[Federal Register Volume 80, Number 72 (Wednesday, April 15, 2015)]
[Notices]
[Pages 20271-20272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-08544]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74689; File No. SR-CME-2015-012]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Facilitate Acceptance of a New Credit Default Swap Index Product Series

April 9, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 31, 2015, 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 primarily prepared by CME. CME filed the proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-
4(f)(4)(ii) \4\ thereunder, so that the proposed rule change 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)(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 its rules regarding the 
listing of new series of CDS indexes available for clearing and the 
deletion of the series whose termination dates have passed.

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 (``DCO'') 
with the Commodity Futures Trading Commission (``CFTC'') and offers 
clearing services for many different futures and swaps products, 
including certain credit default swap index products. Currently, CME 
offers clearing of the Markit CDX North American Investment Grade Index 
Series 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23. 
CME also offers clearing of the Markit CDX North American High Yield 
Index Series 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23.
    The proposed rule change would expand CME's Markit CDX North 
American Investment Grade (``CDX IG'') Index and Markit CDX North 
American High Yield (``CDX HY'') Index product offerings by 
incorporating the upcoming Series 24 for both sets of index products.
    In addition to the changes to expand CME's CDX offering, CME also 
proposes to remove from the current list of accepted CDX indices 
certain products whose termination dates have passed. These products 
are set forth in the following table:

----------------------------------------------------------------------------------------------------------------
                  CDX index                        Series        Termination date (scheduled termination date)
----------------------------------------------------------------------------------------------------------------
CDX North American Investment Grade                         9  20 Dec 2014.
 (CDX.NA.IG).
CDX North American Investment Grade                        13  20 Dec 2014.
 (CDX.NA.IG).
CDX North American Investment Grade                        17  20 Dec 2014.
 (CDX.NA.IG).
CDX North American High Yield (CDX.NA.HY)....              13  20 Dec 2014.
----------------------------------------------------------------------------------------------------------------

    Although these changes will be effective on filing, CME plans to 
operationalize the proposed changes as follows: CDX IG 24 will become 
available for clearing on March 20, 2015 and CDX HY 24 will become 
available for clearing on March 27, 2015; the product deletions would 
be effective immediately.\5\
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    \5\ Staff has not altered any part of this paragraph even though 
the dates referenced in this paragraph have passed.
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    The change that is described in this filing is limited to CME's 
business as a DCO 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 has also certified the 
proposed rule change that is the subject of this filing to its primary 
regulator, the CFTC, in a separate filing, CME Submission 15-100.

[[Page 20272]]

    CME believes the proposed rule change is consistent with the 
requirements of the Act, including Section 17A of the Act.\6\ The 
proposed rule change would expand CME's CDX IG and CDX HY product 
offerings by incorporating the upcoming Series 24 for both sets of 
index products and would therefore provide investors with an expanded 
range of derivatives products for clearing and would also remove 
certain products whose termination dates have passed. As such, the 
proposed rule change is 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 Act.\7\
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    \6\ 15 U.S.C. 78q-1.
    \7\ 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 means it is limited in its effect 
to products that are under the exclusive jurisdiction of the CFTC. As 
such, the proposed rule change is 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 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 proposed rule change is 
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 proposed rule change is therefore consistent with the 
requirements of Section 17A of the 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 proposed rule change 
simply facilitates the offering of two new series of credit default 
swap index products and deletes certain products whose termination 
dates have passed. Further, the proposed rule change is limited to 
CME's futures and swaps clearing businesses and, as such, does not 
affect the security-based swap clearing activities of CME in any way 
and therefore does 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 pursuant to Section 
19(b)(3)(A) \11\ of the Act and paragraph (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)(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-2015-012 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 21049-1090.

All submissions should refer to File Number SR-CME-2015-012. 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-2015-012 and 
should be submitted on or before May 6, 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. 2015-08544 Filed 4-14-15; 8:45 am]
BILLING CODE 8011-01-P