[Federal Register Volume 60, Number 5 (Monday, January 9, 1995)]
[Notices]
[Pages 2415-2416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-382]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35185; File No. SR-OCC-94-12]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change Amending By-Laws Relating to the Holiday Expiration Date 
for Cash-Settled Foreign Currency Options

December 30, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 12, 1994, The 
Options Clearing Corporation (``OCC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
primarily by OCC. The Commission is publishing this notice and order to 
solicit comments on the proposed rule change from interested persons 
and to grant accelerated approval of the proposed rule change.

    \1\15 U.S.C. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change will amend OCC's by-laws to change the 
holiday expiration date for cash-settled foreign currency options.

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.

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

    OCC proposes to amend its by-laws to change the holiday expiration 
date for cash-settled foreign currency options. On December 13, 1994, 
the Commission approved a Philadelphia Stock Exchange (``PHLX'') rule 
change proposing to change the holiday expiration date for cash-settled 
foreign currency options.\2\ Currently, cash-settled foreign currency 
options expire on Mondays. However, if Monday is a PHLX holiday or a 
designated bank holiday, the expiration date reverts to the preceding 
business day, which is usually Friday, but on some occasions may be 
Thursday.

    \2\Securities Exchange Act Release No. 35097, (December 13, 
1994) [File No. SR-PHLX-94-54] (order granting accelerated approval 
of proposed rule change filed by the Philadelphia Stock Exchange, 
Inc., relating to the holiday expiration date for cash/spot foreign 
currency options).
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    Under PHLX's rule change, if the regular Monday expiration occurs 
on a PHLX holiday or a designated bank holiday, the cash-settled 
foreign currency options expire on the following business day rather 
than the preceding business day. Accordingly, when the regular Monday 
expiration occurs on a holiday, the expiration will usually occur on 
Tuesday, but on some occasions will occur on Wednesday.\3\ The proposed 
change will allow cash-settled foreign currency option users to capture 
weekend risk.

    \3\For example, Monday, December 26, 1994 is a PHLX holiday 
(Christmas); therefore, under the proposed change, expiration will 
occur on Tuesday. However, Tuesday, December 27, 1994, is a 
designated bank holiday (Boxing Day), so expiration will occur on 
Wednesday, December 28, 1994.
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    To accommodate the change proposed by PHLX, OCC is proposing to 
modify the definition of ``Expiration Date'' contained in OCC by-laws, 
Article XXII, Section 1E. Under OCC's proposed change, if the regular 
Monday expiration occurs on an exchange designated bank holiday or a 
day that is not a business day, expiration will occur on the following 
business day rather than the preceding business day.

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 comments were not and are not intended to be solicited with 
respect [[Page 2416]] 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)(F)\4\ of the Act requires the rules of a clearing 
agency be designed to foster cooperation and coordination with persons 
engaged in the clearance and settlement of securities transactions. The 
Commission believes that OCC's proposed change is consistent with 
Section 17A(b)(3)(F) of the Act because it works in conjunction with 
the PHLX rule change to better coordinate and to promote cooperation in 
the issuance, clearance, and settlement of these options.

    \4\15 U.S.C. 78q-1(b)(3)(F) (1988).
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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 so approving the proposed rule change because accelerated approval 
will allow OCC to coordinate its holiday expiration dates for cash-
settled foreign currency options with the holiday expiration dates for 
cash-settled foreign currency options with the holiday expiration dates 
set by the PHLX.

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 will also be available 
for inspection and copying at the principal office of OCC. All 
submissions should refer to the file No. SR-OCC-94-12 and should be 
submitted within January 30, 1995.
    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act, particularly 
with Section 17A(b)(3)(F) of the Act, and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-OCC-94-12) be, and hereby 
is, approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\

    \5\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-382 Filed 1-6-95; 8:45 am]
BILLING CODE 8010-01-M