[Federal Register Volume 69, Number 247 (Monday, December 27, 2004)]
[Notices]
[Pages 77287-77295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28183]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50885; File No. SR-NYSE-2002-19]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment Nos. 1 and 2 Thereto by the New York Stock 
Exchange, Inc. Relating to Customer Portfolio and Cross-Margining 
Requirements

December 20, 2004.
    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 June 21, 2004, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') Amendment No. 2 \3\ to the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The NYSE submitted the original proposed 
rule change to the Commission on May 13, 2002 (``Original Filing''). On 
August 21, 2002, the NYSE filed Amendment No. 1 to the proposed rule 
change.\4\ The proposed rule change and Amendment No. 1 were published 
in the Federal Register on October 8, 2002.\5\ The Commission received 
three comment letters in response to proposed rule change.\6\ The NYSE 
is proposing

[[Page 77288]]

Amendment No. 2 for the purpose of eliminating inconsistencies between 
the proposed NYSE and CBOE rules,\7\ and to incorporate certain 
substantive amendments requested by Commission staff. The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Darla C. Stuckey, Corporate Secretary, NYSE, 
to Michael A. Macchiaroli, Associate Director, Division of Market 
Regulation (``Division''), Commission, dated June 17, 2004 
(``Amendment No. 2'').
    \4\ See letter from Mary Yeager, Assistant Secretary, NYSE, to 
T.R. Lazo, Senior Special Counsel, Division of Market Regulation, 
Commission, dated August 20, 2002 (``Amendment No. 1''). In 
Amendment No. 1, the NYSE made technical corrections to its proposed 
rule language to eliminate any inconsistencies between its proposal 
and the Chicago Board Options Exchange, Inc.'s (``CBOE'') proposal 
pursuant to the Rule 431 Committee's (``Committee'') 
recommendations. See Securities Exchange Act Release No. 45630 
(March 22, 2002), 67 FR 15263 (March 29, 2002) (File No. SR-CBOE-
2002-03) (``CBOE Proposal'').
    \5\ See Securities Exchange Act Release No. 46576 (October 1, 
2002), 67 FR 62843 (October 8, 2002).
    \6\ See letter from R. Allan Martin, President, Auric Trading 
Enterprises, Inc., to Secretary, Commission, dated October 9, 2002 
(``Martin Auric Letter''); Phupinder S. Gill, Managing Director and 
President, Chicago Mercantile Exchange Inc., to Jonathan G. Katz, 
Secretary, Commission, dated October 21, 2002 (``Gill CBOE 
Letter''); and E-mail from Mike Ianni, Private Investor to <a href="/cdn-cgi/l/email-protection#6715120b024a04080a0a020913142714020449000811"><span class="__cf_email__" data-cfemail="740601181159171b1919111a0007340711175a131b02">[email protected]</span></a>, dated November 7, 2002 (``Ianni E-mail'').
    \7\ See supra note 4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Rule 431 to permit self-
clearing members and member organizations to margin listed, broad-
based, market index options, index warrants and related exchange-traded 
funds according to a prescribed portfolio margin methodology relating 
to a portfolio margin account of a registered broker-dealer, any 
affiliate of a self-clearing member or member organization, certain 
qualified members of a national futures exchange, and any other person 
or entity that maintains account equity of at least $5 million.
    The Exchange further proposes to amend NYSE Rule 726 to require 
that a disclosure statement and written acknowledgement for use with 
the proposed portfolio margining and cross-margining changes be 
furnished to customers. The text of the proposed rule change is below. 
Additions are in italics. Deletions are in brackets.
* * * * *

Margin Requirements

Rule 431. (a) through (f) unchanged.

Portfolio Margin and Cross-Margin for Index Options

    (g) As an alternative to the ``strategy'' based margin requirements 
set forth in paragraphs (a) through (f) of this Rule, member 
organizations may elect margin for listed, broad-based U.S. index 
options, index warrants and underlying instruments (as defined below) 
in accordance with the portfolio margin requirements set forth in this 
Rule.
    In addition, member organizations, provided they are a Futures 
Commission Merchant (``FCM'') and are either a clearing member of a 
futures clearing organization or have an affiliate that is a clearing 
member of a futures clearing organization, are permitted under this 
section to combine a customer's related instruments (as defined below) 
and listed, broad-based U.S. index options, index warrants and 
underlying instruments and compute a margin requirement (``cross 
margin'') on a portfolio margin basis. Member organizations must 
confine cross-margin positions to a portfolio margin account dedicated 
exclusively to cross-margining.
    The portfolio margin and cross-margining provisions of this Rule 
shall not apply to Individual Retirement Accounts (``IRAs'').
    (1) Member organizations will be expected to monitor the risk of 
portfolio margin accounts and maintain a written risk analysis 
methodology for assessing the potential risk to the member 
organization's capital over a specified range of possible market 
movements of positions maintained in such accounts. The risk analysis 
methodology shall specify the computations to be made, the frequency of 
computations, the records to be reviewed and maintained, and the 
position(s) within the organization responsible for the risk function. 
This risk analysis methodology shall be made available to the Exchange 
upon request. In performing the risk analysis of portfolio margin 
accounts required by this Rule, each member organization shall include 
the following in the written risk analysis methodology:
    (A) Procedures and guidelines for the determination, review and 
approval of credit limits to each customer, and across all customers, 
utilizing a portfolio margin account.
    (B) Procedures and guidelines for monitoring credit risk exposure 
to the member organization, including intra-day credit risk, related to 
portfolio margin accounts.
    (C) Procedures and guidelines for the use of stress testing of 
portfolio margin accounts in order to monitor market risk exposure from 
individual accounts and in the aggregate.
    (D) Procedures providing for the regular review and testing of 
these risk analysis procedures by an independent unit such as internal 
audit or other comparable group.
    (2) Definitions.--For purposes of this paragraph (g), the following 
terms shall have the meanings specified below:
    (A) The term ``listed option'' shall mean any option traded on a 
registered national securities exchange or automated facility of a 
registered national securities association.
    (B) The term ``options class'' refers to all options contracts 
covering the same underlying instrument.
    (C) The term ``portfolio'' means options of the same options class 
grouped with their underlying instruments and related instruments.
    (D) The term ``option series'' relates to listed options and means 
all option contracts of the same type (either a call or a put) and 
exercise style, covering the same underlying instrument with the same 
exercise price, expiration date, and number of underlying units.
    (E) The term ``related instrument'' within an option class or 
product group means futures contracts and options on futures contracts 
covering the same underlying instrument.
    (F) The term ``underlying instrument'' means long and short 
positions in an exchange traded fund or other fund product registered 
under the Investment Company Act of 1940, that holds the same 
securities, and in the same proportion, as contained in a broad-based 
index on which options are listed. The term underlying instrument shall 
not be deemed to include, futures contracts, options on futures 
contracts, underlying stock baskets, or unlisted instruments.
    (G) The term ``product group'' means two or more portfolios of the 
same type (see sub-paragraph (g)(2)(H) below) for which it has been 
determined by Rule 15c3-1a under the Securities Exchange Act of 1934 
that a percentage of offsetting profits may be applied to losses at the 
same valuation point.
    (H) The term ``theoretical gains and losses'' means the gain and 
loss in the value of individual option series and related instruments 
at 10 equidistant intervals (valuation points) ranging from an assumed 
movement (both up and down) in the current market value of the 
underlying instrument. The magnitude of the valuation point range shall 
be as follows:

