Document ID: SEC-2013-2007-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Mercantile Exchange Inc.
Posted Date: 2013-11-25T05:00Z

[Federal Register Volume 78, Number 227 (Monday, November 25, 2013)]
[Notices]
[Pages 70368-70370]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28161]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70901; File No. SR-CME-2013-30]

Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Corrections to Chicago Mercantile Exchange Inc. Rule 
274H.02.A. Regarding Timing of Determination of the Spot Exchange Rate 
of Chilean Peso per United States Dollar for Use in Settlement of 
Cleared Spot, Forward and Swap Contracts

November 19, 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 12, 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. CME filed the proposal 
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(4)(ii) \4\ thereunder so that the

[[Page 70369]]

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)(iii).
    \4\ 17 CFR 240.19b-4(f)(4)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CME is filing a proposed rule change that is limited to its 
business as a derivatives clearing organization. More specifically, the 
proposed rule change would make amendments to its rules to correct an 
error in the current rule text of CME Rule 274H.02.A. regarding cash 
settlement of Cleared OTC USD/CLP Spot, Forwards and Swaps Contracts.

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 amendments to its rules regarding its OTC 
foreign currency (``FX'') swap clearing offering. Although this change 
will be effective on filing, CME plans to operationalize the proposed 
change on November 17, 2013 for trade date November 18, 2013.
    The proposed rule change is intended to correct an error in the 
current rule text of CME Rule 274H.02.A. regarding Cash Settlement of 
Cleared OTC USD/CLP Spot, Forwards and Swaps Contracts. Specifically, 
the proposed rule change would amend the time of the underlying 
benchmark fixing for the spot exchange rate of the Chilean peso per 
U.S. dollar that is calculated by the Central Bank of Chile and is used 
by CME for the final cash settlement of Cleared OTC USD/CLP from 8:00 
p.m. Santiago time to 10:30 a.m. Santiago time.
    The change that is described in this filing is limited to CME's 
business as a derivatives clearing organization clearing products under 
the exclusive jurisdiction of the Commodity Futures Trading Commission 
(``CFTC'') and does not materially impact CME's security-based swap 
clearing business in any way. CME notes that it has already submitted 
the proposed rule change that is the subject of this filing to its 
primary regulator, the CFTC, in CME Submission 13-507R.
    CME believes the proposed rule change is consistent with the 
requirements of the Act including Section 17A of the Act.\5\ The 
proposed rule change would correct an error in the current rule text of 
CME Rule 274H.02.A. regarding cash settlement of Cleared OTC USD/CLP 
Spot, Forwards and Swaps Contracts to reflect the actual time that the 
spot exchange rate of the Chilean peso per U.S. dollar is calculated by 
the Central Bank of Chile (and therefore the timing used by CME for the 
final cash settlement of Cleared OTC USD/CLP). Because the change will 
ensure CME rules accurately reflect this timing, the change should be 
seen to be 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.\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 change is limited in its effect to swaps 
products offered under CME's authority to act as a derivatives clearing 
organization. These products are under the exclusive jurisdiction of 
the CFTC. As such, the proposed change is limited to CME's activities 
as a derivatives clearing organization clearing 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 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 change is limited in its effect to swaps 
products offered under CME's authority to act as a derivatives clearing 
organization, the proposed change is 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, including futures that are not 
security futures, and swaps that are not security-based swaps or mixed 
swaps; 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 change is therefore consistent with the requirements of 
Section 17A of the 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 rule change makes 
changes to accurately reflect the timing of the pricing mechanism for 
settlement of swaps contracts and should therefore not be seen to have 
any competitive concerns.

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 pursuant to Section 
19(b)(3)(A) \10\ of the Act and Rule 19b-4(f)(4)(ii) \11\ 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.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(4)(ii).
    \12\ 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and

[[Page 70370]]

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-2013-30 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-2013-30. 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-2013-30 
and should be submitted on or before December 16, 2013.

    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. 2013-28161 Filed 11-22-13; 8:45 am]
BILLING CODE 8011-01-P