[Federal Register Volume 87, Number 206 (Wednesday, October 26, 2022)]
[Notices]
[Pages 64828-64830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23234]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96118; File No. SR-ICEEU-2022-019]


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

October 20, 2022.
    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 October 11, 2022, 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)(1) 
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.
---------------------------------------------------------------------------

    \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)(1).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    ICE Clear Europe Limited (``ICE Clear Europe'' or the ``Clearing 
House'') proposes to modify its Investment Management Procedures (the 
``Investment Management Procedures'' or the ``Procedures'') to clarify 
certain permitted investments and related limits for the Clearing House 
when managing cash received from Clearing Members as margin or from the 
Clearing House's contribution to the guaranty fund.

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 update the Table of Authorised 
Investments and Concentration Limits for Cash from CMs and from Skin In 
The Game (the ``Table'') in the Procedures to make certain 
clarifications that reflect limitations on investments that can be made 
with customer funds provided by FCM Clearing Members under applicable 
law. The amendments reflect restrictions that ICE Clear Europe 
currently observes (and are described elsewhere in the existing 
Procedures), and accordingly will not constitute a change in practice. 
Specifically, the amendment would provide that the reference in the 
Table to there being ``no limit'' for counterparty concentration in 
respect to investments in (i) US government agency bonds and (ii) UK 
government agency bonds, as well as the 15% concentration limit 
specified for the purchase of EU government agency bonds each applies 
to cash provided by non-FCM Clearing Members. The amendments would also 
state explicitly in the Table that FCM customer funds may not be 
invested in such assets. The proposed changes reflect limitations under 
CFTC regulations.\5\ Such updates

[[Page 64829]]

are intended to provide greater clarity in the Table as to the 
permissible investment of customer cash provided by Clearing Members 
and accurately document existing practices, consistent with legal 
requirements.
---------------------------------------------------------------------------

    \5\ Consistent with ICE Clear Europe's current practice, certain 
limitations in the amendments are more restrictive than required 
under CFTC regulations. For example, investment of FCM customer 
funds in U.S. agency securities is not permitted, as described in 
the amendments, although CFTC Rule 1.25(b)(3)(i)(B) would permit 
investment in U.S. agency obligations up to a maximum of 50 percent 
of the total assets held in segregation by the futures commission 
merchant or derivatives clearing organization. 17 CFR 
1.25(b)(3)(i)(B). A footnote referencing this rule would be included 
in the Table.
---------------------------------------------------------------------------

(b) Statutory Basis
    ICE Clear Europe believes that the proposed amendments to the 
Investment Management Procedures are consistent with the requirements 
of Section 17A of the Act \6\ and the regulations thereunder applicable 
to it. In particular, Section 17A(b)(3)(F) of the Act \7\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1.
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The proposed changes to the Investment Management Procedures are 
designed to reflect the Clearing House's practices with respect to the 
management of investments, in light of existing CFTC regulations 
relating to the investment of customer funds provided by FCM Clearing 
Members. The amendments would reflect certain limitations under CFTC 
Rule 1.25, as discussed above, on investments of FCM customer cash in 
agency securities, consistent with the Clearing House's current 
practice. The proposed amendments thus promote the accuracy and clarity 
of the Clearing House's policies and procedures and are consistent with 
the prompt and accurate clearing and settlement of cleared contracts. 
The amendments are thus also generally consistent with the protection 
of investors and the public interest in the safe operation of the 
Clearing House. The updates will also facilitate management of the cash 
held by the Clearing House from Clearing Members and their customers in 
accordance with applicable law, and thus enhance the safeguarding of 
securities and funds in ICE Clear Europe's custody or control or for 
which it is responsible. Accordingly, the amendments are consistent 
with the requirements of Section 17A(b)(3)(F).\8\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Rule 17A-22(e)(16) requires clearing agencies to safeguard their 
own and their ``participants' assets, minimize the risk of loss and 
delay in access to these assets, and invest such assets in instruments 
with minimal credit, market and liquidity risks.'' \9\ As discussed 
above, the amendments to the Investment Management Procedures are 
intended to more clearly document investment limitations in connection 
with the investment of cash assets provided by Clearing Members to 
reflect current practice and applicable law, including the requirements 
of CFTC regulations. As such, the revised Investment Management 
Procedures will help enable the Clearing House to safeguard such assets 
and minimize the risk of loss from liquidity and investment risks, 
consistent with the requirements of Rule 17Ad-22(e)(16).\10\
---------------------------------------------------------------------------

    \9\ 17 CFR 240.17Ad-22(e)(16).
    \10\ 17 CFR 240.17Ad-22(e)(16).
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed amendments 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 Investment Management Procedures 
to provide clarifications and additional details where necessary in 
order to reflect existing practices and are not intended to impose new 
requirements on Clearing Members. The terms of clearing are not 
otherwise changing. ICE Clear Europe does not believe that proposed 
amendments would adversely affect competition among Clearing Members or 
other market participants or affect the ability of market participants 
to access clearing generally. Therefore, ICE Clear Europe does not 
believe the proposed rule change imposes 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 
Received From Members, Participants or Others

    Written comments relating to the proposed amendment has 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 
rule change.

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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-2022-019 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-2022-019. 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

[[Page 64830]]

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-2022-019 and should be 
submitted on or before November 16, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-23234 Filed 10-25-22; 8:45 am]
BILLING CODE 8011-01-P