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Notice

Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Amendments to Chicago Mercantile Exchange's Rules Governing Contract Specifications for Physically Delivered Single Security Futures

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Start Preamble December 15, 2010.

Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on December 7, 2010, Chicago Mercantile Exchange Inc. (“CME”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. CME also has filed this proposed rule change concurrently with the Commodity Futures Trading Commission (“CFTC”). CME filed a written certification with the CFTC under Section 5c(c) of the Commodity Exchange Act on November 24, 2010.

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I. Self-Regulatory Organization's Description of the Proposed Rule Change

CME proposes to amend its Rules governing the trade of physically delivered single security futures. Specifically, the Exchange intends to delist futures on three (3) Exchange Traded Funds (ETFs), specifically the Nasdaq-100 Tracking StockSM (“QQQQ”), Standard & Poor's Depositary Receipts® (“SPDR”) and iShares Russell 2000 (“IWM”).

The text of the proposed rule changed [sic] is as follows (brackets indicate words to be deleted; italics indicate words to be added):

CHAPTER 710: PHYSICALLY DELIVERED SINGLE SECURITY FUTURES 71004. APPROVED SECURITIES

The following securities have been approved by the Board of Directors as the subject of Physically Delivered Single Security Futures Contracts:

Approved securityUnit of tradingMinimum fluctuationPosition limit in expiring contract in last 5 trading days
[Nasdaq-100 Tracking StockSM (“QQQQ”)][200 Shares][$0.01 or $2.00 per contract][11,250]
[Standard & Poor's Depositary Receipts® (“SPDR”)][100 Shares][$0.01 or $1.00 per contract][22,500]
[iShares Russell 2000 (“IWM”)][200 Shares][$0.01 or $2.00 per contract][11,250]

II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the self-regulatory organization 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. The self-regulatory organization 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

1. Purpose

CME intends to delist futures on three (3) Exchange Traded Funds (ETFs), specifically the Nasdaq-100 Tracking StockSM (“QQQQ”), Standard & Poor's Depositary Receipts® (“SPDR”) and iShares Russell 2000 (“IWM”), because trading activity has been de minimis in these products as illustrated below.

Average Daily Volume

Jan-Oct 20102009
Nasdaq-100 Tracking StockSM (“QQQQ”)11
Standard & Poor's Depositary Receipts® (“SPDR”)47
iShares Russell 2000 (“IWM”)00

2. Statutory Basis

CME believes that the proposed delistings are consistent with Section 6 of the Act.[2] CME believes the rule changes are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general to protect investors and the public interest, because the proposed rule change merely delists products that have had a de minimus amount of historical trading activity on CME.

B. Self-Regulatory Organization's Statement on Burden on Competition

CME does not believe that the proposed action will have an impact on competition because the proposed rule change merely delists products that have had a de minimus amount of historical trading activity on CME.

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

Comments on the proposed rule change have not been solicited.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The proposed rule change has become effective on December 7, 2010. However, CME intends to implement this delisting in such a way as to avoid impacting any current positions in these markets. Accordingly, CME will not delist any contract months while there are open positions. Rather, CME will simply refrain from listing any new contracts. To the extent that open interest declines to zero in any contract month listed subsequent to December 7, 2010, CME shall retire that contract month. Note that, as of Friday, November 12, 2010, there were a total of 14 open positions in the SPDR contract with 5 open contracts in December 2010 and 9 open contracts in January 2011. There was a total of 9 open positions in the QQQQ contract, all held in the December 2010 contract. Finally, there were zero (0) open positions held in the IWN [sic] contract.

Within 60 days of the date of effectiveness of the proposed rule change, the Commission, after consultation with the CFTC, may summarily abrogate the proposed rule change and require that the proposed rule change be refiled in accordance with the provisions of Section 19(b)(1) of the Act.[3]

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:Start Printed Page 80553

Electronic Comments

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-2010-01. This file number should be included on the subject line if e-mail 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 inspection and copying 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 the filing also will be available for inspection and copying at the principal office of the Exchange.[4] 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-2010-01 and should be submitted on or before January 12, 2011.

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For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[5]

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble

Footnotes

4.  The text of the proposed rule change is available on the Commission's Web site at http://www.sec.gov.

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[FR Doc. 2010-32086 Filed 12-21-10; 8:45 am]

BILLING CODE 8011-01-P