Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Notices 8917 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(2). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. OCC also filed this change 

as an advance notice under Section 806(e)(1) of the 

Payment, Clearing, and Settlement Supervision Act 

of 2010. 12 U.S.C. 5465(e)(1). Securities Exchange 

Act Release No. 74073 (January 15, 2015), 80 FR 

3287 (January 22, 2014) (SR–OCC–2014–812). The 

Commission did not receive any comments on the 

advance notice. 

3Securities Exchange Act Release No. 73907 

(December 22, 2014), 79 FR 78543 (December 30, 

2014) (SR–OCC–2014–24). 4ELX Futures LP (‘‘ELX’’) previously submitted 

overnight trading activity to OCC, but currently 

does not submit trades from overnight trading 

sessions to OCC. OCC will re-evaluate ELX’s risk 

controls in the event ELX re-institutes its overnight 

trading sessions. 5See CFE–2014–010 at http://cfe.cboe.com/

publish/CFErulefilings/SR-CFE-2014-010.pdf. 

venues if they deem fee structures to be 

unreasonable or excessive. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any written 

comments from members or other 

interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 8 and paragraph (f)(2) of Rule 

19b–4 thereunder.9 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 necessary or appropriate in the 

public interest, for the protection of 

investors, or 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– 

BYX–2015–08 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–BYX–2015–08. 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 

office 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–BYX– 

2015–08 and should be submitted on or 

before March 12, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03401 Filed 2–18–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74268; File No. SR–OCC– 

2014–24] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Approving Proposed Rule Change 

Concerning Extended and Overnight 

Trading Sessions 

February 12, 2015. 

On December 12, 2014, The Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2014–24 

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

Securities Exchange Act of 1934 

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

The proposed rule change was 

published for comment in the Federal 

Register on December 30, 2014.3 The 

Commission did not receive any 

comments on the proposed rule change. 

This order approves the proposed rule 

change. 

I. Description 

This rule change was filed in 

connection with OCC’s proposed change 

to its operations concerning the 

clearance of confirmed trades executed 

in overnight trading sessions offered by 

exchanges for which OCC provides 

clearance and settlement services. OCC 

currently clears overnight trading 

activity for CBOE Futures Exchange, 

LLC (‘‘CFE’’).4 The total number of 

trades submitted to OCC from overnight 

trading sessions is nominal, typically 

less than 3,000 contracts per session. 

However, OCC has recently observed an 

industry trend whereby exchanges are 

offering overnight trading sessions 

beyond traditional hours. Exchanges 

offering overnight trading sessions have 

indicated to OCC that such sessions 

benefit market participants by providing 

additional price transparency and 

hedging opportunities for products 

traded in such sessions, which, in turn, 

promotes market stability.5 In light of 

this trend, OCC proposed to implement 

a framework for clearing trades executed 

in such sessions that includes: (1) 

Qualification criteria used to approve 

clearing members for overnight trading 

sessions, (2) systemic controls to 

identify trades executed during 

overnight trading sessions by clearing 

members not approved for such 

sessions, (3) enhancements to OCC’s 

overnight monitoring of trades 

submitted by exchanges during 

overnight trading sessions, (4) 

enhancements to OCC’s credit controls 

with respect to monitoring clearing 

members’ credit risk during overnight 

trading sessions, including procedures 

for contacting an exchange offering 

overnight trading sessions in order to 

invoke use of the exchange’s kill switch, 

and (5) taking appropriate disciplinary 

action against clearing members who 

attempt to clear during the overnight 

trading sessions without first obtaining 

requisite approvals. These changes 

(described in greater detail below) are 

designed to reduce and mitigate the 


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8918 Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Notices 

6Comparable controls are applied to futures and 

future option trades executed in overnight trading 

sessions currently cleared by OCC, although such 

controls have been implemented by clearing futures 

commission merchants (‘‘clearing FCMs’’) pursuant 

to Commodity Futures Trading Commission 

(‘‘CFTC’’) Regulation 1.73. This requires clearing 

FCMs to monitor for adherence to such controls 

during regular and overnight trading sessions. Some 

of the risk control measures are similar to those 

proposed by OCC for use in clearing securities 

trades in overnight trading sessions. For instance, 

OCC confirmed that CFE maintains kill switch 

capabilities. 

7Clearing members will be required to designate 

a firm account to ensure that OCC has a general lien 

on the assets in the account and can use them to 

satisfy any obligation of the clearing member to 

OCC. 

