
[Federal Register Volume 80, Number 62 (Wednesday, April 1, 2015)]
[Notices]
[Pages 17538-17540]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-07367]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74593; File No. SR-ICC-2015-003]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing of Amendment No. 1 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 1, to Provide for 
the Clearance of Additional Standard Emerging Market Sovereign Single 
Names

March 26, 2015.

I. Introduction

    On January 23, 2015 ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change SR-ICC-2015-003 pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder.\2\ The 
proposed rule change was published for comment in the Federal Register 
on February 9, 2015.\3\ The Commission did not receive any comments. On 
March 25, 2015, ICC filed Amendment No. 1 to the proposed rule 
change.\4\ The Commission is publishing this notice to solicit comments 
on Amendment No. 1 from interested persons and is approving the 
proposed rule change, as modified by Amendment No. 1, on an accelerated 
basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-74192 (Feb. 3, 2015), 
80 FR 7070 (Feb. 9, 2015) (File No. SR-ICC-2015-003) (hereinafter 
referred to as the ``Initial Rule Filing'').
    \4\ ICC filed Amendment No. 1 to remove Ukraine from the list of 
proposed additional Standard Emerging Market Sovereign single-name 
constituents of the CDX Emerging Markets Index set forth in the 
Initial Rule Filing, as further described below.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

A. Description of the Initial Rule Filing

    ICC proposes to adopt rules that will provide the basis for ICC to 
clear additional credit default swap contracts. Specifically, ICC is 
proposing to amend Subchapter 26D-102 of its rules to provide for the 
clearance of additional Standard Emerging Market Sovereign single-name 
constituents of the CDX Emerging Markets Index (collectively, ``SES 
Contracts''). Currently, ICC is approved to clear eight SES Contracts: 
the Federative Republic of Brazil, the United Mexican States, the 
Bolivarian Republic of Venezuela, the Argentine Republic, the Republic 
of Turkey, the Russian Federation, the Republic of Hungary, and the 
Republic of South Africa.\5\ The proposed change to the ICC Rules would 
provide for the clearance of five additional SES Contracts: the 
Republic of Chile, the Republic of Peru, the Republic of Colombia, 
Ukraine, and the Republic of Poland (``Additional SES Contracts'').
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 34-65588 (Oct. 18, 
2011), 76 FR 65763 (Oct. 24, 2011) (File No. SR-ICC-2011-01) (order 
approving rule change to clear SES Contracts referencing the 
Federative Republic of Brazil, the United Mexican States, the 
Bolivian Republic of Venezuela, and the Argentine Republic); 
Securities Exchange Act Release No. 34-70849 (Nov. 12, 2013), 78 FR 
69167 (Nov. 18, 2013) (File No. SR-ICC-2013-07) (order approving 
rule change to clear SES Contracts referencing the Republic of 
Turkey and the Russian Federation); and Securities Exchange Act 
Release No. 34-73220 (Sep. 25, 2014), 79 FR 59340 (Oct. 1, 2014) 
(File No. SR-ICC-2014-13) (order approving rule change to clear SES 
Contracts referencing the Republic of Hungary and the Republic of 
South Africa).
---------------------------------------------------------------------------

    ICC believes that the addition of these SES Contracts will benefit 
the market for emerging market credit default swaps by providing market 
participants the benefits of clearing, including reduction in 
counterparty risk and safeguarding of margin assets pursuant to 
clearing house rules. ICC states that the Additional SES Contracts will 
be offered on the 2014 ISDA Credit Derivatives Definitions and have 
terms consistent with the other SES Contracts approved for clearing at 
ICC and governed by Subchapter 26D of the ICC rules. According to ICC, 
the clearing of the Additional SES Contracts will not require any 
changes to ICC's Risk Management Framework or other

[[Page 17539]]

policies and procedures constituting rules within the meaning of the 
Act. ICC states that, in connection with the clearance of the new 
contracts, it will apply its existing margin and guaranty fund 
methodology, operational and managerial resources, settlement 
procedures and account structures, and default management policies and 
procedures, which, together, it believes will provide sufficient 
financial, operational, and managerial resources to support the 
clearing of the new contracts.

