7062 Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 

32See note 5, supra. 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(1). 

4 17 CFR 240.19b–4. 

these same reasons, the proposed 

change will reduce systemic risk 

because it will promote confidence that 

OCC will be able to continue operating 

even if it suffers business losses. 

Anticipated Effect on and Management 

of Risk 

OCC believes that the proposed 

change will reduce OCC’s overall level 

of risk because it will help ensure that 

OCC will be able to continue to provide 

its clearing services even if it suffers 

significant business losses. As described 

above, the proposed change includes a 

significant infusion of permanent 

capital. In addition, each feature of the 

Capital Plan would help ensure that 

OCC’s capital is sufficient on an ongoing 

basis to allow it to withstand business 

losses, whether resulting from a decline 

in revenue or otherwise. The Fee Policy 

would provide for the Business Risk 

Buffer, which is designed to ensure that 

fees will be sufficient to cover projected 

operating expenses. The Refund Policy 

and Dividend Policy both would allow 

for refunds of fees or payment of 

dividends, respectively, only to the 

extent that they would allow OCC to 

maintain shareholders’ equity at the 

Target Capital Requirement. They 

would also prohibit refunds and 

dividends when Class C Common Stock 

is outstanding under the Replenishment 

Capital Plan and OCC was in the 

process of rebuilding its capital base. In 

addition, the Replenishment Capital 

Plan would establish a mandatory 

mechanism for the contribution of 

additional capital by OCC’s stockholder 

exchanges in the event capital fell below 

desired levels. Together these features of 

the Capital Plan help ensure that OCC 

maintains levels of capital sufficient to 

allow it to absorb substantial business 

losses and meet its increased 

responsibilities imposed upon it as a 

systemically important financial market 

utility, which in turn helps reduce 

OCC’s overall level of risk. 

III. Date of Effectiveness of the Advance 

Notice and Timing for Commission 

Action 

The designated clearing agency may 

implement this change if it has not 

received an objection to the proposed 

change within 60 days of the later of (i) 

the date that the Commission receives 

the notice of proposed change, or (ii) the 

date the Commission receives any 

further information it requests for 

consideration of the notice. The 

designated clearing agency shall not 

implement this change if the 

Commission has an objection. 

The Commission may, during the 60- 

day review period, extend the review 

period for an additional 60 days for 

proposed changes that raise novel or 

complex issues, subject to the 

Commission providing the designated 

clearing agency with prompt written 

notice of the extension. The designated 

clearing agency may implement a 

change in less than 60 days from the 

date of receipt of the notice of proposed 

change by the Commission, or the date 

the Commission receives any further 

information it requested, if the 

Commission notifies the designated 

clearing agency in writing that it does 

not object to the proposed change and 

authorizes the designated clearing 

agency to implement the change on an 

earlier date, subject to any conditions 

imposed by the Commission. 

The designated clearing agency shall 

post notice on its Web site of proposed 

changes that are implemented. 

The proposal shall not take effect 

until all regulatory actions required 

with respect to the proposal are 

completed.32

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing. 

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 rule-comments@

sec.gov. Please include File Number SR– 

OCC–2014–813 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–OCC–2014–813. 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 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 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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of OCC and on OCC’s Web site 

http://www.optionsclearing.com/about/

publications/bylaws.jsp. 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– 

2014–813 and should be submitted on 

or before February 24, 2015. 

By the Commission. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–02566 Filed 2–6–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74198; File No. SR– 

NASDAQ–2015–007] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Rules of The NASDAQ Options Market 

Regarding Sharing of Risk Settings 

February 3, 2015. 

