[Federal Register Volume 85, Number 4 (Tuesday, January 7, 2020)]
[Notices]
[Pages 752-754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00032]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87880; File No. SR-ICEEU-2019-029]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing and Immediate Effectiveness of Proposed Rule Changes Relating
to Clearing Member Charges and Rates of Return on Cash and Collateral
in Relation to Margin Deposits and Guaranty Fund Contributions for All
Clearing Member House and Customer Accounts
January 2, 2020.
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 December
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20, 2019, ICE Clear Europe Limited (``ICE Clear Europe'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule changes described in Items I, II and III below, which Items have
been primarily prepared 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) \4\ thereunder, so that the proposed rule change was
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 rule change is to revise
Clearing Member Charges and Rates of Return on cash and collateral in
relation to margin deposits and Guaranty Fund contributions for all
Clearing Member House and Customer Accounts. 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.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change, Security-Based Swap Submission or
Advance Notice
In its filing with the Commission, ICE Clear Europe included
statements concerning the purpose of and basis for 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, Security-Based Swap Submission or
Advance Notice
(a) Purpose
The purpose of the proposed rule changes are for ICE Clear Europe
to: (i) Reduce the Rate of Return paid to Clearing Members on cash
balances; and (ii) increase the charges levied on Clearing Members in
relation to collateral in respect of margin deposits and Guaranty Fund
contributions.
Attached [sic] as Exhibit 5 are the tables listing the new Clearing
Member Charges and Rates of Return that will be included in a Circular
in advance of the effective date. The new Clearing Member Charges and
Rates of Return are expected to come into effect on January 1, 2020.
The proposed revisions to the Clearing Member Charges and Rates of
Return are set forth in Exhibit 5 hereto, and described in detail as
follows.
Currently, ICEU pays a rate of return on cash deposited by Clearing
Members in respect of margin deposits and Guaranty Fund contributions
referred to as the ICE Deposit Rate (``IDR''). IDR is calculated daily
and applied to cash balances held at the close of business on the
previous business day in respect of three currencies, U.S. Dollar, Euro
and Pound Sterling. It is calculated as follows: The net income earned
on cash deposits (positive or negative) less a charge of 12.5 basis
points (out of which the Clearing House shall cover external investment
management expenses). ICEU proposes to increase this charge to 15 basis
points.
ICEU also proposes to increase the Clearing House charges for
Collateral and Triparty Collateral as per Exhibit 5.
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Cash Collateral Triparty collateral
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Margin Deposits
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House and Affiliate Accounts (``H'', Clearing House pays IDR Clearing House charges Clearing House charges
``F'' and ``R''). 8.33 [7.5] basis points. 8.33 [7.5] basis
points.
Segregated Customer Accounts (``C'', Clearing House pays IDR Clearing House charges Clearing House charges
``E'', ``K'', ``S'', ``T'', ``W'' 8.33 [7.5] basis points. 8.33 [7.5] basis
and ``Z''). points.
Standard Omnibus Indirect Customer Clearing House pays IDR Clearing House charges Clearing House charges
Accounts (O'', ``P'', ``X'' and 8.33 [7.5] basis points. 8.33 [7.5] basis
``Y''). points.
Gross Omnibus Indirect Customer Clearing House pays IDR Clearing House charges Clearing House charges
Accounts (``A'' and ``B''). minus 15 bps. 10.33 [9.5] basis 10.33 [9.5] basis
points. points.
Individually Segregated Clearing House pays IDR Clearing House charges Clearing House charges
Operationally Co-mingled (``ISOC'') minus 15 bps. 10.33 [9.5] basis 10.33 [9.5] basis
Account (``I'' and ``J'' Account). points. points.
Individually Segregated Sponsored Clearing House pays IDR Clearing House charges Clearing House charges
Account (``Sponsored Principal''). minus 20 bps. 13.33 [12.5] basis 13.33 [12.5] basis
points. points.
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Guaranty Fund
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All Clearing Members................ Clearing House pays IDR Clearing House charges N/A.
8.33 [7.5] basis points.
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(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. More
specifically ICE Clear Europe has determined that imposing such Charges
and Rates of Return uniformly across all market participants thus
provides for the equitable allocation of reasonable dues, fees, and
other charges among its Clearing Members, within the meaning of Section
17A(b)(3)(D) of the Act.\7\ As such, the proposed changes are
appropriately filed pursuant to Section 19(b)(3)(A) \8\ of the Act and
paragraph (f)(2) of Rule 19b-4\9\ thereunder.
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\6\ 15 U.S.C. 78q-1.
\7\ 15 U.S.C. 78q-1(b)(3)(D). Under this provision, ``[a]
clearing agency shall not be registered unless the Commission
determines that--(D) The rules of the clearing agency provide for
the equitable allocation of reasonable dues, fees, and other charges
among its participants.''
\8\ 15 U.S.C 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(2).
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(B) Self-Regulatory Organization'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
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appropriate in furtherance of the purpose of the Act because the
changes to the Clearing Member Charges and Rates of Return will apply
uniformly across all market participants. ICE Clear Europe does not
believe that the amendments would adversely affect the ability of such
Clearing Members or other market participants generally to engage in
cleared transactions or to access clearing.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
Written comments relating to the proposed changes to the rules have
not been solicited or received. ICE Clear Europe will notify the
Commission of any written comments received by ICE Clear Europe.
III. Date of Effectiveness of the Proposed Rule Change, Security-Based
Swap Submission and Advance Notice and Timing for Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) \10\ of the Act and paragraph (f) of Rule 19b-4 \11\
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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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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, security-based swap submission or advance notice 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-2019-029 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-2019-029. 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-2019-029 and should be
submitted on or before January 28, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-00032 Filed 1-6-20; 8:45 am]
BILLING CODE 8011-01-P