Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Notices 8291 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Rule 6.62(e), which defines complex orders. 

5See Securities Exchange Act Release No. 68005 

(Oct. 9, 2012), 77 FR 63362 (Oct. 16, 2012) (SR– 

NYSEArca–2012–106) (establishing fees for certain 

proprietary options market data products). See also 

Securities Exchange Act Release Nos. 69523 (May 

6, 2013), 78 FR 27452 (May 10, 2013) (SR– 

NYSEArca–2013–41) (establishing a schedule of 

Continued 

an easily accessible place a written copy 

of the procedures described in the 

preceding condition, and any 

modifications to such procedures, and 

will maintain and preserve for a period 

of not less than six years from the end 

of the fiscal year in which any purchase 

in an Affiliated Underwriting occurred, 

the first two years in an easily accessible 

place, a written record of each purchase 

of securities in Affiliated Underwritings 

once an investment by a Fund of Funds 

in the securities of the Self-Indexing 

Fund exceeds the limit of section 

12(d)(1)(A)(i) of the Act, setting forth 

from whom the securities were 

acquired, the identity of the 

underwriting syndicate’s members, the 

terms of the purchase, and the 

information or materials upon which 

the Board’s determinations were made. 

9. Before investing in a Self-Indexing 

Fund in excess of the limit in section 

12(d)(1)(A), a Fund of Funds and the 

Trust will execute a FOF Participation 

Agreement stating without limitation 

that their respective boards of directors 

or trustees and their investment 

advisers, or trustee and Sponsor, as 

applicable, understand the terms and 

conditions of the order, and agree to 

fulfill their responsibilities under the 

order. At the time of its investment in 

Shares of a Self-Indexing Fund in excess 

of the limit in section 12(d)(1)(A)(i), a 

Fund of Funds will notify the SelfIndexing Fund of the investment. At 

such time, the Fund of Funds will also 

transmit to the Self-Indexing Fund a list 

of the names of each Fund of Funds 

Affiliate and Underwriting Affiliate. The 

Fund of Funds will notify the SelfIndexing Fund of any changes to the list 

of the names as soon as reasonably 

practicable after a change occurs. The 

Self-Indexing Fund and the Fund of 

Funds will maintain and preserve a 

copy of the order, the FOF Participation 

Agreement, and the list with any 

updated information for the duration of 

the investment and for a period of not 

less than six years thereafter, the first 

two years in an easily accessible place. 

10. Before approving any advisory 

contract under section 15 of the Act, the 

board of directors or trustees of each 

Investing Management Company, 

including a majority of the disinterested 

directors or trustees, will find that the 

advisory fees charged under such 

contract are based on services provided 

that will be in addition to, rather than 

duplicative of, the services provided 

under the advisory contract(s) of any 

Self-Indexing Fund in which the 

Investing Management Company may 

invest. These findings and their basis 

will be fully recorded in the minute 

books of the appropriate Investing 

Management Company. 

11. Any sales charges and/or service 

fees charged with respect to shares of a 

Fund of Funds will not exceed the 

limits applicable to a fund of funds as 

set forth in NASD Conduct Rule 2830. 

12. No Self-Indexing Fund will 

acquire securities of an investment 

company or company relying on section 

3(c)(1) or 3(c)(7) of the Act in excess of 

the limits contained in section 

12(d)(1)(A) of the Act, except to the 

extent the Self-Indexing Fund acquires 

securities of another investment 

company pursuant to exemptive relief 

from the Commission permitting the 

Self-Indexing Fund to acquire securities 

of one or more investment companies 

for short-term cash management 

purposes. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–03301 Filed 2–17–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–77111; File No. SR– 

NYSEARCA–2016–29] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Modifying the Arca 

Options Deep Market Data Product 

February 11, 2016. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on February 

4, 2016, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify the 

Arca Options Deep market data product. 

The proposed rule change is available 

on the Exchange’s Web site at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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 those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to modify the 

Arca Options Deep market data product. 

