80 FR 47014 - Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand Performance Bond Collateral Program To Include Australian Government Debt, Singapore Government Debt, and Ontario and Quebec Canadian Provincial Debt
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 151 (August 6, 2015)
Federal Register Volume 80, Issue 151 (August 6, 2015)
| Page Range | 47014-47018 | |
| FR Document | 2015-19290 |
[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)] [Notices] [Pages 47014-47018] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-19290] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75582; File No. SR-CME-2015-014] Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand Performance Bond Collateral Program To Include Australian Government Debt, Singapore Government Debt, and Ontario and Quebec Canadian Provincial Debt July 31, 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 July 24, 2015, Chicago Mercantile Exchange Inc. (``CME'') 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 primarily by CME. CME filed the proposal pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(4)(ii) thereunder,\4\ so that the proposal 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 proposing to announce via Advisory Notice the expansion of its collateral program to include Australian Government debt, Singapore Government debt, and Ontario and Quebec Provincial debt. More specifically, CME is proposing to issue a CME Clearing Advisory Notice to clearing member firms announcing an expansion of its performance bond collateral program for Base, IRS and CDS Guaranty Fund products to include certain discount bills, notes and bonds issued by the Australian Government (``AGBs''), Singapore Government (``SGBs''), and the Canadian Provinces of Ontario and Quebec (``CPBs''). The text of the proposed rule change is below. Italicized text indicates additions; bracketed text indicates deletions. * * * * * [[Page 47015]] CME Group Advisory Notice TO: Clearing Member, Firms Chief Financial Officers, Back Office Managers FROM: CME Clearing. SUBJECT: Canadian provincial debt, Australian sovereign debt and Singapore sovereign debt. DATE: May 27, 2015. CME Clearing (CME) announces the addition of Australia and Singapore to our list of acceptable foreign sovereign debt. CME also announces the addition of Canadian provincial debt from Ontario and Quebec. Australian and Singapore sovereign debt, and Canadian provincial debt are acceptable for Base, CDS, and IRS performance bond requirements and are part of Category 4 assets for Base and IRS and Category 3 assets for CDS. These additions to our acceptable collateral list will be effective July 20, 2015, pending regulatory approval. Please see the applicable haircuts and limits below. ---------------------------------------------------------------------------------------------------------------- Haircut schedule -------------------------------- Time to maturity Asset class Description -------------------------------- Notes 0 to <= 5 >5 to <=10 years years ---------------------------------------------------------------------------------------------------------------- Foreign Sovereign Debt............ Discount Bills from 5% ..............Australian the following debt is capped at countries: $250 million USDE Australia.. per clearing member. Singapore.. Notes and Bonds from 6% 7.5% Singapore the following debt is capped at countries: $100 million USDE Australia.. per clearing member. Singapore.. Canadian Provincials.............. Discount Bills from 25% .............. Canadian the following Provincial debt is provinces: capped at $100 Ontario.... million USDE per Quebec..... clearing member. Notes and Bonds from 25% .............. Provincials the following that exceed 5 years provinces: time to maturity are Ontario.... not acceptable. Quebec..... ---------------------------------------------------------------------------------------------------------------- For questions regarding these new collateral types, please contact the Financial Unit at (312) 207-2594 or Collateral Services at (312) 648-3775. * * * * * II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filings 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 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 operates a substantial business clearing futures and swaps contracts subject to the jurisdiction of the CFTC. CME is proposing to announce via Advisory Notice the expansion of its collateral program to include Australian Government debt, Singapore Government debt, and Ontario and Quebec Provincial debt. More specifically, CME is proposing to issue a CME Clearing Advisory Notice to clearing member firms announcing an expansion of its performance bond collateral program for Base, IRS and CDS Guaranty Fund products to include certain discount bills, notes and bonds issued by the Australian Government (``AGBs''), Singapore Government (``SGBs''), and the Canadian Provinces of Ontario and Quebec (``CPBs''). AGBs CME continues to seek diversification of both its clearing member and collateral bases where appropriate. Acceptance of AGBs will diversify CME's performance bond collateral base and enable posting of high-quality assets widely held by participants in Australia, where CME obtained local regulatory authorization to offer direct clearing services. CME's credit team evaluated AGBs as eligible