84050 Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Notices 

22 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Notice of Filing infra note 4, 85 FR at 71384. 

4Securities Exchange Act Release No. 90315 

(Nov. 3, 2020), 85 FR 71384 (Nov. 9, 2020) (File No. 

SR–OCC–2020–013) (‘‘Notice of Filing’’). OCC also 

filed a related advance notice (SR–OCC–2020–806) 

(‘‘Advance Notice’’) with the Commission pursuant 

to Section 806(e)(1) of Title VIII of the Dodd-Frank 

Wall Street Reform and Consumer Protection Act, 

entitled the Payment, Clearing, and Settlement 

Supervision Act of 2010 and Rule 19b–4(n)(1)(i) 

under the Exchange Act. 12 U.S.C. 5465(e)(1). 15 

U.S.C. 78s(b)(1) and 17 CFR 240.19b–4, 

respectively. The Advance Notice was published in 

the Federal Register on November 18, 2020. 

Securities Exchange Act Release No. 90416 (Nov. 

13, 2020), 85 FR 73553 (Nov. 18, 2020) (File No. 

SR–OCC–2020–806). 

5Since the proposal contained in the Proposed 

Rule Change was also filed as an advance notice, 

all public comments received on the proposal are 

considered regardless of whether the comments are 

submitted on the Proposed Rule Change or the 

Advance Notice. 

6 In Partial Amendment No. 1, OCC corrects and 

updates a confidential Exhibit 5 to the materials 

filed on October 20, 2020 regarding File No. SR– 

OCC–2020–013. Partial Amendment No. 1 corrects 

an error in the proposed rule text and updates the 

list of vendor agreements attached to the RWD Plan, 

but did not change the purpose of or basis for the 

Proposed Rule Change. 

7References to the Proposed Rule Change from 

this point forward refer to the Proposed Rule 

Change as modified by Partial Amendment No. 1. 

8Capitalized terms used but not defined herein 

have the meanings specified in OCC’s Rules and ByLaws, available at https://www.theocc.com/about/ 

publications/bylaws.jsp. 

9See Securities Exchange Act Release No. 85121 

(Feb. 13, 2019), 84 FR 5157 (Feb. 20, 2019) (File No. 

SR–OCC–2015–02). 

10See Securities Exchange Act Release No. 86725 

(Aug. 21, 2019), 84 FR 44952 (Aug. 27, 2019) (File 

No. SR–OCC–2019–007). 

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–NYSEAMER–2020–83. 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 website (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 website 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 the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEAMER–2020–83, and 

should be submitted on or before 

January 13, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28315 Filed 12–22–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90712; File No. SR–OCC– 

2020–013] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing of Partial Amendment No. 1 

and Order Granting Accelerated 

Approval of Proposed Rule Change, as 

Modified by Partial Amendment No. 1, 

To Update The Options Clearing 

Corporation’s Recovery and Orderly 

Wind-Down Plan 

December 17, 2020. 

I. Introduction 

On October 20, 2020, the Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2020– 

013, (‘‘Proposed Rule Change’’) 

pursuant to Section 19(b) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 2

thereunder to make changes to OCC’s 

Recovery and Orderly Wind-Down Plan 

(‘‘RWD Plan’’).3 The Proposed Rule 

Change was published for public 

comment in the Federal Register on 

November 9, 2020.4 The Commission 

has received no comments regarding the 

Proposed Rule Change.5 On October 20, 

2020, OCC filed a partial amendment 

(‘‘Partial Amendment No. 1’’) to modify 

the Proposed Rule Change.6 The 

Commission is publishing this notice to 

solicit comments on Partial Amendment 

No. 1 from interested persons and is 

approving the proposed rule change, as 

modified by Partial Amendment No. 1, 

on an accelerated basis.7

II. Background 8

The Proposed Rule Change concerns 

changes to OCC’s RWD Plan. As 

described in greater detail below, OCC 

proposes to (1) update the RWD Plan to 

reflect changes to OCC’s capital 

structure resulting from the disapproval 

of OCC’s previously approved ‘‘Capital 

Plan’’ 9 and the subsequent approval of 

OCC’s ‘‘Capital Management Policy,’’ 10

and (2) implement changes identified 

during OCC’s annual review of the RWD 

Plan. The changes arise out of OCC’s 

annual review of the RWD Plan and 

include factual updates (e.g., market 

share and contract volume data) and 

streamlined discussions in the RWD 

Plan (e.g., replacement of detailed 

overview of OCC’s risk management 

program with a more concise summary). 

