[Federal Register Volume 77, Number 74 (Tuesday, April 17, 2012)]
[Notices]
[Pages 22825-22827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9143]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66786; File No. SR-CME-2012-10]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change Regarding Acceptance of Additional Interest Rate Swaps and
Related Interbank Rates for Clearing
April 11, 2012.
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 March 30, 2012, the Chicago Mercantile Exchange Inc. (``CME'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change described in Items I and II below, which items
have been prepared primarily by CME. The Commission is publishing this
Notice and Order to solicit comments on the proposed rule change from
interested persons and to approve the proposed rule change on an
accelerated basis.
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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 Terms of Substance of
the Proposed Rule Change
CME proposes to amend its rules related to its business as a
derivatives clearing organization offering interest rate swap (``IRS'')
clearing services. More specifically, the proposed rule changes would
facilitate the acceptance of Japanese Yen (``JPY''), Swiss Franc
(``ZHF''), and Australian Dollar (``AUD'')
[[Page 22826]]
denominated interest rate swaps and related interbank rates for
clearing. The proposed rule change also contains the corresponding fee
changes. The text of the proposed rule change is available at CME's Web
site at http://www.cmegroup.com/market-regulation/rule-filings.html.
II. Self-Regulatory Organization's Statement of Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CME included statements
concerning the purpose 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 III below. CME 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 Purpose of, and
Statutory Basis for, the Proposed Rule Change
CME is registered as a derivatives clearing organization with the
Commodity Futures Trading Commission and currently offers clearing
services for IRS. The changes that are the subject of this filing are
proposed rules that would facilitate CME's acceptance of JPY, ZHF, and
AUD IRS and related interbank rates for clearing beginning April 16,
2012.
The proposed changes would be made to current CME Rule 90102.E. The
proposed changes would simply add the following line items: AUD-BBR-
BBSW; AUD-LIBOR-BBA; and AUD-AONIA-OIS-COMP.
In connection with the acceptance of such swaps, CME is also
amending its fee schedules for OTC IRS to reflect the fees for JPY, ZHF
and AUD denominated IRS. The proposed rule change features a new fee
schedule that would be applicable to IRS Clearing Members clearing OTC
IRS transactions and, separately, a new fee schedule that would be
applicable to customers of IRS Clearing Members clearing OTC IRS
transactions.
In addition, CME also proposes to make corresponding changes to its
Manual of Operations for CME Cleared Interest Rate Swaps (``IRS
Manual''). These changes would update the IRS Manual to reflect the new
denominations and rate options and certain other associated operational
changes.
CME believes the proposed rule change is consistent with the
requirements of the Act and particularly with Section 17A of the Act
because it involves clearing of swaps and futures contracts and thus
relate solely to CME's swaps and futures clearing activities pursuant
to its registration as a derivatives clearing organization under the
Commodity Exchange Act (``CEA'') and does not significantly affect any
securities clearing operations of the clearing agency or any related
rights or obligations of the clearing agency or persons using such
service. CME further notes that the policies of the CEA with respect to
clearing are comparable to a number of the policies underlying the Act,
such as promoting market transparency for over-the-counter derivatives
and futures markets, promoting the prompt and accurate clearance of
transactions, and protecting investors and the public interest. The
proposed rule changes accomplish those objectives by offering investors
clearing for an expanded range of IRS products at CME.
B. Self-Regulatory Organization's Statement on Burden on Competition
CME does not believe that the proposed rule change will have any
impact or impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
CME has not solicited and does not intend to solicit comments
regarding this proposed rule change. CME has not received any
unsolicited written comments from interested parties.
III. 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 may be submitted by using the
Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml), or send an email to [email protected]. Please include
File No. SR-CME-2012-10 on the subject line.
Paper comments should be sent 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-CME-2012-10. 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 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of CME and on CME's Web site at http://www.cmegroup.com/market-regulation/rule-filings.html. 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-CME-2012-10 and should be
submitted on or before May 8, 2012.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
Section 19(b) of the Act \3\ directs the Commission to approve a
proposed rule change of a self-regulatory organization if it finds that
such proposed rule change is consistent with the requirements of the
Act and the rules and regulations thereunder applicable to such
organization. The Commission finds that the proposed rule change is
consistent with the requirements of the Act, in particular with the
requirements of Section 17A of the Act,\4\ and the rules and
regulations thereunder applicable to CME. Specifically, the Commission
finds that the proposed rule change is consistent with Section
17A(b)(3)(F) of the Act, which requires, among other things, that the
rules of a clearing agency be designed to promote the prompt and
accurate clearance and settlement of derivative agreements, contracts,
and transactions because it will allow CME to offer its services in
clearing IRS products to a broader category of IRS products and thereby
should promote the prompt and
[[Page 22827]]
accurate clearance and settlement of derivative agreements, contracts,
and transactions.\5\
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\3\ 15 U.S.C. 78s(b).
\4\ 15 U.S.C. 78q-1. In approving this proposed rule change, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78q-1(b)(3)(F).
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In its filing, CME requested that the Commission approve this
proposed rule change prior to the thirtieth day after the date of
publication of the notice of the filing. CME has articulated three
reasons for so granting approval. One, the products covered by this
filing and CME's operations as a derivatives clearing organization for
such products are regulated by the CFTC under the CEA. Two, the
proposed rule change relates solely to IRS products and therefore
relate solely to CME's swaps clearing activities and do not
significantly relate to CME's functions as a clearing agency for
security-based swaps. Three, not approving this request on an
accelerated basis will have a significant impact on the swap clearing
business of CME as a designated clearing organization.
The Commission finds good cause for granting approval of the
proposed rule change prior to the thirtieth day after publication of
the notice of its filing because: (i) The proposed rule change does not
significantly affect any securities clearing operations of the clearing
agency (whether in existence or contemplated by its rules) or any
related rights or obligations of the clearing agency or persons using
such service; (ii) the clearing agency has indicated that not providing
accelerated approval would have a significant impact on its IRS
clearing business as a designated clearing organization; and (iii) the
activity relating to the non-security clearing operations of the
clearing agency for which the clearing agency is seeking approval is
subject to regulation by another federal regulator.
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-CME-2012-10) is approved on an
accelerated basis.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9143 Filed 4-16-12; 8:45 am]
BILLING CODE 8011-01-P