performance bond collateral pursuant to requests from market participants and recommended their acceptance to CME's clearing house risk committee (``CHRC''). The decision to accept AGBs is reflective of the global nature of the IRS swaps market as these instruments are likely to be held by, or accessible to, AUD IRS participants. We believe high quality foreign sovereign debt subject to prudent limits will increase the likelihood that high quality financial institutions from foreign jurisdictions will consider clearing membership at CME. Additional clearing members from foreign jurisdictions will add an increased element of geographic diversification to CME's membership base and potentially mitigate the negative impact of systemic events through reduced geographic concentration. CME deemed AGBs with a time to maturity of 10 years or less as eligible collateral after reaching a favorable determination regarding these instruments' liquidity profile in a stressed market environment. The AGBs will be category 4 assets for products supported by the Base and IRS guaranty funds and Category 3 assets for products supported by the CDS guaranty fund. Assets in these categories are capped per clearing firm at a level established to ensure such assets are convertible into cash on a same-day basis via pledge to CME's credit facility. To better ensure liquidity is available to CME in times of market stress, the AGBs are further subject to a sub-limit restricting clearing firms from posting more than $250 million of AGBs at any one time. All clearing members will be eligible to post AGBs as performance bond but CME expects such collateral to originate [[Page 47016]] primarily if not exclusively from Australian market participants in OTC IRS markets due to their natural access to AGBs. Currently, CME has a limited number of indirect Australian IRS participants and no direct Australian IRS participants. As such, the per-clearing member cap on AGBs should result in these instruments accounting for a de minimis portion of CME's overall collateral holdings. As a comparative example, CME accepts as performance bond debt instruments issued by the Japanese government with per-firm limits at four times than the proposed limits for AGBs (i.e., up to $1B per clearing member for JPY debt). Currently, only 0.5% of the overall limit for JPY debt is being utilized. Initially, we expect similarly de minimis amounts of AGBs. Acceptance of AGBs will not impact the overall nature and level of risk presented by CME as the level of margin collected will remain the same; only the constitution of CME's collateral holdings may change. CME analysis indicates the AGBs satisfy each of the characteristics for high-quality liquid assets the Bank for International Settlements (BIS) has created for collateral evaluation, and thus exhibit minimal credit, market and liquidity risk. The risk profile and haircut schedule for AGBs are consistent with those for similarly rated foreign-issued debt accepted by CME as performance bond collateral. SGBs Acceptance of SGBs will diversify CME's performance bond collateral base and enable posting of high-quality assets widely held by participants in Singapore, where CME is seeking regulatory authorization to offer direct clearing services. CME's credit team evaluated SGBs as eligible performance bond collateral pursuant to requests from market participants and recommended their acceptance to CME's clearing house risk committee. The decision to accept SGBs is reflective of the global nature of the CME's markets as these instruments are likely to be held by, or accessible to, Singaporean participants. We believe high quality foreign sovereign debt subject to prudent limits will increase the likelihood that high quality financial institutions from foreign jurisdictions will consider clearing membership at CME. Additional clearing members from foreign jurisdictions will add an increased element of geographic diversification to its membership base and potentially mitigate the negative impact of systemic events through reduced geographic concentration. CME deemed SGBs with a time to maturity of 10 years or less as eligible collateral after reaching a favorable determination regarding these instruments' liquidity profile in a stressed market environment. The SGBs will be category 4 assets for products supported by the Base and IRS guaranty funds and Category 3 assets for products supported by the CDS guaranty fund. Assets in these categories are capped per clearing firm at a level established to ensure such assets are convertible into cash on a same-day basis via pledge to CME's credit facility. To better ensure liquidity is available to CME in times of market stress, the SGBs are further subject to a sub-limit restricting clearing firms from posting more than $100 million of SGBs at any one time. All clearing members will be eligible to post SGBs as performance bond but CME expects such collateral to originate primarily if not exclusively from Singapore market participants due to their natural access to SGBs. Currently, CME has a limited number of indirect Singapore participants and no direct Singapore clearing members. As such, the per-clearing member cap on SGBs should result in these instruments accounting for a de minimis portion of CME's overall collateral holdings. As a comparative example, CME accepts as