[Federal Register Volume 79, Number 3 (Monday, January 6, 2014)]
[Notices]
[Pages 688-690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-31518]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71201; File No. SR-CME-2013-35]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding Modifications to Its OTC FX Fee Schedule
December 30, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on December 23, 2013, Chicago Mercantile Exchange
Inc. (``CME'') 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 proposal pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rules
19b-4(f)(2) and 19b-4(f)(4)(ii) \4\ thereunder 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)(2) and 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 proposes to extend the terms of a current OTC FX fee waiver
program. The text of the proposed rule change is below. Italicized text
indicates additions; bracketed text indicates deletions.
* * * * *
CME OTC FX Fee Waiver Program
Program Purpose
The purpose of this Program is to incentivize market
participants to submit transaction in the OTC FX products listed
below to the Clearing House for clearing. The resulting increase in
volume benefits all participant segments in the market.
Product Scope
The following cleared only OTC FX products (``Products''):
1. CME Cleared OTC FX--Emerging Markets
a. USDBRL, USDCLP, USDCNY, USDCOP, USDIDR, USDINR, USDKRW,
USDMYR, USDPEN, USDPHP, USDRUB, USDTWD Non-Deliverable Forwards.
b. USDCZK, USDHUF, USDHKD, USDILS, USDMXN, USDPLN, USDSGD,
USDTHB, USDTRY, USDZAR Cash-Settled Forwards.
2. CME Cleared OTC FX--Majors
a. AUDJPY, AUDUSD, CADJPY, EURAUD, EURCHF, EURGBP, EURJPY,
EURUSD, GBPUSD, NZDUSD, USDCAD, USDCHF, USDDKK, USDJPY, USDNOK,
USDSEK Cash-Settled Forwards.
Eligible Participants
The temporary reduction in fees will be open to all market
participants and will automatically be applied to any transaction in
the Products submitted to the Clearing House for clearing.
Program Term
Start date is February 1, 2012. End date is [December 31, 2013]
June 30, 2014.
Hours
The Program will be applicable regardless of the transaction
time.
Program Incentives
Fee Waivers. All market participants that submit transactions in
the Products to the
[[Page 689]]
Clearing House will have their clearing fees waived.
* * * * *
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 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.
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 and currently offers clearing
services for many different futures and swaps products. With this
filing, CME proposes to modify the fees that apply to certain OTC FX
cleared-only products cleared at CME. More specifically, the proposed
changes would extend the existing CME fee waiver program supporting OTC
FX products through June 30, 2014. The fee waiver program applies to
all market participants and the fee waivers automatically apply to any
transaction in the covered products submitted to CME for clearing. The
current program by its terms is set to expire on December 31, 2013. All
other terms of the fee waiver program would remain unchanged. Although
the changes would become effective on filing, CME plans to
operationalize the proposed fee changes on January 2, 2014.
The changes that are described in this filing impact fees for OTC
FX products; these proposed fee changes are therefore limited to CME's
business as a derivatives clearing organization clearing products under
the exclusive jurisdiction of the Commodity Futures Trading Commission
(``CFTC'') and do not materially impact CME's security-based swap
clearing business in any way. CME notes that it has already submitted
the proposed rule changes that are the subject of this filing to its
primary regulator, the CFTC, in CME Submission 13-455R.
CME believes the proposed rule changes are consistent with the
requirements of the Exchange Act including Section 17A of the Exchange
Act.\5\ More specifically, the proposed rule changes establish or
change a member due, fee or other charge imposed by CME under Section
19(b)(3)(A)(ii) \6\ of the Securities Exchange Act of 1934 and Rule
19b-4(f)(2) \7\ thereunder. CME believes that the proposed fee change
is consistent with the requirements of the Securities Exchange Act of
1934 and the rules and regulations thereunder and, in particular, to
17A(b)(3)(D),\8\ because the proposed fee changes apply equally to all
market participants clearing covered products and therefore the
proposed changes provide for the equitable allocation of reasonable
dues, fees and other charges among participants. CME also notes that it
operates in a highly competitive market in which market participants
can readily direct business to competing venues.
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\5\ 15 U.S.C. 78q-1.
\6\ 15 U.S.C. 78s(b)(3)(A)(ii).
\7\ 17 CFR 240.19b-4(f)(2).
\8\ 15 U.S.C. 78q-1(b)(3)(D).
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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 derivatives
clearing organization. These products are under the exclusive
jurisdiction of the CFTC.\9\ As such, the proposed CME changes are
limited to CME's activities as a derivatives clearing organization
clearing swaps that are not security-based swaps. CME believes the
proposed changes will promote increased centralized clearing of swaps
products and should therefore be seen to be 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.\10\
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\9\ 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.
\10\ 15 U.S.C. 78q-1(b)(3)(F).
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Because the proposed changes are limited in their effect to swaps
products offered under CME's authority to act as a derivatives clearing
organization, the proposed changes are also 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 also consistent with the requirements of
Section 17A of the Exchange Act \11\ and are properly filed under
Section 19(b)(3)(A) \12\ and Rule 19b-4(f)(4)(ii) \13\ thereunder.
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\11\ 15 U.S.C. 78q-1.
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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
extend a current CME OTC FX fee waiver and as such do not affect the
security-based swap clearing activities of CME in any way and therefore
do not impose any burden on competition that is inappropriate in
furtherance of the purposes of the Act.
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) \14\ of the Act and paragraphs (f)(2) and
(f)(4)(ii) of Rule 19b-4 \15\ 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.\16\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(2) and 17 CFR 240.19b-4(f)(4)(ii).
\16\ 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 proposed rule
[[Page 690]]
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-2013-35 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-2013-35. 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-2013-35
and should be submitted on or before January 27, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-31518 Filed 1-3-14; 8:45 am]
BILLING CODE 8011-01-P