Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 63191 

18 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 ICE, a public company listed on the Exchange, 

owns 100% of Intercontinental Exchange Holdings, 

Inc., a Delaware corporation (‘‘ICE Holdings’’), 

which in turn owns 100% of NYSE Holdings. 

Through ICE Holdings, NYSE Holdings and NYSE 

Group, ICE indirectly owns (1) 100% of the equity 

interest of three registered national securities 

exchanges and self-regulatory organizations 

(together, the ‘‘NYSE Exchanges’’)—the Exchange, 

NYSE Arca, Inc. (‘‘NYSE Arca’’) and NYSE MKT 

LLC (‘‘NYSE MKT’’)—and (2) 100% of the equity 

interest of NYSE Market (DE), Inc. (‘‘NYSE 

Market’’), NYSE Regulation, Inc. (‘‘NYSE 

Regulation’’), NYSE Arca L.L.C., NYSE Arca 

Equities, Inc. and NYSE Amex Options LLC. See 

Exchange Act Release No. 70210 (August 15, 2013) 

(SR–NYSE–2013–42), 78 FR 51758 (August 21, 

2013) (approving proposed rule change relating to 

a corporate transaction in which NYSE Euronext 

will become a wholly owned subsidiary of 

IntercontinentalExchange Group, Inc.). 

5The Exchange’s affiliates NYSE Arca and NYSE 

MKT have also submitted the same proposed rule 

change to terminate the Trust Agreement. See SR– 

NYSEMKT–2014–83 and SR–NYSEArca–2014–112. 

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 the 

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 Number SR– 

NYSEArca–2014–112 and should be 

submitted on or before November 12, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25080 Filed 10–21–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73373; File No. SR–NYSE– 

2014–53] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change in 

Connection With the Proposed 

Termination of the Amended and 

Restated Trust Agreement, Dated as of 

November 13, 2013 and Amended on 

June 2, 2014 by and Among NYSE 

Holdings LLC, a Delaware Limited 

Liability Company, NYSE Group, Inc., a 

Delaware Corporation, Wilmington 

Trust Company, as Delaware Trustee, 

and Each of Jacques de Larosie`re de 

Champfeu, Alan Trager and John 

Shepard Reed, as Trustees 

October 16, 2014. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on October 

8, 2014, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 this rule filing 

in connection with the proposed 

termination of the Amended and 

Restated Trust Agreement, dated as of 

November 13, 2013 and amended on 

June 2, 2014 (the ‘‘Trust Agreement’’), 

by and among NYSE Holdings LLC, a 

Delaware limited liability company 

(‘‘NYSE Holdings’’), NYSE Group, Inc., 

a Delaware corporation (‘‘NYSE 

Group’’), Wilmington Trust Company, 

as Delaware Trustee, and each of 

Jacques de Larosie`re de Champfeu, Alan 

Trager and John Shepard Reed, as 

Trustees. The text of the proposed rule 

change is available on the Exchange’s 

Web site at www.nyse.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange seeks approval for its 

100% direct parent, NYSE Group, and 

its 100% indirect parent, NYSE 

Holdings, to terminate the Trust 

Agreement.4 The Exchange believes that 

the regulatory considerations that led to 

the implementation of the Trust 

Agreement in 2007 are now moot as a 

result of the sale by Intercontinental 

Exchange, Inc., a Delaware corporation 

(‘‘ICE’’), of Euronext N.V. (‘‘Euronext’’) 

in June 2014 and certain changes in the 

corporate governance of ICE, ICE 

Holdings and NYSE Holdings that 

occurred upon such sale.5

Background 

In 2007, NYSE Group, which is the 

100% owner of the Exchange, combined 

with Euronext (the ‘‘Combination’’). The 

new parent company formed in the 

Combination, NYSE Euronext, operated 

several regulated entities in the United 

States and various jurisdictions in 

Europe. In the Commission’s notice 

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63192 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 

6See Exchange Act Release No. 55026 (Dec. 29, 

2006) (SR–NYSE–2006–120), 72 FR 814, 816–817 

(January 8, 2007) (the ‘‘NYSE Euronext Notice’’). 

