[Federal Register Volume 77, Number 62 (Friday, March 30, 2012)]
[Notices]
[Pages 19393-19394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7707]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66659; File No. SR-CME-2012-08]


Self-Regulatory Organizations; Chicago Mercantile Exchange, Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change To Comply With Revisions to the Commodity Futures Trading 
Commission's Part 190 Regulations

March 26, 2012.
    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 March 12, 2012, the 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. The Commission is publishing this 
Notice and Order to solicit comments on the proposed rule change from 
interested persons and to approve the proposed rule change on an 
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of Terms of Substance of 
the Proposed Rule Change

    CME proposes to amend certain of its rules to comply with pending 
revisions to the Commodity Futures Trading Commission's (``CFTC'') Part 
190 Regulations.

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 III below. CME has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of such statements.\3\
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    \3\ The Commission has modified the text of the summaries 
prepared by CME.
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A. Self-Regulatory Organization's Statement of Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    CME is registered as a derivatives clearing organization (``DCO'') 
with the CFTC and operates a substantial business clearing futures and 
swaps contracts subject to the jurisdiction of the CFTC. CME is also 
registered as a clearing agency with the Commission. CME proposes to 
amend certain of its rules to comply with pending amendments to the 
CFTC's Part 190 Bankruptcy Regulations that will become effective on 
April 9, 2012.
    The Part 190 amendments were made in connection with the CFTC's 
final rules for customer swaps segregation. Those revisions include 
creating a ``cleared swap'' customer account class for purposes of 
futures commission merchant and DCO bankruptcies and replacing the 
defined term ``cleared OTC derivatives,'' which is incorporated by 
reference into several CME rules, with the new defined term ``cleared 
swaps.'' In order to reflect the removal of the defined term ``cleared 
OTC derivatives'' from Part 190, CME will amend CME Rules 930.N, 8F100, 
and 8F122 and CME definitions of ``Cleared OTC Derivatives Customers'' 
and ``Funds of Cleared OTC Derivatives Customers.'' The amendments 
comport with CFTC DCO Core Principle C (Participant and Product 
Eligibility) and Core Principle F (Treatment of Funds).
    The text of the CME's proposed rule amendments was attached as 
Exhibit 5 to this proposed rule change filing, which filing can be 
viewed at the CME Web site at http://www.cmegroup.com/market-regulation/files/SEC_19b-4_x12-08x.pdf. CME also made a filing, CME 
Submission 12-066, with its primary regulator, the CFTC, with respect 
to this proposed rule change.
    CME believes the proposed changes are consistent with the 
requirements of the Act and the rules and regulations issued 
thereunder. CME, a DCO, is required to implement the proposed changes 
to comply with recent changes to CFTC regulations. CME notes that the 
policies of the Commodity Exchange Act with respect to clearing are 
comparable to a number of the policies underlying the Act, such as 
promoting market transparency for derivatives markets, promoting the 
prompt and accurate clearance and settlement of transactions, and 
protecting investors and the public interest.

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

[[Page 19394]]

this proposed rule change. CME has not received any unsolicited written 
comments from interested parties.

III. 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-2012-08 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-2012-08. 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-2012-08 and should be 
submitted on or before April 20, 2012.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    In its filing, CME requested that the Commission approve this 
request on an accelerated basis for good cause shown. CME believes 
there is good cause to approve this filing on an accelerated basis 
because the proposed changes are required to comply with new CFTC 
regulations that will become effective on April 9, 2012.
    Section 19(b) of the Act \4\ directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to such 
organization. The Commission finds that the proposed rule changes are 
consistent with the requirements of the Act, in particular the 
requirements of Section 17A of the Act,\5\ and the rules and 
regulations thereunder applicable to CME. Specifically, the Commission 
finds that the proposed rule change is consistent with Section 
17A(b)(3)(F) of the Act which requires, among other things, that the 
rules of a clearing agency be designed to assure the safeguarding of 
securities and funds which are in the custody and control of the 
clearing agency because it will allow CME to comply with the Part 190 
amendments made in connection with the CFTC's final rules for customer 
swaps segregation.\6\
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    \4\ 15 U.S.C. 78s(b).
    \5\ 15 U.S.C. 78q-1. In approving this proposed rule change, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
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    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\7\ for approving the proposed rule change prior to the 30th 
day after the date of publication of notice in the Federal Register 
because the proposed rule change institutes the regulations of another 
regulatory agency, and those regulations were subject to notice and 
comment.
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    \7\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-CME-2012-08) is approved on an 
accelerated basis.

    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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Kevin O'Neill,
Deputy Secretary.
[FR Doc. 2012-7707 Filed 3-29-12; 8:45 am]
BILLING CODE 8011-01-P