31596 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Notices 

22 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3See Notice of Filing infra note 4, 87 FR at 20495. 

4Securities Exchange Act Release No. 94583 

(Apr. 1, 2022), 87 FR 20495 (Apr. 7, 2022) (File No. 

SR–OCC–2022–005) (‘‘Notice of Filing’’). 

5The comment on the Proposed Rule Change is 

available at https://www.sec.gov/comments/sr-occ2022-005/srocc2022005.htm. 

6Capitalized terms used but not defined herein 

have the meanings specified in OCC’s Rules and ByLaws, available at https://www.theocc.com/about/ 

publications/bylaws.jsp. 7See generally, 17 CFR 240.17Ad–22(e)(4) and 

(e)(7). 8Securities Exchange Act Release No. 83916 

(Aug. 23, 2018), 83 FR 44076 (Aug. 29, 2018) (File 

No. SR–OCC–2017–020). 

9See supra note 8, 83 FR at 44079. 

10Securities Exchange Act Release No. 82351 

(Dec. 19, 2017), 82 FR 61107, 61111 (Dec. 26, 2017) 

(File No. SR–OCC–2017–020). 

11 Id. 

12 Id. 

13OCC By-Laws Art. VI, Section 27(a)(i), 

regarding default or insolvency of OCC, requires 

OCC to notify various stakeholders if OCC fails to 

comply with an undisputed obligation to pay 

money or deliver property to a Clearing Member for 

a period of thirty days from the date that OCC 

receives notice from the Clearing Member of the 

past due obligation. See Notice of Filing supra note 

4, 87 FR at 20495. 

14Securities Exchange Act Release No. 82351 

(Dec. 19, 2017), 82 FR 61107, 61112 (Dec. 26, 2017) 

(File No. SR–OCC–2017–020). 

15The letter OCC received from the FIA has been 

provided as Exhibit 3A to File No. SR–OCC–2022– 

005. 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2022–015, and 

should be submitted on or before June 

14, 2022. Rebuttal comments should be 

submitted by June 28, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11066 Filed 5–23–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94938; File No. SR–OCC– 

2022–005] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Granting Approval of Proposed Rule 

Change by the Options Clearing 

Corporation Concerning Revisions to 

OCC’s Partial Tear-Up Rules 

May 18, 2022. 

I. Introduction 

On March 22, 2022, the Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2022– 

005 (‘‘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 

amend OCC’s rules regarding OCC’s 

payment obligations and the allocation 

of losses related to the use of Partial 

Tear-Up (defined below) as a recovery 

tool.3 The Proposed Rule Change was 

published for public comment in the 

Federal Register on April 7, 2022.4 The 

Commission received one comment 

regarding the Proposed Rule Change.5

This order approves the Proposed Rule 

Change. 

II. Background 6

As a covered clearing agency, OCC is 

required to establish policies and 

procedures reasonably designed to 

manage its credit exposures and 

liquidity risk.7 However, a Clearing 

Member default may result in losses or 

shortfalls that exceed OCC’s routine risk 

managemet tools. To address such credit 

losses or liquidity shortfalls, OCC has 

established tools to to re-establish a 

matched book and to allocate uncovered 

losses following the default of a Clearing 

Member.8 One such tool, ‘‘Partial TearUp,’’ is a process designed to return 

OCC to a matched book by 

extinguishing positions that remain 

open after OCC has attempted one or 

more auctions.9 OCC Rule 1111(e) sets 

forth the process for determining and 

terminating Partial Tear-Up positions. 

When it initially proposed Rule 

1111(e) in 2018, OCC noted that the 

Partial Tear-Up process would be 

initiated only if OCC determined that 

potential losses from remaining 

positions of the defaulting member 

would exceed OCC’s financial 

resources.10 OCC further stated that, in 

order for OCC to maintain its ability to 

meet obligations to non-defaulting 

members, the process was designed to 

be initiated in advance of exhausting 

OCC’s financial resources.11 OCC also 

acknowledged that the process may be 

used to allocate losses if OCC’s 

resources are insufficient to pay the 

Partial Tear-Up Price.12 Rule 1111(e)(iii) 

currently provides that when the Partial 

Tear-Up process is used to allocate 

losses, each Clearing Member will 

receive a pro rata payment based on 

OCC’s remaining resources and an 

unsecured claim against OCC for the 

difference between the pro rata amount 

received and the Partial Tear-Up Price. 

