Federal Register / Vol. 72, No. 90 / Thursday, May 10, 2007 / Notices 26669 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CRF 240.19b–4(f)(6). In addition, Rule 19b–

4(f)(6) requires an exchange to give the Commission 

written notice of its intent to file the proposed rule 

change, along with a brief description and text of 

the proposed rule change, at least five days prior 

to the date of filing of the proposed rule change, or 

such shorter time as designated by the Commission. 

The Commission has determined to waive the fiveday pre-filing notice requirement in this case. 

16For purposes only of waiving the operative date 

of this proposal, the Commission has considered 

the rule’s impact on efficiency, competition, and 

capital formation. See 15 U.S.C. 78c(f). 17 17 CFR 200.30–3(a)(12). 

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

2The Commission has modified parts of these 

statements. 

(ii) Impose any significant burden on 

competition; and 

(iii) Become operative for 30 days 

from the date on which it was filed, or 

such shorter time as the Commission 

may designate, if consistent with the 

protection of investors and the public 

interest, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 14 and Rule 19b–4(f)(6) 

thereunder.15

The Exchange has asked the 

Commission to waive the 30-day 

operative delay. The Commission 

believes that such waiver is consistent 

with the protection of investors and the 

public interest because the proposed 

rule change should provide 

transparency and more clarity with 

respect to the trading hours eligibility of 

certain derivative securities products 

and should promote consistency in the 

trading halts of derivative securities. 

The Commission notes that this filing 

does not change the trading hours of the 

Derivative Securities Products listed in 

NYSE Arca Equities Rule 7.34, but 

codifies trading hour sessions that have 

been established through other rule 

changes or through the use of the 

Exchange’s generic listing standards 

pursuant to Rule 19b–4(e) under the 

Act. For these reasons, the Commission 

designates the proposed rule change as 

operative immediately.16

At any time within 60 days of the 

filing of the proposed rule change the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2007–39 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2007–39. 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 

Room. Copies of such filing will also be 

available for inspection and copying at 

the principal office of the Exchange. 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–NYSEArca–2007–39 and should be 

submitted by or before May 31, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9044 Filed 5–9–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55709; File No. SR–OCC–

2007–05] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change Relating to 

OCC’s Clearing Fee Schedule 

May 4, 2007. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

April 11, 2007, The Options Clearing 

Corporation (‘‘OCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which items have been 

prepared primarily by OCC. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change would (i) 

make permanent the current discounted 

clearing fee schedule for specified 

contracts, (ii) further discount the newly 

adopted clearing fee schedule, and (iii) 

modify the new product clearing fee 

schedule, with all changes being 

effective May 1, 2007. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

OCC included statements concerning 

the purpose of and basis for the 

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. OCC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of such statements.2

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

The purpose of the proposed rule 

change is to amend OCC’s standard 

clearing and new products fee 

schedules, effective May 1, 2007, as 

described below. First, OCC is making 

permanent the current discounted 

clearing fee schedule for (i) securities 


pwalker on PROD1PC71 with NOTICES
26670 Federal Register / Vol. 72, No. 90 / Thursday, May 10, 2007 / Notices 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

options and (ii) security futures where 

at least one side of the trade is cleared 

by an OCC clearing member. Second, 

OCC is discounting the newly adopted 

permanent clearing fee schedule until 

further action by the OCC Board of 

Directors. Third, OCC is modifying its 

new product fee schedule to reflect the 

foregoing clearing fee changes and to 

make it easier to administer. The 

following charts summarize the 

changes: 

Contracts/trade 

Current permanent standard fee 

schedule, effective 

April 1, 2004 

New permanent standard fee 

schedule, effective 

May 1, 2007* 

Discounted standard fee 

schedule, effective 

May 1, 2007 

1–500 ............................................. $0.0825/contract ........................... $0.05/contract ............................... $0.035/contract. 

501–1,000 ...................................... $0.0675/contract ........................... $0.04/contract ............................... $0.028/contract. 

1,001–2,000 ................................... $0.0575/contract ........................... $0.03/contract ............................... $0.021/contract. 

>2,000 ............................................ $110.00 (capped) ......................... $55.00 (capped) ........................... $35.00 (capped). 

*Clearing fees are currently charged at these rates as discounted fees. See File No. SR–OCC–2006–14. 

New product fee schedule, effective July 1, 2005 New product fee schedule, effective May 1, 2007 

First calendar month traded: $ .00. From first day of listing through the end of the following calendar 

month. 

Second calendar month traded: $0.00. 

Cleared trades w/contracts of: 1–4,400—$ .01. 

Thereafter reverts to clearing fees specified in the current clearing fee 

schedule. 

