Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Acceptance of a New Series of Credit Default Swap Index Product, 18107-18108 [2014-07042]

Download as PDF Federal Register / Vol. 79, No. 61 / Monday, March 31, 2014 / Notices SECURITIES AND EXCHANGE COMMISSION comments on the proposed rule changes from interested persons. [Release No. 34–71799; File No. SR–CME– 2014–09] I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Changes Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Acceptance of a New Series of Credit Default Swap Index Product CME is filing proposed rule changes that are limited to its business as a derivatives clearing organization. More specifically, the proposed rule changes involve CME’s acceptance of a new credit default swap index product series. March 25, 2014. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 14, 2014, Chicago Mercantile Exchange Inc. (‘‘CME’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule changes described in Items I and II below, which Items have been primarily prepared by CME. CME filed the proposal pursuant to Section 19(b)(3)(A)(iii) of the Act 3 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 In its filing with the Commission, CME included statements concerning the purpose and basis for the proposed rule changes and discussed any comments it received on the proposed rule changes. 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. 18107 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes CME is registered as a DCO with the Commodity Futures Trading Commission 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 and 21. CME also offers clearing of the Markit CDX North American High Yield Index Series 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21. The proposed rule changes 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 22 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: Series Termination date (scheduled termination date) CDX North American Investment Grade (CDX.NA.IG) .................................................................................... CDX North American Investment Grade (CDX.NA.IG) .................................................................................... CDX North American High Yield (CDX.NA.HY) ............................................................................................... tkelley on DSK3SPTVN1PROD with NOTICES CDX Index 11 15 11 20 Dec 2013. 20 Dec 2013. 20 Dec 2013. Although these changes will be effective on filing, CME plans to operationalize the proposed changes as follows: CDX IG 22 will become available for clearing on March 20, 2014; CDX HY 22 will become available for clearing on March 27, 2014; the product deletions will be effective immediately. The changes that are described in this filing are 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 changes that are the subject of this filing to its primary regulator, the Commodity Futures Trading Commission (‘‘CFTC’’), in a separate filing, CME Submission 14–066. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 18:10 Mar 28, 2014 CME believes the proposed rule changes are consistent with the requirements of the Exchange Act including Section 17A of the Exchange Act.5 The proposed rule changes would expand CME’s CDX IG and CDX HY product offerings by incorporating the upcoming Series 22 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 changes 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 3 15 4 17 Jkt 232001 PO 00000 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(4)(ii). Frm 00104 Fmt 4703 Sfmt 4703 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 DCO. These products are under the exclusive jurisdiction of the CFTC. As such, the proposed CME changes are limited to CME’s activities as a DCO 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 products 5 15 6 15 E:\FR\FM\31MRN1.SGM U.S.C. 78q–1. U.S.C. 78q–1(b)(3)(F). 31MRN1 18108 Federal Register / Vol. 79, No. 61 / Monday, March 31, 2014 / Notices offered under CME’s authority to act as a DCO, 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 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. B. Self-Regulatory Organization’s Statement on Burden on Competition CME does not believe that the proposed rule changes will have any impact, or impose any burden, on competition. The rule changes simply facilitate the offering of two new series of credit default swap index products. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Changes Received From Members, Participants, or Others CME has not solicited, and does not intend to solicit, comments regarding the proposed rule changes. CME has not received any unsolicited written comments from interested parties. tkelley on DSK3SPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Changes and Timing for Commission Action The foregoing rule changes has become effective 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 changes, the Commission summarily may temporarily suspend such rule changes 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule changes are consistent with the Act. 7 15 U.S.C. 78q–1. U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f)(4)(ii). 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(4)(ii). 18:10 Mar 28, 2014 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–2014–09 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–2014–09. 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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule changes that are filed with the Commission, and all written communications relating to the proposed rule changes 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–2014–09 and should be submitted on or before April 21, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–07042 Filed 3–28–14; 8:45 am] 8 15 VerDate Mar<15>2010 Comments may be submitted by any of the following methods: BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71797; File No. SR–NSX– 2014–07] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend a Pilot Program Related to Rule 11.19, Titled ‘‘Clearly Erroneous Executions’’ March 25, 2014. 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 March 24, 2014, 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 comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange is proposing to amend Rule 11.19, titled ‘‘Clearly Erroneous Executions’’ in order to extend the operation of a pilot program under which certain portions of the Rule are currently operating. The Exchange has designated this proposal as non-controversial and provided the Commission with the notice required by Rule 19b–4(f)(6)(iii) under the Act.3 The text of the proposed rule change is available on the Exchange’s Web site at https://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. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6)(iii). 2 17 12 17 Jkt 232001 PO 00000 CFR 200.30–3(a)(12). Frm 00105 Fmt 4703 Sfmt 4703 E:\FR\FM\31MRN1.SGM 31MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 79, Number 61 (Monday, March 31, 2014)]
[Notices]
[Pages 18107-18108]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-07042]

