Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Allow the LSOC With Excess Model for CFTC-Regulated Swaps, 12252-12254 [2014-04683]
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Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Notices
government use of data adequately
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(5) What issues are raised by the use
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the adequacy of current international
laws, regulations, or norms?
Ted Wackler,
Deputy Chief of Staff and Assistant Director.
[FR Doc. 2014–04660 Filed 3–3–14; 8:45 am]
BILLING CODE 3270–F2–P
institution and settlement of injunctive
actions;
institution and settlement of
administrative proceedings;
adjudicatory matters; and
other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact the Office of the Secretary at
(202) 551–5400.
Dated: February 28, 2014.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2014–04831 Filed 2–28–14; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71615; File No. SR–CME–
2014–04]
Self-Regulatory Organizations;
Chicago Mercantile Exchange Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Allow the LSOC With
Excess Model for CFTC-Regulated
Swaps
February 26, 2014.
SECURITIES AND EXCHANGE
COMMISSION
tkelley on DSK3SPTVN1PROD with NOTICES
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Thursday, March 6, 2014 at 2 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or her designee, has
certified that, in her opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
and (10), permit consideration of the
scheduled matter at the Closed Meeting.
Commissioner Gallagher, as duty
officer, voted to consider the items
listed for the Closed Meeting in closed
session, and determined that no earlier
notice thereof was possible.
The subject matter of the Closed
Meeting will be:
VerDate Mar<15>2010
19:07 Mar 03, 2014
Jkt 232001
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 February 12, 2014, Chicago
Mercantile Exchange Inc. (‘‘CME’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change 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)
of the Act,3 and Rule 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.
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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–44(f)(4)(ii).
2 17
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
specifically, the proposed rule change
would make amendments to its rules
that would offer FCMs and their cleared
swaps customers the option to transmit
collateral specifically attributed to a
cleared swap customer under an ‘‘LSOC
with excess’’ model.
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 and currently offers
clearing services for many different
futures and swaps products. With this
filing, CME proposes to add new rules
to permit futures commission merchants
(‘‘FCMs’’) to transmit collateral of
cleared swaps customers to CME that is
in excess of the CME requirement for
such customers. The changes by their
terms relate only to swaps and do not
affect security-based swaps and
therefore will be effective on filing.
On November 14, 2012, CME
implemented the Legally Segregated
Operationally Commingled (‘‘LSOC’’)
regime for the protection of Cleared
Swap Customers in accordance with
Part 22 of the Commodity Futures
Trading Commission’s (‘‘CFTC’’)
Regulations. At that time, LSOC was
implemented in a ‘‘no excess’’ mode,
that is, any collateral value deposited by
an FCM with a derivatives clearing
organization (‘‘DCO’’) in excess of the
aggregate client minimum performance
bond margin requirement, to the extent
it is not been explicitly identified by the
FCM as being provided by the firm,
would be treated as unallocated cleared
swap customer value without
attribution to a specific cleared swaps
customer. In this ‘‘no excess’’ model, the
LSOC value for each cleared swaps
customer is presumed to be its
performance bond requirement at the
last settlement cycle and any collateral
on deposit at the DCO in excess of such
requirement aggregate of the customer
E:\FR\FM\04MRN1.SGM
04MRN1
Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Notices
initial margin requirements, is not used
by the DCO for any purpose after an
FCM default.
The proposed rule changes that are
the subject of this filing offer FCMs and
their cleared swaps customers the
option to transmit collateral specifically
attributed to a cleared swap customer
under an ‘‘LSOC with excess’’ model.
These changes are part of a coordinated
futures industry effort. CFTC Regulation
22.13(c) provides requirements for
FCMs to transmit such excess.
Specifically, Regulation 22.13(c) states
that:
tkelley on DSK3SPTVN1PROD with NOTICES
(c) A futures commission merchant may
transmit to a derivatives clearing
organization any collateral posted by a
Cleared Swaps Customer in excess of the
amount required by the derivatives clearing
organization if:
(1) the rules of the derivatives clearing
organization expressly permit the futures
commission merchant to transmit collateral
in excess of the amount required by the
derivatives clearing organization; and (2) the
derivatives clearing organization provides a
mechanism by which the futures commission
merchant is able to, and maintains rules
pursuant to which the futures commission
merchant is required to, identify each
Business Day, for each Cleared Swaps
Customer, the amount of collateral posted in
excess of the amount required by the
derivatives clearing organization.
