[Federal Register Volume 79, Number 66 (Monday, April 7, 2014)]
[Notices]
[Pages 19141-19143]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-07643]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71846; File No. SR-OCC-2014-06]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Make a Change Which Would Authorize the Executive Chairman, the
Management Vice Chairman, or the President To Delegate to Other OCC
Officers Their Authority To Review and Approve Certain Clearing Member
Business Expansion Requests and Changes in Facilities Management
Arrangements, Provided That Such Delegate Is an Officer of the Rank of
Senior Vice President or Higher
April 1, 2014.
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 March 28, 2014, The Options Clearing Corporation (``OCC'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the clearing agency. OCC filed the proposal
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder.\4\ The Commission is publishing this notice to solicit
comments on 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6). As required by Rule 19b-4(f)(6)(iii)
of the Act, OCC has given the Commission written notice of its
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such sorter time as designated by the Commission.
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
This proposed rule change by OCC would make an administrative rule
change to its By-Laws and Rules (collectively, ``Rules'') which would
authorize the Executive Chairman, the Management Vice Chairman, or the
President to delegate to other OCC officers their authority to review
and approve certain clearing member business expansion requests and
changes in facilities management arrangements, provided that such
delegate is an officer of the rank of Senior Vice President or higher.
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, the clearing agency 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. The clearing agency has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
The purpose of this proposed rule change is to expand the number of
OCC officers with delegated authority to review and approve certain
business expansion requests and changes in facilities management
arrangements i.e., a request or change for which a clearing member has
sought review on an expedited basis. Currently, OCC's Rules provide
that the Executive Chairman, the Management Vice Chairman or the
President are the only OCC officers with such delegated authority. OCC
proposes that these officers be allowed to delegate their authority to
perform such reviews and approve such requests or changes to any
officer of the rank of Senior Vice President or higher.
By way of background, OCC's Risk Committee (``Committee'') is
responsible for reviewing and approving clearing member requests to
clear a type or a kind of transaction for which it is not currently
approved to clear through OCC (i.e., a business expansion
[[Page 19142]]
request).\5\ The Committee is also responsible for making certain
determinations with respect to facilities management arrangements
between clearing members. Specifically, the Committee determines
whether a clearing member receiving facilities management services has
the operational capability, experience and competence to perform the
obligations of clearing membership should the facilities management
agreement (``FMA'') with another clearing member be terminated.\6\ In
addition, if a clearing member proposes to enter into an FMA to receive
facilities management services, the Committee must determine that the
FMA meets certain conditions set forth in OCC's By-Laws.\7\
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\5\ OCC By-Law, Article V, Section 1, Interpretation and Policy
.03(e).
\6\ OCC Rule 309.
\7\ OCC By-Law, Article V, Section 1, Interpretation and Policy
.05.
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The Committee has delegated the Executive Chairman, the Management
Vice Chairman or the President with authority to review and approve
both business expansion requests and requests to enter into a
facilities management arrangements in response to requests by clearing
members for expedited review. Such approval is then subject to the
Committee's review and ratification at its next regularly scheduled
meeting. In light of recent changes to OCC's management structure,\8\
as well as a recommendation from the Committee's Chairman, OCC is now
proposing to provide the same expedited review and approval authority
to any OCC officer of the rank of Senior Vice President or higher who
has been delegated by the Executive Chairman, the Management Vice
Chairman or the President with such authority. OCC believes the
proposed change will provide it with operational flexibility because
additional individuals will be able to provide expedited approval of
business expansion requests and facilitates management arrangements.
Approvals by such delegates would be subject to Committee review and
ratification, as described above.
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\8\ See Securities Exchange Act Release No. 70076 (July 30,
2013), 78 FR 47449 (August 5, 2013), (SR-OCC-2013-09).
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In accordance with the above OCC is proposing to amend OCC By-Law,
Article 5, Section 1, Interpretation and Policy .03, which concerns
business expansion requests and OCC Rule 309, Interpretation and Policy
.01 and .02, which concerns facilities management arrangements.
OCC believes that the proposed rule change is consistent with
Section 17A(b)(3)(F) of the Act \9\ because it is designed to promote
the prompt and accurate clearance and settlement of securities
transactions and the protection of securities investors and the public
interest, by allowing additional OCC officers to review and approve
business expansion requests and facilities management arrangements on
an expedited basis. By allowing the Executive Chairman, the Management
Vice Chairman or the President to delegate authority to review and
provide expedited approval of business expansion requests and
facilities management arrangements to OCC officers of the rank of
Senior Vice President or higher, clearing members and their customers
will have more timely access to OCC services for which they qualify.
The proposed rule change is not inconsistent with any rules of OCC,
including those proposed to be amended.
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\9\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Clearing Agency's Statement on Burden on Competition
OCC does not believe that the proposed rule change would impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.\10\ The proposed rule change
will help ensure that OCC will be able to provide fair and open access
to its services in a timely and efficient manner because additional OCC
officers will be able to provide approval of business expansion
requests and facilities management arrangements. To the extent OCC's
clearing members are affected by the proposed rule change, OCC believes
that, by allowing an officer of the rank of Senior Vice President or
higher who has been delegated by the Executive Chairman, the Management
Vice Chairman or the President with authority to review and provide
expedited approval of business expansion requests and facilities
management arrangements, all of OCC's clearing members will have
greater access to its services. Accordingly, OCC does not believe that
the proposed rule will impose any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
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\10\ 15 U.S.C. 78q-1(b)(3)(I).
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(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others
Written comments on the proposed rule change 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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
At any time within 60 days of the filing of the proposed 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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) of the Act \11\ to determine whether the proposed
rule should be approved or disapproved.
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\11\ 15 U.S.C. 78s(b)(2)(B).
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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 proposed 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 Number SR-OCC-2014-06 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-OCC-2014-06. 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
[[Page 19143]]
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
the filing also will be available for inspection and copying at the
principal office of OCC and on OCC's Web site (http://www.theocc.com/about/publications/bylaws.jsp). 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-2014-06 and should be submitted on or before April
28, 2014
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).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07643 Filed 4-4-14; 8:45 am]
BILLING CODE 8011-01-P