[Federal Register Volume 84, Number 231 (Monday, December 2, 2019)]
[Notices]
[Pages 66039-66041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25970]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87624; File No. SR-ICEEU-2019-026]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change, 
Security-Based Swap Submission or Advance Notice Relating to Amendments 
to the ICE Clear Europe Delivery Procedures

November 25, 2019.
    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 November 21, 2019, ICE Clear Europe Limited (``ICE Clear Europe'' or 
the ``Clearing House'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule changes described in 
Items I, II and III below, which Items have been prepared by ICE Clear 
Europe. ICE Clear Europe filed the proposed rule change pursuant to 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(4)(ii) 
thereunder,\4\ such that the proposed rule change was immediately 
effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(4)(ii).
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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 amendments is for ICE Clear 
Europe to add delivery terms relating to the ICE Futures Europe Permian 
West Texas Light Crude Oil Futures Contracts (the ``ICE WTL Futures 
Contracts'') and the ICE Endex Austrian VTP Natural Gas Daily Futures 
Contracts (the ``ICE Endex VTP Natural Gas Daily Futures'', and 
collectively, the ``Contracts'').\5\
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    \5\ Capitalized terms used but not defined herein have the 
meanings specified in the ICE Clear Europe Clearing Rules (the 
``Rules'') and the Delivery Procedures.
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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, ICE Clear Europe 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. ICE Clear Europe has prepared summaries, 
set forth in sections (A), (B), and (C) below, of the most significant 
aspects of such 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

(a) Purpose
    ICE Clear Europe is proposing to amend its Delivery Procedures to 
amend Section 9 and Part CC to provide delivery procedures relating to 
the ICE WTL Futures Contracts, which will be traded on ICE Futures 
Europe and cleared by ICE Clear Europe. In addition, ICE Clear Europe 
is proposing to amend Part EE to provide delivery procedures relating 
to the ICE Endex VTP Natural Gas Daily Futures, which will be traded on 
ICE Endex and cleared by ICE Clear Europe.
    Currently, Section 9 and Part CC set out the delivery 
specifications and procedures for deliveries under the ICE Futures 
Europe Permian West Texas Intermediate Crude Oil Futures Contracts 
(``ICE WTI Contracts''). The proposed amendments would extend Section 9 
and Part CC to also apply to the ICE WTL Futures Contracts, on 
substantially the same basis as the ICE WTI Contracts. In this regard, 
the amended procedures would address, with respect to the ICE WTL 
Futures Contracts, among other matters, delivery options, delivery 
timetables, the nominations process, invoicing, provision of buyer's 
and seller's security, delivery tolerances, and relevant documentation. 
Amended Part CC would make clear that the ICE WTI Contracts and ICE WTL 
Futures Contracts remain separate contracts and would not be fungible, 
and that the various delivery documentation for each of the contract 
types would need to clearly reference the type to which they refer.
    The amendments would add a new definition of ``Permian WT,'' which 
is used to refer to both types of contracts where appropriate in the 
Delivery Procedures. The definition of ``Tariffs'' in Part CC would be 
extended to also

[[Page 66040]]

