Self-Regulatory Organizations; Cboe Futures Exchange, LLC; Notice of a Filing of a Proposed Rule Change Regarding Rule Consolidation, 11020-11022 [2021-03546]
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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices
matter within the Commission’s
jurisdiction.
SECURITIES AND EXCHANGE
COMMISSION
Dated: February 17, 2021.
For the Nuclear Regulatory Commission.
David C. Cullison,
NRC Clearance Officer, Office of the Chief
Information Officer.
[Release No. 34–91144; File No. SR–CFE–
2021–002]
Self-Regulatory Organizations; Cboe
Futures Exchange, LLC; Notice of a
Filing of a Proposed Rule Change
Regarding Rule Consolidation
[FR Doc. 2021–03557 Filed 2–22–21; 8:45 am]
BILLING CODE 7590–01–P
February 17, 2021.
OCCUPATIONAL SAFETY AND
HEALTH REVIEW COMMISSION
Senior Executive Service Performance
Review Board Membership
Occupational Safety and Health
Review Commission.
ACTION: Annual notice.
AGENCY:
Notice is given of the
appointment of members to the
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Occupational Safety and Health Review
Commission.
DATE: Membership is effective on
February 23, 2021.
FOR FURTHER INFORMATION CONTACT:
Linda M. Beard, Human Resources
Specialist, U.S. Occupational Safety and
Health Review Commission, 1120 20th
Street NW, Washington, DC 20036, (202)
606–5393.
SUPPLEMENTARY INFORMATION: The
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U.S.C. 4314(c)(1) through (5), has
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• Tim English, Associate
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SUMMARY:
Cynthia L. Attwood,
Chairman.
[FR Doc. 2021–03669 Filed 2–22–21; 8:45 am]
BILLING CODE 7600–01–P
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Pursuant to Section 19(b)(7) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
February 3, 2021 Cboe Futures
Exchange, LLC (‘‘CFE’’ or ‘‘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 by CFE.2 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons. CFE
also has filed this proposed rule change
with the Commodity Futures Trading
Commission (‘‘CFTC’’). CFE filed a
written certification with the CFTC
under Section 5c(c) of the Commodity
Exchange Act (‘‘CEA’’) 3 on January 28,
2021.
I. Self-Regulatory Organization’s
Description of the Proposed Rule
Change
The Exchange proposes to streamline
the manner in which CFE’s rules require
CFE Trading Privilege Holders (‘‘TPHs’’)
to comply with CFTC regulations
relating to minimum financial
requirements, financial reporting
requirements, and protection of
customer funds. The scope of this filing
is limited solely to the application of the
proposed rule change to security futures
that may be traded on CFE. Although no
security futures are currently listed for
trading on CFE, CFE may list security
futures for trading in the future. The text
of the proposed rule change is attached
as Exhibit 4 to the filing but is not
attached to the publication of this
notice.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, CFE
included statements concerning the
1 15
U.S.C. 78s(b)(7).
Commission notes that the Exchange
originally filed its proposed rule change regarding
rule consolidation on January 29, 2021 (SR–CFE–
2021–001). SR–CFE–2021–001 was subsequently
withdrawn and replaced by this filing in order to
correct certain typographical errors in the Exhibit
1 and proposed rule text.
3 7 U.S.C. 7a–2(c).
2 The
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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. CFE 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
1. Purpose
Chapter 5 (Obligations of Trading
Privilege Holders) of the CFE Rulebook
currently includes a lengthy Appendix
that contains twenty CFE rules
numbered Rules 518 through 537. Each
of these rules provides that any TPH
subject to an enumerated CFTC
Regulation that violates the specified
Regulation shall be deemed to have
violated that CFE rule. The CFTC
Regulations referenced in the Appendix
relate to minimum financial standards
for intermediaries, the segregation of
customer and proprietary funds, the
custody of customer funds, the
investment standards for customer
funds, intermediary default procedures,
and related recordkeeping. The
Appendix is lengthy because it includes
twenty separate CFE rules. The
Appendix is also lengthy because each
of these CFE rules includes CFE rule
language as well as a restatement of the
provisions of the applicable CFTC
Regulation that is referenced in the rule
which follows after the CFE rule
language.
The proposed rule change streamlines
the manner in which the requirements
under the Appendix to Chapter 5 are
presented in the CFE Rulebook while
maintaining the same requirements
within the Rulebook that are currently
provided for under the Appendix.
