[Federal Register Volume 78, Number 103 (Wednesday, May 29, 2013)]
[Notices]
[Pages 32287-32292]
[FR Doc No: 2013-12704]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69628; File No. SR-ICEEU-2013-09]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing of Proposed Rule Change, and Amendment No. 1 Thereto, to
Clear Contracts Traded on the LIFFE Administration and Management
Market

May 23, 2013.
    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 May 13, 2013, ICE Clear Europe Limited (``ICE Clear Europe'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change, as modified by Amendment No. 1, and as described
in Items I, II, and III

below, which Items have been prepared primarily by ICE Clear Europe.\3\
The Commission is publishing this notice to solicit comments on the
proposed change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ On May 22, 2013, ICE Clear Europe submitted Amendment No. 1
to the proposed rule change to, among other things, clarify the
scope of products proposed to be cleared, add new Rule 207(f)
prohibiting FCM/BD Clearing Members and other Clearing Members
organized in the U.S. from clearing LIFFE Contracts that are futures
or options on underlying U.S. securities, add additional
clarification surrounding the operation of the combined F&O Guaranty
Fund and the margining of LIFFE Contracts, and supplement the
statutory basis for the proposed rule change.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    ICE Clear Europe submits revised Parts 1, 2, 4, 5, 7, 8, 11, and 12
and new Part 18 of its Rules (along with other clarifying and
conforming Rule amendments) and revisions to its Finance Procedures,
Clearing Procedures, Delivery Procedures and Membership Procedures. As
announced on December 20, 2012, ICE Clear Europe has agreed to act as
the clearing organization for futures and option contracts traded on
LIFFE Administration and Management, a recognized investment exchange
under the UK Financial Services and Markets Act of 2000, including
those processed through LIFFE Administration and Management's Bclear
service. BClear is the service operated by LIFFE, which enables LIFFE
Clearing Members to report certain bilaterally agreed off exchange
trades to LIFFE, for the purposes of the LIFFE Rules. Upon trades being
reported they will be eligible for clearing by ICE Clear Europe as a
LIFFE Block Transaction under the ICE Clear Europe Rules.
    The LIFFE contracts (``LIFFE Contracts'') that are proposed to be
cleared by ICE Clear Europe include interest rate and government bond
futures and options, certain agricultural futures and options, and
futures and options on underlying equity securities and equity indices.
    With respect to LIFFE Contracts that constitute securities for
purposes of the U.S. securities laws (i.e., LIFFE futures and options
on equity securities) (the ``LIFFE securities products''), LIFFE does
not permit direct access by U.S. persons (including U.S. LIFFE members)
to its trading facility for purposes of trading such products. In
addition, only certain LIFFE securities products are made available for
trading indirectly by U.S. persons, in accordance with applicable U.S.
legal and regulatory requirements.\4\ (Attached in Exhibit 5 hereto is
a list of LIFFE securities products proposed to be cleared by ICE Clear
Europe.) Consistent with these arrangements and U.S. legal and
regulatory restrictions, ICE Clear Europe proposes to adopt new rule
207(f), which provides that FCM/BD Clearing Members and other clearing
members of ICE Clear Europe that are organized in the United States
will not be permitted to clear LIFFE Contracts that are futures or
options on underlying U.S. securities (other than futures contracts on
broad-based security indices). In addition to adopting this Rule, ICE
Clear Europe will notify clearing members of these restrictions and is
adopting procedures for monitoring and enforcing compliance by clearing
members with these restrictions.
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    \4\ See, e.g., SEC No-Action Letter to LIFFE A&M, dated July 29,
2009; SEC No-Action Letter to LIFFE A&M, dated March 6, 1996; SEC