performance bond debt instruments issued by the Japanese government with per-firm limits at ten times than the proposed limits for SGBs (i.e., up to $1B per clearing member for JPY debt). Currently, only 0.5% of the overall limit for JPY debt is being utilized. Initially, we expect similarly de minimis amounts of SGBs. Acceptance of SGBs will not impact the overall nature and level of risk presented by CME as the level of margin collected will remain the same; only the constitution of CME's collateral holdings may change. CME analysis indicates the SGBs satisfy each of the characteristics for high-quality liquid assets the Bank for International Settlements (BIS) has created for collateral evaluation, and thus exhibit minimal credit, market and liquidity risk. The risk profile and haircut schedule for SGBs are consistent with those for similarly rated foreign-issued debt accepted by CME as performance bond collateral. CPBs Acceptance of CPBs will diversify CME's performance bond collateral base and enable posting of high-quality assets widely held by participants in Ontario and Quebec, where CME has local regulatory authorization to offer direct clearing services. CME's credit team evaluated CPBs as eligible performance bond collateral pursuant to requests from market participants and recommended their acceptance to CME's clearing house risk committee (``CHRC''). The decision to accept CPBs is reflective of the global nature of the CME's markets as these instruments are likely to be held by, or accessible to, Canadian clearing members and market participants. We believe high quality foreign sovereign debt subject to prudent limits will increase the likelihood that high quality financial institutions from foreign jurisdictions will consider clearing membership at CME. Additional clearing members from foreign jurisdictions will add an increased element of geographic diversification to CME's membership base and potentially mitigate the negative impact of systemic events through reduced geographic concentration. CME deemed CPBs with a time to maturity of 5 years or less as eligible collateral after reaching a favorable determination regarding these instruments' liquidity profile in a stressed market environment. The CPBs will be category 4 assets for products supported by the Base and IRS guaranty funds and Category 3 assets for products supported by the CDS guaranty fund. Assets in these categories are capped per clearing firm at a level established to ensure such assets are convertible into cash on a same-day basis via pledge to CME's credit facility. To better ensure liquidity is available to CME in times of market stress, the CPBs are further subject to a sub-limit restricting clearing firms from posting more than $100 million of CPBs at any one time. All clearing members will be eligible to post CPBs as performance bond but CME expects such collateral to originate primarily if not exclusively from Canadian market participants due to their natural access to CPBs. The per-clearing member cap on CPBs should result in these instruments accounting for a de minimis portion of CME's overall collateral holdings. As a comparative example, CME accepts as performance bond debt instruments issued by the Japanese government with per-firm limits at ten times than the proposed limits for CPBs (i.e., up to $1B per clearing member for JPY debt). Currently, only 0.5% of the overall limit for JPY debt is being utilized. Initially, we expect similarly de minimis amounts of CPBs. Acceptance of CPBs will not impact the overall nature and level of risk presented by CME as the level of margin collected will remain the same; only the constitution of CME's collateral [[Page 47017]] holdings may change. CME analysis indicates the CPBs satisfy each of the characteristics for high-quality liquid assets the Bank for International Settlements (BIS) has created for collateral evaluation, and thus exhibit minimal credit, market and liquidity risk. The risk profile and haircut schedule for CPBs are consistent with those for similarly rated foreign-issued debt accepted by CME as performance bond collateral. * * * * * A summary of the changes described in the Advisory Notice is set forth in the following chart: ---------------------------------------------------------------------------------------------------------------- Haircut schedule -------------------------------- Time to maturity Asset class Description -------------------------------- Notes >5 to <=10 0 to <=5 years years ---------------------------------------------------------------------------------------------------------------- Foreign Sovereign Debt............ Discount Bills from 5% .............. Australian the following debt is capped at countries: $250 million USDE Australia.. per clearing member Singapore.. Notes and Bonds from 6% 7.5% Singapore the following debt is capped at countries: $100 million USDE Australia.. per clearing member Singapore.. Canadian Provincials.............. Discount Bills from 25% .............. Canadian the following Provincial debt is provinces: capped at $100 Ontario.... million USDE per Quebec..... clearing member Notes and Bonds from 25% .............. Provincials the following that exceed 5 years provinces:. time to maturity are Ontario.... not acceptable Quebec..... ---------------------------------------------------------------------------------------------------------------- * * * * * The proposed rule changes that are described in this filing are limited to CME's business as a derivatives clearing organization clearing products under the exclusive jurisdiction of the Commodity Futures Trading Commission (``CFTC''). CME has not cleared security based swaps and does not plan to and therefore the proposed rule changes do not impact CME's security-based swap clearing business in any way. The proposed changes would become effective immediately. CME notes that it has also submitted the proposed rule changes that are the subject of this filing to its primary regulator, the CFTC, in CME Submission Numbers 15-228R, 15-229RR, and 15-230R. 