[Federal Register Volume 82, Number 182 (Thursday, September 21, 2017)]
[Notices]
[Pages 44235-44238]
[FR Doc No: 2017-20088]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81632; File No. SR-GEMX-2017-42]

Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Its
Schedule of Fees To Offer Monthly Subscriptions for Open and Close
Trade Profile Information

September 15, 2017.
    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 September 1, 2017, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I and II, below, which
Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its Schedule of Fees to offer
monthly subscriptions for Open and Close Trade Profile Information.
    The text of the proposed rule change is available on the Exchange's
Web site at www.ise.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange 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. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    The Exchange proposes to amend its Schedule of Fees to offer
monthly

subscriptions for Open and Close Trade Profile Information;
subscriptions will be available for both end-of-day and intraday
updates.\3\
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    \3\ The Exchange initially filed this proposal as a fee filing
on August 25, 2017 (SR-GEMX-2017-41). The proposal was rejected on
August 31, 2017, and is being resubmitted as a proposal that (i)
does not significantly affect the protection of investors or the
public interest, and (ii) does not impose any significant burden on
competition under Exchange Act Rule 19b-4(f)(6)(iii).
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    The Open/Close Trade Profile provides over 80 fields of trading and
volume data for GEMX-listed options that can be used to create and test
trading models and analytical strategies. Trade Profile data includes:
``Origin Code'' (the type of trader participating in the transaction);
\4\ opening and closing buys and sells; \5\ trading volume and number
of trades categorized by day and series; \6\ the degree to which a
series is ``in'' or ``out'' of the ``money'' ; \7\ the number of days
to expiration; an indication of the degree to which there is ``Open
Interest'' \8\ for each series; and a comparison of the volume of
trading at GEMX relative to the industry as a whole.
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    \4\ ``Origin Code'' categories include Customer, Professional
Customer, Firm and Market Maker. ``Customer'' applies to any
transaction identified by a member or a member organization for
clearing in the Customer range at the Options Clearing Corporation
which is not for the account of a broker or dealer or a
Professional. A ``Professional Customer'' is a high-activity
customer that enters into more than 390 orders per day over the
course of a one-month period. A ``Firm'' is a broker-dealer trading
in its own proprietary account or on behalf of another broker-
dealer. A ``Market Maker'' is a broker-dealer that assumes the risk
of holding a position in a series to facilitate trading.
    \5\ An opening buy is a transaction that creates or increases a
long position and an opening sell is a transaction that creates or
increases a short position. A closing buy is a transaction made to
close out an existing position. A closing sell is a transaction to
reduce or eliminate a long position.
    \6\ Trading volume is the number of contracts traded; the number
of trades is the number of transactions.
    \7\ The degree to which a series is ``in'' or ``out'' of the
``money'' is identified according to the following five levels of
``moneyness'': (i) ``Deep in the Money'' means that the strike price
of this option is more than 12% lower than the price of the
underlying security if it is a call or more than 12% higher if it is
a put; (ii) ``In the Money'' means that the strike price of this
option is within the range of 5%-12% lower than the price of the
underlying security if it is a call or within the range of 5%-12%
higher if it is a put; (iii) ``At the Money'' means that the strike
price of this option is within the range of 5% higher or lower than
the price of the underlying security; (iv) ``Out of the Money''
means that the strike price of this option is within the range of
5%-12% higher than the price of the underlying security if it is a
call or 5%-12% lower if it is a put; and (v) ``Deep out of the
Money'' means that the strike price of this option is more than 12%
higher than the price of the underlying security if it is a call or
more than 12% lower if it is a put.
    \8\ ``Open Interest'' is the total number of outstanding
contracts for each series across all options exchanges for the trade
date of the file.
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    The GEMX Open/Close Trade Profile is currently available as an
historical database available upon request, and the Exchange proposes
to offer intraday and end-of-day subscriptions to Trade Profile
information as well. Such subscriptions will be available to both
members and non-members, similar to the ISE Open/Close Trade
Profile.\9\ The end-of-day file is updated overnight and available for
download the following morning. The intraday file is updated at 10
minute intervals to provide a cumulative record of transactions that
take place over the course of the trading day. The end-of-day
subscription will be available for $500 per month; the intraday
subscription will be available for $1,000 per month.
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    \9\ Nasdaq ISE Rulebook, Fee Schedule, Chapter VIII (Market
Data), A (offering an annual subscription to Nasdaq ISE Open/Close
Trade Profile End of Day for $759 per month) and B (offering a
monthly subscription to the Nasdaq ISE Open/Close Trade Profile
Intraday for $2,000 per month).
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    The proposed rule change will increase transparency in the market
by increasing the amount of information available to market
participants to assist them in making investment decisions related to
GEMX-listed options.
    The proposed fees are optional in that they apply only to firms
that elect to purchase these products. The changes do not impact the
cost of any other GEMX product.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. The proposal is to make open and close trade profile
information, currently available only on an historical basis, available
at 10 minute intervals over the course of the trading day and in
summary form at the end of the trading day, thereby increasing the flow
of information and removing impediments to a free and open market.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \12\
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    \12\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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    Likewise, in NetCoalition v. Securities and Exchange Commission
\13\ (``NetCoalition'') the D.C. Circuit upheld the Commission's use of
a market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\14\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \15\
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    \13\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \14\ See NetCoalition, at 534--535.
    \15\ Id. at 537.
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    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers' . . .'' \16\ Although the court and the
SEC were discussing the cash equities markets, the Exchange believes
that these views apply with equal force to the options markets.
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    \16\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
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    The Exchange believes that adding the proposed subscriptions to the
Exchange's Open/Close Trade Profile is reasonable and equitable in
accordance with Section 6(b)(4) of the Act, and not unreasonably
discriminatory in accordance with Section 6(b)(5) of the Act. The
proposed changes will increase transparency by providing information
about options activity throughout and at the end of the trading day.
The proposed fees, like all proprietary data fees, are constrained by
the Exchange's need to compete for order flow, and are subject to
competition from other options exchanges. As explained in

