Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices 73919 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f). 

19 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). 

would only benefit other Members by 

contributing to increased liquidity and 

improve market quality at the Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

Members or other interested parties. 

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) 

of the Act 17 and paragraph (f) of Rule 

19b–4 thereunder.18 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 rule-comments@

sec.gov. Please include File Number SR– 

EDGX–2014–32 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–EDGX–2014–32. 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–EDGX– 

2014–32, and should be submitted on or 

before January 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29108 Filed 12–11–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73776; File No. SR–CME– 

2014–29] 

Self-Regulatory Organizations; 

Chicago Mercantile Exchange Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Make Clarifying Changes to 

CME Rule 814 and CME Rule 901 

December 8, 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 

November 26, 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 filing a proposed rule change 

that is limited to its business as a 

derivatives clearing organization. More 

specifically, the proposed rule change 

would make amendments to CME Rule 

814 and CME Rule 901 to specify the 

time at which a settlement bank 

becomes responsible to the clearing 

house to perform variation margin 

settlement and the point during the 

clearing cycle at which a clearing 

member’s obligations to the clearing 

house cease. The proposed revisions 

would not modify clearing house 

operations but merely clarify to the 

marketplace the clearing cycle currently 

in place. 

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 amendments to CME 

Rule 814 and CME Rule 901 to specify 

the time at which a settlement bank 

becomes responsible to the clearing 

house to perform variation margin 

settlement and the point during the 

clearing cycle at which a clearing 

member’s obligations to the clearing 

house cease. The proposed revisions 

would not modify clearing house 

operations but merely clarify to the 

marketplace the clearing cycle currently 

in place. CME notes that it has also 

made a corresponding filing with the 

CFTC, in Submission No. 14–280, 

regarding the proposed changes. 

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73920 Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices 

5See Committee on Payment and Settlement 

Systems and Technical Committee of the 

International Organization of Securities 

Commissions, Principles for Financial Market 

Infrastructures (Apr. 16, 2012), available at http:// 

www.bis.org/publ/cpss101a.pdf. 

6 Id. at 64. 

7 15 U.S.C. 78q–1. 

8Pursuant to a teleconference with CME’s 

counsel on December 4, 2014, staff in the Division 

of Trading and Markets has modified this sentence 

to clarify CME’s intended explanation of the 

statutory basis for the proposed rule change. 

9 15 U.S.C. 78q–1(b)(3)(F). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(4)(ii). 

12See Securities Exchange Act Release No. 34– 

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 

Credit Default Swap (‘‘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. 

The proposed changes would reflect 

the best practices outlined in the 

Principles for Financial Market 

Infrastructures (‘‘PFMIs’’), adopted by 

the joint Committee on Payment and 

Settlement Systems and the Technical 

Committee of the International 

Organization of Securities 

Commissions.5 Principle 8 of the PFMIs 

(Settlement finality) states that an 

‘‘FMI’s rules and procedures should 

clearly define the point at which 

settlement is final’’ and that ‘‘[a]n FMI 

should be designed to provide clear and 

certain final settlement of payments, 

transfer instructions, or other 

obligations.’’ 6

Revised CME Rule 814 (Settlement 

Variation) will specify that ‘‘settlement 

variation is deemed final when an 

irrevocable commitment to pay has been 

provided to the Clearing House by a 

settlement bank in a form or manner as 

approved by the Clearing House.’’ The 

amendment to Rule 814 codifies CME’s 

uniform practice in regard to its 

settlement bank legal agreements, which 

provide that the settlement bank’s 

obligation arises upon CME’s receipt of 

the settlement bank’s irrevocable 

commitment to pay. 

CME Rule 901.S (General 

Requirements and Obligations) is being 

added to state that ‘‘the obligation(s) of 

a clearing member to pay settlement 

variation and/or performance bond 

during each clearing cycle is not 

extinguished until all required cash 

and/or collateral is deposited into the 

correct CME bank account at the 

relevant custodial or settlement bank.’’ 

The proposed changes increase the 

transparency of the CME legal 

framework in this area and align the 

existing rules with global PFMI 

standards by specifying the times at 

which settlement bank obligations to the 

clearing house arise and clearing 

member obligations are extinguished. 

