20472 Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices 

7The Commission notes that Chapter V, Section 

18(f)(v) of the Rules of the Boston Exchange Group, 

LLC, ‘‘The Price Improvement Period’’ (‘‘PIP’’), 

includes a similar provision that permits an options 

participant initiating a PIP auction to designate a 

lower amount than the 40% to which it is otherwise 

entitled upon the conclusion of the PIP auction. 

The Commission also recently approved a similar 

provision under Rule 6.74A of the Chicago Board 

of Options Exchange, Incorporated, with respect to 

its AIM auction. See Securities Exchange Act 

Release No. 66375 (February 10, 2012), 77 FR 9274 

(February 16, 2012) (SR–CBOE–2011–117). 

8 15 U.S.C. 78s(b)(2). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission has modified the text of the 

summaries prepared by OCC. 

4Securities Exchange Act Release No. 34–65648 

(October 27, 2011), 76 FR 68236 (November 3, 

2011). 

last priority. The Commission believes 

that, as a result of this flexibility, there 

may be increased usage of AIM auctions 

and the mechanism may attract new 

participants, thereby helping to further 

competition and to enhance the 

possibility of price improvement on 

behalf of customers.7

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (SR–C2–2012– 

006) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8036 Filed 4–3–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66676; File No. SR–OCC– 

2012–03] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing of Proposed Rule Change to 

More Closely Align OCC’s By-Laws 

and Rules with Regulatory 

Requirements Related to ‘‘Statutory 

Disqualifications’’ 

March 29, 2012. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder 2

notice is hereby given that on March 15, 

2012, 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 

more closely align OCC’s By-Laws and 

Rules with applicable regulatory 

requirements related to ‘‘statutory 

disqualifications’’ under the Act in 

order to reduce the overall 

administrative burden on OCC 

associated with addressing the statutory 

disqualification of OCC clearing 

members (‘‘Clearing Members’’) and 

applicants for clearing membership 

(‘‘Applicants’’) while giving guidance to 

Clearing Members and Applicants as to 

OCC’s policies with respect to statutory 

disqualifications. 

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 these statements.3

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

The purpose of this proposed rule 

change is to more closely align OCC’s 

By-Laws and Rules with applicable 

regulatory requirements related to 

‘‘statutory disqualifications’’ under the 

Act in order to reduce the overall 

administrative burden on OCC 

associated with addressing the statutory 

disqualification of Clearing Members 

and Applicants while giving guidance to 

Clearing Members and Applicants as to 

OCC’s policies with respect to statutory 

disqualifications. OCC is also proposing 

to amend its ‘‘Fitness Standards for 

Directors, Clearing Members and 

Others’’ (‘‘Fitness Standards’’) to bring 

such standards into conformity with the 

proposed amendments to OCC’s ByLaws. The Fitness Standards were 

submitted to the Commission in SR– 

OCC–2011–12 and approved by the 

Commission on October 27, 2011.4

Background 

Persons who have engaged in certain 

types of misconduct are subject to 

‘‘statutory disqualification,’’ as defined 

by Section 3(a)(39) of the Act, and must 

undergo a review by the Commission 

under Rule 19h–1 of the Act in order to 

enter or continue in membership in a 

self-regulatory organization (‘‘SRO’’). 

Section 17A(b)(4)(A) of the Act provides 

that a registered clearing agency may, 

and in cases in which the Commission 

so orders must, deny participation to 

any person subject to a statutory 

disqualification. This provision further 

requires a registered clearing agency to 

provide the Commission with 30 days’ 

notice before admitting a statutorily 

disqualified person to clearing 

membership. Rule 19h–1 of the Act 

implements these statutory provisions 

by requiring notice to the Commission 

if a registered clearing agency proposes 

either to admit to membership or to 

continue as a member a person subject 

to a statutory disqualification. Notably, 

unlike in the case of a national 

securities exchange or registered 

securities association, the rule does not 

require a registered clearing agency to 

file such a notice with respect to 

statutory disqualifications of associated 

persons of a Member or Applicant. A 

registered clearing agency is required to 

file such a notice only when the 

Member or Applicant itself is subject to 

the disqualification. 