further detail below, the proposal will impose no burden on competition
because GEMX transaction information is disseminated by the Options
Price Reporting Authority, LLC (``OPRA''), and customers would not pay
a premium for GEMX information when similar transaction information is
available at a lower cost from OPRA, and because the price of GEMX
proprietary data is constrained by the need for GEMX to compete for
order flow. The Exchange further notes that GEMX Open/Close Trade
Profile information is an optional service that only applies to firms
that elect to purchase the product. Moreover, the proposed service is
similar to services already provided by other exchanges, such as the
ISE Open/Close Trade Profile.\17\
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    \17\ Nasdaq ISE Rulebook, Fee Schedule, Chapter VIII (Market
Data), A (offering an annual subscription to Nasdaq ISE Open/Close
Trade Profile End of Day for $759 per month) and B (offering a
monthly subscription to the Nasdaq ISE Open/Close Trade Profile
Intraday for $2,000 per month).
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    The proposed changes are an equitable allocation of reasonable
dues, fees, and other charges because fees will be the same for all of
the purchasers of each product and it is equitable to charge more for
the intraday product--which provides updates at 10 minute intervals
over the course of the trading day--than the end-of-day product, which
provides updates once per day.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed changes will allow
the Exchange to offer intraday and end-of-day subscriptions to options
trading data. If the price of the proposed subscriptions were to be set
above a competitive price, the Exchange may lose revenue as a result.
    GEMX market data fees are constrained by competition among
exchanges and other entities seeking to attract order flow, and the
existence of substitutes that are offered, or may be offered, by other
entities. Order flow is the ``life blood'' of the exchanges. For a
variety of reasons, competition from new entrants, especially for order
execution, has increased dramatically over the last decade, as
demonstrated by the proliferation of new options exchanges such as EDGX
Exchange and MIAX Options within the last four years. Each options
exchange is permitted to produce proprietary data products.
    The markets for order flow and proprietary data are inextricably
linked: A trading platform cannot generate market information unless it
receives trade orders. As a result, the competition for order flow
constrains the prices that platforms can charge for proprietary data
products. Firms make decisions on how much and what types of data to
consume based on the total cost of interacting with GEMX and other
exchanges. Data fees are but one factor in a total platform analysis.
If the cost of the product exceeds its expected value, the prospective
customer will choose not to buy it. A supracompetitive increase in the
fees charged for either transactions or proprietary data has the
potential to impair revenues from both products.
    The price of options data is also constrained by the existence of
multiple substitutes offered by a number of entities, and non-
proprietary data disseminated by OPRA. OPRA is a securities information
processor that disseminates last sale reports and quotations, as well
as the number of options contracts traded, open interest and end-of-day
summaries. Many customers that obtain information from OPRA do not also
purchase proprietary data, but in cases in which customers buy both
products, they may shift purchasing decisions based on price changes.
OPRA constrains the price of proprietary data products on options
exchanges because no customer would pay an excessive price for these
products when they already have data from OPRA. Similarly, no customer
would pay an excessive price for Exchange data when they have the
ability to obtain similar proprietary data from other exchanges. It is
not necessary that products be identical in order to be reasonable
substitutes for each other.
    As such, the price of the GEMX Open/Close Trade Profile product is
constrained by other exchanges in the competition for order flow and
the availability of similar data from OPRA. Customers choose exchanges
based on the total cost of interacting with the exchange; if the GEMX
Open/Close Trade Profile were set above market price, the total cost of
interacting with GEMX would be above market price, and GEMX would lose
market share as a result. In addition, the availability of trading
information from OPRA will constrain the price of the GEMX Open/Close
Trade Profile because customers would not pay an excessive amount for
proprietary data when similar information is available at a lower
price; two products need not be identical for each product to act as a
constraint on the price of the other. For these reasons, the Exchange
does not believe that the proposed changes will impair the ability of
members or competing order execution venues to maintain their
competitive standing in the financial markets.