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 January 

28, 2015, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend the 

rules of The NASDAQ Options Market 

(‘‘NOM’’), pursuant to Section 19(b)(1) 

of the Securities Exchange Act of 1934 

(‘‘Act’’) 3 and Rule 19b–4 thereunder,4 to 

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Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 7063 

5 A ‘‘Participant’’ or ‘‘Options Participant’’ is a 

firm or organization that is registered with the 

Exchange pursuant to Chapter II of the NOM Rules 

for purposes of participating in options trading on 

NOM as a ‘‘Nasdaq Options Order Entry Firm’’ or 

‘‘Nasdaq Options Market Maker’’. The term 

‘‘Nasdaq Options Market Maker’’ or ‘‘Options 

Market Maker’’ means an Options Participant 

registered with the Exchange for the purpose of 

making markets in options contracts traded on the 

Exchange and that is vested with the rights and 

responsibilities specified in Chapter VII of the NOM 

Rules. The terms ‘‘Nasdaq Options Order Entry 

Firm’’ or ‘‘Order Entry Firm’’ or ‘‘OEF’’ mean those 

Options Participants representing as agent 

Customer Orders on NOM and those non-Market 

Maker Participants conducting proprietary trading. 

A ‘‘Clearing Participant’’ means a Participant that 

is self-clearing or a Participant that clears NOM 

Transactions for other Participants of NOM. The 

term ‘‘Trading System’’ means the automated 

trading system used by NOM for the trading of 

options contracts. See Chapter I, Section 1, 

Definitions, of the NOM Rules. 

6 See Chapter VI, Trading Systems, Section 15, 

Submission for Clearance, Subsection (a). 

7 See Chapter VII, Section 8, Letters of Guarantee. 

8 See Securities Exchange Act Release No. 64948 

(July 22, 2011), 76 FR 45308 (July 28, 2011) (SR– 

NASDAQ–2011–077). The Mechanism provides 

protection to participants from the risk of multiple 

executions across multiple series of an option. 

Quoting across many series in an option creates the 

possibility of ‘‘rapid fire’’ executions that can create 

large, unintended principal positions that expose 

market makers, who are required to continuously 

quote in assigned options, to potentially significant 

market risk. Participants may establish a specified 

time period, not to exceed 15 seconds, within 

which a counting program will count the number 

of contracts traded in an option by such Participant. 

When the Participant has traded a certain number 

of contracts during the specified time period, the 

Risk Monitor Mechanism will automatically remove 

such Participant’s quotations from the Exchange’s 

disseminated quotation in all series of the particular 

option. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

authorize the Exchange to share any 

Participant-designated risk settings in 

the Exchange’s Trading System with the 

Clearing Participant that clears 

transactions on behalf of the 

Participant.5

The text of the proposed rule change 

is below; proposed new language is 

italicized; proposed deletions are in 

brackets. 

NASDAQ Stock Market Rules 

Options Rules 

* * * * * 

Chapter VI, Trading Systems 

Sec. 1–19 No change. 

Sec. 20 Exchange Sharing of 

Participant-Designated Risk Settings 

The Exchange may share any 

Participant-designated risk settings in 

the Trading System with the Clearing 

Participant that clears transactions on 

behalf of the Participant. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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. The 

Exchange 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 the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to adopt 

new Section 20, Exchange Sharing of 

Participant-Designated Risk Settings, in 

Chapter VI, Trading Systems, of the 

NOM Rules in order to authorize the 

Exchange to share any Participantdesignated risk settings in Exchange’s 

Trading System with the Clearing 

Participant that clears transactions on 

behalf of the Participant. Pursuant to 

Chapter II, Participation, Section 2, 

Requirements for Options Participation, 

of the NOM Rules, Options Participants 

must be Options Clearing Participants or 

establish a clearing arrangement with a 

Clearing Participant. Every Clearing 

Participant is responsible for the 

clearance of transactions involving an 

options contract that is effected on or 

through NOM or its facilities or systems 

(‘‘NOM Transactions’’) of each Options 

Participant that gives up such Clearing 

Participant’s name pursuant to a letter 

of authorization, letter of guarantee or 

other authorization (‘‘Letter of 

Guarantee’’) given by such Clearing 

Participant to such Options Participant, 

which authorization must be submitted 

to Nasdaq.6 Further, no Options 

Participant may make any transactions 

on NOM unless a Letter of Guarantee 

providing that the issuing Clearing 

Participant accepts financial 

responsibilities for all NOM 

Transactions made by the guaranteed 

Participant has been issued for such 

Participant by a Clearing Participant and 

filed with Nasdaq Regulation.7

Thus, while not all Participants are 

Clearing Participants, all Participants 

require a Clearing Participant’s consent 

to clear transactions on their behalf in 

order to conduct business on the 

Exchange. Each Participant that 

transacts through a Clearing Participant 

on the Exchange executes a Letter of 

Guarantee which codifies the 

relationship between the Participant 

and the Clearing Participant and 

provides the Exchange with notice of 

which Clearing Participants have 

relationships with which Participants. 