The Exchange currently offers the 

following real-time options market data 

feeds: ‘‘Arca Options Top,’’ ‘‘Arca 

Options Deep,’’ and ‘‘Arca Options 

Complex’’ (the ‘‘Arca Options 

Products’’). ‘‘Arca Options Top’’ is a 

single market data product that 

combines last sale data, best bids and 

offers (‘‘BBO’’), order imbalance 

information and series status and 

underlying status messages (collectively 

called security status messages). ‘‘Arca 

Options Deep’’ is also a single market 

data product that provides subscribers 

NYSE Arca Options quotes and orders at 

the first three price levels in each series 

on a real-time basis. ‘‘Arca Options 

Complex,’’ also a single market data 

product, provides subscribers NYSE 

Arca Options quote and trade 

information (including orders/quotes, 

requests for responses, and trades) for 

the complex order book on a real-time 

basis.4

The Exchange charges a single fee for 

Arca Options Top and subscribers of 

Arca Options Top receive all three data 

feeds described above. The Exchange 

charges a separate fee for Arca Options 

Complex for subscribers that seek to 

obtain this data feed on a standalone 

basis.5

mstockstill on DSK4VPTVN1PROD with NOTICES

8292 Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Notices 

NYSE Arca Options proprietary market data fees); 

69554 (May 10, 2013), 78 FR 28917 (May 16, 2013) 

(SR–NYSEArca–2013–47) (establishing non-display 

usage fees and amending the professional end-user 

fees); 71933 (April 11, 2014), 79 FR 21821 (April 

17, 2014) (SR–NYSEArca–2014–34) (amending the 

professional user fees); 73010 (Sept. 5, 2014), 79 FR 

54307 (Sept. 11, 2014) (SR–NYSEArca–2014–94) 

(amending fees for non-display use); 73588 (Nov. 

13, 2014), 79 FR 68922 (Nov. 19, 2014) (SR– 

NYSEArca–2014–129) (establishing fees for the 

complex order book feed); and 76023 (September 

29, 2015), 80 FR 60208 (October 5, 2015) (modifying 

certain proprietary options data products). 

6The OPRA Plan is a national market system plan 

approved by the Securities and Exchange 

Commission (‘‘Commission’’) pursuant to Section 

11A of the Securities Exchange Act of 1934 (the 

‘‘Act’’) and Rule 608 thereunder (formerly Rule 

11Aa3–2). See Securities Exchange Act Release No. 

17638 (March 18, 1981), 22 S.E.C. Docket 484 

(March 31, 1981). The full text of the OPRA Plan 

is available at http://www.opradata.com. The OPRA 

Plan provides for the collection and dissemination 

of last sale and quotation information on options 

that are traded on the participant exchanges. 

Section 5.2(c) of the OPRA Plan also permits OPRA 

Plan participants to disseminate unconsolidated 

market information to certain of their members 

under certain circumstances. The manner in which 

the Exchange proposes to disseminate the products 

would comply with Section 5.2(c) of the OPRA 

Plan, pursuant to which the Exchange may not 

disseminate the products ‘‘on any more timely basis 

than the same information is furnished to the OPRA 

System for inclusion in OPRA’s consolidated 

dissemination of Options Information.’’ 

7The Exchange has not attached an Exhibit 5 

with this proposed rule change because the 

Exchange is not proposing to make any fee changes 

associated with the proposed modification to the 

Arca Options Deep market data product. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005). 

The Exchange proposes to modify the 

Arca Options Deep data feed. As 

proposed, Arca Options Deep will also 

include security status messages, the 

same data that is currently provided as 

part of Arca Options Top. The proposed 

modification to the Arca Options Deep 

data feed will allow subscribers who 

currently obtain depth of market data to 

also receive security status messages in 

a single data feed. Currently, these 

subscribers are required to process two 

data feeds to get the depth of market 

data and security status information. 

Offering a data product that combines, 

in one market data product, depth of 

market data and security status 

messages would provide greater 

efficiencies and better sequencing for 

vendors and subscribers that currently 

choose to integrate the data after 

receiving it from the Exchange. As with 

Arca Options Top, Arca Options Deep 

would provide depth of market and 

series status information on a real-time 

basis as reported to the Options Price 

Reporting Authority (‘‘OPRA’’) and 

disseminated on a consolidated basis 

under the OPRA Plan.6

The Arca Options Products would 

continue to be distributed in their 

current format, to maintain the format of 

the Arca Options Products with that of 

other market data products offered by 

the Exchange. 