------------------------------------------------------------------------
                                            Up/down market move (high &
             Portfolio type                    low valuation points)
------------------------------------------------------------------------
Non-High Capitalization, Broad-based      +/-10%
 U.S. Market Index Option \8\.
High Capitalization, Broad-based U.S.     +6%/-8%
 Market Index Option \9\.
------------------------------------------------------------------------
\8\ In accordance with sub-paragraph (b)(1)(i)(B) of Rule 15c3-1a
  (Appendix A to Rule 15c3-1) under the Securities Exchange Act of 1934,
  17 CFR 240.15c3-1a(b)(1)(i)(B).
\9\ See footnote above.

    (3) Approved Theoretical Pricing Models.--Theoretical pricing 
models must be approved by a Designated Examining Authority and 
reviewed by the Securities and Exchange Commission (``The Commission'') 
in order to qualify. Currently, the theoretical model utilized by The

[[Page 77289]]

Options Clearing Corporation (``The OCC'') is the only model qualified 
pursuant to The Commission's Net Capital Rule. All member organizations 
participating in the pilot program shall obtain their theoretical 
values from The OCC.
    (4) Eligible Participants.--The application of the portfolio margin 
provisions of this paragraph (g), including cross-margining, is limited 
to the following:
    (A) any broker or dealer registered pursuant to Section 15 of the 
Securities Exchange Act of 1934;
    (B) any affiliate of a self-clearing member organization;
    (C) any member of a national futures exchange to the extent that 
listed index options hedge the member's index futures; and
    (D) any other person or entity not included in (4)(A) through 
(4)(C) above that has or establishes, and maintains, equity of at least 
5 million dollars. For purposes of this equity requirement, all 
securities and futures accounts carried by the member organization for 
the same customer may be combined provided ownership across the 
accounts is identical. A guarantee pursuant to paragraph (f)(4) of this 
Rule is not permitted for purposes of the minimum equity requirement.
    (5) Opening of Accounts.
    (A) Only customers that have been approved for options transactions 
and approved to engage in uncovered short option contracts pursuant to 
Exchange Rule 721, are permitted to utilize a portfolio margin account.
    (B) On or before the date of the initial transaction in a portfolio 
margin account, a member organization shall:
    (i) furnish the customer with a special written disclosure 
statement describing the nature and risks of portfolio margining and 
cross-margining which includes an acknowledgement for all portfolio 
margin account owners to sign, and an additional acknowledgement for 
owners that also engage in cross-margining to sign, attesting that they 
have read and understood the disclosure statement, and agree to the 
terms under which a portfolio margin account and the cross-margin 
account respectively, are provided (see Exchange Rule 726 (d)), and
    (ii) obtain the signed acknowledgement(s) noted above from the 
customer (both of which are required for cross-margining customers) and 
record the date of receipt.
    (6) Establishing Account and Eligible Positions
    (1) Portfolio Margin Account. For purposes of applying the 
portfolio margin requirements provided in this paragraph (g), member 
organizations are to establish and utilize a specific securities margin 
account, or sub-account of a margin account, clearly identified as a 
portfolio margin account that is separate from any other securities 
account carried for a customer.
    (2) Cross-Margin Account. For purposes of combining related 
instruments and listed, broad-based U.S. index options, index warrants 
and underlying instruments and applying the portfolio margin 
requirements members are to establish and utilize a portfolio margin 
account, clearly identified as a cross-margin account, that is separate 
from any other securities account or portfolio margin account carried 
for a customer.
    A margin deficit in either the portfolio margin account or the 
cross-margin account of a customer may not be considered as satisfied 
by excess equity in the other account. Funds and/or securities must be 
transferred to the deficient account and a written record created and 
maintained.
    (A) Portfolio Margin Account--Eligible Positions
    (i) A transaction in, or transfer of, a listed, broad-based U.S. 
index option or index warrant may be effected in the portfolio margin 
account.
    (ii) A transaction in, or transfer of, an underlying instrument may 
be effected in the portfolio margin account provided a position in an 
offsetting listed, broad-based U.S. index option or index warrant is in 
the account or is established in the account on the same day.
    (iii) If, in the portfolio margin account, the listed, broad-based 
U.S. index option or index warrant position offsetting an underlying 
instrument position ceases to exist and is not replaced within ten 
business days, the underlying instrument position must be transferred 
to a regular margin account, subject to initial Regulation T margin and 
margined according to the other provisions of this Rule. Member 
organizations will be expected to monitor portfolio margin accounts for 
possible abuse of this provision.
    (iv) In the event that fully paid for long options and /or index 
warrants are the only positions contained within a portfolio margin 
account, such long positions must be transferred to a securities 
account other than a portfolio margin account or cross `` margin 
account within 10 business days, subject to the margin required, unless 
the status of the account changes such that it is no longer composed 
solely of fully paid for long options and/or index warrants.
    (B) Cross-Margin Account--Eligible Positions
    (i) A transaction in, or transfer of, a related instrument may be 
effected in the cross margin account provided a position in an 
offsetting listed, U.S. broad-based index option, index warrant or 
underlying instrument is in the account or is established in the 
account on the same day.
    (ii) If the listed, U.S. broad-based index option, index warrant or 
underlying instrument position offsetting a related instrument ceases 
to exist and is not replaced within ten business days, the related 
instrument position must be transferred to a futures account and 
margined accordingly. Member organizations will be expected to monitor 
cross-margin accounts for possible abuse of this provision.
    (iii) In the event that fully paid for long options and/or index 
warrants (securities) are the only positions contained within a cross-
margin account, such long positions must be transferred to a securities 
account other than a portfolio margin account or cross margin account 
within 10 business days, subject to the margin required, unless the 
status of the account changes such that it is no longer composed solely 
of fully paid for long options and/or index warrants.
    (7) Initial and Maintenance Margin Required.-- The amount of margin 
required under this paragraph (g) for each portfolio shall be the 
greater of:
    (A) the amount for any of the 10 equidistant valuation points 
representing the largest theoretical loss as calculated pursuant to 
paragraph (g)(8) below, or
    (B) $.375 for each listed index option and related instrument 
multiplied by the contract's or instrument's multiplier, not to exceed 
the market value in the case of long positions in listed options and 
options on futures contracts.
    (C) Account guarantees pursuant to paragraph (f)(4) of this Rule 
are not permitted for purposes of meeting initial and maintenance 
margin requirements.
    (8) Method of Calculation.
    (A) Long and short positions in listed options, underlying 
instruments and related instruments are to be grouped by option class; 
each option class group being a ``portfolio''. Each portfolio is 
categorized as one of the portfolio types specified in sub-paragraph 
(g)(2)(H) above.
    (B) For each portfolio, theoretical gains and losses are calculated 
for each position as specified in sub-paragraph (g)(2)(H) above. For 
purposes of determining the theoretical gains and losses at each 
valuation point, member organizations shall obtain and utilize