No-Action Letter to LIFFE A&M, dated May 1, 1992.
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    ICE Clear Europe's clearing activities with respect to the LIFFE
securities products, and in particular those involving U.S. securities,
will be conducted outside the United States. As noted above, all
Clearing Members entitled to clear products involving U.S. securities
will be located outside the United States. In addition, the internal
ICE Clear Europe financial, managerial, operational and similar
resources dedicated to the clearing function for LIFFE securities
products are located in the United Kingdom or otherwise outside the
United States. Specifically, the ICE Clear Europe management team and
risk management personnel are located in London. There will be a
dedicated LIFFE Risk Manager supported by a team of risk analysts in
place on, or after, 1 July 2013, and further resources within the
Operations, Corporate Development, Finance and Treasury Departments all
situated in London.
    ICE Clear Europe itself does not have employees or offices located
in the United States. ICE Clear Europe is recognized as an interbank
payment system by the Bank of England under the Banking Act 2009 in the
UK. Physical settlement of any LIFFE securities products will also
occur through facilities outside the United States, in particular
through the Euroclear UK and Ireland systems as well as other European
Central Securities Depositories (CSDs). ICE Clear Europe does obtain
certain information technology services from its U.S. affiliates
pursuant to intercompany services agreements. However, all clearing
personnel and decision-making, including supervision of such
information technology services by ICE Clear Europe, remains in London,
and those U.S. affiliates do not have any other role in ICE Clear
Europe' clearing operations for the LIFFE securities products.
    The clearing of the LIFFE Contracts, including the LIFFE securities
products, will be supported by the F&O Guaranty Fund. The F&O Guaranty
Fund replaces the existing Energy Guaranty Fund, and will support the
clearing of both the existing energy futures and options products
cleared by ICE Clear Europe and the LIFFE Contracts. (The F&O Guaranty
Fund will not support the clearing of credit default swap (``CDS'') or
FX products cleared at ICE Clear Europe, and the CDS and FX Guaranty
Funds will not support the clearing of energy or LIFFE contracts.) The
F&O Guaranty Fund will be divided into two segments, an energy clearing
segment and a LIFFE clearing segment, each of which is primarily
allocated to losses from products in that segment and secondarily to
losses from products in the other segment, as discussed below. The size
of each segment will be determined separately based on ICE Clear
Europe's risk assessment of the energy and LIFFE products,
respectively, and each segment will be separately stress-tested in
accordance with the clearing house's risk management policies and
procedures. The energy segment will initially be the same size as the
existing Energy Guaranty Fund, approximately USD650 million. The LIFFE
clearing segment is expected to initially be approximately GBP370
million (the exact size will be determined prior to the commencement of
LIFFE Contract clearing).
    In the event of a default of a clearing member for which ICE Clear
Europe needs to apply the F&O Guaranty Fund in accordance with the risk
waterfall under the Rules, the energy segment will be applied first to
losses resulting from cleared energy products, and the LIFFE segment
will be applied first to losses resulting from cleared LIFFE Contracts.
Once a segment has been exhausted by losses in its product category,
remaining assets from the other segment may be applied to those losses.
    The purpose of the rule and procedure changes is to implement this
clearing relationship. The other proposed changes in the Rules and
procedures reflect conforming changes to definitions and related
provisions and other drafting clarifications and updates, as noted
below. In order to effect these amendments, the Finance Procedures have
been updated more

