Federal Register / Vol. 73, No. 161 / Tuesday, August 19, 2008 / Notices 48423 

7 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 

8 15 U.S.C. 78s(b)(2). 

9 17 CFR 200.30–3(a)(12). 

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

2The Commission has modified the text of the 

summaries prepared by OCC. 

3Securities Exchange Act Release No. 55258 

(February 8, 2007), 72 FR 7701 (February 16, 2007). 

proposed rule change is consistent with 

this obligation under the Act because it 

designed to promote the prompt and 

accurate clearance and settlement of 

transactions in realized variance/ 

volatility options by applying 

substantially the same rules and 

procedures to these transactions as OCC 

applies to similar transactions in other 

index options. 

OCC has requested that the 

Commission approve the proposed rule 

change prior to the thirtieth day after 

publication of the notice of filing. The 

Commission finds good cause for 

approving the proposed rule change 

prior to the thirtieth day after 

publication because CBOE’s rule filing 

for realized variance/volatility options 

has been approved by the Commission, 

but CBOE will not be able to commence 

trading realized variance/volatility 

options until OCC’s rule change is 

approved.7 However, OCC will delay 

implementation of this rule change until 

distribution of a supplement addressing 

realized/variance volatility options to 

the options disclosure document, 

Characteristics and Risks of 

Standardized Options, is distributed. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, 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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–OCC–2008–17 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–OCC–2008–17. This file 

number should be included on the 

subject line if e-mail 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 inspection and copying in 

the Commission’s Public Reference 

Section, 100 F Street, NE., Washington, 

DC 20549 on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of OCC and on 

OCC’s Web site at http:// 

www.theocc.com. 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–OCC–

2008–17 and should be submitted on or 

before September 9, 2008. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (File No. SR–

OCC–2008–17) be and hereby is 

approved on an accelerated basis. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19131 Filed 8–18–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58353; File No. SR–OCC–

2008–16] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing of a Proposed Rule Change 

Relating to the Cash Dividend 

Threshold 

August 13, 2008. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

July 24, 2008, The Options Clearing 

Corporation (‘‘OCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

primarily by OCC. The Commission is 

publishing this notice to solicit 

comments from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change would 

mitigate inconsistencies that may result 

under the current policy for adjusting 

stock option contracts. 

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 these statements.2

(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 mitigate inconsistencies 

that may result under the current policy 

for adjusting stock option contracts. In 

February 2007, the Commission 

approved rule change SR–OCC–2006–

01, which amended Section 11A of 

Article VI of the OCC By-Laws 

governing adjustments to options in 

response to cash dividends or 

distributions.3 Under the new 

adjustment policy, cash dividends paid 

by a company otherwise than pursuant 

to a policy or practice of paying 

dividends on a quarterly or other regular 

basis would be deemed ‘‘special’’ and 

would normally trigger a contract 

adjustment provided the value of the 

adjustment is at least $12.50 per option 

contract. This new adjustment policy 

will become effective for cash dividends 

announced on or after February 1, 2009. 

However, certain inconsistencies may 

result when the threshold of ‘‘$12.50 per 

option contract’’ is applied to all 

options on the affected underlying 

security. For example, if a $.10 special 

cash dividend is declared, the standardsize 100 share option would not be 

adjusted (because the value is less than 

$12.50). However, a previously adjusted 

150 share option (reflecting a 3 for 2 


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48424 Federal Register / Vol. 73, No. 161 / Tuesday, August 19, 2008 / Notices 

split) would be adjusted (because the 

value is $15 per contract). Adjusting 

some but not all options of the same 

class in response to the same dividend 

event, especially if the 100 share option 

is not adjusted, could be confusing to 

investors, and OCC’s Securities 

Committee (consisting of representatives 

of each of the options exchanges and 

OCC) determined that this potential 

confusion should be avoided. 

OCC considered modifying the 

threshold to specify $.125 per share 

instead of $12.50 per contract. This 

approach would address all standardsize (100 share) contracts that currently 

exist plus adjusted contracts that come 

into existence in response to splits, etc. 

However, exchanges have proposed to 

introduce ‘‘maxi’’ size contracts. 