CME believes the proposed rule 

change is consistent with the 

requirements of the Act including 

Section 17A.7 Because the proposed 

change clarifies in CME’s rules the time 

at which a settlement bank becomes 

responsible to the clearing house to 

perform variation margin settlement and 

the point during the clearing cycle at 

which a clearing member’s obligations 

to the clearing house cease,8 it promotes 

the prompt and accurate clearance and 

settlement of securities transactions 

and, to the extent applicable, derivatives 

agreements, contracts, and transactions, 

assures the safeguarding of securities 

and funds which are in the custody or 

control of CME or for which it is 

responsible, and, in general, protects 

investors and the public interest in a 

way that is consistent with Section 

17A(b)(3)(F) of the Act.9

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 

specify the time at which a settlement 

bank becomes responsible to the 

clearing house to perform variation 

margin settlement and the point during 

the clearing cycle at which a clearing 

member’s obligations to the clearing 

house cease. The proposed revisions 

will not modify clearing house 

operations but merely clarify to the 

marketplace the clearing cycle currently 

in place. 

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) 10 of the Act and Rule 19b– 

4(f)(4)(ii) 11 thereunder. CME asserts 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. CME believes that the 

proposal does not significantly affect 

any securities clearing operations of 

CME because CME recently filed a rule 

change that clarified that CME has 

decided not to clear security-based 

swaps, except in a very limited set of 

circumstances.12 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 securitybased swaps. Therefore, this proposal 

will not have an effect on any securities 

clearing operations of CME. 

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 rule-comments@

sec.gov. Please include File Number SR– 

CME–2014–29 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–2014–29. 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/

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices 73921 

13 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). 

5 15 U.S.C. 78q–1. 

6 15 U.S.C. 78q–1(b)(3)(F). 

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/marketregulation/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–2014–29 and should 

be submitted on or before January 2, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29102 Filed 12–11–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73786; File No. SR–CME– 

2014–54] 

Self-Regulatory Organizations; 

Chicago Mercantile Exchange Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Related to Position Limits and 

Position Accountability of the USD 

Malaysian Crude Palm Oil Calendar 

(Cleared Only) Contracts 

December 8, 2014. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’),1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on November 25, 2014, Chicago 

Mercantile Exchange Inc. (‘‘CME’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change described in Items 

I, II and III, below, which Items have 

been primarily prepared 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 filing a proposed rule change 

that is limited to its business as a 

derivatives clearing organization 

(‘‘DCO’’). More specifically, the 

proposed rule change would amend 

rules related to the position limits and 

position accountability of the USD 

Malaysian Crude Palm Oil Calendar 

(Cleared Only) Contract for clearing. 

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 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 DCO with the 

Commodity Futures Trading 

Commission (‘‘CFTC’’) 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. More specifically, the 

proposed rule change would amend 

rules related to the position limits and 

position accountability of the USD 

Malaysian Crude Palm Oil Calendar 

Swap (Cleared Only) Contract for 

clearing. 

The proposed amendment would 

establish independent position 

accountability levels for CME’s USD 

Malaysian Crude Palm Oil Calendar 

Swap (the ‘‘Swap’’). Feedback from 

counterparties to the Swap suggests that 

much of the participation in the product 

involves commercial hedgers or 

counterparties to commercial hedgers. 

The Swap is not subject to mandatory 

position limit requirements. 

Transitioning from position limits to 

position accountability levels will 

facilitate the risk reduction practices of 

commercial firms and promote the 

continued participation of 

counterparties to commercial hedgers. 

Accordingly, CME proposes to 

transition the Swap’s current position 

limit of 2,800 contracts into new 

position accountability levels to be set 

at 2,800 contracts. 

The amendment will be reflected in 

the Position Limit, Position 

Accountability and Reportable Level 

Table and Header Notes located in the 

Interpretations and Special Notices 

Section of Chapter 5 of the CME 

Rulebook. 

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. The 

changes will be effective on filing. CME 

notes that it has also certified the 

proposed rule change that is the subject 

of this filing to its primary regulator, the 

CFTC, in a separate filing, CME 

Submission No. 14–434. 

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 the amendment 

to establish new independent position 

accountability levels for CME’s USD 

Malaysian Crude Palm Oil Calendar 

Swap, a change that is expected to 

facilitate the risk reduction practices of 

commercial firms and promote the 

continued participation of 

counterparties to commercial hedgers. 

The change is 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

Furthermore, the proposed change is 

limited in its 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 change is limited to CME’s 

mstockstill on DSK4VPTVN1PROD with NOTICES