8Clearing members approved for overnight 

trading sessions who do not meet the Additional 

Margin requirement for a given overnight trading 

session will be treated like a clearing member not 

approved overnight trading sessions, as described 

below. 

9Under OCC Rule 601, OCC has the discretion to 

fix the margin requirement for any account at an 

amount that it deems necessary or appropriate 

under the circumstances to protect the interests of 

clearing members, OCC and the public. 

10As discussed in more detail below, clearing 

members that attempt to participate in overnight 

trading sessions without the necessary approval 

will be subject to a minor rule violation fine. 

risks associated with clearing trades 

executed in overnight trading sessions. 

In addition, the only products that will 

be eligible for clearing in the overnight 

trading sessions are index options and 

index futures products. 

OCC’s framework for determining 

whether to provide clearing services for 

overnight trading sessions offered by an 

exchange is designed to work in 

conjunction with the risk controls of the 

exchange that offers overnight trading 

sessions. OCC will confirm an 

exchange’s risk controls as well as its 

staffing levels as they relate to overnight 

trading sessions to determine if OCC 

may reasonably rely on such risk 

controls to the reduce risk presented to 

OCC by the exchange’s overnight 

trading sessions. Such exchange risk 

controls will consist of: (1) Price 

reasonability checks; (2) controls to 

prevent orders from being executed 

beyond a certain percentage 

(determined by the exchange) from the 

initial execution price; (3) activity based 

protections which focus on risk beyond 

price, such as a high number of trades 

occurring in a set period of time; and (4) 

kill switch capabilities, which may be 

initiated by the exchange and can cancel 

all open quotes or all orders of a 

particular participant. OCC believes that 

confirming the existence of applicable 

pre-trade risk controls as well as 

overnight staffing at the relevant 

exchanges is essential to mitigating risks 

presented to OCC from overnight 

trading sessions.6 OCC believes that 

providing clearing services to exchanges 

offering such sessions is consistent with 

OCC’s mission to provide market 

participants with clearing and risk 

management solutions that respond to 

changes in the marketplace. 

Qualification Criteria 

In order to mitigate risks associated 

with clearing for overnight trading 

sessions, clearing members that 

participate in such trading sessions will 

be required to provide contact 

information to OCC for operational and 

risk personnel available to be contacted 

by OCC during such sessions. In 

addition, OCC will require that clearing 

members participating in an overnight 

trading session post additional margin 

in a designated account in order to 

mitigate the risk that OCC cannot draft 

a clearing member’s bank account 

during an overnight trading session.7

OCC also will adopt a procedure 

whereby, on a quarterly basis, it 

confirms its record of clearing members 

eligible for overnight trading sessions 

with a similar record maintained by 

exchanges offering such overnight 

trading sessions. 

With respect to providing operational 

and risk contacts, under OCC Rule 201, 

each clearing member is required to 

maintain facilities for conducting 

business with OCC and to have a 

representative authorized in the name of 

the clearing member to take all action 

necessary for conducting business with 

OCC be available at the facility during 

such hours as may be specified from 

time-to-time by OCC. Similarly, OCC 

Rules 214(c) and (d) require clearing 

members to ensure that they have the 

appropriate number of qualified 

personnel and to maintain the ability to 

process anticipated volumes and values 

of transactions. OCC will use this 

existing authority to require clearing 

members trading during overnight 

trading sessions to maintain operational 

and risk staff that may be contacted by 

OCC during such sessions. 

OCC will impose upon clearing 

members qualified to participate in 

overnight trading sessions additional 

margin requirement in an amount of the 

lesser of $10 million or 10% of the 

clearing member’s net capital 

(‘‘Additional Margin’’), which will be 

equal to the first monitoring risk 

threshold (described below) and which 

will be collected the morning before 

each overnight trading sessions. 

Clearing members must identify the 

proprietary account that would be 

charged the Additional Margin amount. 

The Additional Margin requirement is 

intended to provide OCC with 

additional margin assets should a 

clearing member’s credit risk increase 

during overnight trading sessions.8 OCC 

will adopt a process whereby each 

morning OCC Financial Risk 

Management staff will assess the 

Additional Margin requirement prior to 

participating in any future overnight 

trading sessions against clearing 

members eligible to participate in 

overnight trading sessions. Clearing 

members that do not have sufficient 

excess margin on deposit with OCC to 

meet the Additional Margin amount will 

be required to deposit additional funds 

with OCC to satisfy the Additional 

Margin requirement.9 This process will 

be adopted under existing rule 

authority. 