[[Page 77290]]

the theoretical value of a listed index option, underlying instrument 
or related instrument rendered by a theoretical pricing model that, in 
accordance with sub-paragraph (b)(1)(i)(B) of Rule 15c3-1a under the 
Securities Exchange Act of 1934, qualifies for purposes of determining 
the amount to be deducted in computing net capital under a portfolio 
based methodology.
    (C) Offsets. Within each portfolio, theoretical gains and losses 
may be netted fully at each valuation point.
    Offsets between portfolios within the High Capitalization, Broad-
based Index Option product group and the Non-High Capitalization, 
Broad-based Index Option product group may then be applied as permitted 
by Rule 15c3-1a under the Securities Exchange Act of 1934.
    (D) After applying the Offsets above, the sum of the greatest loss 
from each portfolio is computed to arrive at the total margin required 
for the account (subject to the per contract minimum).
    (9) Equity Deficiency.--If, at any time, equity declines below the 
5 million dollar minimum required under sub-paragraph (4)(D) of this 
paragraph (g) and is not restored to at least 5 million dollars within 
three (3) business days (T+3) by a deposit of funds and/or securities; 
member organizations are prohibited from accepting opening orders 
starting on T+4, except that opening orders entered for the purpose of 
hedging existing positions may be accepted if the result would be to 
lower margin requirements. This prohibition shall remain in effect 
until equity of 5 million dollars is established.
    (10) Determination of Value for Margin Purposes.--For the purposes 
of this paragraph (g), all listed index options and related instrument 
positions shall be valued at current market prices. Account equity for 
the purposes of this paragraph (g) shall be calculated separately for 
each portfolio margin account by adding the current market value of all 
long positions, subtracting the current market value of all short 
positions, and adding the credit (or subtracting the debit) balance in 
the account.
    (11) Additional Margin.--If at any time, the equity in any 
portfolio margin account is less than the margin required, the customer 
may deposit additional margin or establish a hedge to meet the margin 
requirement within one business day (T+1). In the event a customer 
fails to hedge existing positions or deposit additional margin within 
one business day, the member organization must liquidate positions in 
an amount sufficient to, at a minimum, lower the total margin required 
to an amount less than or equal to account equity. Paragraph (f)(7) of 
this Rule--Practice of Meeting Regulation T Margin Calls by Liquidation 
Prohibited shall not apply to portfolio margin accounts. However, 
member organizations will be expected to monitor portfolio margin and 
cross-margin accounts for possible abuse of this provision.
    (12) Net Capital Treatment of Portfolio Margin and Cross Margin 
Accounts.
    (A) No member organization that requires margin in any customer 
account pursuant to paragraph (g) of this Rule shall permit gross 
customer portfolio margin requirements to exceed 1,000 percent of its 
net capital for any period exceeding three business days. The member 
organization shall, beginning on the fourth business day, cease opening 
new portfolio margin accounts until compliance is achieved.
    (B) If, at any time, a member organization's gross customer 
portfolio margin requirements exceed 1,000 percent of its net capital, 
the member organization shall immediately transmit telegraphic or 
facsimile notice of such deficiency to the Securities and Exchange 
Commission, 450 Fifth Street NW, Washington, DC, 20549; to the district 
or regional office of the Securities and Exchange Commission for the 
district or region in which the member organization maintains its 
principal place of business; and to its Designated Examining Authority.
    (13) Day Trading Requirements.--The requirements of sub-paragraph 
(f)(8)(B) of this Rule--Day-Trading shall not apply to portfolio margin 
accounts including cross margin accounts.
    (14) Cross Margin Accounts--Requirements to Liquidate
    (A) A member is required immediately either to liquidate, or 
transfer to another broker-dealer eligible to carry cross-margin 
accounts, all customer cross-margin accounts that contain positions in 
futures and/or options on futures if the member is:
    (i) Insolvent as defined in section 101 of title 11 of the United 
States Code, or is unable to meet its obligations as they mature;
    (ii) The subject of a proceeding pending in any court or before any 
agency of the United States or any State in which a receiver, trustee, 
or liquidator for such debtor has been appointed;
    (iii) Not in compliance with applicable requirements under the 
Securities Exchange Act of 1934 or rules of the Securities and Exchange 
Commission or any self-regulatory organization with respect to 
financial responsibility or hypothecation of customer's securities; or
    (iv) Unable to make such computations as may be necessary to 
establish compliance with such financial responsibility or 
hypothecation rules.
    (B) Nothing in this paragraph (14) shall be construed as limiting 
or restricting in any way the exercise of any right of a registered 
clearing agency to liquidate or cause the liquidation of positions in 
accordance with its by-laws and rules.
* * * * *