The Exchange does not propose to 

make any changes to the fees. The single 

fee charged for the Arca Options 

Product that comprise [sic] the Arca 

Options Top, Arca Options Deep and 

Arca Options Complex would continue 

to apply. The separate fee that now 

applies to Arca Options Complex, 

would likewise continue to apply to the 

Arca Options Complex market data 

product.7

Each of the Arca Options Products 

would continue to be offered through 

the Exchange’s Liquidity Center 

Network (‘‘LCN’’), a local area network 

in the Exchange’s Mahwah, New Jersey 

data center that is available to users of 

the Exchange’s co-location services. The 

Exchange would also continue to offer 

the products through the Exchange’s 

Secure Financial Transaction 

Infrastructure (‘‘SFTI’’) network, 

through which all other users and 

member organizations access the 

Exchange’s trading and execution 

systems and other proprietary market 

data products. 

The Exchange will announce the date 

that the Arca Options Deep market data 

product will begin to include security 

status messages through a NYSE Market 

Data Notice. 

The proposed change is not intended 

to address any issues other than those 

described herein, and the Exchange is 

not aware of any problems that vendors 

or subscribers would have in complying 

with the proposed change. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 8 of the Act, 

in general, and furthers the objectives of 

Section 6(b)(5) 9 of the Act, in particular, 

in that it is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in facilitating transactions in securities, 

to remove impediments to and perfect 

the mechanism of a free and open 

market and a national market system 

and, in general, to protect investors and 

the public interest, and it is not 

designed to permit unfair 

discrimination among customers, 

brokers, or dealers. 

The Exchange also believes this 

proposal is consistent with Section 

6(b)(5) of the Act because it protects 

investors and the public interest and 

promotes just and equitable principles 

of trade by providing investors with 

improved options for receiving market 

data. The proposed rule changes would 

benefit investors by facilitating their 

prompt access to the additional realtime information contained in a 

modified Arca Options Deep market 

data product. 

In particular, the Exchange believes 

that combining depth of market data 

with security status messages in the 

Arca Options Deep product is 

reasonable because it would provide 

greater efficiencies for vendors and 

subscribers that currently choose to 

integrate the data after receiving it from 

the Exchange. In addition, the change to 

the Arca Options Deep product reflects 

the interests and needs of subscribers 

and vendors who will no longer have to 

subscribe to multiple data feeds to 

obtain the information they want. The 

Exchange believes the proposed changes 

are reasonable because they would 

provide vendors and subscribers with 

higher quality market data products. 

In adopting Regulation NMS, the 

Commission granted self-regulatory 

organizations and broker-dealers 

increased authority and flexibility to 

offer new and unique market data to 

consumers of such data. It was believed 

that this authority would expand the 

amount of data available to users and 

consumers of such data and also spur 

innovation and competition for the 

provision of market data. The Exchange 

believes that the options data product 

changes proposed herein are precisely 

the sort of market data product 

evolutions that the Commission 

envisioned when it adopted Regulation 

NMS. The Commission concluded that 

Regulation NMS—by lessening 

regulation of the market in proprietary 

data—would itself further the Act’s 

goals of facilitating efficiency and 

competition: 

[E]fficiency is promoted when brokerdealers who do not need the data beyond the 

prices, sizes, market center identifications of 

the NBBO and consolidated last sale 

information are not required to receive (and 

pay for) such data. The Commission also 

believes that efficiency is promoted when 

broker-dealers may choose to receive (and 

pay for) additional market data based on their 

own internal analysis of the need for such 

data.10

By removing ‘‘unnecessary regulatory 

restrictions’’ on the ability of exchanges 

to sell their own data, Regulation NMS 

advanced the goals of the Act and the 

principles reflected in its legislative 

history. 

The Exchange further notes that the 

existence of alternatives to the 

Exchange’s products, including realmstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Notices 8293 

11 15 U.S.C. 78f(b)(8). 

12 15 U.S.C. 78s(b)(3)(A)(iii). 