Specifically, the proposed rule change
consolidates those requirements by
enumerating all of them within current
CFE Rule 518 (Compliance with
Minimum Financial Requirements,
Financial Reporting Requirements, and
Requirements Relating to Protection of
Customer Funds) instead of within an
Appendix to Chapter 5. The proposed
rule change also deletes the restatement
of all of the provisions of the CFTC
Regulations referenced in the Appendix
while maintaining within Rule 518
reference to those same CFTC
Regulations and to the subject matter of
those regulations.
The following table identifies for each
of the current CFE rules that is proposed
to be consolidated into Rule 518 the rule
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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices
number of the current rule, the
subsection of amended Rule 518 that is
proposed to address the subject matter
Current CFE rule
New CFE rule
of the current rule, and the CFTC
regulation underlying the current rule.
The table also includes a high level
CFTC regulation
519 ....................
518(a)
4 1.10
520 ....................
518(b)
5 1.11
521 ....................
518(c)
6 1.12
522 ....................
518(d)
7 1.17
523 ....................
518(e)
8 1.18
524 ....................
518(f)
9 1.20
525 ....................
518(g)
10 1.21
526 ....................
518(h)
11 1.22
527 ....................
518(i)
12 1.23
528 ....................
518(j)
13 1.24
529 ....................
518(k)
14 1.25
530 ....................
518(l)
15 1.26
531 ....................
518(m)
16 1.27
532 ....................
518(n)
17 1.28
533 ....................
518(o)
18 1.29
534 ....................
518(p)
19 1.30
535 ....................
518(q)
20 1.31
536 ....................
518(r)
21 1.32
537 ....................
518(s)
22 1.36
CFR 1.10.
CFR 1.11.
6 17 CFR 1.12.
7 17 CFR 1.17.
8 17 CFR 1.18.
9 17 CFR 1.20.
10 17 CFR 1.21.
description of the subject matter of each
of those rules as provided for under
applicable CFTC regulation.
Summary of rule
Requires TPHs subject to CFTC Regulation 1.10 to comply with financial reporting requirements, including the requirement to file CFTC Form 1–FR.
Requires TPHs subject to CFTC Regulation 1.11 to comply with the requirement that
futures commission merchants (‘‘FCMs’’) establish, maintain, and enforce a system
of risk management policies and procedures.
Requires TPHs subject to CFTC Regulation 1.12 to comply with the requirement to notify the CFTC if the TPH fails to maintain an adjusted net capital above certain specified thresholds.
Requires TPHs subject to CFTC Regulation 1.17 to comply with certain minimum financial requirements.
Requires TPHs subject to CFTC Regulation 1.18 to comply with the requirement to
maintain records for and relating to financial reporting and a monthly computation regarding the TPH’s assets, liabilities, and capital.
Requires TPHs subject to CFTC Regulation 1.20 to comply with the requirement to
separately account for all future customer funds and segregate those funds as belonging to the TPH’s futures customers.
Requires TPHs subject to CFTC Regulation 1.21 to comply with the requirement to
treat all money and equities accruing to an FCM on behalf of any futures customer
as accruing to the futures customer.
Requires TPHs subject to CFTC Regulation 1.22 to comply with a prohibition on using
or permitting the use of the customer funds of one futures customer to purchase,
margin, or settle the trades of or to secure credit of any person other than that futures customer.
Requires TPHs subject to CFTC Regulation 1.23 to comply with a prohibition on the
commingling of futures customer funds with the funds of an FCM.
Requires TPHs subject to CFTC Regulation 1.24 to comply with an exclusion that
money held in a segregated account shall not include money invested in obligations
or stocks of any clearing organization or contract market.
Requires TPHs subject to CFTC Regulation 1.25 to comply with the requirements and
restrictions regarding the investments of customer funds.
Requires TPHs subject to CFTC Regulation 1.26 to comply with the requirement that
each FCM that invests customer funds in instruments described in CFTC Regulation
1.25, except for investments in money market mutual funds, shall separately account
for those instruments as futures customer funds and segregate those instruments as
funds belonging to customers.
Requires TPHs subject to CFTC Regulation 1.27 to comply with the requirement that
each FCM which invests customer funds shall keep certain records of the investment.