NYSE Euronext acquired NYSE MKT, the third of 

the NYSE Exchanges, in 2008. 

7Excerpts from the Further Amended and 

Restated Governance and Option Agreement, dated 

March 21, 2014, among the Dutch foundation, 

Euronext Group N.V. and ICE are attached as 

Exhibit 5C. 

8 ICE’s press release dated June 24, 2014 is 

available at the following link: http://ir.theice.com/ 

investors-and-media/press/press-releases/pressrelease-details/2014/Intercontinental-ExchangeAnnounces-Closing-of-Euronext-Initial-PublicOffering/default.aspx. 

9An English translation of the Dutch Ministry of 

Finance’s letter is attached as Exhibit 5D. 

10See note 4, supra. 

11See Exchange Act Release No. 72158 (May 13, 

2014) (SR–NYSE–2014–23), 79 FR 28784 (May 19, 

2014) (notice of filing and immediate effectiveness 

of proposed rule change relating to name changes 

of the Exchange’s ultimate parent) (revising Trust 

Agreement to reflect name changes of ICE and ICE 

Holdings). 

12As noted above, this has been confirmed by the 

Dutch Ministry of Finance. 

relating to the proposed Combination, 

the Exchange emphasized the 

importance of continuing to regulate 

marketplaces locally: 

A core aspect of the structure of the 

Combination is continued local regulation of 

the marketplaces. Accordingly, the 

Combination is premised on the notion that 

. . . [c]ompanies listing their securities only 

on markets operated by Euronext and its 

subsidiaries will not become newly subject to 

U.S. laws or regulation by the SEC as a result 

of the Combination, and companies listing 

their securities only on the Exchange or 

NYSE Arca, will not become newly subject 

to European rules or regulation as a result of 

the Combination.6

In connection with obtaining 

regulatory approval of the Combination, 

NYSE Euronext implemented certain 

special arrangements consisting of two 

standby structures, one involving a 

Dutch foundation (Stichting) and one 

involving a Delaware trust. The Dutch 

foundation was empowered to take 

actions to mitigate the effects of any 

material adverse change in U.S. law that 

had an ‘‘extraterritorial’’ impact on nonU.S. issuers listed on Euronext markets, 

non-U.S. financial services firms that 

were members of Euronext markets or 

holders of exchange licenses with 

respect to the Euronext markets. The 

Delaware trust was empowered to take 

actions to mitigate the effects of any 

material adverse change in European 

law that had an ‘‘extraterritorial’’ impact 

on the non-European issuers listed on 

NYSE Group securities exchanges, nonEuropean financial services firms that 

were members of any NYSE Group 

securities market or holders of exchange 

licenses with respect to the NYSE Group 

securities exchanges. 

The current form of the Trust 

Agreement is attached as Exhibit 5A, 

and a form of unanimous written 

consent of all parties to, or otherwise 

bound by, the Trust Agreement 

resolving that the Delaware trust be 

terminated is attached as Exhibit 5B. 

The terms of the Dutch foundation and 

the Delaware trust are complex. An 

explanation of the terms is included in 

the NYSE Euronext Notice. Subsequent 

modifications to the arrangements, to 

the extent relevant to the proposed rule 

change, are described herein. 