13 17 CFR 240.19b–4(f)(6). As required under Rule 

19b–4(f)(6)(iii), the Exchange provided the 

Commission with written notice of its intent to file 

the proposed rule change, along with a brief 

description and the text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6)(iii). 

16For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

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

time consolidated data, free delayed 

consolidated data, and proprietary data 

from other sources, ensures that the 

Exchange is not unreasonably 

discriminatory because vendors and 

subscribers can elect these alternatives. 

The proposed options data products 

will help to protect a free and open 

market by providing additional data to 

the marketplace and give investors 

greater choices. In addition, the 

proposal would not permit unfair 

discrimination because the products 

will be available to all of the Exchange’s 

customers and broker-dealers through 

both the LCN and SFTI. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,11 the Exchange does not believe 

that the proposed rule change will 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The market for proprietary data 

products is currently competitive and 

inherently contestable because there is 

fierce competition for the inputs 

necessary to the creation of proprietary 

data. Numerous exchanges compete 

with each other for listings, trades, and 

market data itself, providing virtually 

limitless opportunities for entrepreneurs 

who wish to produce and distribute 

their own market data. This proprietary 

data is produced by each individual 

exchange, as well as other entities (such 

as internalizing broker-dealers and 

various forms of alternative trading 

systems, including dark pools and 

electronic communication networks), in 

a vigorously competitive market. It is 

common for market participants to 

further and exploit this competition by 

sending their order flow and transaction 

reports to multiple markets, rather than 

providing them all to a single market. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 12 and Rule 

19b–4(f)(6) thereunder.13 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

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

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 14 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4–(f)(6)(iii),15 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission believes that 

waiver of the operative delay is 

consistent with investor protection and 

the public interest because the proposal 

would allow the Exchange to offer 

currently available market data in a 

streamlined format that would enhance 

the quality of market data available to 

investors and would enable investors to 

better monitor trading activity on the 

Exchange. Accordingly, the Commission 

hereby waives the 30-day operative 

delay and designates the proposal 

operative upon filing.16

At any time within 60 days of the 

filing of such 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 

under Section 19(b)(2)(B) 17 of the Act to 

determine whether the proposed rule 

change 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– 

NYSEARCA–2016–29 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEARCA–2016–29. 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 the 

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– 

NYSEARCA–2016–29 and should be 

submitted on or before March 10, 2016. 

mstockstill on DSK4VPTVN1PROD with NOTICES

8294 Federal Register / Vol. 81, No. 32 / Thursday, February 18, 2016 / Notices 

18 17 CFR 200.30–3(a)(12). 

1The Stockholder Exchanges are: Chicago Board 

Options Exchange, Incorporated; International 

Securities Exchange, LLC; NASDAQ OMX PHLX, 

LLC; NYSE MKT LLC; and NYSE Arca, Inc. See 

Exchange Act Release No. 74136 (January 26, 2015), 

80 FR 5171 (January 30, 2015) (SR–OCC–2015–02) 

(‘‘Notice’’). 

2Under OCC’s By-Laws, exchanges other than 

Stockholder Exchanges may participate in OCC’s 

services subject to meeting certain qualifications. 

See OCC By-Laws, Article VIIB (Non-Equity 

Exchanges). 

3OCC also is registered with the Commodity 

Futures Trading Commission as a derivatives 

clearing organization regulated to provide clearing 

services for four futures exchanges. 

4OCC has over 100 members which include large 

domestic and international broker-dealers and 

futures commission merchants. See OCC’s 2014 

Annual Report (available at: http://www.options

clearing.com/components/docs/about/annualreports/occ_2014_annual_report.pdf), and OCC’s 

Web site, ‘‘What is OCC?’’ (available at: https:// 

www.optionsclearing.com/about/corporateinformation/what-is-occ.jsp). 