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 changes involve expanding its collateral program to include Australian Government debt, Singapore Government debt, and Ontario and Quebec Provincial debt. More specifically, CME is proposing to issue a CME Clearing Advisory Notice to clearing member firms announcing an expansion of its performance bond collateral program for Base, IRS and CDS Guaranty Fund products to include certain discount bills, notes and bonds issued by the Australian Government (``AGBs''), Singapore Government (``SGBs''), and the Canadian Provinces of Ontario and Quebec (``CPBs''). 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. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A) \5\ of the Act and Rule 19b-4(f)(4)(ii) \6\ thereunder. CME has designated that this proposal constitutes 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 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, which renders the proposed change effective upon filing. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78s(b)(3)(A). \6\ 17 CFR 240.19b-4(f)(4)(ii). --------------------------------------------------------------------------- CME believes that the proposal does not significantly affect any securities clearing operations of CME because CME recently filed a proposed rule change that clarified that CME has decided not to clear security-based swaps, except in a very limited set of circumstances.\7\ The rule filing reflecting CME's decision not to clear security-based swaps removed any ambiguity concerning CME's ability or intent to perform the functions of a clearing agency with respect to security- based swaps. Therefore, this proposal will have no effect on any securities clearing operations of CME. --------------------------------------------------------------------------- \7\ See Securities Exchange Act Release No. 73615 (Nov. 17, 2014), 79 FR 69545 (Nov. 21, 2014) (SR-CME-2014-49). The only exception is with regards to Restructuring European Single Name CDS Contracts created following the occurrence of a Restructuring Credit Event in respect of an iTraxx Component Transaction. The clearing of Restructuring European Single Name CDS Contracts will be a necessary byproduct after such time that CME begins clearing iTraxx Europe index CDS. --------------------------------------------------------------------------- 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. [[Page 47018]] 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-2015-014 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-2015-014. 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 10:00 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-2015-014 and should be submitted on or before August 27, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\8\ --------------------------------------------------------------------------- \8\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-19290 Filed 8-5-15; 8:45 am] BILLING CODE 8011-01-P
![47014 Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Notices
SLPs are obligated to: (1) Maintain a bid C. Additional Proposed Rule Changes SECURITIES AND EXCHANGE
or an offer at the NBB or NBO in each COMMISSION
assigned security in round lots at least The Exchange proposes to delete: (1)
10% of the trading day on average; and NYSE Rule 104T, which is no longer
[Release No. 34–75582; File No. SR–CME–
(2) add a certain volume of liquidity for operative because the Commission 2015–014]
all assigned SLP securities. SLMMs approved the NMM Pilot; (2) NYSE Rule
have continuous two-sided quoting 104.05, which was only intended to be Self-Regulatory Organizations;
obligations and must meet certain effective through October 31, 2009; and Chicago Mercantile Exchange Inc.;
pricing obligations for those quotes. As (3) a related reference to NYSE Rule Notice of Filing and Immediate
a benefit for incurring these obligations, 104.05. The Commission finds that Effectiveness of Proposed Rule
SLPs receive a financial rebate for each these proposed deletions from the Change To Expand Performance Bond
transaction when liquidity that the SLP Exchange’s rule text are consistent with Collateral Program To Include
posts on the Exchange is executed the Act because they remove text from Australian Government Debt,
against an inbound order. When it the Exchange’s rulebook that is Singapore Government Debt, and
adopted the SLP Pilot, the Exchange extraneous, particularly now that the Ontario and Quebec Canadian
represented that it would use the SLP Commission is approving the NMM and Provincial Debt
Pilot period to identify and address any SLP programs on a permanent basis. July 31, 2015.
