[Federal Register Volume 89, Number 38 (Monday, February 26, 2024)]
[Notices]
[Pages 14121-14122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03776]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99568; File No. SR-OCC-2023-007]


Self-Regulatory Organizations; Options Clearing Corporation; 
Notice of Designation of Longer Period for Commission Action on 
Proceedings To Determine Whether To Approve or Disapprove a Proposed 
Rule Change, as Modified by Partial Amendment No. 1 and Amendment No. 
2, Concerning Modifications to the Amended and Restated Stock Options 
and Futures Settlement Agreement Between the Options Clearing 
Corporation and the National Securities Clearing Corporation

February 20, 2024.
    On August 10, 2023, the Options Clearing Corporation (``OCC'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change SR-OCC-2023-007 (``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 modify the 
Amended and Restated Stock Options and Futures Settlement Agreement 
dated August 5, 2017, between OCC and National Securities Clearing 
Corporation (``NSCC''), OCC's rules related to liquidity risk 
management, and OCC's rules related to default management in connection 
with the proposed modifications to the Existing Accord.\3\ The Proposed 
Rule Change was published for public comment in the Federal Register on 
August 30, 2023.\4\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Notice of Filing infra note 4, at 88 FR 59976.
    \4\ Securities Exchange Act Release No. 98215 (Aug. 24, 2023), 
88 FR 59976 (Aug. 30, 2023) (File No. SR-OCC-2023-007) (``Notice of 
Filing''). OCC also filed a related advance notice (SR-OCC-2023-801) 
(``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 August 30, 2023. Securities Exchange Act Release 
No. 98214 (Aug. 24, 2023), 88 FR 59988 (Aug. 30, 2023) (File No. SR-
OCC-2023-801).
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    On September 25, 2023, pursuant to section 19(b)(2) of the Exchange 
Act,\5\ the Commission designated a longer period within which to 
approve, disapprove, or institute proceedings to determine whether to 
approve or

[[Page 14122]]

disapprove the Proposed Rule Change.\6\ On November 8, 2023, OCC filed 
a Partial Amendment No. 1 to the Proposed Rule Change.\7\ On November 
14, 2023, the Commission published notice of Partial Amendment No. 1 
and instituted proceedings, pursuant to section 19(b)(2)(B) of the 
Exchange Act,\8\ to determine whether to approve or disapprove the 
proposed rule change, as modified by the Partial Amendment No. 1.\9\ On 
January 23, 2024, OCC filed Amendment No. 2 to the Proposed Rule 
Change, which was published in the Federal Register for public comment 
on January 30, 2024.\10\ The Commission has received comments regarding 
the Proposed Rule Change.\11\
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    \5\ 15 U.S.C. 78s(b)(2).
    \6\ Securities Exchange Act Release No. 98508 (Sep. 25, 2023), 
88 FR 67407 (Sep. 29, 2023) (File No. SR-OCC-2023-007).
    \7\ Partial Amendment No. 1 delays implementation of the 
proposed change; however, Partial Amendment No. 1 was amended and 
replaced by Amendment No. 2. See Notice of Amendment infra note 10, 
at 89 FR 5974.
    \8\ 15 U.S.C. 78s(b)(2)(B).
    \9\ See Securities Exchange Act Release No. 98932 (Nov. 14, 
2023), 88 FR 80781 (Nov. 20, 2023) (File No. SR-OCC-2023-007).
    \10\ See Securities Exchange Act Release No. 99426 (Jan. 24, 
2024), 89 FR 5974 (Jan. 30, 2024) (File No. SR-OCC-2023-007) 
(``Notice of Amendment''). Amendment No. 2 adds a second phase of 
changes to the proposed rule change. The changes added in Phase 2 
include improved information sharing between OCC and NSCC and are 
designed to facilitate the shortening of the standard settlement 
cycle for most broker-dealer transactions from T+2 to T+1. See 
Securities Exchange Act Release No. 96930 (Feb. 15, 2023), 88 FR 
13872 (Mar. 6, 2023) (File No. S7-05-22).
    \11\ Comments on the Advance Notice are available at https://www.sec.gov/comments/sr-occ-2023-801/srocc2023801.htm. The 
Commission received one comment supporting the proposed changes. See 
comment from John P. Davidson, Principal, Pirnie Advisory (Oct. 4, 
2023), available at https://www.sec.gov/comments/sr-occ-2023-801/srocc2023801-268179-645042.htm. Since the proposal contained in the 
Advance Notice was also filed as a proposed rule change, 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. Comments on the Proposed Rule Change are 
available at https://www.sec.gov/comments/sr-occ-2023-007/srocc2023007.htm. The Commission received comments on the proposed 
rule change that express concerns unrelated to the substance of the 
filing. See, e.g., comment from Gregory Englebert (Feb. 2, 2024) 
(raising concerns about a conflict of interest in the role of 
Financial Risk Management Officers as well as margin calls) comment 
from Curtis H. (Feb. 3, 2024) (referencing short selling and 
margin), and comment from CK Kashyap (Feb. 5, 2024) (referring to 
broker risk management in response to margin).
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    Section 19(b)(2) of the Exchange Act \12\ provides that proceedings 
to determine whether to approve or disapprove a proposed rule change 
must be concluded within 180 days of the date of publication of notice 
of filing of the proposed rule change. The time for conclusion of the 
proceedings may be extended for up to 60 days if the Commission 
determines that a longer period is appropriate and publishes the 
reasons for such determination.\13\ The 180th day after publication of 
the Notice in the Federal Register is February 26, 2024.
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    \12\ 15 U.S.C. 78s(b)(2).
    \13\ 15 U.S.C 78s(b)(2)(B)(ii)(II).
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    The Commission is extending the period for Commission action on the 
Proposed Rule Change, as modified by Partial Amendment No. 1 and 
Amendment No. 2 (hereinafter, the ``Proposed Rule Change''). The 
Commission finds that it is appropriate to designate a longer period 
within which to take action on the Proposed Rule Change so that the 
Commission has sufficient time to consider the issues raised by the 
Proposed Rule Change and to take action on the Proposed Rule Change. 
Accordingly, pursuant to section 19(b)(2)(B)(ii)(II) of the Exchange 
Act,\14\ the Commission designates April 26, 2024, as the date by which 
the Commission should either approve or disapprove the Proposed Rule 
Change SR-OCC-2023-007.
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    \14\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-03776 Filed 2-23-24; 8:45 am]
BILLING CODE 8011-01-P