Federal Register / Vol. 77, No. 70 / Wednesday, April 11, 2012 / Notices 21819 

1 15 U.S.C. 78q. 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(1). 

temperature, humidity, and radiation 

levels consistent with the spent fuel 

pool water at saturation conditions for 

an extended period. 

1.3 Power supplies: Instrumentation 

channels shall provide for power 

connections from sources independent 

of the plant alternating current (ac) and 

direct current (dc) power distribution 

systems, such as portable generators or 

replaceable batteries. Power supply 

designs should provide for quick and 

accessible connection of sources 

independent of the plant ac and dc 

power distribution systems. Onsite 

generators used as an alternate power 

source and replaceable batteries used for 

instrument channel power shall have 

sufficient capacity to maintain the level 

indication function until offsite resource 

availability is reasonably assured. 

1.4 Accuracy: The instrument shall 

maintain its designed accuracy 

following a power interruption or 

change in power source without 

recalibration. 

1.5 Display: The display shall 

provide on-demand or continuous 

indication of spent fuel pool water level. 

2. The spent fuel pool 

instrumentation shall be maintained 

available and reliable through 

appropriate development and 

implementation of a training program. 

Personnel shall be trained in the use 

and the provision of alternate power to 

the safety-related level instrument 

channels. 

[FR Doc. 2012–8669 Filed 4–10–12; 8:45 am] 

BILLING CODE 7590–01–P 

POSTAL SERVICE 

Board of Governors; Sunshine Act 

Meeting 

Board Votes To Close March 30, 2012, 

Meeting 

By telephone vote on March 30, 2012, 

members of the Board of Governors of 

the United States Postal Service met and 

voted unanimously to close to public 

observation its meeting held in 

Washington, DC, via teleconference. The 

Board determined that no earlier public 

notice was possible. 

ITEMS CONSIDERED: 

1. Strategic Issues. 

2. Financial Matters. 

GENERAL COUNSEL CERTIFICATION: The 

General Counsel of the United States 

Postal Service has certified that the 

meeting was properly closed under the 

Government in the Sunshine Act. 

CONTACT PERSON FOR MORE INFORMATION: 

Requests for information about the 

meeting should be addressed to the 

Secretary of the Board, Julie S. Moore, 

at (202) 268–4800. 

Julie S. Moore, 

Secretary. 

[FR Doc. 2012–8868 Filed 4–9–12; 4:15 pm] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549–0213. 

Extension: Rule 17g–2, SEC File No. 270– 

564, OMB Control No. 3235–0628. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rule 17g–2 (17 CFR 240.17g–2) under 

the Securities Exchange Act of 1934 (15 

U.S.C. 78a et seq.) (‘‘Exchange Act’’). 

Rule 17g–2, ‘‘Records to be made and 

retained by nationally recognized 

statistical rating organizations,’’ 

implements the Commission’s 

recordkeeping rulemaking authority 

under Section 17(a) of the Exchange 

Act.1 The rule requires a Nationally 

Recognized Statistical Rating 

Organization (‘‘NRSRO’’) to make and 

retain certain records relating to its 

business and to retain certain other 

business records, if such records are 

made. The rule also prescribes the time 

periods and manner in which all these 

records must be retained. The 

Commission estimates that the burden 

associated with Rule 17g–2 is 2,987, 

which includes one-time reporting 

burdens for processing reports, and a 

cost of $5,933, which includes a onetime cost for recordkeeping software. 

The Commission may not conduct or 

sponsor a collection of information 

unless it displays a currently valid 

control number. No person shall be 

subject to any penalty for failing to 

comply with a collection of information 

subject to the PRA that does not display 

a valid OMB control number. 

Background documentation for this 

information collection may be viewed at 

the following Web site, http:// 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: 

Shagufta_Ahmed@omb.eop.gov; and (ii) 

Thomas Bayer, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way, 

Alexandria, VA 22312 or send an email 

to: PRA_Mailbox@sec.gov. Comments 

must be submitted to OMB within 30 

days of this notice. 

Dated: April 5, 2012. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8715 Filed 4–10–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66742; File No. SR–OCC– 

2012–05] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Relating to 

Rescinding a Policy Interpretation 

Affecting Certain Adjustments 

April 5, 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 26, 

2012, The Options Clearing Corporation 

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

Exchange Commission (‘‘Commission’’) 

the proposed rule change described in 

Items I, II, and III below, which items 

have been prepared primarily by OCC. 

OCC filed the proposed rule change 

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

Act and Rule 19b–4(f)(1) 4 thereunder. 

I. Self-Regulatory Organization’s 

Statement of Terms of Substance of the 

Proposed Rule Change 

The proposed rule change would 

rescind a policy interpretation adopted 

by the OCC Securities Committee 

relating to the possible reclassification 

of recurrent cash dividends for 

adjustment purposes. A conforming 

change would also be made to the 

corresponding policy applicable to 

security futures. 


wreier-aviles on DSK5TPTVN1PROD with NOTICES
21820 Federal Register / Vol. 77, No. 70 / Wednesday, April 11, 2012 / Notices 

II. Self-Regulatory Organization’s 

Statement of Purpose of, and Statutory 

Basis for, the Proposed Rule Change 

In its filing with the Commission, 

OCC included statements concerning 

the purpose 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. 

