Document ID: SEC-2011-1657-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Mercantile Exchange, Inc.
Posted Date: 2011-10-28T04:00Z

[Federal Register Volume 76, Number 209 (Friday, October 28, 2011)]
[Notices]
[Pages 67011-67012]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-27897]

[[Page 67011]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65612; File No. SR-CME-2011-13]

Self-Regulatory Organizations; Chicago Mercantile Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rules To Reflect the Change in Regulatory Status of Eris 
Exchange, LLC From an EBOT to a DCM

October 24, 2011.
    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 October 18, 2011, 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 proposed rule 
change pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b-
4(f)(4)(ii) \4\ thereunder.
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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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I. Self-Regulatory Organization's Statement of Terms of Substance of 
the Proposed Rule Change

    CME proposes to adopt revisions to certain CME rules in connection 
with its clearing of contracts listed by the Eris Exchange, LLC 
(``Eris'') to reflect the pending change in regulatory status of Eris 
from an ``EBOT'' to a designated contract market. CME is also at the 
same time amending its Manual of Operations to reflect the proposed 
rule changes related to Eris. The text of the proposed rule change in 
the CME rulebook is available at the 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 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 Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    CME proposes to adopt revisions to CME Rules 8F001 (Scope of 
Chapter) and 8F004 (OTC Clearing Member Obligations and Qualifications) 
and to the CME Clearing House Manual of Operations in connection with 
its clearing of contracts listed by Eris Exchange, LLC (``Eris''). CME 
began acting as the clearing house for Eris in 2010, at which time Eris 
became an exempt board of trade (``EBOT''). Initially, with respect to 
customer positions, Eris contracts were cleared in the Regulation 30.7/
secured origin, and since October 2010, they have been cleared in the 
Cleared OTC Derivatives Account Class/sequestered origin. Because of 
its status as an EBOT, Eris has been referenced in Chapter 8-F (Over-
the-Counter Derivative Clearing) of CME's rule book.
    After passage of the Dodd-Frank Act, Eris applied for registration 
with the Commodity Futures Trading Commission as a designated contract 
market (``DCM''). CME understands that Eris expects to begin operating 
as a DCM in or around mid October, 2011. To reflect Eris's change in 
regulatory status from an EBOT to a DCM, and the related requirement 
that customer positions and collateral be maintained in the futures 
account class/segregated origin, CME proposes to remove references to 
Eris from Chapter 8-F of CME's rule book. CME also proposes to make 
related revisions to the section on Eris in CME's Clearing House Manual 
of Operations.
    All proposed revisions will become effective immediately but will 
not become operational earlier than the date on which the Commodity 
Futures Trading Commission grants Eris's DCM application. CME notes 
that it has also certified the proposed rule changes that are the 
subject of this filing to its primary regulator, the Commodity Futures 
Trading Commission (``CFTC'').
    The proposed CME rule amendments are intended to facilitate CME's 
activities as a derivatives clearing organization clearing the futures 
transactions of a DCM. As such, the proposed CME rule amendments do not 
significantly affect the security-based swap clearing operations of CME 
or any related rights or obligations of CME security-based swap 
clearing participants. The proposed rule change is therefore properly 
filed under Section 19(b)(3)(A) and Rule 19b-4(f)(4)(ii) thereunder 
because it effects a change in an existing service of a registered 
clearing agency that primarily affects the futures clearing operations 
of the clearing agency with respect to futures that are not security 
futures and does not significantly affect any securities clearing 
operations of the clearing agency or any related rights or obligations 
of the clearing agency or persons using such service.

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.

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 was filed pursuant to Section 19(b)(3)(A) 
of the Act and paragraph (f)(2) of Rule 19b-4 and became effective on 
filing. At any time within sixty days of the filing of such 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.

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 may be submitted by using 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-2011-13 on the subject line.
     Paper comments should be sent 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-2011-13. 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

[[Page 67012]]

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 a.m. and 3 p.m. Copies of such 
filing also will be available for inspection and copying at the 
principal office of CME. 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-2011-13 and 
should be submitted on or before November 18, 2011.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-27897 Filed 10-27-11; 8:45 am]
BILLING CODE 8011-01-P