Accordingly, CME is proposing CME
Rules 821, 8G821, and 8H821 which
would expressly permit FCMs to
transmit excess cleared swap customer
collateral to CME and would require
that they identify each Business Day, for
each cleared swaps customer, the value
of performance bond posted in excess of
the amount required for such cleared
swaps customer. Under the rules, FCMs
will not be required to transmit excess
collateral to CME by adoption of this
rule but will be given the option to do
so. Additionally, FCMs currently
operating in the ‘‘no excess’’ mode will
be allowed to continue in such mode.
The proposed rules changes do not
apply to security-based swaps positions.
The proposed changes that are
described in this filing are limited to
CME’s business as a derivatives clearing
organization clearing products under
the exclusive jurisdiction of the
Commodity Futures Trading
Commission (‘‘CFTC’’) and do not
materially impact CME’s security-based
swap clearing business in any way. CME
notes that it has already submitted the
proposed rule change that is the subject
of this filing to the CFTC.
CME believes the proposed rule
change is consistent with the
requirements of the Exchange Act
including Section 17A of the Exchange
VerDate Mar<15>2010
19:07 Mar 03, 2014
Jkt 232001
Act.5 The proposed rule change permits
futures commission merchants
(‘‘FCMs’’) to transmit collateral of
cleared swaps customers to CME that is
in excess of the CME requirement for
such customer and as such are 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
Furthermore, the proposed changes
are limited in their effect to swaps
products offered under CME’s authority
to act as a derivatives clearing
organization. Swaps are under the
exclusive jurisdiction of the CFTC. As
such, the proposed CME changes are
limited to CME’s activities as a
derivatives clearing organization
clearing swaps that are not securitybased 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 changes are
limited in their effect to swaps offered
under CME’s authority to act as a
derivatives clearing organization, the
proposed 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, and swaps that are not securitybased swaps or mixed swaps; 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 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.
5 15
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(F).
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).
6 15
PO 00000
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12253
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 rule changes simply
permit futures commission merchants
(‘‘FCMs’’) to transmit collateral of
cleared swaps customers to CME that is
in excess of the CME requirement for
such customer.
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) 10 of the Act and paragraph
(f)(2) of Rule 19b–4 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.11
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 (https://www.sec.gov/
rules/sro.shtml), or
• Send an email to rule-comments@
sec.gov. Please include File No. SR–
CME–2014–04 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–2014–04. This file
number should be included on the
subject line if email is used. To help the
10 15
11 15
E:\FR\FM\04MRN1.SGM
U.S.C. 78s(b)(3)(A).
U.S.C. 78s(b)(3)(C).
04MRN1
12254
Federal Register / Vol. 79, No. 42 / Tuesday, March 4, 2014 / Notices
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 (https://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
https://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–2014–04 and should
be submitted on or before March 25,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–04683 Filed 3–3–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
tkelley on DSK3SPTVN1PROD with NOTICES
[Release No. 34–71618; File No. SR–
NYSEArca-2013–144]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Designation of a
Longer Period for Commission Action
on a Proposed Rule Change To List
and Trade Shares of the ETSpreads HY
Long Credit Fund, the ETSpreads HY
Short Credit Fund, the ETSpreads IG
Long Credit Fund and the ETSpreads
IG Short Credit Fund Under NYSE Arca
Equities Rule 8.600
1 15
February 26, 2014.
On December 27, 2013, NYSE Arca,
Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
12 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
19:07 Mar 03, 2014
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’)1 and Rule
19b–4 thereunder,2 a proposed rule
change to list and trade shares of the
ETSpreads HY Long Credit Fund, the
ETSpreads HY Short Credit Fund, the
ETSpreads IG Long Credit Fund and the
ETSpreads IG Short Credit Fund
(collectively, ‘‘Funds’’) under NYSE
Arca Equities Rule 8.600. The proposed
rule change was published for comment
in the Federal Register on January 15,
2014.3 The Commission received no
comment letters on the proposed rule
change.
