Document ID: SEC-2014-2086-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Mercantile Exchange Inc.
Posted Date: 2014-12-11T05:00Z

[Federal Register Volume 79, Number 238 (Thursday, December 11, 2014)]
[Notices]
[Pages 73655-73656]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29003]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73752; File No. SR-CME-2014-55]

Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Fee Schedule Applicable to Its OTC Credit Default Swap 
Clearing Offering

December 5, 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 December 1, 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)(ii) of the Act,\3\ and Rule 19b-4(f)(2) 
\4\ thereunder, so that the proposal was effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CME is proposing to amend the fee schedule that currently applies 
to its OTC Credit Default Swap (``CDS'') index clearing offering. The 
text of the proposed rule change is available on CME's Web site at 
http://www.cmegroup.com, at the principal office of CME, 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, 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 currently offers 
clearing services for many different futures and swaps products. With 
this filing, CME proposes to make certain amendments to the current fee 
schedule that applies to its OTC CDS index clearing offering. The 
changes described in this filing are limited to products that fall 
under the exclusive jurisdiction of the CFTC.
    The first set of proposed modifications specifies the fees that 
will apply to iTraxx Index Products that will be cleared by CME once 
the product is made available for clearing. This is scheduled to occur 
on December 8, 2014 or whenever applicable regulatory approvals are 
obtained. In general, iTraxx products will have the same fee schedule 
as the similar North American CDX products that CME currently clears, 
but will be charged in Euros as opposed to U.S. Dollars. Additionally, 
the proposed modifications will also feature a temporary discount on 
these products to all clients.
    The second set of proposed modifications relate to the volume-based 
tiers that are currently offered in connection with CME's North 
American CDX index product offering. These proposed modifications would 
lower certain of the current tier thresholds. These changes would 
become operational on January 1, 2015.
    The proposed fee changes are limited to CME's business as a 
derivatives clearing organization clearing products and do not impact 
security-based swaps in any way. CME has also certified the proposed 
rule changes that are the subject of this filing to the CFTC in CFTC 
Submission 14-441.
    CME believes the proposed rule change is consistent with the 
requirements of the Act including Section 17A of the Act.\5\ More 
specifically, the proposed rule change establishes or changes a member 
due, fee or other charge imposed by CME under Section 19(b)(3)(A)(ii) 
\6\ of the Act and Rule 19b-4(f)(2) \7\ thereunder. CME believes that 
the proposed fee change is consistent with the requirements of the Act 
and the rules and regulations thereunder and, in particular, to Section 
17A(b)(3)(D) of the Act,\8\ because the proposed fee changes apply 
equally to all market participants clearing covered products and 
therefore the proposed changes provide for the equitable allocation of 
reasonable dues, fees and other charges among participants. CME also 
notes that it operates in a highly competitive market in which market 
participants can readily direct business to competing venues. As such, 
the proposed changes are appropriately filed pursuant to Section 
19(b)(3)(A)(ii) \9\ of the Act and Rule 19b-4(f)(2) \10\ thereunder.
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    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ 15 U.S.C. 78q-1(b)(3)(D).
    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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 proposed 
modifications will introduce pricing for a new OTC CDS index swap 
offering and will make minor modifications to the pricing schedules for 
current OTC CDS index clearing offerings. These products are swaps 
under the exclusive jurisdiction of the CFTC, and, as such, these 
proposed changes do not affect the security-based swap clearing 
activities of CME in any way and therefore do not impose any burden on 
competition that is inappropriate in furtherance of the purposes of the 
Act.

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

    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

[[Page 73656]]

19(b)(3)(A)(ii) \11\ of the Act and Rule 19b-4(f)(2) \12\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
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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-2014-55 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-2014-55. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filings will also be available 
for inspection and copying at the principal office of CME and on CME's 
Web site at http://www.cmegroup.com/market-regulation/rule-filings.html.
    All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-CME-2014-55 
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\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29003 Filed 12-10-14; 8:45 am]
BILLING CODE 8011-01-P