Moreover, OCC also will confirm that 

an exchange offering overnight trading 

sessions has adopted a procedure 

whereby such exchange would contact 

OCC when a trader requests trading 

privileges during overnight trading 

sessions. The purpose of this contact is 

to verify that the trader’s clearing firm 

(i.e., the OCC clearing member) is 

approved for overnight trading sessions. 

If the applicable OCC clearing member 

is not approved for overnight trading 

sessions, then the clearing member must 

receive OCC’s approval for overnight 

trading sessions, or the exchange will 

not provide the trader trading privileges 

during overnight trading sessions. 

Moreover, OCC will confirm that an 

exchange offering overnight trading 

sessions has implemented a procedure 

to periodically (i.e., quarterly) validate 

its record of approved clearing firms 

against OCC’s record of clearing 

members approved for overnight trading 

sessions.10 Any discrepancies between 

the two records will be promptly 

resolved by either the clearing member 

obtaining approval from OCC for 

overnight trading sessions, or by the 

exchange revoking the clearing firm’s 

trading privileges for overnight trading 

sessions. 

Systemic Controls 

OCC will implement system changes 

so that trades submitted to OCC during 

overnight trading sessions that have 

been executed by clearing members not 

approved for such trading sessions will 

be reviewed by OCC staff after 

acceptance but before being processed 

(each such trade being a ‘‘Reviewed 

Trade’’). OCC will contact the 

submitting exchange regarding each 

Reviewed Trade in order to determine if 

the trade is a valid trade. If the exchange 

determines that the Reviewed Trade was 

in error such that, as provided in Article 

VI, Section 7(c) of OCC’s By-laws, new 


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Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Notices 8919 

11OCC’s Member Services staff will also receive 

alerts in order to contact clearing members as may 

be necessary. 

or revised trade information is required 

to properly clear the transaction, OCC 

expects the exchange would instruct 

OCC to disregard or ‘‘bust’’ the trade. If 

the exchange determines that the 

Reviewed Trade was not in error, then 

OCC will clear the Reviewed Trade and 

take appropriate disciplinary action 

against the non-approved clearing 

member, as described below. OCC 

believes that clearing the Reviewed 

Trade is appropriate in order to avoid 

potentially harming the clearing 

member approved for overnight trading 

sessions that is on the opposite side of 

the transaction. 

Overnight Monitoring 

OCC will implement additional 

overnight monitoring in order to better 

monitor clearing members’ credit risk 

during overnight trading sessions. Such 

monitoring of credit risk is similar to 

existing OCC practices concerning 

futures cleared during overnight trading 

hours and includes automated processes 

within OCC’s clearing ENCORE to 

measure, by clearing member: (i) The 

aggregate mark-to-market amounts of a 

clearing member’s positions, including 

positions created during overnight 

trading, based on current prices using 

OCC’s Portfolio Revaluation System; (ii) 

the aggregate incremental margin 

produced by all positions resulting from 

transactions executed during overnight 

trading; and (iii) with respect to options 

cleared during overnight trading hours, 

the aggregate net trade premium 

positions resulting from trades executed 

during overnight trading (each of these 

measures being a ‘‘Credit Risk 

Number’’). Hourly credit reports would 

be generated by ENCORE containing the 

Credit Risk Numbers expressed in terms 

of both dollars and, except for the markto-market position values, as a 

percentage of net capital for each 

clearing member trading during 

overnight trading sessions. The Credit 

Risk Numbers are the same information 

used by OCC staff to evaluate clearing 

member exposure during regular trading 

hours and, in addition to OCC’s 

knowledge of its clearing members’ 

businesses, are effective measures of the 

risk presented to OCC by each clearing 

member. OCC’s Operations staff will 

review such reports as they are 

generated and, in the event that any of 

the Credit Risk Numbers for positions 

established by a clearing member during 

an overnight trading session exceed 

established thresholds, staff will alert 

OCC’s Market Risk staff 11 of the 

exceedance in accordance with 

established procedures, as described 

below. 