5For instance, OCC provides CCP services for 

OTC options, and for two securities lending market 

structures, OCC’s OTC Stock Loan Program and 

AQS, an automated marketplace for securities 

lending and borrowing operated by Automated 

Equity Finance Markets, Inc. OCC currently 

participates in cross-margin programs with the CME 

and ICE and offers an internal cross-margin program 

for products regulated by the SEC and CFTC. See 

OCC’s Web site, OCC Fact Sheet (available at: 

http://www.optionsclearing.com/components/docs/

about/occ-factsheet.pdf), ‘‘What is OCC?,’’ 

(available at: http://www.optionsclearing.com/

about/corporate-information/what-is-occ.jsp.) and 

OCC’s Web site, ‘‘Cross Margin Programs’’ 

(available at: http://www.optionsclearing.com/

clearing/clearing-services/cross-margin.jsp.). 

6See Financial Stability Oversight Council 

(‘‘FSOC’’) 2012 Annual Report, Appendix A, 

(available at http://www.treasury.gov/initiatives/

fsoc/Documents/2012%20Appendix%20A%20

Designation%20of%20Systemically%20Important

%20Market%20Utilities.pdf). 7According to OCC, as of December 31, 2013, at 

the time it developed the Capital Plan, OCC had 

total shareholders’ equity of about $25 million, 

which represents approximately 6 weeks of 

operating expenses. Based on internal operational 

risk scenarios and loss modeling, OCC quantified its 

operational risk at $226 million and pension risk at 

$21 million. According to OCC, as of August 31, 

2015, in the absence of the $150 million capital 

contribution made pursuant to the Capital Plan, 

OCC’s adjusted shareholder equity would be about 

$149 million and OCC’s total capital resources 

would be less than $150 million. See Notice at 

5172–73; OCC’s Written Statement in Support of 

Affirming March 6, 2015 Order Approving Capital 

Plan (October 7, 2015) (‘‘OCC Support Statement’’). 

8 12 U.S.C. 5465(e)(1). On February 26, 2015, the 

Commission issued a notice of no objection to the 

advance notice filing. See Exchange Act Release No. 

74387 (February 26, 2015), 80 FR 12215 (March 6, 

2015) (SR–OCC–2014–813). 

9 15 U.S.C. 78s(b)(1). 

10 17 CFR 240.19b–4. 

11See Notice. 

12See Letter from Eric Swanson, General Counsel 

& Secretary, BATS Global Markets, Inc. (‘‘BATS’’) 

(February 19, 2015) (‘‘BATS Letter I’’); Letter from 

Tony McCormick, Chief Executive Officer, BOX 

Options Exchange, (‘‘BOX’’) (February 19, 2015) 

(‘‘BOX Letter I’’); Letter from Howard L. Kramer on 

behalf of Belvedere Trading, CTC Trading Group, 

IMC Financial Markets, Integral Derivatives, 

Susquehanna Investment Group, and Wolverine 

Trading (February 20, 2015) (‘‘MM Letter’’); Letter 

from Ellen Greene, Managing Director, Financial 

Services Operations, SIFMA (February 20, 2015) 

(‘‘SIFMA Letter’’); Letter from James E. Brown, 

General Counsel, OCC (February 23, 2015) 

(responding to BATS Letter and BOX Letter) (‘‘OCC 

Letter I’’); Letter from James E. Brown, General 

Counsel, OCC (February 23, 2015) (responding to 

MM Letter) (‘‘OCC Letter II’’); Letter from Barbara 

J. Comly, Executive Vice President, General Counsel 

& Corporate Secretary, Miami International 

Securities Exchange, LLC, (‘‘MIAX’’) (February 24, 

2015) (‘‘MIAX Letter I’’); Letter from James E. 

Brown, General Counsel, OCC (February 24, 2015) 

(responding to SIFMA Letter) (‘‘OCC Letter III’’); 

Letter from John A. McCarthy, General Counsel, 

KCG Holdings, Inc., (‘‘KCG’’) (February 26, 2015) 

(‘‘KCG Letter I’’); Letter from Eric Swanson, General 

Counsel and Secretary, BATS (February 27, 2015) 

