[Federal Register Volume 78, Number 40 (Thursday, February 28, 2013)]
[Notices]
[Pages 13715-13716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-04552]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68962; File No. SR-OCC-2013-01]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Provide Clarifying Language To Conform Interpretive Guidance Concerning
Options Overlying Fund Shares With OCC's By-Laws Governing Adjustments
February 21, 2013.
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 February 14, 2013, The Options Clearing Corporation (``OCC'') filed
with the Securities and Exchange Commission (``Commission'') the rule
change described in Items I, II and III below, which items have been
prepared primarily by OCC. OCC filed the proposal pursuant to Section
19(b)(3)(A)(i) of the Act,\3\ and Rule 19b-4(f)(1) \4\ thereunder so
that the proposal was effective upon filing with the Commission. The
Commission is publishing this Notice to solicit comments on the rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(i).
\4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of Terms of Substance of
the Proposed Rule Change
OCC is providing clarifying language to conform interpretive
guidance concerning options on fund shares with certain By-Law
provisions that govern adjustments of contracts.
II. Self-Regulatory Organization's Statement of 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 rule change and discussed
any comments it received on the 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 such statements.\5\
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\5\ The Commission has modified the text of the summaries
prepared by OCC.
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[[Page 13716]]
A. Self-Regulatory Organization's Statement of Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the rule change is to make a technical correction in
Interpretation and Policy .08 to Article VI, Section 11A
(``Interpretation and Policy .08'') that relates to OCC's amendment of
Section 11A in connection with equity options that are originally
listed with a unit of trading of 10 shares (``Mini Options''), which
was previously approved by the Commission.\6\ The correction to
Interpretation and Policy .08 clarifies that the same adjustment
treatment thresholds that were added to Article VI, Section 11A(c)(ii),
by Commission approval of SR-OCC-2012-16 (``Mini Options Rule
Change''), are also meant to extend to options contracts overlying fund
shares.
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\6\ Securities Exchange Act Release No. 34-68104 (October 25,
2012); 77 FR 65917 (October 31, 2012) (SR-OCC-2012-16) (Securities
and Exchange Commission Order Granting Accelerated Approval of
Proposed Rule Change To Accommodate Equity Options That Have a Unit
of Trading of 10 Shares).
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Commission approval of SR-OCC-2012-16 amended Section 11A(c)(ii) to
provide that it is the general rule that no adjustment will be made for
a cash dividend or distribution by the issuer of the underlying
security if such dividend or distribution is less than $.0125 per
share, provided that if a contract is originally listed with a unit of
trading larger than 100 shares the applicable threshold is $12.50 per
contract. The rule change to Interpretation and Policy .08 specifically
addresses the adjustment treatment of distributions on contracts
overlying fund shares. Interpretation and Policy .08 currently does not
expressly indicate that options on fund shares are subject to the same
adjustment treatment thresholds that are set out in Article VI, Section
11A(c)(ii) as a result of the Mini Options Rule Change. The rule change
clarifies that the adjustment thresholds are the same.
In connection with the Mini Options Rule Change, the Commission
approved an amendment of the options disclosure document (``ODD''),
Characteristics and Risks of Standardized Options, to reflect the
adjustment thresholds specified in Article VI, Section 11A(c)(ii).\7\
No further supplementation of the ODD is necessary since this rule
change is consistent with those adjustment thresholds.
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\7\ Securities Exchange Act Release No. 34-68368 (December 6,
2012); 77 FR 74043 (December 12, 2012) (SR-ODD-2012-02).
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OCC believes that the rule change is consistent with Section 17A of
the Act \8\, and the rules and regulations thereunder, because the
modifications clarify that the rules concerning adjustments of
contracts overlying fund shares are meant to be consistent with the
rules governing options on shares of common preferred stock. OCC
believes that this clarification helps to ensure that the rules of OCC
are designed to foster cooperation and coordination with persons
engaged in the clearance and settlement of securities transactions and
thereby promotes the prompt and accurate clearance and settlement of
securities transactions.\9\
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\8\ 15 U.S.C. 78q-1.
\9\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Self-Regulatory Organization's Statement on Burden on Competition
OCC does not believe the rule change would impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments on the rule change were not and are not intended
to be solicited and none have been received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(i) \10\ of the Act and Rule 19b-4(f)(1) \11\ thereunder
because it constitutes a stated policy, practice, or interpretation
with respect to the meaning, administration, or enforcement of an
existing rule. OCC will delay the implementation of the rule change
until it is deemed certified under CFTC Regulation Sec. 40.6. At any
time within 60 days of the filing of the rule change, the Commission
summarily may temporarily suspend such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A)(i).
\11\ 17 CFR 240.19b-4(f)(1).
\12\ 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the rule change
is consistent with the Act. Comments may be submitted by any of the
following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml), or
Send an email to [email protected]. Please include
File No. SR-OCC-2013-01 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-2013-01. 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 of
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 OCC and on OCC's
Web site at http://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_13_01.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-2013-01
and should be submitted on or before March 21, 2013.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary .
[FR Doc. 2013-04552 Filed 2-27-13; 8:45 am]
BILLING CODE 8011-01-P