[Federal Register Volume 78, Number 45 (Thursday, March 7, 2013)]
[Notices]
[Pages 14866-14867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05283]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69017; File No. SR-CME-2013-01]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change Regarding an Increase of CME Corporate Contribution to
Interest Rate Swaps Financial Safeguards Package
March 1, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 1, 2013, 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 rules related to its business as a
derivatives clearing organization offering interest rate swap (``IRS'')
clearing services. More specifically, CME proposes to increase CME's
corporate contribution to the financial safeguards for IRS to
$150,000,000.
II. Self-Regulatory Organization's 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 statutory 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
Commodity Futures Trading Commission (``CFTC'') and currently offers
clearing services for IRS. With this filing, CME proposes to increase
CME's corporate contribution to the financial safeguards for IRS to
$150,000,000. CME proposes to implement such amendments on March 1,
2013.
CME periodically assesses the structure of its financial safeguards
packages. In assessing the financial safeguards available for IRS
products, CME determined that an increase to the CME corporate
contribution is appropriate. An amendment to CME Rule 8G802.B.1 is
proposed which would reflect the increase in such contribution and an
amendment to Rule 8G802.H is proposed which would reflect a conforming
change to the CME contribution during an IRS Cooling Off Period.
CME notes that it has also submitted the proposed rule change that
is the subject of this filing to its primary regulator, the CFTC, in
CME Submission 13-045.
CME believes the proposed rule change is consistent with the
requirements of the Act, including Section 17A of the Act. The proposed
rule change involves improvements to CME's IRS product offering for
investors because it increases the amount of financial resources
available to support the default of an IRS Clearing member at CME and
as such is designed to promote the prompt and accurate clearance and
settlement of securities transactions and derivatives agreements,
contracts and transactions, to assure the safeguarding of securities
and funds which are in the custody or control of the clearing agency
and, in general, help to protect investors and the public interest.
Furthermore, the proposed rule change is limited to the clearing of IRS
(that is, swaps) and thus relate solely to the CME's swaps clearing
activities pursuant to its registration as a derivatives clearing
organization under the Commodity Exchange Act (``CEA'') and do 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
Exchange Act, such as promoting market transparency for over-the-
counter derivatives markets, promoting the prompt and accurate
clearance of transactions and protecting investors and the public
interest.
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-2013-01 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-2013-01. 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
[[Page 14867]]
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-2013-01
and should be submitted on or before March 28, 2013.
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,\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,\5\ which requires, among other things, that
the rules of a clearing agency be designed to assure the safeguarding
of securities and funds which are in the custody or control of the
clearing agency or for which it is responsible and to protect investors
and the public interest, because the proposed rule change would allow
CME to enhance the financial safeguards package that applies to its IRS
clearing business.
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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 the
proposed rule change on an accelerated basis for good cause shown. 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 of filing in the Federal
Register because (i) the proposed rule changes relate solely to IRS 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; and (ii) the proposed rules change would increase
the amount of financial resources available to support the default of
an IRS Clearing member at CME and therefore will protect investors and
the public interest.
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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,\7\ that the proposed rule change (SR-CME-2013-01) be, and hereby
is, approved on an accelerated basis.
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\7\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-05283 Filed 3-6-13; 8:45 am]
BILLING CODE 8011-01-P