[Federal Register Volume 80, Number 67 (Wednesday, April 8, 2015)]
[Notices]
[Pages 18881-18883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-07962]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74634; File No. SR-CME-2015-004]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rulebook Provisions Establishing Decision-Making and Emergency 
Authority Over Clearing House Matters

April 2, 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 March 30, 2015, 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) \3\ of the Act, 
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)(ii).
    \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 a proposed rule change that is limited to its 
business as a derivatives clearing organization. More specifically, the 
proposed rule change would make amendments to rulebook provisions 
establishing decision-making and emergency authority over clearing 
house matters.

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

[[Page 18882]]

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 rulebook changes that are limited to 
its business clearing futures and swaps under the exclusive 
jurisdiction of the CFTC. More specifically, the proposed rule change 
would make amendments to rulebook provisions establishing decision-
making and emergency authority over clearing house matters.
    The proposed rule change relates to recent management structure and 
reporting line changes at CME. Current CME rules do not include any 
reference to or establishment of authority in the newly created role of 
President of Global Operations, Technology & Risk (``President GOTR''). 
The proposed rule change referenced in this submission is designed to 
ensure the President GOTR is authorized to undertake certain actions 
related to clearing house operations and emergency financial 
conditions. In light of the Chief Operating Officer`s (``COO'') newly 
established reporting line to the President GOTR, authority regarding 
certain clearing house matters and emergency financial conditions will 
be conferred from the COO to the President GOTR with these changes. The 
proposed rule revisions are designed to clearly specify the roles and 
responsibilities of management during extraordinary circumstances that 
impact the clearing house.
    The proposed rule change adds references to or establishes 
authority for the President GOTR in the following CME rules: Rule 257 
(Exchange Physical Emergencies); Rule 403 (Clearing House Risk 
Committee); Rule 701 (Declarations of Force Majeure); Rule 744 
(Failsafe Currency Availability Procedures for Physical Delivery); Rule 
812 (Final Settlement Price); Rule 824 (Additional Performance Bond); 
Rule 8G25 (IRS Default Management Committee); Rule 8G824 (Additional 
IRS Performance Bond); Rule 8G975 (IRS Emergency Financial Conditions); 
Rule 8H26 (CDS Default Management Committee); Rule 8H27 (CDS Risk 
Committee); Rule 8H824 (Additional CDS Performance Bond); Rule 8H975 
(CDS Emergency Financial Conditions); Rule 974 (Suspension of Member 
Firm Privileges); Rule 975 (Emergency Financial Conditions); Rule 976 
(Suspension of Clearing Members); Rule 978 (Open Trades of Suspended 
Clearing Members); and Rule 979 (Suspended or Expelled Clearing 
Members).
    The proposed rule change that is described in this filing is 
limited to its business as a derivatives clearing organization clearing 
products under the exclusive jurisdiction of the CFTC. CME has not 
cleared security based swaps and does not plan to and therefore the 
proposed rule change does not impact CME's security-based swap clearing 
business in any way. The proposed rule change would become effective 
immediately. CME notes that it has also submitted the proposed rule 
change that is the subject of this filing to its primary regulator, the 
CFTC, in CME Submission 15-047.
    CME believes the proposed rule change is consistent with the 
requirements of the Exchange Act including Section 17A of the Exchange 
Act.\5\ The proposed rule revisions are designed to clearly specify the 
roles and responsibilities of management during extraordinary 
circumstances that impact the clearing house. The changes would help 
ensure that all appropriate officers of CME have the ability to 
exercise decision-making and emergency authority in relation to matters 
impacting the clearing house, thereby enhancing the overall safety of 
the clearing house and the efficiency with which such actions may be 
taken. As such, the proposed rule change should be seen to be 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.\6\
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    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
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    Furthermore, the proposed rule change is limited to CME's futures 
and swaps clearing businesses, which mean they are limited in their 
effect to products that are under the exclusive jurisdiction of the 
CFTC. As such, the changes are limited to CME's activities as a DCO 
clearing futures that are not security futures and 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.
    Because the proposed rule change is limited in its effect to CME's 
futures and swaps clearing businesses, the changes are 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, swaps that are not security-based swaps or mixed 
swaps; and forwards that are not security forwards; 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 \7\ and are properly filed under 
Section 19(b)(3)(A) \8\ and Rule 19b-4(f)(4)(ii) \9\ thereunder.
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    \7\ 15 U.S.C. 78q-1.
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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 proposed rule 
revisions simply specify the roles and responsibilities of management 
during extraordinary circumstances that impact the clearing house. 
Further, the changes are limited to CME's futures and swaps clearing 
businesses and, as such, 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.

[[Page 18883]]

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 Rule 19b-4(f)(4)(ii) \11\ 
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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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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-2015-004 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-2015-004. 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-2015-004 and 
should be submitted on or before April 29, 2015.

    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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Brent J. Fields,
Secretary.
[FR Doc. 2015-07962 Filed 4-7-15; 8:45 am]
BILLING CODE 8011-01-P