Market Risk staff will follow a 

standardized process concerning such 

exceedances, including escalation to 

OCC’s management, if required by such 

process. Given the nominal volume of 

trades executed in overnight trading 

sessions that are presently submitted for 

clearance, OCC does not contemplate 

changes in its current staffing levels that 

support overnight clearing activities at 

this time, however, OCC will 

periodically assess and adjust such 

staffing levels, as appropriate. As part of 

the overnight clearing activities, OCC 

has, however, designated an on-call 

Market Risk duty officer who would be 

responsible for reviewing issues that 

arise when clearing for overnight 

trading session and determining what 

measures to be taken as well as 

additional escalation, if necessary. 

With respect to OCC’s escalation 

thresholds, if any Credit Risk Number of 

a clearing member approved for 

overnight trading sessions is $10 million 

or more, or any Credit Risk Number 

equals 10% or more of the clearing 

member’s net capital, OCC’s Operations 

staff will be required to provide email 

notification to Market Risk and Member 

Services staff. If any Credit Risk Number 

of a clearing member not approved for 

overnight trading sessions is $10 million 

or more, or any Credit Risk Number 

equals 10% or more of the clearing 

member’s net capital, OCC’s Operations 

will also notify Market Risk and 

Member Services staff as well as its 

senior management. Such departments 

will take action to prevent additional 

trading by the non-approved clearing 

member, including contacting the 

exchange to invoke use of the 

exchange’s kill switch. 

If any Credit Risk Number of a 

clearing member approved for overnight 

trading sessions is $50 million or more, 

or equals 25% or more of the clearing 

member’s net capital, Operations staff 

will be required to contact, by 

telephone: (i) Market Risk and Member 

Services, (ii) the applicable exchange for 

secondary review, and (iii) the clearing 

member’s designated contacts. The oncall Market Risk duty officer also will 

consider if additional action is 

necessary, which may include 

contacting a designated executive officer 

in order to issue an intra-day margin 

call, increase the clearing member’s 

margin requirement in order to prevent 

the withdrawal of a specified amount of 

excess margin collateral, if any, the 

clearing member has on deposit with 

OCC or contacting the exchange in order 

to invoke the use of its kill switch. 

If any Credit Risk Number is $75 

million or more, or equals 50% or more 

of the clearing member’s net capital, 

Operations staff will be required to 

contact, by telephone, Market Risk staff, 

the on-call Market Risk duty officer and 

a designated executive officer. Such 

officer will be responsible for reviewing 

the situation and determining whether 

to implement credit controls, which are 

described in greater detail below and 

include: Issuing an intra-day margin 

call, increasing a clearing member’s 

margin requirement in order to prevent 

the withdrawal of a specified amount of 

excess margin collateral, if any, the 

clearing member has on deposit with 

OCC, whether further escalation is 

warranted in order for OCC to take 

protective measures pursuant to OCC 

Rule 305, or contact the exchange in 

order to invoke use of its kill switch. 

OCC stated that it chose the above 

described escalation thresholds based 

on its analysis of historical overnight 

trading activity across the futures 

industry. OCC believes that these 

thresholds strike an appropriate balance 

between effective risk monitoring and 

operational efficiency. 

Credit Controls 

In order to address credit risk 

associated with trading during overnight 

trading sessions, and as described 

above, OCC will collect Additional 

Margin from clearing members as well 

as monitor and analyze the impact that 

positions established during such 

sessions have on a clearing member’s 

overall exposure. Should the need arise 

based on threshold breaches described 

above, and pursuant to OCC Rule 609, 

OCC may require the deposit of 

additional margin (‘‘intra-day margin’’) 

by any clearing member that increases 

its incremental risk as a result of trading 

activity during overnight trading 

sessions. Accordingly, a clearing 

member’s positions established during 

such sessions will be incorporated into 

OCC’s intra-day margin process. 

Further, if a clearing member’s exposure 

significantly increases during a time 

when settlement banks are not open to 

process an intra-day margin call, OCC 

will use its current authority under OCC 

Rule 601 to increase a clearing 

member’s margin requirement, which 

will restrict the clearing member’s 

ability to withdraw excess margin 

collateral. The implementation of these 

measures is discussed more fully below. 

In the event that a clearing member’s 

exposure during overnight trading 

sessions causes a clearing member to 

exceed OCC’s intra-day margin call 

threshold for overnight trading sessions, 

OCC will require the clearing member to 


emcdonald on DSK67QTVN1PROD with NOTICES
8920 Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Notices 

12Total risk charge is a number derived from 

STANS outputs and is the sum of expected 

shortfall, stress test charges and any add-on charges 

computed by STANS. STANS is OCC’s proprietary 

margin methodology. 13 In addition, OCC Rule 601 provides OCC with 

the authority to fix the margin requirement for any 

account or any class of cleared contracts at such 

amount as it deems necessary or appropriate under 

the circumstances to protect the respective interests 

of clearing members, OCC and the public. 