Capital Management Policy Updates. 

As a result of the implementation of the 

Capital Management Policy, OCC is 

proposing changes to Chapters 2, 5, and 

6 of its RWD Plan. In Chapter 2, OCC 

is proposing to revise its discussion of 

fee management for consistency with 

the Capital Management Policy. In 

Chapter 5, OCC is proposing to (i) 

replace its discussion of the 

Replenishment Plan established under 

the disapproved Capital Plan with a 

discussion of the replenishment 

structure adopted under the Capital 

Management Policy; (ii) replace 

references to the discretionary use of 

OCC’s current and/or retained earnings 

with references to the mandatory 

contribution—immediately following 

the use of margin, deposits in lieu of 

margin and the Clearing Fund deposits 

of the suspended Clearing Member—of 

OCC’s current and retained earnings 

greater than 110% of OCC’s annuallyestablished ‘‘Target Capital 

Requirement;’’ (iii) update the 

description of how OCC could increase 

the minimum required cash 

contribution to the Clearing Fund to 

reflect enhancements to OCC’s liquidity 

risk management framework that the 


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Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Notices 84051 

11See Securities Exchange Act Release No. 89014 

(Jun. 4, 2020), 85 FR 35446 (Jun. 10, 2020) (File No. 

SR–OCC–2020–003). 

12 15 U.S.C. 78s(b)(2)(C). 

13 15 U.S.C. 78q–1(b)(3)(F). 

14 17 CFR 240.17Ad–22(e)(3)(ii). 

15 15 U.S.C. 78q–1(b)(3)(F). 

Commission approved in 2020; 11 and 

(iv) include a discussion of the 

mandatory contribution of any unvested 

portions of OCC’s Executive Deferred 

Compensation Plan (‘‘EDCP’’) in 

proportion to any charges against the 

mutualized portion of OCC’s Clearing 

Fund. OCC also proposes to revise the 

list of ‘‘Recovery Trigger Events’’ in 

Chapter 5 to: (a) Delete one of the 

Recovery Trigger Events that was 

derived from a defined term in the 

Capital Plan; (b) consolidate two other 

Recovery Trigger Events into a single, 

operational loss-related recovery trigger; 

and (c) add a qualification onto an 

existing liquidity loss-related recovery 

trigger. In Chapter 6, OCC is proposing 

to update discussion of the tools by 

which OCC could recapitalize in certain 

recovery and wind-down scenarios. 

Further, OCC is proposing to revise the 

list of Wind-Down Plan Trigger Events 

(‘‘WDP Triggers’’): Specifically, OCC 

proposes to consolidate two current 

WDP Triggers into a single WDP Trigger 

related to OCC’s financial resource 

requirements and to consolidate two 

other WDP Triggers into a single WDP 

Trigger related to operational 

disruption. Similar to the changes OCC 

proposes in Chapter 5, the changes 

proposed in Chapter 6 would be 

designed to reflect OCC’s current 

replenishment plan under the Capital 

Management Policy. 

Annual Review Updates. As a result 

of its annual review and update process, 

OCC is proposing changes to Chapters 2, 

3, 5, 6, 7, and 8 of its RWD Plan. In 

Chapter 2, OCC is proposing to update 

(i) market share and contract volume 

data; (ii) lists of the securities options 

exchanges and other markets for which 

OCC provides clearing services; (iii) 

organizational charts, headcount 

numbers, discussions of OCC’s 

management structure and descriptions 

of management roles and 

responsibilities; (iv) updated 

descriptions of OCC’s Board’s 

responsibilities and procedures, lists of 

Board members and descriptions of 

OCC’s Board committees’ roles and 

responsibilities; and (v) graphs of total 

monthly deposits to OCC’s Clearing 

Fund. OCC is also proposing revisions 

to reflect certain program changes that 

have occurred at OCC since the initial 

approval of the RWD Plan in 2018 (e.g., 

changes to cross-margining 

arrangements, credit facilities, 

investment counterparties, and vendors) 

