[Federal Register Volume 80, Number 6 (Friday, January 9, 2015)]
[Notices]
[Pages 1451-1453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-00127]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73981; File No. SR-CME-2014-58]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend a Fee Waiver Program for Certain OTC FX Cleared-Only Products

January 5, 2015.
    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 December 22, 2014, Chicago Mercantile Exchange 
Inc. (``CME'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as 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)(ii) 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)(ii).
    \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 extend an existing fee waiver program 
supporting certain CME cleared-only over-the-counter (``OTC'') foreign 
exchange (``FX'') products through December 31, 2015.
    The text of the proposed rule change is below. Italicized text 
indicates additions; bracketed text indicates deletions.
* * * * *

[[Page 1452]]

CME OTC FX Fee Waiver Program
Program Purpose
    The purpose of this Program is to incentivize market participants 
to submit transaction in the OTC FX products listed below to the 
Clearing House for clearing. The resulting increase in volume benefits 
all participant segments in the market.
Product Scope
    The following cleared only OTC FX products (``Products''):
    1. CME Cleared OTC FX--Emerging Markets.
    a. USDBRL, USDCLP, USDCNY, USDCOP, USDIDR, USDINR, USDKRW, USDMYR, 
USDPEN, USDPHP, USDRUB, USDTWD Non-Deliverable Forwards.
    b. USDCZK, USDHUF, USDHKD, USDILS, USDMXN, USDPLN, USDSGD, USDTHB, 
USDTRY, USDZAR Cash-Settled Forwards.
    2. CME Cleared OTC FX--Majors.
    a. AUDJPY, AUDUSD, CADJPY, EURAUD, EURCHF, EURGBP, EURJPY, EURUSD, 
GBPUSD, NZDUSD, USDCAD, USDCHF, USDDKK, USDJPY, USDNOK, USDSEK Cash-
Settled Forwards.
Eligible Participants
    The temporary reduction in fees will be open to all market 
participants and will automatically be applied to any transaction in 
the Products submitted to the Clearing House for clearing.
Program Term
    Start date is February 1, 2012. End date is December 31, 201[4]5.
Hours
    The Program will be applicable regardless of the transaction time.
Program Incentives
    Fee Waivers. All market participants that submit transactions in 
the Products to the Clearing House will have their clearing fees 
waived.
* * * * *

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 (``CFTC'') and currently offers 
clearing services for many different futures and swaps products. With 
this filing, CME proposes to make proposed changes to CME rules 
governing certain cleared-only OTC FX products.
    The proposed changes would extend an existing fee waiver program 
that applies to these OTC FX products. The only proposed changes are 
modifying the current December 31, 2014 termination date for the 
current fee waiver program to December 31, 2015.
    There is no limit to the number of participants that may 
participate in the proposed fee waiver program; it will be open to all 
market participants and will be automatically applied to all 
transaction fees in the enumerated OTC FX products. The changes that 
are described in this filing are limited to fee changes for OTC FX 
products. The proposed changes would become effective on filing.
    The proposed fee changes are limited to CME's business as a 
derivatives clearing organization clearing products under the exclusive 
jurisdiction of the CFTC and do not materially impact CME's security-
based swap clearing business in any way. CME notes that it recently 
filed a proposed rule change that clarified that CME has decided not to 
clear security-based swaps, except in a very limited set of 
circumstances.\5\ CME has also certified the proposed rule change that 
is the subject of this filing to the CFTC in CFTC Submission 14-523.
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    \5\ See Securities Exchange Act Release No. 34-73615 (Nov. 17, 
2014), 79 FR 69545 (Nov. 21, 2014) (SR-CME-2014-49). The only 
exception is with regards to Restructuring European Single Name CDS 
Contracts created following the occurrence of a Restructuring Credit 
Event in respect of an iTraxx Component Transaction. The clearing of 
Restructuring European Single Name CDS Contracts will be a necessary 
byproduct after such time that CME begins clearing iTraxx Europe 
index CDS.
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    CME believes the proposed rule change is consistent with the 
requirements of the Exchange Act including Section 17A of the Exchange 
Act.\6\ More specifically, the proposed rule change establishes or 
changes a member due, fee or other charge imposed by CME under Section 
19(b)(3)(A)(ii) \7\ of the Securities Exchange Act of 1934 and Rule 
19(f)(2) \8\ 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 Section 
17A(b)(3)(D),\9\ because the proposed fee changes apply equally to all 
market participants 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) \10\ of the Act and paragraph (f)(2) of 
Rule 19b-4 thereunder.
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    \6\ 15 U.S.C. 78q-1.
    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
    \9\ 15 U.S.C. 78q-1(b)(3)(D).
    \10\ 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 rule change 
extends a currently operating OTC FX fee waiver program for an 
additional year. 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) of the Act \11\ and Rule 19(f)(2) 
thereunder.\12\ 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,

[[Page 1453]]

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 240.19(f)(2).
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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-2014-58 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-2014-58. 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 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-2014-58 and 
should be submitted on or before January 30, 2015.

    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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Brent J. Fields,
Secretary.
[FR Doc. 2015-00127 Filed 1-8-15; 8:45 am]
BILLING CODE 8011-01-P