[Federal Register Volume 87, Number 38 (Friday, February 25, 2022)]
[Notices]
[Pages 10835-10837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-03961]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94281; File No. SR-ICEEU-2022-005]


Self-Regulatory Organizations; ICE Clear Europe Limited; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Amendments to the Rate of Return on Euro and Pound Sterling Cash 
Margin and Guaranty Fund Deposits

February 18, 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 February 15, 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)(2) 
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.
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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)(2).
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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 the rate of return paid by the Clearing House on Euro 
(``EUR'') and Pound Sterling (``GBP'') cash margin and Guaranty Fund 
deposits. The proposed amendments 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.
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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
    (a) The purpose of the proposed rule changes is for ICE Clear 
Europe to [sic] its rate of return paid on EUR and GBP cash margin and 
Guaranty Fund deposits applicable to all Clearing Members for house and 
customer accounts. ICE Clear Europe pays a rate of return on cash 
deposited by Clearing

[[Page 10836]]

Members in respect of margin and Guaranty Fund requirements referred to 
as the ICE Deposit Rate (the ``IDR''). The IDR is calculated daily and 
applied to cash balances held at the close of business on the previous 
business day in respect of US Dollar (``USD''), EUR and GBP deposits. 
The IDR is calculated as the net income earned on cash deposits in the 
relevant currency (positive or negative) less a charge or spread. 
Currently, the spread for all currencies is 15 bps.
    (b) ICE Clear Europe is proposing to increase the spread for EUR 
balances from 15 bps to 25 bps and reduce the spread for GBP balances 
from 15 bps to 12 bps. The spread for USD balances would remain 
unchanged at 15 bps. ICE Clear Europe has determined that in light of 
financial market conditions, including repo rates available in the 
market, the current spread levels have provided an incentive for 
Clearing Members to provide EUR balances as compared to GBP balances, 
including by using EUR balances to cover margin obligations denominated 
in GBP. Such a practice by Clearing Members could result in reduced 
available liquidity for the Clearing House in GBP. To avoid such 
potential concerns, ICE Clear Europe believes it is appropriate to 
reduce the IDR on EUR balances (through a higher spread) while 
comparatively increasing the IDR on GBP balances (through a lower 
spread). ICE Clear Europe believes the change would better align the 
relative costs and benefits of using EUR and GBP to cover margin and 
Guaranty Fund obligations and thereby improve Clearing House liquidity 
management.
(b) Statutory Basis
    ICE Clear Europe believes that the proposed rule changes are 
consistent with the requirements of the Act, including Section 17A of 
the Act \6\ and regulations thereunder applicable to it. In particular, 
Section 17A(b)(3)(D) of the Act \7\ requires that ``[t]he rules of the 
clearing agency provide for the equitable allocation of reasonable 
dues, fees and other charges among its participants''. ICE Clear Europe 
believes that the IDR, as proposed to be amended, would be reasonable 
and appropriate in light of market conditions, including available repo 
rates, for the relevant currencies. The proposed modifications would 
apply to all Clearing Members and other market participants who hold 
cash balances in EUR and GBP. Further, ICE Clear Europe has determined 
that the revised spreads would enhance GBP liquidity by providing a 
greater incentive for Clearing Members to provide GBP balance to 
satisfy GBP margin and Guaranty Fund obligations as compared to EUR 
balances. As such, in ICE Clear Europe's view, the amendments are 
consistent with the equitable allocation of reasonable dues, fees and 
other charges among its Clearing Members and other market participants, 
within the meaning of Section 17A(b)(3)(D) of the Act.\8\
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    \6\ 15 U.S.C. 78q-1.
    \7\ 15 U.S.C. 78q-1(b)(3)(D).
    \8\ 15 U.S.C. 78q-1(b)(3)(D).
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    The proposed amendments are also consistent with the requirements 
of Section 17A(b)(3)(F) of the Act \9\ which requires, among other 
things, that ``[t]he rules of a clearing agency [. . .] are not 
designed to permit unfair discrimination in the admission of 
participants or among participants in the use of the clearing agency''. 
As noted above, the GBP and EUR spreads, as proposed to be amended, 
would apply on a currency level and would apply to all Clearing 
Members. The amendments would not otherwise change the ability of 
Clearing Members to post GBP and EUR in satisfaction of their 
obligations. As a result, the amendments would not result in any unfair 
discrimination among Clearing Members in their use of the Clearing 
House, within the meaning of Section 17A(b)(3)(F) of the Act.\10\
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    \9\ 15 U.S.C. 78q-1(b)(3)(F).
    \10\ 15 U.S.C. 78q-1(b)(3)(F).
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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 purpose of the Act. Although ICE 
Clear Europe is revising certain spreads applied to the IDR, as set 
forth herein, it believes such changes are appropriate to align 
incentives for providing EUR and GBP deposits with general market 
conditions and to avoid potential reductions in GBP liquidity. Further, 
as discussed above, the changes to the spreads would be applied equally 
to all Clearing Members who deposit cash balances in EUR and GBP. ICE 
Clear Europe does not believe that the amendments would adversely 
affect the ability of such Clearing Members or other market 
participants generally to access clearing services. Further, ICE Clear 
Europe believes that the amendments would not otherwise affect 
competition among Clearing Members, adversely affect the market for 
clearing services or limit market participants' choices for obtaining 
clearing services. As a result, ICE Clear Europe does not believe the 
amendments would have any impact or impose any burden on competition 
that is not necessary or appropriate 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 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 \11\ and paragraph (f)(2) 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)(2).
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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-2022-005 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-2022-005. 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

[[Page 10837]]

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/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-2022-005 and should be 
submitted on or before March 18, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-03961 Filed 2-24-22; 8:45 am]
BILLING CODE 8011-01-P


