Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 6915 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 76686 

(December 18, 2015), 80 FR 80422 (December 24, 

2015) (SR–OCC–2015–018). 

4Members of the TC will not need to be 

technology experts. 

5 15 U.S.C. 78s(b)(2)(C). 

6 15 U.S.C. 78q–1(b)(3)(F). 

7 17 CFR 240.17Ad–22(d)(8). 

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–DTC– 

2016–002 and should be submitted on 

or before March 1, 2016. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–02438 Filed 2–8–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–77042; File No. SR–OCC– 

2015–018] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Approving the Adoption of a Charter of 

a New Committee of The Options 

Clearing Corporation’s Board of 

Directors, the Technology Committee 

February 3, 2016. 

On December 8, 2015, The Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2015– 

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

Securities Exchange Act of 1934 

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

On December 24, 2015, the proposed 

rule change was published for comment 

in the Federal Register.3 The 

Commission did not receive any 

comments on the proposed rule change. 

This order approves the proposed rule 

change. 

I. Description 

OCC is adopting a Charter for a new 

committee of OCC’s Board of Directors 

(‘‘Board’’), the Technology Committee 

(‘‘TC’’). Additionally, OCC is adding a 

description of the TC into Article III, 

Section 9 of OCC’s By-Laws. The Board 

formed the TC in order to enhance the 

Board’s understanding and oversight of 

key technology, information security, 

and cyber-security risk issues at OCC. 

Consistent with OCC’s other Board-level 

committee charters, the TC Charter sets 

forth: (i) The purpose, functions, and 

responsibilities of the TC; and (ii) the 

composition and organization of the TC. 

As set forth in the TC Charter, the TC 

will be responsible for: (i) Overseeing 

major information technology (‘‘IT’’) 

related strategies, projects, and 

technology architecture decisions; (ii) 

monitoring whether OCC’s IT programs 

effectively support OCC’s business 

objectives and strategies; (iii) 

monitoring OCC’s IT risk management 

efforts as well as the security of OCC’s 

information systems and physical 

security of information system assets; 

and (iv) conferring with OCC’s senior IT 

management team and informing the 

Board on IT-related matters. 

Further, and with respect to the TC 

Charter’s role in the oversight of OCC’s 

IT strategy and projects, the TC Charter 

provides that the TC will be specifically 

tasked with: (i) Evaluating OCC’s IT 

strategy, including the financial, 

tactical, and strategic benefits of IT 

projects and technology architecture 

initiatives; (ii) critically reviewing IT 

projects and technology architecture 

decisions, including review of the 

process related to approval of capital 

expenditures as they relate to IT 

projects; and (iii) making 

recommendations to the Board with 

respect to IT-related projects and 

investments that require Board 

approval. In addition, the TC Charter 

will require that the TC: (i) Monitor the 

quality and effectiveness of OCC’s IT 

and physical security, including 

periodically reviewing and appraising 

OCC’s disaster recovery capabilities and 

crisis management plans; (ii) in 

coordination and cooperation with the 

Audit Committee of the Board, monitor 

the quality and effectiveness of OCC’s IT 

systems and processes that relate to or 

affect OCC’s internal controls and assess 

OCC’s management of IT-related 

compliance risks; (iii) report to the 

Board and the Audit Committee about 

IT risks and controls; and (iv) serve in 

an advisory role with respect to IT 

decisions at OCC. In connection with 

carrying out its responsibilities, the TC 

will also, in general, inform and make 

recommendations to the Board and 

other Board-level committees with 

respect to IT-related matters. 

The TC Charter will provide that the 

TC be comprised of three or more 

directors, and meet at least four times 

per year.4 The TC will function in a 

manner similar to the other Board-level 

committees in that it will have the 

ability to hire specialists and meet in 

executive session as well as be required 

to report to the Board on an annual 

basis. The TC will also have to annually 

confirm to the Board that its 

responsibilities, as set forth in the TC 

Charter, have been carried out and 

evaluate its and its members’ 

performance on a regular basis. 

II. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act 5 directs 

the Commission to approve a proposed 

rule change of a self-regulatory 

organization if it finds that the rule 

change, as proposed, 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. This 

section requires, among other things, 

that the rules of a clearing agency 

promote the prompt and accurate 

clearance and settlement of securities 

transactions.6 The rule change should 

enhance the effectiveness of the Board’s 

oversight on OCC’s business and 

operational processes. Specifically, it 

should enhance technology-related 

processes (such as disaster recovery and 

crisis management plans), as well as IT 

systems that relate to internal controls 

and compliance risks, through a 

dedicated Board-level committee’s 

oversight of such processes. 

Accordingly, the proposed rule change 

will increase the likelihood that OCC’s 

technology processes work as expected, 

including those processes tied to the 

clearance and settlement of securities 

transactions. 

Additionally, the Commission finds 

that the proposed rule change is 

consistent with Rule 17Ad–22(d)(8). 

This rule requires a clearing agency’s 

the written policies and procedures to: 

(i) Have governance arrangements that 

are clear and transparent to fulfill the 

public interest requirements in Section 

17A of the Act; (ii) support the 

objectives of OCC’s owners and 

participants; and (iii) promote the 

effectiveness of OCC’s risk management 

procedures.7 First, the TC Charter 

delineates a clear and transparent 

governance arrangement designed to 

increase the likelihood that OCC’s 

technology processes work as expected 

(including those processes tied to the 

clearance and settlement of securities 

transactions). By increasing the 

likelihood that OCC’s technology 

processes work as expected, the TC 

Charter also supports the objective of 

OCC’s owners and participants to 

promote the prompt and accurate 

clearance and settlement of securities 

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6916 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 

8 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). 

9 15 U.S.C. 78s(b)(2). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 76646 

(Dec. 15, 2015), 80 FR 79371 (‘‘Notice’’). 

4See Securities Exchange Act Release Nos. 74290 

(February 18, 2015), 80 FR 9818 (February 24, 2015) 

(SR–NYSEArca–2015–05) (‘‘Prior Notice’’); 74675 

(April 8, 2015), 80 FR 20038 (April 14, 2015) (SR– 

NYSEArca–2015–05) (‘‘Prior Order’’ and, together 

with the Prior Notice, the ‘‘Prior Release’’). 

5NYSE Arca Equities Rule 5.2(j)(3) provides that 

the term ‘‘US Component Stock’’ shall mean an 

equity security that is registered under Sections 

12(b) or 12(g) of the Act and an American 

Depositary Receipt, the underlying equity securities 

of which is registered under Sections 12(b) or 12(g) 

of the Act. 

6See Notice, supra note 3, 80 FR at 79371. 

7The Index is maintained by the Chicago Board 

Options Exchange, Inc. (‘‘CBOE’’) and tracks the 

value of a passive investment strategy, which 

consists of overlaying of S&P 500 Index put options 

(‘‘SPX Puts’’) over a money market account, 

invested in one and three-month Treasury bills. The 

SPX Puts are struck at-the-money and are sold on 

a monthly basis, usually the third Friday of the 

month (i.e., the ‘‘Roll Date’’), which matches the 

expiration date of the SPX Puts. All SPX Puts are 

standardized options traded on the CBOE. 

8NYSE Arca Equities Rule 5.2(j)(3), Commentary 

.01(a)(A)(5) provides that all securities in the 

applicable index or portfolio shall be US 

Component Stocks listed on a national securities 

exchange and shall be NMS Stocks as defined in 

Rule 600 under Regulation NMS of the Act. Each 

component stock of the S&P 500 Index is a US 

Component Stock that is listed on a national 

securities exchange and is an NMS Stock. Options 

are excluded from the definition of NMS Stock. 

9See Notice, supra note 3, at 79372 and 79373 for 

the Exchange’s representation of the average daily 

trading volume of at-the-money 30-day SPX Puts, 

the trading volume of the at-the-money SPX Puts, 

and the daily high, low and last reported sales 

prices on each of the Roll Dates for SPX Puts atthe-money. 

10See Notice, supra note 3, at 79373. The 

Exchange states that the short-term Treasury 

securities that the Fund will acquire as part of its 

strategy are not readily susceptible to market 

manipulation due to the liquidity and extensive 

oversight associated with the short-term U.S. 

Treasury market. 

transactions. Finally, the TC Charter 

promotes the effectiveness of OCC’s risk 

management procedures by establishing 

a Board-level committee focused on 

reducing IT-related risk at OCC. 

