Federal Register / Vol. 80, No. 13 / Wednesday, January 21, 2015 / Notices 2991 

9See supra note 7. 

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

11 17 CFR 240.19b–4(f). 12 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). 

The Exchange’s proposed 

membership fees will be lower than the 

cost of membership on other 

exchanges,9 and therefore, may 

stimulate intramarket competition by 

attracting additional firms to become 

Members on the Exchange. In addition, 

membership fees are subject to 

competition from other exchanges. 

Accordingly, if the changes proposed 

herein are unattractive to market 

participants, it is likely the Exchange 

will see a decline in membership and/ 

or trading activity as a result. The 

proposed fee change will not impact 

intermarket competition because it will 

apply to all Members equally. As stated 

above, the Exchange notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if the [sic] deem fee structures, 

including Annual Membership Fees, to 

be unreasonable or excessive. 

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 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 Act10 and paragraph (f) of Rule 

19b–4 thereunder.11 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– 

BYX–2015–01 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–BYX–2015–01. 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 

filing also will be available for 

inspection and copying at the principal 

offices 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–BYX– 

2015–01, and should be submitted on or 

before February 11, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00835 Filed 1–20–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74055; File No. SR–CME– 

2015–001] 

Self-Regulatory Organizations; 

Chicago Mercantile Exchange Inc.; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Related to Clearing of Certain 

iTraxx Europe Index Untranched CDS 

Contracts on Indices Administered by 

Markit 

January 14, 2015. 

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 January 5, 2015, 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 

The purpose of the proposed changes 

to CME’s clearing rules (the ‘‘CDS 

Product Rules’’) is to enable CME to 

offer clearing of certain iTraxx Europe 

index untranched CDS contracts on 

indices administered by Markit (‘‘iTraxx 

Contracts’’). All capitalized terms not 

defined herein shall have the meaning 

given to them in the CDS Product Rules. 

CME is submitting the proposed 

amendments to the iTraxx Chapters (as 

defined in Item II.A. below) to become 

effective immediately, subject to 

receiving all regulatory approvals. 

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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
2992 Federal Register / Vol. 80, No. 13 / Wednesday, January 21, 2015 / Notices 

5Currently, those rules are CME Rules 230, 8H10, 

8H14, 8H26, 8H27, 8H802, 8H913, and 8H975. 

6Currently, those rules are CME Rules 230, 8H10, 

8H14, 8H26, 8H27, 8H802, and 8H975. 

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 

1. Purpose 

CME is registered as a Derivatives 

Clearing Organization (‘‘DCO’’) with the 

Commodity Futures Trading 

Commission (‘‘CFTC’’) and offers 

clearing services for many different 

futures and swaps products, including 

certain CDS index products. Currently, 

CME offers clearing of (i) the Markit 

CDX North American Investment Grade 

Index Series 8 and forward and (ii) the 

Markit CDX North American High Yield 

Index Series 13 and forward ((i) and (ii) 

collectively, the ‘‘CDX Contracts’’). 

The primary purpose and effect of the 

proposed changes to the CDS Product 

Rules that are described in this filing is 

to enable CME to offer clearing of iTraxx 

Contracts under CME’s authority to act 

as a DCO. iTraxx Contracts have similar 

terms to CDX Contracts currently 

cleared by CME. Accordingly, the 

proposed rules largely mirror the CME 

rules for CDX Contracts, with certain 

modifications that reflect the differing 

underlying reference entities, different 

standard currencies and other logistical 

differences in how the markets and 

documentation for iTraxx Contracts 

operate. The iTraxx Contracts reference 

the iTraxx Europe index, the current 

series of which consists of 125 European 

corporate reference entities. The credit 

protection offered by iTraxx Contracts 

and any Restructuring European Single 

Name CDS Contract consistent with 

market convention and widely used 

standard terms documentation, can be 

triggered by credit events including 

failure to pay, bankruptcy, restructuring 

and, in respect of transactions that will 

reference the 2014 ISDA Definitions 

(such transactions, ‘‘2014 Definitions 

Transactions’’) governmental 

intervention. iTraxx Contracts will be 

denominated in Euro. 

