Daily Rules, Proposed Rules, and Notices of the Federal Government
CME proposes to amend certain of its rules to comply with the Commodity Futures Trading Commission's ("CFTC") Part 22 Regulations. The text of the proposed rule change is available at the CME's Web site at
In its filing with the Commission, CME 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 III below. CME has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
CME is registered as a derivatives clearing organization with the CFTC and operates a substantial business clearing futures and swaps contracts subject to the jurisdiction of the CFTC. CME proposes to adopt revisions to CME Rules 818.B, 930.H, 971 and 973 and to the CME Chapter 8F rules to comply with the CFTC's Part 22 Regulations that will become effective on November 8, 2012. The proposed rule changes would become operational on Monday, November 5, 2012.
The CFTC's Part 22 regulations for the "Legally Segregated, Operationally Commingled" ("LSOC") customer protection regime for cleared swaps: (1) introduce new defined terms including Cleared Swap, Cleared Swaps Customer, Cleared Swaps Customer Account and Cleared Swaps Customer Collateral; and (2) incorporate by reference certain customer protection regulations for customer segregated (futures) accounts, including CFTC Regulations 1.20, 1.25, 1.27 to 1.30, and 1.49. Derivatives clearing organizations like CME and CFTC-registered futures commission merchants must comply with Part 22 by no later than Thursday, November 8, 2012.
The Part 22 regulations supplant the current customer OTC "sequestered" rules in Chapter 8F of the CME rule book, which were implemented in October 2010. CME is therefore removing customer "sequestered" Rules 8F100 to 8F136 and related definitions from its rule book. In addition, CME, CBOT and NYMEX are revising Rules 818.B, 930.H, 971 and 973 in each of their rule books to reflect the removal of CME's customer "sequestered" rules and utilization of the new terms identified above from the CFTC Part 22 regulations.
CME also made a filing, CME Submission 12-240, with its primary regulator, the CFTC, with respect to the proposed rule changes.
CME believes the proposed changes are consistent with the requirements of the Exchange Act including Section 17A. The rule changes are being proposed to comply with the CFTC's Part 22 Regulations which are designed to protect investors. As such, the proposed changes are designed to promote the prompt and accurate clearance and settlement of securities transactions and derivatives agreements, contracts and transactions to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency and, in general, help to protect investors and the public interest. CME, a derivatives clearing organization registered with the CFTC, further notes that it is required to implement the proposed changes to comply with applicable CFTC regulations. CME notes that the policies of the Commodity Exchange Act ("CEA") with respect to clearing are comparable to a number of the policies underlying the Exchange Act, such as promoting market transparency for derivatives markets, promoting the prompt and accurate clearance of transactions and protecting investors and the public interest.
CME does not believe that the proposed rule change will have any impact, or impose any burden, on competition.
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.
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 (
* Send an email to
* Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
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-2012-30 and should be submitted on or before November 2, 2012.
Section 19(b) of the Act
In its filing, CME requested that the Commission approve this proposed rule change on an accelerated basis for good cause shown. CME cites as the reason for this request CME's operation as a derivatives clearing organization subject to regulation by the CFTC and that the proposed changes are required to comply with new CFTC regulations that become effective on November 8, 2012.
The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,