An unsecured claim issued pursuant 

to Rule 1111(e) provides a mechanism 

for OCC to compensate Clearing 

Members that receive a pro rata 

payment, when warranted by particular 

circumstances (e.g., when funds are 

subsequently recovered from a defaulted 

Clearing Member or the estate of the 

defaulted Clearing Member). However, 

OCC Rules do not currently describe a 

specific payment obligation for these 

claims. OCC states that the Proposed 

Rule Change is intended to provide 

clarity regarding the nature of the claim 

issued following a Partial Tear-Up. More 

specifically, the revisions to Rule 

1111(e) would add the following details 

about the claim: (i) A Clearing Member 

receiving a pro rata payment following 

a Partial Tear-Up will have a claim for 

the value of the difference between the 

pro rata amount received and the Partial 

Tear-Up Price; and (ii) such a claim 

shall be an unsecured claim on any 

recovery from a suspended or defaulted 

Clearing Member (or from the estate of 

a suspended or defaulted Clearing 

Member). OCC believes that clarifying 

the nature of the claim arising out of 

Rule 1111(e) would, in turn, clarify that 

such claims would not provide a basis 

for Clearing Members to trigger the 

close-out netting process under Article 

VI, Section 27 of OCC’s By-Laws.13

In proposing to adopt Partial Tear-Up 

as a recovery tool, OCC proposed a 

mechanism for re-allocating losses for 

non-defaulting Clearing Members 

arising out of Partial Tear-Up.14 OCC 

Rule 1111(g) currently provides OCC’s 

Board of Directors (the ‘‘Board’’) with 

discretionary authority to levy a special 

charge against remaining non-defaulting 

Clearing Members for the purpose of reallocating the losses, costs, and fees 

imposed on holders of torn-up 

positions. Currently, Rule 1111 does not 

impose any ex ante limit on the amount 

of any discretionary special charge that 

could be levied by the Board. Following 

the adoption of OCC Rule 1111, OCC 

received a letter from the Futures 

Industry Association (‘‘FIA’’) requesting 

that OCC limit the amount of the Rule 

1111(g) Board-levied special charge to 

the amount of a Clearing Member’s 

required contribution to the Clearing 

Fund.15 Upon consideration of this 

request, OCC proposes to amend Rule 

1111(g) to cap the amount of the special 

charge levied under the rule to the 

amount of the Clearing Member’s 

required contribution to the Clearing 

Fund at the time of the special charge. 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Notices 31597 

16See Notice of Filing supra note 4, 87 FR at 

20495. 

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

18 15 U.S.C. 78q–1(b)(3)(F). 

19 15 U.S.C. 78q–1(b)(3)(F). 

20See Notice of Filing supra note 4, 87 FR at 

20495. 

21The comment on the Proposed Rule Change is 

available at https://www.sec.gov/comments/sr-occ2022-005/srocc2022005.htm. 

22 15 U.S.C. 78q–1(b)(3)(F). 

23 17 CFR 240.17Ad–22(e)(23)(ii). 

24 Id. 

According to OCC, the purpose of this 

change is to provide Clearing Members 

with a firm ex ante limit that would 

improve their ability to measure, 

monitor and manage their potential 

exposure to OCC.16

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Exchange 

Act directs the Commission to approve 

a proposed rule change of a selfregulatory organization if it finds that 

such proposed rule change is consistent 

with the requirements of the Exchange 

Act and the rules and regulations 

thereunder applicable to such 

organization.17 After carefully 

considering the Proposed Rule Change, 

the Commission finds that the proposal 

is consistent with the requirements of 

the Exchange Act and the rules and 

regulations thereunder applicable to 

OCC. More specifically, the Commission 

finds that the proposal is consistent 

with Section 17A(b)(3)(F) of the 

Exchange Act 18 as described in detail 

below. 

