Federal Register / Vol. 77, No. 74 / Tuesday, April 17, 2012 / Notices 22827 

5 15 U.S.C. 78q–1(b)(3)(F). 

6 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–66485 

(February 28, 2012), 77 FR 13164 (March 5, 2012). 

In its filing with the Commission, FICC included 

statements concerning the purpose of and basis for 

the proposed rule change. The text of these 

statements is incorporated into the discussion of the 

proposed rule change in Section II below. 

4The GSD rules define ‘‘Cap’’ as any Debit 

Forward Mark Adjustment Payment or Credit 

Forward Mark Adjustment Payment up to a dollar 

amount, as determined by FICC from time to time, 

that is automatically collected from or paid to the 

Repo Broker, as applicable. 

5 15 U.S.C. 78s(b)(2)(B). 

6 15 U.S.C. 78q–1(b)(3)(F). 

7 15 U.S.C. 78s(b)(2). 

8 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f). 

accurate clearance and settlement of 

derivative agreements, contracts, and 

transactions.5

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

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–9143 Filed 4–16–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66785; File No. SR–FICC– 

2012–01] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Approving Proposed Rule Change To 

Make a Technical Correction to the 

Rule Relating to the Calculation of 

Funds-Only Settlement Amounts for 

Repo Brokers 

April 11, 2012. 

I. Introduction 

On February 14, 2012, the Fixed 

Income Clearing Corporation (‘‘FICC’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–FICC–2012– 

01 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 2 thereunder. 

The proposed rule change was 

published for comment in the Federal 

Register on March 5, 2012.3 The 

Commission received no comment 

letters regarding the proposal. For the 

reasons discussed below, the 

Commission is granting approval of the 

proposed rule change. 

II. Description 

The proposed rule change consists of 

modifications to Rule 19, Section 4 of 

the rules of the Government Securities 

Division (‘‘GSD’’) of FICC. The purpose 

of the rule change is to make technical 

corrections to GSD Rule 19 (Special 

Provisions For Brokered Repo 

Transactions), Section 4 (Calculations of 

Funds-Only Settlement Amounts for 

Repo Brokers) as described below. GSD 

Rule 19, Section 4 states that FICC may 

retain any amount of a Credit Forward 

Mark Adjustment Payment that is in 

excess of the Cap 4 and that interest 

earned on such amount shall be paid to 

the Repo Broker on the subsequent 

business day. The second part of this 

sentence is incorrectly stated because 

FICC pays interest to those who were 

debited forward mark adjustment 

amounts not those who were credited 

such amounts. On the following day 

(i.e., the day after the broker received 

the Credit Forward Mark Adjustment 

Payment) when the broker is debited the 

interest for the use of funds it received 

as a credit, the broker will be debited 

the interest on the amount that it 

actually received as a credit (i.e., it will 

not be debited interest for the amount of 

Credit payment withheld above the 

Cap). The rule is also revised to state 

that Repo Brokers with more than one 

Segregated Repo Account must 

aggregate Debit Forward Mark 

Adjustments and Credit Forward Mark 

Adjustment Payments in those accounts 

for purposes of the Cap. The Repo 

Brokers currently comply with this 

correction and the revision reflects 

current practice. 

III. Discussion 

Section 19(b)(2)(B) of the Act 5 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. In 

particular, Section 17A(b)(3)(F) 6 of the 

Act requires, among other things, that 

the rules of a clearing agency be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions and to assure the 

safeguarding of securities and funds 

which are in the custody or control of 

such clearing agency or for which it is 

responsible. Because the proposed 

change would align FICC’s rulebook 

with its practices and provide 

transparency in its processes, the 

Commission believes that the proposed 

rule change is consistent with FICC’s 

obligations under the Act. 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and in 

particular with the requirements of 

Section 17A of the Act and the rules and 

regulations thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) 7 of the Act, that the 

proposed rule change (File No. SR– 

FICC–2012–01) be, and hereby is, 

approved.8


wreier-aviles on DSK5TPTVN1PROD with NOTICES
22828 Federal Register / Vol. 77, No. 74 / Tuesday, April 17, 2012 / Notices 

9 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Exchange Fees Schedule, Section 20.I. 4 15 U.S.C. 78f(b). 

5 15 U.S.C. 78f(b)(4). 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f). [sic] 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary . 

[FR Doc. 2012–9142 Filed 4–16–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66781; File No. SR–CBOE– 

2012–036 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Fees 

Schedule 

April 11, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 2, 

2012, the Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Fees Schedule. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http:// 

www.cboe.com/AboutCBOE/ 

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

and at the Commission. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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. The 

Exchange 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, Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fees Schedule. Specifically, the 

Exchange proposes to exclude 

executions related to contracts that are 

routed to one or more exchanges in 

connection with the Options Order 

Protection and Locked/Crossed Market 

Plan referenced in CBOE Rule 6.80 

(‘‘Linkage’’) from counting towards the 

Exchange’s Volume Incentive Program 

(the ‘‘Program’’), through which Trading 

Permit Holders (‘‘TPHs’’) are credited 

increasing per contract amounts for 

electronically executing increasing 

numbers of public customer contracts in 

multiply-listed classes. The Exchange 

does not benefit from transactions 

revenue resulting from the execution of 

public customer contracts that are 

routed to other exchanges through 

Linkage,3 so providing a credit for such 

executions means that the Exchange is 

paying out monies for such executions 

without taking in any net revenue. The 

Exchange cannot continue to subsidize 

Linkage-related transactions in this 

manner, and therefore proposes to 

exclude such transactions from the 

Program. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.4 Specifically, 

the Exchange believes the proposed rule 

change is consistent with Section 6(b)(4) 

of the Act,5 which provides that 

Exchange rules may provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

Trading Permit Holders and other 

persons using its facilities. The 

proposed change to exclude Linkagerelated executions from the Program is 

reasonable because the Exchange does 

not generally take in revenue for such 

customer transactions, and therefore it 

is not currently economically logical to 

provide a credit for such executions. 

This change is equitable and not 

unfairly discriminatory for similar 

reasons; it is certainly equitable to not 

provide a credit in circumstances 

wherein the Exchange does not collect 

a fee (otherwise, the recipients of said 

credits would be collecting ‘‘free 

money’’ from the Exchange), and it is 

not unfairly discriminatory as this 

exclusion applies to all parties to whom 

the Program applies. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

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) 6 of the Act and paragraph (f) 

of Rule 19b–4 7 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. 

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 rulecomments@sec.gov. Please include File 

Number SR–CBOE–2012–036 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549. 

All submissions should refer to File 

Number SR–CBOE–2012–036. This file 

number should be included on the 

subject line if email is used. To help the 


wreier-aviles on DSK5TPTVN1PROD with NOTICES