Article V of OCC’s By-Laws 

establishes the qualifications required of 

Clearing Members and sets forth the 

procedures for admitting persons to 

clearing membership, including those 

that are or become subject to a statutory 

disqualification. Currently, 

Interpretation and Policy .03 of Article 

V, Section 1 of OCC’s By-Laws provides 

that the Membership/Risk Committee 

(‘‘Committee’’) will not recommend the 

approval of an application for 

membership if the Applicant or an 

associated person is subject to a 

statutory disqualification unless the 

Committee makes a finding that ‘‘special 

circumstances’’ exist warranting a 

waiver of the statutory disqualification. 

The requirements of this By-Law are 

more stringent than those applied to 

registered clearing agencies by the Act 

or Commission rules because they 

require the Committee to (i) make 

specific findings of ‘‘special 

circumstances’’ before recommending 

membership approval and (ii) address 

statutory disqualifications of associated 

persons. The By-Laws therefore impose 

additional administrative burdens on 

OCC that are not required under any 


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Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices 20473 

5Commodity Exchange Act Section 5b(c)(2)(O); 7 

U.S.C. 7a–1(c)(2)(O). 6 15 U.S.C. 78q–1. 

statute or rule administered by the 

Commission. 

Neither Article V of the By-Laws nor 

OCC’s Rules currently contain 

procedures for notice to OCC that an 

Applicant or Clearing Member is subject 

to a statutory disqualification, which 

provides insufficient guidance to 

Applicants and Clearing Members and 

exposes OCC to the risk that such notice 

may be given on a delayed basis. OCC’s 

By-Laws and Rules are also silent as to 

the procedures to be followed by a 

Clearing Member when it becomes 

subject to a statutory disqualification 

even though Rule 19h–1 requires a 

registered clearing agency to file a 

notice if it intends to permit such a firm 

to remain a Clearing Member. 

As a registered derivatives clearing 

organization (‘‘DCO’’), OCC is also 

subject to the jurisdiction of the 

Commodity Futures Trading 

Commission (‘‘CFTC’’). OCC’s By-Laws 

also address statutory disqualification 

under Section 8a(2)–(4) of the 

Commodity Exchange Act (‘‘CEA’’), 

which allows the CFTC to refuse to 

register or to suspend the registration of 

futures commission merchants and 

other entities required to register under 

the CEA. Neither the CEA nor the 

CFTC’s regulations require DCOs to file 

a notice similar to that required by Rule 

19h–1, and OCC therefore is not 

proposing to amend Article V or the 

Rules to specifically address statutory 

disqualifications under the CEA other 

than to clarify that if a principal of a 

futures commission merchant is subject 

to a statutory disqualification, the 

Membership/Risk Committee has 

discretion to not recommend the 

approval of such futures commission 

merchant’s application for membership 

pursuant to Section 8a(2) of the CEA or 

to determine not to permit such a 

futures commission merchant to 

continue in Clearing Membership. 

In addition to being consistent with 

the Commission’s regulations, OCC’s 

Fitness Standards, as described above, 

were constructed in part to comply with 

core principles (‘‘Core Principles’’) 

applicable to DCOs as these core 

principles were amended by the DoddFrank Wall Street Reform and Consumer 

Protection Act and as are set forth in the 

CEA. The Fitness Standards establish 

certain minimum fitness criteria for 

directors, Clearing Members, and their 

affiliates sufficient to comply with Core 

Principle O as set forth in the CEA.5

However, the Fitness Standards were 

also drafted to conform to OCC’s 

existing qualification standards for 

Clearing Members, which standards 

OCC is now proposing to revise. 

Accordingly, OCC proposes to amend 

the Fitness Standards to conform them 

to the proposed amendments to the 

qualification standards for Applicants 

and Clearing Members in OCC’s ByLaws. 