[[Page 18107]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71799; File No. SR-CME-2014-09]

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

March 25, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on March 14, 2014, Chicago Mercantile Exchange
Inc. (``CME'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule changes described in Items I and II
below, which Items have been primarily prepared by CME. CME filed the
proposal pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ 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 changes 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)(iii).
\4\ 17 CFR 240.19b-4(f)(4)(ii).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Changes

CME is filing proposed rule changes that are limited to its
business as a derivatives clearing organization. More specifically, the
proposed rule changes involve CME's acceptance of a new credit default
swap index product series.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Changes

In its filing with the Commission, CME included statements
concerning the purpose and basis for the proposed rule changes and
discussed any comments it received on the proposed rule changes. 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 Changes

CME is registered as a DCO with the Commodity Futures Trading
Commission 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 and 21. CME also offers clearing of the Markit CDX North
American High Yield Index Series 11, 12, 13, 14, 15, 16, 17, 18, 19, 20
and 21.
The proposed rule changes 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 22 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:

------------------------------------------------------------------------
Termination date
CDX Index Series (scheduled termination
date)
------------------------------------------------------------------------
CDX North American Investment 11 20 Dec 2013.
Grade (CDX.NA.IG).
CDX North American Investment 15 20 Dec 2013.
Grade (CDX.NA.IG).
CDX North American High Yield 11 20 Dec 2013.
(CDX.NA.HY).
------------------------------------------------------------------------

Although these changes will be effective on filing, CME plans to
operationalize the proposed changes as follows: CDX IG 22 will become
available for clearing on March 20, 2014; CDX HY 22 will become
available for clearing on March 27, 2014; the product deletions will be
effective immediately.
The changes that are described in this filing are 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 changes that are the subject of this filing to its
primary regulator, the Commodity Futures Trading Commission (``CFTC''),
in a separate filing, CME Submission 14-066.
CME believes the proposed rule changes are consistent with the
requirements of the Exchange Act including Section 17A of the Exchange
Act.\5\ The proposed rule changes would expand CME's CDX IG and CDX HY
product offerings by incorporating the upcoming Series 22 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 changes 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\
---------------------------------------------------------------------------

\5\ 15 U.S.C. 78q-1.
\6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

Furthermore, the proposed changes are limited in their effect to
swaps products offered under CME's authority to act as a DCO. These
products are under the exclusive jurisdiction of the CFTC. As such, the
proposed CME changes are limited to CME's activities as a DCO 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
products

[[Page 18108]]

offered under CME's authority to act as a DCO, 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 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.
---------------------------------------------------------------------------

\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).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

CME does not believe that the proposed rule changes will have any
impact, or impose any burden, on competition. The rule changes simply
facilitate the offering of two new series of credit default swap index
products.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Changes Received From Members, Participants, or Others

CME has not solicited, and does not intend to solicit, comments
regarding the proposed rule changes. CME has not received any
unsolicited written comments from interested parties.

III. Date of Effectiveness of the Proposed Rule Changes and Timing for
Commission Action

The foregoing rule changes has become effective 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 changes,
the Commission summarily may temporarily suspend such rule changes 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.
---------------------------------------------------------------------------

\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(4)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
changes are 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-2014-09 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-2014-09. 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 (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule changes that are
filed with the Commission, and all written communications relating to
the proposed rule changes 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-2014-09 and
should be submitted on or before April 21, 2014.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07042 Filed 3-28-14; 8:45 am]
BILLING CODE 8011-01-P

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