Delivery of Options Disclosure Document and Prospectus

Rule 726 (a) through (c) unchanged.

Portfolio Margining and Cross-Margining Disclosure Statement and 
Acknowledgement

    (d) The special written disclosure statement describing the nature 
and risks of portfolio margining and cross-margining, and 
acknowledgement for customer signature, required by Rule 431(g)(5)(B) 
shall be in a format prescribed by the Exchange or in a format 
developed by the member organization, provided it contains 
substantially similar information as in the prescribed Exchange format 
and has received the prior written approval of the Exchange.

Sample Portfolio Margining and Cross-Margining Risk Disclosure 
Statement to Satisfy Requirements of Exchange Rule 431(g)

Overview of Portfolio Margining

    1. Portfolio margining is a margin methodology that sets margin 
requirements for an account based on the greatest projected net loss of 
all positions in a ``product class'' or ``product group'' as determined 
by an options pricing model using multiple pricing scenarios. These 
pricing scenarios are designed to measure the theoretical loss of the 
positions given changes in both the underlying price and implied 
volatility inputs to the model. Portfolio margining is currently 
limited to product classes and groups of index products relating to 
broad-based market indexes.
    2. The goal of portfolio margining is to set levels of margin that 
more precisely reflects actual net risk. The customer benefits from 
portfolio margining in that margin requirements calculated on net risk 
are generally lower than alternative ``position'' or ``strategy'' based 
methodologies for determining margin requirements. Lower margin 
requirements allow the customer more leverage in an account.

[[Page 77291]]

Customers Eligible for Portfolio Margining

    3. To be eligible for portfolio margining, customers (other than 
broker-dealers and certain non-broker-dealer affiliates of the carrying 
broker-dealer) must meet the basic standards for having an options 
account that is approved for uncovered writing and must have and 
maintain at all times account net equity of not less than $5 million, 
aggregated across all accounts under identical ownership at the 
clearing broker. The identical ownership requirement excludes accounts 
held by the same customer in different capacities (e.g., as a trustee 
and as an individual) and accounts where ownership is overlapping but 
not identical (e.g., individual accounts and joint accounts).

Positions Eligible for a Portfolio Margin Account

    4. All positions in broad-based U.S. market index options and index 
warrants listed on a national securities exchange, and exchange traded 
funds and other products registered under the Investment Company Act of 
1940 that are managed to track the same index that underlies permitted 
index options, are eligible for a portfolio margin account.

Special Rules for Portfolio Margin Accounts

    5. A portfolio margin account may be either a separate account or a 
sub-account of a customer's regular margin account. In the case of a 
sub-account, equity in the regular account will be available to satisfy 
any margin requirement in the portfolio margin sub-account without 
transfer to the sub-account.
    6. A portfolio margin account or sub-account will be subject to a 
minimum margin requirement of $.375 multiplied by the index multiplier 
for every option contract or index warrant carried long or short in the 
account. No minimum margin is required in the case of eligible exchange 
traded funds or other eligible fund products.
    7. Margin calls in the portfolio margin account or sub-account, 
regardless of whether due to new commitments or the effect of adverse 
market moves on existing positions, must be met within one business 
day. Any shortfall in aggregate net equity across accounts must be met 
within three business days. Failure to meet a margin call when due will 
result in immediate liquidation of positions to the extent necessary to 
reduce the margin requirement. Failure to meet an equity call prior to 
the end of the third business day will result in a prohibition on 
entering any opening orders, with the exception of opening orders that 
hedge existing positions, beginning on the fourth business day and 
continuing until such time as the minimum equity requirement is 
satisfied.
    8. A position in an exchange traded index fund or other eligible 
fund product may not be established in a portfolio margin account 
unless there exists, or there is established on the same day, an 
offsetting position in securities options, or other eligible 
securities. Exchange traded index funds and/or other eligible funds 
will be transferred out of the portfolio margin account and into a 
regular securities account subject to initial Regulation T and NYSE 
Rule 431 margin if the offsetting securities options, other eligible 
securities and/or related instruments no longer remain in the account 
for ten business days.
    9. When a broker-dealer carries a regular cash account or margin 
account for a customer, the broker-dealer is limited by rules of the 
Securities and Exchange Commission and of The Options Clearing 
Corporation (``OCC'') to the extent to which the broker-dealer may 
permit OCC to have a lien against long option positions in those 
accounts. In contrast, OCC will have a lien against all long option 
positions that are carried by a broker-dealer in a portfolio margin 
account, and this could, under certain circumstances, result in greater 
losses to a customer having long option positions in such an account in 
the event of the insolvency of the customer's broker. Accordingly, to 
the extent that a customer does not borrow against long option 
positions in a portfolio margin account or have margin requirements in 
the account against which the long option can be credited, there is no 
advantage to carrying the long options in a portfolio margin account 
and the customer should consider carrying them in an account other than 
a portfolio margin account.

