Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Regarding an Increase of CME Corporate Contribution to Interest Rate Swaps Financial Safeguards Package, 14866-14867 [2013-05283]

Download as PDF 14866 Federal Register / Vol. 78, No. 45 / Thursday, March 7, 2013 / Notices prohibitively costly, to provide, and explain why. [FR Doc. 2013–05222 Filed 3–6–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69017; File No. SR–CME– 2013–01] Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Regarding an Increase of CME Corporate Contribution to Interest Rate Swaps Financial Safeguards Package March 1, 2013. 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 1, 2013, 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 and to approve the proposed rule change on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CME proposes to amend rules related to its business as a derivatives clearing organization offering interest rate swap (‘‘IRS’’) clearing services. More specifically, CME proposes to increase CME’s corporate contribution to the financial safeguards for IRS to $150,000,000. emcdonald on DSK67QTVN1PROD with NOTICES 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 of, and statutory 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 III below. CME has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4 . VerDate Mar<15>2010 14:43 Mar 06, 2013 Jkt 229001 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 IRS. With this filing, CME proposes to increase CME’s corporate contribution to the financial safeguards for IRS to $150,000,000. CME proposes to implement such amendments on March 1, 2013. CME periodically assesses the structure of its financial safeguards packages. In assessing the financial safeguards available for IRS products, CME determined that an increase to the CME corporate contribution is appropriate. An amendment to CME Rule 8G802.B.1 is proposed which would reflect the increase in such contribution and an amendment to Rule 8G802.H is proposed which would reflect a conforming change to the CME contribution during an IRS Cooling Off Period. 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 13–045. CME believes the proposed rule change is consistent with the requirements of the Act, including Section 17A of the Act. The proposed rule change involves improvements to CME’s IRS product offering for investors because it increases the amount of financial resources available to support the default of an IRS Clearing member at CME and as such is designed to promote the prompt and accurate clearance and settlement of securities transactions and derivatives agreements, contracts and transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency and, in general, help to protect investors and the public interest. Furthermore, the proposed rule change is limited to the clearing of IRS (that is, swaps) and thus relate solely to the CME’s swaps clearing activities pursuant to its registration as a derivatives clearing organization under the Commodity Exchange Act (‘‘CEA’’) and do not significantly affect any securities clearing operations of the clearing agency or any related rights or obligations of the clearing agency or persons using such service. CME further notes that the policies of the CEA with respect to clearing are comparable to a number of the policies underlying the Exchange Act, such as PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 promoting market transparency for overthe-counter derivatives markets, promoting the prompt and accurate clearance of transactions and protecting investors and the public interest. 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. 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. 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 rulecomments@sec.gov. Please include File Number SR–CME–2013–01 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–2013–01. 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 E:\FR\FM\07MRN1.SGM 07MRN1 Federal Register / Vol. 78, No. 45 / Thursday, March 7, 2013 / Notices emcdonald on DSK67QTVN1PROD with NOTICES 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/marketregulation/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–2013–01 and should be submitted on or before March 28, 2013. IV. Commission’s Findings and Order Granting Accelerated Approval of Proposed Rule Change Section 19(b) of the Act 3 directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. The Commission finds that the proposed rule change is consistent with the requirements of the Act, in particular the requirements of Section 17A of the Act,4 and the rules and regulations thereunder applicable to CME. Specifically, the Commission finds that the proposed rule change is consistent with Section 17A(b)(3)(F) of the Act,5 which requires, among other things, that the rules of a clearing agency be designed 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 to protect investors and the public interest, because the proposed rule change would allow CME to enhance the financial safeguards package that applies to its IRS clearing business. In its filing, CME requested that the Commission approve the proposed rule change on an accelerated basis for good cause shown. The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,6 for approving the proposed rule change prior to the 30th day after the date of publication of notice of filing in the Federal Register because (i) the proposed rule changes relate solely to 3 15 U.S.C. 78s(b). U.S.C. 78q–1. In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78q–1(b)(3)(F). 6 15 U.S.C. 78s(b)(2). 4 15 VerDate Mar<15>2010 14:43 Mar 06, 2013 Jkt 229001 IRS and therefore relate solely to CME’s swaps clearing activities and do not significantly relate to CME’s functions as a clearing agency for security-based swaps; and (ii) the proposed rules change would increase the amount of financial resources available to support the default of an IRS Clearing member at CME and therefore will protect investors and the public interest. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (SR–CME–2013– 01) be, and hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–05283 Filed 3–6–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69009; File No. SR–NSX– 2013–07] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a New Order Type Called the MidpointSeeker Order and Amend Rule 11.3(c) Regarding Rounding of Sub-Penny Midpoint Executions February 28, 2013. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 27, 2013, National Stock Exchange, Inc. (‘‘NSX®’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change, as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comment on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to amend: (1) NSX Rule 11.3(c) to clarify how the NSX System may execute certain types of undisplayed orders that are pegged to the midpoint between the Protected 7 Id. 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 14867 BBO in subpennies; and (2) NSX Rule 11.11(c), entitled ‘‘Orders and Modifiers’’ to adopt a new order type called a Midpoint-Seeker Order. The text of the proposed rule change is available on the Exchange’s Web site at http://www.nsx.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, the Exchange included statements concerning the purpose of 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 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to amend: (1) NSX Rule 11.3(c) to clarify how the NSX System may execute certain types of undisplayed orders that are pegged to the midpoint between the Protected Best Bid or Offer (‘‘BBO’’) 3 in subpennies; and (2) NSX Rule 11.11(c), entitled ‘‘Orders and Modifiers’’ to adopt a new order type called a Midpoint-Seeker Order. Rounding of Midpoint Orders The Exchange proposes to amend NSX Rule 11.3(c) to clarify how the NSX System may execute certain types of Zero Display Reserve Orders 4 that are pegged to the midpoint between the Protected BBO in subpennies. NSX Rule 11.3(c) provides that a Zero Display Reserve Order that is pegged at the midpoint of the Protected BBO may be executed in subpennies, if necessary, to obtain a midpoint price. The Exchange is proposing to amend Rule 11.3(c) in order to clarify how the System rounds executions in securities priced less than $1.00 per share resulting from a Zero Display Reserve Order pegged at the midpoint to the nearest permissible 3 Exchange Rule 1.5. ‘‘Protected BBO’’ is defined as ‘‘the better of the following: (a) [t]he Protected NBBO or (b) [t]he displayed Top of Book.’’ 4 Under Exchange Rule 11.11(c)(2)(A), a ‘‘Zero Display Reserve Order’’ is a ‘‘Reserve Order with zero display quantity.’’ E:\FR\FM\07MRN1.SGM 07MRN1

