[Federal Register Volume 78, Number 136 (Tuesday, July 16, 2013)]
[Notices]
[Pages 42572-42573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-16932]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69956; File No. SR-CME-2013-09]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Regarding Interest Rate Swap Clearing Changes

July 10, 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 June 28, 2013, Chicago Mercantile Exchange Inc. (``CME'') 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)(4)(ii) 
\4\ thereunder, so that the proposal was effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed 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)(4)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CME is filing proposed rules changes that are limited to its 
business as a derivatives clearing organization offering interest rate 
swap (``IRS'') clearing services. More specifically, the proposed rule 
changes that are the subject of this filing would facilitate the 
addition of new IRS products for clearing and would also include 
certain changes to its existing IRS clearing offering.
    The text of the proposed rule changes is also 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 Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
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. The self-regulatory organization 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 
Commodity Futures Trading Commission and currently offers clearing 
services for interest rate swaps (``IRS''). With this filing, CME 
proposes to accept the following swaps for clearing beginning July 1, 
2013:
     Fixed-Floating IRS denominated in Hong Kong Dollar 
(``HKD''), New Zealand Dollar (``NZD'') and Singapore Dollar (``SGD'') 
with Termination Dates up to 15 years.

Additionally, CME will amend CME Rules 90002.F and 90102.E to add the 
following swap specifications to its existing offering of IRS:
     OIS swaps with Termination Dates up to 30 years;
     Variable notional amounts (amortizing, roller coaster and 
accreting) for fixed-floating and basis swaps;
     Swaps with straight and spread compounding; and
     New Zealand as an acceptable calendar adjustment for 
Business Day Conventions.
    The changes to CME Rule 90002.F reflect the addition of variable 
notional amounts. The changes to CME Rule 90102.E reflect the addition 
of certain Floating Rate Options for HKD, NZD and SGD swaps and certain 
addition OIS rates. The Manual of Operations for CME Cleared Interest 
Rate Swaps (the ``IRS Manual'') is also being updated in connection 
with these proposed changes described in this filing.
    The changes that are described in this filing are limited to CME's 
IRS clearing offering and do not materially impact CME's credit default 
swap clearing

[[Page 42573]]

business in any way. CME notes that it has also submitted the proposed 
rule changes that are the subject of this filing to its primary 
regulator, the Commodity Futures Trading Commission (``CFTC''), in CME 
Submission 13-164.
    CME believes the proposed rule changes are consistent with the 
requirements of the Exchange Act including Section 17A of the Exchange 
Act. The proposed rule changes involve enhancements to CME's interest 
rate swap product offering for investors, including new products for 
clearing, and as such are designed to promote the prompt and accurate 
clearance and settlement of securities transactions and derivatives 
agreements, contracts and transactions, and 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. Furthermore, the proposed changes are limited to 
listing new IRS for clearing and making changes to CME's existing IRS 
clearing offering. IRS is under the exclusive jurisdiction of the CFTC. 
As such, the proposed CME changes are limited to CME's activities as a 
derivatives clearing organization clearing swaps that are not security-
based swaps; CME notes that the policies of the CFTC with respect to 
administering the Commodity Exchange Act are comparable to a number of 
the policies underlying the Exchange Act, such as promoting market 
transparency for over-the-counter derivatives markets, promoting the 
prompt and accurate clearance of transactions and protecting investors 
and the public interest. In summary, the proposed CME changes do not 
significantly affect the security-based swap clearing operations of CME 
or any related rights or obligations of CME security-based swap 
clearing participants. The changes are therefore consistent with the 
requirements of Section 17A of the Exchange and are properly filed 
under Section 19(b)(3)(A) and Rule 19b-4(f)(4)(ii) thereunder.

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. The rule changes simply 
add new types of interest rates swaps to the CME rulebook and make 
certain other additions to the existing swap certifications in the CME 
Rulebook.

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 has been filed pursuant to Section 
19(b)(3)(A) \5\ of the Act and paragraph (f)(4)(ii) of Rule 19b-4 \6\ 
thereunder and will become effective on filing. At any time within 60 
days of the filing of the proposed 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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    \5\ Supra note 3.
    \6\ Supra note 4.
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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 Number SR-CME-2013-09 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-2013-09. 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 (http://www.cmegroup.com/market-regulation/files/sec_19b-4_13-09.pdf).
    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-2013-09 
and should be submitted on or before August 6, 2013.

    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. 2013-16932 Filed 7-15-13; 8:45 am]
BILLING CODE 8011-01-P