as well as changes to OCC’s retirement 

plan obligations. In Chapter 3, the RWD 

Plan lists OCC’s internal support 

functions. OCC is proposing the 

addition of two new internal support 

functions to that list and the removal of 

the Office of the Corporate Executive 

from the list. The net result of the 

proposed changes would bring the total 

number of internal support functions 

listed from fourteen to sixteen. OCC also 

proposes to update the descriptions of 

all OCC’s internal support functions so 

they align with OCC’s internal 

descriptions of such functions. 

In Chapter 6, OCC is proposing to (i) 

update references to OCC’s internal 

support functions; and (ii) certain 

references to headcount. In Chapter 7, 

OCC is proposing to update staff titles 

to reflect changes in related office titles. 

In Chapter 8, OCC is proposing to 

update lists of (i) Clearing Members; (ii) 

Board participation; (iii) settlement 

bank and letter of credit bank; (iv) 

OCC’s vendors and service providers; 

(v) updates to the extreme hypothetical 

scenarios designed by OCC that, if such 

scenarios occurred, could cause OCC to 

activate the RWD Plan; and (vi) key 

agreements. 

Administrative and Streamlining 

Changes. In addition to the updates 

described above, OCC is also proposing 

several administrative and streamlining 

changes throughout the RWD Plan. OCC 

proposes to align the executive 

summary and overview section of the 

RWD Plan with the changes described 

above. OCC also proposes moving 

annual report excerpts from Chapter 2 to 

an appendix to the RWD Plan, replace 

the current overview of OCC’s risk 

management program with a more 

concise summary, and update a 

summary description of OCC’s 

interconnections with external vendors 

and a list of vendors that provide OCC 

critical technology and information 

reporting services. In Chapter 4, OCC 

proposes to update certain factual 

references and make other minor 

changes to reflect the use of a single 

term for Critical Services that are 

currently identified separately. OCC 

also proposes to revise the mapping of 

Critical Services to Support Functions 

in Chapter 4 to reflect the categorization 

of Support Functions as either 

‘‘primary,’’ ‘‘secondary,’’ or ‘‘noncritical.’’ In Chapter 5, OCC proposes to 

(i) clean up references to its by-laws that 

are now rules; (ii) consolidate two 

recovery triggers into a single, 

operational loss-related recovery trigger; 

and (iii) add qualifying language to an 

existing liquidity loss-related recovery 

trigger. 

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Exchange 

Act directs the Commission to approve 

a proposed rule change of a selfregulatory organization if it finds that 

such proposed rule change is consistent 

with the requirements of the Exchange 

Act and the rules and regulations 

thereunder applicable to such 

organization.12 After carefully 

considering the Proposed Rule Change, 

the Commission finds that the proposal 

is consistent with the requirements of 

the Exchange Act and the rules and 

regulations thereunder applicable to 

OCC. More specifically, the Commission 

finds that the proposal is consistent 

with Section 17A(b)(3)(F) of the 

Exchange Act 13 and Rule17Ad– 

22(e)(3)(ii) thereunder.14

A. Consistency With Section 

17A(b)(3)(F) of the Exchange Act 

Section 17A(b)(3)(F) of the Exchange 

Act requires, among other things, that 

the rules of a clearing agency be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions and assure the 

safeguarding of securities and funds 

which are in the custody or control of 

the clearing agency or for which it is 

responsible.15 As a central counterparty, 

it is important for OCC to have a plan 

in place to address extreme stresses or 

crises with the aim of maintaining 

OCC’s viability and ability to provide 

critical services. In the event that OCC’s 

recovery efforts are not successful, the 

RWD Plan would seek to increase the 

possibility that a resolution of OCC’s 

operations could be conducted in an 

orderly manner. The Commission 

continues to believe that OCC specifying 

the steps that it would take in either a 

recovery or orderly wind-down would 

enhance OCC’s ability to address 

circumstances specific to an extreme 

stress event. The Commission also 

continues to believe that, by increasing 

the likelihood that recovery would be 

orderly, efficient, and successful, the 

RWD Plan enhances OCC’s ability to 

maintain the continuity of its critical 

services (including clearance and 

settlement services) during, through, 

and following periods of extreme stress 

giving rise to the need for recovery, 

thereby promoting the prompt and 

accurate clearance and settlement of 


jbell on DSKJLSW7X2PROD with NOTICES
84052 Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Notices 

