[Federal Register Volume 86, Number 83 (Monday, May 3, 2021)]
[Notices]
[Pages 23443-23445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09027]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91673; File No. SR-ICEEU-2021-008]


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

April 26, 2021.
    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 April 19, 2021, 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)(4)(ii) 
\4\ thereunder, such that the proposed rule 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 transition of the trading of Deliverable EU 
Emissions Contracts from ICE Futures Europe to ICE Endex.\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 in connection with the contemplated transition of the 
trading of Deliverable EU Emissions Contracts from ICE Futures Europe 
to ICE Endex Markets B.V (``ICE Endex'').\6\ The transition is expected 
to occur in June 2021.\7\ The Deliverable EU Emissions Contracts being 
transitioned will be the EUA Futures and Options, EUA Daily Futures and 
EUAA Futures. Following the transition, the contracts will continue to 
be cleared by ICE Clear Europe. ICE Clear Europe is also removing from 
Part A provisions relating to CER Contracts and Auction Contracts, 
which are no longer traded on ICE Futures Europe.
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    \6\ See ICE Futures Europe Circular 21/012 (Feb 8, 2021).
    \7\ See ICE Futures Europe Circular 21/025 (Feb. 25, 2021).
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    Changes would be made throughout Part A to reference ICE Endex as 
the relevant exchange in lieu of ICE Futures Europe, including to refer 
to the relevant contracts as ``ICE Endex Deliverable EU Emissions 
Contracts.'' In connection with the removal of the CER Contracts, the 
Clearing House is proposing to remove the definitions of Auction, 
Auctioneer Seller, Certified Emission Reduction or CER, CER Contract, 
CER Delivery Amount, CER Transfer Request, Kyoto Protocol, Linking 
Directive and UNFCCC Independent Transaction Log and related concepts. 
The defined term ``Account'' would be renamed ``Registry Account'' 
(with references to CERs removed), with conforming changes made 
throughout Part A.

[[Page 23444]]

    In addition, throughout Part A, references to the Crystal system 
would be updated to references to ECS and/or MFT, reflecting current 
Clearing House systems.
    The defined term ``Carbon Emissions Allowance'' or ``EUA'' would be 
amended to remove reference to the start date of the validity period 
for the ICE Futures EUA Phase 4 Daily Futures Contract because the 
referenced date (January 1, 2021) has already passed, and would instead 
reference validity during the relevant period.
    In paragraphs 2.2 and 8, a clarification would be made that the 
time of the determination of the EDSP for purposes of calculating the 
payment owed for delivery under certain contracts would be the end of 
the trading period on the Contract Date (as opposed to the last trading 
day of the contract month) to be consistent with relevant exchange 
rules.
    Certain amendments would be made to the routine delivery timetable 
for emissions contracts in paragraph 5, including the following: the 
note that some events may occur up to 24 hours earlier would be 
removed; various clarifications would be made to the description of 
certain steps; the description of consequences of transfer requests 
made by the Seller before the deadline for submission would be deleted; 
the requirement that with respect to ICE Endex EUA and EUAA Futures 
Contracts, the Clearing House, upon receipt of allowances from the 
applicable sellers would randomly select the order in which it will 
make outbound Transfer Requests to applicable buyers would be deleted 
as inapplicable to those contracts; and the timetable would provide 
that account sales will be available via MFT.
    Consistent with the removal of provisions referencing auction 
contracts, the ICE EUA and EUAA Auction Contracts timetable for routine 
and for late and failed delivery would be removed. The delivery 
documentation summary would also be deleted as it references an 
outdated monthly confirmation form that is not used.
(b) Statutory Basis
    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. The proposed 
amendments are designed to facilitate the transition of trading of the 
Deliverable EU Emissions Contracts from ICE Futures Europe to ICE 
Endex. Such contracts will continue to be cleared by the Clearing House 
in the same manner as they are currently, and will be supported by ICE 
Clear Europe's existing financial resources, risk management, systems 
and operational arrangements. Accordingly, ICE Clear Europe believes 
that its financial resources, risk management, systems and operational 
arrangements are sufficient to support clearing of such contracts 
following the transition to ICE Endex (and to address physical delivery 
under such contracts) and to manage the risks associated with such 
contracts. As a result, in ICE Clear Europe's view, the amendments 
would be consistent with the prompt and accurate clearance and 
settlement of the contracts, and the protection of investors and the 
public interest consistent with the requirements of Section 
17A(b)(3)(F) of the Act.\9\ (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).\10\)
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    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
    \10\ 15 U.S.C. 78q-1(b)(3)(F).
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    In addition, Rule 17Ad-22(e)(10) \11\ 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 Delivery Procedures the amendments necessary to facilitate the 
transition of trading of the Deliverable EU Emissions Contracts from 
ICE Futures Europe to ICE Endex. Such contracts will continue to be 
cleared in the same manner as they are currently cleared, supported by 
ICE Clear Europe's existing financial resources, risk management, 
systems and operational arrangements. The amendments would remove other 
provisions related to contracts that are not currently traded and make 
certain other clarifications. As a result, ICE Clear Europe believes 
the amendments are consistent with the requirements of Rule 17Ad-
22(e)(10).\12\
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    \11\ 17 CFR 240.17Ad-22(e)(10).
    \12\ 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 transition of the trading of the Emission Contracts from ICE 
Futures Europe to ICE Endex and to provide general drafting 
clarifications and improvements. The terms of clearing of such 
contracts are not otherwise changing. 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 
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 \13\ and paragraph (f) of Rule 19b-4 \14\ 
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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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and

[[Page 23445]]

arguments concerning the foregoing, including whether the proposed rule 
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 Number SR-ICEEU-2021-008 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-2021-008. 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, security-based 
swap submission or advance notice that are filed with the Commission, 
and all written communications relating to the proposed rule change, 
security-based swap submission or advance notice 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/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-2021-008 and should be 
submitted on or before May 24, 2021.

    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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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09027 Filed 4-30-21; 8:45 am]
BILLING CODE 8011-01-P