generally, and the Finance Procedures and Delivery Procedures have been
updated to reflect changes in EU Law with respect to Registry
Regulations and the emissions markets operated by ICE Futures Europe.

II. Self-Regulatory Organization'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 significant aspects of
these statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

(a) Purpose
    ICE Clear Europe submits revised Parts 1, 2, 4, 7, 8, 11, and 12
and new Part 18 of its Rules (along with other clarifying and
conforming Rule amendments) and revisions to its Finance Procedures,
Clearing Procedures, Delivery Procedures and Membership Procedures. As
announced on December 20, 2012, ICE Clear Europe has agreed to act as
the clearing organization for futures and option contracts traded on
LIFFE Administration and Management, a recognized investment exchange
under the UK Financial Services and Markets Act of 2000. The purpose of
the rule and procedure changes is to implement this clearing
relationship. The other proposed changes in the Rules and procedures
reflect conforming changes to definitions and related provisions and
other drafting clarifications, and do not affect the substance of the
Rules and procedures. The text of the proposed rule and procedure
amendments are attached, with additions underlined and deletions in
strikethrough text.
Rules
    The amendments revise Part 1 of the Rules, in which Rule 101, which
provides definitions for certain terms, is modified to add new defined
terms and revise existing definitions. Included in the changes to Rule
101 are the designation of LIFFE as a Market for which ICE Clear Europe
provides clearing services, the addition of defined terms and other
revisions to cover LIFFE Contracts and the creation of a new category
``F&O Contracts'' that will include Energy Contracts and LIFFE
Contracts (and related definitions). The Energy Guaranty Fund will be
redesignated as the F&O Guaranty Fund, which fund will be sub-divided
with respect to Energy Contracts and LIFFE Contracts as discussed
above.
    Part 2 of the Rules has been revised to address requirements for
LIFFE Clearing Members and other conforming changes. New Rule 207(f)
would be adopted to prohibit U.S. clearing members from clearing LIFFE
securities products involving underlying U.S. securities.
    Part 3 of the Rules contain certain conforming changes.
    Changes to Part 4 of the Rules address the submission of LIFFE
Contracts for clearing and related matters. A new Rule 410 has been
added to set out a framework for Link Agreements, which are generally
defined as agreements entered into between ICE Clear Europe and another
exchange for which ICE Clear Europe does not otherwise provide clearing
services that provides for the transfer of contracts to or from that
exchange (or its clearing house) to ICE Clear Europe. LIFFE currently
has link arrangements with Tokyo Financial Exchange Inc. and Tokyo
Stock Exchange Inc., which exchanges would constitute ``Participating
Exchanges'' pursuant to the new Rules.
    Part 5 of the Rules, which addresses margin requirements, contains
certain conforming changes. Margin requirements for LIFFE Contracts
will be calculated using the SPAN[supreg]1 v4 algorithm,\5\ with
modifications for concentration charges and a trinomial model used with
respect to certain LIFFE option transactions. ICE Clear Europe will
determine the margin parameters used in the SPAN algorithm for LIFFE
Contracts cleared by ICE Clear Europe, and make appropriate
modifications to those parameters from time to time, within the
framework of the margin requirement policy approved by the ICEU F&O
Risk Committee. The margin parameters applicable from time to time will
be issued and amended by ICE Clear Europe via a circular posted on its
Web site.
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    \5\ SPAN is a registered trademark of Chicago Mercantile
Exchange Inc. and used by ICE Clear Europe under license. SPAN is a
risk evaluation and margin framework algorithm.
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    Part 6 of the Rules contain no changes.
    The amendments revise Part 7 of the Rules, which deals with
settlement and delivery of futures, to address settlement of LIFFE
Contracts. Specifically, Rule 703 has been amended to address the
treatment of tenders delivered in relation to Futures that are not
settled in cash. Additionally, Rule 704, which deals with the credit
and debit of accounts, has been amended to provide that any payment or
other allowance payable by or to either the Buyer or Seller under the
terms of the Contract shall be paid by or to the Clearing House for
onward payment to the Buyer or Seller, as the case may be.
    The amendments revise Part 8 of the Rules, which deals with
Options, to provide additional terms with respect to the exercise of
option contracts other than options on futures. Specifically, new Rule
806 provides that upon exercise of any Option with a Deliverable which
is not a Future, a Contract for the sale and purchase of the relevant
Deliverable (a ``Contract of Sale'') at the Strike Price (or such other
price as is required pursuant to the Contract Terms) will arise
pursuant to Rule 401 and in accordance with the Contract Terms for the
Option and applicable Market Rules. Additionally, new Rule 806 provides
that upon such Contract of Sale or Contracts of Sale having arisen and
all necessary payments having been made by the Clearing Member and
Clearing House pursuant to the Clearing Procedures, the rights,
obligations and liabilities of the Clearing House and the relevant
Clearing Member in respect of the Option shall be satisfied and the
Option shall be terminated.
    The amendments to Part 8 of the Rules also include the addition of
new Rule 809, which clarifies the delivery and settlement procedures
with respect to Contracts of Sale arising from Options. Pursuant to new
Rule 809, the Clearing House has the authority to direct a Clearing
Member, who is a seller under a Contract of Sale subject to delivery,
to deliver the Deliverable under such Contract to another Clearing
Member that is a buyer. New Rule 809 further provides that if a buyer
under a Contract of Sale rejects a Deliverable delivered to it, the
Clearing House as buyer under the back-to-back Contract with the Seller
shall be entitled, if to do so would be in accordance with the
applicable Contract Terms, to take the same action as against the
seller under the equivalent Contract and the Clearing House shall not
be deemed to have accepted such delivery until the relevant buyer has
accepted delivery under the first Contract.
    New Rule 810 addresses the cash settlement terms of Options with
Deliverables other than Futures. New