Applying the same per share threshold 

to a 1,000 and 100 share option could 

sometimes result in significant value 

being left on the table in the case of the 

1,000 share option. Taking the same 

example of a $.10 per share special 

dividend, neither option would be 

adjusted if the threshold were $.125 per 

share. This would result in a loss of 

only $10 per contract for the 100 share 

option, but the loss would be $100 per 

contract for the 1,000 share option. For 

this reason, a per share threshold is not 

being proposed. 

Greater consistency across contracts 

of varying sizes can be achieved by 

retaining the $12.50 per contract 

threshold in all cases but adding a 

qualification specifying that if a 

corresponding standard-size contract 

exists on the underlying security, 

previously adjusted contracts will be 

adjusted only if the corresponding 

standard-size contract is also adjusted. 

For example, if a 100 share option and 

a 150 share option (previously adjusted 

for a 3 for 2 split) exist, the 150 share 

option would be adjusted for a special 

cash dividend only if the 100 share 

standard option would also be adjusted 

for that dividend. Stated differently, 

OCC proposes to refer back to the 

preadjustment standard-size option (if 

any exist) in deciding whether or not to 

adjust a previously adjusted option. 

Thus a 150 share option that was 

derived from a 100 share option as a 

result of a 3 for 2 split would be referred 

back to the 100 share option. A 1,500 

share option (previously adjusted for a 

3 for 2 split) would be referred back to 

the 1,000 share option (the ‘‘standard’’

size option for a ‘‘maxi’’ contract). Thus, 

the qualification specifies ‘‘only if the 

corresponding standard-size option 

contract is also adjusted.’’

This qualification achieves greater 

consistency because in most cases all 

contracts on the same underlying 

security would be adjusted if the 100 

share contract is adjusted. The 

qualification also would allow a 1,000 

share ‘‘standard’’ contract to be adjusted 

independently of a 100 share contract. 

Also, it could happen that an adjusted 

contract exists but not the 

corresponding standard contract, or a 

contract calling for delivery of fewer 

than 100 shares may exist (e.g., as a 

result of a spinoff adjustment). In these 

cases, the qualification would be 

inapplicable and a straightforward 

application of the $12.50 threshold 

would determine whether an 

adjustment would be made. The 

following are examples of the 

qualification to the $12.50 per contract 

threshold. 

(A) If a corresponding standard size 

contract exists: 

Shares Contract $.09 Dividend 

($Value) Adjust? $.13 Dividend ($Value) Adjust? 

100 ................................. Standard ................................................................ 9.00 NO ............... 13 .00 YES. 

133 ................................. 4/3 split .................................................................. 11.97 NO ............... 17 .29 YES. 

150 ................................. 3/2 split .................................................................. 13.50 NO ............... 19 .50 YES. 

10 ................................... Spinoff .................................................................... 0.90 NO ............... 1 .30 NO. 

177 ................................. Merger .................................................................... 15.93 NO ............... 23 .01 YES. 

1000 ............................... Standard ................................................................ 90.00 YES ............. 130 .00 YES. 

1500 ............................... 3/2 split .................................................................. 135.00 YES ............. 195 YES. 

Shares Contract $.02 Dividend 

($Value) Adjust? $.01 Dividend ($Value) Adjust? 

100 ................................. Standard ................................................................ 2.00 NO ............... 1 .00 NO. 

133 ................................. 4/3 split .................................................................. 2.66 NO ............... 1 .33 NO. 

150 ................................. 3/2 split .................................................................. 3.00 NO ............... 1 .50 NO. 

10 ................................... Spinoff .................................................................... 0.20 NO ............... 0 .10 NO. 

177 ................................. Merger .................................................................... 3.54 NO ............... 1 .77 NO. 

1000 ............................... Standard ................................................................ 20.00 YES ............. 10 .00 NO. 

1500 ............................... 3/2 split .................................................................. 30.00 YES ............. 15 .00 NO. 

(B) If the 100 share standard size 

contract does not exist: 

Shares Option $.09 Dividend 

($Value) Adjust? $.13 Dividend ($Value) Adjust? 

133 ................................. 4/3 split .................................................................. 11.97 NO ............... 17 .29 YES. 

150 ................................. 3/2 split .................................................................. 13.50 YES ............. 19 .50 YES. 

10 ................................... Spinoff .................................................................... 0.90 NO ............... 1 .30 NO. 

177 ................................. Merger .................................................................... 15.93 YES ............. 23 .01 YES. 

