[Federal Register Volume 77, Number 194 (Friday, October 5, 2012)]
[Notices]
[Pages 61044-61045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-24574]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67953; File No. SR-CME-2012-38]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change To Comply With Revisions to CFTC Regulations Governing
Derivatives Clearing Organizations
October 1, 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 September 21, 2012, 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 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 the Terms of Substance
of the Proposed Rule Change
CME proposes to amend certain of its rules to comply with pending
revisions to Commodity Futures Trading Commission (``CFTC'')
Regulations governing derivatives clearing organizations (``DCOs'').
The text of the proposed rule changes is available at the CME's Web
site at http://www.cmegroup.com, at the principal office of CME, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organizations Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CME 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 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 the Purpose of, and
Statutory Basis for, the Proposed Rule Change
CME is registered as a derivatives clearing organization with the
CFTC and operates a substantial business clearing futures and swaps
contracts subject to the jurisdiction of the CFTC. CME proposes to
amend certain of its rules to comply with pending changes to CFTC
Regulations that require DCOs to make corresponding rule changes. The
changes that are the subject of this filing are required by the CFTC to
become effective on October 1, 2012.
CFTC Regulation 39.12(b)(7) (Time Frame for Clearing), which
becomes effective on October 1, requires each DCO to have rules
providing that the DCO: (1) ``will accept or reject for clearing as
quickly after execution as would be technologically practicable if
fully automated systems were used, all contracts'' listed for clearing
and executed competitively on or subject to the rules of a designated
contract market (``DCM'') or a swap execution facility (``SEF''); and
(2) ``will accept or reject for clearing as quickly after submission to
the [DCO] as would be technologically practicable if fully automated
systems were used, all swaps'' listed for clearing that are not
executed on or subject to the rules of a DCM or a SEF or executed
noncompetitively on or subject to the
[[Page 61045]]
rules of a DCM or a SEF. In order to comply with CFTC Regulation
39.12(b)(7), CME proposes to amend CME Rules 8F005, 8G005 and 8H005.
CME will also make relevant changes to the corresponding CME Clearing
Manuals of Operations to account for the proposed rule changes.
CME also made a separate filing, CME Submission 12-280, with its
primary regulator, the CFTC, with respect to the proposed rule changes.
CME believes the proposed changes are consistent with the
requirements of the Exchange Act. CME, a derivatives clearing
organization, is required to implement the proposed changes to comply
with recent changes to CFTC regulations. CME notes that the policies of
the Commodity Exchange Act (``CEA'') with respect to clearing are
comparable to a number of the policies underlying the Exchange Act,
such as promoting market transparency for derivatives markets,
promoting the prompt and accurate clearance of transactions and
protecting investors and the public interest. CME believes the
mandatory CFTC changes are specifically designed to facilitate the
prompt and efficient processing of all contracts, agreements, and
transactions submitted for clearing and will therefore help protect
investors and safeguard customer funds.
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
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml ); or
Send an email to [email protected]. Please include
File Number SR-CME-2012-38 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-CME-2012-38. 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 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-2012-38
and should be submitted on or before October 26, 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 the
requirements of Section 17A of the Act, and the rules and regulations
thereunder applicable to CME.\4\ 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
registered 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.\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 on an accelerated basis for good cause shown. CME
cites as the reason for this request CME's operation as a DCO, which is
subject to regulation by the CFTC under the CEA, and that the proposed
rule changes are required to comply with new CFTC regulations that
become effective on October 1, 2012.
The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\6\ for approving the proposed rule change prior to the 30th
day after the date of publication of notice in the Federal Register
because, as a registered DCO, CME must amend certain of its rules to
comply with CFTC Regulation 39.12(b)(7), which becomes effective on
October 1, 2012.
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\6\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-CME-2012-38) be, and hereby is,
approved on an accelerated basis.
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\7\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24574 Filed 10-4-12; 8:45 am]
BILLING CODE 8011-01-P