[Federal Register Volume 77, Number 116 (Friday, June 15, 2012)]
[Notices]
[Pages 36025-36027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14623]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67181; File No. SR-CME-2012-23]


Self-Regulatory Organizations; Chicago Mercantile Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend CME Rules Relating to Acceptable Performance Bond Deposits

June 11, 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 June 5, 2012, 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, so that the proposed rule change was effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested parties.
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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

    CME proposes to adopt revisions that would amend CME's rules 
relating to acceptable performance bond deposits for futures trading. 
The text of the proposed changes is as follows with additions 
italicized and deletions in brackets.
* * * * *
    Rule 100--Rule 930.B--No Change
* * * * *

Rule 930.C ACCEPTABLE PERFORMANCE BOND DEPOSITS

1. Non-Security Futures and OTC Derivatives
    Clearing members may accept from their account holders as 
performance bond cash currencies of any denomination, readily 
marketable securities (as defined by SEC Rule 15c3-1(c)(11) and 
applicable SEC interpretations), money market mutual funds allowable 
under CFTC Regulation 1.25, bank-issued letters of credit, warrants, 
warehouse receipts and shipping certificates that are registered

[[Page 36026]]

as deliverable for commodities traded on Chicago Mercantile Exchange 
Inc., Chicago Board of Trade Inc., New York Mercantile Exchange, Inc. 
or Commodity Exchange, Inc., and ``London Good Delivery'' gold, as 
defined by the London Bullion Market Association.
    Clearing members shall not accept as performance bond from an 
account holder securities that have been issued, sponsored or otherwise 
guaranteed by the account holder or an affiliate of the account holder 
unless the clearing member files a petition with and receives 
permission from Clearing House staff.
    Bank-issued letters of credit must be in a form acceptable to the 
Clearing House. Such letters of credit must be drawable in the United 
States. Clearing members shall not accept as performance bond from an 
account holder letters of credit issued by the account holder, an 
affiliate of the account holder, the clearing member, or an affiliate 
of the clearing member.
    All assets deposited by account holders to meet performance bond 
requirements must be and remain unencumbered by third party claims 
against the depositing account holder.
    Except to the extent that Clearing House staff shall prescribe 
otherwise, cash currency performance bond deposits shall be valued at 
market value. All other performance bond deposits other than letters of 
credit, warrants, warehouse receipts and shipping certificates shall be 
valued at an amount not to exceed market value less applicable haircuts 
as set forth in SEC Rule 240.15c3-1. Warrants, warehouse receipts and 
shipping certificates shall be valued at an amount not to exceed the 
market value of the commodities represented by the warrants, warehouse 
receipts or shipping certificates, less a deduction in the same amount 
as the inventory haircut specified in Commission Regulation 
1.17(c)(5)(ii).
* * * * *
    Rule 930.C(2)--End--No Change

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.\5\
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    \5\ 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 proposes to amend certain rules that relate to the forms of 
acceptable performance bond deposits it will accept for futures 
trading. More specifically, CME proposes to amend CME Rule 930.C 
(Acceptable Performance Bond Deposits) to allow warrants, shipping 
certificates and warehouse receipts registered as deliverable on 
commodities traded at CME, CBOT, NYMEX and the Commodity Exchange 
(``COMEX'') to be acceptable performance bond deposits at all of these 
Exchanges at the account-holder level. For example, under the revised 
Rule, a clearing member could accept COMEX warrants that are registered 
as deliverable to satisfy a customer's performance bond requirements 
for positions on CME, CBOT, COMEX and/or NYMEX. This revision will 
broaden the acceptability of performance bond deposits for customers 
trading at multiple Exchanges within CME Group Inc.
    CME certified the proposed changes that are the subject of this 
filing to the CFTC in CME Submission 12-178.
    The proposed CME changes are limited to CME's activities as a 
derivatives clearing organization clearing futures transactions. As 
such, the proposed CME changes do not significantly affect the 
security-based swap clearing operations of CME or any related rights or 
obligations of CME security-based swap clearing participants. The 
proposed change is therefore properly filed under Section 19(b)(3)(A) 
and Rule 19b-4(f)(4)(ii) thereunder because it 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.

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 was filed pursuant to Section 19(b)(3)(A) 
\6\ of the Act and Rule 19b-4(f)(4)(ii) \7\ thereunder and thus became 
effective upon filing because it 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. 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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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 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 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-2012-23 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-2012-23. 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

[[Page 36027]]

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 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-2012-23 and 
should be submitted on or before July 6, 2012.
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    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14623 Filed 6-14-12; 8:45 am]
BILLING CODE 8011-01-P