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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \18\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\19\
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    \18\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\21\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requests
that the Commission waive the 30-day operative delay. The Exchange
notes that a product similar to the proposed product is already being
sold by another exchange. The Exchange also asserts that the addition
of the proposed product can increase competition, and will not harm
firms that do not purchase the product as the service is optional. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission hereby waives the 30-day operative delay
and designates the

proposed rule change operative upon filing.\22\
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    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 17 CFR 240.19b-4(f)(6)(iii).
    \22\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or 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-GEMX-2017-42 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-GEMX-2017-42. 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 the filing also will be available
for inspection and copying at the principal office of the Exchange. 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-GEMX-2017-42 and should be
submitted on or before October 12, 2017.
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    \23\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-20088 Filed 9-20-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 199 (Friday, October 14, 2011)]
[Notices]
[Pages 63940-63941]
[FR Doc No: 2011-26613]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

Notice of Maximum Amount of Assistance Under the Individuals and
Households Program

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: FEMA gives notice of the maximum amount for assistance under
the Individuals and Households Program for emergencies and major
disasters declared on or after October 1, 2011.

DATES: Effective Date: October 1, 2011, and applies to emergencies and
major disasters declared on or after October 1, 2011.

FOR FURTHER INFORMATION CONTACT: Michael Grimm, Recovery Directorate,
Federal Emergency Management Agency, 500 C Street, SW., Washington, DC
20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Section 408 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (the Stafford Act), 42
U.S.C. 5174,

prescribes that FEMA must annually adjust the maximum amount for
assistance provided under the Individuals and Households (IHP) Program.
FEMA gives notice that the maximum amount of IHP financial assistance
provided to an individual or household under section 408 of the
Stafford Act with respect to any single emergency or major disaster is
$31,400. The increase in award amount as stated above is for any single
emergency or major disaster declared on or after October 1, 2011. In
addition, in accordance with 44 CFR 61.17(c), this adjustment includes
the maximum amount of available coverage under any Group Flood
Insurance Policy (GFIP) issued for those disasters.
    FEMA bases the adjustment on an increase in the Consumer Price
Index for All Urban Consumers of 3.8 percent for the 12-month period
ended in August 2011. The Bureau of Labor Statistics of the U.S.
Department of Labor released the information on September 15, 2011.

Catalog of Federal Domestic Assistance No. 97.048, Individuals and
Households--Housing; 97.049, Individuals and Households--Disaster
Housing Operations; 97.050, Individuals and Households--Other Needs.

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2011-26613 Filed 10-13-11; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 80, Number 204 (Thursday, October 22, 2015)]
[Notices]
[Pages 64041-64042]
[FR Doc No: 2015-26809]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76177; File No. SR-ISE-2015-31]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend the Schedule of Fees

October 16, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on October 1, 2015, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change, as
described in Items I, II, and III below, which Items have been prepared
by the self-regulatory organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The ISE proposes to amend language in the Schedule of Fees related
to excluding days from its average daily volume calculations when the
market is not open for the entire trading day. The text of the proposed
rule change is available on the Exchange's Web site (http://www.ise.com), at the principal office of the Exchange, and at the
Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
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. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.

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

1. Purpose
    Currently, for purposes of determining a member's average daily
volume (``ADV''), any day that the regular or complex order books are
not open for the entire trading day may be excluded from such
calculation. The Exchange proposes to amend language in the Schedule of
Fees related to excluding days from the ADV calculations used to
determine applicable fee and rebate tiers. Specifically, the Exchange
proposes to permit days to be excluded from its ADV calculations where
the Exchange is technically open for the entire trading day, but has
instructed members to route away due to a systems or other error that
ultimately does not impact trading on the Exchange. Currently, the
Exchange's ability to remove days from its ADV calculations is limited
to days where the market is not open for the entire trading day. This
allows the Exchange to exclude days, for example, where the Exchange
declares a trading halt in all securities, honors a market-wide trading
halt declared by another market, or closes early for holiday
observance. Because these days generally have artificially lower
trading volume, the Exchange believes that it is reasonable and
equitable to not include such days in determining fee and rebate tiers.
The Exchange notes, however, that if it has a systems issue in the
morning before the market opens, it may instruct members to route away
to other markets. If the systems issue continues into trading hours,
the Exchange is permitted to exclude the day for all members that would
have a lower ADV with the day included. If, however, the systems issue
is resolved prior to the opening of trading, the Exchange is not
permitted to exclude the day from its ADV calculations. This is the
case regardless of the fact that many members would have already made
arrangements to route away in accordance with the Exchange's
instructions. To prevent this undesirable result, and preserve the
Exchange's intent behind adopting volume-based pricing, the Exchange
proposes to allow days to be excluded from its ADV calculation whenever
all members are instructed, in writing, to route their orders to other
markets.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\3\ in general, and Section
6(b)(4) of the Act,\4\ in particular, in that it is designed to provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and other persons using its facilities. The
Exchange believes that it is reasonable and equitable to exclude a day
from its ADV calculations when members are instructed to route their
orders to other markets as this preserves the Exchange's intent behind
adopting volume-based pricing, and avoids penalizing members that
follow this instruction. Without this change, members that route away
in accordance with the Exchange's instructions may be negatively
impacted, resulting in an effective cost increase for those members.
The Exchange further believes that the proposed rule change is not
unfairly discriminatory because it applies equally to all members and
ADV calculations. As is the Exchange's current practice, the Exchange
will inform members of any day to be excluded from its ADV calculations
by sending members a notice and posting such notice on the Exchange's
Web site.
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    \3\15 U.S.C. 78f.
    \4\15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\5\ the Exchange does
not believe that the proposed rule change will impose any burden on
intermarket or intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
believes that the proposed modifications to its ADV calculation are
pro-competitive and will result in lower total costs to end users, a
positive outcome of competitive markets. The Exchange operates in a
highly competitive market in which market participants can readily
direct their order flow to competing venues. In such an environment,
the Exchange must