Greater than 4,400—$ 40.00 per trade 

Third calendar month traded: 

Cleared trades w/contracts of: 1–2,200—$ .02. 

Greater than 2,200—$ 40.00 per trade. 

Fourth calendar month traded: 

Reverts to current clearing fees. 

The foregoing reductions in OCC’s 

clearing fees reflect the strong contract 

volume experienced by OCC this year to 

date. OCC believes that these fee 

changes will financially benefit clearing 

members and other market participants 

without adversely affecting OCC’s 

ability to meet its expenses and 

maintain an acceptable level of retained 

earnings. The discounted clearing fees 

will remain in effect until further action 

by OCC’s Board of Directors. 

The proposed rule change is 

consistent with Section 17A of the Act 

because it benefits clearing members 

and other market participants by 

reducing and discounting clearing fees 

and allocating them in a fair and 

equitable manner. The proposed rule 

change is not inconsistent with the 

existing rules of OCC, including any 

other rules proposed to be amended. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

OCC does not believe that the 

proposed rule change would impose any 

burden on competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were not and are 

not intended to be solicited with respect 

to the proposed rule change and none 

have been received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule change 

changes fees charged clearing members 

by OCC, it has become effective 

pursuant to Section 19(b)(3)(A)(ii) of the 

Act3 and Rule 19b–4(f)(2)4 thereunder. 

At any time within sixty days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml) or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–OCC–2007–05 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE, Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–OCC–2007–05. 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, 100 F Street, NE., Washington, 

DC 20549. Copies of such filing also will 

be available for inspection and copying 

at the principal office of OCC and on 

OCC’s Web site at http:// 

www.optionsclearing.com. 

All comments received will be posted 

without change; the Commission does 

not edit personal identifying 


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Federal Register / Vol. 72, No. 90 / Thursday, May 10, 2007 / Notices 26671 

5 17 CFR 200.30–3(a)(12). 

1 17 CFR 240.9b–1. 

2See letter from Jean M. Cawley, First Vice 

President and Deputy General Counsel, OCC, to 

Sharon Lawson, Senior Special Counsel, Division of 

Market Regulation (‘‘Division’’), Commission, dated 

September 21, 2006. 

3See letter from Jean M. Cawley, First Vice 

President and Deputy General Counsel, OCC, to 

Sharon Lawson, Senior Special Counsel, Division, 

Commission, dated December 21, 2006. 

4See letter from Jean M. Cawley, First Vice 

President and Deputy General Counsel, OCC, to 

Sharon Lawson, Senior Special Counsel, Division, 

Commission, dated April 26, 2007. 

5See Securities Exchange Act Release No. 55258 

(February 8, 2007), 72 FR 7701 (February 16, 2007) 

(SR–OCC–2006–01). 

6 Id. 

7 Id. 

8See Securities Exchange Act Release No. 50895 

(December 20, 2004), 69 FR 78085 (December 29, 

2004) (SR–OCC–2004–11). 

9 Id. 

10See Securities Exchange Act Release No. 55124 

(January 18, 2007), 72 FR 3466 (January 25, 2007) 

(SR–OCC–2006–20). 

11See Securities Exchange Act Releases No. 

54087 (June 30, 2006), 71 FR 38918 (July 10, 2006) 

(SR–ISE–2005–60); 54693 (November 2, 2006), 71 

FR 65851 (November 9, 2006) (SR–CBOE–2006–74); 

and 54983 (December 20, 2006), 71 FR 78476 

(December 29, 2006) (SR–Amex–2006–87). 

12See Securities Exchange Act Releases No. 

54450 (September 14, 2006), 71 FR 55230 

(September 21, 2006) (approving SR–Amex–2006–

44) and 55547 (March 28, 2007), 72 FR 16388 (April 

4, 2007) (SR–Amex–2006–110). 

13See Securities Exchange Act Release No. 47418 

(February 27, 2003), 68 FR 11439 (March 10, 2003) 

(SR–ODD–2003–01) (‘‘February 2003 Supplement’’). 

14See e.g., Securities Exchange Act Releases No. 

50880 (December 17, 2004), 69 FR 77790 (December 

28, 2004) (SR–CBOE–2004–83) and 51246 (February 

24, 2005), 70 FR 10425 (March 3, 2005) (SR–Amex–

2005–11). 

15The Commission notes that the options markets 

must continue to ensure that the ODD is in 

compliance with the requirements of Rule 9b–

1(b)(2)(i) under the Act, 17 CFR 240.9b–1(b)(2)(i). 

Any future changes to the rules of the options 

markets would need to be submitted to the 

Commission under Section 19(b) of the Act. 15 

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

16 17 CFR 240.9b–1(b)(2)(i). 

