1114 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 

No. SR–Phlx–2011–181 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 

20549–1090. 

All submissions should refer to File No. 

SR–Phlx–2011–181. 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 the 

Exchange. 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 No. SR–Phlx–2011– 

181 and should be submitted on or 

before January 30, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–111 Filed 1–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66083; File No. SR–CME– 

2011–19] 

Self-Regulatory Organizations; 

Chicago Mercantile Exchange, Inc.; 

Notice of Filing and Order Granting 

Accelerated Approval of Proposed 

Rule Change To Comply With New 

CFTC DCO Regulations 

January 3, 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 December 

20, 2011, 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. 

I. Self-Regulatory Organization’s 

Statement of Terms of Substance of the 

Proposed Rule Change 

CME proposes to amend certain of its 

rules to comply with new CFTC 

Regulations 39.16(d) (Insolvency of a 

clearing member) and 39.15(d) (Transfer 

of customer positions), respectively. The 

text of the proposed rule change is 

below. The italicized text indicates 

additions. Bracketed text indicates 

deletions. 

CME Rulebook 

Rule 100—Rule 441—No Change. 

Chapter 4. Enforcement of Rules 

Rule 442. NOTIFICATION OF 

SIGNIFICANT EVENTS 

Each Member shall provide 

immediate[ly] notice to [fy] the Market 

Regulation Department (and each 

Member that is a Member Firm or a 

Clearing member shall also provide 

immediate notice to the Clearing 

House), in writing upon becoming 

aware of any of the following events 

relating to such Member: 

1. any suspension, expulsion, 

revocation or restriction of such 

Member’s trading privileges or any fine 

in excess of $25,000, through an adverse 

determination, voluntary settlement or 

otherwise, by any court, commodity or 

securities exchange or related clearing 

organization, the Securities and 

Exchange Commission, the Commodity 

Futures Trading Commission or the 

securities commission or equivalent 

authority of any state, territory, the 

District of Columbia or foreign country, 

the National Futures Association, the 

Financial Industry Regulatory 

Authority, Inc. or any self-regulatory or 

regulatory organization; 

2. any indictment of the Member or 

any of its officers for, any conviction of 

the Member or any of its officers of, or 

any confession of guilt or plea of guilty 

or nolo contendere by the Member or 

any of its officers to 1) any felony or 2) 

any misdemeanor involving, arising 

from, or related to the purchase or sale 

of any commodity, security, futures 

contract, option or other financial 

instrument or involving or arising from 

fraud or moral turpitude; and/or 

3. any filing of a [involuntary] 

bankruptcy petition or insolvency, 

receivership or equivalent proceeding of 

which the member is a subject. [that has 

been filed against such Member, or i] In 

the case of a voluntary bankruptcy, 

insolvency, receivership or equivalent 

proceeding, the Member also shall 

notify the Market Regulation 

Department, and the Clearing House in 

the case of a Member that is a Member 

Firm or Clearing Member) when such 

Member [has filed or has] forms[ed] a 

definite intention to file such 

proceeding [for bankruptcy]. 

Nothing in this Rule shall limit or 

negate any other reporting obligations 

that any member may have to the 

Exchange or any other regulator or 

person. 

* * * * * 

Rule 443–Rule 852—No Change. 

Chapter 8. Clearing House and 

Performance Bonds 

Rule 853. TRANSFERS OF TRADES 

AND CUSTOMER ACCOUNTS 

853.A. Transfers of Trades 

1. Subject to the limitations of Rule 

854, existing trades may be transferred 

either on the books of a clearing member 

or from one clearing member to another 

clearing member provided: 

i[1]. The transfer merely constitutes a 

change from one account to another 

account provided the underlying 

beneficial ownership in said accounts 

remains the same; or 

ii[2]. An error has been made in the 

clearing of a trade and the error is 

discovered and the transfer is completed 

within two business days after the trade 

date. 

[B]2. Subject to the limitations of Rule 

854, Exchange staff may, upon request 

by the clearing member(s), approve a 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 1115 

transfer of existing trades either on the 

books of the same clearing member, or 

from the books of one clearing member 

to the books of another clearing member 

if the transfer is in connection with, or 

as a result of, a merger, asset purchase, 

consolidation or similar non-recurring 

transaction between two or more 

entities where one or more entities 

become the successor in interest to one 

or more other entities. 