Requires TPHs subject to CFTC Regulation 1.28 to comply with the requirement that
FCMs that invest customer funds in instruments described in CFTC Regulation 1.25
shall include those instruments in segregated account records and reports at values
not exceeding current market values.
Requires TPHs subject to CFTC Regulation 1.29 to comply with the provision that an
FCM may invest customer funds and retain as the TPH’s own incremental income or
interest resulting therefrom and the requirement that an FCM shall bear sole responsibility for any losses resulting from the investment of customer funds in instruments
described in CFTC Regulation 1.25.
Requires TPHs subject to CFTC Regulation 1.30 to comply with a prohibition against
an FCM lending funds on an unsecured basis to finance customers’ trading or lending funds to customers secured by the customers’ accounts.
Requires TPHs subject to CFTC Regulation 1.31 to comply with the requirement to
maintain electronic records in accordance with certain provisions and to further establish appropriate systems and controls that ensure the authority and reliability of
electronic regulatory records.
Requires TPHs subject to CFTC Regulation 1.32 to comply with the requirement each
FCM compute as of the close of each business day the total amount of futures customer funds on deposit in segregated accounts as well as other specified details.
Requires TPHs subject to CFTC Regulation 1.36 to comply with the requirement that
each FCM maintain a record of all securities and property received from customers
in lieu of money to margin, purchase, guarantee, or secure the transactions of those
customers.
4 17
11 17
18 17
5 17
12 17
19 17
VerDate Sep<11>2014
CFR 1.22.
CFR 1.23.
13 17 CFR 1.24.
14 17 CFR 1.25.
15 17 CFR 1.26.
16 17 CFR 1.27.
17 17 CFR 1.28.
18:36 Feb 22, 2021
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11021
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CFR 1.29.
CFR 1.30.
20 17 CFR 1.31.
21 17 CFR 1.32.
22 17 CFR 1.36.
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Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Notices
CFE believes that its proposed
approach to amending the Appendix to
Chapter 5 simplifies the CFE Rulebook
by streamlining a lengthy portion of the
Rulebook that contains twenty separate
rules into one straightforward rule that
reflects all of the same requirements that
exist under the consolidated rules
thereby making it easier for TPHs to
reference these requirements within
CFE’s Rulebook because they will all be
enumerated in a single rule.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,23 in general, and
furthers the objectives of Sections
6(b)(1) 24 and 6(b)(5) 25 in particular, in
that it is designed:
• To enable the Exchange to enforce
compliance by its TPHs and persons
associated with its TPHs with the
provisions of the rules of the Exchange,
• to prevent fraudulent and
manipulative acts and practices,
• to promote just and equitable
principles of trade,
• to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system,
• and in general, to protect investors
and the public interest.
The proposed rule change retains
within the CFE Rulebook rule
provisions that address minimum
financial requirements, financial
reporting requirements, and protection
of customer funds, including rules
relating to appropriate minimum
financial standards for intermediaries,
the segregation of customer and
proprietary funds, the custody of
customer funds, the investment
standards for customer funds,
intermediary default procedures, and
related recordkeeping as required by
CFTC regulations, all in furtherance of
TPH compliance with those rule
provisions and their enforcement by the
Exchange. In particular, the proposed
rule change streamlines a lengthy
portion of the Rulebook that contains
twenty separate rules into one
straightforward rule that reflects all of
the same requirements that exist under
the consolidated rules thereby making it
easier for TPHs to reference those
requirements within CFE’s Rulebook
because they will all be enumerated in
a single rule. The Exchange believes that
making it easier for TPHs to reference
those requirements will contribute to
23 15
U.S.C. 78f(b).
U.S.C. 78f(b)(1).
25 15 U.S.C. 78f(b)(5).
furthering compliance with those
requirements by TPHs.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CFE does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act, in that the
Exchange believes that the proposed
rule change will contribute to furthering
compliance by TPHs with CFTC
regulations relating to minimum
financial requirements, financial
reporting requirements, and protection
of customer funds. The Exchange
believes that the proposed rule change
is equitable and not unfairly
discriminatory in that it would apply
equally to all TPHs subject to the
relevant CFTC regulations.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change will
become operative on February 11, 2021.
At any time within 60 days of the date
of effectiveness of the proposed rule
change, the Commission, after
consultation with the CFTC, may
summarily abrogate the proposed rule
change and require that the proposed
rule change be refiled in accordance
with the provisions of Section 19(b)(1)
of the Act.26
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 Number SR–
CFE–2021–002 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.