CME notes that, upon the occurrence 

of a restructuring credit event with 

respect to a reference entity that is a 

component of an iTraxx Contract, such 

reference entity will be ‘‘spun out’’ and 

maintained as a separate single-name 

CDS contract (a ‘‘Restructuring 

European Single Name CDS Contract’’) 

until settlement. If neither of the 

counterparties elects to trigger 

settlement, the positions in the 

Restructuring European Single Name 

CDS Contract will be maintained at 

CME until maturity of the index or the 

occurrence of a subsequent credit event 

for the same reference entity. However, 

CME will not permit market participants 

to increase, close out or otherwise affect 

the size of a position in a Restructuring 

European Single Name CDS Contract 

(other than due to the occurrence of a 

credit event, default management 

process, close out of a defaulting 

customer’s positions, or withdrawal 

from clearing membership in 

accordance with CME rules) 5 and CME 

has included language in its proposed 

rule change to this effect. CME notes 

that it may impose an increase or 

decrease in the position of a 

Restructuring European Single Name 

CDS Contract through its default 

management process under applicable 

CME rules.6

To the extent that a Restructuring 

European Single Name CDS Contract is 

created, CME will either (i) obtain any 

relief needed to permit a clearing 

member to maintain customer money, 

securities, and property received by the 

clearing member to margin, guarantee, 

or secure customer positions in cleared 

CDS Contracts, which include both 

swaps and security-based swaps, in a 

segregated account established and 

maintained in accordance with Section 

4d(f) of the Commodity Exchange Act 

(‘‘CEA’’) and the rules thereunder for 

the purpose of clearing such positions 

under a programme to comingle and 

portfolio margin CDS, or (ii) will hold 

customer positions in Restructuring 

European Single Name CDS Contracts 

and any margin in connection with such 

Restructuring European Single Name 

CDS Contracts in segregated accounts or 

take any other action required in order 

to comply with the provisions of the 

Exchange Act or any order or relief 

thereunder. 

(i) Description of Proposed CME Rule 

Changes 

CME is proposing to amend its CDS 

Product Rules by amending Chapter 801 

and adding new Chapters 800: Part B, 

804: Part B, 805: Part C, 806: Part B and 

Appendix 805: Part B (collectively, the 

‘‘iTraxx Chapters’’). CME is also 

proposing to add new Chapters 805: Part 

B, 806: Part A and Appendix 805: Part 

A (together, the ‘‘2014 iTraxx 

Chapters’’). 

CME also proposes to make 

corresponding changes to its CDS 

Manual of Operations to provide for the 

clearance of iTraxx Contracts. 

Specifically, amendments have been 

made where CDX Contracts are 

described as the only CDS Contracts 

which CME clears and a deletion has 

been made to reflect that Restructuring 

will be a credit event for iTraxx 

Contracts. Also, a reference which 

relates to outdated aspects of the CDS 

risk model is proposed to be deleted. 

CME will update its list of products 

eligible for clearing, which is available 

on its Web site at http:// 

www.cmegroup.com/trading/cds/ 

cleared-cds-product-specs.xls, to 

incorporate the additional cleared 

products. Upon Commission approval, 

CME intends to provide for the 

clearance of the following European 

Indices: Markit iTraxx Europe Main 3Y: 

Series 17 and all subsequent Series, up 

to and including the current on-the-run 

Series, Markit iTraxx Europe Main 5Y: 

Series 17 and all subsequent Series, up 

to and including the current on-the-run 

Series, Markit iTraxx Europe Main 7Y: 

Series 17 and all subsequent Series, up 

to and including the current on-the-run 

Series, Markit iTraxx Europe Main 10Y: 

Series 17 and all subsequent Series, up 

to and including the current on-the-run 

Series, and Markit iTraxx Europe 

Crossover 5Y: Series 17 and all 

subsequent Series, up to and including 

the current on-the-run Series. 