(‘‘BATS Letter II’’); Letter from John A. McCarthy, 

General Counsel, KCG (February 27, 2015) (‘‘KCG 

Letter II’’); Letter from Richard J. McDonald, Chief 

Regulatory Counsel, Susquehanna International 

Group, LLP, (‘‘SIG’’) (February 27, 2015) (‘‘SIG 

Letter I’’); Letter from Barbara J. Comly, Executive 

Vice President, General Counsel & Corporate 

Secretary, MIAX (March 1, 2015) (‘‘MIAX Letter 

II’’); Letter from James E. Brown, General Counsel, 

OCC (March 2, 2015) (‘‘OCC Letter IV’’); Letter from 

Eric Swanson, General Counsel and Secretary, 

BATS (March 3, 2015) (‘‘BATS Letter III’’); and 

Letter from Tony McCormick, Chief Executive 

Officer, BOX (March 3, 2015) (‘‘BOX Letter II’’); 

Letter from Brian Sopinsky, General Counsel, SIG 

(March 4, 2015) (‘‘SIG Letter II’’). Since the proposal 

was filed as both an advance notice and proposed 

rule change, the Commission considered all 

comments received on the proposal, regardless of 

whether the comments were submitted to the 

proposed rule change or advance notice file. See 

comments on the advance notice (File No. SR– 

OCC–2014–813), http://www.sec.gov/comments/srocc-2014-813/occ2014813.shtml and comments on 

the proposed rule change (File No. SR–OCC–2015– 

02), http://www.sec.gov/comments/sr-occ-2015-02/

occ201502.shtml. In its evaluation of the proposed 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–03267 Filed 2–17–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–77112; File No. SR–OCC– 

2015–02] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Setting Aside Action by Delegated 

Authority, Approving Proposed Rule 

Change Concerning the Options 

Clearing Corporation’s Capital Plan 

and Denying Motions 

February 11, 2016. 

I. Introduction 

The Options Clearing Corporation 

(‘‘OCC’’) is a clearing agency registered 

with the Securities and Exchange 

Commission (‘‘Commission’’) and is the 

only clearing agency for standardized 

U.S. options listed on U.S. national 

securities exchanges. Today, listed 

options are traded on twelve national 

securities exchanges: five national 

securities exchanges that are equal 

owners of OCC (‘‘Stockholder 

Exchanges’’) 1 and seven national 

securities exchanges that have no 

ownership stake in OCC (‘‘NonStockholder Exchanges’’).2 OCC also 

serves other markets, including those 

trading commodity futures, commodity 

options, and security futures,3 the 

securities lending market and the OTC 

options market. In each of these 

markets, OCC provides clearing 

members 4 with central counterparty 

(‘‘CCP’’) clearing services and performs 

critical functions in the clearance and 

settlement process.5 OCC’s services 

increase the efficiency and speed of 

options trading and settlement as well 

as reduce members’ operational 

expenses and counterparty credit risk. 

OCC’s role as the CCP for all listed 

options contracts in the U.S. makes it an 

integral part of the national system for 

clearance and settlement, and its failure 

or service disruption could have 

cumulative negative effects on the U.S. 

options and futures markets, financial 

institutions, and the broader financial 

system. As such, OCC was designated 

by the Financial Stability Oversight 

Council as a systemically important 

financial market utility (‘‘SIFMU’’) in 

2012.6

In the context of a number of 

developments in the financial markets, 

OCC’s Board of Directors (‘‘Board’’) 

decided that OCC was significantly 

undercapitalized, and, in response, 

proposed and implemented an 

expedited plan to substantially increase 

OCC’s capitalization (the ‘‘Capital 

Plan’’), and, given OCC’s critical 

clearing functions and its systemic 

importance, the Commission agrees that 

having OCC increase its capitalization is 

appropriate and in the public interest.7

Procedural Background 

OCC filed the Capital Plan as an 

advance notice, SR–OCC–2014–813, 

under Section 806(e)(1) of the Payment, 

Clearing, and Settlement Supervision 

Act of 2010 (‘‘Payment, Clearing and 

Settlement Supervision Act’’) 8 on 

December 29, 2014. OCC filed the 

proposed rule change implementing the 

Capital Plan, SR–OCC–2015–02, with 

the Commission pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 9 and 

Rule 19b–4 thereunder 10 on January 14, 

2015. The proposed rule change was 

published for comment in the Federal 

Register on January 30, 2015.11 The 

Commission received seventeen 

comment letters on OCC’s proposal from 

twelve commenters, including OCC.12

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