[Federal Register Volume 78, Number 67 (Monday, April 8, 2013)]
[Notices]
[Pages 21000-21002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-08107]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69266; File No. SR-CME-2013-03]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Make Clarifying Amendments to CME Rule 980

April 2, 2013.
    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 March 18, 2013, Chicago Mercantile Exchange Inc. (``CME'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change 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) of the Act \3\ 
and Rule 19b-4(f)(1) \4\ thereunder so that the proposal was effective 
upon filing with the Commission. The Commission is publishing this 
Notice to solicit comments on the rule change from interested persons.
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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)(1).
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I. Self-Regulatory Organization's Statement of Terms of Substance of 
the Proposed Rule Change

    CME proposes to make certain clarifying revisions to existing CME 
Rule 980 relating to clearing member records and reports. CME also 
certified the proposed changes that are the subject of this filing to 
the Commodity Futures Trading Commission (``CFTC'') in CME Submission 
13-073. CME intends to implement the proposed changes on March 21, 
2013. The text of the rule change is as follows, with additions in 
italics and deletions in brackets.
* * * * *
Rule 100--Rule 979--No Change
* * * * *
CME RULE 980. REQUIRED RECORDS AND REPORTS
A. Each clearing member shall prepare, maintain and keep current those 
books and records required by the rules of the Exchange, the Commodity 
Exchange Act and the Regulations thereunder. Such books and records 
shall be open to inspection and

[[Page 21001]]

promptly provided to the Exchange upon request.
B. Each clearing member shall maintain an adequate accounting system, 
internal accounting controls, and procedures for safeguarding customer 
and firm assets [as set forth in CFTC Regulation 1.16(d)(2)]. This 
includes, but is not limited to, the following:
    1. Preparation and maintenance of complete and accurate 
reconciliations for all accounts; [and]
    2. Resolution of reconciling items in a timely manner; and
    3. Prevention of a material inadequacy as defined in CFTC 
Regulation 1.16(d)(2).
C. A clearing member must file any information requested by the 
Exchange within the time period specified in the request.
D. Each clearing member shall maintain at all times the ability to 
provide to the Exchange in an acceptable form a complete set of equity 
system reports (including, at a minimum, the equity run, open position 
listing, day trade listing, cash adjustments listing and performance 
bond call and debit equity listing). Such reports shall be available to 
the Exchange in Chicago no later than 8:00 a.m. Chicago time on the 
business day following the report date.
E. Each clearing member shall maintain at all times the ability to 
provide to the Exchange a listing of each customer's method of access 
to CME markets, including front end applications and network 
connections.
* * * * *
Rule 981--End--No Change
* * * * *

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 of and basis for the proposed rule change and 
discussed any comments it received on the 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.\5\
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    \5\ 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 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 make 
certain clarifying amendments to CME Rule 980 relating to clearing 
member records and reports. Current CME Rule 980.B requires each CME 
clearing member to maintain adequate books and records in accordance 
CFTC Regulation 1.16(d)(2). The Rule further identifies specific 
requirements in sub-clauses 980.B.1 (preparation and maintenance of 
complete and accurate reconciliations for all accounts) and 980.B.2 
(resolution of reconciling items in a timely manner) which are 
requirements of CME. In order to clarify the requirements of CME Rule 
980, CME is proposing to amend CME Rule 980.B to provide for a separate 
clause requiring compliance with CFTC Regulation 1.16(d)(2) as a new 
sub-clause 980.B.3. As such, the change constitutes a stated policy, 
practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule. The rule change is 
therefore properly filed under Section 19(b)(3)(A) of the Act and Rule 
19b-4(f)(1) 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, Section 17A(b)(3)(F) of the Act, which requires, among 
other things, that the rules of a clearing agency be designed to 
protect investors and the public interest. The proposed rule change is 
designed to clarify clearing members' obligations under CME Rule 980 
with respect to maintaining an adequate accounting system, internal 
accounting controls, and procedures for safeguarding customer and firm 
assets. Specifically, the proposed rule change clarifies that these 
obligations include the preparation and maintenance of complete and 
accurate reconciliations for all accounts, the resolution of 
reconciling items in a timely manner, and prevention of a material 
inadequacy as defined in CFTC Regulation 1.16(d)(2). This rule change 
is being made to enhance CME's efforts to protect investors who utilize 
its clearinghouse services through its clearing members.

B. Self-Regulatory Organization's Statement on Burden on Competition

    CME does not believe that the 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 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 has become effective pursuant to Section 
19(b)(3)(A) \6\ of the Act and Rule 19b-4(f)(1) \7\ thereunder because 
it constitutes a stated policy, practice, or interpretation with 
respect to the meaning, administration, or enforcement of an existing 
rule. At any time within 60 days of the filing of the 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\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(1).
    \8\ 15 U.S.C. 78s(b)(3)(C).
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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 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-2013-03 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-2013-03. This file 
number should be included on the subject line if email is used. To help 
the

[[Page 21002]]

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. 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-2013-03 
and should be submitted on or before April 29, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-08107 Filed 4-5-13; 8:45 am]
BILLING CODE 8011-01-P