Certain iTraxx Contracts which CME 

proposes to clear will, following the 

implementation date of the 2014 ISDA 

Definitions, be bifurcated such that 

certain component transactions will 

continue to reference the 2003 Credit 

Derivatives Definitions published by 

ISDA, as supplemented in 2009 (the 

‘‘2003 ISDA Definitions’’) (such 

transactions, ‘‘2003 Definitions 

Transactions’’), and certain other 

component transactions will be 2014 

Definitions Transactions. Consistent 

with CME’s treatment of CDS products 

with different product terms, CME will 

position iTraxx Component 

Transactions that do not incorporate the 

same set of credit derivatives definitions 

as separate cleared CDS Contracts upon 

the occurrence of a restructuring credit 

event in respect of such iTraxx 

Component Transactions. As a result of 

the above mentioned bifurcation, CME 

proposes to split Chapters 800, 804 and 

805 of its current rules into separate 

sub-parts and to introduce a new 

Chapter 806 and a new Appendix to 

Chapter 805 (each of which will also be 

split into sub-parts) to allow for the 

separate treatment of iTraxx Component 

Transactions depending on whether 

such transactions are 2014 Definitions 

Transactions or 2003 Definitions 

Transactions. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 13 / Wednesday, January 21, 2015 / Notices 2993 

7See Securities Exchange Act Release No. 34– 

73849 (Dec. 16, 2014), 79 FR 76428 (Dec. 22, 2014) 

(SR–CME–2014–51). 

The computation of the spread risk, 

interest rate risk, and liquidity and 

concentration risk components in CME’s 

risk model framework is described in 

CME’s proposed rule change to revise its 

risk model for CDS (the ‘‘CDS Risk 

Model’’) 7 and will be agnostic to 

whether the 2003 ISDA Definitions or 

the 2014 ISDA Definitions are 

applicable, therefore allowing risk 

offsets across iTraxx Component 

Transactions that refer to the same 

reference entity but that do not 

incorporate the same set of credit 

derivatives definitions. No risk offsets 

will be provided for computation of 

idiosyncratic risk requirements for 

iTraxx Component Transactions which 

refer to the same reference entity but 

that do not incorporate the same set of 

credit derivatives definitions. The 

applicability of the post credit event risk 

requirement will be based on whether a 

credit event occurs by reference to the 

relevant credit derivatives definitions 

(2003 ISDA Definitions or the 2014 

ISDA Definitions) and the relevant 

transaction type that is applicable to an 

iTraxx Component Transaction. The 

post credit event risk requirement will 

be computed on a net notional basis for 

a particular reference entity within an 

iTraxx index where a Credit Event has 

been determined under the relevant 

credit derivatives definitions. 

(a) Chapter 800 (Credit Default Swaps: 

Part B) 

CME proposes to add a sub-part to 

Chapter 800 entitled ‘‘Credit Default 

Swaps: Part B.’’ Chapter 800: Part B 

provides the meanings of capitalized 

terms that are used but not defined 

within the proposed rules and the 

location of the meanings of any terms 

used in the proposed rules but not 

defined within Chapter 800: Part B. In 

addition, CME has included CME Rule 

80002.B (Interpretation), which 

provides for the interpretation of certain 

contractual terms used within the 

proposed rules, and CME Rule 80003.B 

(Notices and Clearing House System 

Failures), which provides for how 

notices are to be provided by, or to, 

CME and also for the extension of 

applicable deadlines for the delivery of 

notices if CME, or any of its clearing 

members, is unable to deliver or receive 

notices due to a failure of the relevant 

CME internal system. CME notes that 

CME Rule 80002.B and CME Rule 

80003.B (each as described in the 

aforementioned sentence) are 

substantially similar to CME Rule 80002 

and CME Rule 80003, respectively, that 

are provided in the currently published 

Chapter 800. 

(b) Chapter 801 (CDS Contracts) 

CME proposes to amend Chapter 801 

(CDS Contracts) to include in CME Rule 

80103.C (Eligible CDS) an additional 

provision which describes when an 

iTraxx Contract will be eligible for 

clearing and other conforming, 

clarification changes and drafting 

improvements. 

(c) Chapter 804 (CME CDS Risk 

Committee: Part B) 

CME proposes to add a sub-part to 

Chapter 804 entitled ‘‘CME CDS Risk 

Committee: Part B’’ to apply only in 

connection with 2003 Definitions 

Transactions. Chapter 804: Part B will 

not contain any iTraxx specific 

provisions, but will be created in 

anticipation of the currently published 

Chapter 804 being updated to operate in 

conjunction with the 2014 ISDA 

Definitions. Chapter 804: Part B is 

substantially similar to the currently 

published Chapter 804 with the 

exception that Chapter 804: Part B 

grants an additional authority to the 

CDS RC to determine matters of 

contractual interpretation relevant to 

market standard documentation 

incorporated into the terms of a CDS 

Contract. In addition, modifications 

have been made in order to ensure 

alignment of the CDS Product Rules 

with the current market practices (as 

proposed by ISDA) to clarify the 

circumstances under which the CDS RC 

may make such determinations to avoid 

determinations that are inconsistent 

with DC determinations, and other 

conforming, clarification changes and 

drafting improvements. 

