[Federal Register Volume 77, Number 124 (Wednesday, June 27, 2012)]
[Notices]
[Pages 38350-38351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-15635]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67232; File No. SR-CME-2012-24]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change To Amend CME Rule 802 Regarding CME's Capital Contribution 
to the Base Guaranty Fund

 June 21, 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 9, 2012, 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)(2).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CME proposes to amend CME Rule 802 regarding CME's capital 
contribution to the financial safeguards package that includes its Base 
Guaranty Fund (that is, for products other than credit default swaps 
and interest rate swaps). The text of the proposed rule change is 
available at the CME's Web site at http://www.cmegroup.com/market-regulation/files/SEC_19b-4_12-24.pdf, at the principal office of CME, 
and at the Commission's Public Reference Room.

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 proposes to adopt revisions to CME Rule 802 that relate to 
CME's capital contribution to the financial safeguards package that 
includes its Base Guaranty Fund (that is, for products other than 
credit default swaps and interest rate swaps). More specifically, CME 
proposes to amend CME Rule 802.B (Satisfaction of Clearing House 
Obligations) to make CME's capital contribution $100 million to the 
Base Guaranty Fund financial safeguards package. CME notes that it has 
already certified the proposed changes that are the subject of this 
filing to the CFTC, in Submission 12-184.
    CME believes the proposed change is consistent with the 
requirements of the Act including Section 17A of the Act because it 
helps to assure the safeguarding of securities and funds which are in 
its custody or control or for which it is responsible and it protects 
investors and the public interest. According to CME, the proposed rule 
change accomplishes the objectives of the Act by offering enhancements 
to the financial safeguards package that applies to CME's Base Guaranty 
Fund.

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. 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

[[Page 38351]]

Internet comment form (http://www.sec.gov/rules/sro.shtml), or send an 
email to [email protected]. Please include File No. SR-CME-2012-24 
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-2012-24. 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-2012-24 and should be 
submitted on or before July 18, 2012.

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

    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 change is 
consistent with the requirements of the Act, in particular the 
requirements of Section 17A of the Act, and the rules and regulations 
thereunder applicable to CME.\5\ Specifically, the Commission finds 
that the proposed rule change is consistent with Section 17A(b)(3)(F) 
\6\ 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 or control of the clearing agency or 
for which it is responsible and to protect investors and the public 
interest because the proposed rule change should allow CME enhance the 
financial safeguards package that applies to CME's Base Guaranty Fund.
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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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    In its filing, CME requested that the Commission approve this 
proposed rule change prior to the thirtieth day after the date of 
publication of the notice of the filing. CME has articulated three 
reasons for so granting approval. First, CME cites as a reason for this 
request CME's operation as a DCO, which is subject to regulation by the 
CFTC under the CEA. Second, CME also cites that the proposed rule 
changes relate solely to FX swap products and therefore relate solely 
to its swaps clearing activities and do not significantly relate to the 
CME's functions as a clearing agency for security-based swaps. Third, 
CME states that not approving this request on an accelerated basis will 
have a significant impact on the futures and swaps clearing business of 
the CME as a designated clearing organization.
    The Commission finds good cause for granting approval of the 
proposed rule change prior to the thirtieth day after publication of 
the notice of its filing because: (i) The proposed rule change does not 
significantly affect any securities clearing operations of the clearing 
agency (whether in existence or contemplated by its rules) or any 
related rights or obligations of the clearing agency or persons using 
such service; (ii) the clearing agency has indicated that not providing 
accelerated approval would have a significant impact on its business as 
a designated clearing organization; and (iii) the activity relating to 
the non-security clearing operations of the clearing agency for which 
the clearing agency is seeking approval is subject to regulation by 
another federal regulator.

V. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the Act 
that the proposed rule change (SR-CME-2012-24) be, and hereby is, 
approved on an accelerated basis.

    For the Commission, by the Division of Trading and markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-15635 Filed 6-26-12; 8:45 am]
BILLING CODE 8011-01-P