continually review, and consider adjusting, its fees and rebates to
remain competitive with other exchanges. For the reasons described
above, the Exchange believes that the proposed fee changes reflect this
competitive environment.
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    \5\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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)(ii) of the Act \6\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\7\ because it establishes a due, fee, or other charge
imposed by ISE.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or 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-ISE-2015-31 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2015-31. 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 filing also will be available
for inspection and copying at the principal office of the Exchange. 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-ISE-2015-31, and should be
submitted on or before November 12, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-26809 Filed 10-21-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: March 7, 2008 (Volume 73, Number 46)]
[Notices]
[Page 12499]
[DOCID:fr07mr08-146]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. PE-2008-08]

Petition for Exemption; Summary of Petition Received

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of petition for exemption received.

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SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of 14 CFR. The purpose of this notice is to
improve the public's awareness of, and participation in, this aspect of
FAA's regulatory activities. Neither publication of this notice nor the
inclusion or omission of information in the summary is intended to
affect the legal status of the petition or its final disposition.

DATES: Comments on this petition must identify the petition docket
number involved and must be received on or before March 27, 2008.

ADDRESSES: You may send comments identified by Docket Number FAA-2007-
0041 using any of the following methods:
     Government-wide rulemaking Web site: Go to http://
www.regulations.gov and follow the instructions for sending your
comments electronically.
     Mail: Send comments to the Docket Management Facility;
U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West
Building Ground Floor, Room W12-140, Washington, DC 20590.
     Fax: Fax comments to the Docket Management Facility at
202-493-2251.
     Hand Delivery: Bring comments to the Docket Management
Facility in Room W12-140 of the West Building Ground Floor at 1200 New
Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
    Privacy: We will post all comments we receive, without change, to
http://www.regulations.gov, including any personal information you
provide. Using the search function of our docket web site, anyone can
find and read the comments received into any of our dockets, including
the name of the individual sending the comment (or signing the comment
for an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477-78).
    Docket: To read background documents or comments received, go to
http://www.regulations.gov at any time or to the Docket Management
Facility in Room W12-140 of the West Building Ground Floor at 1200 New
Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Jan Thor, ANM-113,<PHONE_NUMBER>,
Federal Aviation Administration, 1601 Lind Avenue, SW., Renton, WA
98057-3356, or Frances Shaver,<PHONE_NUMBER>). Office of Rulemaking,
Federal Aviation Administration, 800 Independence Avenue, SW.,
Washington, DC 20591.
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC on March 4, 2008.
Pamela Hamilton-Powell,
Director, Office of Rulemaking.

Petition for Exemption

    Docket No.: FAA-2007-0041.
    Petitioner: The Boeing Company.
    Section of 14 CFR Affected: Sec. Sec.  25.785(j); 25.807(d), (g)(1)
and (i)(1); 25.809(a); 25.810(a)(1); 25.812(e); 25.813(b); 25.857(e);
and 25.1447(c)(1).
    Description of Relief Sought: To allow carriage of up to 4
supernumeraries on the flightdeck of the B767-300 Boeing Converted
Freighter airplane which has a main deck Class E cargo compartment. The
supernumeraries would be allowed access to this compartment during
flight.

[FR Doc. E8-4587 Filed 3-6-08; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 79, Number 109 (Friday, June 6, 2014)]
[Notices]
[Pages 32792-32797]
[FR Doc No: 2014-13152]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72297; File No. SR-ICEEU-2014-06]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing of Proposed Rule Change Regarding Investment Losses and Non-
Default Losses

June 2, 2014.
    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 30, 2014, 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 prepared primarily by ICE Clear Europe. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The principal purpose of the proposed changes is to amend the ICE
Clear Europe Clearing Rules to address investment losses and non-
default losses (as described in more detail below) that may affect the
clearing house.

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. 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 these statements.

