Daily Rules, Proposed Rules, and Notices of the Federal Government
CME proposes to make amendments to CME Rule 971 as part of an industry wide initiative that is designed to further safeguard customer funds held at the futures commission merchant ("FCM") level.
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 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 971 in coordination with the implementation by the National Futures Association ("NFA") of parallel revisions to NFA rules. The proposed rule changes are part of a continuing effort to enhance the protection of customer funds held at the FCM level.
Under revised CME 971.C, FCM clearing members would be required to provide the CME Audit Department with view-only full access of segregated, secured, and Cleared Swaps Customer accounts at a bank or trust company. Amended CME Rule 971.C would provide the CME Audit Department with enhanced capabilities to review FCM funds at a bank or trust company for verification on a real-time and surprise basis, without seeking further authorization from FCM clearing members.
The proposed effective date for these revisions is after November 5, 2012 and will be coordinated with implementation by the National Futures Association ("NFA") of parallel revisions to NFA rules. The proposed changes to CME Rule 971 are attached as Exhibit 5 to the Form 19b-4 that was filed with the Commission in connection with this proposed rule change.
CME believes the proposed changes are consistent with the requirements of the Exchange Act. First, CME, a derivatives clearing organization, is implementing the proposed changes in furtherance with applicable CFTC regulations and the Commodity Exchange Act ("CEA"), which contains a number of provisions that are comparable to the policies underlying the 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.
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-2012-39 and should be submitted on or before November 13, 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 because the proposed changes are part of an industry wide initiative that is specifically designed to protect investors and the public interest through adoption of requirements that help safeguard customer funds held at the FCM level.
The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,