[Federal Register Volume 77, Number 194 (Friday, October 5, 2012)]
[Notices]
[Pages 61044-61045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-24574]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67953; File No. SR-CME-2012-38]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change To Comply With Revisions to CFTC Regulations Governing 
Derivatives Clearing Organizations

October 1, 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 September 21, 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 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 the Terms of Substance 
of the Proposed Rule Change

    CME proposes to amend certain of its rules to comply with pending 
revisions to Commodity Futures Trading Commission (``CFTC'') 
Regulations governing derivatives clearing organizations (``DCOs''). 
The text of the proposed rule changes is available at the CME's Web 
site at http://www.cmegroup.com, at the principal office of CME, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organizations Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, CME included statements 
concerning the purpose of 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    CME is registered as a derivatives clearing organization with the 
CFTC and operates a substantial business clearing futures and swaps 
contracts subject to the jurisdiction of the CFTC. CME proposes to 
amend certain of its rules to comply with pending changes to CFTC 
Regulations that require DCOs to make corresponding rule changes. The 
changes that are the subject of this filing are required by the CFTC to 
become effective on October 1, 2012.
    CFTC Regulation 39.12(b)(7) (Time Frame for Clearing), which 
becomes effective on October 1, requires each DCO to have rules 
providing that the DCO: (1) ``will accept or reject for clearing as 
quickly after execution as would be technologically practicable if 
fully automated systems were used, all contracts'' listed for clearing 
and executed competitively on or subject to the rules of a designated 
contract market (``DCM'') or a swap execution facility (``SEF''); and 
(2) ``will accept or reject for clearing as quickly after submission to 
the [DCO] as would be technologically practicable if fully automated 
systems were used, all swaps'' listed for clearing that are not 
executed on or subject to the rules of a DCM or a SEF or executed 
noncompetitively on or subject to the

[[Page 61045]]

rules of a DCM or a SEF. In order to comply with CFTC Regulation 
39.12(b)(7), CME proposes to amend CME Rules 8F005, 8G005 and 8H005. 
CME will also make relevant changes to the corresponding CME Clearing 
Manuals of Operations to account for the proposed rule changes.
    CME also made a separate filing, CME Submission 12-280, with its 
primary regulator, the CFTC, with respect to the proposed rule changes.
    CME believes the proposed changes are consistent with the 
requirements of the Exchange Act. CME, a derivatives clearing 
organization, 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 (``CEA'') with respect to clearing are 
comparable to a number of the policies underlying the Exchange Act, 
such as promoting market transparency for derivatives markets, 
promoting the prompt and accurate clearance of transactions and 
protecting investors and the public interest. CME believes the 
mandatory CFTC changes are specifically designed to facilitate the 
prompt and efficient processing of all contracts, agreements, and 
transactions submitted for clearing and will therefore help protect 
investors and safeguard customer funds.

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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml ); or
     Send an email to [email protected]. Please include 
File Number SR-CME-2012-38 on the subject line.

Paper Comments

     Send paper comments 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-2012-38. 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 filing also will 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/rule-filings.html.
    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-2012-38 
and should be submitted on or before October 26, 2012.

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

    Section 19(b) of the Act \3\ 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.\4\ 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 
registered clearing agency be designed to promote the prompt and 
accurate clearance and settlement of securities transactions and, to 
the extent applicable, derivative agreements, contracts, and 
transactions.\5\
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    \3\ 15 U.S.C. 78s(b).
    \4\ 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).
    \5\ 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 on an accelerated basis for good cause shown. CME 
cites as the reason for this request CME's operation as a DCO, which is 
subject to regulation by the CFTC under the CEA, and that the proposed 
rule changes are required to comply with new CFTC regulations that 
become effective on October 1, 2012.
    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\6\ for approving the proposed rule change prior to the 30th 
day after the date of publication of notice in the Federal Register 
because, as a registered DCO, CME must amend certain of its rules to 
comply with CFTC Regulation 39.12(b)(7), which becomes effective on 
October 1, 2012.
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    \6\ 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-2012-38) be, and hereby is, 
approved on an accelerated basis.
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24574 Filed 10-4-12; 8:45 am]
BILLING CODE 8011-01-P