[Federal Register Volume 79, Number 195 (Wednesday, October 8, 2014)]
[Notices]
[Pages 60879-60881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23980]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73287; File No. SR-CME-2014-39]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Make Amendments to CME ClearPort Hours for Certain Commodity Index
Cleared OTC Swap Contracts
October 2, 2014.
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 September 25, 2014, 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. CME filed the proposal
pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 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)(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. CME proposes to amend
the current CME ClearPort hours for certain enumerated commodity index
cleared swap contracts. The proposed changes are as follows:
------------------------------------------------------------------------
Cleared OTC Swap Rulebook
Clearing code product DCM chapter
------------------------------------------------------------------------
CAW......................... AUD Chicago Soft Red CBT 14G
Winter Swap
(Cleared Only).
CCS......................... Corn Calendar Swap CBT 10C
(Clearing Only).
CPC......................... USD Malaysian Crude CME 204A
Palm Oil Calendar
Swap (Cleared Only).
[[Page 60880]]
DFL......................... DAP FOB NOLA Swaps CBT 48
(Clearing Only).
DFT......................... DAP FOB Tampa Swaps CBT 47
(Clearing Only).
DG2......................... Bloomberg Commodity CBT 29B
Index 2-Month
Forward Swaps
(Cleared OTC).
DG3......................... Bloomberg Commodity CBT 29C
Index 3-Month
Forward Swaps
(Cleared OTC).
DGS......................... Bloomberg Commodity CBT 29A
Index Swaps
(Cleared OTC).
KAW......................... AUD KC Hard Red CBT 14J
Winter Wheat Swap
(Cleared Only).
KWS......................... KC HRW Wheat CBT 14M
Calendar Spread
Options.
RRE......................... S&P GSCI Enhanced ER CME 415B
Index Swaps
(Cleared OTC).
SE2......................... S&P GSCI ER Index 2 CME 415E
Month Forward Swaps
(Cleared OTC).
SE3......................... S&P GSCI-ER Index 3 CME 415F
Month Forward Swaps
(Cleared OTC).
SES......................... S&P GSCI ER swap.... CME 415A
SNS......................... Soybean Calendar CBT 11D
Swaps (Clearing
Only).
UFG......................... Urea (Granular) FOB CBT 50
Egypt Swaps
(Clearing Only).
UFN......................... Urea (Granular) FOB CBT 45
US Gulf Coast Swaps
(Clearing Only).
UFU......................... UAN FOB NOLA Swaps CBT 46
(Clearing Only).
UFZ......................... Urea (Prilled) FOB CBT 49
Yuzhny Swaps
(Clearing Only).
WCS......................... Wheat Calendar Swaps CBT 14C
(Clearing Only).
------------------------------------------------------------------------
The current hours for submission to clearing via CME ClearPort for
the above-referenced contracts are 5:00 p.m. CT to 4:15 p.m. CT next
day, Sunday-Friday. The new hours for the above-referenced contracts
will be 6:00 p.m. CT to 5:45 p.m. CT next day, Sunday-Friday.
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 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 these 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 and offers clearing services for many different futures and
swaps products. The proposed rule change that is the subject of this
filing is limited to CME's business as a DCO offering clearing services
for CFTC-regulated swaps products. The proposed rule change would amend
the CME ClearPort hours for commodity index cleared swap contracts. CME
ClearPort provides functionality for the acceptance of contracts for
clearing. The affected contracts are listed below:
------------------------------------------------------------------------
Cleared OTC Swap Rulebook
Clearing code product DCM chapter
------------------------------------------------------------------------
CAW......................... AUD Chicago Soft Red CBT 14G
Winter Swap
(Cleared Only).
CCS......................... Corn Calendar Swap CBT 10C
(Clearing Only).
CPC......................... USD Malaysian Crude CME 204A
Palm Oil Calendar
Swap (Cleared Only).
DFL......................... DAP FOB NOLA Swaps CBT 48
(Clearing Only).
DFT......................... DAP FOB Tampa Swaps CBT 47
(Clearing Only).
DG2......................... Bloomberg Commodity CBT 29B
Index 2-Month
Forward Swaps
(Cleared OTC).
DG3......................... Bloomberg Commodity CBT 29C
Index 3-Month
Forward Swaps
(Cleared OTC).
DGS......................... Bloomberg Commodity CBT 29A
Index Swaps
(Cleared OTC).
KAW......................... AUD KC Hard Red CBT 14J
Winter Wheat Swap
(Cleared Only).
KWS......................... KC HRW Wheat CBT 14M
Calendar Spread
Options.
RRE......................... S&P GSCI Enhanced ER CME 415B
Index Swaps
(Cleared OTC).
SE2......................... S&P GSCI ER Index 2 CME 415E
Month Forward Swaps
(Cleared OTC).
SE3......................... S&P GSCI-ER Index 3 CME 415F
Month Forward Swaps
(Cleared OTC).
SES......................... S&P GSCI ER swap.... CME 415A
SNS......................... Soybean Calendar CBT 11D
Swaps (Clearing
Only).
UFG......................... Urea (Granular) FOB CBT 50
Egypt Swaps
(Clearing Only).
UFN......................... Urea (Granular) FOB CBT 45
US Gulf Coast Swaps
(Clearing Only).
UFU......................... UAN FOB NOLA Swaps CBT 46
(Clearing Only).
UFZ......................... Urea (Prilled) FOB CBT 49
Yuzhny Swaps
(Clearing Only).
WCS......................... Wheat Calendar Swaps CBT 14C
(Clearing Only).
------------------------------------------------------------------------
The current hours for submission to clearing via CME ClearPort for
these contracts are 5:00 p.m. CT to 4:15 p.m. CT next day, Sunday-
Friday. Under the proposed rule change, the new hours for the affected
contracts would be 6:00 p.m. CT to 5:45 p.m. CT next day, Sunday-
Friday. The proposed change in hours will shorten the period in which
daily trade submission is halted from 45 minutes to 15 minutes. The
proposed new hours will be made known to the trading community in
advance of the effective date via a Special Executive Report and will
be posted in the trading specifications for the contracts on the CME
Web site.
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
[[Page 60881]]
any way. The proposed changes would become effective immediately but
would be operationalized on October 6, 2014. CME notes that it has also
certified the proposed rule change that is the subject of this filing
to its primary regulator, the Commodity Futures Trading Commission
(``CFTC''), in a separate filing, CME Submission No. 14-382.
CME believes the proposed rule change is consistent with the
requirements of the Exchange Act including Section 17A of the Exchange
Act.\5\ CME is proposing revised hours for acceptance of cleared swap
contracts; the proposed changes would have the effect of shortening the
period in which daily trade submission is halted from 45 minutes to 15
minutes and, as such, should 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.\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
products offered under CME's authority to act as a DCO. The products
that are the subject of this filing 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, futures that are not security futures and forwards that are not
security forwards. 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
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, swaps that are not security-based swaps or mixed
swaps; and forwards that are not security forwards; 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 amendments would
adopt new CME ClearPort hours for twenty commodity index cleared swap
contracts. Further, the changes are limited to CME's derivatives
clearing business and, as such, do not affect the security-based swap
clearing activities of CME in any way and therefore would 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
Written comments relating to the proposed changes have not been
solicited or received. CME will notify the Commission of any written
comments received by CME.
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 Rule 19b-4(f)(4)(ii) \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:
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-2014-39 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CME-2014-39. 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 filings will also 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-2014-39
and should be submitted on or before October 29, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23980 Filed 10-7-14; 8:45 am]
BILLING CODE 8011-01-P