16See Securities Exchange Act Release No. 83918 

(Aug. 23, 2018), 83 FR 44091, 44094 (Aug. 29, 2018) 

(File No. SR–OCC–2017–021); Securities Exchange 

Release No. 83928 (Aug. 23, 2018), 83 FR 44109, 

44112 (Aug. 29, 2018) (File No. SR–OCC–2017– 

810). 

17See Securities Exchange Act Release No. 83918 

(Aug. 23, 2018), 83 FR 44091, 44094 (Aug. 29, 2018) 

(File No. SR–OCC–2017–021). 

18See Securities Exchange Act Release No. 85121 

(Feb. 13, 2019), 84 FR 5157 (Feb. 20, 2019) (File No. 

SR–OCC–2015–02). 

19See Securities Exchange Act Release No. 86725 

(Aug. 21, 2019), 84 FR 44952 (Aug. 27, 2019) (File 

No. SR–OCC–2019–007). 

20See Securities Exchange Act Release No. 34– 

78961 (Oct. 13, 2016), 81 FR 70786, 70808 (Oct. 13, 

2016) (File No. S7–03–14). 

21For example, OCC is proposing to update its 

market share and contract volume data, lists of the 

securities options exchanges and other markets for 

which OCC provides clearing services, 

organizational charts, and headcount numbers. OCC 

also proposes to replace the detailed overview of 

OCC’s risk management program with a more 

concise summary. 

22 15 U.S.C. 78q–1(b)(3)(F). 

23 17 CFR 240.17Ad–22(e)(3)(ii). 

24See Securities Exchange Act Release No. 83918 

(Aug. 23, 2018), 83 FR 44091, 44095 (Aug. 29, 2018) 

(File No. SR–OCC–2017–021); Securities Exchange 

Release No. 83928 (Aug. 23, 2018), 83 FR 44109, 

44113 (Aug. 29, 2018) (File No. SR–OCC–2017– 

810). 

25 17 CFR 240.17Ad–22(e)(3)(ii). 26 15 U.S.C. 78s(b)(2). 

securities transactions.16 Further, the 

Commission continues to believe that 

the RWD Plan is designed to assure the 

safeguarding of securities or funds in 

the custody or control of OCC by 

reducing the likelihood of a disorderly 

or unsuccessful recovery or wind-down, 

which could otherwise disrupt access to 

such securities or funds.17

As described above, OCC proposes to 

(1) update the RWD Plan to reflect 

changes to OCC’s capital structure 

resulting from the disapproval of OCC’s 

previously approved ‘‘Capital Plan’’ 18

and the subsequent approval of OCC’s 

‘‘Capital Management Policy,’’ 19 and (2) 

implement changes identified during 

OCC’s annual review of the RWD Plan. 

Consistent with the Commission’s prior 

statements regarding disclosure of 

documents describing a covered 

clearing agency’s recovery and winddown plans, the Commission believes 

that such recovery and wind-down 

plans should be updated regularly or 

more frequently as necessary.20 OCC 

also proposes to update and streamline 

the data and descriptions provided in 

the RWD Plan.21 The Commission 

believes that keeping the RWD Plan 

updated with current information, and 

refining the descriptions to make it 

more concise, makes it a more accurate 

and useful document. As such, the 

Commission believes, therefore, that the 

Proposed Rule Change is consistent 

with the requirements of Section 

17A(b)(3)(F) of the Exchange Act.22

B. Consistency With Rule 17Ad– 

22(e)(3)(ii) Under the Exchange Act 

Rule 17Ad–22(e)(3)(ii) under the 

Exchange Act requires that a covered 

clearing agency establish, implement, 

maintain, and enforce written policies 

and procedures reasonably designed to 

maintain a sound risk management 

framework for comprehensively 

managing legal, credit, liquidity, 

operational, general business, 

investment, custody, and other risks 

that arise in or are borne by the covered 

clearing agency, which includes plans 

for the recovery and orderly wind-down 

of the covered clearing agency 

necessitated by credit losses, liquidity 

shortfalls, losses from general business 

risk, or any other losses.23

The Commission continues to believe 

that the RWD Plan (i) clearly describes 

OCC’s recovery tools, which enhance 

OCC’s ability to recover from credit 

losses, liquidity shortfalls, general 

business risk losses, or other losses, 

consistent with Rule 17Ad–22(e)(3)(ii); 