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

    ICE Clear Europe submitted proposed amendments to its Rules in
order to adopt new provisions relating to certain investment losses on
margin and guaranty fund contributions provided by clearing members (as
defined more fully below, ``investment losses'') as well as other
losses to the clearing house arising other than from a clearing member
default (as defined more fully below, ``non-default losses''),
including losses from general business risk and operational risk. The
amendments would (i) require ICE Clear Europe to apply a specified
amount of its own assets to cover non-default losses and investment
losses (``loss assets'') and (ii) require clearing members in all
product categories to make contributions (referred to as ``collateral
offset obligations'') to cover investment losses (but not other non-
default losses) that exceed the available clearing house loss assets.
The proposed rules would also limit the clearing house's liability for
losses arising from a failure of a bank or similar custodian.
    The Bank of England has indicated that ICE Clear Europe will be
required to have rules addressing the allocation of non-default losses
that threaten the clearing house's solvency and to have plans to
maintain continuity of services if such continuity is threatened as a
result of such losses, commencing May 1, 2014. Plans to address losses
from general business risk are also an element of the CPSS-IOSCO
Principles for Financial Market Infrastructures (the ``PFMIs'').\3\ The
amendments are separate from the clearing house's existing rules and
planned rule changes that address allocation of losses resulting from
clearing member defaults and related recovery and wind-down plans.
---------------------------------------------------------------------------

    \3\ We also note in this regard that the Commodity Futures
Trading Commission has adopted a similar requirement for
systemically important derivatives clearing organizations and
``subpart C'' derivatives clearing organizations in CFTC Rule
39.33(b)(2), and that the Commission has proposed a similar
requirement for certain ``covered clearing agencies'' in proposed
Rule 17Ad-22(e)(15). Standards for Covered Clearing Agencies,
Release No. 34-71699 (Mar. 12, 2014).
---------------------------------------------------------------------------

    The proposed Rule amendments are described in detail as follows.
    Part 1 of the Rules has been revised to include new definitions for
``Investment Losses'' and ``Non-Default Losses,'' which form the basis
of the new loss allocation provisions in the proposed rules. Investment
Losses means losses incurred or suffered by the clearing house arising
in connection with the default of the issuer of any instrument and/or
counterparty to any repurchase or reverse repurchase contract or
similar transaction in respect of investment or reinvestment by the
clearing house of margin (other than variation margin) or guaranty fund
contributions other than a loss resulting from the clearing house's
failure to follow its own investment policies. By way of clarification,
investment losses will be allocated separately from losses arising from
a default, and accordingly, an investment loss relating to margin or
guaranty fund contributions provided by a defaulting clearing member
will be included in the calculation of investment losses. (The amount
of investment losses will thus not be reduced by any amounts ICE Clear
Europe may use from its default resources under Parts 9 and 11 of the
Rules (including guaranty fund contributions or assessments) to address
losses from a default). In addition, Investment Losses do not include
custodial losses.
    ``Non-Default Losses'' means losses suffered by the clearing house
(other than Investment Losses) arising in connection with any event
other than an event of default and which threaten the solvency of the
clearing house. In addition, a new definition for ``Collateral Offset
Obligations'' has been added, which refers to obligations of a clearing
member arising pursuant to new Rule 919, as discussed below, to make
payments to the clearing house in respect of Investment Losses, which
offset obligations of the clearing house to pay the clearing member or
return assets in respect of margin provided to the clearing house by
the clearing member. New definitions for ``Custodian'' (which is used
in new Rule 919), and ``Loss Assets'' (assets of the clearing house
itself that are intended to be applied to investment losses and non-
default losses under Rule 919 as described below) have been added.
    In Rules 111 and 905, conforming and clarifying changes to the
description of various types of losses or liabilities that may be borne
by the clearing house have been made, through addition of references to
``claims'' and ``shortfalls,'' in order to ensure consistent use of
language throughout Rules where other references are made to losses.
    The proposed changes would adopt new Rule 919, which includes the
allocation rules for investment losses and non-default losses and
procedures for applying collateral offset obligations. Under Rule
919(b), non-default losses will be satisfied by applying the available
loss assets designated by the clearing house and then other available
capital or assets of the clearing house. Investment losses, on the
other hand, will first be satisfied by applying the available loss
assets provided by the clearing house, and thereafter by collateral
offset obligations as discussed herein. The amount of loss assets
provided by ICE Clear Europe will initially be USD 90 million (pursuant
to Rule 919(p)), subject to adjustment by the clearing house by
circular from time to time. ICE Clear Europe will not have an
obligation to replenish the amount of loss assets, if applied to non-
default losses or investment losses.
    Pursuant to Rule 919(c), if there is an investment loss in an
amount greater than the then-available loss assets, all clearing
members will be required to indemnify the clearing house and pay
collateral offset obligations to the clearing house in accordance with
Rule 919(d). The clearing house will publish a circular including
certain required details of any investment loss and collateral offset
obligations due. The amount of such payment is determined pursuant to
Rule 919(d), and is based on the proportion of a clearing member's
aggregate initial margin and guaranty fund contributions (for all
product categories) to the aggregate initial margin and guaranty fund
contributions of all clearing members (for all product categories) (in
any case other than margin and contributions of defaulting clearing
members that are applied or included in the net sum calculation under
the Rules as a result of the default). Under Rule 919(e), the
collateral offset obligation of a clearing member shall not exceed the
total of all initial margin and guaranty fund contributions (across all
accounts and product categories) that it has deposited with the
clearing house at the time of the event giving rise to the investment
loss. To the extent the investment losses exceed the amount of
available loss assets and the capped collateral offset obligations of
clearing members, clearing members would not have