Special Risks of Portfolio Margin Accounts

    10. Portfolio margining generally permits greater leverage in an 
account, and greater leverage creates greater losses in the event of 
adverse market movements.
    11. Because the time limit for meeting margin calls is shorter than 
in a regular margin account, there is increased risk that a customer's 
portfolio margin account will be liquidated involuntarily, possibly 
causing losses to the customer.
    12. Because portfolio margin requirements are determined using 
sophisticated mathematical calculations and theoretical values that 
must be calculated from market data, it may be more difficult for 
customers to predict the size of future margin calls in a portfolio 
margin account. This is particularly true in the case of customers who 
do not have access to specialized software necessary to make such 
calculations or who do not receive theoretical values calculated and 
distributed periodically by The Options Clearing Corporation.
    13. For the reasons noted above, a customer that carries long 
options positions in a portfolio margin account could, under certain 
circumstances, be less likely to recover the full value of those 
positions in the event of the insolvency of the carrying broker.
    14. Trading of securities index products in a portfolio margin 
account is generally subject to all the risks of trading those same 
products in a regular securities margin account. Customers should be 
thoroughly familiar with the risk disclosure materials applicable to 
those products, including the booklet entitled Characteristics and 
Risks of Standardized Options.
    15. Customers should consult with their tax advisers to be certain 
that they are familiar with the tax treatment of transactions in 
securities index products.
    16. The descriptions in this disclosure statement relating to 
eligibility requirements for portfolio margin accounts, and minimum 
equity and margin requirements for those accounts, are minimums imposed 
under Exchange rules. Time frames within which margin and equity calls 
must be met are maximums imposed under Exchange rules. Broker-dealers 
may impose their own more stringent requirements.

Overview of Cross-Margining

    17. With cross-margining, index futures and options on index 
futures are combined with offsetting positions in securities index 
options and underlying instruments, for the purpose of computing a 
margin requirement based on the net risk. This generally produces lower 
margin requirements than if the related instruments \10\ and securities 
products are viewed separately, thus providing more leverage in the 
account.
---------------------------------------------------------------------------

    \10\ For purposes of this Rule, the term ``related 
instruments,'' within an option class or product means futures 
contracts, and options on futures contracts covering the same 
underlying instrument.
---------------------------------------------------------------------------

    18. Cross-margining must be done in a portfolio margin account 
type. A separate portfolio margin account must be established 
exclusively for cross-margining.

[[Page 77292]]

    19. When index futures and options on futures are combined with 
offsetting positions in index options and underlying instruments in a 
dedicated account, and a portfolio margining methodology is applied to 
them, cross-margining is achieved.

Customers Eligible for Cross-Margining

    20. The eligibility requirements for cross-margining are generally 
the same as for portfolio margining, and any customer eligible for 
portfolio margining is eligible for cross-margining.
    21. Members of futures exchanges on which cross-margining eligible 
index contracts are traded are also permitted to carry positions in 
cross-margin accounts without regard to the minimum aggregate account 
equity.

Positions Eligible for Cross-Margining

    22. All securities products eligible for portfolio margining are 
also eligible for cross-margining.
    23. All broad-based U.S. listed market index futures and options on 
index futures traded on a designated contract market subject to the 
jurisdiction of the Commodity Futures Trading Commission (``CFTC'') are 
eligible for cross-margining.

Special Rules for Cross-Margining

    24. Cross-margining must be conducted in a portfolio margin account 
type. A separate portfolio margin account must be established 
exclusively for cross-margining. A cross margin account is a securities 
account, and must be maintained separate from all other securities 
account.
    25. Cross-margining is automatically accomplished with the 
portfolio margining methodology. Cross-margin positions are subject to 
the same minimum margin requirement for every contract, including 
futures contracts.
    26. Margin calls arising in cross-margin account, and any shortfall 
in aggregate net equity across accounts, must be satisfied within the 
same timeframe, and subject to the same consequences, as in a portfolio 
margin account.
    27. A position in a futures product may not be established in a 
cross-margin account unless there exists, or there is established on 
the same day, an offsetting position in securities options and/or other 
eligible securities. Related instruments will be transferred out of the 
cross margin account and into a futures account if, for more than ten 
business days and for any reason, the offsetting securities options 
and/or other eligible securities no longer remain in the account. If 
the transfer of related instruments to a futures account causes the 
futures account to be undermargined, a margin call will be issued or 
positions will be liquidated to the extent necessary to eliminate the 
deficit.
    28. Customers participating in cross-margining will be required to 
sign an agreement acknowledging that their positions and property in 
the cross-margin account will be subject to the customer protection 
provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 and 
the Securities Investor Protection Act, and will not be subject to the 
provisions of the Commodity Exchange Act, including segregation of 
funds.
    29. According to the rules of the exchanges, a broker dealer is 
required to immediately liquidate, or, if feasible, transfer to another 
broker-dealer eligible to carry cross-margin accounts, all customer 
cross-margin accounts that contain positions in futures and/or options 
on futures in the event that the carrying broker-dealer becomes 
insolvent.
    30. In signing the agreement referred to in paragraph 28 above, a 
customer also acknowledges that a cross-margin account that contains 
positions in futures and/or options on futures will be immediately 
liquidated, or, if feasible, transferred to another broker-dealer 
eligible to carry cross-margin accounts, in the event that the carrying 
broker-dealer becomes insolvent.