3[C]. Exchange staff may, with the 

consent of the clearing member(s) 

involved, permit the transfer of existing 

trades if, in staff’s opinion, the situation 

so requires and such transfer is in the 

best interests of the Exchange. 

4[D]. Provided that the transfer is 

permitted pursuant to Sections 1[A]., 

2[B]. or 3[C]. above, transactions in all 

physically delivered futures contracts 

except for FX futures contracts must be 

recorded and carried on the books of the 

receiving firm at the original trade dates; 

all other transactions may be recorded 

and carried at either the original trade 

date or the transfer date. Futures 

transactions may be transferred using 

either the original trade price or the 

most recent settlement price; options 

transactions may be transferred using 

either the original trade price or a trade 

price of zero. 

[E]5. All transfers shall be reported to 

the Clearing House in a form acceptable 

to the Exchange for the type of 

transactions involved. The proper 

indicator must be included in the 

transfer such that the transactions, 

including the transaction(s) to reverse 

an error, clear as transfers. The clearing 

members involved shall maintain a full 

and complete record of all transactions 

together with all pertinent memoranda. 

853.B. Transfers of Customer Accounts 

1. Subject to the limitations of Rule 

853.A, after receipt of a signed 

instruction from a Clearing Member (the 

‘‘Carrying Clearing Member’’) to transfer 

all or a portion of a customer account 

to another Clearing Member (the 

‘‘Receiving Clearing Member’’), and 

provided that such instruction contains 

the customer’s name and account 

number (and, if the transfer is not of the 

entire account, a description of which 

portion is to be transferred), and 

provided that the Receiving Clearing 

Member agrees to accept the account, 

the Exchange shall promptly transfer 

the account (or the relevant portion 

thereof), without requiring any close-out 

or rebooking of positions in connection 

with the transfer, provided that: 

i. The transferred positions will satisfy 

Exchange performance bond 

requirements at the Receiving Clearing 

Member; and 

ii. Any remaining positions in the 

customer account at the Carrying 

Clearing Member will satisfy Exchange 

performance bond requirements. 

* * * * * 

Rule 854–End—No Change. 

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 proposes to amend certain of its 

rules to comply with new CFTC 

Regulations 39.16(d) (Insolvency of a 

clearing member) and 39.15(d) (Transfer 

of customer positions). The new CFTC 

regulations were part of a 

comprehensive set of principle-based 

regulations adopted by the CFTC that 

establish certain standards of 

compliance for derivatives clearing 

organizations (‘‘DCOs’’) like CME. 

New CFTC Regulation 39.16(d), 

which becomes effective on January 9, 

2011, requires each DCO to have a rule 

that requires clearing members to 

provide prompt notice to the DCO if the 

clearing member becomes the subject of 

a bankruptcy petition, receivership 

proceeding, or the equivalent. New 

CFTC Regulation 39.15(d), also effective 

on January 9, 2012, requires each DCO 

to have rules providing that the DCO 

will promptly transfer all or a portion of 

a customer’s account from one clearing 

member to another, provided that the 

conditions in the Regulation are 

satisfied. In order to comply with these 

CFTC requirements, CME proposes to 

amend current CME Rules 442 and Rule 

853 as set forth above. CME will 

consider whether any future changes 

would be necessary to the language of 

CME Rule 853 to the extent CME begins 

clearing securities products. The 

proposed effective date for these 

revisions is January 4, 2012. 

CME also made a filing, CME 

Submission 11–491, with its primary 

regulator, the Commodity Futures 

Trading Commission, with respect to 

the proposed rule changes. 

CME believes the proposed changes 

are consistent with the requirements of 

the Exchange Act. CME, a DCO, is 

required to implement the proposed 

changes to comply with recent changes 

to CFTC regulations. CME notes that the 

policies of the Commodity Exchange 

Act (‘‘CEA’’) with respect to clearing are 

comparable to a number of the policies 

underlying the Exchange Act, such as 

promoting market transparency for 

derivatives markets, promoting the 

prompt and accurate clearance of 

transactions and protecting investors 

and the public interest. 

