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[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Notices]
[Pages 15559-15560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8223]

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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38421; File No. SR-OCC-97-03]

Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change Modifying The Options Clearing Corporation's Restated 
Certificate of Incorporation and By-Laws

March 19, 1997.
    Pursuant to Section 19(b)(1)\1\ of the Securities Exchange Act of 
1934 (``Act''), notice is hereby given that on February 18, 1997, The 
Options Clearing Corporation (``OCC'') 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 
primarily by OCC. The Commission is publishing this notice and order to 
solicit comments from interested persons on the proposed rule change 
and to grant accelerated approval of the proposed rule change.
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    \1\15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change modifies OCC's Restated Certificate of 
Incorporation and By-Laws to extend each public director's term on 
OCC's Board of Directors (``Board'') from a maximum of four consecutive 
years to a maximum of six consecutive years.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\2\
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    \2\ The Commission has modified the text of the summaries 
prepared by OCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to modify OCC's Restated 
Certificate of Incorporation and By-Laws in order to provide greater 
continuity of leadership and more meaningful representation on OCC's 
Board by

[[Page 15560]]

extending each public director's term on the Board from a maximum of 
four consecutive years to a maximum of six consecutive years. Under the 
proposed rule change, public directors elected prior to 1999 shall 
serve a maximum of three consecutive two-year terms, and public 
directors elected in 1999 or thereafter shall serve a maximum of two 
consecutive three-year terms. On October 16, 1992, the Commission 
approved a proposed rule change extending a public director's term from 
one two-year term to two consecutive two-year terms.\3\ OCC believes 
that the reasons supporting Commission approval of that proposed rule 
change are very similar to the reasons for the present proposed rule 
change. In particular, OCC`s business has been and continues to be 
increasingly complex. A public director may find that two two-year 
terms are still insufficient time to prepare for meaningful 
administration and interpretation of OCC's rules, operations, and 
policies and for input of meaningful guidance once the public director 
has gained the necessary knowledge and expertise. Because each public 
director's term would be limited to a total of six consecutive years, 
diversity in that position will still be preserved.
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    \3\ Securities Exchange Act Release No. 31329 (October 16, 
1992), 57 FR 48414.
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    OCC believes the proposed rule change is consistent with the 
requirements of Section 17A of the Act \4\ and the rules and 
regulations thereunder because the proposed rule change enhances the 
ability of public directors to have meaningful input on the Board and 
contributes to the fair representation of OCC's members in the 
selection of its directors and administration of its affairs.
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    \4\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    OCC does not believe that the proposed rule change will impose any 
burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    Written comment were not and are not intended to be solicited with 
respect to the proposed rule change and none have been received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Section 17A(b)(3)(C) of the Act states that the rules of a clearing 
agency must assure a fair representation of its shareholders and 
participants in the selection of its directors and administration of 
its affairs.\5\ The Commission believes that the proposed modification 
to OCC's Restated Certificate of Incorporation and By-Laws to extend 
each public director's term on the Board from a maximum of four 
consecutive years to a maximum of six consecutive years is consistent 
with OCC's obligations under Section 17A of the Act. The proposed rule 
change should result in OCC's Board having greater continuity of 
leadership and more meaningful representation. Due to the increasing 
complexity of OCC's business, continuity of leadership has become more 
important to the proper functioning of OCC. Allowing a public 
director's maximum tenure to extend to six consecutive years will 
enhance the continuity of leadership on OCC's Board and still preserve 
the requirement of fair representation under the Act.
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    \5\ 15 U.S.C. 78q-1(b)(3)(C).
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    OCC has requested that the Commission find good cause for approving 
the proposed rule change prior to the thirtieth day after the date of 
publication of notice of the filing. The Commission finds good cause 
for approving the proposed rule change prior to the thirtieth day after 
the date of publication of notice of the filing because accelerated 
approval will allow OCC to implement the new term structure without 
disrupting the current composition of the OCC Board.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
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 inspection and copying in the 
Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of OCC. All 
submissions should refer to File No. SR-OCC-97-03 and should be 
submitted by June 22, 1997.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-OCC-97-03) be and hereby is 
approved on an accelerated basis.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-8223 Filed 3-31-97; 8:45 am]
BILLING CODE 8010-01-M
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