[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]
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-21634 Filed 8-31-12; 8:45 am]
BILLING CODE 8011-01-P