The Clearing Member that guarantees 

the Participant’s transactions on the 

Exchange has a financial interest in 

understanding the risk tolerance of the 

Participant. The proposal would 

provide the Exchange with authority to 

directly provide Clearing Participants 

with information that may otherwise be 

available to such Clearing Participants 

by virtue of their relationship with the 

respective Participants. 

At this time, the risk settings covered 

by this proposal are set forth in Chapter 

VI, Trading Systems, Section 19, Risk 

Monitor Mechanism.8 The Exchange 

may adopt additional rules providing 

for Participant-designated risk settings 

other than those provided in Chapter VI, 

Section 19 that could be shared with a 

Participant’s Clearing Participant under 

the proposal, and the Exchange would 

announce these additional risk settings 

by issuing an Options Trader Alert. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 9 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 10

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

The proposed rule change will allow 

the Exchange to directly provide a 

Participant’s designated risk settings to 

the Clearing Participant that clears 

trades on behalf of the Participant. 

Because a Clearing Participant that 

executes a clearing Letter of Guarantee 

on behalf of a Participant guarantees all 

transactions of that Participant, and 

therefore bears the risk associated with 

those transactions, it is appropriate for 

the Clearing Participant to have 

knowledge of what risk settings the 

Participant may utilize within the 

Exchange’s trading system. The 

proposal will permit Clearing 

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7064 Federal Register / Vol. 80, No. 26 / Monday, February 9, 2015 / Notices 

11 15 U.S.C. 78s(b)(3)(a)(ii). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Participants who have a financial 

interest in the risk settings of 

Participants with whom the Clearing 

Participant has entered into a clearing 

Letter of Guarantee to better monitor 

and manage the potential risks assumed 

by Clearing Participants, thereby 

providing Clearing Participants with 

greater control and flexibility over 

setting their own risk tolerance and 

exposure and aiding Clearing 

Participants in complying with the Act. 

To the extent a Clearing Participant 

might reasonably require a Participant 

to provide access to its risk setting as a 

prerequisite to continuing to clear trades 

on the Participant’s behalf, the 

Exchange’s proposal to share those risk 

settings directly reduces the 

administrative burden on Participants 

and ensures that Clearing Participants 

are receiving information that is up to 

date and conforms to the settings active 

in the Exchange’s trading system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change is not designed to 

address any competitive issues and does 

not pose an undue burden on nonClearing Participants because, unlike 

Clearing Participants, non-Clearing 

Participants do not guarantee the 

execution of a Participant’s transactions 

on the Exchange. The proposal is 

structured to offer the same 

enhancement to all Clearing 

Participants, regardless of size, and 

would not impose a competitive burden 

on any Participant. Any Participant that 

does not wish to share its designated 

risk settings with its Clearing 

Participant could avoid sharing such 

settings by becoming a Clearing 

Participant. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(ii) [sic] of the Act 11 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.12

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or 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 rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2015–007 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2015–007. 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 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. 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– 

NASDAQ–2015–007, and should be 

submitted on or before March 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02511 Filed 2–6–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74196; File No. SR–BOX– 

2015–07] 

Self-Regulatory Organizations; BOX 

Options Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

IM–3120–2 to Rule 3120 To Extend the 

Pilot Program That Eliminated the 

Position Limits for Options on SPDR 

S&P 500 ETF 

February 3, 2015. 

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 January 

26, 2015, BOX Options Exchange LLC 

(the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend IM– 

3120–2 to Rule 3120 to extend the pilot 

program that eliminated the position 

limits for options on SPDR S&P 500 ETF 

mstockstill on DSK4VPTVN1PROD with NOTICES