[Federal Register Volume 83, Number 213 (Friday, November 2, 2018)]
[Notices]
[Pages 55219-55221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-23968]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84498; File No. SR-ICEEU-2018-014]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Amendments to the Recovery Plan and Wind-Down Plan

October 29, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934, as amended (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is 
hereby given that on October 16, 2018, 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 and II 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) \3\ of the Act and Rule 19b-
4(f)(6) thereunder,\4\ so that the proposal 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 updates to its Recovery 
Plan and Wind-Down Plan. 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 (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

[[Page 55220]]

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 make certain updates and 
amendments to its Recovery Plan and Wind-Down Plan. The amendments 
principally reflect certain changes in the Clearing House's treasury 
arrangements and related service providers, such as custody banks, 
investment agents and settlement banks, that are described in the 
current Recovery Plan and Wind-Down Plan.
Recovery Plan
    Specifically, the discussion of Treasury Services in the Recovery 
Plan has been revised to reflect that ICE Clear Europe has appointed a 
number of concentration banks, custodians and APS banks to support the 
treasury function, and to reflect that the current list of such persons 
from time to time is made available on the Clearing House website. The 
amendments accordingly remove from the Recovery Plan certain references 
to specific banks.
    Similarly, lists of key service providers have been updated to 
refer to the general categories of investment agents, custodians, 
custody agents, APS banks and central banks, to avoid the need to 
mention specific institutions in these categories and accordingly 
facilitate keeping the plan up to date. Corresponding changes have been 
made in appendices to the Recovery Plan to update references to various 
institutions that provide treasury services to ICE Clear Europe, 
including an additional investment agent. In ICE Clear Europe's view, 
the amendments will facilitate use by the Clearing House of additional 
service providers, consistent with other ICE Clear Europe policies and 
procedures, which will help the Clearing House appropriately manage 
credit, operational and other risks from treasury operations.
Wind-Down Plan
    Similar updates are proposed to be made to the Wind-Down Plan. The 
discussion concerning termination of various service agreements during 
wind-down has been revised to refer more generally to the appointed 
investment agents, custodians, custody agents and settlement banks that 
may be used by the Clearing House at the time (rather than referring to 
specific institutions). The revisions also refer to the termination 
provisions (including notice requirements) of the particular agreements 
between ICE Clear Europe and those institutions. These amendments will 
facilitate keeping the Wind-Down Plan up to date as treasury service 
providers change from time to time. The amendments also add references 
to the Dutch National Bank as an additional central bank used as a 
concentration bank.
(b) Statutory Basis
    ICEU believes that the proposed amendments are consistent with the 
requirements of Section 17A of the Act \6\ and the regulations 
thereunder applicable to it, including the standards under Rule 17Ad-
22.\7\ Section 17A(b)(3)(F) of the Act \8\ 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. In addition, Rule 
17Ad-22(e)(3)(ii) \9\ requires that each covered clearing agency shall 
establish, implement, maintain and enforce written policies and 
procedures reasonably designed to, as applicable, maintain a sound risk 
management framework for comprehensively managing legal, credit, 
liquidity, operational, general business, investment, custody, and 
other risks that arise in or are borne by the covered clearing agency, 
which includes plans for the recovery and orderly wind-down of the 
covered clearing agency necessitated by credit losses, liquidity 
shortfalls, losses from general business risk, or any other losses.
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    \6\ 15 U.S.C. 78q-1.
    \7\ 17 CFR 240.17Ad-22.
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ 17 CFR 240.17Ad-22(e)(3)(ii).
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    The amendments to the Recovery Plan and Wind-Down Plan are designed 
to update certain provisions relating to treasury arrangements of the 
Clearing House, principally to address changes in treasury service 
providers (such as custody banks, settlement banks and investment 
agents) currently referred to in the plans. The changes will also 
facilitate keeping the Recovery and Wind-Down Plan up to date as 
certain treasury service providers change from time to time, and 
facilitate use by the Clearing House of additional service providers to 
manage risks from treasury operations. The amendments do not otherwise 
affect the substantive provisions and procedures detailed in the 
Recovery Plan or the Wind-Down Plan for addressing recovery or wind-
down as a result of credit losses, liquidity shortfalls, losses from 
general business risk or other losses, including the triggers for 
invoking recovery or wind-down procedures. The amendments also do not 
affect the recovery and wind-down tools and options available to the 
Clearing House to address severe loss events, or the planned sequence 
or scope of recovery or wind-down actions that ICE Clear Europe may 
take in a loss scenario. As a result, in ICE Clear Europe's view, the 
amended Recovery Plan and Wind-Down Plan will continue to satisfy the 
requirements of Section 17A(b)(3)(F) of the Act \10\ and Rule 17Ad-
22(e)(3)(ii).\11\ In addition, ICE Clear Europe does not believe the 
amendments will affect the costs of recovery or wind-down, and 
therefore is of the view that its equity capital remains sufficient to 
satisfy the requirements of Rule 17Ad-22(e)(15) under the revised 
plans.\12\
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    \10\ 15 U.S.C. 78q-1(b)(3)(F).
    \11\ 17 CFR 270.17Ad-22(e)(3)(ii).
    \12\ 17 CFR 270.17Ad-22(e)(15). Rule 17Ad-22(e)(15) requires the 
covered clearing agency to hold sufficient liquid net assets funded 
by equity to cover potential general business losses so that the 
covered clearing agency can continue operations and services as a 
going concern if those losses materialize, including by (i) 
determining the amount of liquid net assets funded by equity based 
upon its general business risk profile and the length of time 
required to achieve a recovery or orderly wind-down, as appropriate, 
of its critical operations and services if such action is taken, and 
(ii) holding liquid net assets funded by equity equal to the greater 
of either (x) six months of the covered clearing agency's current 
operating expenses, or (y) the amount determined by the board of 
directors to be sufficient to ensure a recovery or orderly wind-down 
of critical operations and services of the covered clearing agency, 
as contemplated by the recovery and wind-down plans established 
under Rule 17Ad-22(e)(3)(ii).
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(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 amendments 
update certain provisions relating to service providers for Clearing 
House treasury operations, and do not otherwise change the substantive 
provisions of the Recovery Plan or the Wind-Down Plan. The amendments 
do not change the rights or obligations of

[[Page 55221]]

the Clearing House or Clearing Members under the Rules and Procedures. 
As a result, ICE Clear Europe does not believe the amendments will 
impact competition among Clearing Members or other market participants, 
affect the cost of clearing or affect the ability of market 
participants to access clearing generally.

(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 
rule change.

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)(iii) of the Act \13\ 
and Rule 19b-4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s19(b)(3)(A)(iii).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
ICE Clear Europe has satisfied this requirement.
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    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-2018-014 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-2018-014. 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 Section, 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-2018-014 and should be submitted on or before November 23, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-23968 Filed 11-1-18; 8:45 am]
BILLING CODE 8011-01-P


