80 FR 17516 - Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish a Default Management Committee and Address OTC Products That Are Subject to CME's Base Financial Safeguards
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 62 (April 1, 2015)
Federal Register Volume 80, Issue 62 (April 1, 2015)
| Page Range | 17516-17518 | |
| FR Document | 2015-07361 |
[Federal Register Volume 80, Number 62 (Wednesday, April 1, 2015)] [Notices] [Pages 17516-17518] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-07361] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74587; File No. SR-CME-2015-005] Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish a Default Management Committee and Address OTC Products That Are Subject to CME's Base Financial Safeguards March 26, 2015. 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 23, 2015, Chicago Mercantile Exchange Inc. (``CME'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change described in Items I, II and III, below, which Items have been primarily prepared by CME. CME filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 19b- 4(f)(4)(ii) \4\ thereunder, so that the proposed rule change 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-4(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 existing rules to establish a default management committee (``Active Base OTC Default Management Committee'' or ``Committee'') and address over-the-counter (``OTC'') products that are subject to CME's base financial safeguards, including OTC FX. 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 [[Page 17517]] 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 (``CFTC'') and currently offers clearing services for many different futures and swaps products. With this filing, CME proposes to make rulebook changes that are limited to its business clearing futures and swaps under the exclusive jurisdiction of the CFTC. More specifically, the proposed rule change would make amendments to existing rules to establish a default management committee and address OTC products that are subject to CME's base financial safeguards, including OTC FX. CME currently has an IRS Default Management Committee to assist with the management of a defaulting IRS Clearing Member's positions and a CDS Default Management Committee to assist with the management of a defaulting CDS Clearing Member's positions. The proposed rule change establishes the Committee as a similar construct to assist with the management of portfolio of its OTC Clearing Member's positions. The Committee will be comprised of traders in OTC products that are employees or directors of Base OTC Clearing Members (or their affiliates) and will serve on the Committee on a rotating basis. The Committee will assist CME in structuring hedges and portfolios for auction. Members of the Committee will also participate in default management drills for Base OTC products. The proposed rule amendments are summarized further as follows:New CME Rule 8F025. (Active Base OTC Default Management Committee) will establish the Committee and specify its composition of traders in the relevant OTC products who will serve on a rotational basis; CME Rule 8F004 (OTC Clearing Member Obligations and Qualifications) amendments will add requirements for OTC Clearing Members to (i) avail traders with proper experience to the Committee and (ii) participate in OTC Derivative default drill exercises; CME Rule 8F014 (Mitigation of Losses) amendments will harmonize with the related OTC IRS and OTC CDS rules, including the deletion of allocations of OTC positions; CME Rule 8F002 (Definitions) amendments will add the terms ``Base OTC Clearing Member'' and ``OTC Derivative Product Category.'' The proposed rule change that is described in this filing is limited to CME's business as a derivatives clearing organization clearing products under the exclusive jurisdiction of the CFTC. CME has not cleared security based swaps and does not plan to, and therefore the proposed rule change does not impact CME's security-based swap clearing business in any way. The proposed rule change will become effective immediately. CME notes that it has also submitted the proposed rule change that is the subject of this filing to its primary regulator, the CFTC, in CME Submission 14-080. CME believes the proposed rule change is consistent with the requirements of the Act including Section 17A of the Act.\5\ The establishment of the Committee and OTC Clearing Member requirements to provide traders and participate in auction as set forth in the proposed rule change forms part of CME's default procedures for OTC products to permit CME to take timely action to contain losses resulting from OTC positions in the event of a default of a CME OTC Clearing Member. The proposed rule change should therefore be seen to be 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 Act.\6\ --------------------------------------------------------------------------- \5\ 15 U.S.C. 78q-1. \6\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- Furthermore, the proposed rule change is limited to CME's futures and swaps clearing businesses, which means it is limited in its effect to products that are under the exclusive jurisdiction of the CFTC. As such, the proposed rule change is limited to CME's activities as a derivatives clearing organization clearing futures that are not security futures and 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 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 rule change is limited in its effect to CME's futures and swaps clearing businesses, the proposed rule change is 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, swaps that are not security-based swaps or mixed swaps; and forwards that are not security forwards; 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 rule change is therefore consistent with the requirements of Section 17A of the Act \7\ and is 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 change will have any impact, or impose any burden, on competition. The proposed rule change would make amendments to existing rules to establish a default management committee to further strengthen CME's ability to take timely action to contain losses resulting from OTC positions in the event of a default of a CME OTC Clearing Member. Further, the proposed rule change is limited to CME's futures and swaps clearing businesses and, as such, does not affect the security-based swap clearing activities of CME in any way and therefore does not impose any burden on competition that is inappropriate in furtherance of the purposes of the Act. 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. [[Page 17518]] III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) \10\ of the Act and paragraph (f)(4)(ii) of Rule 19b-4 \11\ 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. --------------------------------------------------------------------------- \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 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 (http://www.sec.gov/rules/sro.shtml), or Send an email to rule-comments@sec.gov. Please include File No. SR-CME-2015-005 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 21049-1090. All submissions should refer to File Number SR-CME-2015-005. 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 or 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 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-2015-005 and should be submitted on or before April 22, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\ --------------------------------------------------------------------------- \12\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-07361 Filed 3-31-15; 8:45 am] BILLING CODE 8011-01-P
![17516 Federal Register / Vol. 80, No. 62 / Wednesday, April 1, 2015 / Notices
from the Web site cited above or by CFR 3020.90 and 3020.91.1 The Postal By the Commission.
