[Federal Register Volume 79, Number 21 (Friday, January 31, 2014)]
[Notices]
[Pages 5501-5502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-01963]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71403; File No. SR-CME-2014-03]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Fee Schedule Applicable to its OTC Credit Default Swap 
Clearing Offering

January 27, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on January 17, 2014, 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 proposal pursuant to Section 19(b)(3)(A) of the 
Act,\3\ and Rule 19b-4(f)(2) \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)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CME is proposing to amend the fee schedule that currently applies 
to its OTC Credit Default Swap index clearing offering. The text of the 
proposed rule change is available on the Exchange's Web site at http://www.cmegroup.com, at the principal office of the Exchange, 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, CME 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. 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 
Commodity Futures Trading Commission and currently offers clearing 
services for many different futures and swaps products. With this 
filing, CME proposes to make certain amendments to the current fee 
schedule that applies to CDX North American Index Credit Default Swaps 
cleared at CME. The proposed modifications would extend the current 
twenty-five percent (25%) discount off of base clearing fees for all 
market participants

[[Page 5502]]

that clear OTC North American Index CDS products at CME. The proposed 
changes also make one additional adjustment to the pricing in the 
current ``Fee Schedule B'' by amending a base fee from $2.90 to $2.00.
    The changes that are described in this filing are limited to fee 
changes for OTC CDS index products. The proposed changes therefore will 
become effective immediately. It should also be noted that these 
proposed fee changes 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 security-based swap clearing business in 
any way. CME has also certified the proposed rule changes that are the 
subject of this filing to the Commodity Futures Trading Commission 
(``CFTC'') in CFTC Submission 14-010.
    CME believes the proposed rule changes are consistent with the 
requirements of the Exchange Act including Section 17A of the Exchange 
Act.\5\ More specifically, the proposed rule changes establish or 
change a member due, fee or other charge imposed by CME under Section 
19(b)(3)(A)(ii) \6\ of the Securities Exchange Act of 1934 and Rule 
19b-4(f)(2) \7\ thereunder. CME believes that the proposed fee change 
is consistent with the requirements of the Securities Exchange Act of 
1934 and the rules and regulations thereunder and, in particular, to 
17A(b)(3)(D) \8\, because the proposed fee changes apply equally to all 
market participants clearing covered products and therefore the 
proposed changes provide for the equitable allocation of reasonable 
dues, fees and other charges among participants. CME also notes that it 
operates in a highly competitive market in which market participants 
can readily direct business to competing venues. As such, the proposed 
changes are appropriately filed pursuant to Section 19(b)(3)(A) \9\ of 
the Act and paragraph (f)(2) of Rule 19b-4 thereunder.
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    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ 15 U.S.C. 78q-1(b)(3)(D).
    \9\ 15 U.S.C. 78s(b)(3)(A).
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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 proposed 
modifications have the effect of extending current CDS index swap 
clearing pricing. These products are swaps under the exclusive 
jurisdiction of the CFTC, and, as such, these proposed changes do not 
affect the security-based swap clearing activities of CME in any way 
and therefore do not impose any burden on competition that is 
inappropriate in furtherance of the purposes of the Act.

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 upon filing pursuant 
to Section 19(b)(3)(A) \10\ of the Act and paragraph (f)(2) of Rule 
19b-4 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.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 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-2014-03 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-2014-03. 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-2014-03 
and should be submitted on or before February 21, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-01963 Filed 1-30-14; 8:45 am]
BILLING CODE 8011-01-P