A. Self-Regulatory Organization’s 

Statement of Purpose of, and Statutory 

Basis for, the Proposed Rule Change 

Under Article VI, Section 11 of the 

OCC By-Laws, the Securities Committee 

(‘‘Committee’’), (which is comprised of 

representatives of all participant options 

exchanges and OCC) may adopt 

statements of policy or interpretations 

pertaining to adjustments to the terms of 

listed options in response to corporate 

events. All adjustments to particular 

options are determined on a case by 

case basis by adjustment panels of the 

Committee convened for that purpose. 

Interpretation and Policy .01 

(‘‘Interpretation’’) under Article VI, 

Section 11A of OCC’s By-Laws provides 

that cash dividends or distributions by 

the issuer of the underlying security that 

are ‘‘non-ordinary’’ will normally result 

in an adjustment to the terms of listed 

stock options. In 2010, an amendment 

(the ‘‘Amendment’’) was effected to the 

Interpretation, and to the corresponding 

interpretation under Section 3 of Article 

XII (applicable to security futures), 

under which the Committee could 

under certain conditions cease adjusting 

for recurring cash dividends previously 

deemed to be non-ordinary dividends 

based on subsequent facts suggesting 

that the dividends should be reclassified 

as ‘‘ordinary’’. (OCC and not the 

Committee determines adjustment made 

under Article XII, Section 3 although 

one of the criteria for OCC to use is 

‘‘consistency with the actions of the 

Securities Committee in making 

adjustments to options on the same 

underlying interest’’.) 

The Amendment set forth the 

conditions under which the Committee 

could cease adjusting for non-ordinary 

cash dividends as: (i) The issuer 

discloses that it intends to pay such 

dividends or distributions on a quarterly 

or other regular basis, (ii) the issuer has 

paid such dividends or distributions for 

four or more consecutive months or 

quarters or two or more years after the 

initial payment whether or not the 

amounts paid were the same from 

period to period, or (iii) the Committee 

determines for other reasons that the 

issuer has a policy or practice of paying 

such dividends or distributions on a 

quarterly or other regular basis. In 

fairness to existing holders of open 

interest who may have assumed option 

positions with the belief that the 

Committee would continue to adjust for 

these recurring ‘‘special’’ dividends, the 

Amendment was made effective only for 

dividends and distributions announced 

after February 1, 2012. 

The purpose of this rule change is to 

rescind the change in policy allowing 

reclassification of certain dividends that 

was to be implemented on February 1, 

2012, under the aforementioned 

Amendment. 

1. Background 

The Amendment was prompted by a 

series of cash dividends declared by 

Diamond Offshore Corporation (‘‘DO’’). 

DO characterized these dividends as 

‘‘special’’ and differentiated them from 

the company’s ‘‘regular’’ cash 

dividends. The ‘‘special’’ and ‘‘regular’’ 

DO dividends have customarily gone 

‘‘ex-distribution’’ on the same date, and 

DO has declared a special dividend for 

every quarter since the fourth quarter of 

2007. Initially, the Committee deemed 

these ‘‘special’’ dividends to be nonordinary under the Interpretation and 

adjusted listed options in response. 

However, the frequent adjustment to DO 

listed options in response to the 

recurrent special dividends caused 

serious operational problems in terms of 

option symbol and series proliferation 

that in turn adversely affected liquidity 

for the adjusted series. (Volume tends to 

gravitate to the standard option symbol 

and series at the expense of the adjusted 

option symbol and series.) The 

Committee and others felt that such DO 

dividends had been declared so 

consistently and predictably that they 

should no longer be considered ‘‘nonordinary’’ for adjustment purposes. 

Accordingly, the Committee adopted the 

Amendment. 