Special Risks of Cross-Margining

    31. Cross-margining must be conducted in a portfolio margin account 
type. Generally, cross-margining and the portfolio margining 
methodology both contribute to provide greater leverage than a regular 
margin account, and greater leverage creates greater losses in the 
event of adverse market movements.
    32. Since cross-margining must be conducted in a portfolio margin 
account type, the time required for meeting margin calls is shorter 
than in a regular securities margin account and may be shorter than the 
time ordinarily required by a futures commission merchant for meeting 
margin calls in a futures account. Consequently, there is increased 
risk that a customer's cross-margin positions will be liquidated 
involuntarily, causing possible loss to the customer.
    33. As noted above, cross margin accounts are securities accounts 
and are subject to the customer protections set-forth in Rule 15c3-3 
under the Securities Exchange Act of 1934 and the Securities Investor 
Protection Act. Cross-margin positions are not subject to the customer 
protection rules under the segregation provisions of the Commodity 
Exchange Act and the rules of the CFTC adopted pursuant to the 
Commodity Exchange Act.
    34. Trading of index options and futures contracts in a cross-
margin account is generally subject to all the risks of trading those 
same products in a futures account or a regular securities margin 
account. Customers should be thoroughly familiar with the risk 
disclosure materials applicable to those products, including the 
booklet entitled Characteristics and Risks of Standardized Options and 
the risk disclosure document required by the CFTC to be delivered to 
futures customers. Because this disclosure statement does not disclose 
the risks and other significant aspects of trading in futures and 
options, customers should review those materials carefully before 
trading in a cross-margin account.
    35. Customers should bear in mind that the discrepancies in the 
cash flow characteristics of futures and certain options are still 
present even when those products are carried together in a cross margin 
account. Both futures and options contracts are generally marked to the 
market at least once each business day, but the marks may take place 
with different frequency and at different times within the day. When a 
futures contract is marked to the market, the gain or loss is 
immediately credited to or debited from, respectively, the customer's 
account in cash. While an increase in the value of a long option 
contract may increase the equity in the account, the gain is not 
realized until the option is sold or exercised. Accordingly, a customer 
may be required to deposit cash in the account in order to meet a 
variation payment on a futures contract even though the customer is in 
a hedged position and has experienced a corresponding (but yet 
unrealized) gain on a long option. Alternatively, a customer who is in 
a hedged position and would otherwise be entitled to receive a 
variation payment on a futures contract may find that the cash is 
required to be held in the account as margin collateral on an 
offsetting option position.
    36. Customers should consult with their tax advisers to be certain 
that they are familiar with the tax treatment of transactions in index 
products, including tax consequences of trading strategies involving 
both futures and option contracts.
    37. The descriptions in this disclosure statement relating to 
eligibility requirements for cross-margining, and minimum equity and 
margin requirements for cross margin accounts, are minimums imposed 
under Exchange

[[Page 77293]]

rules. Time frames within which margin and equity calls must be met are 
maximums imposed under Exchange rules. The broker-dealer carrying a 
customer's portfolio margin account, including any cross-margin 
account, may impose its own more stringent requirements.
* * * * *

Sample Portfolio Margining and Cross-Margining Acknowledgements

Acknowledgement for Customers Utilizing a Portfolio Margin Account

--Cross-Margining and Non-Cross-Margining--

    Rule 15c3-3 under the Securities Exchange Act of 1934 requires that 
a broker or dealer promptly obtain and maintain physical possession or 
control of all fully-paid securities and excess margin securities of a 
customer. Fully-paid securities are securities carried in a cash 
account and margin equity securities carried in a margin or special 
account (other than a cash account) that have been fully paid for. 
Excess margin securities are a customer's margin securities having a 
market value in excess of 140% of the total of the debit balances in 
the customer's non-cash accounts. For the purposes of Rule 15c3-3, 
securities held subject to a lien to secure obligations of the broker-
dealer are not within the broker-dealer's physical possession or 
control. The Commission staff has taken the position that all long 
option positions in a customer's portfolio-margining account (including 
any cross-margin account) may be subject to such a lien by OCC and will 
not be deemed fully-paid or excess margin securities under Rule 15c3-3.
    The hypothecation rules under the Securities Exchange Act of 1934 
(Rules 8c-1 and 15c2-1), prohibit broker-dealers from permitting the 
hypothecation of customer securities in a manner that allows those 
securities to be subject to any lien or liens in an amount that exceeds 
the customer's aggregate indebtedness. However, all long option 
positions in a portfolio-margining account (including any cross-
margining account) will be subject to OCC's lien, including any 
positions that exceed the customer's aggregate indebtedness. The 
Commission staff has taken a position that would allow customers to 
carry positions in portfolio-margining accounts, (including any cross-
margining account) even when those positions exceed the customer's 
aggregate indebtedness. Accordingly, within a portfolio margin account 
or cross-margin account, to the extent that you have long option 
positions that do not operate to offset your aggregate indebtedness and 
thereby reduce your margin requirement you receive no benefit from 
carrying those positions in your portfolio-margin account or cross-
margin account and incur the additional risk of OCC's lien on your long 
option position(s).

By signing below the customer affirms that the customer has read and 
understood the foregoing disclosure statement and acknowledges and 
agrees that long option positions in portfolio-margining accounts, and 
cross-margining accounts, will be exempted from certain customer 
protection rules of the Securities and Exchange Commission as described 
above and will be subject to a lien by the Options Clearing Corporation 
without regard to such rules.