further obligations to make payments to the clearing house in respect
thereof.
    Collateral offset obligations are due at the time specified by the
clearing house, under Rule 919(f), and will be payable in accordance
with the procedures for collection of margin under Rule 302 and the
Finance Procedures. Collateral offset obligations may, at the election
of the clearing house, be offset against the obligation of the clearing
house to return initial margin or guaranty fund contributions, and will
be collected pursuant to a call for margin from a proprietary account
of the clearing member. (In the case of a defaulting clearing member,
the clearing house may include the collateral offset obligation in any
net sum (to reduce any net sum otherwise payable to the defaulting
clearing member) or offset it against any other obligation of the
clearing house to return any remaining margin or guaranty fund
contributions after application in respect of the default). Collection
of the collateral offset obligation from the proprietary account of a
clearing member is not intended to preclude a clearing member from
passing the cost of the collateral offset obligation to its
Customer(s), to the extent the obligation relates to customer account
margin or otherwise to a customer and to the extent permitted by
applicable law.
    If the clearing house subsequently recovers amounts in respect of
an investment loss, Rule 919(h) provides for allocating the recovery to
clearing members on a pro rata basis in proportion to their collateral
offset obligations satisfied (after repaying the clearing house for any
of its own assets applied in excess of the loss assets or any other
persons for their assets applied).
    Pursuant to Rules 919(i), the obligation of a clearing member to
make collateral offset obligations is separate from, and does not
reduce, its obligation to provide margin and to make guaranty fund
contributions or guaranty fund assessment contributions under the
existing rules. Under Rule 919(j), if the clearing house calls for
collateral offset obligations in excess of that actually required, it
will credit the excess to the relevant clearing members' proprietary
accounts, from which it may be withdrawn in accordance with the usual
procedure for withdrawal of excess margin under Part 3 of the Rules.
    Rule 919(k) provides that the obligation to provide collateral
offset obligations under Rule 919 applies independently from the powers
of assessment following clearing member defaults in other parts of the
Rules, and notes for clarification that the limits on assessment in
Rules 917 and 918 for the F&O and FX product categories do not affect
the liability of clearing members for collateral offset obligations.
Rule 919(l) clarifies that the exercise of rights under Rule 919 does
not constitute a Clearing House Event (i.e., a payment default or
insolvency of the clearing house). Rule 919(m) provides for payments of
collateral offset obligations to be made in accordance with the general
procedures for payments under Part 3 of the Rules and the Finance
Procedures, subject to the clearing house's setoff and netting rights
under the Rules.
    Under Rule 919(n), the clearing house is not required to pursue any
litigation or other action against any person in respect of unpaid
amounts (including those representing an investment loss or non-default
loss). As discussed above, to the extent the clearing house recovers
amounts in respect of an investment loss, Rule 919(h) provides for
allocating such recovery to clearing members that have paid collateral
offset obligations. Rule 919(o) allows the clearing house to make
currency conversions in making determinations under Rule 919.
    As discussed above, Rule 919(p) establishes the initial level of
loss assets at USD 90 million. The clearing house may change the level
of loss assets from time to time by Circular. Pursuant to Rule 919(q),
ICE Clear Europe must notify clearing members of the amount of loss
assets used from time to time. The clearing house is not required to
replenish the amount of loss assets if used, although it may elect to
do so. Separately, Rule 919(q) also provides that the clearing house
may replenish any regulatory capital as required to bring it in
compliance with applicable laws at any time, including following an
investment loss or other non-default loss. However, no such
recapitalization will result in any obligation of any clearing member
to pay collateral offset obligations, or the size of any investment
loss, being reduced. In addition, replenishment of required regulatory
capital does not in itself require, or result in, a replenishment of
loss assets.
    Under Rule 919(r), the clearing house is not liable to any clearing
member, customer or any other person for losses arising from a failure
of a payment or security services provider, including a Custodian such
as a payment or custody bank, securities depository or securities
settlement system.
    Other related changes are made in Parts 11, 12 and 16 of the Rules.
A change is made in Rule 1103(e) to allow the loss assets to be held
together with other clearing house contributions to the guaranty fund
(without affecting the limitations in the existing rules and Rule 919
on the use of such assets). (As a result of this change, each clearing
house contribution is no longer required to be held in a separate
account, although the three clearing house guaranty fund contributions
and the loss assets are required to be held separately from other
clearing house assets.) Conforming changes to definitions relating to
custodians are made in Rule 1201.
    New Rule 1606(b) is added to address certain matters relating to
the investment of customer collateral in the form of cash provided by
FCM/BD Clearing Members under applicable CFTC regulations. The revised
rule confirms that such cash can only be invested in U.S. treasury
securities in accordance with applicable law. The rule further provides
that FCM/BD Clearing Members must direct the clearing house whether to
so invest such cash or to leave it uninvested (and deems the clearing
member to have instructed the clearing house to invest such collateral
if it does not provide direction).
    ICE Clear Europe believes that the proposed rule changes are
consistent with the requirements of Section 17A of the Act \4\ and the
regulations thereunder applicable to it, including the standards under
Rule 17Ad-22.\5\ Section 17A(b)(3)(F) of the Act \6\ 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. Neither Section 17A of the Act \7\ nor
Rule 17Ad-22 \8\ specifically addresses non-default losses of the type
contemplated by the proposed rules. Nonetheless, ICE Clear Europe
believes that the proposed rule changes are consistent with the Act and
the regulations thereunder applicable to ICE Clear Europe, in
particular, Section 17(A)(b)(3)(F),\9\ because ICE Clear Europe
believes that the new rules will enhance the clearing house's ability
to bear such losses. This will in turn further the clearing house's
ability to continue operations if faced by investment or non-default
losses, which will facilitate prompt and accurate settlement of
securities transactions and, to the extent applicable, derivative

