Document ID: SEC-2013-2030-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Mercantile Exchange Inc.
Posted Date: 2013-11-27T05:00Z

[Federal Register Volume 78, Number 229 (Wednesday, November 27, 2013)]
[Notices]
[Pages 71015-71016]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28422]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70917; File No. SR-CME-2013-24]

Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing of Proposed Rule Change Regarding the Designation of a 
Primary Backup Data Center

November 21, 2013.
    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 15, 2013, 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 prepared primarily by CME. The Commission is publishing 
this notice to solicit comments on the proposed rule change for 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CME proposes to activate its New York Data Center (``1NE Data 
Center'') as its primary backup data center. The 1NE Data Center 
currently operates in part as a tertiary data center for CME. The 1NE 
Data Center will be redesigned and become the primary backup data 
center in place of CME's current backup data center, the Remote Data 
Center (``RDC''). The proposed change does not involve any changes to 
CME's rulebook.

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

    As a derivatives clearing organization (``DCO'') registered with 
the Commodity Futures Trading Commission (``CFTC''), CME has an 
obligation to establish and maintain a business continuity and disaster 
recovery plan. The procedures associated with this plan are intended to 
ensure that CME has sufficient physical, technological and personnel 
resources to enable the timely recovery and resumption of operations 
following disruptions. Maintaining backup data centers is one component 
of these procedures.
    With this filing, CME proposes to activate its New York Data Center 
(``1NE Data Center'') as its primary backup data center. The 1NE Data 
Center currently operates in part as a tertiary data center for CME. 
The 1NE Data Center will be redesigned and will become the primary 
backup data center in place of CME's current backup data center, the 
Remote Data Center (``RDC''). The 1NE Data Center will be an ``all 
disaster recovery data center'' housing the primary back-up for 
electronic trading, clearing, and regulatory infrastructures. It will 
also continue to house CME's New York trading floor and office staff 
systems as well.
    CME believes the proposed change will increase the reliability and 
security of its backup facilities. First, the new back-up facility is 
located in a distinct geographic area from CME's primary facility and 
therefore CME Group would have capabilities to mitigate risks 
associated with a large scale disruption associated with only one 
geographical area (for example, a weather event). In addition, because 
CME Group's new datacenter strategy employs single IP connectivity, 
customers will no longer have to change their configurations or take 
any additional steps to connect to the backup datacenter and therefore 
the switch from CME Group's production to back-up data center will be 
seamless for CME Group's customers.
    CME believes that implementation of the proposed change will 
therefore allow it to continue to maintain a robust and effective 
business continuity program. The proposed change does not involve any 
changes to CME's rulebook. CME currently plans to operationalize the 
new 1 NE Data Center as soon as all required regulatory approvals are 
obtained. CME is currently making preparations to implement the change 
as of November 25, 2013. CME notes that it has also submitted the 
proposed changes to the CFTC in a separate filing, CME Submission 13-
379, as an ``Advance Notice'' filing pursuant to CFTC Regulation 
40.10(a).
    CME believes the proposed rule changes are consistent with the 
requirements of the Act including Section 17A of the Act.\3\ The 
proposed rule changes involve enhancements to CME's business continuity 
and disaster recovery plan procedures and, as such, 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 Act.\4\ 
The proposed rule changes designate a new location as CME's primary 
backup data center in the event of a disruption. The area that is 
proposed to be designated as the new back-up area currently operates as 
a tertiary data center for CME. This proposed new back-up facility is 
not located near CME's primary facilities. This means that CME will be 
able to mitigate risks associated with a large scale disruption 
associated with only one geographical area (for example, a weather 
event). In addition, because CME's new datacenter strategy employs 
single IP connectivity, customers will no longer have to change their 
configurations or take any additional steps to connect to the backup 
datacenter and therefore the switch from CME's production to back-up 
data center will be seamless for CME's customers. Further, the new 
backup

[[Page 71016]]

location will act as the primary back-up for electronic trading, 
clearing, and regulatory infrastructures.
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    \3\ 15 U.S.C. 78q-1.
    \4\ 15 U.S.C. 78q-1(b)(3)(F).
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    For these reasons, CME believes this change will increase the 
reliability and security of its backup facilities. Because the change 
is designed to help ensure that critical business activities will be 
able to be performed in a timely manner even in the event of a 
significant disruption, CME believes the change should be seen to 
contribute to the safeguarding of securities and funds in CME's custody 
or control or for which CME is responsible and the protection of 
investors. As such, CME believes the proposed changes are consistent 
with the purposes and requirements of Section 17A(b)(3)(F) of the 
Act.\5\
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    \5\ 15 U.S.C. 78q-1(b)(3)(F).
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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 designation of a new 
backup data center should not be seen to have any competitive effects.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    CME has not solicited 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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (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-comment@sec.gov. Please include File 
No. SR-CME-2013-24 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC, 20549-1090.

All submissions should refer to File Number SR-CME-2013-24. 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/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-2013-24 
and should be submitted on or before December 18, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-28422 Filed 11-26-13; 8:45 am]
BILLING CODE 8011-01-P