[Federal Register Volume 77, Number 210 (Tuesday, October 30, 2012)]
[Notices]
[Pages 65730-65731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26560]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68093; File No. SR-CME-2012-42]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing of Proposed Rule Change Regarding the Valuation of
Securities on Deposit
October 24, 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 October 10, 2012, Chicago Mercantile Exchange Inc. (``CME'') 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 primarily by CME. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CME is proposing to make certain changes to the way CME values
securities on deposit. The text of the proposed changes is available on
the CME's Web site at http://www.cmegroup.com, at the principal office
of CME, and at the Commission's Public Reference Room.
[[Page 65731]]
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 IV below. CME has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.\3\
---------------------------------------------------------------------------
\3\ The Commission has modified the text of the summaries
prepared by CME.
---------------------------------------------------------------------------
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
CME is proposing to issue an Advisory Notice that announces certain
changes to the way CME will value securities on deposit. Under the
proposed changes, CME will begin using the current market value, plus
accrued interest, to value securities on deposit. CME currently
excludes accrued interest from the value of securities on deposit.
Therefore, with this adjustment, accrued interest will now be included
in the market value of the security. The purpose of the adjustment is
to harmonize valuations with existing industry conventions. CME intends
to implement these changes beginning on December 3, 2012, subject to
securing required regulatory approvals.
The proposed changes that will take effect are described in the CME
Advisory Notice, available on the CME's Web site at http://www.cmegroup.com, at the principal office of CME, and at the
Commission's Public Reference Room; additions are underlined and
deletions are bracketed. CME will also make a filing with its primary
regulator, the CFTC, with respect to the proposed changes.
CME believes the proposed changes are consistent with the
requirements of the Exchange Act. The proposed rules are designed to
promote the prompt and accurate clearance and settlement of derivative
agreements, contracts, and transactions, and to assure the safeguarding
of securities and funds which are in the custody or control of the
clearing agency. These changes would use the current market value, plus
accrued interest, for securities on deposit at CME, which will better
align CME's practices with the marketplace and expectations of its
participants. The changes will therefore enhance CME's ability to
manage the risks associated with discharging its responsibilities as a
derivatives clearing organization and clearing agency. Because these
changes will enhance CME's ability to manage its risks they are also
designed to protect investors and the public interest and will help
further safeguard customer funds held at the FCM level.
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. 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 protected]. Please include
File Number SR-CME-2012-42 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-2012-42. 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 such filing also will be available
for inspection and copying at the principal office of CME and on the
CME's Web site at http://www.cmegroup.com.
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-2012-42
and should be submitted on or before November 20, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\4\
---------------------------------------------------------------------------
\4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-26560 Filed 10-29-12; 8:45 am]
BILLING CODE 8011-01-P