[Federal Register Volume 77, Number 198 (Friday, October 12, 2012)]
[Notices]
[Pages 62273-62275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25078]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67982; File No. SR-CME-2012-30]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change To Comply With CFTC Part 22 Regulations

 October 4, 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

[[Page 62274]]

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 the 
Commodity Futures Trading Commission's (``CFTC'') Part 22 Regulations. 
The text of the proposed rule change 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 
adopt revisions to CME Rules 818.B, 930.H, 971 and 973 and to the CME 
Chapter 8F rules to comply with the CFTC's Part 22 Regulations that 
will become effective on November 8, 2012. The proposed rule changes 
would become operational on Monday, November 5, 2012.
    The CFTC's Part 22 regulations for the ``Legally Segregated, 
Operationally Commingled'' (``LSOC'') customer protection regime for 
cleared swaps: (1) introduce new defined terms including Cleared Swap, 
Cleared Swaps Customer, Cleared Swaps Customer Account and Cleared 
Swaps Customer Collateral; and (2) incorporate by reference certain 
customer protection regulations for customer segregated (futures) 
accounts, including CFTC Regulations 1.20, 1.25, 1.27 to 1.30, and 
1.49. Derivatives clearing organizations like CME and CFTC-registered 
futures commission merchants must comply with Part 22 by no later than 
Thursday, November 8, 2012.
    The Part 22 regulations supplant the current customer OTC 
``sequestered'' rules in Chapter 8F of the CME rule book, which were 
implemented in October 2010. CME is therefore removing customer 
``sequestered'' Rules 8F100 to 8F136 and related definitions from its 
rule book. In addition, CME, CBOT and NYMEX are revising Rules 818.B, 
930.H, 971 and 973 in each of their rule books to reflect the removal 
of CME's customer ``sequestered'' rules and utilization of the new 
terms identified above from the CFTC Part 22 regulations.
    CME also made a filing, CME Submission 12-240, 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 including Section 17A. The rule 
changes are being proposed to comply with the CFTC's Part 22 
Regulations which are designed to protect investors. As such, the 
proposed changes are designed to promote the prompt and accurate 
clearance and settlement of securities transactions and derivatives 
agreements, contracts and transactions to assure the safeguarding of 
securities and funds which are in the custody or control of the 
clearing agency and, in general, help to protect investors and the 
public interest. CME, a derivatives clearing organization registered 
with the CFTC, further notes that it is required to implement the 
proposed changes to comply with applicable 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.

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-2012-30 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-2012-30. 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-2012-30 
and should be submitted on or before November 2, 2012.

[[Page 62275]]

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 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.\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 derivatives 
clearing organization subject to regulation by the CFTC and that the 
proposed changes are required to comply with new CFTC regulations that 
become effective on November 8, 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 derivatives clearing organization, CME must 
amend certain of its rules to comply with the CFTC's Part 22 
Regulations that will become effective on November 8, 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-2012-30) 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. 2012-25078 Filed 10-11-12; 8:45 am]
BILLING CODE 8011-01-P