contacting the identified DFO. Service seeks to add non-denominated, Shoshana M. Grove,
Moreover, in view of the possibility that non-expiring (‘‘Forever’’) status to Secretary.
the schedule for ACRS meetings may be stamps in five different First-Class Mail [FR Doc. 2015–07355 Filed 3–31–15; 8:45 am]
adjusted by the Chairman as necessary stamp categories: (1) A postcard stamp, BILLING CODE 7710–FW–P
to facilitate the conduct of the meeting, (2) the two-ounce letter stamp, (3) the
persons planning to attend should check three-ounce letter stamp, (4) the
with these references if such additional ounce stamp, and (5) the first SECURITIES AND EXCHANGE
rescheduling would result in a major ounce nonmachinable surcharge stamp, COMMISSION
inconvenience. as well as modify the definition of
If attending this meeting, please enter Forever stamps. Notice at 1. The Postal [Release No. 34–74587; File No. SR–CME–
through the One White Flint North Service presents these proposed changes 2015–005]
building, 11555 Rockville Pike, to the Mail Classification Schedule Self-Regulatory Organizations;
Rockville, MD. After registering with (MCS) in Attachment 1 to the Notice. Chicago Mercantile Exchange Inc.;
security, please contact Mr. Theron See Notice, Attachment 1. Notice of Filing and Immediate
Brown (Telephone 240–888–9835) to be The Postal Service states that the Effectiveness of Proposed Rule
escorted to the meeting room. proposed changes reflect its objective to Change To Establish a Default
Dated: March 25, 2015. simplify the transactions associated Management Committee and Address
Mark L. Banks, with price changes. Notice at 2. It also OTC Products That Are Subject to
Chief, Technical Support Branch, Advisory seeks to eliminate the need for CME’s Base Financial Safeguards
Committee on Reactor Safeguards. customers and the Postal Service to
acquire and distribute new denominated March 26, 2015.
[FR Doc. 2015–07485 Filed 3–31–15; 8:45 am]
stamps when a prices change occurs. Id. Pursuant to Section 19(b)(1) of the
BILLING CODE 7590–01–P
The Postal Service states that the Securities Exchange Act of 1934
proposed changes are minor in nature (‘‘Act’’),1 and Rule 19b–4 thereunder,2
and are consistent with 39 U.S.C. 3642. notice is hereby given that on March 23,
POSTAL REGULATORY COMMISSION Id. at 1, n.1, and 3. 2015, Chicago Mercantile Exchange Inc.
(‘‘CME’’) filed with the Securities and
[Docket No. MC2015–42; Order No. 2414] II. Notice of Commission Action Exchange Commission (‘‘Commission’’)
Pursuant to 39 CFR 3020.92, the the proposed rule change described in
New Postal Product Items I, II and III, below, which Items
Commission has posted the Notice on
AGENCY: Postal Regulatory Commission. its Web site and invites comments on have been primarily prepared by CME.
whether the Postal Service’s filings in CME filed the proposed rule change
ACTION: Notice.
