Document ID: SEC-2015-1412-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Mercantile Exchange Inc.
Posted Date: 2015-08-24T04:00Z

[Federal Register Volume 80, Number 163 (Monday, August 24, 2015)]
[Notices]
[Pages 51343-51345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20789]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75724; File No. SR-CME-2015-015]

Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Expand the Listing Schedule for the Urea (Granular) FOB US Gulf Coast 
Swaps (Clearing Only) Contract

August 18, 2015.
    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 August 10, 2015, 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)(4)(ii) 
thereunder,\4\ 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)(4)(ii).

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[[Page 51344]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CME is proposing to expand the listing schedule for the Urea 
(Granular) FOB US Gulf Coast Swaps (Clearing Only) contract listed on 
The Board of Trade of the City of Chicago, Inc. (``CBOT'') designated 
contract market, which is available for submission for clearing via CME 
ClearPort. More specifically, the CME ClearPort listing schedule as of 
August 17, 2015 will be amended from 12 consecutive calendar months to 
24 consecutive calendar months. CME has determined that the amended 
listing schedule is more conducive to the needs of market participants. 
The text of the proposed rule change is below. Italicized text 
indicates additions; bracketed text indicates deletions.
* * * * *

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                                      DCM: CBOT                            Current CME          CME ClearPort
           Product title              Rulebook       Clearing code     ClearPort  listing   listing  schedule as
                                       chapter                              schedule         of August 17, 2015
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Urea (Granular) FOB US Gulf Swaps            45   UFN                 [12 consecutive       24 consecutive
 (Clearing Only).                                                      calendar months].     calendar months.
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* * * * *

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 (``CFTC'') and operates a 
substantial business clearing futures and swaps contracts subject to 
the jurisdiction of the CFTC. CME is proposing to expand the listing 
schedule for the Urea (Granular) FOB US Gulf Coast Swaps (Clearing 
Only) contract listed on the CBOT designated contract market, which is 
available for submission for clearing via CME ClearPort. More 
specifically, the CME ClearPort listing schedule as of August 17, 2015 
will be amended from 12 consecutive calendar months to 24 consecutive 
calendar months. CME has determined that the amended listing schedule 
is more conducive to the needs of market participants.
* * * * *
    A summary of the amendments to the Urea (Granular) FOB US Gulf 
Coast Swaps (Clearing Only) contract's listing schedule is set forth in 
the following table:

----------------------------------------------------------------------------------------------------------------
                                      DCM: CBOT                            Current CME          CME ClearPort
           Product title              Rulebook       Clearing code     ClearPort  listing   listing  schedule as
                                       chapter                              schedule         of  August 17, 2015
----------------------------------------------------------------------------------------------------------------
Urea (Granular) FOB US Gulf Swaps            45   UFN                 12 consecutive        24 consecutive
 (Clearing Only).                                                      calendar months.      calendar months
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* * * * *
    The proposed rule changes that are described in this filing are 
limited to CME's business as a derivatives clearing organization 
clearing products under the exclusive jurisdiction of the CFTC. CME has 
not cleared security based swaps and does not plan to and therefore the 
proposed rule changes do not impact CME's security-based swap clearing 
business in any way. The proposed changes would become effective 
immediately. CME notes that it has also submitted the proposed rule 
changes that are the subject of this filing to its primary regulator, 
the CFTC, in CME Submission Number 15-290.
    CME believes the proposed rule changes are consistent with the 
requirements of the Exchange Act including Section 17A.\5\ The proposed 
rules expand the listing schedule for the Urea (Granular) FOB US Gulf 
Coast Swaps (Clearing Only) contract, which is available for submission 
for clearing via CME ClearPort, from 12 consecutive calendar months to 
24 consecutive calendar months in response to the needs of market 
participants. These rule changes are therefore 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\
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    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
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    Furthermore, the proposed changes are limited to CME's futures and 
swaps clearing businesses, which mean they are limited in their effect 
to products that are under the exclusive jurisdiction of the CFTC. As 
such, the proposed CME changes are limited to CME's activities as a DCO 
clearing futures that are not security futures and swaps that are not 
security-based swaps. CME notes that the policies of the CFTC with 
respect to administering the Commodity Exchange Act are comparable to a 
number of the policies underlying the Exchange Act, such as promoting 
market transparency for over-the-counter derivatives markets, promoting 
the prompt and accurate clearance of transactions and protecting 
investors and the public interest.
    Because the proposed changes are limited in their effect to CME's 
futures and swaps clearing businesses, the proposed changes are 
properly classified as effecting 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,

[[Page 51345]]

including futures that are not security futures, 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.
    As such, the changes are therefore consistent with the requirements 
of Section 17A of the Exchange Act \7\ and are properly filed under 
Section 19(b)(3)(A) \8\ and Rule 19b-4(f)(4)(ii) \9\ thereunder.
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    \7\ 15 U.S.C. 78q-1.
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(4)(ii).
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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 changes 
involve expanding the listing schedule for the Urea (Granular) FOB US 
Gulf Coast Swaps (Clearing Only) contract listed on the CBOT designated 
contract market, which is available for submission for clearing via CME 
ClearPort. More specifically, the CME ClearPort listing schedule as of 
August 17, 2015 will be amended from 12 consecutive calendar months to 
24 consecutive calendar months. CME has determined that the amended 
listing schedule is more conducive to the needs of market participants.

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

    Pursuant to Section 19(b)(3)(A) of the Exchange Act \10\ and Rule 
19b-4(f)(4)(ii) thereunder,\11\ CME has designated 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(4)(ii).
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    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.\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 security-based swaps. Therefore, this proposal will have no 
effect on any securities clearing operations of CME.
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    \12\ See Securities Exchange Act Release No. 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 Europe 
index CDS.
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    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 Exchange 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-2015-015 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-2015-015. 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-2015-015 and 
should be submitted on or before September 14, 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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-20789 Filed 8-21-15; 8:45 am]
BILLING CODE 8011-01-P