(d) Chapter 805 (CME CDS Physical 

Settlement: Part B), Chapter 805 (CME 

CDS Physical Settlement: Part C) and 

CDS Participant Provisions Appendix 

CME proposes to add two sub-parts to 

Chapter 805 entitled ‘‘CME CDS 

Physical Settlement: Part B’’ and ‘‘CME 

CDS Physical Settlement: Part C.’’ CME 

notes that it is anticipated that the 

currently published Chapter 805 will be 

amended and referred to as ‘‘Part A’’ as 

part of CME’s amendments to its CDS 

Product Rules to incorporate the 2014 

ISDA Definitions, but that such 

amendments will not take into account 

the required iTraxx specific changes 

that would need to be made to Chapter 

805 in order for CME to clear iTraxx 

Contracts. Chapter 805: Part B will 

apply only in connection with 2014 

Definitions Transactions and Chapter 

805: Part C will apply only in 

connection with 2003 Definitions 

Transactions. In general, both Chapter 

805: Part B and Chapter 805: Part C 

provide for the physical settlement 

process that will apply as the fallback 

settlement method with respect to 

iTraxx Contracts and Restructuring 

European Single Name CDS Contracts in 

circumstances where auction settlement 

does not apply. The substance of the 

new provisions is based on the fallback 

physical settlement provisions that 

apply for CDX Contracts, with some 

additional features addressing the 

product terms particular to iTraxx 

Contracts and some further clarification 

and detail in light of the increased 

likelihood of physical settlement being 

applicable to iTraxx Contracts and 

Restructuring European Single Name 

CDS Contracts. These additional 

features are described in further detail 

below. 

CME Rules 80502.B.A and 80502.C.A 

(Matched Pair Notice) provide 

additional detail in relation to the 

matching process. The additions do not 

substantively alter the CDS Product 

Rules but rather, seek to provide greater 

clarity with respect to the current 

matching process and how such process 

will work in respect of iTraxx Contracts. 

CME Rules 80502.B.C and 80502.C.D 

(Notices) have been updated to provide 

additional detail around the notice 

procedures in light of the more complex 

notice requirements following a 

restructuring credit event with respect 

to an iTraxx Component Transaction or 

a Restructuring European Single Name 

CDS Contract. As a result of the more 

complex notice requirements, CME 

proposes to insert in CME Rule 

80502.B.D and 80502.C.E (Disputes as to 

Notices) a more comprehensive dispute 

process in relation to the effective 

delivery of notices to preserve more 

accurately the economic effect of the 

delivery of certain notices. 

CME Rule 80503.B and 80503.C 

(Physical Settlement of Non DVP 

Obligations) provide greater clarity with 

respect to the timing of the delivery of 

Non DVP Obligations and payment of 

the related portion of the Physical 

Settlement Amount. In addition, the 

allocation of any expenses incurred in 

connection with physical settlement is 

now expressly contemplated. 

CME Rule 80507.B and 80507.C 

(Clearing House Guarantee of Matched 

Pair CDS Contracts) and CME Rule 

80508.B and 80508.C (Failure to 

Perform Under Matched Pair CDS 

Contracts) have been updated to align 

the matching process with the general 

physical settlement provisions of CME 

as set out in Chapter 7 (Delivery 

Facilities and Procedures). 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
2994 Federal Register / Vol. 80, No. 13 / Wednesday, January 21, 2015 / Notices 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(4)(ii). 

10See supra note 7. 

11 15 U.S.C. 78q–1. 

12 7 U.S.C. 2(h). 

13 15 U.S.C. 78q–1(b)(3)(F). 