Agencies

[Federal Register Volume 78, Number 45 (Thursday, March 7, 2013)]
[Notices]
[Pages 14866-14867]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-05283]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69017; File No. SR-CME-2013-01]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change Regarding an Increase of CME Corporate Contribution to 
Interest Rate Swaps Financial Safeguards Package

March 1, 2013.
    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 1, 2013, 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 
and to approve the proposed rule change on an accelerated basis.
---------------------------------------------------------------------------

    \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 amend rules related to its business as a 
derivatives clearing organization offering interest rate swap (``IRS'') 
clearing services. More specifically, CME proposes to increase CME's 
corporate contribution to the financial safeguards for IRS to 
$150,000,000.

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 of, and statutory 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 III 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 IRS. With this filing, CME proposes to increase 
CME's corporate contribution to the financial safeguards for IRS to 
$150,000,000. CME proposes to implement such amendments on March 1, 
2013.
    CME periodically assesses the structure of its financial safeguards 
packages. In assessing the financial safeguards available for IRS 
products, CME determined that an increase to the CME corporate 
contribution is appropriate. An amendment to CME Rule 8G802.B.1 is 
proposed which would reflect the increase in such contribution and an 
amendment to Rule 8G802.H is proposed which would reflect a conforming 
change to the CME contribution during an IRS Cooling Off Period.
    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 13-045.
    CME believes the proposed rule change is consistent with the 
requirements of the Act, including Section 17A of the Act. The proposed 
rule change involves improvements to CME's IRS product offering for 
investors because it increases the amount of financial resources 
available to support the default of an IRS Clearing member at CME and 
as such is designed to promote the prompt and accurate clearance and 
settlement of securities transactions and derivatives agreements, 
contracts and transactions, to assure the safeguarding of securities 
and funds which are in the custody or control of the clearing agency 
and, in general, help to protect investors and the public interest. 
Furthermore, the proposed rule change is limited to the clearing of IRS 
(that is, swaps) and thus relate solely to the CME's swaps clearing 
activities pursuant to its registration as a derivatives clearing 
organization under the Commodity Exchange Act (``CEA'') and do not 
significantly affect any securities clearing operations of the clearing 
agency or any related rights or obligations of the clearing agency or 
persons using such service.
    CME further notes that the policies of the CEA with respect to 
clearing 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.

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.

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. 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 rule-comments@sec.gov. Please include 
File Number SR-CME-2013-01 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-2013-01. 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

[[Page 14867]]

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-2013-01 
and should be submitted on or before March 28, 2013.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    Section 19(b) of the Act \3\ directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to such 
organization. The Commission finds that the proposed rule change is 
consistent with the requirements of the Act, in particular the 
requirements of Section 17A of the Act,\4\ and the rules and 
regulations thereunder applicable to CME. Specifically, the Commission 
finds that the proposed rule change is consistent with Section 
17A(b)(3)(F) of the Act,\5\ which requires, among other things, that 
the rules of a clearing agency be designed 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 to protect investors 
and the public interest, because the proposed rule change would allow 
CME to enhance the financial safeguards package that applies to its IRS 
clearing business.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(b).
    \4\ 15 U.S.C. 78q-1. In approving this proposed rule change, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78q-1(b)(3)(F).
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    In its filing, CME requested that the Commission approve the 
proposed rule change on an accelerated basis for good cause shown. The 
Commission finds good cause, pursuant to Section 19(b)(2) of the 
Act,\6\ for approving the proposed rule change prior to the 30th day 
after the date of publication of notice of filing in the Federal 
Register because (i) the proposed rule changes relate solely to IRS and 
therefore relate solely to CME's swaps clearing activities and do not 
significantly relate to CME's functions as a clearing agency for 
security-based swaps; and (ii) the proposed rules change would increase 
the amount of financial resources available to support the default of 
an IRS Clearing member at CME and therefore will protect investors and 
the public interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-CME-2013-01) be, and hereby 
is, approved on an accelerated basis.
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    \7\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-05283 Filed 3-6-13; 8:45 am]
BILLING CODE 8011-01-P