14Clearing members frequently deposit margin at 

OCC in excess of requirements. 

15Clearing members will be able to substitute the 

locked-up collateral during normal time frames (i.e., 

6:00 a.m. to 5:00 p.m. (Central Time) for equity 

securities). 16See OCC Rule 1201(b). 

17 15 U.S.C. 78s(b)(2)(C). 

18 15 U.S.C. 78q–1(b)(3)(F). 

deposit intra-day margin equal to the 

increased incremental risk presented by 

the clearing member. Specifically, if a 

clearing member has a total risk 

charge 12 exceeding 25% (a reduction of 

the usual figure of 50%), as computed 

overnight by OCC’s STANS system, and 

a loss of greater than $50,000 from an 

overnight trading session(s), as 

computed by Portfolio Revaluation, 

OCC will initiate an intra-day margin 

call. OCC will know at approximately 

8:30 a.m. (Central Time) if an intra-day 

margin call on a clearing member will 

be initiated based on breaches of these 

thresholds. This ‘‘start of business’’ 

margin call is in addition to daily 

margin OCC collects from clearing 

members pursuant to OCC Rule 605, any 

intra-day margin call that OCC may 

initiate as a result of regular trading 

sessions or special margin call that OCC 

may initiate. 

In addition to, or instead of, requiring 

additional intra-day margin, OCC Rule 

601 13 and OCC’s Clearing Member 

Margin Call Policy will work together to 

authorize Market Risk staff to increase a 

clearing member’s margin requirement 

which may be in an amount equal to an 

intra-day margin call.14 (Any increased 

margin requirement will remain in 

effect until the next business day.) This 

action will immediately prevent 

clearing members from withdrawing any 

excess margin collateral (in the amount 

of the increased margin requirement) 

the clearing member has deposited with 

OCC. With respect to clearing trades 

executed in overnight trading sessions, 

and in the event OCC requires 

additional margin from a clearing 

member, Market Risk staff may use 

increased margin requirements as a 

means of collateralizing the increase in 

incremental risk a clearing member 

incurred during such sessions without 

having to wait for banks to open to 

process an intra-day margin call.15 Such 

action may be taken by OCC instead of, 

or in addition to, issuing an intra-day 

margin call depending on the amount of 

excess margin a clearing member has on 

deposit with OCC and the amount of the 

incremental risk presented by such 

clearing member. OCC believes that the 

expansion of its intra-day margin call 

process as described in the preceding 

paragraph, including OCC’s ability to 

manually increase clearing members’ 

margin requirements, will mitigate the 

risk that OCC is under-collateralized as 

a result of overnight trading hours. 

Moreover, a designated executive 

officer may call an exchange offering 

overnight trading sessions to invoke the 

use of its kill switch. The kill switch 

prevents a clearing member (or the 

market participant clearing through a 

clearing member) from executing trades 

on the exchange during a given 

overnight trading session or, if needed, 

stop all trading during a given overnight 

trading session. Finally, pursuant to 

OCC Rule 305, the Executive Chairman 

or the President of OCC, in certain 

situations, has the authority to impose 

limitations and restrictions on the 

transactions, positions and activities of 

a clearing member. This authority will 

be used, as needed, in the event a 

clearing member accumulates 

significant credit risk during overnight 

trading sessions, or a clearing member’s 

activities during such trading sessions 

otherwise warrant OCC taking 

protective action. 

Rule Enforcement Actions 

In order to deter clearing members 

from attempting to participate in 

overnight trading sessions without 

authorization as well as appropriately 

enforce the above described processes, 

OCC will ensure that any attempt by a 

clearing member to participate in 

overnight trading sessions without first 

obtaining the necessary approval will 

result in the initiation of a rule 

enforcement action against such 

clearing member. As described above, 

clearing members not approved for 

overnight trading sessions that trade 

during such overnight sessions will 

have their trades reviewed by OCC staff. 

Clearing members that attempt to 

participate in overnight trading sessions 

but not obtain the necessary approval to 

do so will be subject to a minor rule 

violation fine.16 In addition, if a clearing 

member’s operational or risk contacts 

for overnight trading sessions were 

unavailable had OCC attempted to 

contact such individuals, the clearing 

member will be subject to a minor rule 

violation fine. OCC has existing 

processes in place to monitor for 

clearing member violations of OCC’s 

rules and such processes will also apply 

to clearing member activity during 

overnight trading sessions. 

II. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act 17

directs the Commission to approve a 

proposed rule change of a selfregulatory organization if it finds that 

the proposed rule change is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to such organization. 

The Commission finds that the 

proposed rule change is consistent with 

Section 17A(b)(3)(F) of the Act,18 which 

requires, among other things, that the 

rules of a clearing agency are 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. Although 

clearing transactions executed in 

overnight trading sessions may present 

additional risk to OCC and the markets 

in general, OCC’s proposal is designed 

to monitor and mitigate these risks and 

thus assure the safeguarding of 

securities and funds which are in OCC’s 

custody or control or for which it is 

responsible. 

By limiting the product set eligible for 

overnight trading sessions to index 

options and index futures products and 

by instituting qualification criteria for 

determining whether to provide clearing 

services for overnight trading sessions 

offered by a particular exchange, OCC 

should be able to better assure the 

safeguarding of securities and funds 

which are in its custody or control. In 

addition, in order to address the risks 

associated with extended trading hours, 

including those associated with OCC 

and clearing members’ inability to 

transfer funds to satisfy margin during 

overnight hours, OCC’s proposed 

framework, which includes a number of 

mechanisms designed to further control 

the risks and safeguard securities and 

funds, should also facilitate the 

safeguarding of securities and funds. 

These mechanisms include (i) clearing 

member qualification criteria; (ii) 

systemic controls to identify trades 

executed by clearing members not 

approved for overnight trading; (iii) 

enhancements to OCC’s overnight 

monitoring of trades submitted by 

exchanges during overnight trading 

sessions; (iv) enhancements to OCC’s 

credit controls with respect to 

monitoring clearing members’ credit 

risk during overnight trading sessions; 

and (v) disciplinary actions for 

unapproved clearing members who 


emcdonald on DSK67QTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 33 / Thursday, February 19, 2015 / Notices 8921 

19 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

20 15 U.S.C. 78s(b)(2). 

21 17 CFR 200.30–3(a)(12). 

attempt to clear during overnight 

trading sessions. 

In particular, OCC’s overnight 

monitoring and escalation mechanism, 

which includes the ability for OCC to 

require additional intra-day margin, 

increase a clearing member’s margin 

requirement, invoke an exchange’s kill 

switch, or use any combination thereof, 

should provide OCC with the necessary 

mechanisms to ensure securities and 

funds which are in its custody or 

control. The obligation for OCC and 

clearing members to maintain and 

enforce adequate staffing by employing 

the use of a designated an on-call 

Market Risk duty officer should also 

help assure that clearing activities and 

margin levels are being adequately 

monitoring during the overnight trading 

hours, which in turn should facilitate 

the safeguarding of securities and funds 

which are in the custody or control of 

OCC or for which it is responsible. 

III. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Act and in particular with the 

requirements of Section 17A of the 

Act 19 and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,20 that the 

proposed rule change (SR–OCC–2014– 

24) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03403 Filed 2–18–15; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice 9043] 

Culturally Significant Object Imported 

for Exhibition Determinations: 

‘‘International Pop’’ Exhibition 

SUMMARY: Notice is hereby given of the 

following determinations: Pursuant to 

the authority vested in me by the Act of 

October 19, 1965 (79 Stat. 985; 22 U.S.C. 

2459), Executive Order 12047 of March 

27, 1978, the Foreign Affairs Reform and 

Restructuring Act of 1998 (112 Stat. 

2681, et seq.; 22 U.S.C. 6501 note, et 

seq.), Delegation of Authority No. 234 of 

October 1, 1999, Delegation of Authority 

No. 236–3 of August 28, 2000 (and, as 

appropriate, Delegation of Authority No. 

257 of April 15, 2003), I hereby 

determine that the object to be included 

in the exhibition ‘‘International Pop,’’ 

imported from abroad for temporary 

exhibition within the United States, is 

of cultural significance. The object is 

imported pursuant to a loan agreement 

with the foreign owner or custodian. I 

also determine that the exhibition or 

display of the exhibit object at the 

Walker Art Center, Minneapolis, MN, 

from on or about April 11, 2015, until 

on or about September 6, 2015, at the 

Dallas Museum of Art, Dallas, TX, from 

on or about October 11, 2015, until on 

or about January 17, 2016, at the 

Philadelphia Museum of Art, 

Philadelphia, PA, from on or about 

February 18, 2016, until on or about 

May 15, 2016, and at possible additional 

exhibitions or venues yet to be 

determined, is in the national interest. 