Proposed By-Law Changes 

Article V (Clearing Members) sets 

forth the qualifications for Clearing 

Members. OCC proposes to amend the 

current Article V provisions addressing 

statutory disqualifications to eliminate 

provisions that require unnecessary 

Committee action and to add provisions 

designed to ensure that OCC receives 

appropriate notice of a statutory 

disqualification in order to discharge its 

obligations as an SRO. The proposed 

amendments are generally based on 

similar rules of the National Securities 

Clearing Corporation and the Chicago 

Board Options Exchange. OCC proposes 

to amend Article V, Section 1, 

Interpretation and Policy .03 

(Experience and Competence) to: 

1. Eliminate the requirement that the 

Committee must find ‘‘special 

circumstances’’ warranting the waiver of 

a statutory disqualification in order to 

recommend an Applicant’s approval for 

clearing membership providing instead 

that the Committee may in its discretion 

consider a statutory disqualification in 

determining whether or not to 

recommend approval. 

2. Eliminate the requirement that the 

Committee address the status of 

associated persons who are subject to 

statutory disqualifications. 

3. Establish procedures requiring 

Clearing Members and Applicants to 

provide notice of a statutory 

disqualification. 

4. Eliminate the second paragraph of 

subsection c. The definition of statutory 

disqualification in subsection a. 

includes the conduct covered by Section 

15(b)(4)(B) of the Act, making the 

second paragraph of subsection c. 

redundant. 

OCC proposes to amend Chapter II 

and Chapter XII of its Rules to: 

1. Establish procedures applicable to 

Clearing Members who are or become 

subject to a statutory disqualification to 

provide that: (i) OCC has the discretion 

not to permit any such Clearing Member 

to continue in Clearing Membership, (ii) 

such Clearing Member must notify OCC 

of any statutory disqualification and 

may seek to continue in Clearing 

Membership, (iii) a failure to notify OCC 

of a statutory disqualification may be 

deemed a violation of OCC’s rules, (iv) 

OCC may convene a Disciplinary 

Committee to conduct a hearing 

concerning a Clearing Member’s 

statutory disqualification, (v) OCC has 

discretion to waive such provisions if 

another self-regulatory organization is 

conducting a proceeding addressing a 

Clearing Member’s statutory 

disqualification with respect to the same 

matter, and (vi) OCC has discretion to 

waive the hearing provisions if OCC 

intends to grant the Clearing Member’s 

application to continue in Clearing 

Membership in certain circumstances. 

2. Add Interpretation and Policy .01 

to Rule 1201 in order to clarify that a 

decision to suspend or expel a Clearing 

Member after a disciplinary proceeding 

under Chapter XII of the Rules would be 

grounds for summary suspension under 

Chapter XI of the Rules. 

OCC also proposes to amend its 

Fitness Standards to conform them to 

the proposed amendments to OCC’s ByLaws. 

OCC believes that the proposed 

changes to its By-Laws are consistent 

with the purposes and requirements of 

Section 17A of the Act 6 and the rules 

and regulations thereunder applicable to 

OCC because they are designed to more 

closely align OCC’s By-Laws and Rules 

with applicable regulatory 

requirements, establish standard 

notification and other procedures, 

provide Clearing Members with 

guidance as to OCC’s policies regarding 

statutory disqualifications, facilitate the 

timely filing of notices pursuant to Rule 

19h–1 should OCC determine to admit 

to membership or continue in 

membership any person subject to a 

statutory disqualification and are not 

designed to permit unfair 

discrimination in the admission of 

participants or among participants in 

the use of OCC. The proposed rule 

change is not inconsistent with any 

rules of OCC. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

OCC believes that the proposed rule 

change will not impose any burden on 

competition that is not necessary or 

appropriate in 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 

Written comments relating to the 

proposed rule change have not been 

solicited or received. OCC will notify 

the Commission of any written 

comments received by OCC. 