24 15
VerDate Sep<11>2014
18:36 Feb 22, 2021
All submissions should refer to File
Number SR–CFE–2021–002. 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 website (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 website 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CFE–2021–002, and should
be submitted on or before March 16,
2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–03546 Filed 2–22–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91146; File No. SR–
PEARL–2021–03]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rule 200, Trading Permits
February 17, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
27 17
CFR 200.30–3(a)(73).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
26 15
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U.S.C. 78s(b)(1).
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]]>Agencies
[Federal Register Volume 86, Number 34 (Tuesday, February 23, 2021)]
[Notices]
[Pages 11020-11022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-03546]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91144; File No. SR-CFE-2021-002]
Self-Regulatory Organizations; Cboe Futures Exchange, LLC; Notice
of a Filing of a Proposed Rule Change Regarding Rule Consolidation
February 17, 2021.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on February 3, 2021 Cboe
Futures Exchange, LLC (``CFE'' or ``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 by CFE.\2\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons. CFE also
has filed this proposed rule change with the Commodity Futures Trading
Commission (``CFTC''). CFE filed a written certification with the CFTC
under Section 5c(c) of the Commodity Exchange Act (``CEA'') \3\ on
January 28, 2021.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(7).
\2\ The Commission notes that the Exchange originally filed its
proposed rule change regarding rule consolidation on January 29,
2021 (SR-CFE-2021-001). SR-CFE-2021-001 was subsequently withdrawn
and replaced by this filing in order to correct certain
typographical errors in the Exhibit 1 and proposed rule text.
\3\ 7 U.S.C. 7a-2(c).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Description of the Proposed Rule
Change
The Exchange proposes to streamline the manner in which CFE's rules
require CFE Trading Privilege Holders (``TPHs'') to comply with CFTC
regulations relating to minimum financial requirements, financial
reporting requirements, and protection of customer funds. The scope of
this filing is limited solely to the application of the proposed rule
change to security futures that may be traded on CFE. Although no
security futures are currently listed for trading on CFE, CFE may list
security futures for trading in the future. The text of the proposed
rule change is attached as Exhibit 4 to the filing but is not attached
to the publication of this notice.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CFE 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. CFE 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
1. Purpose
Chapter 5 (Obligations of Trading Privilege Holders) of the CFE
Rulebook currently includes a lengthy Appendix that contains twenty CFE
rules numbered Rules 518 through 537. Each of these rules provides that
any TPH subject to an enumerated CFTC Regulation that violates the
specified Regulation shall be deemed to have violated that CFE rule.
The CFTC Regulations referenced in the Appendix relate to minimum
financial standards for intermediaries, the segregation of customer and
proprietary funds, the custody of customer funds, the investment
standards for customer funds, intermediary default procedures, and
related recordkeeping. The Appendix is lengthy because it includes
twenty separate CFE rules. The Appendix is also lengthy because each of
these CFE rules includes CFE rule language as well as a restatement of
the provisions of the applicable CFTC Regulation that is referenced in
the rule which follows after the CFE rule language.
The proposed rule change streamlines the manner in which the
requirements under the Appendix to Chapter 5 are presented in the CFE
Rulebook while maintaining the same requirements within the Rulebook
that are currently provided for under the Appendix. Specifically, the
proposed rule change consolidates those requirements by enumerating all
of them within current CFE Rule 518 (Compliance with Minimum Financial
Requirements, Financial Reporting Requirements, and Requirements
Relating to Protection of Customer Funds) instead of within an Appendix
to Chapter 5. The proposed rule change also deletes the restatement of
all of the provisions of the CFTC Regulations referenced in the
Appendix while maintaining within Rule 518 reference to those same CFTC
Regulations and to the subject matter of those regulations.
The following table identifies for each of the current CFE rules
that is proposed to be consolidated into Rule 518 the rule
[[Page 11021]]
number of the current rule, the subsection of amended Rule 518 that is
proposed to address the subject matter of the current rule, and the
CFTC regulation underlying the current rule. The table also includes a
high level description of the subject matter of each of those rules as
provided for under applicable CFTC regulation.
---------------------------------------------------------------------------
\4\ 17 CFR 1.10.
\5\ 17 CFR 1.11.
\6\ 17 CFR 1.12.
\7\ 17 CFR 1.17.
