[Federal Register Volume 85, Number 143 (Friday, July 24, 2020)]
[Notices]
[Pages 44948-44950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16022]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89351; File No. SR-ICEEU-2020-011]
Self-Regulatory Organizations; ICE Clear Europe Limited (``ICE
Clear Europe''); Notice of Filing and Immediate Effectiveness of
Proposed Rule Changes Relating to Amendments to Delivery Fees on UK
Electricity Futures Contracts and Amendments to Clearing Fees of
Certain Natural Gas Spot and Natural Gas Daily Futures Contracts
July 20, 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 July 15, 2020, 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, 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
ICE Clear Europe Limited (``ICE Clear Europe'') proposes rule
changes relating to (i) amendments to delivery fees on UK electricity
futures contracts and (ii) amendments to clearing fees of certain
natural gas spot and natural gas daily futures contracts. 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. 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
The purpose of the proposed rule changes is for ICE Clear Europe to
(i) reduce the delivery fees associated with UK electricity futures to
better reflect the actual variable cost charged by the transmission
system operator through Elexon; \6\ and (ii) increase exchange and
clearing fees in combination with removing the cash settlement and
delivery charges for a number of natural gas spot and natural gas daily
futures contracts. Attached as Exhibit 5 is an attachment containing
tables listing the new fee schedules and a Circular in advance of the
proposed effective date. The new fees are intended to come into effect
on 01 August 2020 subject to regulatory approval. The proposed
revisions to the fees are described in detail as follows.
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\6\ Elexon is known as the balance and settlement code company
for the UK electricity market and is responsible for processing
payments between generators and suppliers after comparing the amount
they said they would consume with actual volumes (https://www.elexon.co.uk/).
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The fee currently charged for the delivery of the UK electricity
futures cleared by ICE Clear Europe (GBP0.00450/MWh) is nine times
higher than the actual variable costs for the delivery service provided
by the transmissions system operator through Elexon (GBP0.00050/MWh).
Accordingly, ICE Clear Europe is proposing to decrease the delivery fee
for the following products:
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Trading venue
Product name Product name Type (MIC) Clearing venue
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UBL............................ UK Base Electricity Daily Future..... IFEU............. ICEU.
Future (Gregorian).
UPL............................ UK Peak Electricity Daily Future..... IFEU............. ICEU.
Future (Gregorian).
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Please see fee schedule and proposed change below:
[[Page 44949]]
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Fee type Trade type Current fee Proposed fee Currency UoM
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Exchange fee................. EFP/EFS/Block.. 0.00050 0.00050 GBP............ MWh.
Clearing fee................. EFP/EFS/Block.. 0.00450 0.00450 GBP............ MWh.
Exchange fee................. Futures........ 0.00150 0.00150 GBP............ MWh.
Clearing fee................. Futures........ 0.00350 0.00350 GBP............ MWh.
Cash settlement.............. ............... n/a n/a GBP............ MWh.
Deliveries................... ............... 0.00450. 0.00050 GBP............ MWh.
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The proposed changes to ICE Clear Europe's exchange and clearing
fees in combination with removing the cash settlement and delivery
charges will apply to the following products:
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Trading venue
Product name Product name Type (MIC) Clearing venue
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TFE............................ Dutch TTF Gas Daily Daily Future..... NDEX............. ICEU.
Futures.
NBD............................ UK Natural Gas Daily Daily Future..... IFEU............. ICEU.
Future.
EZH............................ Belgian ZTP Gas Spot.. Spot............. NDXS............. ICEU.
EZL............................ Belgian ZTPL Gas Spot. Spot............. NDXS............. ICEU.
ETT............................ TTF Gas Spot.......... Spot............. NDXS............. ICEU.
ENB............................ UK OCM Gas Spot....... Spot............. NDCM............. ICEU.
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The proposal, which follows consultation with market participants,
involves removing the cash settlement and delivery charges for these
contracts and increasing the exchange and clearing fees (whilst
maintaining the existing ratio between execution and clearing).