The Dutch foundation and the 

Delaware trust remained in effect after 

the merger of ICE Holdings (then known 

as IntercontinentalExchange, Inc.) and 

NYSE Euronext in 2013 under ICE (then 

known as IntercontinentalExchange 

Group, Inc.) as a new public holding 

company. However, in connection with 

ICE’s announced plan to sell the 

Euronext securities exchanges in an 

initial public offering, the Dutch 

Ministry of Finance permitted 

modifications of the terms of the 

governing document of the Dutch 

foundation under which the powers of 

the Dutch foundation would cease to 

apply to ICE and its affiliates at such 

time as ICE ceased to hold a 

‘‘controlling interest’’ in Euronext, with 

‘‘controlling interest’’ defined by 

reference to the definition of ‘‘control’’ 

under Rule 10 of the International 

Financial Reporting Standards (‘‘IFRS 

10’’).7 In June 2014 ICE announced that 

it had sold all but approximately 6% of 

the ownership interest in Euronext in an 

underwritten public offering outside the 

United States.8 Upon application by 

ICE, the Dutch Ministry of Finance 

confirmed on July 16, 2014 that the 

conditions to the cessation of the 

application of the Dutch foundation to 

ICE had been satisfied or waived.9 As a 

result, ICE and its subsidiaries are no 

longer subject to the provisions of the 

Dutch foundation. 

In the 2013 merger, NYSE Euronext 

was succeeded by the entity now known 

as NYSE Holdings, which is currently a 

party to the Trust Agreement. At that 

time, references to the nominating and 

governance committee of the board of 

directors of NYSE Euronext, which 

selected the Trustees of the Delaware 

trust, were replaced by references to the 

nominating and governance committee 

of the board of directors of ICE.10 Other 

provisions of the Trust Agreement are 

substantially unchanged.11

In connection with the Combination 

of NYSE Group and Euronext in 2007 

and the establishment of the Dutch 

foundation and the Delaware trust, the 

Certificate of Incorporation and Bylaws 

of NYSE Euronext included several 

provisions relating to representation of 

European interests on the board of 

directors and other provisions requiring 

the board to give due consideration to 

European regulatory requirements and 

the interests of identified categories of 

European stakeholders. These 

provisions are summarized in the NYSE 

Euronext Notice. Each such provision 

was subject to automatic revocation in 

the event that NYSE Euronext no longer 

held a controlling interest in Euronext 

or certain of its subsidiaries. For this 

purpose, ‘‘controlling interest’’ was 

defined to mean 50% or more of the 

outstanding shares of each class of 

voting securities and of the combined 

voting power of outstanding voting 

securities entitled to vote generally in 

the election of directors. Substantially 

identical provisions were added to the 

Certificate of Incorporation and Bylaws 

of ICE and ICE Holdings, and were 

retained in the Operating Agreement of 

NYSE Holdings, when ICE acquired 

NYSE Euronext in 2013, except that the 

‘‘controlling interest’’ test was modified 

to become a ‘‘control’’ test under IFRS 

10, as described above with respect to 

the Dutch foundation. As a result of the 

initial public offering of Euronext, ICE 

has established that it no longer controls 

Euronext within the meaning of IFRS 

10, and the provisions of the constituent 

documents of ICE, ICE Holdings and 

NYSE Holdings have automatically and 

without further action become void and 

are of no further force and effect. 

Proposed Rule Change 

The Exchange requests approval to 

terminate the Delaware trust because it 

believes that the regulatory 

considerations that led to the 

implementation of the Trust Agreement 

in 2007 have been mooted by the sale 

of Euronext in June 2014, the automatic 

revocation of corporate governance 

provisions applicable to ICE, ICE 

Holdings and NYSE Holdings that 

occurred upon such sale, and the fact 

that the Dutch foundation which 

functioned as a European analog to the 

Delaware trust, ceased to have any 

authority over ICE and its subsidiaries 

upon the closing of the sale of 

Euronext.12 The Exchange believes that 

the prospect for any material adverse 

change in European law that would 

have an ‘‘extraterritorial’’ impact on the 

non-European issuers listed on NYSE 

Group securities exchanges, nonEuropean financial services firms that 

are members of any NYSE Group 

securities market or holders of exchange 

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Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 63193 

13 15 U.S.C. 78f(b). 

14 17 CFR 240.19b–4. 

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

16 15 U.S.C. 78f(b)(1). 17 15 U.S.C. 78f(b)(5). 

licenses with respect to the NYSE Group 

securities exchanges is now remote. 