and (ii) supports OCC’s ability to use 

risk management and recovery tools 

effectively to bring about a recovery by 

identifying in advance which tools may 

be most effective for different situations 

or needs, consistent with Rule 17Ad– 

22(e)(3)(ii).24 As described above, the 

RWD Plan sets forth OCC’s plans to 

recover or wind-down its operations as 

a result of severe financial or 

operational stress in an orderly fashion. 

The proposed updates will make the 

information provided in the RWD Plan 

more accurate and useful. The revised 

RWD Plan would, in turn, provide a 

more accurate and usable playbook for 

OCC or source of information for a 

resolution authority. Accordingly, the 

Commission believes that the proposed 

changes to the RWD Plan are consistent 

with Rule 17Ad–22(e)(3)(ii) under the 

Exchange Act.25

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as modified by Partial 

Amendment No. 1, is consistent with 

the Exchange 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 rule-comments@

sec.gov. Please include File Number SR– 

OCC–2020–013 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–2020–013. 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 website (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 website 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 website at 

https://www.theocc.com/CompanyInformation/Documents-and-Archives/ 

By-Laws-and-Rules. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal identifying 

information from comment submissions. 

You should submit only information 

that you wish to make available 

publicly. 

All submissions should refer to File 

Number SR–OCC–2020–013 and should 

be submitted on or before January 13, 

2021. 

V. Accelerated Approval of the 

Proposed Rule Change, as Modified by 

Partial Amendment No. 1 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Exchange Act,26 to approve the 

proposed rule change prior to the 30th 

day after the date of publication of 

Partial Amendment No. 1 in the Federal 

Register. As discussed above, Partial 

Amendment No. 1 corrects an error in 

the proposed rule text and updates the 

list of vendor agreements attached to the 

RWD Plan. Correcting typographical 

errors Partial Amendment No. 1 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Notices 84053 

27 15 U.S.C. 78q–1(b)(3)(F). 

28 15 U.S.C. 78s(b)(2). 

29 In approving this Proposed Rule Change, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

30 15 U.S.C. 78s(b)(2). 

31 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Exchange Act Release No. 90227 (Oct. 20, 2020), 

85 FR 67794 (Oct. 26, 2020) (File No. SR–FINRA– 

2020–035 (‘‘Notice’’). 

4Letter from the Steven B. Caruso, Maddox 

Hargett Caruso, P.C., dated October 20, 2020 

(‘‘Caruso Letter’’), available at https://www.sec.gov/ 

comments/sr-finra-2020-035/srfinra2020035- 

7927147-224628.htm. 

5See letter from Mignon McLemore, Assistant 

General Counsel, Office of General Counsel, FINRA, 

to Lourdes Gonzalez, Assistant Chief Counsel, 

Division of Trading and Markets, Commission, 

dated December 9, 2020. 

6A ‘‘hearing session’’ is any meeting between the 

parties and arbitrator(s) of four hours or less, 

including a hearing or a prehearing conference. See 

FINRA Rules 12100(p) and 13100(p). 

7For example, during a typical arbitration, the 

Chair oversees the discovery process, conducts the 

initial prehearing conference (‘‘IPHC’’) and 

subsequent prehearing conferences as needed, 

drafts rulings and orders, and manages efficient 

hearings. See Notice at note 4. 

8See FINRA Rule 12214(a)(2). The term 

‘‘hearing’’ means the hearing on the merits of an 

arbitration under FINRA Rules 12600 and 13600. 

See FINRA Rules 12100(o) and 13100(o). 

9A typical day has two hearing sessions. See 

Notice at note 3. 

