
[Federal Register Volume 77, Number 74 (Tuesday, April 17, 2012)]
[Notices]
[Pages 22825-22827]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9143]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66786; File No. SR-CME-2012-10]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change Regarding Acceptance of Additional Interest Rate Swaps and 
Related Interbank Rates for Clearing

 April 11, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 30, 2012, the Chicago Mercantile Exchange Inc. (``CME'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change described in Items I and II below, which items 
have been prepared primarily by CME. The Commission is publishing this 
Notice and Order to solicit comments on the proposed rule change from 
interested persons and to approve the proposed rule change on an 
accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    CME proposes to amend its rules related to its business as a 
derivatives clearing organization offering interest rate swap (``IRS'') 
clearing services. More specifically, the proposed rule changes would 
facilitate the acceptance of Japanese Yen (``JPY''), Swiss Franc 
(``ZHF''), and Australian Dollar (``AUD'')

[[Page 22826]]

denominated interest rate swaps and related interbank rates for 
clearing. The proposed rule change also contains the corresponding fee 
changes. The text of the proposed rule change is available at CME's Web 
site at http://www.cmegroup.com/market-regulation/rule-filings.html.

II. Self-Regulatory Organization's Statement of 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 III below. CME has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of 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 IRS. The changes that are the subject of this filing are 
proposed rules that would facilitate CME's acceptance of JPY, ZHF, and 
AUD IRS and related interbank rates for clearing beginning April 16, 
2012.
    The proposed changes would be made to current CME Rule 90102.E. The 
proposed changes would simply add the following line items: AUD-BBR-
BBSW; AUD-LIBOR-BBA; and AUD-AONIA-OIS-COMP.
    In connection with the acceptance of such swaps, CME is also 
amending its fee schedules for OTC IRS to reflect the fees for JPY, ZHF 
and AUD denominated IRS. The proposed rule change features a new fee 
schedule that would be applicable to IRS Clearing Members clearing OTC 
IRS transactions and, separately, a new fee schedule that would be 
applicable to customers of IRS Clearing Members clearing OTC IRS 
transactions.
    In addition, CME also proposes to make corresponding changes to its 
Manual of Operations for CME Cleared Interest Rate Swaps (``IRS 
Manual''). These changes would update the IRS Manual to reflect the new 
denominations and rate options and certain other associated operational 
changes.
    CME believes the proposed rule change is consistent with the 
requirements of the Act and particularly with Section 17A of the Act 
because it involves clearing of swaps and futures contracts and thus 
relate solely to CME's swaps and futures clearing activities pursuant 
to its registration as a derivatives clearing organization under the 
Commodity Exchange Act (``CEA'') and does not significantly affect any 
securities clearing operations of the clearing agency or any related 
rights or obligations of the clearing agency or persons using such 
service. CME further notes that the policies of the CEA with respect to 
clearing are comparable to a number of the policies underlying the Act, 
such as promoting market transparency for over-the-counter derivatives 
and futures markets, promoting the prompt and accurate clearance of 
transactions, and protecting investors and the public interest. The 
proposed rule changes accomplish those objectives by offering investors 
clearing for an expanded range of IRS products at CME.

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

    CME does not believe that the proposed rule change will have any 
impact or impose any burden on competition.

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

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

III. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:
     Electronic comments may be submitted by using the 
Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml), or send an email to rule-comments@sec.gov. Please include 
File No. SR-CME-2012-10 on the subject line.
     Paper comments should be sent 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-2012-10. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml 
). Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549 on official business days between the hours of 10 a.m. and 3 
p.m. Copies of such filing also will be available for inspection and 
copying at the principal office of CME and on CME's Web site at http://www.cmegroup.com/market-regulation/rule-filings.html. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CME-2012-10 and should be 
submitted on or before May 8, 2012.

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

    Section 19(b) of the Act \3\ directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to such 
organization. The Commission finds that the proposed rule change is 
consistent with the requirements of the Act, in particular with the 
requirements of Section 17A of the Act,\4\ and the rules and 
regulations thereunder applicable to CME. Specifically, the Commission 
finds that the proposed rule change is consistent with Section 
17A(b)(3)(F) of the Act, which requires, among other things, that the 
rules of a clearing agency be designed to promote the prompt and 
accurate clearance and settlement of derivative agreements, contracts, 
and transactions because it will allow CME to offer its services in 
clearing IRS products to a broader category of IRS products and thereby 
should promote the prompt and

[[Page 22827]]

accurate clearance and settlement of derivative agreements, contracts, 
and transactions.\5\
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(b).
    \4\ 15 U.S.C. 78q-1. In approving this proposed rule change, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    In its filing, CME requested that the Commission approve this 
proposed rule change prior to the thirtieth day after the date of 
publication of the notice of the filing. CME has articulated three 
reasons for so granting approval. One, the products covered by this 
filing and CME's operations as a derivatives clearing organization for 
such products are regulated by the CFTC under the CEA. Two, the 
proposed rule change relates solely to IRS products and therefore 
relate solely to CME's swaps clearing activities and do not 
significantly relate to CME's functions as a clearing agency for 
security-based swaps. Three, not approving this request on an 
accelerated basis will have a significant impact on the swap clearing 
business of CME as a designated clearing organization.
    The Commission finds good cause for granting approval of the 
proposed rule change prior to the thirtieth day after publication of 
the notice of its filing because: (i) The proposed rule change does not 
significantly affect any securities clearing operations of the clearing 
agency (whether in existence or contemplated by its rules) or any 
related rights or obligations of the clearing agency or persons using 
such service; (ii) the clearing agency has indicated that not providing 
accelerated approval would have a significant impact on its IRS 
clearing business as a designated clearing organization; and (iii) the 
activity relating to the non-security clearing operations of the 
clearing agency for which the clearing agency is seeking approval is 
subject to regulation by another federal regulator.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-CME-2012-10) is approved on an 
accelerated basis.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9143 Filed 4-16-12; 8:45 am]
BILLING CODE 8011-01-P


