[Federal Register Volume 79, Number 195 (Wednesday, October 8, 2014)]
[Notices]
[Pages 60879-60881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23980]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73287; File No. SR-CME-2014-39]


Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Make Amendments to CME ClearPort Hours for Certain Commodity Index 
Cleared OTC Swap Contracts

October 2, 2014.
    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 September 25, 2014, Chicago Mercantile Exchange Inc. (``CME'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II and III 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) 
\4\ thereunder, 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CME is filing proposed rules changes that are limited to its 
business as a derivatives clearing organization. CME proposes to amend 
the current CME ClearPort hours for certain enumerated commodity index 
cleared swap contracts. The proposed changes are as follows:

------------------------------------------------------------------------
                                Cleared OTC Swap              Rulebook
        Clearing code                product          DCM      chapter
------------------------------------------------------------------------
CAW.........................  AUD Chicago Soft Red  CBT     14G
                               Winter Swap
                               (Cleared Only).
CCS.........................  Corn Calendar Swap    CBT     10C
                               (Clearing Only).
CPC.........................  USD Malaysian Crude   CME     204A
                               Palm Oil Calendar
                               Swap (Cleared Only).

[[Page 60880]]

 
DFL.........................  DAP FOB NOLA Swaps    CBT     48
                               (Clearing Only).
DFT.........................  DAP FOB Tampa Swaps   CBT     47
                               (Clearing Only).
DG2.........................  Bloomberg Commodity   CBT     29B
                               Index 2-Month
                               Forward Swaps
                               (Cleared OTC).
DG3.........................  Bloomberg Commodity   CBT     29C
                               Index 3-Month
                               Forward Swaps
                               (Cleared OTC).
DGS.........................  Bloomberg Commodity   CBT     29A
                               Index Swaps
                               (Cleared OTC).
KAW.........................  AUD KC Hard Red       CBT     14J
                               Winter Wheat Swap
                               (Cleared Only).
KWS.........................  KC HRW Wheat          CBT     14M
                               Calendar Spread
                               Options.
RRE.........................  S&P GSCI Enhanced ER  CME     415B
                               Index Swaps
                               (Cleared OTC).
SE2.........................  S&P GSCI ER Index 2   CME     415E
                               Month Forward Swaps
                               (Cleared OTC).
SE3.........................  S&P GSCI-ER Index 3   CME     415F
                               Month Forward Swaps
                               (Cleared OTC).
SES.........................  S&P GSCI ER swap....  CME     415A
SNS.........................  Soybean Calendar      CBT     11D
                               Swaps (Clearing
                               Only).
UFG.........................  Urea (Granular) FOB   CBT     50
                               Egypt Swaps
                               (Clearing Only).
UFN.........................  Urea (Granular) FOB   CBT     45
                               US Gulf Coast Swaps
                               (Clearing Only).
UFU.........................  UAN FOB NOLA Swaps    CBT     46
                               (Clearing Only).
UFZ.........................  Urea (Prilled) FOB    CBT     49
                               Yuzhny Swaps
                               (Clearing Only).
WCS.........................  Wheat Calendar Swaps  CBT     14C
                               (Clearing Only).
------------------------------------------------------------------------

    The current hours for submission to clearing via CME ClearPort for 
the above-referenced contracts are 5:00 p.m. CT to 4:15 p.m. CT next 
day, Sunday-Friday. The new hours for the above-referenced contracts 
will be 6:00 p.m. CT to 5:45 p.m. CT next day, Sunday-Friday.

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 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. CME has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of these statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    CME is registered as a DCO with the Commodity Futures Trading 
Commission and offers clearing services for many different futures and 
swaps products. The proposed rule change that is the subject of this 
filing is limited to CME's business as a DCO offering clearing services 
for CFTC-regulated swaps products. The proposed rule change would amend 
the CME ClearPort hours for commodity index cleared swap contracts. CME 
ClearPort provides functionality for the acceptance of contracts for 
clearing. The affected contracts are listed below:

