[Federal Register Volume 76, Number 211 (Tuesday, November 1, 2011)]
[Notices]
[Pages 67517-67519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28207]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65634; File No. SR-CME-2011-11]
Self-Regulatory Organizations; Chicago Mercantile Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Establish a Fee Waiver Program Applicable to Its OTC Credit Default
Swap Index Clearing Offering
October 26, 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 October 17, 2011, 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 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.
* * * * *
FEE WAIVER PROGRAM FOR OTC CREDIT DEFAULT SWAP CLEARING
Program Purpose.
The purpose of this Program is to encourage market participants
to increase their OTC clearing activity for the product listed
below.
Product Scope
OTC Credit Default Swap Clearing (``Product'').
[[Page 67518]]
Eligible Participants
All market participants including CME CDS Clearing Members and
their customers are eligible. The fee incentives described below
will be automatically applied to all cleared trades in the Product.
Program Term
Start date is October 31, 2011. End date is December 31, 2011.
Hours
The incentives will apply to transactions cleared in the
Product.
Program Incentives
Fee Waivers. All market participants that clear the Product will
have their clearing fees waived.
* * * * *
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 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 Purpose of, and
Statutory Basis for, the Proposed Rule Change
CME proposes to implement a fee waiver program that will apply to
OTC credit default swap index clearing at CME (the ``Program''). The
Program will be a general fee waiver that would apply equally to all
market participants, including CDS Clearing Members and their
customers. The Program by its terms would become operative on October
31, 2011 and extend through December 31, 2011.
In July 2011, CME lifted certain volume caps applicable to its OTC
credit default swap index clearing business that were initially
implemented in December, 2009. CME followed up with a launch of a
broader set of credit default swap index products available for
clearing in September, 2011. CME expects that the combination of its
recently expanded breadth of products, the termination of the volume
caps and the establishment of the Program will encourage customers to
place more volume into the system to ensure readiness and help build
open interest in credit default swap index products prior to
implementation of the upcoming centralized clearing mandate.
The proposed rule changes that are the subject of this filing are
related to fees and therefore will become effective immediately.
However, the Program will become operative as of October 31, 2011. CME
has also certified the proposed rule changes that are the subject of
this filing to its primary regulator, the Commodity Futures Trading
Commission (``CFTC''), and CME expects that those certified proposed
rule changes will become effective on October 31, 2011. The text of the
proposed rule amendments is in Section 1 of this notice, with additions
italicized and deletions in brackets.
The proposed CME rule amendments establish or change a member due,
fee or other charge imposed by CME under Section 19(b)(3)(A)(ii) of the
Securities Exchange Act of 1934 and Rule 19b-4(f)(ii) thereunder. CME
believes that the proposed rule 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)(iv),\5\ in that
it provides for the equitable allocation of reasonable dues, fees and
other charges among participants. CME notes that it operates in a
highly competitive market in which market participants can readily
direct business to competing venues. CME further notes that the
proposed change is non-discriminatory in that it is equally applicable
to all market participants.
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\5\ The Commission notes that the correct citation is Section
19(b)(3)(A).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not 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 was filed pursuant to Section
19(b)(3)(A)(ii) of the Act and paragraph (f)(ii) of Rule 19b-4 and
became effective on filing. At any time within 60 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.
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 email to [email protected]. Please include
File No. SR-CME-2011-11 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-2011-11. 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
a.m. and 3 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-2011-11 and
should be submitted on or before November 22, 2011.
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\6\ 17 CFR 200.30-3(a)(12).
[[Page 67519]]
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For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\6\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-28207 Filed 10-31-11; 8:45 am]
BILLING CODE 8011-01-P