Continuance of the Trust Agreement 

when it no longer furthers the purposes 

of Section 6(b) of the Exchange Act 13

also imposes certain administrative 

burdens and costs upon the Exchange 

and its affiliates, and may cause investor 

uncertainty, that create impediments to 

a free and open market. Specifically, the 

Trust Agreement imposes 

administrative burdens on ICE and the 

nominating and governance committee 

of its board of directors, such as the 

need to periodically consider and vote 

on Trustees; the need to consider 

whether any proposed action requires 

approval under the Trust Agreement 

and, if so, the obligation to prepare 

materials for consideration and vote by 

the Trustees; and the need to consider 

whether any proposed action requires 

an amendment to the Trust Agreement 

and, if so, the additional obligation to 

submit such amendment to the 

Commission for approval under Rule 

19b–4.14 The Trust Agreement results in 

out-of-pocket costs to the Exchange and 

its affiliates including the fees of the 

individual Trustees and the Delaware 

Trustee as well as fees of counsel 

incurred in connection with review of 

proposed amendments and assistance 

with the SEC approval process. The 

Exchange also believes that some 

analysts and institutional investors may 

not fully understand the purpose of the 

Delaware trust and may not have 

appreciated that, even when ICE 

controlled Euronext and European 

regulatory considerations played a 

substantial role in ICE’s corporate 

governance, the likelihood of the 

Delaware trust’s substantive provisions 

ever being invoked was, by design, 

extremely remote. 

In light of the sale of Euronext, the 

revocation of the governance provisions 

relating to European considerations, and 

the cessation of application of the Dutch 

foundation to ICE and its affiliates, ICE 

believes it appropriate to terminate the 

Delaware trust in order to avoid any 

future need to reassure analysts and 

investors that the trust does not impact 

the daily operations or valuations of 

ICE’s national securities exchanges. 

Termination of the Delaware trust 

would be implemented through a 

unanimous written consent of all parties 

to, or otherwise bound by, the Trust 

Agreement in the form attached as 

Exhibit 5B. 

References to the Delaware trust also 

would be deleted from, and related 

conforming changes would be made to, 

the constituent documents of NYSE 

Holdings, NYSE Group, the Exchange, 

NYSE MKT, NYSE Market and NYSE 

Regulation. In particular: 

NYSE Holdings. The Fifth Amended 

and Restated Limited Liability Company 

Agreement of NYSE Holdings would be 

further amended and restated to 

eliminate the definition of the term 

‘‘Trust’’ in Section 1.1 and the 

references to the Delaware trust in 

Section 7.2. See Exhibit 5E. 

NYSE Group. The Third Amended 

and Restated Certificate of Incorporation 

of NYSE Group would be further 

amended and restated to eliminate 

references to the Delaware trust in 

Article IV, Section 4(a) and (b). See 

Exhibit 5F. 

The Exchange. The Sixth Amended 

and Restated Operating Agreement of 

the Exchange would be further amended 

and restated to eliminate references to 

the Delaware trust in Section 3.03. See 

Exhibit 5G. 

NYSE MKT. The Fifth Amended and 

Restated Operating Agreement of NYSE 

MKT would be further amended and 

restated to eliminate references to the 

Delaware trust in Section 3.03. See 

Exhibit 5H. 

NYSE Market. The Second Amended 

and Restated Certificate of Incorporation 

of NYSE Market would be further 

amended and restated to eliminate 

references to the Delaware trust in 

Article IV, Section 2. See Exhibit 5I. 