administrative or operational problems Furthermore, the Exchange proposes Pursuant to Section 19(b)(1) of the
prior to expanding it.70 The Exchange to: (1) Replace the term ‘‘Display Book’’ Securities Exchange Act of 1934
also opined that the Pilot period would with either the term ‘‘Exchange (‘‘Act’’),1 and Rule 19b–4 thereunder,2
provide SLPs with ‘‘essential practical systems’’ or ‘‘Exchange book’’ notice is hereby given that on July 24,
experience with the new program and throughout NYSE Rules 104 and 1000; 2015, Chicago Mercantile Exchange Inc.
enable the SLPs to become proficient in (2) in NYSE Rule 104(k), replace the (‘‘CME’’) filed with the Securities and
the SLP role before expanding the term ‘‘NYSE Regulation’s Division of Exchange Commission (‘‘Commission’’)
assigned securities to all NYSE-listed Market Surveillance’’ with the term ‘‘the the proposed rule change as described
securities.’’ 71 Exchange’’ pursuant to NYSE Rule 0; in Items I and II below, which Items
In seeking to make the SLP Pilot and (3) correct an errant cross reference have been prepared primarily by CME.
permanent, the Exchange has explained in NYSE Rule 107B(b). The Commission CME filed the proposal pursuant to
that the number of stocks quoted by at finds that these additional changes are Section 19(b)(3)(A) of the Act,3 and Rule
least one SLP has increased consistent with the Act because they 19b–4(f)(4)(ii) thereunder,4 so that the
substantially since it first launched the will provide additional clarity and proposal was effective upon filing with
SLP Pilot.72 The Exchange represents consistency throughout the current the Commission. The Commission is
that: (1) Through December 2014, SLPs NMM rules. publishing this notice to solicit
represented 25.2% of liquidity- comments on the proposed rule change
providing execution; and (2) SLPs IV. Conclusion from interested persons.
currently account for 13.3% of the It is therefore ordered that, pursuant
liquidity-providing volume in issues to Section 19(b)(2) of the Act,75 the I. Self-Regulatory Organization’s
outside of the Exchange’s 1,000 most proposed rule change (SR–NYSE–2015– Statement of the Terms of Substance of
active issues.73 The Exchange also states 26) be, and hereby is, approved. the Proposed Rule Change
that SLPs—along with DMMs—have
been important contributors to the For the Commission, by the Division of CME is proposing to announce via
Exchange’s ability to set the NBBO.74 Trading and Markets, pursuant to delegated Advisory Notice the expansion of its
authority.76 collateral program to include Australian
The Commission has reviewed the
Robert W. Errett, Government debt, Singapore
data analysis provided by the Exchange
Deputy Secretary. Government debt, and Ontario and
and believes that the Exchange has
[FR Doc. 2015–19288 Filed 8–5–15; 8:45 am] Quebec Provincial debt. More
shown that the SLP Pilot, as part of the
specifically, CME is proposing to issue
NMM Pilot, has produced sufficient BILLING CODE 8011–01–P
a CME Clearing Advisory Notice to
execution quality to attract volume and clearing member firms announcing an
sufficient incentives to liquidity expansion of its performance bond
providers to supply this execution collateral program for Base, IRS and
quality. Accordingly, the Commission CDS Guaranty Fund products to include
finds that making the provisions certain discount bills, notes and bonds
governing SLPs set forth in NYSE Rule issued by the Australian Government
107B permanent is consistent with the (‘‘AGBs’’), Singapore Government
requirements of the Act. (‘‘SGBs’’), and the Canadian Provinces
of Ontario and Quebec (‘‘CPBs’’). The
70 See SLP Notice, supra note 11, 73 FR at 65905. text of the proposed rule change is
71 See id.
72 See Notice, supra note 3, 80 FR at 34725. The
below. Italicized text indicates
Exchange represents that when it first launched the
additions; bracketed text indicates
tkelley on DSK3SPTVN1PROD with NOTICES
SLP Pilot, only 497 symbols were covered by an deletions.
