[Federal Register Volume 85, Number 182 (Friday, September 18, 2020)]
[Notices]
[Pages 58412-58413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20569]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89862; File No. SR-ICEEU-2020-012]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Amendments to the Clearing Rules (the ``Rules'')

September 14, 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 September 11, 2020, 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 primarily 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)(6) \4\ 
thereunder, 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)(6).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    ICE Clear Europe proposes to make certain amendments to its Rules 
\5\ in connection with its application to the European Securities and 
Markets Authority (``ESMA'') for recognition as a third country central 
counterparty (``CCP'').
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    \5\ Capitalized terms used but not defined herein have the 
meaning specified in the Rules.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    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

(a) Purpose
    ICE Clear Europe proposes to amend the definitions of ``Applicable 
Law'' and ``Regulatory Authority'' set out in Rule 101. The amendments 
are being made to clarify the scope of such definitions in the context 
of the application by ICE Clear Europe to ESMA for recognition as a 
third country CCP under the European Market Infrastructure Regulation 
(EMIR).\6\ Such recognition will be necessary in order for ICE Clear 
Europe to continue to provide clearing services in the European Union 
following the exit of the United Kingdom from the European Union and 
the termination of certain transitional arrangements currently in 
effect under the UK European Union (Withdrawal) Act 2018. Termination 
of such transitional arrangements is currently expected to occur with 
effect from January 1, 2021.
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    \6\ Regulation 648/2012 of the European Parliament and of the 
Council of 4 July 2012 on OTC derivatives, central counterparties 
and trade repositories.
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    Specifically, the defined term ``Applicable Law'' would be amended 
to include expressly any consent entered into by the Clearing House for 
the benefit or one or more Governmental Authorities. The term 
``Regulatory Authority,'' which is defined as a Governmental Authority 
that exercise certain regulatory or supervisory functions, would be 
amended specifically to refer to ESMA, among other enumerated 
regulatory authorities. The amendments are intended to clarify that the 
term Applicable Law will include a consent required to be executed by 
the Clearing House in favor of ESMA under EMIR \7\ in connection with 
the third country CCP application, pursuant to which ICE Clear Europe 
will, under certain circumstances set out in EMIR, provide ESMA on 
request with certain information and allow ESMA access to its business 
premises (the ``Consent''). The amendments will thereby clarify that 
the Consent, and the provision of information and access pursuant to 
the Consent, are consistent with the Rules. including Rule 106.\8\
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    \7\ EMIR article 25(2b)(c)(i).
    \8\ Rule 106(c) permits the Clearing House to disclose certain 
confidential information in certain circumstances, including to a 
Regulatory Authority upon a lawful request therefrom or pursuant to 
Applicable Law.
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(b) Statutory Basis
    ICE Clear Europe believes that the changes described herein are 
consistent with the requirements of Section 17A of the Act \9\ and the 
regulations thereunder applicable to it. Section 17A(b)(3)(F) of the 
Act \10\ in particular requires, among other things, that the rules of 
the 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, to 
assure the safeguarding of securities and funds in the custody or 
control of the clearing agency or for which it is responsible and, in 
general, protect investors and the public interest. In order to 
continue to provide clearing services in the European Union (including 
to EU-based clearing members) following the United Kingdom's withdrawal 
from the European Union and the termination of the UK-EU transitional 
arrangements currently in effect, ICE Clear Europe must obtain 
recognition from ESMA as a third country CCP under EMIR. One of the 
requirements under EMIR that will be applicable to ICE Clear Europe, as 
a third country CCP, is to enter into the Consent. ICE Clear Europe is 
proposing to amend the Rules to provide certainty that the Consent 
falls within the definition of Applicable Law and accordingly that the 
obligations of ICE Clear Europe thereunder are permissible under the 
Rules, including Rule 106(c). As a result, in ICE Clear Europe's view, 
the amendments will facilitate approval of its application to ESMA for 
third country recognition and thereby permit it to continue to provide 
clearing services in the EU, and avoid the significant market 
disruption that could otherwise result. As such, the amendments are 
consistent with the continued prompt and accurate clearance and 
settlement of cleared transactions, the safeguarding of securities and 
funds in the custody or control of ICE Clear Europe or for which

[[Page 58413]]

it is responsible, and the protection of investors and the public 
interest, within the meaning of Section 17A(b)(3)(F) of the Act.\11\
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    \9\ 15 U.S.C. 78q-1.
    \10\ 15 U.S.C. 78q-1(b)(3)(F).
    \11\ 15 U.S.C. 78q-1(b)(3)(F).
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    The amendments are also consistent with Rule 17Ad-22(e)(1), which 
requires in relevant part that a covered clearing agency have policies 
and procedures reasonably designed to ``provide for a well-founded, 
clear, transparent and enforceable legal basis for each aspect of its 
activities in all relevant jurisdictions.'' \12\ As noted above, the 
amendments would provide certainty that the terms of the Consent are 
permissible under the Rules, which in turn would facilitate approval of 
its application to ESMA for third country CCP status which is required 
in order for ICE Clear Europe to continue to offer clearing services in 
the European Union following the termination of UK-EU transitional 
measures.
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    \12\ 17 CFR 240.17Ad-22(e)(1).
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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 purpose of the Act. The amendments 
are limited to modifying certain defined terms in order to clarify that 
the Consent, and the related provision of certain required information, 
and required access, to ESMA as a regulatory authority under EMIR, is 
consistent with the Rules. To the extent the amendments affect Clearing 
Members or Sponsored Principals, they will apply consistently across 
all such persons. The amendments are also not expected to affect the 
cost of, or access to, clearing or affect the market for cleared 
derivatives generally. As a result, in ICE Clear Europe's view, the 
amendments would not impose any burden on competition that is not 
necessary or appropriate in furtherance of the purposes 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 rule changes 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 and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 
19b-4(f)(6) 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.

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-ICEEU-2020-012 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-2020-012. 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 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 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/notices/Notices.shtml?regulatoryFilings.
    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-2020-012 and should be 
submitted on or before October 9, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
J. Matthew DeLesDernier,
Assistant Secretary.
     
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    \13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2020-20569 Filed 9-17-20; 8:45 am]
BILLING CODE 8011-01-P