A. Consistency With Section 

17A(b)(3)(F) of the Exchange Act 

Section 17A(b)(3)(F) of the Exchange 

Act requires, among other things, that a 

clearing agency’s rules are designed, in 

general, to protect investors and the 

public interest.19 Based on its review of 

the record, and for the reasons described 

below, the Commission believes that the 

proposed changes to Rule 1111(e) and 

(g) are consistent with being organized 

to protect investors and the public 

interest. 

With the proposed revisions to Rule 

1111(e), OCC codifies critical details 

about the nature of a Clearing Member’s 

claim resulting from the Partial Tear-Up 

process, including the specific value of 

the claim (e.g., the value of the 

difference between the pro rata amount 

received and the Partial Tear-Up Price) 

and the source of funds that the claim 

would draw upon (e.g., an unsecured 

claim on any recovery from a suspended 

or defaulted Clearing Member, or from 

the estate of a suspended or defaulted 

Clearing Member). These details provide 

Clearing Members with material 

information regarding their potential 

claims, and provide greater visibility to 

Clearimg Members on how open claims 

from the partial tear-up process would 

be honored. In particular, the revisions 

remove any ambiguity that could cause 

Clearing Members to believe that OCC 

would default if it fails to pay an 

unsecured claim issued by a Clearing 

Member as a result of the Partial TearUp process, because revised Rule 

1111(e) would place appropriate 

responsibility for the unsecured claim 

on the suspended or defaulted Clearing 

Member. As such, the Commission 

believes that these revisions to Rule 

1111(e) are consistent with being 

organized to protect investors and the 

public interest. 

With the proposed revisions to Rule 

1111(g), OCC codifies a specific limit to 

the amount of special charge that the 

Board would potentially levy on each 

non-defaulting Clearing Member. This 

revision indicates to non-defaulting 

Clearing Members that such special 

charges are not unlimited in nature, and 

provides non-defaulting Clearing 

Members with the assurance to manage 

and monitor their potential exposures to 

OCC with fewer concerns on whether or 

not they could cover their exposures 

successfully. As such, the Commission 

believes that these revisions to Rule 

1111(e) are also consistent with the 

protection of investors and the public 

interest. 

In response to the Notice of Filing,20

the Commission received a comment 

opposing the proposal on the basis that 

it would increase investor risk by 

shifting the responsibility of covering 

default-related liability from OCC to 

individual investors.21 The Commission 

disagrees with this assertion, as the 

Proposed Rule Change provides further 

information to Clearing Members on the 

nature and amount of Partial Tear-Up 

claims. In particular, the Proposed Rule 

Change indicates that unsecured claims 

issued by a Clearing Member as a result 

of the Partial Tear-Up process are the 

responsibility of the defaulted or 

suspended Clearing Member, thus 

removing the risk of an unintended OCC 

wind-down due to Clearing Members 

initiating a close-out netting under 

Article XI, Section 27 of OCC’s By-Laws. 

The Proposed Rule Change also 

provides further information to nondefaulting Clearing Members on the 

nature and amount of Board-levied 

special charges. As such, the revisions 

would in fact support the goals of the 

Partial Tear-Up process, which are to 

account for the exposures of nondefaulting Clearing Members and place 

responsibility on suspended or 

defaulted Clearing Members where 

due—the opposite of what the comment 

is asserting. 

