[Federal Register Volume 78, Number 67 (Monday, April 8, 2013)]
[Notices]
[Pages 21000-21002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-08107]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69266; File No. SR-CME-2013-03]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Make Clarifying Amendments to CME Rule 980
April 2, 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 18, 2013, Chicago Mercantile Exchange Inc. (``CME'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change described in Items I, II and
III below, which items have been prepared primarily by CME. CME filed
the proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\
and Rule 19b-4(f)(1) \4\ thereunder so that the proposal was effective
upon filing with the Commission. The Commission is publishing this
Notice to solicit comments on the rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of Terms of Substance of
the Proposed Rule Change
CME proposes to make certain clarifying revisions to existing CME
Rule 980 relating to clearing member records and reports. CME also
certified the proposed changes that are the subject of this filing to
the Commodity Futures Trading Commission (``CFTC'') in CME Submission
13-073. CME intends to implement the proposed changes on March 21,
2013. The text of the rule change is as follows, with additions in
italics and deletions in brackets.
* * * * *
Rule 100--Rule 979--No Change
* * * * *
CME RULE 980. REQUIRED RECORDS AND REPORTS
A. Each clearing member shall prepare, maintain and keep current those
books and records required by the rules of the Exchange, the Commodity
Exchange Act and the Regulations thereunder. Such books and records
shall be open to inspection and
[[Page 21001]]
promptly provided to the Exchange upon request.
B. Each clearing member shall maintain an adequate accounting system,
internal accounting controls, and procedures for safeguarding customer
and firm assets [as set forth in CFTC Regulation 1.16(d)(2)]. This
includes, but is not limited to, the following:
1. Preparation and maintenance of complete and accurate
reconciliations for all accounts; [and]
2. Resolution of reconciling items in a timely manner; and
3. Prevention of a material inadequacy as defined in CFTC
Regulation 1.16(d)(2).
C. A clearing member must file any information requested by the
Exchange within the time period specified in the request.
D. Each clearing member shall maintain at all times the ability to
provide to the Exchange in an acceptable form a complete set of equity
system reports (including, at a minimum, the equity run, open position
listing, day trade listing, cash adjustments listing and performance
bond call and debit equity listing). Such reports shall be available to
the Exchange in Chicago no later than 8:00 a.m. Chicago time on the
business day following the report date.
E. Each clearing member shall maintain at all times the ability to
provide to the Exchange a listing of each customer's method of access
to CME markets, including front end applications and network
connections.
* * * * *
Rule 981--End--No Change
* * * * *
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 of and basis for the proposed rule change and
discussed any comments it received on the 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.\5\
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\5\ The Commission has modified the text of the summaries
prepared by CME.
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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
CFTC and operates a substantial business clearing futures and swaps
contracts subject to the jurisdiction of the CFTC. CME proposes to make
certain clarifying amendments to CME Rule 980 relating to clearing
member records and reports. Current CME Rule 980.B requires each CME
clearing member to maintain adequate books and records in accordance
CFTC Regulation 1.16(d)(2). The Rule further identifies specific
requirements in sub-clauses 980.B.1 (preparation and maintenance of
complete and accurate reconciliations for all accounts) and 980.B.2
(resolution of reconciling items in a timely manner) which are
requirements of CME. In order to clarify the requirements of CME Rule
980, CME is proposing to amend CME Rule 980.B to provide for a separate
clause requiring compliance with CFTC Regulation 1.16(d)(2) as a new
sub-clause 980.B.3. As such, the change constitutes a stated policy,
practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule. The rule change is
therefore properly filed under Section 19(b)(3)(A) of the Act and Rule
19b-4(f)(1) thereunder.
CME believes that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder and,
in particular, Section 17A(b)(3)(F) of the Act, which requires, among
other things, that the rules of a clearing agency be designed to
protect investors and the public interest. The proposed rule change is
designed to clarify clearing members' obligations under CME Rule 980
with respect to maintaining an adequate accounting system, internal
accounting controls, and procedures for safeguarding customer and firm
assets. Specifically, the proposed rule change clarifies that these
obligations include the preparation and maintenance of complete and
accurate reconciliations for all accounts, the resolution of
reconciling items in a timely manner, and prevention of a material
inadequacy as defined in CFTC Regulation 1.16(d)(2). This rule change
is being made to enhance CME's efforts to protect investors who utilize
its clearinghouse services through its clearing members.
B. Self-Regulatory Organization's Statement on Burden on Competition
CME does not believe that the 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 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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) \6\ of the Act and Rule 19b-4(f)(1) \7\ thereunder because
it constitutes a stated policy, practice, or interpretation with
respect to the meaning, administration, or enforcement of an existing
rule. At any time within 60 days of the filing of the 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.\8\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(1).
\8\ 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the 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 No. SR-CME-2013-03 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-2013-03. This file
number should be included on the subject line if email is used. To help
the
[[Page 21002]]
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. 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-2013-03
and should be submitted on or before April 29, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-08107 Filed 4-5-13; 8:45 am]
BILLING CODE 8011-01-P