[Federal Register Volume 78, Number 189 (Monday, September 30, 2013)]
[Notices]
[Pages 59994-59995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-23684]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70486; File No. SR-OCC-2013-12]
Self-Regulatory Organizations; The Options Clearing Corporation;
Order Approving Proposed Rule Change to Revise OCC By-Laws and Rules to
Make Structural Changes to OCC's Membership/Risk Committee Regarding
Public Directors and the Process for Designating Membership/Risk
Committee Members
September 24, 2013.
I. Introduction
On August 2, 2013, The Options Clearing Corporation (``OCC'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change SR-OCC-2013-12 pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder.\2\ The proposed rule change was published for comment in
the Federal Register on August 21, 2013.\3\ The Commission received no
comment letters. For the reasons discussed below, the Commission is
granting approval of the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Exchange Act Release No. 34-70207 (August 15, 2013), 78 FR
51786 (August 21, 2013).
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II. Description
OCC is amending its By-Laws and Rules to make structural changes to
OCC's Membership/Risk Committee (``MRC'') regarding Public Directors
\4\
[[Page 59995]]
and the process for designating MRC members. Specifically, OCC is
amending Article III, Section 9 of OCC's By-Laws to provide that at
least one Public Director is required to serve on the MRC. The Public
Director(s) will be nominated to serve on the MRC by the Chairman of
the Board and such nomination will be subject to approval by the Board
of Directors. OCC is also amending Article III, Section 9 of OCC's By-
Laws to provide that the Chairman of the MRC will be required to be a
Public Director. If more than one Public Director is nominated to serve
on the MRC, the Chairman of the Board will nominate one of the Public
Directors to serve as the MRC Chairman.
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\4\ In relevant part, Article III, Section 6A of OCC's By-Laws
defines a Public Director as a person who is not affiliated with any
national securities exchange, national securities association, or
any broker or dealer engaging in securities transactions.
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In addition, OCC is amending Article III, Section 9 of OCC's By-
Laws to eliminate the requirement that MRC members must be designated
at the first meeting of OCC's Board of Directors that follows each
annual meeting. Instead, OCC's By-Laws will require MRC members to be
designated annually.
OCC is also amending Article III, Section 9 to eliminate specific
references to Article V of the By-Laws and Chapter VI of the Rules in
order to avoid any erroneous inference that those are the only
provisions of OCC's By-Laws and Rules that set forth powers and duties
of the MRC, which are in fact contained in a number of other provisions
of its By-Laws and Rules as well.
III. Discussion
Section 19(b)(2)(C) of the Act \5\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that the proposed rule change is consistent with the requirements
of the Act and the rules and regulations thereunder applicable to such
organization. Section 17A(b)(3)(F) of the Act\6\ requires that the
rules of a registered clearing agency be designed to, among other
things, assure the safeguarding of securities and funds which are in
the custody or control of the clearing agency or for which it is
responsible, and, in general, protect investors and the public
interest. Section 17A(b)(3)(F) \7\ of the Act also requires that the
rules of a registered clearing agency not be designed to permit unfair
discrimination in the admission of participants or among participants
in the use of the clearing agency.
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\5\ 15 U.S.C. 78s(b)(2)(C).
\6\ 15 U.S.C. 78q-1(b)(3)(F).
\7\ Id.
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The Commission finds that the rule change is consistent with
Section 17A(b)(3)(F) of the Act \8\ because amending OCC's By-Laws to
require that OCC's Board of Directors appoints at least one Public
Director to the MRC and designates a Public Director as Chairman of the
MRC, should help ensure that diverse viewpoints contribute to the
decision-making process at the MRC, which should ultimately lead to
decisions that assure the safeguarding of securities and funds which
are in OCC's custody or control or for which OCC is responsible, and
generally protect investors and the public interest. Furthermore, by
proposing rules that require the appointment of a Public Director to
the MRC, the rule change should help diminish the likelihood of unfair
discrimination in the evaluation of prospective OCC members and the
treatment of current OCC members by interested participants.
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\8\ Id.
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IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act and in
particular with the requirements of Section 17A of the Act \9\ and the
rules and regulations thereunder.
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\9\ 15 U.S.C. 78q-1.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (File No. SR-OCC-2013-12) be and
hereby is approved.\11\
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\10\ 15 U.S.C. 78s(b)(2).
\11\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
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For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-23684 Filed 9-27-13; 8:45 am]
BILLING CODE 8011-01-P