The Commission believes, therefore, 

that the proposal to revise Rule 1111(e) 

and (g) is consistent with the 

requirements of Section 17A(b)(3)(F) of 

the Exchange Act.22

B. Consistency With Rule 17Ad– 

22(e)(23) Under the Exchange Act 

Rule 17Ad–22(e)(23)(ii) under the 

Exchange Act requires that a clearing 

agency must establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

provide sufficient information to enable 

participants to identify and evaluate the 

risks, fees, and other material costs they 

incur by participating in the covered 

clearing agency.23 Based on its review of 

the record, and for the reasons described 

below, the Commission believes that the 

proposed changes to Rule 1111(e) and 

(g) are consistent with the requirements 

of Rule 17Ad–22(e)(23)(ii). 

By revising Rule 1111(e) to codify 

critical details on the nature of a 

Clearing Member’s claim resulting from 

the Partial Tear-Up process, including 

the specific value of the claim (e.g., the 

value of the difference between the pro 

rata amount received and the Partial 

Tear-Up Price) and the source of funds 

that the claim would be against (e.g., an 

unsecured claim on any recovery from 

a suspended or defaulted Clearing 

Member, or from the estate of a 

suspended or defaulted Clearing 

Member), OCC provides critical 

information that Clearing Members may 

use to better evaluate the nature and 

amount of their claims resulting from 

the Partial Tear-Up process. Similarly, 

the 1111(g) revisions codify a specific 

limit to the amount of special charge 

that the Board would potentially levy on 

each non-defaulting Clearing Member. 

Non-defaulting Clearing Members may 

use this additional information to better 

evaluate the nature and amount of the 

special charges. As such, the 

Commission believes that the Rule 

1111(e) and (g) revisions are consistent 

with providing sufficient information to 

enable participants to identify and 

evaluate the risks, fees, and other 

material costs incurred with 

participation in the covered clearing 

agency. 

The Commission believes, therefore, 

that the proposal to revise Rule 1111(e) 

and (g) is consistent with the 

requirements of Rule 17Ad–22(e)(23)(ii) 

under the Exchange Act.24


jspears on DSK121TN23PROD with NOTICES1
31598 Federal Register / Vol. 87, No. 100 / Tuesday, May 24, 2022 / Notices 

25 In approving this Proposed Rule Change, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

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

26 15 U.S.C. 78s(b)(2). 

27 17 CFR 200.30–3(a)(12). 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Exchange Act, and 

in particular, the requirements of 

Section 17A of the Exchange Act 25 and 

the rules and regulations thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,26

that the Proposed Rule Change (SR– 

OCC–2022–005) be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11061 Filed 5–23–22; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Data Collection Available for Public 

Comments 

ACTION: 60-Day notice and request for 

comments. 

SUMMARY: The Small Business 

Administration (SBA) intends to request 

approval, from the Office of 

Management and Budget (OMB) for the 

collection of information described 

below. The Paperwork Reduction Act 

(PRA) federal agencies to publish a 

notice in the Federal Register 

concerning each proposed collection of 

information before submission to OMB, 

and to allow 60 days for public 

comment in response to the notice. This 

notice complies with that requirement. 

DATES: Submit comments on or before 

July 25, 2022. 

ADDRESSES: Send all comments to, 

Roman Ivey, Program Analyst, Office of 

Policy Planning and Liaison, Small 

Business Administration, at 

roman.ivey@sba.gov, (202) 401–1420. 

FOR FURTHER INFORMATION CONTACT: 

Roman Ivey, Program Analyst, Office of 

Policy Planning and Liaison, Small 

Business Administration, at 

roman.ivey@sba.gov, (202) 401–1420. 

SUPPLEMENTARY INFORMATION: Small 

business concerns (SBCs) that are 

awarded set-aside or sole source 

contracts are limited in their ability to 

subcontract to other than small business 

concerns by the limitation on 

subcontracting (LOS) clauses set forth in 

their contracts. To help determine 

whether theses SBCs are in compliance 

with any LOS clauses, Contracting 

Officers may require the SBCs to submit 

information evidencing their 

compliance. 

OMB Control Number: 3245–0400. 

Title: ‘‘Limitations on Subcontracting 

Reporting’’. 

Description of Respondents: Small 

business concerns. 

Form Number: N/A. 

Annual Responses: 18,500. 