include Magellan Tariff R.C.T. 1.3.0 or BridgeTex Tariff F.E.R.C. 6.1.0 
in respect of the ICE WTL Futures Contracts. Additional conforming 
amendments would be made throughout Part CC to incorporate the 
inclusion of the ICE WTL Futures Contracts.
    Currently, Part EE sets out the delivery specifications and 
procedures for deliveries under the ICE Endex CEGH Austrian VTP Natural 
Gas Futures (``ICE Endex VTP Natural Gas Futures''). The proposed 
amendments would extend Part EE to also apply to the ICE Endex VTP 
Natural Gas Daily Futures, on a similar basis.
    In this regard, the amended procedures would address, with respect 
to ICE Endex VTP Natural Gas Daily Futures, among other matters, trade 
nominations, the delivery process, delivery timetables, Clearing House 
liability, nominations process, invoicing, provision of buyer's and 
seller's security, delivery failures and relevant documentation. 
Separate delivery timetables (both for routine and failed deliveries) 
would be added for the ICE Index VTP Natural Gas Daily Futures, which 
would address in further detail the timing of the nominations process 
and the provision of buyer's and seller's security, among other 
matters. A new documentation summary would also be added for the ICE 
Endex VTP Natural Gas Daily Futures.
    The amendments would also add a new definition for ``ICE Endex VTP 
Natural Gas Daily Futures'' and amend the defined term, ``ICE Endex VTP 
Natural Gas,'' to ``ICE Endex VTP Natural Gas Futures''. Additional 
conforming amendments would be made throughout Part EE to incorporate 
the inclusion of the ICE Endex VTP Natural Gas Daily Futures, as well 
as to make certain typographical and similar corrections.
(b) Statutory Basis
    Section 17A(b)(3)(F) of the Act \6\ 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, the safeguarding of securities and funds in the custody 
or control of the clearing agency or for which it is responsible, and 
the protection of investors and the public interest. The proposed 
amendments are designed to facilitate the clearing of new physically 
settled Contracts that are being launched for trading by the ICE 
Futures Europe and ICE Endex exchanges and that will be cleared by ICE 
Clear Europe. The amendments would extend the existing Delivery 
Procedures for the ICE WTI Contracts and the ICE Endex VTP Natural Gas 
Futures to the obligations and roles of the Clearing House and the 
relevant parties for delivery under the ICE WTL Futures Contracts and 
the ICE Endex VTP Natural Gas Daily Futures, respectively. ICE Clear 
Europe believes that its financial resources, risk management, systems 
and operational arrangements are sufficient to support clearing of such 
Contracts (and to address physical delivery under such Contracts) and 
to manage the risks associated with such Contracts. As a result, in ICE 
Clear Europe's view, the amendments would be consistent with the prompt 
and accurate clearance and settlement of the Contracts as set out in 
the proposed Delivery Procedures amendments, and the protection of 
investors and the public interest consistent with the requirements of 
Section 17A(b)(3)(F) of the Act.\7\ (In ICE Clear Europe's view, the 
amendments would not adversely affect the safeguarding of funds or 
securities in the custody or control of the clearing agency or for 
which it is responsible, within the meaning of Section 
17A(b)(3)(F).\8\)
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    \6\ 15 U.S.C. 78q-1(b)(3)(F).
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
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    In addition, Rule 17Ad-22(e)(10) \9\ requires that each covered 
clearing agency establish and maintain transparent written standards 
that state its obligations with respect to the delivery of physical 
instruments, and establish and maintain operational practices that 
identify, monitor and manage the risks associated with such physical 
deliveries. As discussed above, the amendments would clarify the 
application of the existing Delivery Procedures to establish the 
obligations and roles of the Clearing House and the relevant parties 
for delivery under the Contracts and facilitate identifying, monitoring 
and managing risks associated with delivery.
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    \9\ 17 CFR 240.17Ad-22(e)(10).
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(B) Clearing Agency's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed rule changes would 
have any impact, or impose any burden, on competition not necessary or 
appropriate in furtherance of the purposes of the Act. The changes are 
being proposed in order to update the Delivery Procedures in connection 
with the listing of the Contracts for trading on the ICE Futures Europe 
and ICE Endex markets. ICE Clear Europe believes that the Contracts 
would provide additional opportunities for interested market 
participants to engage in trading activity in the Permian West Texas 
light crude oil market and in the Austrian natural gas market. ICE 
Clear Europe does not believe the amendments would adversely affect 
competition among Clearing Members, materially affect the cost of 
clearing, adversely affect access to clearing in Contracts for Clearing 
Members or their customers, or otherwise adversely affect competition 
in clearing services. Accordingly, ICE Clear Europe does not believe 
that the amendments would impose any impact or burden on competition 
that is not appropriate in furtherance of the purpose of the Act.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants or Others

    Written comments relating to the proposed amendments have not been 
solicited or received by ICE Clear Europe. ICE Clear Europe will notify 
the Commission of any comments received with respect to the proposed 
amendments.

III. Date of Effectiveness of the Proposed Rule Change, Security-Based 
Swap Submission and Advance Notice and Timing for Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and paragraph (f) of Rule 19b-4\11\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f).
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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

[[Page 66041]]

     Send an email to [email protected]. Please include 
File Number SR-ICEEU-2019-026 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ICEEU-2019-026. 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 website (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 website 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 Europe and on ICE Clear Europe's website at https://www.theice.com/clear-europe/regulation.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ICEEU-2019-026 and should be 
submitted on or before December 23, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25970 Filed 11-29-19; 8:45 am]
 BILLING CODE 8011-01-P