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–2011– 

19 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–2011–19. 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 


tkelley on DSK3SPTVN1PROD with NOTICES
1116 Federal Register / Vol. 77, No. 5 / Monday, January 9, 2012 / Notices 

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). 

6 15 U.S.C. 78s(b)(2). 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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–2011–19 and should 

be submitted on or before January 30, 

2012. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of 

Proposed Rule Change 

In its filing, CME requested that the 

Commission approve this request on an 

accelerated basis for good cause shown. 

CME cites the reason for granting this 

request on an accelerated basis as CME’s 

operations as a DCO, subject to 

regulation by the CFTC under the CEA. 

These rule changes are being made 

according to regulations promulgated by 

the CFTC, which were previously 

subject to notice and comment. Not 

approving this request on an accelerated 

basis will have a significant impact on 

CME’s operations as a DCO. 

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 changes are 

consistent with the requirements of the 

Act, in particular 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 assure the 

safeguarding of securities and funds 

which are in the custody and control of 

the clearing agency because it should 

allow CME to enhance its risk 

management efforts, both in motoring 

the financial status of clearing members 

and porting customer accounts among 

clearing members.5

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the Act,6

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 institutes the regulations of 

another regulatory agency, and those 

regulations were subject to notice and 

comment. 

V. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–CME–2011– 

19) is approved on an accelerated basis. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–98 Filed 1–6–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66081; File No. SR–OCC– 

2011–18] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Order Granting 

Accelerated Approval of Proposed 

Rule Change Relating to DCO 60 Day 

Regulations 

January 3, 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 December 

20, 2011, Options Clearing Corporation 

(‘‘OCC’’) 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 OCC. 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. 

I. Self-Regulatory Organization’s 

Statement of Terms of Substance of the 

Proposed Rule Change 

The Options Clearing Corporation 

(‘‘OCC’’ or the ‘‘Corporation’’) proposes 

to amend its By-Laws and Rules as set 

forth below in order to ensure OCC’s 

technical compliance with final 

regulations promulgated by the 

Commodity Futures Trading 

Commission (‘‘CFTC’’) applicable to 

derivatives clearing organizations 

(‘‘DCOs’’). Material proposed to be 

added to OCC’s By-Laws and Rules as 

currently in effect is italicized and 

material proposed to be deleted is 

enclosed in bold brackets. 

THE OPTIONS CLEARING 

CORPORATION 

BY-LAWS 

* * * * * 

ARTICLE VI 

CLEARANCE OF EXCHANGE 

TRANSACTIONS 

* * * * * 

General Clearance Rule 

SECTION 1. [no change] 

...Interpretations and Policies 

.01–.02 [no change] 

.03 (a) Except as otherwise provided 

in the By-Laws or Rules (including 

Chapter XI thereof), the Corporation will 

promptly transfer all or any portion of 

a carrying Clearing Member’s segregated 

futures customer account maintained in 

accordance with Section 3(f) of this 

Article VI or segregated futures 

professional account maintained in 

accordance with Section 3(j) of this 

Article VI, and will, at the same time, 

transfer related funds (if any) upon the 

request of the carrying Clearing Member 

and the confirmation of the receiving 

Clearing Member that it will accept such 

transfer, provided that the request for 

transfer and confirmation of transfer are 

received by the Corporation in 

accordance with the procedures and 

within such timeframes as required by 

the Corporation. 

(b) Any transfer effected pursuant to 

this Interpretation and Policy .03 shall 

be subject to such policies and 

procedures as the Corporation 

determines are reasonably necessary for 

the protection of the Corporation, other 

Clearing Members, customers and the 

general public and the Corporation may 

refuse any transfer request that does not 

comply with such policies and 

procedures. 

(c) Any carrying Clearing Member 

requesting a transfer pursuant to this 

Interpretation and Policy .03 shall be 

deemed to have represented to the 

Corporation that: (1) such transfer is 

being made upon the instruction of the 

customer of the carrying Clearing 

Member to make such transfer, (2) the 

customer instructing the carrying 

Clearing Member to transfer its positions 

is not currently in default to the carrying 


tkelley on DSK3SPTVN1PROD with NOTICES