Docket No. MC2015–42 are consistent pursuant to Section 19(b)(3)(A) of the
SUMMARY: The Commission is noticing a with the policies of 39 U.S.C. 3642 and Act,3 and Rule 19b–4(f)(4)(ii) 4
recent Postal Service filing concerning 39 CFR 3020 subpart E. Comments are thereunder, so that the proposed rule
the Postal Service’s notice of a minor due no later than April 2, 2015. The change was effective upon filing with
classification change regarding the public portions of these filings can be the Commission. The Commission is
issuance of new Forever stamps. This accessed via the Commission’s Web site publishing this notice to solicit
notice informs the public of the filing, (http://www.prc.gov). comments on the proposed rule change
invites public comment, and takes other The Commission appoints Kenneth E. from interested persons.
administrative steps. Richardson to represent the interests of I. Self-Regulatory Organization’s
DATES: Comments are due: April 2, the general public (Public Statement of the Terms of Substance of
2015. Representative) in this docket. the Proposed Rule Change
ADDRESSES: Submit comments III. Ordering Paragraphs CME is filing a proposed rule change
electronically via the Commission’s that is limited to its business as a
Filing Online system at http:// It is ordered: derivatives clearing organization. More
www.prc.gov. Those who cannot submit 1. The Commission establishes Docket specifically, the proposed rule change
comments electronically should contact No. MC2015–42 to consider matters would make amendments to existing
the person identified in the FOR FURTHER raised by the notice. rules to establish a default management
INFORMATION CONTACT section by 2. Pursuant to 39 U.S.C. 505, Kenneth committee (‘‘Active Base OTC Default
telephone for advice on filing E. Richardson is appointed to serve as Management Committee’’ or
alternatives. an officer of the Commission (Public ‘‘Committee’’) and address over-the-
Representative) to represent the counter (‘‘OTC’’) products that are
FOR FURTHER INFORMATION CONTACT:
interests of the general public in this subject to CME’s base financial
David A. Trissell, General Counsel, at
proceeding. safeguards, including OTC FX.
202–789–6820.
3. Comments by interested persons II. Self-Regulatory Organization’s
SUPPLEMENTARY INFORMATION:
are due by April 2, 2015. Statement of the Purpose of, and
Table of Contents 4. The Secretary shall arrange for Statutory Basis for, the Proposed Rule
publication of this Order in the Federal
mstockstill on DSK4VPTVN1PROD with NOTICES
I. Introduction Change
II. Notice of Commission Action Register.
In its filing with the Commission,
III. Ordering Paragraphs
CME included statements concerning
1 Notice of the United States Postal Service of
I. Introduction Minor Classification Changes Related to the 1 15 U.S.C. 78s(b)(1).
On March 25, 2015, the Postal Service Issuance of Forever Stamp Status to the Postcard,
2 17 CFR 240.19b–4.
Two-Ounce, Three-Ounce, Additional Ounce, and
filed a notice of minor classification Nonmachinable Surcharge Stamps, March 25, 2015 3 15 U.S.C. 78s(b)(3)(A).
changes under Commission rules 39 (Notice). 4 17 CFR 240.19b–4(f)(4)(ii).
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![17518 Federal Register / Vol. 80, No. 62 / Wednesday, April 1, 2015 / Notices
III. Date of Effectiveness of the filing also will be available for I. Self-Regulatory Organization’s
Proposed Rule Change and Timing for inspection and copying at the principal Statement of the Terms of Substance of
Commission Action office of CME and on CME’s Web site at the Proposed Rule Change
The foregoing rule change has become http://www.cmegroup.com/market- The Exchange filed a proposal to
effective pursuant to Section regulation/rule-filings.html. amend the fee schedule applicable to
19(b)(3)(A) 10 of the Act and paragraph All comments received will be posted Members 5 and non-members of the
(f)(4)(ii) of Rule 19b–4 11 thereunder. At without change; the Commission does Exchange pursuant to BATS Rules
any time within 60 days of the filing of not edit personal identifying 15.1(a) and (c). Changes to the fee
the proposed rule change, the information from submissions. You schedule pursuant to this proposal are
Commission summarily may should submit only information that effective upon filing.
temporarily suspend such rule change if you wish to make available publicly. The text of the proposed rule change
it appears to the Commission that such is available at the Exchange’s Web site
action is necessary or appropriate in the All submissions should refer to File at www.batstrading.com, at the
public interest, for the protection of Number SR–CME–2015–005 and should principal office of the Exchange, and at
investors, or otherwise in furtherance of be submitted on or before April 22, the Commission’s Public Reference
the purposes of the Act. 2015. Room.
IV. Solicitation of Comments For the Commission, by the Division of
II. Self-Regulatory Organization’s
Trading and Markets, pursuant to delegated
Interested persons are invited to Statement of the Purpose of, and
authority.12
submit written data, views and Statutory Basis for, the Proposed Rule
Brent J. Fields, Change
arguments concerning the foregoing,
including whether the proposed rule Secretary.