\8\ 17 CFR 1.18.
\9\ 17 CFR 1.20.
\10\ 17 CFR 1.21.
\11\ 17 CFR 1.22.
\12\ 17 CFR 1.23.
\13\ 17 CFR 1.24.
\14\ 17 CFR 1.25.
\15\ 17 CFR 1.26.
\16\ 17 CFR 1.27.
\17\ 17 CFR 1.28.
\18\ 17 CFR 1.29.
\19\ 17 CFR 1.30.
\20\ 17 CFR 1.31.
\21\ 17 CFR 1.32.
\22\ 17 CFR 1.36.
----------------------------------------------------------------------------------------------------------------
Current CFE rule New CFE rule CFTC regulation Summary of rule
----------------------------------------------------------------------------------------------------------------
519........................ 518(a)..................... \4\ 1.10.................. Requires TPHs subject to
CFTC Regulation 1.10 to
comply with financial
reporting requirements,
including the requirement
to file CFTC Form 1-FR.
520........................ 518(b)..................... \5\ 1.11.................. Requires TPHs subject to
CFTC Regulation 1.11 to
comply with the
requirement that futures
commission merchants
(``FCMs'') establish,
maintain, and enforce a
system of risk management
policies and procedures.
521........................ 518(c)..................... \6\ 1.12.................. Requires TPHs subject to
CFTC Regulation 1.12 to
comply with the
requirement to notify the
CFTC if the TPH fails to
maintain an adjusted net
capital above certain
specified thresholds.
522........................ 518(d)..................... \7\ 1.17.................. Requires TPHs subject to
CFTC Regulation 1.17 to
comply with certain
minimum financial
requirements.
523........................ 518(e)..................... \8\ 1.18.................. Requires TPHs subject to
CFTC Regulation 1.18 to
comply with the
requirement to maintain
records for and relating
to financial reporting
and a monthly computation
regarding the TPH's
assets, liabilities, and
capital.
524........................ 518(f)..................... \9\ 1.20.................. Requires TPHs subject to
CFTC Regulation 1.20 to
comply with the
requirement to separately
account for all future
customer funds and
segregate those funds as
belonging to the TPH's
futures customers.
525........................ 518(g)..................... \10\ 1.21................. Requires TPHs subject to
CFTC Regulation 1.21 to
comply with the
requirement to treat all
money and equities
accruing to an FCM on
behalf of any futures
customer as accruing to
the futures customer.
526........................ 518(h)..................... \11\ 1.22................. Requires TPHs subject to
CFTC Regulation 1.22 to
comply with a prohibition
on using or permitting
the use of the customer
funds of one futures
customer to purchase,
margin, or settle the
trades of or to secure
credit of any person
other than that futures
customer.
527........................ 518(i)..................... \12\ 1.23................. Requires TPHs subject to
CFTC Regulation 1.23 to
comply with a prohibition
on the commingling of
futures customer funds
with the funds of an FCM.
528........................ 518(j)..................... \13\ 1.24................. Requires TPHs subject to
CFTC Regulation 1.24 to
comply with an exclusion
that money held in a
segregated account shall
not include money
invested in obligations
or stocks of any clearing
organization or contract
market.
529........................ 518(k)..................... \14\ 1.25................. Requires TPHs subject to
CFTC Regulation 1.25 to
comply with the
requirements and
restrictions regarding
the investments of
customer funds.
530........................ 518(l)..................... \15\ 1.26................. Requires TPHs subject to
CFTC Regulation 1.26 to
comply with the
requirement that each FCM
that invests customer
funds in instruments
described in CFTC
Regulation 1.25, except
for investments in money
market mutual funds,
shall separately account
for those instruments as
futures customer funds
and segregate those
instruments as funds
belonging to customers.
531........................ 518(m)..................... \16\ 1.27................. Requires TPHs subject to
CFTC Regulation 1.27 to
comply with the
requirement that each FCM
which invests customer
funds shall keep certain
records of the
investment.
532........................ 518(n)..................... \17\ 1.28................. Requires TPHs subject to
CFTC Regulation 1.28 to
comply with the
requirement that FCMs
that invest customer
funds in instruments
described in CFTC
Regulation 1.25 shall
include those instruments
in segregated account
records and reports at
values not exceeding
current market values.