Customer Name:---------------------------------------------------------

By:--------------------------------------------------------------------

     (Signature/title)

Date:------------------------------------------------------------------

Acknowledgement for Customers Engaged in Cross-Margining

    As disclosed above, futures contracts and other property carried in 
customer accounts with Futures Commission Merchants (``FCM'') are 
normally subject to special protection afforded under the customer 
segregation provisions of the Commodity Exchange Act (``CEA'') and the 
rules of the Commodity Futures Trading Commission adopted pursuant to 
the CEA. These rules require that customer funds be segregated from the 
accounts of financial intermediaries and be accounted for separately. 
However, they do not provide for, and regular futures accounts do not 
enjoy the benefit of, insurance protecting customer accounts against 
loss in the event of the insolvency of the intermediary carrying the 
accounts.
    As discussed above, cross-margining must be conducted in a 
portfolio margin account, dedicated exclusively to cross margining and 
cross margin accounts are not treated as a futures account with an FCM. 
Instead, cross margin accounts are treated as securities accounts 
carried with broker-dealers. As such, cross margin accounts are covered 
by Rule 15c3-3 under the Securities Exchange Act of 1934, which 
protects customer accounts. Rule 15c3-3, among other things, requires a 
broker-dealer to maintain physical possession or control of all fully-
paid and excess margin securities and maintain a special reserve 
account for the benefit of their customers. However, with regard to 
cross margin accounts, there is an exception to the possession or 
control requirement of Rule 15c3-3 that permits The Options Clearing 
Corporation to have a lien on long positions. This exception is 
outlined in a separate acknowledgement form that must be signed prior 
to or concurrent with this form. Additionally, the Securities Investor 
Protection Corporation (``SIPC'') insures customer accounts against the 
financial insolvency of a broker-dealer in the amount of up to $500,000 
to protect against the loss of registered securities and cash 
maintained in the account for purchasing securities or as proceeds from 
selling securities (although the limit on cash claims is $100,000). 
According to the rules of the exchanges, a broker-dealer is required to 
immediately liquidate, or, if feasible, transfer to another broker-
dealer eligible to carry cross-margin accounts, all customer cross 
margin accounts that contain positions in futures and/or options on 
futures in the event that the carrying broker-dealer becomes insolvent.

By signing below the customer affirms that the customer has read and 
understood the foregoing disclosure statement and acknowledges and 
agrees that: (1) Positions and property in cross-margining accounts, 
will not be subject to the customer protection rules under the customer 
segregation provisions of the Commodity Exchange Act and the rules of 
the Commodity Futures Trading Commission adopted pursuant to the CEA 
and (2) cross-margining accounts that contain positions in futures and/
or options on futures will be immediately liquidated, or if feasible, 
transferred to another broker-dealer eligible to carry cross-margin 
accounts in the event that the carrying broker-dealer becomes 
insolvent.

Customer Name:---------------------------------------------------------

By:--------------------------------------------------------------------

     (Signature/title)

Date:------------------------------------------------------------------
* * * * *

I. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange 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 Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

[[Page 77294]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
a. Background
    NYSE Rule 431 generally prescribes minimum maintenance margin 
requirements for customer accounts held at members and member 
organizations. In April 1996, the Exchange established the Committee to 
assess the adequacy of NYSE Rule 431 on an ongoing basis, review margin 
requirements, and make recommendations for change. A number of proposed 
amendments resulting from the Committee's recommendations have been 
approved by the Exchange's Board of Directors since the Committee was 
established. Similarly, the proposed amendments discussed below have 
been recommended by the Committee and have been adopted by the Exchange 
in this proposal, as amended.\11\ The Exchange represents that the 
proposed portfolio margin and cross-margin rules have been developed in 
conjunction with the CBOE, The Options Clearing Corporation, the 
American Stock Exchange LLC, the Board of Trade of the City of Chicago, 
Inc., the Chicago Mercantile Exchange Inc., and the National 
Association of Securities Dealers, Inc.
---------------------------------------------------------------------------

    \11\ Many aspects of the proposed rule change are similar to the 
CBOE's proposed rule change to permit customer portfolio margining 
and cross-margining. See CBOE Proposal, supra note 4.
---------------------------------------------------------------------------

    The Exchange filed Amendment No. 2 for the purpose of eliminating 
inconsistencies between the proposed NYSE and CBOE rules,\12\ and to 
incorporate certain substantive amendments requested by Commission 
staff.
---------------------------------------------------------------------------

    \12\ See CBOE Proposal, supra note 4.
---------------------------------------------------------------------------

b. Portfolio Margin
    The Exchange proposes to amend NYSE Rule 431 to expand the scope of 
its margin rule by providing a portfolio margin methodology for listed, 
broad-based market index options, index warrants and related exchange-
traded funds. The Exchange believes that the proposed amendments would 
allow clearing members and member organizations to extend a portfolio 
margin methodology to eligible customers as an alternative to the 
current strategy-based margin requirements. The Exchange further 
believes that the proposed rule also would allow broad-based market 
index futures and options on such futures to be included in a portfolio 
margin account, thus providing a cross-margin capability. The Exchange 
proposes to introduce the amendments as a two-year pilot program that 
would be available on a voluntary basis to member organizations.
    Portfolio margining is a margin methodology that sets margin 
requirements for an account based on the greatest projected net loss of 
all positions in a product class or group as determined by the 
Commission-approved options pricing model using multiple pricing 
scenarios. These scenarios are designed to measure the theoretical loss 
of the positions given changes in both the underlying price and implied 
volatility inputs to the model. Accordingly, the margin required is 
based on the greatest loss that would be incurred in a portfolio if the 
value of its components move up or down by a predetermined amount.
    The Exchange represents that the purpose and benefit of portfolio 
margining is to efficiently set levels of margin that more precisely 
reflect actual net risk of all positions in the account. A customer 
benefits from portfolio margining in that margin requirements 
calculated on net position risk are generally lower than strategy-based 
margin methodologies currently in place. In permitting margin 
computation based on actual net risk, members and member organizations 
will no longer be required to compute a margin requirement for each 
individual position or strategy in a customer's account.
    However, as a pre-condition to permitting portfolio margining, the 
member or member organization would be required to establish procedures 
and guidelines to monitor credit risk to the member or member 
organization's capital, including intra-day credit risk, and stress 
testing of portfolio margin accounts. Further, members and member 
organizations would have to establish procedures for regular review and 
testing of these required risk analysis procedures.
c. Cross-Margining Capability
    Amendment No. 2 requires a clearing member or member organization 
to establish a separate portfolio margin account (securities margin 
account) exclusively for cross-margining.\13\ In this regard, related 
index futures and options on such futures would be carried in a 
separate cross-margin account, thus affording a cross-margin 
capability. In a portfolio margin account that is used exclusively for 
cross-margining, separate portfolios may be established containing 
index options, index warrants and exchange-traded funds structured to 
replicate the composition of the index underlying a particular 
portfolio, as well as related index futures and options on such 
futures.
---------------------------------------------------------------------------

