Document ID: SEC-2014-0560-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Mercantile Exchange Inc.
Posted Date: 2014-04-07T04:00Z

[Federal Register Volume 79, Number 66 (Monday, April 7, 2014)]
[Notices]
[Pages 19145-19146]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-07640]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71843; File No. SR-CME-2014-10]

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 MXN OTC IRS Clearing Offering

April 1, 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 March 24, 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 prepared primarily by CME. CME filed 
the proposal pursuant to Section 19(b)(3)(A) 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).
    \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 Interest Rate Swap clearing offering by adopting a fee 
waiver program that applies to Mexican Peso (``MXN'') over-the-counter 
(``OTC'') interest rate swap (``IRS'') house accounts. The text of the 
proposed rule change is below. Italicized text indicates additions; no 
deletions are shown.
* * * * *

Mexican Peso (MXN) Over-the-Counter (OTC) Interest Rate Swaps (IRS) 
House Fee Waiver

Program Purpose

    The purpose of the Program is to incentivize market participants 
to submit transactions in the MXN OTC IRS product listed below to 
the Clearing House for clearing, which will improve market 
liquidity. The resulting addition of liquidity benefits all 
participants in the market.

Product Scope

    MXN OTC IRS cleared by the Clearing House (``Product'').

Eligible Participants

    There is no limit to the number of participants that may 
participate in the Program. The fee incentive described below will 
be open to all market participants and will be automatically applied 
to all transaction fees for house accounts on MXN OTC IRS.

Program Term

    Start date is April 1, 2014. End date is March 31, 2015.

Hours

    The Program will be applicable regardless of the transaction 
time.

Program Incentives

    Fee Waiver. All market participants that submit transactions in 
the Products to the Clearing House will have their transaction fees 
for house accounts waived.
* * * * *

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 derivatives clearing organization with the 
Commodity Futures Trading Commission and currently offers clearing 
services for many different futures and swaps products. With this 
filing, CME proposes to make certain amendments related to the fees it 
applies to certain interest rate swaps cleared at CME. The proposed 
changes involve a fee waiver program that applies to house account 
clearing of MXN OTC IRS products. The changes are designed to 
incentivize market participants to submit additional transactions in 
MXN OTC IRS products to CME for clearing. There is no limit to the 
number of participants that may participate in the proposed fee waiver 
program; it will be open to all market participants and will be 
automatically applied to all transaction fees for house accounts on MXN 
OTC IRS.
    The changes that are described in this filing are limited to fee 
changes for OTC IRS products. Although the proposed changes would 
become effective on

[[Page 19146]]

filing, CME plans to operationalize the fee waiver program on April 1, 
2014. The terms of program are set to expire on March 31, 2015.
    The proposed fee changes are limited to CME's business as a 
derivatives clearing organization clearing products under the exclusive 
jurisdiction of the Commodity Futures Trading Commission (``CFTC'') and 
do not materially impact CME's security-based swap clearing business in 
any way. CME has also certified the proposed rule changes that are the 
subject of this filing to the Commodity Futures Trading Commission 
(``CFTC'') in CFTC Submission 14-082.
    CME believes the proposed rule changes are consistent with the 
requirements of the Exchange Act including Section 17A of the Exchange 
Act.\5\ More specifically, the proposed rule changes establish or 
change a member due, fee or other charge imposed by CME under Section 
19(b)(3)(A)(ii) \6\ of the Securities Exchange Act of 1934 and Rule 
19b-4(f)(2) \7\ thereunder. CME believes that the proposed fee change 
is consistent with the requirements of the Securities Exchange Act of 
1934 and the rules and regulations thereunder and, in particular, to 
17A(b)(3)(D) \8\, because the proposed fee changes apply equally to all 
market participants clearing MXN OTC IRS in house accounts 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) \9\ of the Act and paragraph (f)(2) of Rule 19b-4 
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).
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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 rule changes 
modify pricing for house account clearing of MXN OTC IRS products. 
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 19(b)(3)(A) \10\ of the Act and paragraph (f)(2) 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 No. SR-CME-2014-10 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-2014-10. 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 or 
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-2014-10 and 
should be submitted on or before April 28, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07640 Filed 4-4-14; 8:45 am]
BILLING CODE 8011-01-P