In its filing with the Commission, the
change is consistent with the Act. [FR Doc. 2015–07361 Filed 3–31–15; 8:45 am]
Exchange included statements
Comments may be submitted by any of BILLING CODE 8011–01–P concerning the purpose of and basis for
the following methods: the proposed rule change and discussed
Electronic Comments any comments it received on the
SECURITIES AND EXCHANGE proposed rule change. The text of these
• Use the Commission’s Internet COMMISSION statements may be examined at the
comment form (http://www.sec.gov/ places specified in Item IV below. The
rules/sro.shtml), or [Release No. 34–74589; File No. SR–BATS– Exchange has prepared summaries, set
• Send an email to rule-comments@ 2015–23] forth in Sections A, B, and C below, of
sec.gov. Please include File No. SR–
the most significant parts of such
CME–2015–005 on the subject line. Self-Regulatory Organizations; BATS statements.
Paper Comments Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed A. Self-Regulatory Organization’s
• Send paper comments in triplicate Statement of the Purpose of, and
to Secretary, Securities and Exchange Rule Change Related to Fees for Use
of BATS Exchange, Inc. Statutory Basis for, the Proposed Rule
Commission, 100 F Street NE., Change
Washington, DC 21049–1090. March 26, 2015.
All submissions should refer to File 1. Purpose
Number SR–CME–2015–005. This file Pursuant to Section 19(b)(1) of the The Exchange proposes to modify its
number should be included on the Securities Exchange Act of 1934 fee schedule in order to: (1) Modify the
subject line if email is used. To help the (‘‘Act’’),1 and Rule 19b–4 thereunder,2 requirements for meeting Add Volume
Commission process and review your notice is hereby given that on March 17, Tiers 5 and 6; (2) delete Tier 3 of the
comments more efficiently, please use 2015, BATS Exchange, Inc. (the Cross-Asset Step-Up Tiers; (3) adjust
only one method. The Commission will ‘‘Exchange’’ or ‘‘BATS’’) filed with the rebates for orders that yield fee code A;
post all comments on the Commission’s Securities and Exchange Commission (4) add new fee code RN; (5) add a
Internet Web site (http://www.sec.gov/ (‘‘SEC’’ or ‘‘Commission’’) the proposed clarifying statement regarding fee codes
rules/sro.shtml). Copies of the rule change as described in Items I, II, applicable to certain orders routed to
submission, all subsequent and III below, which Items have been NYSE Arca, Inc. (‘‘NYSE Arca’’); and (6)
amendments, all written statements prepared by the Exchange. The to make a non-substantive change to
with respect to the proposed rule Exchange has designated the proposed remove a typographical error.
change that are filed with the rule change as one establishing or
Commission, and all written changing a member due, fee, or other Modifying Add Volume Tiers 5 and 6
communications relating to the charge imposed by the Exchange under The Exchange proposes to amend its
proposed rule change between the Section 19(b)(3)(A)(ii) of the Act 3 and fee schedule to raise the ADAV 6 as a
Commission and any person, other than Rule 19b-4(f)(2) thereunder,4 which percentage of TCV 7 required to meet
those that may be withheld from the renders the proposed rule change Tiers 5 and 6 of the Add Volume Tiers
public in accordance with the effective upon filing with the
5 The term ‘‘Member’’ is defined as ‘‘any
provisions of 5 U.S.C. 552, will be Commission. The Commission is
registered broker or dealer that has been admitted
available for Web site viewing and publishing this notice to solicit to membership in the Exchange.’’ See Exchange
mstockstill on DSK4VPTVN1PROD with NOTICES
printing in the Commission’s Public comments on the proposed rule change Rule 1.5(n).
Reference Room, 100 F Street NE., from interested persons. 6 ‘‘ADAV’’ means average daily volume calculated
Washington, DC 20549, on official as the number of shares added per day on a
business days between the hours or 12 17
monthly basis.
CFR 200.30–3(a)(12). 7 ‘‘TCV’’ means total consolidated volume
10:00 a.m. and 3:00 p.m. Copies of such 1 15 U.S.C. 78s(b)(1). calculated as the volume reported by all exchanges
2 17 CFR 240.19b–4.
and trade reporting facilities to a consolidated
10 15 U.S.C. 78s(b)(3)(A). 3 15 U.S.C. 78s(b)(3)(A)(ii).
transaction reporting plan for the month for which
11 17 CFR 240.19b–4(f)(4)(ii). 4 17 CFR 240.19b–4(f)(2). the fees apply.
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Document Created: 2015-12-18 11:03:37
Document Modified: 2015-12-18 11:03:37
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 80 FR 17516 |
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