[Federal Register Volume 78, Number 192 (Thursday, October 3, 2013)]
[Notices]
[Pages 61420-61422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24243]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70559; File No. SR-CME-2013-20]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding Its Acceptance of a New Series of Credit Default Swap Index
Products
September 30, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on September 18, 2013, Chicago Mercantile Exchange
Inc. (``CME'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change described in
[[Page 61421]]
Items I, II and III below, which Items have been prepared primarily by
CME. CME filed the proposal pursuant to Section 19(b)(3)(A) of the
Act,\3\ and Rule 19b-4(f)(4)(ii) thereunder,\4\ so that the proposal
was effective upon filing with the Commission. The Commission is
publishing this notice to solicit comments on the proposed 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)(4)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CME is filing proposed rules changes that are limited to its
business as a derivatives clearing organization (``DCO''). More
specifically, the proposed rule changes involve CME's acceptance of a
new credit default swap index product series.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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 IV below. The self-regulatory organization 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 DCO with the Commodity Futures Trading
Commission (``CFTC'') and currently offers clearing services for many
different futures and swaps products. CME currently offers clearing
services for certain credit default swap index products. Currently, CME
offers clearing of the Markit CDX North American Investment Grade Index
Series 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 and 20 and also offers
clearing of the Markit CDX North American High Yield Index Series 11,
12, 13, 14, 15, 16, 17, 18, 19 and 20.
The proposed rule changes would expand CME's Markit CDX North
American Investment Grade (``CDX IG'') Index and Markit CDX North
American High Yield (``CDX HY'') Index product offerings by
incorporating the upcoming Series 21 for both sets of index products.
Although these changes will be effective on filing, CME plans to
operationalize the proposed changes as follows: CDX IG 21will become
available for clearing on September 20, 2013 and CDX HY 21 will become
available for clearing on September 27, 2013.
The changes that are described in this filing are limited to CME's
business as a DCO clearing products under the exclusive jurisdiction of
the CFTC and do not materially impact CME's security-based swap
clearing business in any way. CME notes that it has also certified the
proposed rule changes that are the subject of this filing to its
primary regulator, the Commodity Futures Trading Commission, in a
separate filing.
CME believes the proposed rule changes are consistent with the
requirements of the Exchange Act including Section 17A of the Exchange
Act.\5\ The proposed rule changes would expand CME's CDX IG and CDX HY
product offerings by incorporating the upcoming Series 21 for both sets
of index products and would therefore provide investors with an
expanded range of derivatives products for clearing. As such, the
proposed changes are designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivatives agreements, contracts, and transactions, 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, in general, to protect investors and the public
interest consistent with Section 17A(b)(3)(F) of the Exchange Act.\6\
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\5\ 15 U.S.C. 78q-1.
\6\ 15 U.S.C. 78q-1(b)(3)(F).
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Furthermore, the proposed changes are limited in their effect to
swaps products offered under CME's authority to act as a DCO. These
products are under the exclusive jurisdiction of the CFTC. As such, the
proposed CME changes are limited to CME's activities as a DCO clearing
swaps that are not security-based swaps; CME notes that the policies of
the CFTC with respect to administering the Commodity Exchange Act 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.
Because the proposed changes are limited in their effect to swaps
products offered under CME's authority to act as a DCO, the proposed
changes are properly classified as effecting a change in an existing
service of CME that:
(a) Primarily affects the clearing operations of CME with respect
to products that are not securities, including futures that are not
security futures, and swaps that are not security-based swaps or mixed
swaps; and
(b) Does not significantly affect any securities clearing
operations of CME or any rights or obligations of CME with respect to
securities clearing or persons using such securities-clearing service.
As such, the changes are therefore consistent with the requirements of
Section 17A of the Exchange Act \7\ and are properly filed under
Section 19(b)(3)(A) \8\ and Rule 19b-4(f)(4)(ii) \9\ thereunder.
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\7\ 15 U.S.C. 78q-1.
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(4)(ii).
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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. The rule changes simply
facilitate the offering of two new series of credit default swap index
products.
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
The foregoing rule change has become effective upon filing pursuant
to Section 19(b)(3)(A) \10\ of the Act and paragraph (f)(4)(ii) of Rule
19b-4 \11\ thereunder. At any time within 60 days of the filing of the
proposed 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.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(4)(ii).
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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 proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 61422]]
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-2013-20 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-2013-20. 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 or
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-2013-20
and should be submitted on or before October 24, 2013.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24243 Filed 10-2-13; 8:45 am]
BILLING CODE 8011-01-P