[Federal Register Volume 76, Number 162 (Monday, August 22, 2011)]
[Notices]
[Pages 52373-52374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21348]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65141; File No. SR-CME-2011-01]


Self-Regulatory Organizations; Chicago Mercantile Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Adopt a New Rule Regarding Liens on Collateral That Relates Solely to 
Its Futures Clearing Operations

August 16, 2011.
    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 August 5, 2011, 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. CME filed the proposed rule change 
pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b-4(f)(4)(ii) 
\4\ thereunder.
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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 Terms of Substance of 
the Proposed Rule Change

    The text of the proposed rule change is below. Italicized text 
indicates additions; bracketed text indicates deletions.
* * * * *
    Rule 819. [Reserved] Lien on Collateral.
    Each Clearing Member hereby grants to the Clearing House a first 
priority and unencumbered lien, as security for all obligations of such 
Clearing Member to the Clearing House, against any property and 
collateral deposited with the Clearing House by the Clearing Member 
which is the property of the Clearing Member. Clearing Members shall 
execute any documents required by CME to create and enforce such lien.

II. Self-Regulatory Organization's Statement of 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 Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Current CME Rule 902.F provides that ``[e]ach Clearing Member 
hereby grants to the Clearing House a first priority and unencumbered 
lien against all memberships required for clearing membership by the 
Exchange.'' Other CME rules in Chapters 8 and 9 of the CME rulebook 
address the CME Clearing House's security interest in CME clearing 
member's guaranty fund and performance bond deposits (perfected by 
possession of the collateral), but do not contain the type of express 
language as appears in Rule 902.F. In order to more clearly indicate 
CME Clearing's security interest in CME clearing member's guaranty fund 
and performance bond deposits, CME proposes to adopt new CME Rule 819, 
which states as follows:
    Each Clearing Member hereby grants to the Clearing House a first 
priority and unencumbered lien, as security for all obligations of such 
Clearing Member to the Clearing House, against any property and 
collateral deposited with the Clearing House by the Clearing Member 
which is the property of the Clearing Member. Clearing Members shall 
execute any documents required by CME to create and enforce such lien.
    The proposed rule language mirrors that of CME Rule 8F008 (Lien on 
Collateral), in Chapter 8F (Over-the-Counter Derivative Clearing) of 
the CME rule book, which states that ``[e]ach OTC Clearing Member 
hereby grants to CME a first priority and unencumbered lien against any 
cash, securities or other collateral deposited with the Clearing House 
by the OTC Clearing Member which is the property of the OTC Clearing 
Member. OTC Clearing Members shall execute any documents required by 
CME to create and enforce such lien.''
    New proposed Rule 819 only affects the futures clearing operations 
of CME. It does not significantly affect any securities clearing 
operations of CME or any related rights or obligations of CME clearing 
members. As discussed above, current CME Rule 8F008 currently applies 
to CME clearing members and is the operative rule covering the subject 
matter of proposed Rule 819 with respect to CME's security-based swaps 
clearing activities. As such, the proposed rule change effects a change 
in an existing service of a registered clearing agency that primarily 
affects the futures clearing operations of the clearing agency with 
respect to futures that are not security futures and does 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 also submitted a filing to the Commodity Futures Trading 
Commission (``CFTC'') regarding proposed Rule 819 pursuant to CFTC 
Regulation 40.6 on July 26, 2011 with a proposed effective date of 
August 9, 2011 (that is, ten business days after the date of the 
submission).

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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has been filed pursuant to Section 
19(b)(3)(A) \5\ of the Act and paragraph (f)(4)(ii) of Rule 19b-4 \6\ 
thereunder and will become effective on August 9, 2011,\7\ the same 
date CME's corresponding filing with

[[Page 52374]]

the CFTC becomes effective. At any time within sixty days of the filing 
of such 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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    \5\ Supra note 3.
    \6\ Supra note 4.
    \7\ The Commission notes that the proposed rule change became 
effective upon filing under Section 19(b)(3)(A) of the Act. CME's 
statement indicates that the proposed rule change, which became 
effective on August 5, 2011, will not become operative until August 
9, 2011.
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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 may be submitted by using the 
Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml), or send an e-mail to [email protected]. Please include 
File No. SR-CME-2011-01 on the subject line.
     Paper comments should be sent 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-2011-01. This file 
number should be included on the subject line if e-mail 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 website viewing and 
printing in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549. 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-2011-01 and 
should be submitted on or before September 12, 2011.

    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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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-21348 Filed 8-19-11; 8:45 am]
BILLING CODE 8011-01-P