[Federal Register Volume 85, Number 4 (Tuesday, January 7, 2020)]
[Notices]
[Pages 752-754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00032]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87880; File No. SR-ICEEU-2019-029]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Changes Relating 
to Clearing Member Charges and Rates of Return on Cash and Collateral 
in Relation to Margin Deposits and Guaranty Fund Contributions for All 
Clearing Member House and Customer Accounts

January 2, 2020.
    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 December

[[Page 753]]

20, 2019, ICE Clear Europe Limited (``ICE Clear Europe'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule changes described in Items I, II and III below, which Items have 
been primarily 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)(2) \4\ thereunder, so that the proposed rule change was 
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)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The principal purpose of the proposed rule change is to revise 
Clearing Member Charges and Rates of Return on cash and collateral in 
relation to margin deposits and Guaranty Fund contributions for all 
Clearing Member House and Customer Accounts. The revisions do not 
involve any changes to the ICE Clear Europe Clearing Rules or 
Procedures.\5\
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    \5\ Capitalized terms used but not defined herein have the 
meanings specified in the ICE Clear Europe Clearing Rules.
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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. 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
    The purpose of the proposed rule changes are for ICE Clear Europe 
to: (i) Reduce the Rate of Return paid to Clearing Members on cash 
balances; and (ii) increase the charges levied on Clearing Members in 
relation to collateral in respect of margin deposits and Guaranty Fund 
contributions.
    Attached [sic] as Exhibit 5 are the tables listing the new Clearing 
Member Charges and Rates of Return that will be included in a Circular 
in advance of the effective date. The new Clearing Member Charges and 
Rates of Return are expected to come into effect on January 1, 2020. 
The proposed revisions to the Clearing Member Charges and Rates of 
Return are set forth in Exhibit 5 hereto, and described in detail as 
follows.
    Currently, ICEU pays a rate of return on cash deposited by Clearing 
Members in respect of margin deposits and Guaranty Fund contributions 
referred to as the ICE Deposit Rate (``IDR''). IDR is calculated daily 
and applied to cash balances held at the close of business on the 
previous business day in respect of three currencies, U.S. Dollar, Euro 
and Pound Sterling. It is calculated as follows: The net income earned 
on cash deposits (positive or negative) less a charge of 12.5 basis 
points (out of which the Clearing House shall cover external investment 
management expenses). ICEU proposes to increase this charge to 15 basis 
points.
    ICEU also proposes to increase the Clearing House charges for 
Collateral and Triparty Collateral as per Exhibit 5.

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                                                Cash                  Collateral           Triparty collateral
----------------------------------------------------------------------------------------------------------------
                                                 Margin Deposits
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House and Affiliate Accounts (``H'',  Clearing House pays IDR  Clearing House charges    Clearing House charges
 ``F'' and ``R'').                                              8.33 [7.5] basis points.  8.33 [7.5] basis
                                                                                          points.
Segregated Customer Accounts (``C'',  Clearing House pays IDR  Clearing House charges    Clearing House charges
 ``E'', ``K'', ``S'', ``T'', ``W''                              8.33 [7.5] basis points.  8.33 [7.5] basis
 and ``Z'').                                                                              points.
Standard Omnibus Indirect Customer    Clearing House pays IDR  Clearing House charges    Clearing House charges
 Accounts (O'', ``P'', ``X'' and                                8.33 [7.5] basis points.  8.33 [7.5] basis
 ``Y'').                                                                                  points.
Gross Omnibus Indirect Customer       Clearing House pays IDR  Clearing House charges    Clearing House charges
 Accounts (``A'' and ``B'').           minus 15 bps.            10.33 [9.5] basis         10.33 [9.5] basis
                                                                points.                   points.
Individually Segregated               Clearing House pays IDR  Clearing House charges    Clearing House charges
 Operationally Co-mingled (``ISOC'')   minus 15 bps.            10.33 [9.5] basis         10.33 [9.5] basis
 Account (``I'' and ``J'' Account).                             points.                   points.
Individually Segregated Sponsored     Clearing House pays IDR  Clearing House charges    Clearing House charges
 Account (``Sponsored Principal'').    minus 20 bps.            13.33 [12.5] basis        13.33 [12.5] basis
                                                                points.                   points.
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                                                  Guaranty Fund
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All Clearing Members................  Clearing House pays IDR  Clearing House charges    N/A.
                                                                8.33 [7.5] basis points.
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(b) Statutory Basis
    ICE Clear Europe believes that the proposed rule changes are 
consistent with the requirements of the Act, including Section 17A of 
the Act \6\ and regulations thereunder applicable to it. More 
specifically ICE Clear Europe has determined that imposing such Charges 
and Rates of Return uniformly across all market participants thus 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among its Clearing Members, within the meaning of Section 
17A(b)(3)(D) of the Act.\7\ As such, the proposed changes are 
appropriately filed pursuant to Section 19(b)(3)(A) \8\ of the Act and 
paragraph (f)(2) of Rule 19b-4\9\ thereunder.
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    \6\ 15 U.S.C. 78q-1.
    \7\ 15 U.S.C. 78q-1(b)(3)(D). Under this provision, ``[a] 
clearing agency shall not be registered unless the Commission 
determines that--(D) The rules of the clearing agency provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among its participants.''
    \8\ 15 U.S.C 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
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(B) Self-Regulatory Organization'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

[[Page 754]]

appropriate in furtherance of the purpose of the Act because the 
changes to the Clearing Member Charges and Rates of Return will apply 
uniformly across all market participants. ICE Clear Europe does not 
believe that the amendments would adversely affect the ability of such 
Clearing Members or other market participants generally to engage in 
cleared transactions or to access clearing.

(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 changes to the rules have 
not been solicited or received. ICE Clear Europe will notify the 
Commission of any written comments received by ICE Clear Europe.

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) \10\ of the Act 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)(2).
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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
     Send an email to [email protected]. Please include 
File Number SR-ICEEU-2019-029 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-ICEEU-2019-029. 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-2019-029 and should be 
submitted on or before January 28, 2020.

    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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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-00032 Filed 1-6-20; 8:45 am]
 BILLING CODE 8011-01-P