B. Description of Amendment No. 1

    On March 25, 2015, ICC filed Amendment No. 1 to the proposed rule 
change. The purpose of the proposed rule change in Amendment No. 1 is 
to modify the list of proposed contracts set forth in the Initial Rule 
Filing. Specifically, ICC proposes removing Ukraine from the proposed 
list of contracts. Therefore, the proposed rule change, as amended, 
seeks approval for the clearance of the Republic of Chile, the Republic 
of Peru, the Republic of Columbia, and the Republic of Poland. ICC 
states that Amendment No. 1 does not significantly change the purpose 
of, and statutory basis for, the proposed rule change. ICC believes the 
proposed rule change, as modified by Amendment No. 1, remains 
consistent with the promotion of the prompt and accurate clearance and 
settlement of securities transactions and, to the extent applicable, 
derivatives agreements, contracts, and transactions, the safeguarding 
of securities and funds in the custody or control of ICC or for which 
it is responsible, and the protection of investors and the public 
interest, within the meaning of Section 17A(b)(3)(F) of the Act, as 
described in the Initial Rule Filing.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \6\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if the 
Commission finds that such proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to such self-regulatory organization. Section 17A(b)(3)(F) 
of the Act \7\ requires, among other things, that the rules of a 
clearing agency are 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 which are in the 
custody or control of the clearing agency or for which it is 
responsible and, in general, to protect investors and the public 
interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2)(C).
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission finds that clearing of the Additional SES Contracts, 
as modified by Amendment No. 1, is consistent with the requirements of 
Section 17A of the Act \8\ and regulations thereunder applicable to it, 
including the standards under Rule 17Ad-22.\9\ The proposed rule change 
will provide for clearing of Additional SES Contracts, as modified by 
Amendment No. 1, which are similar to the other SES contracts currently 
cleared by ICC, in the same manner as other SES Contracts already 
cleared by ICC. Specifically, the Commission believes that ICC's 
proposal to clear the new contracts pursuant to ICC's existing margin 
and guaranty fund methodology, operational and managerial procedures, 
settlement procedures and default management policies is designed to 
promote the prompt and accurate clearance and settlement of securities 
transactions and derivative agreements, contracts and transactions 
cleared by ICC, to assure the safeguarding of securities and funds in 
the custody or control of ICC, and to protect investors and the public 
interest, consistent with Section 17A(b)(3)(F) of the Act.\10\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1.
    \9\ 17 CFR 240.17Ad-22.
    \10\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

IV. Accelerated Approval of Proposed Rule Change as Modified by 
Amendment No. 1

    As discussed above, ICC submitted Amendment No. 1 to the proposed 
rule change to removing Ukraine from the proposed list of the 
Additional SES Contracts. The Commission believes that the modification 
by Amendment No. 1 to the Initial Rule Filing is consistent with the 
safeguarding of securities and funds in the custody or control of ICC 
or for which 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\. Accordingly, the Commission finds good cause, pursuant to Section 
19(b)(2)(C)(iii) of the Act \12\, to approve the proposed rule change, 
as modified by Amendment No. 1, prior to the thirtieth day after the 
date of publication of notice of Amendment No. 1 in the Federal 
Register.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78q-1(b)(3)(F).
    \12\ 15 U.S.C. 78s(b)(2)(C)(iii).
---------------------------------------------------------------------------

V. Solicitation of Comments on Amendment No. 1

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether Amendment No. 1 
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 rule-comments@sec.gov. Please include 
File No. SR-ICC-2015-003 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC, 21049-1090.
    All submissions should refer to File Number SR-ICC-2015-003. 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 Web site (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 Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours or 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of ICC and on ICC's Web 
site at https://www.theice.com/clear-credit/regulation.
    All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly.
    All submissions should refer to File Number SR-ICC-2015-003 and 
should be submitted on or before April 22, 2015.

VI. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the

[[Page 17540]]

Act and in particular with the requirements of Section 17A of the Act 
\13\ and the rules and regulations thereunder.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change (SR-ICC-2015-003), as modified 
by Amendment No. 1, be, and hereby is, approved on an accelerated 
basis.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(2).
    \15\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-07367 Filed 3-31-15; 8:45 am]
 BILLING CODE 8011-01-P