10See FINRA Rules 12500(c) and 13500(c). 

improves the efficiency of the filing 

process by obviating the need for OCC 

to propose another change to its rules to 

resolve the error in the future while not 

changing the purpose of or basis for the 

Proposed Rule Change. Updating the list 

of vendor agreements as part of the 

immediate proposal would similarly 

reduce the need for future filings 

without changing the purpose of or 

basis for the Proposed Rule Change. 

For similar reasons as discussed 

above, the Commission finds that Partial 

Amendment No. 1 is consistent with the 

requirement that OCC’s rules be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions and assure the 

safeguarding of securities and funds 

which are in the custody or control of 

the clearing agency or for which it is 

responsible under Section 17A(b)(3)(F) 

of the Exchange Act.27 Accordingly, the 

Commission finds good cause for 

approving the proposed rule change, as 

modified by Partial Amendment No. 1, 

on an accelerated basis, pursuant to 

Section 19(b)(2) of the Exchange Act.28

VI. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Exchange Act, and 

in particular, the requirements of 

Section 17A of the Exchange Act 29 and 

the rules and regulations thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,30

that the Proposed Rule Change (SR– 

OCC–2020–013), as modified by Partial 

Amendment No. 1, be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28317 Filed 12–22–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90705; File No. SR–FINRA– 

2020–035] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change To Amend the 

FINRA Codes of Arbitration Procedure 

To Increase Arbitrator Chairperson 

Honoraria and Certain Arbitration Fees 

December 17, 2020. 

I. Introduction 

On October 16, 2020, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend the Code of Arbitration 

Procedure for Customer Disputes 

(‘‘Customer Code’’) and the Code of 

Arbitration Procedure for Industry 

Disputes (‘‘Industry Code’’) (together, 

‘‘Codes’’) to increase arbitrator 

chairperson (‘‘Chair’’) honoraria. 

Specifically, the proposed rule change 

would: (1) Increase the additional 

hearing day honorarium Chairs receive 

for each hearing on the merits from $125 

to $250 and (2) create a new $125 Chair 

honorarium for each prehearing 

conference in which the Chair 

participates. Under the proposed rule 

change, these increases would be 

funded primarily by certain increases to 

the member surcharge and process fees 

for claims of more than $250,000 or 

claims for non-monetary or unspecified 

damages. The proposed rule change 

would also increase filing fees and 

hearing session fees for customers, 

associated persons and members 

bringing claims of more than $500,000 

or claims for non-monetary or 

unspecified damage. 

The proposed rule change was 

published for comment in the Federal 

Register on October 26, 2020.3 The 

public comment period closed on 

November 16, 2020. The Commission 

received one comment letter in response 

to the Notice.4 On December 9, 2020, 

FINRA consented to an extension of the 

time period in which the Commission 

must approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposed rule change to December 31, 

2020.5 This order approves the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

FINRA makes arbitrator honoraria 

payments to its arbitrators for the 

services they provide to FINRA’s 

dispute resolution forum. Currently, 

under FINRA Rule 12214(a)(1), 

arbitrators receive $300 for each hearing 

session in which the arbitrator 

participates.6 In recognition of their 

increased experience and the extra 

responsibilities they must perform 

during an arbitration,7 Chairs currently 

receive an additional $125 for serving as 

Chair during a hearing (‘‘hearing day 

honorarium’’).8 The Chair receives the 

additional honorarium for each hearing 

day, regardless of the number of hearing 

sessions held per day.9 Currently, 

Chairs do not receive an additional 

honorarium for prehearing conferences, 

which they are required to lead and for 

which they are required to perform 

additional tasks, such as setting 

discovery, briefing, and motion 

deadlines, scheduling subsequent 

hearing sessions, and drafting 

prehearing orders.10

A. Proposed Increases to Arbitrator 

Chair Honoraria 

The proposed rule change would 

amend FINRA Rules 12214 and 13214 to 

increase the arbitrator Chair honoraria. 

Specifically, the proposed rule change 

would increase the hearing day 

honorarium from $125 to $250 to better 

compensate the Chair for the additional 

training and responsibilities required of 

the position. In addition, the proposed 

rule change would establish a new 


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