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 8

and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,9 that the 

proposed rule change (SR–OCC–2015– 

018) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–02437 Filed 2–8–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–77045; File No. SR– 

NYSEArca–2015–113] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Approving a 

Proposed Rule Change Relating to the 

Index Underlying the WisdomTree Put 

Write Strategy Fund 

February 3, 2016. 

I. Introduction 

On December 2, 2015, NYSE Arca, 

Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposal to change 

a representation the Exchange made in 

support of a prior proposed rule change. 

The proposed rule change was 

published for comment in the Federal 

Register on December 21, 2015.3 The 

Commission received no comments on 

the proposed rule change. This order 

approves the proposed rule change. 

II. The Exchange’s Description of the 

Proposed Rule Change 

A. The Prior Proposal 

The Commission approved the listing 

and trading on the Exchange of shares 

(‘‘Shares’’) of the WisdomTree Put Write 

Strategy Fund (‘‘Fund’’) under NYSE 

Arca Equities Rule 5.2(j)(3), which 

governs the listing and trading of 

Investment Company Units.4 The 

Exchange filed that proposed rule 

change because the Fund and the Shares 

did not meet all of the ‘‘generic’’ listing 

requirements of Commentary .01(a)(A) 

to NYSE Arca Equities Rule 5.2(j)(3), 

applicable to the listing of Investment 

Company Units based upon an index of 

‘‘US Component Stocks.’’ 5 The 

Exchange represented that the Shares 

would conform to the initial and 

continued listing criteria under NYSE 

Arca Equities Rules 5.2(j)(3) and 

5.5(g)(2), except that the underlying 

index, the CBOE S&P 500 Put Write 

Index (the ‘‘Index’’), would not meet the 

requirements of NYSE Arca Equities 

Rule 5.2(j)(3), Commentary .01(a)(A)(1)– 

(5). The Exchange, however, also 

represented that the Index would (1) 

include a minimum of 20 components, 

and therefore (2) meet the numerical 

requirements of NYSE Arca Equities 

Rule 5.2(j)(3), Commentary .01(a)(A)(4), 

which requires a minimum of 13 index 

or portfolio components. 

The Exchange has not listed or 

commenced trading in the Shares.6

B. The Instant Proposed Rule Change 

The Exchange submitted this proposal 

to correct two representations made in 

support of its prior proposal to list and 

trade the Shares. Specifically, the 

Exchange seeks to strike its 

representations that the Index will (1) 

include a minimum of 20 components; 

and (2) meet the numerical 

requirements of NYSE Arca Equities 

Rule 5.2(j)(3), Commentary .01(a)(A)(4). 

At any given time, the Index consists of 

one component, an ‘‘SPX Put.’’ 7

Additionally, NYSE Arca clarifies that 

the Commentary is inapplicable because 

the Index contains options 

components.8

The Exchange asserts that the deletion 

of its prior representations would not 

adversely affect investors or the public 

interest, because the Index is based on 

CBOE-traded puts on the S&P 500, 

which are highly liquid.9 The Exchange 

further estimates that, on the launch 

date, the Fund would hold 

approximately $2.5–$5.0 million in cash 

and cash equivalents. The Exchange 

also believes that sufficient protections 

are in place to protect against market 

manipulation of the Fund’s Shares and 

SPX Puts because: (i) Trading in the 

Shares and the underlying Fund 

instruments are subject to the federal 

securities laws and to the Exchange’s, 

CBOE’s, and the Financial Industry 

Regulatory Authority’s rules and 

surveillance programs, which are 

designed to detect violations; (ii) assets 

in the portfolio—which will primarily 

be short-term U.S. Treasury bills 10 and 

SPX Puts—will be acquired in 

extremely liquid and highly regulated 

markets; and (iii) the exchange-traded 

fund creation/redemption and arbitrage 

mechanisms are tied to the large pool of 

liquidity of each of the Fund’s 

underlying investments. 

The Exchange represents that trading 

in the Shares will be subject to the 

existing trading surveillances and that 

these procedures are adequate to 

properly monitor Exchange trading of 

the Shares in all trading sessions and to 

deter and detect violations of Exchange 

rules and federal securities laws. 

Furthermore, the Financial Industry 

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