[Federal Register Volume 85, Number 223 (Wednesday, November 18, 2020)]
[Notices]
[Pages 73549-73550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25383]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90402; File No. SR-ICEEU-2020-014]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Amendments to the ICE Clear Europe Delivery Procedures

November 12, 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 November 6, 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 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)(4)(ii) 
\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)(4)(ii).
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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 amendments is for ICE Clear 
Europe to amend its Delivery Procedures (the ``Delivery Procedures'') 
in connection with the commencement of clearing for certain European 
emissions futures contracts and to clarify certain defined terms.\5\
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    \5\ Capitalized terms used but not defined herein have the 
meaning specified in the ICE Clear Europe Clearing Rules (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 is proposing to amend Part A of its Delivery 
Procedures.
    The Clearing House is proposing to amend the definitions of the 
terms ``Carbon Emissions Allowance'' or ``EUA'' to provide that such 
terms include allowances that are valid for determining compliance with 
emission limitations commitments during the period starting from 1 
January 2021, with respect to the ICE Futures EUA Phase 4 Daily Futures 
Contract (the ``EUA Phase 4 Contract'') only, which is a new contract 
expected to be listed for trading by ICE Futures Europe. Other 
amendments to those definitions would remove unnecessary words for 
conciseness.
    Other amendments to Part A would simplify the drafting to state 
that Part A applies to all ICE Deliverable EU Emissions Contracts which 
go to physical delivery on the expiry date (``ICE Deliverable EU 
Emissions Contracts''), rather than reference such contracts 
individually. In Part A of the Delivery Procedures, the new defined 
term ``ICE Deliverable EU Emissions Contracts'' would be introduced in 
lieu of naming the following separate contracts: ICE Futures EUA 
Futures Contract, ICE Futures EUA Daily Futures Contract, ICE Futures 
EUA Auction Contract, ICE Futures EUAA Futures Contract, ICE Futures 
EUAA Auction Contract, ICE Futures CER Futures Contract and ICE Futures 
CER Futures Daily Contract. These changes would be general drafting 
clarifications and improvements for improved readability and 
conciseness, and would not affect the substance of the Delivery 
Procedures.
(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 incorporate the new EUA Phase 4 Contracts 
into the existing Delivery Procedures, in a manner that is similar to 
other EU emissions contracts and supported by ICE Clear Europe's 
existing financial resources, risk management, systems and operational 
arrangements. ICE Clear Europe believes that its financial resources, 
risk management, systems and operational arrangements are sufficient to 
support clearing of such contract (and to address physical delivery 
under such contract) and to manage the risks associated with such 
contract. As a result, in ICE Clear Europe's view, the amendments would 
be consistent with the prompt and accurate clearance and settlement of 
the EUA Phase 4 Contract (as well as the existing cleared contracts), 
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 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 incorporate into 
the existing Delivery Procedures the new EUA Phase 4 Contract, in a 
manner similar to other EU emissions contracts and supported by ICE 
Clear Europe's existing financial resources, risk management, systems 
and operational arrangements. The amendments would also simplify and 
clarify the application of the existing Delivery Procedures to the 
other ICE Futures Europe EU emissions contracts. As a result, ICE Clear 
Europe believes the amendments are consistent with the requirements of 
Rule 17Ad-22(e)(10).\10\
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    \9\ 17 CFR 240.17Ad-22(e)(10).
    \10\ 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 incorporation into the existing

[[Page 73550]]

Delivery Procedures of the new EUA Phase 4 Contract and to provide 
general drafting clarifications and improvements for improved 
readability and conciseness. ICE Clear Europe believes that the new EUA 
Phase 4 Contracts would provide opportunities for interested market 
participants to engage in trading activity in this 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 the new 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 and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\ 
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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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 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-2020-014 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-2020-014. 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-2020-014 and should be 
submitted on or before December 9, 2020.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-25383 Filed 11-17-20; 8:45 am]
BILLING CODE 8011-01-P