emcdonald on DSK29S0YB1PROD with NOTICES
20474 Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices 

7 17 CFR 200.30–3(a)(12). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: (A) by 

order approve or disapprove the 

proposed rule change 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 

• Use the Commission’s Internet 

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

rules/sro.shtml) or 

Send an email to rulecomments@sec.gov. Please include File 

Number SR–OCC–2012–03 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–OCC–2012–03. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filings 

will also be available for inspection and 

copying at the principal office of OCC 

and on OCC’s Web site at http:// 

www.optionsclearing.com/components/ 

docs/legal/rules_and_bylaws/ 

sr_occ_12_03.pdf. 

All comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–OCC–2012–03 and should 

be submitted on or before April 25, 

2012. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Kevin O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8035 Filed 4–3–12; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Administrator’s Line of Succession 

Designation, No. 1–A, Revision 33 

This document replaces and 

supersedes ‘‘Line of Succession 

Designation No. 1–A, Revision 32.’’ 

Line of Succession Designation No. 1– 

A, Revision 33: 

Effective immediately, the 

Administrator’s Line of Succession 

Designation is as follows: 

(a) In the event of my inability to 

perform the functions and duties of my 

position, or my absence from the office, 

the Deputy Administrator will assume 

all functions and duties of the 

Administrator. In the event the Deputy 

Administrator and I are both unable to 

perform the functions and duties of the 

position or are absent from our offices, 

I designate the officials in listed order 

below, if they are eligible to act as 

Administrator under the provisions of 

the Federal Vacancies Reform Act of 

1998 (5 U.S.C. 3345–3349d), to serve as 

Acting Administrator with full authority 

to perform all acts which the 

Administrator is authorized to perform: 

(1) Chief of Staff; 

(2) General Counsel; 

(3) Chief Operating Officer; 

(4) Associate Administrator, Office of 

Disaster Assistance; and 

(5) Regional Administrator for Region 

8. 

(b) Notwithstanding the provisions of 

SBA Standard Operating Procedure 00 

01 2, ‘‘absence from the office,’’ as used 

in reference to myself in paragraph (a) 

above, means the following: 

(1) I am not present in the office and 

cannot be reasonably contacted by 

phone or other electronic means, and 

there is an immediate business necessity 

for the exercise of my authority; or 

(2) I am not present in the office and, 

upon being contacted by phone or other 

electronic means, I determine that I 

cannot exercise my authority effectively 

without being physically present in the 

office. 

(c) An individual serving in an acting 

capacity in any of the positions listed in 

subparagraphs (a)(1) through (5), unless 

designated as such by the 

Administrator, is not also included in 

this Line of Succession. Instead, the 

next non-acting incumbent in the Line 

of Succession shall serve as Acting 

Administrator. 

(d) This designation shall remain in 

full force and effect until revoked or 

superseded in writing by the 

Administrator, or by the Deputy 

Administrator when serving as Acting 

Administrator. 

(e) Serving as Acting Administrator 

has no effect on the officials listed in 

subparagraphs (a)(1) through (5), above, 

with respect to their full-time position’s 

authorities, duties and responsibilities 

(except that such official cannot both 

recommend and approve an action). 

Dated: March 15, 2012 

Karen G. Mills, 

Administrator. 

[FR Doc. 2012–8015 Filed 4–3–12; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

Delegation of Authority; Delegation of 

Authority No. 24 to the Chief Operating 

Officer 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice of delegation of 

authority. 

DATES: Effective March 15, 2012. 

SUMMARY: This is notice that the 

Administrator of Small Business 

Administration (SBA) has delegated to 

the Chief Operating Officer (COO) of 

SBA management and supervisory 

authority, with certain limited 

exceptions noted below, over the Office 

of the Chief Information Officer and the 

Office of Management and 

Administration, and responsibility for 

coordinating and collaborating with 

other relevant officers within the 

Agency so as to achieve the mission and 

goals of the Agency. 


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