As the February 1, 2012, effective date 

approached, OCC and the Committee 

became aware of investor questions and 

concerns regarding the application of 

the reclassification policy. Consistent 

with other adjustment provisions, the 

Amendment was written to provide the 

Committee with discretion to respond to 

future events. Assuming the criteria 

referenced above are satisfied, the 

Amendment provides that the 

Committee may exercise its best 

judgment to determine on a case by case 

basis whether a ‘‘special’’ dividend will 

be reclassified as ordinary so that 

adjustments on the overlying options 

and futures would cease. However, in 

considering investor questions and 

concerns, OCC and the Committee 

became aware that investors sought 

more definitive guidance about the 

likelihood of individual decisions under 

the Amendment. For example, although 

the Amendment indicates the 

Committee may reclassify special 

dividends as ordinary, it does not 

express criteria that will aid investors in 

anticipating when the Committee will 

reclassify such dividends. The 

Committee considered a range of 

hypothetical cases and found it difficult 

to identify and articulate in advance 

clear, specific considerations that would 

lead to particular outcomes across the 

wide range of cases that the Committee 

may be called upon to consider. The 

Committee was also concerned that if 

the Amendment was further modified to 

make its applications ‘‘automatic’’ and 

thereby predictable, it could be ‘‘locked 

in’’ to actions it would otherwise deem 

inadvisable (for example, not adjusting 

for a dramatically large special dividend 

declared after adjustments 

‘‘automatically’’ ceased). In addition, 

the Committee was informed that 

announcing decisions to cease adjusting 

for recurring special dividends at the 

time of the final adjustment, as was the 

intention under the Amendment and 

was announced in OCC Information 

Memos, did not provide enough 

guidance to traders. (For example, 

traders of 2014 LEAPS options do not 

want to wait until the 2012 special 

dividend to learn whether the 

anticipated 2013 dividend would be 

reclassified as ordinary.) 

In view of the uncertain application of 

the Amendment, the Committee decided 

to adjust for the February 2012 DO 

special dividend and to not take the 

opportunity afforded by the 

Amendment to cease adjusting for 

future DO special dividends. While the 

decision not to reclassify was within the 

discretion of the Committee as set forth 

in the Amendment and was explained 

in OCC information memoranda, it 

appears to have caused further investor 

confusion. Therefore, the Committee 

recommended to the Board of Directors 

of OCC that OCC seek approval to 

rescind the reclassification policy as 

provided in the Amendment. 

2. Rationale for the Proposal To Amend 

the OCC By-Laws 

OCC and the Committee especially 

note three factors which favor 

rescinding the re-classification policy: 

(1) An industry change to options 

symbology (implemented after the 

adoption of the rescission policy) has 

substantially alleviated the operational 


wreier-aviles on DSK5TPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 70 / Wednesday, April 11, 2012 / Notices 21821 

5See Exchange Act Release Nos. 34–58059 (June 

30, 2008), 73 FR 36367 (July 9, 2008); 34–59442 

(February 24, 2009), 74 FR 9654 (March 5, 2009); 

and 34–62879 (September 9, 2010), 75 FR 56631 

(September 16, 2010). Consistent with past practice, 

the interpretative guidance will be available on 

OCC’s public Web site but not incorporated into 

OCC’s By-Laws and Rules. 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

burdens associated with recurrent 

adjustments (especially option symbol 

proliferation), which were highlighted 

in the instance of DO (With this change 

in symbology, all adjusted series can 

normally be housed under the standard 

option symbol, dramatically reducing 

option symbol proliferation.); (2) OCC 

and the Committee believe alleviation of 

investor uncertainty is of paramount 

importance and have concluded that 

attempts to further modify the 

Amendment to provide more specific 

guidance about the application of the 

Amendment to particular cases may be 

complicated and thereby create even 

more uncertainty for investors; and (3) 

If the reclassification policy is 

rescinded, non-ordinary dividends 

which have occasioned adjustments in 

the past will ordinarily continue to 

occasion adjustments in the future and 

thus alleviate investor uncertainty. 

The reclassification policy applied to 

listed options was discussed in and 

published in interpretative guidance, 

which will be updated to reflect its 

rescission.5 Clean and marked copies of 

the updated interpretative guidance are 

available as described below. The 

marked copy shows changes from the 

current language. 

* * * * * 

The proposed change is consistent 

with Section 17A of the Act because it 

facilitates the prompt and accurate 

clearance and settlement of securities 

transactions and the protection of 

investors and reduces unnecessary costs 

and burdens on investors and persons 

facilitating transactions on their behalf. 

It does so in response to investor 

feedback by reducing uncertainty 

regarding adjustments for certain cash 

dividends and distributions. 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 will have any 

impact or impose any burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

OCC has not solicited and does not 

intend to solicit comments regarding 

this proposed rule change. OCC has not 

received any unsolicited written 

comments from interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change was filed 

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

Act and paragraph (f)(1) of Rule 19b–4 

thereunder and therefore became 

effective on filing although OCC will 

delay the implementation of the rule 

change until it is deemed certified 

under CFTC Regulation § 40.6. At any 

time within sixty days of the filing of 

such rule change, the Commission 

summarily may temporarily suspend 

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 may be 

submitted by using 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 No. SR–OCC–2012– 

05 on the subject line. 

• Paper comments should be sent 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–2012–05. 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 Room, 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 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/components/

docs/legal/rules_and_bylaws/sr_occ_12_

05.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–2012–05 and should 

be submitted on or before May 2, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8708 Filed 4–10–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66743; File No. SR–CBOE– 

2012–034] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Correct Hyperlink in 

Rule 5.5A 

April 5, 2012. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on April 2, 

2012, Chicago Board Options Exchange, 

Incorporated (the ‘‘Exchange’’ or 

‘‘CBOE’’) filed with the Securities and 

Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 


wreier-aviles on DSK5TPTVN1PROD with NOTICES