SLP and that, by the end of September 2014, * * * * *
‘‘nearly every Exchange symbol, including
operating companies, preferred stocks, warrants,
1 15 U.S.C. 78s(b)(1).
rights and all other issue types, had at least once
SLP quoting in it.’’ See id. 2 17 CFR 240.19b–4.
73 See id. 75 15 U.S.C. 78s(b)(2). 3 15 U.S.C. 78s(b)(3)(A).
74 See id. at 34724. 76 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(4)(ii).
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![47018 Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Notices
IV. Solicitation of Comments For the Commission, by the Division of and consists of periodic computer-based
Trading and Markets, pursuant to delegated training on regulatory, compliance,
Interested persons are invited to authority.8 ethical, and supervisory subjects and
submit written data, views and Robert W. Errett, sales practice standards, which must be
arguments concerning the foregoing, Deputy Secretary. completed within prescribed
including whether the proposed rule [FR Doc. 2015–19290 Filed 8–5–15; 8:45 am] timeframes.5 There are four Regulatory
change is consistent with the Act. BILLING CODE 8011–01–P Element programs: (1) The S106 for
Comments may be submitted by any of Investment Company and Variable
the following methods: Contracts Representatives; (2) the S201
SECURITIES AND EXCHANGE for registered principals and
Electronic Comments COMMISSION supervisors; (3) the S901 for Operations
• Use the Commission’s Internet [Release No. 34–75581; File No. SR–FINRA– Professionals; and (4) the S101 for all
comment form (http://www.sec.gov/ 2015–015] other registration categories. Currently,
rules/sro.shtml), or the Regulatory Element may be
Self-Regulatory Organizations; administered in a test center or at a firm
• Send an email to rule-comments@ Financial Industry Regulatory that meets the requirements in Rule
sec.gov. Please include File No. SR– Authority, Inc.; Order Approving a 1250 for in-firm delivery of CE.6
CME–2015–014 on the subject line. Proposed Rule Change To Provide a FINRA proposed to amend FINRA
Web-Based Delivery Method for Rule 1250 to provide that the Regulatory
Paper Comments
Completing the Regulatory Element of Element program will be administered
• Send paper comments in triplicate the Continuing Education through Web-based delivery or such
to Secretary, Securities and Exchange Requirements other technological manner and format
Commission, 100 F Street NE., as specified by FINRA, and to eliminate
July 31, 2015 the requirements for in-firm delivery of
Washington, DC, 20549–1090.
I. Introduction the Regulatory Element.7 FINRA
All submissions should refer to File proposed to implement Web-based
Number SR–CME–2015–014. This file On June 4, 2015, the Financial
delivery for the S106, S201, and S901
number should be included on the Industry Regulatory Authority, Inc.
Regulatory Element programs on
subject line if email is used. To help the (‘‘FINRA’’) filed with the Securities and
October 1, 2015, and to implement Web-
Exchange Commission (‘‘Commission’’),
Commission process and review your based delivery for the S101 Regulatory
pursuant to Section 19(b)(1) of the
comments more efficiently, please use Element program on January 4, 2016.