Rule 811 provides that the Clearing House shall make any necessary
credits or debits to or from Clearing Members' Proprietary Margin
Account and Customer Margin Accounts, as appropriate, arising as a
result of each cash settlement and delivery in accordance with Part 3
of the Rules.
    Part 9 of the Rules contain certain conforming changes.
    Part 10 of the Rules contain no changes.
    The amendments revise Part 11 of the Rules, which deals with the
Guaranty Funds. The clearing of LIFFE Contracts will be supported by
the existing Energy Guaranty Fund, which will be re-designated the
``F&O Guaranty Fund.'' Contributions to the F&O Guaranty Fund will be
primarily allocated to losses from either Energy Contracts or LIFFE
Contracts, and secondarily allocated to the other such class of
Contracts, as set forth in Rule 1103 and as discussed above.
    The amendments also revise Part 12 of the Rules, which addresses UK
Settlement Finality Regulations and the Companies Act 1989. Conforming
changes have been made to incorporate LIFFE Contracts in the provisions
addressing various categories of transfer orders.
    The amendments include a new Part 18 of the Rules, which provide
for transitional provisions concerning the novation of open contracts
with LIFFE A&M and LCH.Clearnet Limited, under LIFFE A&M's existing
clearing arrangements, to ICE Clear Europe, under the new clearing
relationship, and the transfer of Clearing Member cash and securities
from LCH.Clearnet Limited to ICE Clear Europe.
Membership Procedures
    ICE Clear Europe Limited also submits revised Membership
Procedures. ICE Clear Europe's Membership Procedures have been updated
to provide for the clearing of LIFFE Contracts and to reflect a new
membership category, ``F&O Clearing Members'', which identify Clearing
Members seeking to clear LIFFE Contracts as well as existing Energy
Clearing Members. The amendments reflect various other updates and
changes to conform to other provisions of the Rules and procedures. In
Section 4 (``Matters Requiring Notification by Clearing Members''), the
chart governing all notifications, their timing and their form
requirements have been generally updated to address the changes to the
numbering of provisions and otherwise to reflect the latest version of
ICE Clear's Clearing Rules. New subsections G (``Clearing
Procedures''), H (``Finance Procedures''), I (``Complaint Resolution
Procedures'') and J (``Business Continuity Procedures'') have also been
added, reflecting the notifications, timing and form requirements
contained in such procedures.
Finance Procedures
    ICE Clear Europe also submits revised Parts 2, 3, 4, 5, 6 and 9 of
its Finance Procedures, which reflect general updates as well as
changes to the clearing of LIFFE Contracts.
    Section 2.1 has been revised to clarify the currencies supported by
ICE Clear Europe in various contexts. Initial and Original Margin
obligations may be met only in USD, GBP and EUR currency. CAD, CHF and
SEK currency may be used by Clearing Members only for the receipt of
income on non-cash Permitted Cover with coupons payable in those
currencies. CAD may also be used for Variation Margin and settlement
payments only for Energy Contracts which settle in CAD. Certain
additional currencies may be used for Variation Margin and settlement
payments for LIFFE Contracts which settle in such currencies.
    Similarly, Section 3.7 has been amended to clarify that currencies
eligible for Triparty Collateral for Original or Initial Margin are
limited to USD, GBP and EUR.
    Section 4.1 governing currency requirements for the accounts of the
Clearing Members has been slightly modified: All F&O Clearing Members
must have an account, denominated in USD; all CDS Clearing Members must
have an account denominated in EUR; all F&O Clearing Members must
additionally have at least one further account denominated in either
GBP or EUR; all CDS Clearing Members must additionally have at least
one further account denominated in either GBP or USD; a Clearing Member
which has an Open Contract Position in a contract for which EUR, GBP,
USD or CAD is the settlement currency must have an account denominated
in such currency; a Clearing Member which transfers non-cash Permitted
Cover to the Clearing House which pays a coupon, interest or
redemptions in USD, EUR, GBP, CAD, CHF or SEK must have an account in
that currency; and an F&O Clearing Member that is a LIFFE Clearing
Member and is party to LIFFE Contracts which settle in CAD, CHF, CZK,
DKK, HUF, JPY, NOK, PLN, SEK or TRY must have an account in each such
currency.
    The procedures of the assured payment system have been updated
under Section 5.5 of the Finance Procedures to conform to changes
recently made to Rule 301(f) regarding the liability of Clearing
Members for the remittance of funds through Approved Financial
Institutions.
    Section 6.1(h), which addresses the various payments that may be
included in a cash transfer, has been modified to address intra-day
call of additional Initial or Original Margin Call, the proceeds of
which may be applied against future Variation Margin or Mark-to-Market
Margin calls. Intra-day Calls will now only be processed in USD, GBP or
EUR. Section 6.1(h)(vi) has been revised to address general procedures
for rebates, fee discounts and incentive programs that the Clearing
House may adopt from time to time. In addition, the provisions on
Currency Holidays and payments on other currencies, Section
6.1(h)(viii), have also been updated and now include language on Force
Majeure Events and Financial Emergencies.
    In Section 9, the definitions relating to the use of Emission
Allowances and Permitted Cover have been updated to reflect changes in
EU Law with respect to Registry Regulations. Certain conforming changes
are made in Part 10 of the Finance Procedures. Finally, Section 12.1
has been revised to reflect the sub-categories of Letters of Credit
that might be used to satisfy Original Margin, being a ``Standard
Letter of Credit'' and a ``Pass-Through Letter of Credit''. The
relevant forms of the Letters of Credit have also been updated in
Section 12.4.
Clearing Procedures
    ICE Clear Europe submits its revised Clearing Procedures. ICE Clear
Europe's Clearing Procedures have been updated to provide for the
clearing of LIFFE Contracts as well as certain other updates and
confirmations. Accordingly, amendments have been made to the provisions
relating to ICE Clear Europe's post-trade administration, clearing and
settlement systems, position management and position accounts in
Sections 1, 2 and 3, respectively.
Delivery Procedures
    ICE Clear Europe submits its revised Delivery Procedures. ICE Clear
Europe's Delivery Procedures have been amended to provide for the
delivery of LIFFE Contracts. The following provisions have been added
to the Delivery Procedures, which set out the new delivery
arrangements:
     Section 8 (``Alternative Delivery Procedure: LIFFE White
Sugar and Raw Sugar'');
     Section 17 (``LIFFE Guardian''), which describes the LIFFE
Guardian electronic grading and delivery system

