[Federal Register Volume 77, Number 171 (Tuesday, September 4, 2012)]
[Notices]
[Pages 53948-53950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21634]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67743; File No. SR-CME-2012-33]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Fee Schedule Applicable to its OTC Interest Rate Swap 
Clearing Offering

August 28, 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 August 17, 2012, Chicago Mercantile Exchange Inc. (``CME'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as 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)(2) \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)(2).
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I. Self-Regulatory Organization's Statement of Terms of Substance of 
the Proposed Rule Change

    CME is proposing to amend the fee schedule that currently applies 
to its OTC Interest Rate Swap clearing offering.

[[Page 53949]]

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 currently offers clearing for certain OTC Interest Rate Swap 
products. This filing proposes to amend the current fee schedule that 
applies to CME's OTC Interest Rate Swap (``IRS'') clearing offering. 
Specifically, CME will be adding; (i) An optional alternative fee 
schedule, (ii) progressive fee tiers for the standard fee schedule, and 
(iii) fee waivers for CME OTC IRS clearing member's back-loaded trades.
    Under the new optional alternative fee schedule, house or customer 
accounts will be able to elect to be subject to an alternate 
transaction fee schedule for OTC IRS that includes certain per ticket 
transaction fee and certain monthly charges measured in basis points 
annualized on the client's initial margin requirement. Election of the 
alternative transaction fee schedule requires notice to CME which must 
be given (i) during the firm's onboarding process, or (ii) at least 
fifteen (15) days prior to a calendar quarter that the firm elects to 
receive the alternative fee schedule.
    The second feature of the proposed changes relates to new 
progressive fee tiers. Under these changes, each calendar quarter, 
firms may qualify to receive a fixed discount applicable to base OTC 
IRS fees for the following calendar quarter on the basis of the USD 
equivalent base fees incurred during the current quarter. The discount 
applicable to the following calendar quarter will be calculated on a 
weighted average basis using the USD equivalent base fees for the 
current calendar quarter and certain discount percentages. 
Additionally, from September 1, 2012 to December 31, 2013, the proposed 
changes would provide for a one-time rebate on current calendar quarter 
activity during the first calendar quarter that its weighted average 
discount is equal to or greater than 15%.
    Finally, for IRS Clearing Members, the proposed rule changes would 
provide for certain fee waivers for back-loaded trades. A backloaded 
trade is a trade accepted for clearing where the effective date for the 
trade is prior to the date the trade was accepted for clearing. The 
proposed changes are related to fees and therefore will become 
effective immediately. However, the proposed fee changes will become 
operative as of September 1, 2012. CME has also certified the proposed 
rule changes that are the subject of this filing to the Commodity 
Futures Trading Commission (``CFTC''), in CFTC Submission 12-254.
    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) \5\ of 
the Act and Rule 19b-4(f)(2) \6\ thereunder. CME believes that the 
proposed rule change is consistent with the requirements of the Act and 
the rules and regulations thereunder and, in particular, to Section 
17A(b)(3)(D),\7\ in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among participants. The 
proposed changes apply to all IRS Clearing Members or customers, as 
applicable. The modifications should encourage firms to submit 
additional volume into the system which should help ensure readiness 
and also help build open interest ahead of a regulatory mandate. CME 
notes that it operates in a highly competitive market in which market 
participants can readily direct business to competing venues.
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    \5\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \6\ 17 CFR 240.19b-4(f)(2).
    \7\ 15 U.S.C. 78q-1(b)(3)(D).
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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) 
\8\ of the Act and Rule 19b-4(f)(2) \9\ thereunder and thus became 
effective upon filing because it effects a change in a due, fee, or 
other charge applicable only to a member. 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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
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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

     Use 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-2012-33 on the subject line.

Paper Comments

     Send 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-2012-33. 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 
10:00 a.m. and 3:00 p.m. Copies of such filings will also be available 
for inspection and copying at the principal office of CME and on CME's 
Web site at http://www.cmegroup.com/market-regulation/files/SEC_19B-4_12-33.pdf. All comments received will be posted without change; the 
Commission does

[[Page 53950]]

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-2012-33 and should be 
submitted on or before September 25, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-21634 Filed 8-31-12; 8:45 am]
BILLING CODE 8011-01-P