CME also proposes to add an 

Appendix to Chapter 805 which will be 

split into two sub-parts. Appendix: Part 

A will apply only in connection with 

2014 Definitions Transactions and 

Appendix: Part B will apply only in 

connection with 2003 Definitions 

Transactions. The Appendix primarily 

sets out provisions dealing with 

physical settlement and the delivery of 

notices between clearing members and 

their customers. The provisions are 

intended to facilitate the delivery of 

notices and physical settlement. The 

Appendix is intended to apply to all 

CDS contracts; however, the provisions 

are for the convenience of the clearing 

members and their customers and will 

not bind CME. The Appendix includes 

provisions addressing (i) the timing of 

the delivery of physical notices in a 

chain of transactions between the 

clearing house, the clearing members 

and their customers, (ii) when notices, 

requests or instructions between a 

clearing member and its customer are 

effective, (iii) the delivery of deliverable 

obligations between a clearing member 

and its customer, (iv) circumstances 

where a fallback to cash settlement will 

be deemed to apply, (v) buy-in of bonds 

not delivered and the circumstances 

around the effective delivery of a buyin notice, and (vi) alternative 

procedures relating to loans not 

delivered and the circumstances around 

the effective delivery of an alternative 

loan buyer notice. The Appendix will 

only be relevant to CME CDS Physical 

Settlement, and not when auction 

settlement applies and is therefore 

unlikely to be applicable to settlement 

in most cases. 

(e) Chapter 806 (iTraxx Europe Index 

Untranched CDS Contracts: Part A) and 

Chapter 806 (iTraxx Europe Index 

Untranched CDS Contracts: Part B) 

CME proposes to add Chapter 806 

which will be split into two sub-parts 

entitled ‘‘iTraxx Europe Index 

Untranched CDS Contracts: Part A’’ and 

Chapter 806 ‘‘iTraxx Europe Index 

Untranched CDS Contracts: Part B.’’ 

Chapter 806: Part A will apply only in 

connection with 2014 Definitions 

Transactions and Chapter 806: Part B 

will apply only in connection with 2003 

Definitions Transactions. 

CME Rules 80601.A and 80601.B 

(Scope of Chapter) set forth the 

applicable standard terms relevant for 

iTraxx Component Transactions and 

where the terms and conditions for 

Restructuring European Single Name 

CDS Contracts are set out. Further, it is 

clarified that unless a restructuring 

credit event occurs, no iTraxx 

Component Transaction will be fungible 

with a European single name CDS 

contract. 

CME Rules 80602.A and 80602.B 

(Contract Terms) reflect or incorporate 

the basic contract specifications for 

iTraxx Contracts and Restructuring 

European Single Name CDS Contracts 

and are substantially similar to CME 

Rule 80202 (Contract Terms) for CDX 

Contracts. Similarly CME Rules 80603.A 

and 80603.B (Contract Modifications) 

are substantially similar to CME Rule 

80203 (Contract Modifications) for CDX 

Contracts, except for conforming 

changes. 

In addition, CME Rule 80604.A and 

80604.B (Restructuring) have been 

added to reflect the fact that 

restructuring is a credit event for iTraxx 

Contracts and Restructuring European 

Single Name CDS Contracts, that 

governmental intervention is a credit 

event for certain 2014 Definitions 

Transactions, and that Restructuring 

European Single Name CDS Contracts 

may be created. In addition, CME has 

inserted (i) a notice delivery procedure 

to address the delivery of restructuring 

credit event notices and notices to 

exercise movement options, (ii) a 

process to separate any matched 

restructuring pairs following an 

announcement that a restructuring 

credit event did not in fact occur, (iii) 

provisions relating to the identification 

of the reference obligation for a 

Restructuring European Single Name 

CDS Contract, (iv) a comprehensive 

dispute process in relation to the 

effective delivery of restructuring credit 

event notices and notices to exercise 

movement options that are delivered 

directly (not via DTCC), and (v) a 

procedure for CME to communicate 

certain information received from 

DTCC, or from its clearing members, as 

applicable, to the relevant clearing 

members via reports. 

