38750 Federal Register / Vol. 83, No. 152 / Tuesday, August 7, 2018 / Notices 

17 15 U.S.C. 78mm. 18 17 CFR 200.30–3(a)(76). 1 12 U.S.C. 5465(e)(1). 

2 17 CFR 240.19b–4(n)(1)(i). 

3 15 U.S.C. 78a et seq. 

4 17 CFR 240.17Ad–22(e)(3)(ii). 

5See Securities Exchange Act Release No. 82514 

(January 17, 2018), 83 FR 3224 (January 23, 2018) 

(SR–OCC–2017–810) (hereinafter referred to as the 

‘‘Initial Filing’’). Initial Filing, 83 FR 3224. 

6See Memorandum from Office of Clearance and 

Settlement, Division of Trading and Markets, dated 

January 23, 2018, available at https://www.sec.gov/ 

comments/sr-occ-2017-810/occ2017810-2948228- 

161854.pdf. 

7See Memorandum from Office of Clearance and 

Settlement, Division of Trading and Markets, dated 

July 17, 2018, available at https://www.sec.gov/ 

comments/sr-occ-2017-810/occ2017810-4062513- 

169149.pdf. 

8This Partial Amendment No. 3 is substantially 

the same as Partial Amendments No. 1 and 2 but 

would correct certain technical errors in the 

previous amendments (e.g., update a cross-reference 

to OCC filing SR–OCC–2017–809, as now amended 

by Amendment No. 2, and correct a pagination error 

in Exhibits 4 and 5). Substantive changes to the 

Initial Filing, as reflected in Partial Amendment No. 

3, are described in Item II below. 

9The amendment to the list of Critical Support 

Functions would be made to the confidential and 

redacted portions of the RWD Plan. 

10See Amendment No. 2 to SR–OCC–2017–809. 

The three amendments to Chapter 5 also would be 

made to the confidential and redacted portions of 

the RWD Plan. 

Nasdaq Market changes a rule that the 

Exchanges have incorporated by 

reference. 

Accordingly, it is ordered, pursuant to 

Section 36 of the Exchange Act,17 that 

the Exchanges are exempt from the rule 

filing requirements of Section 19(b) of 

the Exchange Act solely with respect to 

changes to the rules identified in its 

request that incorporate by reference 

certain Nasdaq Market rules that are the 

result of changes to such Nasdaq Market 

rules, provided that the Exchanges 

promptly provide written notice to their 

members whenever the Nasdaq Market 

proposes to change a rule that the 

Exchanges have incorporated by 

reference. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–16799 Filed 8–6–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83762; File No. SR–OCC– 

2017–810] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing of Partial Amendments No. 1, 

2, and 3 to Advance Notice Concerning 

Updates to and Formalization of OCC’s 

Recovery and Orderly Wind-Down Plan 

August 1, 2018. 

I. Introduction 

Pursuant to Section 806(e)(1) of Title 

VIII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, 

entitled Payment, Clearing, and 

Settlement Supervision Act of 2010 

(‘‘Clearing Supervision Act’’) 1 and Rule 

19b–4(n)(1)(i) 2 under the Securities 

Exchange Act of 1934 (‘‘Act’’),3 The 

Options Clearing Corporation (‘‘OCC’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) an 

advance notice pursuant to which OCC 

would formalize and update its 

Recovery and Orderly Wind-Down Plan 

(‘‘RWD Plan’’ or ‘‘Plan’’), consistent 

with the applicable requirement in Rule 

17Ad–22(e)(3)(ii) 4 (‘‘Advance Notice’’). 

The Advance Notice was published for 

public comment in the Federal Register 

on January 23, 2018.5 On January 23, 

2018, the Commission requested OCC 

provide it with additional information 

regarding the Advance Notice.6 OCC 

responded to this request for 

information, and the information was 

received on July 13, 2018.7 On July 11 

and 12, 2018, OCC filed Partial 

Amendment No. 1 and Partial 

Amendment No. 2 to the Initial Filing. 

On July 12, 2018, OCC also filed a 

partial amendment (‘‘Partial 

Amendment No. 3’’) to the Initial Filing. 

This Partial Amendment No. 3 is 

intended to supersede and replace 

Amendments No. 1 and 2 in their 

entirety.8 Therefore, the Initial Filing 

together with Partial Amendment No. 3 

reflects the changes being proposed. 

The Advance Notice, as amended by 

Partial Amendment No. 3 is described 

in Item II below, which Item has been 

prepared by OCC. The Commission is 

publishing this notice to solicit 

comments on the Advance Notice, as 

amended by Partial Amendments No. 1, 

2 and 3, from interested persons. 