NYSE Regulation. The Restated 

Certificate of Incorporation of NYSE 

Regulation would be further amended 

and restated to eliminate references to 

the Delaware trust in Article V. See 

Exhibit 5J. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Exchange Act 15 in 

general, and with Section 6(b)(1) 16 in 

particular, in that it enables the 

Exchange to be so organized as to have 

the capacity to be able to carry out the 

purposes of the Exchange Act and to 

comply, and to enforce compliance by 

its exchange members and persons 

associated with its exchange members, 

with the provisions of the Exchange Act, 

the rules and regulations thereunder, 

and the rules of the Exchange. The 

Delaware trust was implemented in 

response to potential concerns arising 

under non-U.S. law and regulation at a 

time when the Exchange was owned by 

a company with substantial holdings of 

non-U.S. securities exchanges, 

substantial non-U.S. board 

representation, and explicit obligations 

on the part of its board to give due 

consideration to matters of non-U.S. law 

and the interests of non-U.S. 

stakeholders. In light of the elimination 

of these concerns as discussed above, 

the Exchange believes that termination 

of the Delaware trust is consistent with 

Section 6(b)(1). 

The Exchange also believes that this 

filing furthers the objectives of Section 

6(b)(5) of the Exchange Act 17 because 

the proposed rule change would be 

consistent with and facilitate a 

governance and regulatory structure that 

is designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to, and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. As discussed above, the 

Exchange believes that termination of 

the Delaware trust will remove 

impediments to the operation of the 

Exchange by eliminating certain 

expenses and administrative burdens as 

well as the potential for uncertainty 

among analysts and investors as to the 

practical implications of the Delaware 

trust on the Exchange as a marketplace 

and as a significant asset of ICE. For the 

same reasons, the proposed rule change 

is also designed to protect investors as 

well as the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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 Exchange Act. 

Indeed, the proposed rule change would 

eliminate an earlier arrangement 

intended in part to address potential 

competitive issues in the European 

securities markets that have abated as a 

result of ICE’s sale of the Euronext 

securities exchanges in June 2014. The 

proposed rule change results in no 

concentration or other changes of 

ownership of exchanges. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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63194 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices 

18 17 CFR 200.30–3(a)(12). 

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). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days after publication (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 Number SR– 

NYSE–2014–53 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2014–53. 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 the 

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 Number SR–NYSE– 

2014–53 and should be submitted on or 

before November 12, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25079 Filed 10–21–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73370; File No. SR–CME– 

2014–41] 

Self-Regulatory Organizations; 

Chicago Mercantile Exchange Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change to CME Rule 816 

October 16, 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 October 

7, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

CME is proposing to make certain 

changes to CME Rule 816 which governs 

guaranty fund deposits. More 

specifically, the proposed changes 

would amend CME Rule 816 (Guaranty 

Fund Deposit) to establish CME risk 

management staff as responsible for 

determining one of the two alternative 

minimum amounts for clearing 

members’ Base Guaranty Fund deposits. 

The proposed changes would only 

impact the CME Base Guaranty Fund 

and would not impact the CME CDS 

Guaranty Fund. 

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 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 make certain changes to 

CME Rule 816 which governs guaranty 

fund deposits. The proposed changes 

would only impact the CME Base 

Guaranty Fund and would not impact 

the CME CDS Guaranty Fund. 

More specifically, the proposed 

changes would amend CME Rule 816 

(Guaranty Fund Deposit) to establish 

CME risk management staff as 

responsible for determining one of the 

two alternative minimum amounts for 

clearing members’ Base Guaranty Fund 

deposits. Under current Rule 816, the 

minimum Base Guaranty Fund deposit 

of each clearing member is calculated as 

the greater of (a) a minimum amount 

specified by the Clearing House Risk 

Committee (‘‘CHRC’’) or (b) the clearing 

member’s proportionate share of the 

‘‘Aggregate Guaranty Fund Deposit,’’ an 

amount which is also determined by the 

CHRC. 

Revised Rule 816 would empower 

CME risk management staff rather than 

the CHRC to determine the Aggregate 

Guaranty Fund Deposit, thus enabling 

risk management staff to adjust the 

minimum Base Guaranty Fund deposit 

as necessary to remain in compliance 

with CME’s financial resource 

requirements under applicable 

Commodity Futures Trading 

Commission (‘‘CFTC’’) regulations. The 

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