Securities Exchange Act of 1934 FINRA also proposed to phase-out test-
only one method. The Commission will
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a center delivery by no later than six
post all comments on the Commission’s
proposed rule change to change the months after January 4, 2016.8
Internet Web site (http://www.sec.gov/ method of delivery for the Regulatory
rules/sro.shtml). Copies of the In proposing these changes, FINRA
Element of the Continuing Education noted that Web-based delivery will
submission, all subsequent (‘‘CE’’) program. The proposed rule
amendments, all written statements provide registered persons the flexibility
change was published for comment in to complete the Regulatory Element at a
with respect to the proposed rule the Federal Register on June 17, 2015.3
change that are filed with the location of their choosing and at any
The Commission received four comment time during their 120-day window for
Commission, and all written letters on the proposed rule change.4
communications relating to the completion of the Regulatory Element,
This order approves the proposed rule consistent with their firm’s
proposed rule change between the change. requirements. In addition, there will be
Commission and any person, other than
II. Description of the Proposed Rule no three and a half hour time limitation,
those that may be withheld from the
Change as there is currently. FINRA also noted
public in accordance with the
that the Web-based format will include
provisions of 5 U.S.C. 552, will be A. Web-Based Delivery safeguards to authenticate the identity
available for Web site viewing and of the CE candidate (e.g., by asking the
As FINRA described in the Notice, the
printing in the Commission’s Public CE requirements under FINRA Rule candidate to provide a portion of his
Reference Room, 100 F Street, NE., 1250 consist of a Regulatory Element
Washington, DC 20549, on official and a Firm Element. The Regulatory 5 See Notice, supra note 3 at 34778 (describing
business days between the hours of Element applies to registered persons the Regulatory Element in more detail, including
10:00 a.m. and 3:00 p.m. Copies of such the timeframes for completing the Regulatory
Element). Currently, candidates have three and a
filing also will be available for 8 17 CFR 200.30–3(a)(12). half hours to complete their CE session.
inspection and copying at the principal 1 15 U.S.C. 78s(b)(1). 6 See id. at n. 8 (describing in-firm delivery
office of CME and on CME’s Web site at 2 17 CFR 240.19b–4. procedures).
http://www.cmegroup.com/market- 3 See Securities Exchange Act Release No. 75154 7 FINRA also proposed to delete Incorporated
regulation/rule-filings.html. (June 11, 2015), 80 FR 34777 (‘‘Notice’’). NYSE Rule 345A (Continuing Education for
4 See letters from Kevin Zambrowicz, Associate Registered Persons) and Incorporated NYSE Rule
All comments received will be posted General Counsel & Managing Director and Stephen Interpretation 345A (Continuing Education for
without change; the Commission does Vogt, Assistant Vice President & Assistant General Registered Persons). According to FINRA, these
Counsel, Securities Industry and Financial Markets rules are substantially similar to FINRA Rule 1250.
not edit personal identifying Association, dated July 7, 2015 (‘‘SIFMA Letter’’); 8 Under the proposal, firms will not be able to
information from submissions. You Daniel Kosowsky, Chief Compliance Officer, establish new in-firm delivery programs after
tkelley on DSK3SPTVN1PROD with NOTICES
should submit only information that Morgan Stanley Smith Barney LLC and Rose-Anne October 1, 2015. Firms that have pre-existing in-
you wish to make available publicly. Richter, Chief Compliance Officer, Morgan Stanley firm delivery programs that are established before
& Co. LLC, dated July 8, 2015 (‘‘Morgan Stanley October 1, 2015 will not be able to use that delivery
All submissions should refer to File Letter’’); David T. Bellaire, Executive Vice President method for the S106, S201, and S901 Regulatory
Number SR–CME–2015–014 and should & General Counsel, Financial Services Institute, Element programs after October 1, 2015, and they
dated July 8, 2015 (‘‘FSI Letter’’); and Michele Van will not be able to use that delivery method for the
be submitted on or before August 27, Tassel, President, Association of Registration S101 Regulatory Element program after January 4,
2015. Management, dated July 8, 2015 (‘‘ARM Letter’’). 2016.
VerDate Sep<11>2014 17:50 Aug 05, 2015 Jkt 235001 PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 E:\FR\FM\06AUN1.SGM 06AUN1](https://thefederalregister.org/doc/80_FR_47165/page/5.svg)
Document Created: 2018-02-23 10:55:57
Document Modified: 2018-02-23 10:55:57
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Dates | May 27, 2015. | |
| FR Citation | 80 FR 47014 |
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