[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]


-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \5\ The Commission notes that the correct citation is Section 
19(b)(3)(A).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).


[[Page 67519]]


---------------------------------------------------------------------------

    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