This PDF is the current document as it appeared on Public Inspection on 03/18/2014 at 08:45 am.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act” or “Act”), and Rule 19b-4 thereunder, notice is hereby given that on March 4, 2014, Chicago Mercantile Exchange Inc. (“CME”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change described in Items I and II, below, which Items have been prepared primarily by CME. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
CME proposes to make amendments to CME Rule 980 by adding a new paragraph F. The new provision would provide for administrative fees to be imposed for late submissions of reports and other financial information to CME's Financial and Regulatory Surveillance Department (“FRSD”). Under the proposed changes, CME's FRSD would be able to assess clearing members a $1,000 administrative fee for each required submission that is not received by the due date and time. The proposed rule language would also allow the FRSD to, in its discretion, waive assessment of the administrative fee for good cause shown.
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 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
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 proposes to make rule changes to CME Rule 980. Current CME Rule 980 sets out required records and reports for clearing members of CME. The proposed changes would add a new paragraph F. CME has also made filings with the CFTC, Submission No. 13-581 and Submission No. 14-023, regarding the proposed changes to new paragraph F to existing Rule 980.
The new provision would provide for administrative fees to be imposed for late submissions of reports and other financial information to CME's Financial and Regulatory Surveillance Department (“FRSD”). Under the proposed changes, CME's FRSD would be able to assess clearing members a $1,000 administrative fee for each required submission that is not received by the due date and time. The proposed rule language would also allow the FRSD to, in its discretion, waive assessment of the administrative fee for good cause shown.Start Printed Page 15381
The new language is intended to address timely reporting of required financial information. To the extent a firm shows a pattern or practice of late submissions that could potentially indicate insufficient internal accounting controls or procedures, CME notes that there are separate existing processes available via the Clearing House Risk Committee which can result in additional disciplinary sanctions in appropriate circumstances. The imposing of an administrative fee that is the subject of this provision is not intended to replace these existing Clearing House Risk Committee processes. Rather, the new language is intended to supplement these processes by giving CME the ability to impose a $1,000 administrative fee on clearing members for each late submission of required reports.
CME plans to operationalize the proposed changes on April 15, 2014, pending applicable regulatory reviews and approvals. CME has also made filings with the CFTC, Submission No. 13-581 and Submission No. 14-023, regarding the proposed changes.
CME, a derivatives clearing organization, notes that it is implementing the proposed changes as part of an effort to discharge its regulatory obligations under the Commodity Exchange Act (“CEA”) more effectively. CME believes the proposed rule changes are also entirely consistent with the requirements of the Exchange Act and the rules and regulations thereunder, including Section 17A of the Exchange Act. The proposed changes enhance CME's self-regulatory organization function by providing the ability to assess a $1,000 administrative fee on clearing members for late submissions of financial information to CME's FRSD. These changes will strengthen CME's self-regulatory organization function and will encourage more accurate financial reporting by clearing members, which are goals that are clearly 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 CME or for which it is responsible, and, in general, to protect investors and the public interest in a way that is consistent with Section 17A(b)(3)(F) of the Exchange Act.
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 will give CME the ability to impose a $1,000 administrative fee on clearing members for the late submission of required reports and financial information.
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
Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove the proposed rule change or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
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:
- Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml), or
- Send an email to email@example.com. Please include File No. SR-CME-2014-07 on the subject line.
- 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-2014-07. 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-2014-07 and should be submitted on or before April 9, 2014.Start Signature
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Kevin M. O'Neill,
3. CME notes that the CEA contains a number of provisions that are comparable to the policies underlying the Exchange Act, including, for example, promoting market transparency for derivatives markets, promoting the prompt and accurate clearance of transactions and protecting investors and the public interest.Back to Citation
[FR Doc. 2014-05985 Filed 3-18-14; 8:45 am]
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