[Federal Register Volume 77, Number 16 (Wednesday, January 25, 2012)]
[Notices]
[Pages 3828-3829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-1445]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66193; File No. SR-ODD-2012-01]
Self-Regulatory Organizations; The Options Clearing Corporation;
Order Granting Approval of Accelerated Delivery of Supplement to the
Options Disclosure Document Reflecting Certain Changes to Disclosure
Regarding Relative Performance Options
January 19, 2012.
On August 15, 2011, The Options Clearing Corporation (``OCC'')
submitted to the Securities and Exchange Commission (``Commission''),
pursuant to Rule 9b-1 under the Securities Exchange Act of 1934
(``Act''),\1\ five preliminary copies of a supplement to amend the
options disclosure document (``ODD'') to reflect certain changes to
disclosure regarding relative performance options (``January 2012
Supplement'').\2\ On January 5, 2012, the OCC submitted to the
Commission five definitive copies of the January 2012 Supplement.\3\
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\1\ 17 CFR 240.9b-1.
\2\ See letter from Jean M. Cawley, Senior Vice President,
Deputy General Counsel and Chief Compliance Officer, OCC, to Sharon
Lawson, Senior Special Counsel, Division of Trading and Markets
(``Division''), Commission, dated August 15, 2011.
\3\ See letter from Jean M. Cawley, Senior Vice President,
Deputy General Counsel and Chief Compliance Officer, OCC, to Sharon
Lawson, Senior Special Counsel, Division, Commission, dated January
5, 2012.
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The ODD currently contains general disclosures on the
characteristics and risks of trading standardized options. The March
2011 Supplement amended the ODD to provide disclosure regarding
relative performance options in response to the Commission's approval
of NASDAQ OMX PHLX LLC's (``Phlx'') proposal to list and trade Alpha
Index options.\4\ In August 2011, the Commission approved a proposed
rule change that permitted Phlx to list and trade certain Alpha Index
options where both components of the Alpha Index are ETF shares.\5\ The
current proposed January 2012 Supplement amends the ODD disclosure to
accommodate the listing of relative performance options where both
components of the
[[Page 3829]]
underlying relative performance index could be an ETF share. The
supplement also clarifies that the ETF share components must be non-
leveraged. In addition, the supplement proposes to add an example of
the calculation of a relative performance index. The proposed
supplement is intended to be read in conjunction with the more general
ODD, which discusses the characteristics and risks of options
generally.\6\
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\4\ See Securities Exchange Act Release No. 63860 (February 7,
2011), 76 FR 7888 (February 11, 2011) (SR-Phlx-2010-176) (order
approving Phlx's proposed rule change to list and trade Alpha Index
options).
\5\ See Securities Exchange Act Release No. 65149 (August 17,
2011), 76 FR 52729 (August 23, 2011) (SR-Phlx-2011-89) (order
approving Phlx's proposed rule change to list and trade Alpha Index
options where both Alpha Index components are ETF shares).
\6\ The Commission notes that the options markets must continue
to ensure that the ODD is in compliance with the requirements of
Rule 9b-1(b)(2)(i) under the Act, 17 CFR 240.9b-1(b)(2)(i),
including when changes regarding relative performance options are
made in the future. Any future changes to the rules of the options
markets concerning relative performance options would need to be
submitted to the Commission under Section 19(b) of the Act. 15
U.S.C. 78s(b).
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Rule 9b-1(b)(2)(i) under the Act \7\ provides that an options
market must file five copies of an amendment or supplement to the ODD
with the Commission at least 30 days prior to the date definitive
copies are furnished to customers, unless the Commission determines
otherwise, having due regard to the adequacy of the information
disclosed and the public interest and protection of investors.\8\ In
addition, five copies of the definitive ODD, as amended or
supplemented, must be filed with the Commission not later than the date
the amendment or supplement, or the amended ODD, is furnished to
customers. The Commission has reviewed the proposed January 2012
Supplement, and the amendments to the ODD contained therein, and finds
that, having due regard to the adequacy of the information disclosed
and the public interest and protection of investors, the supplement may
be furnished to customers as of the date of this order.
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\7\ 17 CFR 240.9b-1(b)(2)(i).
\8\ This provision permits the Commission to shorten or lengthen
the period of time which must elapse before definitive copies may be
furnished to customers.
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It is therefore ordered, pursuant to Rule 9b-1 under the Act,\9\
that definitive copies of the January 2012 Supplement to the ODD (SR-
ODD-2012-01), reflecting changes to disclosure regarding relative
performance options, may be furnished to customers as of the date of
this order.
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\9\ 17 CFR 240.9b-1.
\10\ 17 CFR 200.30-3(a)(39).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-1445 Filed 1-24-12; 8:45 am]
BILLING CODE 8011-01-P