II. Clearing Agency’s Statement of the 

Terms of Substance of Partial 

Amendment No. 3 to the Advance 

Notice 

This Partial Amendment No. 3 would 

make the following three amendments 

to the Initial Filing: (1) Removal of 

sections of the RWD Plan concerning 

OCC’s proposed authority to require 

cash settlement of certain physically 

delivered options and single stock 

futures; (2) updating the list of OCC’s 

Critical Support Functions; 9 and (3) 

making three changes to Chapter 5 of 

the RWD Plan in order to conform to a 

change contemporaneously proposed in 

Amendment No. 2 to OCC advance 

notice filing SR–OCC–2017–809 

concerning enhanced and new tools for 

recovery scenarios.10

With regard to the removal of sections 

of the RWD Plan concerning OCC’s 

proposed authority to require cash 

settlement of certain physically 

delivered options and single stock 

futures, OCC proposes to amend the 

following text on pages 16–17 and 55 of 

the Initial Filing (new text is underlined 

and proposed deletions are marked in 

strikethrough text). 


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OCC also proposes to amend the 

following text on pages 22–23 and 61– 

62 of the Initial Filing (including 

associated footnotes). 

OCC plans to resubmit the proposed 

cash settlement tool previously filed in 

SR–OCC–2017–018 and SR–OCC–2017– 

807 on a separate timeline from the rest 

of its enhanced and new tools for 

recovery scenarios and would submit a 


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38752 Federal Register / Vol. 83, No. 152 / Tuesday, August 7, 2018 / Notices 

11See Amendment No. 2 to SR–OCC–2017–809. 

subsequent filing to the Commission to 

amend the RWD Plan at that time. 

In addition, OCC proposes to make 

the following amendments on pages 32 

and 71 of the Initial Filing. 

With regard to updating the list of 

OCC’s Critical Support Functions, the 

amendment would revise OCC’s RWD 

Plan to consistently identify one of 

OCC’s internal functions as a Critical 

Support Function. 

Finally, OCC proposes to make two 

changes to Chapter 5 of the RWD Plan, 

which would align an exhibit, a related 

list and a related paragraph with the 

certain changes OCC is 

contemporaneously proposing in 

Amendment No. 2 to OCC advance 

notice filing SR–OCC–2017–809 

concerning enhanced and new tools for 

recovery scenarios.11 Specifically, OCC 

would change the aforementioned 

exhibit, list and paragraph in Chapter 5 

to recognize that while OCC does not 

intend, in the first instance for its tearup process to serve as a means of loss 

allocation, circumstances may arise 

such that, despite best efforts, OCC has 

inadequate remaining financial 

resources to extinguish torn-up 

positions at their assigned Tear-Up Price 

without forcing a reduction in the 

amount of unpaid value of such 

positions (e.g., despite best efforts, 

market movements not accounted for by 

monitoring, additional Clearing Member 

defaults occur immediately preceding a 

tear-up). In such circumstances, despite 

best efforts, OCC would use its partial 

tear-up process as a means of loss 

allocation. 

OCC has included an updated Exhibit 

5 containing its RWD Plan as well as an 

Exhibit 4 showing the changes proposed 

in this Partial Amendment No. 3 to the 

proposed rule text in the Initial Filing, 

with the proposed changes in the Initial 

Filing marked in underlined and 

strikethrough text. Exhibits 4 and 5 have 

been redacted and filed separately with 

the Commission and confidential 

treatment for Exhibits 4 and 5 is 

requested pursuant to 17 CFR 240.24b– 

2. 

The Partial Amendments No. 1, 2 and 

3 would not change the purpose of or 

basis for the proposed changes. All 

other representations in the Initial 

Filing remain as stated therein and no 

other changes are being made. 

III. Date of Effectiveness of the Advance 

Notice and Timing for Commission 

Action 

The proposed change may be 

implemented if the Commission does 

not object to the proposed change 

within 60 days of the later of (i) the date 

the proposed change was filed with the 

Commission or (ii) the date any 

additional information requested by the 

Commission is received. OCC shall not 

implement the proposed change if the 

Commission has any objection to the 

proposed change. 

The Commission may extend the 

period for review by an additional 60 

days if the proposed change raises novel 

or complex issues, subject to the 

Commission providing the clearing 

agency with prompt written notice of 

the extension. A proposed change may 

be implemented in less than 60 days 

from the date the advance notice is 

filed, or the date further information 

requested by the Commission is 

received, if the Commission notifies the 

clearing agency in writing that it does 

not object to the proposed change and 

authorizes the clearing agency to 

implement the proposed change on an 

earlier date, subject to any conditions 

imposed by the Commission. 

OCC shall post notice on its website 

of proposed changes that are 

implemented. The proposal shall not 

take effect until all regulatory actions 

required with respect to the proposal are 

completed. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the advance notice is 

consistent with the Clearing 

Supervision Act. Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commissions 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–2017–810 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–OCC–2017–810. 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 advance notice that 

are filed with the Commission, and all 

written communications relating to the 

advance notice 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 

http://www.theocc.com/about/ 

publications/bylaws.jsp. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal or 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–2017–810 and should 

be submitted on or before August 22, 

2018. 

By the Commission. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–16823 Filed 8–6–18; 8:45 am] 

BILLING CODE 8011–01–P 


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