------------------------------------------------------------------------
                                Cleared OTC Swap              Rulebook
        Clearing code                product          DCM      chapter
------------------------------------------------------------------------
CAW.........................  AUD Chicago Soft Red  CBT     14G
                               Winter Swap
                               (Cleared Only).
CCS.........................  Corn Calendar Swap    CBT     10C
                               (Clearing Only).
CPC.........................  USD Malaysian Crude   CME     204A
                               Palm Oil Calendar
                               Swap (Cleared Only).
DFL.........................  DAP FOB NOLA Swaps    CBT     48
                               (Clearing Only).
DFT.........................  DAP FOB Tampa Swaps   CBT     47
                               (Clearing Only).
DG2.........................  Bloomberg Commodity   CBT     29B
                               Index 2-Month
                               Forward Swaps
                               (Cleared OTC).
DG3.........................  Bloomberg Commodity   CBT     29C
                               Index 3-Month
                               Forward Swaps
                               (Cleared OTC).
DGS.........................  Bloomberg Commodity   CBT     29A
                               Index Swaps
                               (Cleared OTC).
KAW.........................  AUD KC Hard Red       CBT     14J
                               Winter Wheat Swap
                               (Cleared Only).
KWS.........................  KC HRW Wheat          CBT     14M
                               Calendar Spread
                               Options.
RRE.........................  S&P GSCI Enhanced ER  CME     415B
                               Index Swaps
                               (Cleared OTC).
SE2.........................  S&P GSCI ER Index 2   CME     415E
                               Month Forward Swaps
                               (Cleared OTC).
SE3.........................  S&P GSCI-ER Index 3   CME     415F
                               Month Forward Swaps
                               (Cleared OTC).
SES.........................  S&P GSCI ER swap....  CME     415A
SNS.........................  Soybean Calendar      CBT     11D
                               Swaps (Clearing
                               Only).
UFG.........................  Urea (Granular) FOB   CBT     50
                               Egypt Swaps
                               (Clearing Only).
UFN.........................  Urea (Granular) FOB   CBT     45
                               US Gulf Coast Swaps
                               (Clearing Only).
UFU.........................  UAN FOB NOLA Swaps    CBT     46
                               (Clearing Only).
UFZ.........................  Urea (Prilled) FOB    CBT     49
                               Yuzhny Swaps
                               (Clearing Only).
WCS.........................  Wheat Calendar Swaps  CBT     14C
                               (Clearing Only).
------------------------------------------------------------------------

    The current hours for submission to clearing via CME ClearPort for 
these contracts are 5:00 p.m. CT to 4:15 p.m. CT next day, Sunday-
Friday. Under the proposed rule change, the new hours for the affected 
contracts would be 6:00 p.m. CT to 5:45 p.m. CT next day, Sunday-
Friday. The proposed change in hours will shorten the period in which 
daily trade submission is halted from 45 minutes to 15 minutes. The 
proposed new hours will be made known to the trading community in 
advance of the effective date via a Special Executive Report and will 
be posted in the trading specifications for the contracts on the CME 
Web site.
    The changes that are described in this filing are limited to CME's 
business as a DCO clearing products under the exclusive jurisdiction of 
the CFTC and do not materially impact CME's security-based swap 
clearing business in

[[Page 60881]]

any way. The proposed changes would become effective immediately but 
would be operationalized on October 6, 2014. CME notes that it has also 
certified the proposed rule change that is the subject of this filing 
to its primary regulator, the Commodity Futures Trading Commission 
(``CFTC''), in a separate filing, CME Submission No. 14-382.
    CME believes the proposed rule change is consistent with the 
requirements of the Exchange Act including Section 17A of the Exchange 
Act.\5\ CME is proposing revised hours for acceptance of cleared swap 
contracts; the proposed changes would have the effect of shortening the 
period in which daily trade submission is halted from 45 minutes to 15 
minutes and, as such, should 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 Exchange Act.\6\
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    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Furthermore, the proposed changes are limited in their effect to 
products offered under CME's authority to act as a DCO. The products 
that are the subject of this filing are under the exclusive 
jurisdiction of the CFTC. As such, the proposed CME changes are limited 
to CME's activities as a DCO clearing swaps that are not security-based 
swaps, futures that are not security futures and forwards that are not 
security forwards. 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 Exchange 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 changes are limited in their effect to 
products offered under CME's authority to act as a DCO, the proposed 
changes are 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 changes are therefore consistent with the requirements 
of Section 17A of the Exchange Act \7\ and are 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 amendments would 
adopt new CME ClearPort hours for twenty commodity index cleared swap 
contracts. Further, the changes are limited to CME's derivatives 
clearing business and, as such, do not affect the security-based swap 
clearing activities of CME in any way and therefore would 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

    Written comments relating to the proposed changes have not been 
solicited or received. CME will notify the Commission of any written 
comments received by CME.

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) \10\ of the Act and Rule 19b-4(f)(4)(ii) \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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#99ebecf5fcb4faf6f4f4fcf7edead9eafcfab7fef6ef"><span class="__cf_email__" data-cfemail="ee9c9b828bc38d8183838b809a9dae9d8b8dc0898198">[email protected]</span></a>. Please include 
File Number SR-CME-2014-39 on the subject line.

Paper Comments

    <bullet> 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-2014-39. 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 filings will also 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-2014-39 
and should be submitted on or before October 29, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23980 Filed 10-7-14; 8:45 am]
BILLING CODE 8011-01-P


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