which will be used in certain LIFFE deliveries; and
    Parts I-Q, which set out the delivery arrangements for the
additional LIFFE Contracts as follows:

[cir] Part I: ``LIFFE Cocoa Contracts''
[cir] Part J: ``LIFFE Coffee Contracts''
[cir] Part K: ``LIFFE White Sugar Contracts''
[cir] Part L ``LIFFE Wheat Contracts''
[cir] Part M: ``LIFFE Deliveries''
[cir] Part N: ``LIFFE Common Delivery Procedures''
[cir] Part O: ``LIFFE Gilt Contracts''
[cir] Part P: ``LIFFE Japanese Government Bond Contracts''
[cir] Part Q: ``LIFFE Equity Futures/Options''

    .Further, the Schedule of Forms and Reports has been updated and
lists additional delivery forms used for the LIFFE Contracts.
    Part A of the Delivery Procedures relating to emissions contracts
has also been amended, reflecting changes to EU legislation, certain
new emission contracts previously launched by ICE Futures Europe and
the use of a single EU registry together with additional conforming and
updating changes to the Delivery Procedures generally.
(b) Statutory Basis
    ICE Clear Europe believes that the proposed rule and procedure
changes 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\ The amendments will provide for
clearing of LIFFE Contracts by ICE Clear Europe, consistent with ICE
Clear Europe's existing clearing arrangements and related financial
safeguards, protections and risk management procedures, as discussed
herein. Acceptance of LIFFE Contracts for clearing, and conditions set
out in these rule and procedure amendments, will promote the prompt and
accurate clearance of and settlement of securities transactions, the
safeguarding of securities and funds in the custody or control of ICE
Clear Europe and the protection of investors and the public interest,
within the meaning of Section 17A(b)(3)(F) of the Act.\8\ The proposed
amendments do not impact ICE Clear Europe's financial resources devoted
to its security-based swap related (i.e., credit default swap) clearing
business. Clearing of LIFFE Contracts will satisfy relevant
requirements of Rule 17Ad-22,\9\ as discussed below.
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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.
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    Financial Resources. As discussed above, ICE Clear Europe has
structured the F&O Guaranty Fund to provide sufficient additional
financial resources to support the clearing of LIFFE Contracts
consistent with the requirements of Rule 17Ad-22.\10\ The proposed
amendments do not impact ICE Clear Europe's financial resources devoted
to its security-based swap related (i.e., credit default swap) clearing
business. Moreover, new policies were approved covering margin
requirements, mark-to-market margin, capital to margin, membership,
internal rating, backtesting, wrong-way risk, concentration charges,
intraday margin and stress testing in respect of the LIFFE A&M clearing
relationship. Relevant models applicable to the clearing of LIFFE
Contracts were subjected to independent validation as required by ICE
Clear Europe's model governance framework.
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    \10\ Id.
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    Operational Resources. ICE Clear Europe believes it will have the
operational and managerial capacity to clear the LIFFE Contracts as of
the commencement of clearing, consistent with the requirements of Rule
17Ad-22(d)(4).\11\ Staffing levels and resources at ICE Clear Europe
related to operational and technology needs for the clearing of LIFFE
Contracts will be subject to ongoing review. ICE Clear Europe believes
that its existing systems are appropriately scalable to handle the
expected increase in volume. ICE Clear Europe may also enter into
services arrangements with LIFFE A&M from time to time in connection
with the clearing of LIFFE Contracts, under which LIFFE A&M or its
personnel may assist with certain clearing functions, particularly with
respect to contracts that go to delivery.
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    \11\ Id.
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    Participant Requirements. ICE Clear Europe believes that the
Amendments and the clearing of LIFFE Contracts are consistent with the
requirements of Rule 17Ad-22(d)(2) \12\ to provide fair and open access
through participation requirements that are objective and publicly
disclosed. ICE Clear Europe believes that the Amendments establish fair
and objective criteria for the eligibility to clear LIFFE Contracts.
ICE Clear Europe clearing membership is available to participants that
meet such criteria. ICE Clear Europe clearing members that wish to