    \13\ The Original Proposal and Amendment No. 1 permitted cross-
margin positions to either be combined in the same account with 
other portfolio margin positions, or carried in a separate cross-
margin account.
---------------------------------------------------------------------------

    To determine theoretical gains and losses, and resulting margin 
requirements, the same portfolio margin computation procedure will be 
applied to a portfolio margin account that is identified as a cross-
margin account.
    The liquidation/transfer requirement set forth in Amendment No. 2 
necessitates that cross-margin positions be carried in a separate 
account, whereas the Original Proposal and Amendment No. 1 permitted 
cross-margin positions to either be combined in the same account with 
other portfolio margin positions, or carried in a separate cross-margin 
account. Amendment No. 2 also proposes changes to numerous sections of 
Rule 431 to remove references to the ability to co-mingle cross-margin 
positions along with all other portfolio margin positions.
    Another change in Amendment No. 2 is the incorporation of a 
provision, as requested by Commission staff, that requires liquidation 
or transfer of cross-margin accounts in the event that a carrying 
broker-dealer becomes insolvent. This requirement would provide for 
Securities Investor Protection Corporation (``SIPC'') coverage of 
futures and options on futures in a securities account because such 
instruments would be viewed as converted to cash in the event of a firm 
insolvency.
d. Disclosure Document and Customer Attestation
    Exchange Rule 726 prescribes requirements for the delivery of 
options disclosure documents concerning the opening of customer 
accounts. As proposed by the Exchange, members and member organizations 
would be required to provide every portfolio margin customer with a 
written risk disclosure statement at or prior to the initial opening of 
a portfolio margin account. The disclosure statement is divided into 
two sections, one dealing with portfolio margining, and the other with 
cross-margining.
    The statement would disclose the risk and operation of portfolio 
margin accounts, including cross-margining, and the differences between 
portfolio margin and strategy-based margin requirements. The disclosure 
statement

[[Page 77295]]

would also address who is eligible to open a portfolio margin account, 
the instruments that are allowed, and when deposits to meet margin and 
minimum equity are required.
    Included within the portfolio margin section of the disclosure 
statement would be a list of certain of the risks unique to portfolio 
margin accounts, such as: Increased leverage; shorter time for meeting 
margin; involuntary liquidation if margin not received; inability to 
calculate future margin requirements because of the data and 
calculations required; and that long positions are subject to a lien. 
The risks and operation of a cross-margin feature are delineated in the 
cross-margin section of the disclosure statement, and a list of certain 
of the risks associated with cross-margining will be included as well.
    In addition, at or prior to the time a portfolio margin account is 
initially opened, members and member organizations would be required to 
obtain a signed acknowledgement regarding certain implications of 
portfolio margining (e.g., treatment under SEC Rules 8c-1, 15c2-1 and 
15c3-3 under the Act) from the customer. Further, prior to providing 
cross-margining, members and member organizations would be required to 
obtain a second signed customer acknowledgement relative to the 
segregation treatment for futures contracts and SIPC coverage.
    Amendment No. 2 reflects changes to the risk disclosure statement 
and acknowledgement forms to reflect proposed amendments to the rule 
language concerning separation of cross-margining from all other 
portfolio margining. The acknowledgement form in Amendment No. 2 will 
require that by signing the cross-margin agreement, the signer 
acknowledges that all positions carried in a cross-margin account will 
be immediately liquidated or transferred to another broker-dealer 
eligible to carry cross-margin accounts in the event that the carrying 
broker-dealer becomes insolvent.
2. Statutory Basis
    The Exchange believes the proposed rule change, as amended, is 
consistent with Section 6(b) of the Act \14\ in general, and furthers 
the objectives of Section 6(b)(5) of the Act \15\ in particular, 
because it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest. In addition, the Exchange believes that Section 
6(b)(5) of the Act \16\ requires that the rules of an exchange foster 
cooperation and coordination with persons engaged in regulating 
transactions in securities.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in the 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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve such proposed rule change, as amended, 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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#fb898e979ed6989496969e958f88bb889e98d59c948d"><span class="__cf_email__" data-cfemail="1361667f763e707c7e7e767d6760536076703d747c65">[email protected]</span></a>. Please include 
File Number SR-NYSE-2002-19 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.

All submissions should refer to File Number SR-NYSE-2002-19. 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 inspection and 
copying in the Commission's Public Reference Section, 450 Fifth Street, 
NW., Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of the NYSE. 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-NYSE-2002-19 and should be 
submitted on or before January 18, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-28183 Filed 12-23-04; 8:45 am]
BILLING CODE 8010-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>