[Federal Register Volume 76, Number 196 (Tuesday, October 11, 2011)]
[Notices]
[Pages 62891-62892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-26159]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65483 File No. SR-OCC-2011-13]
Self-Regulatory Organizations; Options Clearing Corporation;
Notice of Filing of Proposed Rule Relating to Relative Performance
Indexes
October 4, 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 September 21, 2011, The Options Clearing Corporation (``OCC'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change. On October 4, 2011, OCC filed Amendment No. 1 to
the proposed rule change. The proposed rule change as amended by
Amendment No. 1 is described in Items I, II, and III below, which Items
have been prepared primarily by OCC. The Commission is publishing this
notice to solicit comments on the proposed rule change and Amendment
No. 1 to the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change would remove any potential cloud on the
jurisdictional status of relative performance indexes.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to remove any potential
cloud on the jurisdictional status of relative performance indexes.
NASDAQ OMX PHLX has proposed to trade options on indexes (``Alpha Index
Options'') that measure the relative total returns of a stock or
exchange-traded fund (``ETF'') against another stock or ETF, including
where one of the reference ETFs measured by the index is a gold- or
silver-based ETF.\3\ Generally, a relative performance index should be
considered to be an index of securities since the components of a
relative performance index are ETFs or other securities. However, OCC
would like to confirm the jurisdictional treatment of relative
performance indexes in situations in which one of the reference
securities of an underlying relative performance index is an ETF
designed to measure the return of gold or silver. To accomplish this
purpose, OCC is proposing to add an interpretation following Section 2
in Article XVII of OCC's By-Laws,\4\ clarifying that OCC will clear and
treat as securities any relative performance index, including in
situations in which one of the reference securities of a relative
performance index is an ETF designed to measure the return of gold or
silver. The Commission and Commodity Futures Trading Commission
(``CFTC'') have previously approved changes to OCC's By-Laws clarifying
that options on the CBOE Gold ETF Volatility Index will be cleared and
treated as securities.\5\
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\3\ The staff notes that on August 17, 2011, the Commission
issued an Order granting approval this proposed rule change. See
Securities Exchange Act Release No. 34-65149, 76 FR 52729 (August
23, 2011).
\4\ The staff notes that OCC's is also adding a definition of
``relative performance index'' to Section 1, which will be defined
as an index designed to measure the relative performance of a
reference security or reference index in relation to another
reference security or reference index.
\5\ See Securities Exchange Act Release No. 34-62290, 75 FR
35861 (June 23, 2010); CFTC Order Exempting the Trading and Clearing
of Certain Products Related to the CBOE Gold ETF Volatility Index
and Similar Products, 75 FR 81977 (December 29, 2010).
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In its capacity as a ``derivatives clearing organization''
registered as such with the CFTC, OCC is filing this proposed rule
change for prior approval by the CFTC pursuant to provisions of the
Commodity Exchange Act (the ``CEA'') in order to foreclose any
potential liability under the CEA based on an argument that the
clearing by OCC of such options as securities options constitutes a
violation of the CEA.
OCC believes that the proposed interpretation of OCC's By-Laws is
consistent with the purposes and requirements of Section 17A of the
Exchange Act because it is designed to promote the prompt and accurate
clearance and settlement of transactions in securities options, to
foster cooperation and coordination with persons engaged in the
clearance and settlement of such transactions, to remove impediments to
and perfect the mechanism of a national system for the prompt and
accurate clearance and settlement of such transactions, and, in
general, to protect investors and the public interest. It accomplishes
this purpose by reducing the likelihood of a dispute as to the
Commission's jurisdiction over relative performance indexes in
situations where one of the reference securities of an underlying
relative performance index is a gold- or silver-based ETF. The proposed
rule change is not inconsistent with the By-Laws and Rules of OCC.
(B) Self-Regulatory Organization's Statement on Burden on Competition
OCC does not believe that the proposed rule change would impose any
burden on competition.
[[Page 62892]]
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
Written comments were not and are not intended to be solicited with
respect to the proposed rule change and none have been received.
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:
Electronic Comments
Use the Commissions Internet comment form (http://www.sec.gov/rules/sro.shtml) or
Send an e-mail to [email protected]. Please include File Number
SR-OCC-2011-13 on the subject line.
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-OCC-2011-13. 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 website viewing and
printing in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 pm. Copies of such filings will also be available for
inspection and copying at the principal office of OCC and on OCC's Web
site at http://www.optionsclearing.com/components/docs/legal/rules_and_bylaws/sr_occ_11_13_a_1.pdf.
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-OCC-2011-13
and should be submitted on or before November 1, 2011.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-26159 Filed 10-7-11; 8:45 am]
BILLING CODE 8011-01-P