clear LIFFE Contracts will have to satisfy the financial resources
requirements to clear these products and continue to do so in order to
preserve their eligibility to clear LIFFE Contracts. Clearing member
compliance with the requirements to clear LIFFE Contracts will be
monitored by ICE Clear Europe.
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    \12\ Id.
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    Settlement. ICE Clear Europe believes that the Amendments will
improve the finality and accuracy of its daily settlement process and
reduce the risk to ICE Clear Europe of settlement failures, consistent
with the requirements of Rule 17Ad-22(d)(5), (12) and (15).\13\ The
proposed Amendments require ICE Clear Europe clearing members that
clear LIFFE Contracts to maintain accounts at approved financial
institutions and that are denominated in the settlement currency of the
LIFFE Contracts such clearing member clears. Also, the Finance
Procedures Amendments clarify the steps a clearing member (and its
approved financial institutions) must take in order for the clearing
member's obligations to pay ICE Clear Europe to be deemed satisfied and
complete.
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    \13\ Id.
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    Likewise, the proposed Amendments to the delivery procedures
clarify the obligations of ICE Clear Europe and its clearing members in
respect of physically-settled LIFFE Contracts. The proposed Amendments
contemplate that ICE Clear Europe may, from time to time, enter into
clearing services arrangements with LIFFE A&M, in respect of LIFFE
Contracts, pursuant to which certain functions may be performed by
LIFFE A&M for ICE Clear Europe. In general, the terms to be added to
the ICE Clear Europe delivery procedures in large part reflect the
terms currently applicable to the LIFFE Contracts under their existing
clearing arrangements.
    ICE Clear Europe believes these changes are thus in furtherance of,
and are consistent with, the requirements of Rule 17Ad-22 \14\ and will
facilitate the continued operation of the clearing house's settlement
process. ICE Clear Europe believes that its Rules and procedures
related to settlements (including physical settlements), as amended,
appropriately identify and manage the risks associated with settlements
under LIFFE Contracts.
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    \14\ Id.
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    Default Procedures. ICE Clear Europe believes that the Rules and
its relevant procedures allow for it to take timely action to contain
losses and liquidity pressures and to continue meeting its obligations
in the event of clearing member insolvencies or defaults, including in
respect of LIFFE Contracts,

in accordance with Rule 17Ad-22(d)(11).\15\

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    \15\ Id.
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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. LIFFE A&M is an
established market for the LIFFE Contracts, and ICE Clear Europe does
not anticipate that its becoming the clearing house for the LIFFE
Contracts will adversely affect the trading market for those contracts
on LIFFE A&M. Moreover, ICE Clear Europe has established fair and
objective criteria for eligibility to clear LIFFE Contracts, and
accordingly ICE Clear Europe does not believe that the proposed rule
changes will impose any burden on competition among clearing members.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    Written comments relating to the rule changes have been solicited
and one comment has been received to date but was not in connection
with the specific rule and procedure changes. 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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the proposed rule change or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

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_ADDRESS>Please include
File Number SR-ICEEU-2013-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ICEEU-2013-09. 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 Web site (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 Web site 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 also will be available
for inspection and copying at the principal office of ICE Clear Europe
and on ICE Clear Europe's Web site at https://www.theice.com/publicdocs/regulatory_filings/ICEU_SEC_051313_3.pdf.
    All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-ICEEU-2013-09
and should be submitted on or before June 19, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-12704 Filed 5-28-13; 8:45 am]
BILLING CODE 8011-01-P