Annual Burden: 18,500. 

Curtis Rich, 

Agency Clearance Officer. 

[FR Doc. 2022–11076 Filed 5–23–22; 8:45 am] 

BILLING CODE 8026–09–P 

SOCIAL SECURITY ADMINISTRATION 

[Docket No SSA–2022–0022] 

Agency Information Collection 

Activities: Proposed Request and 

Comment Request 

The Social Security Administration 

(SSA) publishes a list of information 

collection packages requiring clearance 

by the Office of Management and 

Budget (OMB) in compliance with 

Public Law 104–13, the Paperwork 

Reduction Act of 1995, effective October 

1, 1995. This notice includes one new 

collection and revisions of OMBapproved information collections. 

SSA is soliciting comments on the 

accuracy of the agency’s burden 

estimate; the need for the information; 

its practical utility; ways to enhance its 

quality, utility, and clarity; and ways to 

minimize burden on respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. Mail, email, or 

fax your comments and 

recommendations on the information 

collection(s) to the OMB Desk Officer 

and SSA Reports Clearance Officer at 

the following addresses or fax numbers. 

(OMB) Office of Management and 

Budget, Attn: Desk Officer for SSA, 

Comments: https://www.reginfo.gov/ 

public/do/PRAMain. Submit your 

comments online referencing Docket ID 

Number [SSA–2022–0022]. 

(SSA) Social Security Administration, 

OLCA, Attn: Reports Clearance Director, 

3100 West High Rise, 6401 Security 

Blvd., Baltimore, MD 21235, Fax: 410– 

966–2830, Email address: 

OR.Reports.Clearance@ssa.gov, Or you 

may submit your comments online 

through https://www.reginfo.gov/public/ 

do/PRAMain, referencing Docket ID 

Number [SSA–2022–0022]. 

I. The information collection below is 

pending at SSA. SSA will submit it to 

OMB within 60 days from the date of 

this notice. To be sure we consider your 

comments, we must receive them no 

later than July 25, 2022. Individuals can 

obtain copies of the collection 

instrument by writing to the above 

email address. 

Enterprise Scheduling System (ESS)— 

0960–NEW. The Enterprise Scheduling 

System (ESS) will provide a better 

respondent and employee experience. 

The first ESS release is specific to 

allowing self-scheduling for 

enumeration services. ESS subsequent 

releases will expand services for other 

appointment needs. Through ESS 

respondent self-scheduling and 

technician scheduling, SSA will collect 

specific information about respondents 

(e.g., respondent: Name, address, zip 

code, telephone number, and email 

address). In addition, we ask the 

respondent to consent to receive 

optional electronic messaging or opt 

out; electronic message preference 

(email/text), if respondents provide 

consent; language preferences (English/ 

Spanish); respondent’s preferred office 

to receive service; and appointment (day 

and time preference) to schedule an inoffice appointment to process a request 

for an original SSN or replacement 

Social Security card. In addition, we 

will ask respondents scheduling their 

initial appointment through a 

technician to create a one-time passcode 

to securely allow online updates to their 

appointment. The technician will 

document the one-time passcode with 

the respondent’s other appointment 

preferences. Respondents will use ESS 

to complete required screens and fields 

to select a date and time for an 

appointment at an SSA field office (FO) 

to provide the proofs necessary to obtain 

a replacement or original SSN card. 

Respondents can complete the online 

collection themselves. If respondents 

encounter issues with ESS, they may 

contact SSA by phone to complete 

scheduling the appointment through a 

technician. We will integrate ESS with 

VIPr Mobile check-in functions, so ESS 

respondents will have the option to 

check-in for their appointment using 

Mobile check-in on their personal 

device, instead of checking in at the 

kiosk. Using VIPr, SSA employees can 

request walk-in visitors and individuals 

with appointments to come into the 

office. The respondents are individuals 

looking to schedule their own SSA visit 

using ESS. 

Type of Request: Request for a new 

information collection. 


jspears on DSK121TN23PROD with NOTICES1