533........................ 518(o)..................... \18\ 1.29................. Requires TPHs subject to
CFTC Regulation 1.29 to
comply with the provision
that an FCM may invest
customer funds and retain
as the TPH's own
incremental income or
interest resulting
therefrom and the
requirement that an FCM
shall bear sole
responsibility for any
losses resulting from the
investment of customer
funds in instruments
described in CFTC
Regulation 1.25.
534........................ 518(p)..................... \19\ 1.30................. Requires TPHs subject to
CFTC Regulation 1.30 to
comply with a prohibition
against an FCM lending
funds on an unsecured
basis to finance
customers' trading or
lending funds to
customers secured by the
customers' accounts.
535........................ 518(q)..................... \20\ 1.31................. Requires TPHs subject to
CFTC Regulation 1.31 to
comply with the
requirement to maintain
electronic records in
accordance with certain
provisions and to further
establish appropriate
systems and controls that
ensure the authority and
reliability of electronic
regulatory records.
536........................ 518(r)..................... \21\ 1.32................. Requires TPHs subject to
CFTC Regulation 1.32 to
comply with the
requirement each FCM
compute as of the close
of each business day the
total amount of futures
customer funds on deposit
in segregated accounts as
well as other specified
details.
537........................ 518(s)..................... \22\ 1.36................. Requires TPHs subject to
CFTC Regulation 1.36 to
comply with the
requirement that each FCM
maintain a record of all
securities and property
received from customers
in lieu of money to
margin, purchase,
guarantee, or secure the
transactions of those
customers.
----------------------------------------------------------------------------------------------------------------
[[Page 11022]]
CFE believes that its proposed approach to amending the Appendix to
Chapter 5 simplifies the CFE Rulebook by streamlining a lengthy portion
of the Rulebook that contains twenty separate rules into one
straightforward rule that reflects all of the same requirements that
exist under the consolidated rules thereby making it easier for TPHs to
reference these requirements within CFE's Rulebook because they will
all be enumerated in a single rule.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\23\ in general, and furthers the
objectives of Sections 6(b)(1) \24\ and 6(b)(5) \25\ in particular, in
that it is designed:
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\23\ 15 U.S.C. 78f(b).
\24\ 15 U.S.C. 78f(b)(1).
\25\ 15 U.S.C. 78f(b)(5).
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To enable the Exchange to enforce compliance by its TPHs
and persons associated with its TPHs with the provisions of the rules
of the Exchange,
to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade,
to remove impediments to and perfect the mechanism of a
free and open market and a national market system,
and in general, to protect investors and the public
interest.
The proposed rule change retains within the CFE Rulebook rule
provisions that address minimum financial requirements, financial
reporting requirements, and protection of customer funds, including
rules relating to appropriate minimum financial standards for
intermediaries, the segregation of customer and proprietary funds, the
custody of customer funds, the investment standards for customer funds,
intermediary default procedures, and related recordkeeping as required
by CFTC regulations, all in furtherance of TPH compliance with those
rule provisions and their enforcement by the Exchange. In particular,
the proposed rule change streamlines a lengthy portion of the Rulebook
that contains twenty separate rules into one straightforward rule that
reflects all of the same requirements that exist under the consolidated
rules thereby making it easier for TPHs to reference those requirements
within CFE's Rulebook because they will all be enumerated in a single
rule. The Exchange believes that making it easier for TPHs to reference
those requirements will contribute to furthering compliance with those
requirements by TPHs.
B. Self-Regulatory Organization's Statement on Burden on Competition
CFE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act, in that the Exchange believes that the
proposed rule change will contribute to furthering compliance by TPHs
with CFTC regulations relating to minimum financial requirements,
financial reporting requirements, and protection of customer funds. The
Exchange believes that the proposed rule change is equitable and not
unfairly discriminatory in that it would apply equally to all TPHs
subject to the relevant CFTC regulations.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change will become operative on February 11,
2021. At any time within 60 days of the date of effectiveness of the
proposed rule change, the Commission, after consultation with the CFTC,
may summarily abrogate the proposed rule change and require that the
proposed rule change be refiled in accordance with the provisions of
Section 19(b)(1) of the Act.\26\
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
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 [email protected]. Please include
File Number SR-CFE-2021-002 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-CFE-2021-002. 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 website (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 website 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 the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CFE-2021-002, and should be submitted on
or before March 16, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(73).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-03546 Filed 2-22-21; 8:45 am]
BILLING CODE 8011-01-P