agreements, contracts and transactions and contribute to the
safeguarding of securities and funds which are in the custody or
control of ICE Clear Europe or for which it is responsible, as set
forth herein.
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    \4\ 15 U.S.C. 78q-1.
    \5\ 17 CFR 240.17Ad-22.
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
    \7\ 15 U.S.C. 78q-1.
    \8\ 17 CFR 240.17Ad-22.
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    ICE Clear Europe has developed the proposed rules to satisfy
paragraphs 29A and 29B under the UK's Financial Services and Markets
Act 2000 (Recognition Requirements for Investment Exchanges and
Clearing Houses) Regulations 2001, Schedule, as inserted by the
Financial Services and Markets Act 2000 (Over the Counter Derivatives,
Central Counterparties and Trade Repositories) (No. 2) Regulations
2013. Rules addressing allocation of investment and non-default losses
are also contemplated under the PFMIs. Consistent with these
requirements, the proposed rules are designed to allocate investment
losses (i.e., losses from a default under an investment) to the
clearing house and clearing members, while other non-default losses
(i.e., other losses not resulting from clearing member default) are
allocated only to the clearing house. The rules further limit the
liability of the clearing house for losses resulting from a failure of
a Custodian--losses that are outside of the control of the clearing
house but which could threaten the solvency of the clearing house. ICE
Clear Europe does not expect that these rules will affect the ordinary
course operation of the clearing house or its existing protections for
the securities and funds in its custody or control or for which it is
responsible. ICE Clear Europe believes that the proposed rule changes
will enhance the stability of ICE Clear Europe if it experiences
significant investment losses or non-default losses, by providing new
resources to cover such losses. The proposed rules will also provide
greater certainty for clearing members and the clearing house itself as
to the scope of resources that will be available to cover such losses
and the liability of the clearing house and clearing members for such
losses. Taken together, the amendments will thus promote the prompt and
accurate clearance and settlement of contracts cleared by ICE Clear
Europe, consistent with the requirements of Section 17A(b)(3)(F).\10\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The amendments also are consistent with the relevant requirements
of Rule 17Ad-22, and in particular the financial resources requirements
of Rule 17Ad-22(b)(2-3).\11\ ICE Clear Europe does not propose to
change the amount of financial resources (both pre-funded resources and
potential assessment resources) currently available to support its
clearing operations in any product category. The amendments would
provide an additional financial resource to address investment losses
and non-default losses. In addition, ICE Clear Europe believes that the
changes will enhance its ability to continue clearing operations
following an investment loss or non-default loss and provide it and
market participants with greater certainty as to the financial
resources that will be available to the clearing house following such
losses.
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    \11\ 17 CFR 240.17Ad-22(b)(2)-(3).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed rule changes would
have any material impact, or impose any material burden, on competition
not necessary or appropriate in furtherance of the purposes of the Act.
    The rule amendments will by definition impose additional potential
costs on clearing members in investment loss scenarios, as they may be
required to make collateral offset obligations, up to the defined
maximum amount. The limitation on liability for custodial losses may
also impose costs on clearing members. As discussed above, ICE believes
this approach is warranted in light of the need to allocate such losses
and implement recovery and wind-down plans as a result of such losses,
as required under applicable UK legislation. Moreover, ICE Clear Europe
does not believe these costs are likely to have a material impact on
the ordinary course operation of the clearing house, as they are
relevant only under extreme non-default loss scenarios where the
alternative could be clearinghouse failure or insolvency.
    In terms of access to the clearing house, ICE Clear Europe is not
proposing to change its standards for clearing membership or financial
requirements for clearing membership. As such, ICE Clear Europe does
not believe the changes will reduce access by clearing members to the
clearing house. While there will be additional potential costs for
clearing members, the limit on collateral offset obligations is
intended to provide clearing members with greater certainty as to the
extent of their financial obligations to the clearinghouse, and to
limit their maximum potential liability. As a result, the amendments
may make it easier for some market participants to become members, and
a failure to adopt the amendments could, in ICE Clear Europe's view,
dissuade some market participants from being members. As a result, ICE
Clear Europe does not believe the amendments will reduce clearing
member access to the clearing house. In addition, ICE Clear Europe does
not believe the proposed amendments are likely to adversely affect
competition among clearing members. The proposed rules will apply to
all clearing members in the same way. Enhanced certainty, and greater
stability of the clearing house in the event of non-default losses, may
also benefit the market for cleared derivatives generally, which in
turn may enhance competition.
    In terms of the impact on customers of clearing members, it is
possible that the added costs to clearing members of potential
collateral offset obligations, and the limitation on liability for
custodial losses, will result in higher costs for customers in some
circumstances. As with the costs on clearing members themselves, ICE
Clear Europe believes that the proposed rule changes are warranted in
light of the UK requirements to allocate investment and non-default
losses, and benefits of enhanced financial resources and stability for
the clearing house. In addition, ICE Clear Europe does not believe that
the potential additional costs will have a significant burden on
competition, as they apply to all clearing members equally.
    ICE Clear Europe also does not believe the rule amendments will
adversely affect the ability of market participants to continue to
clear transactions or otherwise limit market participants' choices for
clearing transactions. ICE Clear Europe expects that, in light of the
PFMIs and applicable regulatory requirements in the US and EU, other
clearing organizations will similarly need to develop procedures for
addressing non-default losses. The rule amendments are intended to
provide a stronger framework for the clearing house to deal with non-
default loss events and keep clearing services in operation despite
such losses. This should generally enhance the ability of market
participants to continue to clear derivative products, reduce systemic
effects on the cleared markets generally and reduce the risk of failure
of a clearinghouse (which would generally be expected to have an
adverse impact on competition). To the extent market participants have
greater certainty as to how investment and non-default losses would be
handled by the clearing house, they may have greater confidence in
clearing generally, which will also tend to enhance the stability and
strength of the market for cleared products, consistent with the goals
of the Act.
    For the foregoing reasons, the proposed rules are, in ICE Clear

