
[Federal Register Volume 77, Number 85 (Wednesday, May 2, 2012)]
[Notices]
[Pages 26062-26063]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-10544]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66867; File No. SR-CME-2012-13]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change To Add Reporting Requirements for FCM Clearing Members

April 26, 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 April 23, 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 including certain additional reporting requirements 
for futures commission merchant (``FCM'') clearing members. The 
enhanced reporting requirements are designed to further safeguard 
customer funds held at the FCM level. The text of the proposed rule 
change is available at the 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 (''CFTC'') and operates a 
substantial business clearing futures and swaps contracts subject to 
the jurisdiction of the CFTC. CME wants to impose additional reporting 
requirements for FCM clearing members pursuant to CME Rule 970.D. The 
new reporting requirements will require all FCM clearing members to 
file daily, segregated, secured 30.7 and ``sequestered'' (or customer 
cleared swaps) statements, as applicable, on a daily basis. The 
proposed effective date for this new requirement is May 1, 2012.
    As further described in CME-issued Audit Information Bulletin 12-
04, the enhanced reporting requirements are designed to further 
safeguard customer funds held at the FCM level. The proposed daily 
reporting requirements comport with the CFTC's DCO Core Principle F 
(Treatment of Funds), which requires each DCO to ``have standards and 
procedures designed to ensure the safety of member and participant 
funds.''
    CME Audit Information Bulletin 12-04 constitutes the CME's proposed 
changes. CME also made a filing, CME Submission 12-112, with its 
primary regulator, the CFTC, with respect to the proposed changes.
    CME believes the proposed changes are consistent with the 
requirements of the Act. First, CME, a derivatives clearing 
organization, is implementing the proposed changes in furtherance with 
applicable CFTC regulations and Commodity Exchange Act (``CEA''), which 
contains a number of provisions that are comparable to the policies 
underlying the Act, including, for example, promoting market 
transparency for derivatives markets, promoting the prompt and accurate 
clearance of transactions and protecting investors and the public 
interest. Second, CME believes the proposed changes are specifically 
designed to protect investors and the public interest because the 
requirements help safeguard customer funds held at the FCM level.

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-2012-13 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-2012-13. 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

[[Page 26063]]

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. 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-2012-13 and should be submitted on or before May 23, 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 the 
requirements of Section 17A of the Act, and the rules and regulations 
thereunder applicable to CME.\4\ 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 protect investors and the public 
interest because the proposed rule change should allow CME to better 
monitor the financial status and risk management procedures of its 
clearing members.\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 on an accelerated basis for good cause shown. CME 
cites as the reason for this request CME's operation as a DCO, which is 
subject to regulation by the CFTC under the CEA. This rule change is 
being made to enhance CME's efforts to protect investors who utilize 
its clearinghouse services through its FCM clearing members.
    The Commission finds good cause for approving the proposed rule 
change prior to the 30th day after the date of publication of notice in 
the Federal Register because the proposed rule change allows CME to 
implement the additional clearing member surveillance designed 
specifically to protect investors and the public interest.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-CME-2012-13) is approved on an 
accelerated basis.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
Kevin M. O'Neill,
Deputy Secretary .
[FR Doc. 2012-10544 Filed 5-1-12; 8:45 am]
BILLING CODE 8011-01-P