I have ordered that Public Notice of 

these Determinations be published in 

the Federal Register. 

FOR FURTHER INFORMATION CONTACT: For 

further information, including the object 

list, contact Julie Simpson, AttorneyAdviser, Office of the Legal Adviser, 

U.S. Department of State (telephone: 

202–632–6467). The mailing address is 

U.S. Department of State, SA–5, L/PD, 

Fifth Floor (Suite 5H03), Washington, 

DC 20522–0505. 

Dated: February 11, 2015. 

Kelly Keiderling, 

Principal Deputy Assistant Secretary, Bureau 

of Educational and Cultural Affairs, 

Department of State. 

[FR Doc. 2015–03498 Filed 2–18–15; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF STATE 

[Public Notice 9042] 

Culturally Significant Objects Imported 

for Exhibition Determinations: ‘‘Ships, 

Clocks & Stars: The Quest for 

Longitude’’ 

SUMMARY: Notice is hereby given of the 

following determinations: Pursuant to 

the authority vested in me by the Act of 

October 19, 1965 (79 Stat. 985; 22 U.S.C. 

2459), Executive Order 12047 of March 

27, 1978, the Foreign Affairs Reform and 

Restructuring Act of 1998 (112 Stat. 

2681, et seq.; 22 U.S.C. 6501 note, et 

seq.), Delegation of Authority No. 234 of 

October 1, 1999, and Delegation of 

Authority No. 236–3 of August 28, 2000 

(and, as appropriate, Delegation of 

Authority No. 257 of April 15, 2003), I 

hereby determine that the objects to be 

included in the exhibition ‘‘Ships, 

Clocks & Stars: The Quest for 

Longitude,’’ imported from abroad for 

temporary exhibition within the United 

States, are of cultural significance. The 

objects are imported pursuant to loan 

agreements with the foreign owners or 

custodians. I also determine that the 

exhibition or display of the exhibit 

objects at the Folger Shakespeare 

Library, Washington, DC, from on or 

about March 16, 2015, until on or about 

August 23, 2015, the Mystic Seaport 

Museum, Mystic, Connecticut, from on 

or about September 14, 2015, until on or 

about March 28, 2016, and at possible 

additional exhibitions or venues yet to 

be determined, is in the national 

interest. I have ordered that Public 

Notice of these Determinations be 

published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: For 

further information, including a list of 

the imported objects, contact Paul W. 

Manning, Attorney-Adviser, Office of 

the Legal Adviser, U.S. Department of 

State (telephone: 202–632–6469). The 

mailing address is U.S. Department of 

State, SA–5, L/PD, Fifth Floor (Suite 

5H03), Washington, DC 20522–0505. 

Dated: February 11, 2015. 

Kelly Keiderling, 

Principal Deputy Assistant Secretary, Bureau 

of Educational and Cultural Affairs, 

Department of State. 

[FR Doc. 2015–03497 Filed 2–18–15; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF STATE 

[Public Notice 9041] 

Culturally Significant Objects Imported 

for Exhibition Determinations: 

‘‘Sultans of Deccan India, 1500–1700: 

Opulence and Fantasy’’ 

SUMMARY: Notice is hereby given of the 

following determinations: Pursuant to 

the authority vested in me by the Act of 

October 19, 1965 (79 Stat. 985; 22 U.S.C. 

2459), Executive Order 12047 of March 

27, 1978, the Foreign Affairs Reform and 

Restructuring Act of 1998 (112 Stat. 

2681, et seq.; 22 U.S.C. 6501 note, et 

seq.), Delegation of Authority No. 234 of 

October 1, 1999, and Delegation of 

Authority No. 236–3 of August 28, 2000 

(and, as appropriate, Delegation of 

Authority No. 257 of April 15, 2003), I 

hereby determine that the objects to be 

included in the exhibition ‘‘Sultans of 

Deccan India, 1500–1700: Opulence and 

Fantasy,’’ imported from abroad for 

temporary exhibition within the United 

States, are of cultural significance. The 

objects are imported pursuant to a loan 

agreement with the foreign owner or 


emcdonald on DSK67QTVN1PROD with NOTICES