process. Such changes
are reflected throughout the Pricing Policy. ICC has also updated the
Pricing Policy to specify that ICC will send the unsolicited FIX API
messages directly to each CP.
[[Page 13174]]
Under the new CP direct price submission process, ICC will
consolidate the price discovery process across indices and singles
names; as such, new FIX API messages will include information for both
Indices and Single Names. Previously, the price discovery process
provided files separately for each product type.
ICC updated the Submission Requirements set forth in the Pricing
Policy to include iTraxx Australia and iTraxx Asia Ex-Japan indices.
For both indices, prices must be submitted in spread and either
midpoint or bid-offer format. Further, ICC updated the Submission
Requirements for CDX.NA.HY and CDX.EM indices to note that prices may
be submitted in either price or upfront format; previously, only price
format was accepted.
ICC has updated the Pricing Policy to reflect the replacement of
existing firm trade data files with new FIX API firm trade messages.
ICC also made minor changes to the timing of certain steps in the price
settlement process; no changes were made to the actual settlement
submission windows.
ICC also updated the Distribution of End-of-Day Prices process set
forth in the Pricing Policy. Under the new CP direct price submission
process, ICC will publish separate messages to CPs, listing end-of-day
prices for single names and indices. The end-of-day prices provided
will not change and will continue to be based on CPs' cleared
positions. ICC will continue to publish end-of-day prices for every
listed risk sub-factors' most actively traded instrument, and will
distribute daily end-of-day prices for all cleared instruments through
Markit.
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 simplify and
increase the efficiency of ICC's price discovery process, which
includes the determination of settlement prices and firm trades. As
such, the proposed changes are 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) of the Act.\5\ Further, such changes are
consistent with Rule 17Ad-22(d)(4),\6\ as the changes will decrease
external operational risk, since ICC no longer would rely on the
service of an intermediary agent to perform key aspects of its price
discovery process.
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\3\ 15 U.S.C. 78q-1(b)(3)(F).
\4\ Id.
\5\ Id.
\6\ 17 CFR 240.17Ad-22(d)(4).
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B. Clearing Agency'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 changes to ICC's
price submission process 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. Clearing Agency's Statement on Comments on the Proposed Rule Change,
Security-Based Swap Submission, or Advance Notice 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, Security-Based
Swap Submission, or Advance Notice 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 such 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, security-based swap submission, or advance notice 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-2017-003 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-2017-003. 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, security-
based swap submission, or advance notice that are filed with the
Commission, and all written communications relating to the proposed
rule change, security-based swap submission, or advance notice 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-2017-003
and should be submitted on or before March 30, 2017.
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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[[Page 13175]]
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-04602 Filed 3-8-17; 8:45 am]
BILLING CODE 8011-01-P