The table below sets out the current fees:
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Current Fees
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Fees Trade type NDXS NDXS NDCM NDCM
NDEX ---------------------------------------------------------------- IFEU
08-18 18-08 08-18 18-08
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EUR/MWh
GBPp/therm
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Exchange fee...................... EFP/EFS/Block....... 0.00038 n/a n/a n/a n/a 0.00025
Clearing fee...................... EFP/EFS/Block....... 0.00337 n/a n/a n/a n/a 0.00225
Exchange fee...................... Futures............. 0.00113 0.00113 0.00375 0.00100 0.00300 0.00080
Clearing fee...................... Futures............. 0.00262 0.00262 0.00750 0.00200 0.00600 0.00170
Cash settlement................... .................... n/a n/a n/a n/a n/a 0.00050
Deliveries........................ .................... 0.00200 n/a n/a n/a n/a 0.00500
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The table below sets out the proposed changes to the fees (with
changes in italics for ease of review):
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Proposed Fees
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Fees Trade type NDXS NDXS NDCM NDCM
NDEX ---------------------------------------------------------------- IFEU
08-18 18-08 08-18 18-08
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EUR/MWh
GBPp/therm
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Exchange fee...................... EFP/EFS/Block....... 0.00125 n/a n/a n/a n/a 0.00050
Clearing fee...................... EFP/EFS/Block....... 0.01125 n/a n/a n/a n/a 0.00450
Exchange fee...................... Futures............. 0.00417 0.00417 0.00833 0.00167 0.00333 0.00170
Clearing fee...................... Futures............. 0.00833 0.00833 0.01667 0.00333 0.00667 0.00330
Cash settlement................... .................... n/a n/a n/a n/a n/a n/a
Deliveries........................ .................... n/a n/a n/a n/a n/a n/a
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Please note that the fees on the website are in GBP/lot (=1,000
therms), whilst the fees in the filing are equal to 1/10 of this as are
expressed in GBPp (pence)/therm.
(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 \7\ and regulations thereunder applicable to it. ICE Clear
Europe's fees are imposed at the product level on a per transaction
[[Page 44950]]
basis (as are the applicable Exchange fees). As a result, the fees
apply equally to all market participants who trade/clear the Contracts.
ICE Clear Europe believes that the changes in fees provides appropriate
incentives and rewards to market participants for the use of the
Clearing House's clearing services for the Contracts. ICE Clear Europe
believes that the current delivery fee in relation to UK electricity
contracts could better reflect the actual variable cost charged by the
transmission system operator through Elexon, and therefore plans to
reduce the delivery fee. Following consultation with market
participants, ICE Clear Europe also believes that the current fees in
relation to the natural gas products should be increased, to properly
compensate ICE Clear Europe for the risks, costs and expenses of
clearing the Contracts. ICE Clear Europe believes that the increases in
the fees are relatively modest in size. ICE Clear Europe has determined
that the revised fees will provide a more appropriate balance between
the costs of clearing and expenses incurred by ICE Clear Europe. 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\ and further do not
unfairly discriminate among such participants in their use of the
Clearing House, within the meaning of Section 17A(b)(3)(F) of the
Act.\9\
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\7\ 15 U.S.C. 78q-1.
\8\ 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.''
\9\ 15 U.S.C. 78q-1(b)(3)(F).
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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
appropriate in furtherance of the purpose of the Act. As discussed
above, because fees are imposed on a per transaction basis at the
product level, the changes to the fees are applied equally to all those
market participants who trade and/or clear the Contracts. Although the
amendments with respect to the natural gas contracts may result in
higher fees for particular Clearing Members because of the higher fee
on specific products, ICE Clear Europe believes that the new fees would
be set at an appropriate level to better reflect the cost that the
Clearing House takes on by facilitating the relevant clearing services.
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 for the Contracts.
Further, since the revised fees will apply to all Clearing Members that
clear the products, 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.
(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 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-2020-011 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-2020-011. 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 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/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-2020-011 and should be submitted on or before August 14, 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. 2020-16022 Filed 7-23-20; 8:45 am]
BILLING CODE 8011-01-P