17This provision permits the Commission to 

shorten or lengthen the period of time which must 

elapse before definitive copies may be furnished to 

customers. 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–OCC–2007–05 and should 

be submitted on or before May 31, 2007. 

For the Commission by the Division of 

Market Regulation, pursuant to delegated 

authority.5

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–8957 Filed 5–9–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55702; File No. SR–ODD–

2007–02] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Granting Approval of Accelerated 

Delivery of Supplement to the Options 

Disclosure Document Reflecting 

Certain Changes to Disclosure 

Regarding Options Adjustment 

Methodology and Fund Shares 

May 3, 2007. 

On September 22, 2006, The Options 

Clearing Corporation (‘‘OCC’’) submitted 

to the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Rule 9b–1 under the Securities 

Exchange Act of 1934 (‘‘Act’’),1 five 

preliminary copies of a supplement to 

its options disclosure document 

(‘‘ODD’’) reflecting certain changes to 

disclosure regarding options adjustment 

methodology.2 On December 22, 2006, 

OCC submitted to the Commission five 

preliminary copies of another 

supplement to the ODD reflecting 

certain changes to disclosure regarding, 

among other things, the term ‘‘fund 

shares.’’ 3 On April 27, 2007, OCC 

submitted to the Commission five 

definitive copies of a single supplement 

combining the two preliminary 

supplements discussed above.4

The ODD currently provides general 

disclosures on the characteristics and 

risks of trading standardize options. 

Recently, OCC amended its options 

adjustment rules to eliminate the need 

to round adjusted strike prices and/or 

units of trading in the event of certain 

stock dividends, stock distributions, or 

stock splits.5 OCC also revised the 

definition of ‘‘ordinary dividends and 

distributions’’ such that cash dividends 

or cash distributions announced on or 

after February 1, 2009, would be 

considered ordinary if declared on a 

regular basis pursuant to a policy or 

practice.6 Further, OCC amended its 

rules to provide that no adjustment 

would be made for cash dividends or 

cash distributions less than $12.50 per 

contract.7 The proposed supplement 

therefore amends the ODD to 

accommodate these changes. 

The proposed supplement also 

amends the ODD to reflect certain other 

changes to OCC rules. To accommodate 

one such change, the proposed 

supplement adds disclosure pertaining 

to OCC’s authority to adjust yield-based 

Treasury options if an options exchange 

increases the multiplier for such 

options.8 The proposed supplement also 

adds disclosure pertaining to OCC’s 

authority to fix exercise settlement price 

for yield-based Treasury options in 

unusual market conditions.9 Pursuant to 

another OCC rule change, the proposed 

supplement amends the ODD to include 

acceleration of the expiration date of 

American-style equity options that have 

been adjusted to call for cash 

deliverable.10

The proposed supplement also 

amends the ODD to reflect changes to 

the rules of the option exchanges. For 

instance, certain options exchanges 

amended their rules to permit listing 

and trading of options on fund shares 

that hold baskets of currencies 11 or hold 

or trade in commodity futures 

products.12 Therefore, to accommodate 

listing and trading of these options, the 

proposed supplement amends the term 

‘‘fund shares.’’

Lastly, the proposed supplement 

deletes certain disclosures originally 

made in February 2003 Supplement.13

First, the proposed supplement deletes 

disclosure pertaining to options series 

opened before September 16, 2000, as 

those options have all expired. Second, 

pursuant to adoption of rules by certain 

options exchanges to permit 

cancellation or adjustment of trades 

resulting from an erroneously reported 

index level, the proposed supplement 

deletes the provision disclosing that a 

person who buys or sells an index 

option based on such erroneously 

information is bound by the trade.14 The 

proposed supplement is intended to be 

read in conjunction with the more 

general ODD, which, as described 

above, discusses the characteristics and 

risks of options generally.15

Rule 9b–1(b)(2)(i) under the Act 16

provides that an options market must 

file five copies of an amendment or 

supplement to the ODD with the 

Commission at least 30 days prior to the 

date definitive copies are furnished to 

customers, unless the Commission 

determines otherwise, having due 

regard to the adequacy of information 

disclosed and the public interest and 

protection of investors.17 In addition, 

five copies of the definitive ODD, as 

amended or supplemented, must be 

filed with the Commission not later than 

the date the amendment or supplement, 

or the amended options disclosure 

document, is furnished to customers. 

The Commission has reviewed the 

proposed supplement and finds, having 

due regard to the adequacy of 

information disclosed and the public 

interest and protection of investors, that 

the proposed supplement may be 

furnished to customers as of the date of 

this order. 


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