Section 19(b)(2) of the Act 4 provides
that, within 45 days of the publication
of notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The Commission is
extending this 45-day time period.
The Commission finds that it is
appropriate to designate a longer period
within which to take action on the
proposed rule change so that it has
sufficient time to consider the proposed
rule change. The proposed rule change
would permit the listing and trading of
shares of the Funds, which will invest
substantially all of their assets in
cleared credit default index swaps,
cleared single name credit default
swaps, futures contracts based on credit
default swaps or other similar futures
contracts, and obligations of, or those
guaranteed by, the United States
government with a maturity of less than
six years, money market instruments,
and cash.
Accordingly, the Commission,
pursuant to Section 19(b)(2) of the Act,5
designates April 15, 2014, as the date by
which the Commission should either
approve or disapprove or institute
proceedings to determine whether to
disapprove the proposed rule change
(File Number SR–NYSEArca–2013–
144).
Jkt 232001
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Securities Exchange Act Release No. 71266
(January 9, 2014), 79 FR 2705 (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
5 15 U.S.C. 78s(b)(2).
2 17
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–04684 Filed 3–3–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71616; File No. SR–MSRB–
2013–09]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Order Granting Approval of
Proposed Rule Change, as Modified by
Amendment No. 1, Consisting of
Amendments to MSRB Rules A–12, on
Initial Fee, G–14, on Reports of Sales
or Purchases, and the Facility for RealTime Transaction Reporting and Price
Dissemination (‘‘RTRS Facility’’);
Deletion of Rules A–14, on Annual Fee,
A–15, on Notification to the Board of
Change in Status or Change of Name
or Address, and G–40, on Electronic
Mail Contacts; Deletion of References
to RTRS Testing Requirements Under
G–14(b)(v), G–14(c), on RTRS
Procedures, and in the RTRS Facility;
Elimination of MSRB Forms RTRS and
G–40, and Adoption of a Single,
Consolidated Electronic Registration
Form, New Form A–12
February 26, 2014.
I. Introduction
On December 24, 2013, the Municipal
Securities Rulemaking Board (the
‘‘MSRB’’ or ‘‘Board’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’ or ‘‘SEC’’), pursuant to
Section 19(b)(1) of the Securities
Exchange Act of 1934 (the ‘‘Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change consisting of amendments to
MSRB Rules A–12, on initial fee, G–14,
on reports of sales or purchases, and the
Facility for Real-Time Transaction
Reporting and Price Dissemination
(‘‘RTRS Facility’’); deletion of Rules A–
14, on annual fee, A–15, on notification
to the Board of change in status or
change of name or address, and G–40,
on electronic mail contacts; deletion of
references to RTRS Testing
Requirements under G–14(b)(v), G–
14(c), on RTRS Procedures, and in the
RTRS Facility; elimination of MSRB
Forms RTRS and G–40, and adoption of
a single, consolidated electronic
registration form, new Form A–12. On
6 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 79, Number 42 (Tuesday, March 4, 2014)]
[Notices]
[Pages 12252-12254]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-04683]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71615; File No. SR-CME-2014-04]
Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Allow the LSOC With Excess Model for CFTC-Regulated Swaps
February 26, 2014.
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 February 12, 2014, Chicago Mercantile Exchange
Inc. (``CME'' or the ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change 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) of the
Act,\3\ and Rule 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.
---------------------------------------------------------------------------
\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-44(f)(4)(ii).
---------------------------------------------------------------------------
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 that would
offer FCMs and their cleared swaps customers the option to transmit
collateral specifically attributed to a cleared swap customer under an
``LSOC with excess'' model.
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 and currently offers clearing
services for many different futures and swaps products. With this
filing, CME proposes to add new rules to permit futures commission
merchants (``FCMs'') to transmit collateral of cleared swaps customers
to CME that is in excess of the CME requirement for such customers. The
changes by their terms relate only to swaps and do not affect security-
based swaps and therefore will be effective on filing.
