[Federal Register Volume 79, Number 53 (Wednesday, March 19, 2014)]
[Notices]
[Pages 15380-15381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05985]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71719; File No. SR-CME-2014-07]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing of Proposed Rule Change to Adopt Rule 980.F

March 13, 2014.
    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 March 4, 2014, 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 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 proposes to make amendments to CME Rule 980 by adding a new 
paragraph F. The new provision would provide for administrative fees to 
be imposed for late submissions of reports and other financial 
information to CME's Financial and Regulatory Surveillance Department 
(``FRSD''). Under the proposed changes, CME's FRSD would be able to 
assess clearing members a $1,000 administrative fee for each required 
submission that is not received by the due date and time. The proposed 
rule language would also allow the FRSD to, in its discretion, waive 
assessment of the administrative fee for good cause shown.

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 (``CFTC'') and operates a 
substantial business clearing futures and swaps contracts subject to 
the jurisdiction of the CFTC. CME proposes to make rule changes to CME 
Rule 980. Current CME Rule 980 sets out required records and reports 
for clearing members of CME. The proposed changes would add a new 
paragraph F. CME has also made filings with the CFTC, Submission No. 
13-581 and Submission No. 14-023, regarding the proposed changes to new 
paragraph F to existing Rule 980.
    The new provision would provide for administrative fees to be 
imposed for late submissions of reports and other financial information 
to CME's Financial and Regulatory Surveillance Department (``FRSD''). 
Under the proposed changes, CME's FRSD would be able to assess clearing 
members a $1,000 administrative fee for each required submission that 
is not received by the due date and time. The proposed rule language 
would also allow the FRSD to, in its discretion, waive assessment of 
the administrative fee for good cause shown.

[[Page 15381]]

    The new language is intended to address timely reporting of 
required financial information. To the extent a firm shows a pattern or 
practice of late submissions that could potentially indicate 
insufficient internal accounting controls or procedures, CME notes that 
there are separate existing processes available via the Clearing House 
Risk Committee which can result in additional disciplinary sanctions in 
appropriate circumstances. The imposing of an administrative fee that 
is the subject of this provision is not intended to replace these 
existing Clearing House Risk Committee processes. Rather, the new 
language is intended to supplement these processes by giving CME the 
ability to impose a $1,000 administrative fee on clearing members for 
each late submission of required reports.
    CME plans to operationalize the proposed changes on April 15, 2014, 
pending applicable regulatory reviews and approvals. CME has also made 
filings with the CFTC, Submission No. 13-581 and Submission No. 14-023, 
regarding the proposed changes.
    CME, a derivatives clearing organization, notes that it is 
implementing the proposed changes as part of an effort to discharge its 
regulatory obligations under the Commodity Exchange Act (``CEA'') more 
effectively.\3\ CME believes the proposed rule changes are also 
entirely consistent with the requirements of the Exchange Act and the 
rules and regulations thereunder, including Section 17A of the Exchange 
Act. The proposed changes enhance CME's self-regulatory organization 
function by providing the ability to assess a $1,000 administrative fee 
on clearing members for late submissions of financial information to 
CME's FRSD. These changes will strengthen CME's self-regulatory 
organization function and will encourage more accurate financial 
reporting by clearing members, which are goals that are clearly 
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 CME or for 
which it is responsible, and, in general, to protect investors and the 
public interest in a way that is consistent with Section 17A(b)(3)(F) 
of the Exchange Act.\4\
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    \3\ CME notes that the CEA contains a number of provisions that 
are comparable to the policies underlying the Exchange Act, 
including, for example, promoting market transparency for 
derivatives markets, promoting the prompt and accurate clearance of 
transactions and protecting investors and the public interest.
    \4\ 15 U.S.C. 78q-1(b)(3)(F).
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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 changes will 
give CME the ability to impose a $1,000 administrative fee on clearing 
members for the late submission of required reports and financial 
information.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the proposed rule change or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2014-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CME-2014-07. 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-2014-07 
and should be submitted on or before April 9, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-05985 Filed 3-18-14; 8:45 am]
BILLING CODE 8011-01-P