Federal Register / Vol. 65, No. 238 / Monday, December 11, 2000 / Notices 77413

17 15 U.S.C. 78s(b)(5).

18 17 CFR 200.30–3(a)(12).

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

2Securities Exchange Act Release No. 43276,

(September 11, 2000), 65 FR 56015.

3 17 CFR 240.8c–1 and 240.15c2/1.

4See also no-action letter from Michael A.

Macchiaroli, Associate Director, Division of Market

Regulation, Commission, to William H. Navin,

Executive Vice President and General Counsel,

OCC, (June 15, 2000).

5Non-conforming subordination agreements are

subordination agreements that do not meet the

requirements of Appendix D of Rule 15c3–1.

6As defined, a Related Person is essentially a

person whose account would be a ‘‘proprietary

account’’ under the rules of the Commodity Futures

Trading Commission, but who is nevertheless a

‘‘customer’’ for purposes of the Commission’s

hypothecation rules cited above. Market Makers

who are Related Persons of a clearing member are

deemed to be Associated Market Makers and are

excluded from the Combined Market Maker

Account under Article VI, Section 3(c) of OCC’s ByLaws.

7 15 U.S.C. 78q–1(b)(3)(F).

8 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

this new product by trading them as

soon as possible. Accordingly, the

Commission finds that there is good

cause, consistent with Section 6(b)(5) of

the Act,17 to approve the proposal on an

accelerated basis.

V. Conclusion

It is Therefore Ordered, pursuant to

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

proposed rule change (SR–NYSE–00–

53), is hereby approved on an

accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.18

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–31386 Filed 12–8–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43668; File No. SR–OCC–

99–15]

Self-Regulatory Organizations; The

Options Clearing Corporation; Order

Granting Approval of Proposed Rule

Change Relating to Clearing Member

Affiliates

December 4, 2000.

On November 2, 1999, The Options

Clearing Corporation (‘‘OCC’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’) a

proposed rule change (File No. SR–

OCC–99–15) and on August 11, 2000,

amended the proposed rule change

pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’)1 Notice of the proposal was

published in the Federal Register on

September 15, 2000.2 No comment

letters were received. For the reasons

discussed below, the Commission is

granting approval of the proposed rule

change.

I. Description

The principal purpose of the

proposed rule change is allow certain

affiliates of a clearing member to be

designated as non-customers under the

Commission’s hypothecation rules 3 so

that the affiliates may have their

transactions and positions commingled

in their clearing member’s firm account

and/or proprietary X–M account at OCC

for the purpose of receiving more

favorable clearing margin treatment.4

The proposed rule change creates a

definition of Member Affiliates that

consists of the relevant portion of the

existing definition of Related Person in

OCC’s By-Laws. (For the sake of

economy of expression and consistency,

OCC proposes a replace that portion of

the Related Person definition used to

define Member Affiliate with the term

Member Affiliate.) The proposed rule

change then modifies the definition of

Non-Customer to include a Member

Affiliate that has executed a nonconforming subordination agreement 5

that has been approved by the clearing

member’s designated examining

authority.

Additionally, the proposed rule

change modifies the definition of

Related Person to eliminate

redundancies and to more closely

parallel 17 CFR 1.3(y), which defines

‘‘proprietary account’’ for the purposes

of the Commodity Exchange Act’s

regulations.6 The proposed rule no

longer refers to spouses of ‘‘any such

person’’ (i.e., any officer, director, or

general or special partner) which was

redundant because the rule already

covers spouses of ‘‘any non-customer of

the clearing member,’’ and the

definition of Non-Customer includes

officers, directors, or general or special

partners. Additionally, in order to

conform OCC rules with Section 1.3(y)’s

definition of ‘‘proprietary account,’’ the

proposed rule change clarifies that not

only are spouses and minor dependents

of non-customers Related Persons but

also that the spouses and minor

dependents of certain employees are

also Related Persons.

II. Discussion

Section 17A(b)(3)(F) 7 of the Act

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds

which are in the custody or control of

the clearing agency or for which it is

responsible. For the reasons set forth

below, the Commission believes that

OCC’s proposed rule change is

consistent with OCC’s obligations under

the Act.

The proposed rule change to add and

modify several definitions so that

affiliates may have their transactions

and positions commingled in their

clearing member’s firm account and/or

proprietary X–M account at OCC should

result in a more accurate assessment of

risk and a more appropriate margin

requirement thus further assuring the

safeguarding the securities and funds

within OCC’s control. In addition the

proposed rule change should provide

more consistency with respect to the

interplay of the Commodity Exchange

Act’s regulations with OCC’s rules.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposed

rule change is consistent with the

requirements of the Act and in

particular Section 17A of the Act and

the rules and regulations thereunder.

It is therefore ordered, pursuant to

section 19(b)(2) of the Act, that the

proposed rule change (File No. SR–

OCC–99–15) be and hereby is approved.

For the Commission by the Division of

Market Regulations, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–31380 Filed 12–8–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43645; File No. SR–Phlx–

00–92]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Concerning Reporting, Examination,

Recordkeeping, and Disclosure

Requirements Related to Off-Floor

Trading Organizations and Their

Affiliated Traders

November 30, 2000.

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

Securities Exchange Act of 1934

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

notice is hereby given that on October

11, 2000, the Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in