On November 14, 2012, CME implemented the Legally Segregated
Operationally Commingled (``LSOC'') regime for the protection of
Cleared Swap Customers in accordance with Part 22 of the Commodity
Futures Trading Commission's (``CFTC'') Regulations. At that time, LSOC
was implemented in a ``no excess'' mode, that is, any collateral value
deposited by an FCM with a derivatives clearing organization (``DCO'')
in excess of the aggregate client minimum performance bond margin
requirement, to the extent it is not been explicitly identified by the
FCM as being provided by the firm, would be treated as unallocated
cleared swap customer value without attribution to a specific cleared
swaps customer. In this ``no excess'' model, the LSOC value for each
cleared swaps customer is presumed to be its performance bond
requirement at the last settlement cycle and any collateral on deposit
at the DCO in excess of such requirement aggregate of the customer
[[Page 12253]]
initial margin requirements, is not used by the DCO for any purpose
after an FCM default.
The proposed rule changes that are the subject of this filing offer
FCMs and their cleared swaps customers the option to transmit
collateral specifically attributed to a cleared swap customer under an
``LSOC with excess'' model. These changes are part of a coordinated
futures industry effort. CFTC Regulation 22.13(c) provides requirements
for FCMs to transmit such excess. Specifically, Regulation 22.13(c)
states that:
(c) A futures commission merchant may transmit to a derivatives
clearing organization any collateral posted by a Cleared Swaps
Customer in excess of the amount required by the derivatives
clearing organization if:
(1) the rules of the derivatives clearing organization expressly
permit the futures commission merchant to transmit collateral in
excess of the amount required by the derivatives clearing
organization; and (2) the derivatives clearing organization provides
a mechanism by which the futures commission merchant is able to, and
maintains rules pursuant to which the futures commission merchant is
required to, identify each Business Day, for each Cleared Swaps
Customer, the amount of collateral posted in excess of the amount
required by the derivatives clearing organization.
Accordingly, CME is proposing CME Rules 821, 8G821, and 8H821 which
would expressly permit FCMs to transmit excess cleared swap customer
collateral to CME and would require that they identify each Business
Day, for each cleared swaps customer, the value of performance bond
posted in excess of the amount required for such cleared swaps
customer. Under the rules, FCMs will not be required to transmit excess
collateral to CME by adoption of this rule but will be given the option
to do so. Additionally, FCMs currently operating in the ``no excess''
mode will be allowed to continue in such mode. The proposed rules
changes do not apply to security-based swaps positions.
The proposed changes that are described in this filing are limited
to CME's business as a derivatives clearing organization clearing
products under the exclusive jurisdiction of the Commodity Futures
Trading Commission (``CFTC'') and do not materially impact CME's
security-based swap clearing business in any way. CME notes that it has
already submitted the proposed rule change that is the subject of this
filing to the CFTC.
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 change permits futures commission merchants
(``FCMs'') to transmit collateral of cleared swaps customers to CME
that is in excess of the CME requirement for such customer and as such
are 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 changes are limited in their effect to
swaps products offered under CME's authority to act as a derivatives
clearing organization. Swaps are under the exclusive jurisdiction of
the CFTC. As such, the proposed CME changes are limited to CME's
activities as a derivatives clearing organization clearing 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 changes are limited in their effect to swaps
offered under CME's authority to act as a derivatives clearing
organization, the proposed 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, and swaps that are not security-based swaps or mixed
swaps; 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 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 rule changes simply
permit futures commission merchants (``FCMs'') to transmit collateral
of cleared swaps customers to CME that is in excess of the CME
requirement for such customer.
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) \10\ of the Act and paragraph (f)(2) of Rule
19b-4 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.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 15 U.S.C. 78s(b)(3)(C).
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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 (https://www.sec.gov/rules/sro.shtml), or
Send an email to rule-comments@sec.gov. Please include
File No. SR-CME-2014-04 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-2014-04. This file
number should be included on the subject line if email is used. To help
the
[[Page 12254]]
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 (https://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
https://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-2014-04
and should be submitted on or before March 25, 2014.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-04683 Filed 3-3-14; 8:45 am]
BILLING CODE 8011-01-P