(ii) CDS Risk Model 

CME has submitted to the 

Commission, pursuant to Section 

19(b)(3)(A) of the Exchange Act8 and 

Rule 19b–4(f)(4)(ii)9 thereunder, the 

proposed CDS Risk Model, for the 

purposes of enabling CME to offer 

clearing of additional CDS instruments, 

including iTraxx Contracts, within the 

CDS Risk Model.10

2. Statutory Basis 

CME has identified iTraxx Contracts 

as products that have become 

increasingly important for market 

participants to manage risk with respect 

to European corporate and financial 

entities’ credit risk. CME believes the 

proposed changes to its CDS Product 

Rules are consistent with the 

requirements of the Exchange Act 

including Section 17A of the Exchange 

Act.11 The proposed changes which will 

facilitate CME’s clearance of iTraxx 

Contracts would expand CME’s CDS 

index product offering and would 

therefore provide investors with an 

expanded range of derivatives products 

for clearing. CME notes that the 

facilitation of clearance of iTraxx 

Contracts is of particular importance as 

the CFTC has determined that iTraxx 

Contracts that are subject to a 5Y or 10Y 

tenor are subject to mandatory clearing 

under Section 2(h) of the CEA.12 As 

such, the proposed changes are 

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.13

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CME does not believe that the 

proposed rule change would have any 

impact, or impose any burden, on 

competition. On the contrary, the 

clearance of iTraxx Contracts will 

promote competition since some of 

CME’s competitors, including ICE Clear 

Credit LLC, ICE Clear Europe Limited 

and LCH.Clearnet S.A., already offer 

clearing of iTraxx Contracts. CME will 

therefore be able to provide market 

participants with an expanded choice 

for clearing iTraxx Contracts. 

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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 13 / Wednesday, January 21, 2015 / Notices 2995 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(4)(ii). 

16See 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 

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 Contracts. 17 17 CFR 200.30–3(a)(12). 

19(b)(3)(A)14 of the Act and Rule 19b– 

4(f)(4)(ii)15 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 proposed rule 

change that clarified that CME has 

decided not to clear security-based 

swaps, except in a very limited set of 

circumstances.16 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 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 No. SR– 

CME–2015–001 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–2015–001. 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 

filing also will 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–2015–001 and should 

be submitted on or before February 11, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00839 Filed 1–20–15; 8:45 am] 

BILLING CODE 8011–01–P 

SELECTIVE SERVICE SYSTEM 

Forms Submitted to the Office of 

Management and Budget for Extension 

of Clearance 

AGENCY: Selective Service System. 

ACTION: Notice. 

The following forms have been 

submitted to the Office of Management 

and Budget (OMB) for extension of 

clearance in compliance with the 

Paperwork Reduction Act (44 U.S.C. 

Chapter 35): 

SSS Form 1 

Title: The Selective Service System 

Registration Form. 

Purpose: Is used to register men and 

establish a data base for use in 

identifying manpower to the military 

services during a national emergency. 

Respondents: All 18-year-old males 

who are United States citizens and those 

male immigrants residing in the United 

States at the time of their 18th birthday 

are required to register with the 

Selective Service System. 

Frequency: Registration with the 

Selective Service System is a one-time 

occurrence. 

Burden: A burden of two minutes or 

less on the individual respondent. 

Copies of the above identified form 

can be obtained upon written request to 

the Selective Service System, Reports 

Clearance Officer, 1515 Wilson 

Boulevard, Arlington, Virginia 22209– 

2425. 

Written comments and 

recommendations for the proposed 

extension of clearance of the form 

should be sent within 30 days of the 

publication of this notice to the 

Selective Service System, Reports 

Clearance Officer, 1515 Wilson 

Boulevard, Arlington, Virginia 22209– 

2425. 

A copy of the comments should be 

sent to the Office of Information and 

Regulatory Affairs, Attention: Desk 

Officer, Selective Service System, Office 

of Management and Budget, New 

Executive Office Building, Room 3235, 

Washington, DC 20503. 

Dated: January 14, 2015. 

Lawrence Romo, 

Director. 

[FR Doc. 2015–00845 Filed 1–20–15; 8:45 am] 

BILLING CODE 8015–01–P 

SELECTIVE SERVICE SYSTEM 

Forms Submitted to the Office of 

Management and Budget for Extension 

of Clearance 

AGENCY: Selective Service System. 

ACTION: Notice. 

The following forms have been 

submitted to the Office of Management 

and Budget (OMB) for extension of 

clearance in compliance with the 


asabaliauskas on DSK5VPTVN1PROD with NOTICES