[Federal Register Volume 78, Number 168 (Thursday, August 29, 2013)]
[Notices]
[Pages 53490-53491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21035]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70247; File No. SR-CME-2013-16]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Regarding Modifications to Its OTC IRS Clearing Offering Including New 
Fees and the Addition of Four New Currencies and Two New Rate Options

August 23, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on August 16, 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. 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.
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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. More specifically, the 
proposed rule changes would modify the fee schedule that applies to its 
over-the-counter (``OTC'') interest rate swap (``IRS'') clearing 
offering and would also make changes to current CME IRS rules to 
facilitate the addition of four new currencies and two new rate 
options.

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 many different futures and swaps products. With this 
filing, CME proposes to modify the fee schedule (the ``Fee Schedule'') 
that applies to over-the-counter (``OTC'') Interest Rate Swaps 
(``IRS'') cleared at CME and also proposes to make certain changes to 
current CME Rule 90102E to facilitate the addition of four new 
currencies to its IRS offering, specifically, the Czech Krona, 
Hungarian Forint, Polish Zloty and the South African Rand, and to add 
two new rate option for its IRS clearing offering, the Canadian Dollar 
OIS and the USD-Federal Funds-H.15-LIBOR-BBA Rate Option. Finally, CME 
will also be making certain conforming changes to its IRS Manual of 
Operations for CME Cleared Interest Rate Swaps to make certain 
operational changes to address the changes described above. Although 
these changes will be effective on filing, CME plans to operationalize 
the proposed fee changes on August 19, 2013 and the proposed changes to 
Rule 90102E on August 26, 2013.
    The changes that are described in this filing impact fees and make 
certain other adjustments as described above that are limited to CME's 
business as a derivatives clearing organization clearing products under 
the exclusive jurisdiction of the Commodity Futures Trading Commission 
(``CFTC'') and do not materially impact CME's credit default swap 
clearing business in any way. CME notes that it has already submitted 
the proposed rule changes that are the subject of this filing to its 
primary regulator, the CFTC, in CME Submissions 13-310, 13-313 and 13-
315.
    CME believes the proposed rule changes are consistent with the 
requirements of the Exchange Act including Section 17A of the Exchange 
Act.\3\ More specifically, the first aspect of the proposed rule 
changes establish or change a member due, fee or other charge imposed 
by CME under Section 19(b)(3)(A)(ii) \4\ of the Securities Exchange Act 
of 1934 and Rule 19b-4(f)(2) \5\ thereunder. CME believes that the 
proposed fee change is consistent with the requirements of the 
Securities Exchange Act of 1934 and the rules and

[[Page 53491]]

regulations thereunder and, in particular, to 17A(b)(3)(D),\6\ in that 
it provides for the equitable allocation of reasonable dues, fees and 
other charges among participants. The proposed changes apply to all 
market participants clearing IRS at CME. CME notes that it operates in 
a highly competitive market in which market participants can readily 
direct business to competing venues.
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    \3\ 15 U.S.C. 78q-1.
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 17 CFR 240.19b-4(f)(2).
    \6\ 15 U.S.C. 78q-1(b)(3)(D).
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    Second, the proposed rule changes also include changes to 
facilitate the addition of four new currencies and two new rate option 
choices associated with its IRS offering. These enhancements will offer 
investors an expanded choice of products for IRS clearing and will 
promote central clearing of swaps under the CFTC's jurisdiction. As 
such, CME believes the changes are designed to promote the prompt and 
accurate clearance and settlement of securities transactions and, to 
the extent applicable, derivatives agreements, contracts, and 
transactions, 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, in general, to protect investors and the public 
interest consistent with Section 17A(b)(3)(F) of the Exchange Act.\7\ 
Furthermore, the proposed changes are limited in their effect to swaps 
products offered under CME's authority to act as a derivatives clearing 
organization. These products are 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.
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    \7\ 15 U.S.C. 78q-1(b)(3)(F).
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    Because the proposed changes are limited in their effect to swaps 
products offered under CME's authority to act as a derivatives clearing 
organization, the proposed changes are also properly classified as 
effecting a change in an existing service of CME that:
    (a) primarily affects the clearing operations of CME with respect 
to products that are not securities, including futures that are not 
security futures, and swaps that are not security-based swaps or mixed 
swaps; and
    (b) does not significantly affect any securities clearing 
operations of CME or any rights or obligations of CME with respect to 
securities clearing or persons using such securities-clearing service.

As such, the changes are therefore consistent with the requirements of 
Section 17A of the Exchange Act \8\ and are properly filed under 
Section 19(b)(3)(A) \9\ and Rule 19b-4(f)(4)(ii) \10\ thereunder.
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    \8\ 15 U.S.C. 78q-1.
    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(4)(ii).
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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 
modify CME's current IRS fee schedule to include two additional 
maturity buckets for short-dated IRS and make changes to another CME 
IRS rule to facilitate the addition of four new currencies and two new 
rate options for IRS.

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 become effective pursuant to Section 
19(b)(3)(A) \11\ of the Act and paragraphs (f)(2) and (f)(4)(ii) of 
Rule 19b-4 \12\ thereunder. 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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2) and 17 CFR 240.19b-4(f)(4)(ii).
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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 No. SR-CME-2013-16 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-2013-16. 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 or 
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-2013-16 
and should be submitted on or before September 19, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-21035 Filed 8-28-13; 8:45 am]
BILLING CODE 8011-01-P