Europe's view, appropriate in furtherance of the purposes of the Act
and other legal requirements applicable to ICE Clear Europe. The
clearing house does not believe that the proposed amendments will
impose any burden on competition not necessary or appropriate in
furtherance of the purpose of the Act.

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

    Comments relating to the rule changes were solicited from clearing
members by Circular No. C14/056 (May 2, 2014). ICE Clear Europe has
received comments from the Futures Industry Association and comments
provided on behalf of various clearing members. These comments raised
certain objections to the proposed rules, including that (i) allocation
of investment losses in respect of an FCM customer account is
inconsistent with CFTC Rule 1.29(b), (ii) allocation of investment
losses would create undue and potentially unlimited and unquantifiable
risk to clearing members, (iii) the proposed rules lack a formula for
determining the amount of loss assets provided by ICE Clear Europe, and
should require that ICE Clear Europe replenish the loss assets, (iv)
collateral offset obligations should not be netted against unrelated
payment obligations of ICE Clear Europe, (v) loss assets should not be
used for both investment losses and non-default losses, (vi) the loss
assets and ICE contributions to the guaranty funds should each be held
in a separate account, (vii) the manner of allocation of investment
losses attempts should be revised, including to allocate investment
losses between customer accounts and proprietary accounts, based on
product categories, and/or based on cash margin rather than total
margin.
    ICE Clear Europe has considered and disagrees with these comments.
Specifically, ICE Clear Europe believes that in light of the provisions
of proposed Rule 1606(b), the allocation of investment losses in
respect of the FCM customer account is consistent with the requirements
of CFTC Rule 1.29(b), and further that because of the cap on collateral
offset obligations in Rule 919(e), the liability for collateral offset
obligations is neither unlimited nor unquantifiable. ICE Clear Europe
does not believe a defined formula for loss assets is necessary. In ICE
Clear Europe's view, the proposed rule provides a significant
additional resource to cover investment losses and non-default losses
as compared to the current rules. For this reason, ICE Clear Europe
does not believe it is necessary to provide separate resources for non-
default losses and investment losses, or to have an obligation to
replenish such assets or otherwise provide even more resources. Netting
under Rule 919(f) would apply to obligations to return margin or
guaranty fund contributions, which are not unrelated to investment
losses, and in ICE Clear Europe's view is appropriate with a view to
reducing unnecessary payment flows. ICE Clear Europe further does not
believe it is necessary for loss assets and ICE Clear Europe guaranty
fund contributions to be held in separate accounts, given that such
amounts are kept separate from amounts provided by clearing members and
the limitations on the use of such amounts are unchanged. In light of
the limited scenarios in which the loss allocation rules of Rule 919
are expected to be used, and the fact that a loss may not be readily
allocable to any particular clearing member, customer or product
category, ICE Clear Europe does not believe it is desirable to attempt
to allocate losses between customer and proprietary accounts, or to
particular product categories. ICE Clear Europe further believes that
allocating based on overall initial margin and guaranty fund
contributions is an efficient and equitable means of allocating the
losses.
    ICE Clear Europe notes that certain comments also suggested that
ICE Clear Europe provide additional information and transparency
concerning its investment policies. ICE Clear Europe is continuing to
consider such changes, in consultation with clearing members, although
it does not believe such changes would affect the proposed rules.
    ICE Clear Europe will notify the Commission of any additional
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-2014-06 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-2014-06. 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 will also 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/notices/Notices.shtml?regulatoryFilings.
    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-2014-06
and should be submitted on or before June 27, 2014.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13152 Filed 6-5-14; 8:45 am]
BILLING CODE 8011-01-P