1000 ............................... Standard ................................................................ 90.00 YES ............. 130 .00 YES. 

1500 ............................... 3/2 split .................................................................. 135.00 YES ............. 195 YES. 

The new adjustment policy approved 

in File No. SR–OCC–2006–01 will take 

effect beginning with dividends 

announced on and after February 1, 

2009. OCC intends this proposed rule 

change to take effect at the same time, 


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Federal Register / Vol. 73, No. 161 / Tuesday, August 19, 2008 / Notices 48425 

4 17 CFR 200.30–3(a)(12). 

but these changes will not be 

implemented until the exchanges have 

conducted appropriate educational 

efforts and definitive copies of an 

appropriate supplement to the options 

disclosure document, Characteristics 

and Risks of Standardized Options, are 

available for distribution. 

OCC believes that the proposed rule 

change is consistent with the purposes 

and requirements of the Act because it 

is designed to promote the prompt and 

accurate clearance and settlement of 

transactions in securities options, to 

remove impediments to and perfect the 

mechanism of a national system for the 

prompt and accurate clearance and 

settlement of such transactions, and, in 

general, to protect investors and the 

public interest. It accomplishes this by 

reducing inconsistencies in the 

adjustment of stock option contracts. 

The proposed rule change is not 

inconsistent with the existing By-Laws 

and Rules of OCC, including any rules 

proposed to be amended. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

OCC does not believe that the 

proposed rule change would impose any 

material 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 

to the proposed rule change, and none 

have been received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within thirty-five days of the date of 

publication of this notice in the Federal 

Register or within such longer period: 

(i) As the Commission may designate up 

to ninety days of such date if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve such proposed 

rule change or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be 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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–OCC–2008–16 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–OCC–2008–16. This file 

number should be included on the 

subject line if e-mail 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 inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of OCC and on 

OCC’s Web site at http:// 

www.theocc.com/publications/rules/ 

proposed_changes/sr_occ_08_16.pdf. 

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–OCC–2008–16 and should 

be submitted on or before September 3, 

2008. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.4

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19132 Filed 8–18–08; 8:45 am] 

BILLING CODE 8010–01–P 

SMALL BUSINESS ADMINISTRATION 

National Women’s Business Council 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice of open Federal advisory 

committee meeting. 

SUMMARY: The SBA is issuing this notice 

to announce the location, date, time, 

and agenda for the next meeting of the 

National Women’s Business Council 

(NWBC). The meeting will be open to 

the public. 

DATES: The meeting will be held on 

September 11, 2008 from approximately 

8:30 a.m. to 3 p.m. EST. 

ADDRESSES: The meeting will be held at 

the U.S. Small Business Administration, 

409 Third Street, SW., Eisenhower 

Conference Room, Washington, DC 

20416. 

SUPPLEMENTARY INFORMATION: Pursuant 

to section 10(a)(2) of the Federal 

Advisory Committee Act (5 U.S.C. 

appendix 2), SBA announces the 

meeting of the National Women’s 

Business Council. The National 

Women’s Business Council is tasked 

with providing issues of importance to 

women business owners to the 

President, Congress, and the SBA 

Administrator. 

The purpose of the meeting is to 

introduce the NWBC’s agenda and 

action items for fiscal year 2009 

included but not limited to 

procurement, access to capital, access to 

training and technical assistance, and 

affordable health care. The topics to be 

discussed will include: H.R. 5050 20th 

anniversary celebration; update on FY 

2008 projects; swearing in of new 

members; upcoming Town Hall Meeting 

on November 6, in San Francisco, CA; 

and future projects. 

FOR FURTHER INFORMATION CONTACT: The 

meeting is open to the public; however, 

advance notice of attendance is 

requested. Anyone wishing to attend or 

make a presentation to the NWBC must 

contact Katherine Stanley by Friday, 

September 5, 2008, by fax or e-mail in 

order to be placed on the agenda. 

Katherine Stanley, Operations Manager, 

NWBC, 409 Third Street, SW., Suite 

210, Washington, DC 20416, telephone 

202–205–6695, fax 202–205–6825, email Katherine.stanley@nwbc.gov. 

Additionally, if you need 

accommodations because of a disability 

or require additional information, please 

contact Katherine Stanley at the above 

information. 


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