48420 Federal Register / Vol. 73, No. 161 / Tuesday, August 19, 2008 / Notices 

3 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78s(b)((3)(A)(i). 

3 17 CFR 240.19b–4(f)(1). 

4 In June 2007 and August 2007, the Commission 

approved changes to OCC’s Rules designed to 

accommodate credit default options and credit 

default basket options, respectively. Securities 

Exchange Act Release Nos. 55872 (June 6, 2007), 72 

FR 32693 (June 13, 2007) [SR–OCC–2007–01] and 

56288 (Aug. 20, 2007), 72 FR 49034 (Aug. 27, 2007) 

[SR–OCC–2007–06]. In November 2007, the 

Commission approved additional changes to OCC’s 

Rules designed to accommodate binary options, 

including fixed return options and binary options 

on broad-based indexes. Securities Exchange Act 

Release No. 56875 (Nov. 30, 2007), 72 FR 69274 

(Dec.7, 2007) [SR–OCC–2007–08]. 

(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–2008–09 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–2008–09. 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_09.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–2008–09 and should 

be submitted on or before September 9, 

2008. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.3

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19116 Filed 8–18–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58349; File No. SR–OCC–

2008–15] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change Relating to 

Binary Options 

August 12, 2008. 

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

Securities Exchange Act of 1934,1 notice 

is hereby given that on July 23, 2008, 

The Options Clearing Corporation 

(‘‘OCC’’) filed with the Securities and 

Exchange Commission the proposed 

rule change as described in Items I, II 

and III below, which Items have been 

prepared primarily by OCC. OCC filed 

the proposed rule change pursuant to 

Section 19(b)(3)(A)(i) of the Act 2 and 

19b–4(f)(1) thereunder 3 so that the 

proposal was effective upon filing with 

the Commission. 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 the Substance 

of the Proposed Rule Change 

The proposed rule change would 

clarify how a listing exchange may 

define the exercise settlement amount 

for binary options and that escrow 

deposits are not permitted in lieu of 

margin with respect to binary options 

on any underlying interest. 

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 

The purpose of the proposed rule 

change is to clarify, in two respects, the 

application of OCC’s By-Laws and Rules 

to certain binary options. OCC currently 

clears the following types of binary 

options: credit default options, credit 

default basket options, and ‘‘other 

binary options.’’ 4 ‘‘Other binary 

options’’ include ‘‘fixed return options’’

traded on the American Stock Exchange 

LLC \ (‘‘Amex’’) and binary options on 

broad-based indexes traded on the 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’). ‘‘Other binary 

options’’ are European-style options that 

will be automatically exercised if the 

value of the underlying interest at 

expiration when measured against its 

exercise price is determined to meet the 

criteria for automatic exercise as 

specified in the rules of the listing 

exchange. All binary options, when 

automatically exercised, have a fixed 

exercise settlement amount that does 

not vary depending upon how much the 


ebenthall on PRODPC60 with NOTICES
Federal Register / Vol. 73, No. 161 / Tuesday, August 19, 2008 / Notices 48421 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(1). 

8 17 CFR 200.30–3(a)(12). 

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

option is in the money. The present rule 

filing addresses two unrelated points 

concerning ‘‘other binary options.’’

The first issue addressed in this filing 

relates to the description of the fixed 

exercise settlement amount. CBOE’s 

proposed rules for binary options on 

broad-based indexes define the fixed 

exercise settlement amount as the 

product of the multiplier for that option 

and another fixed value, both 

established by CBOE at or before the 

opening of trading in a series of binary 

options. In contrast, the fixed exercise 

settlement amount for binary options 

currently traded on Amex is defined 

without reference to a multiplier. Since 

‘‘multiplier’’ is defined in Section I of 

Article XIV of OCC’s By-Laws only with 

respect to premiums and not exercise 

settlement amounts, OCC wishes to 

clarify through a new interpretation to 

Article XIV, Section 2B of OCC’s ByLaws that some exchanges are permitted 

to describe the fixed exercise settlement 

amount as being the product of a 

multiplier times another fixed value. 

Secondly, OCC proposes to clarify 

through an amendment to Rule 1506 

that escrow deposits, like other deposits 

in lieu of margin, are not permitted with 

respect to binary options. The 

clarification will state that neither Rule 

610 and Rule 613 shall not apply to 

binary options. 

OCC states that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 5

because it will promote the prompt and 

accurate clearance and settlement of 

transactions in binary options by 

clarifying the consistent application of 

OCC’s By-Laws and Rules to binary 

options notwithstanding differences in 

the manner in which different listing 

exchanges define the exercise settlement 

amount for these options. OCC further 

states that the proposed rule change is 

not inconsistent with the rules of OCC, 

including those 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 

burdenon competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

OCC did not solicit or receive written 

comments with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act 6 and Rule 19b–4(f)(1) 7

thereunder because it constitutes a 

stated policy, practice, or interpretation 

with respect to the meaning, 

administration, or enforcement of an 

existing rule. At any time within sixty 

days of the filing of such proposed rule 

change, the Commission may summarily 

abrogate 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. 

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 rulecomment@sec.gov. Please include File 

No. SR–OCC–2008–15 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 No. 

SR–OCC–2008–15. 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. to 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

OCC’s principal office and on OCC’s 

Web site at http://www.theocc.com/ 

publications/rules/proposed_changes/ 

proposed_changes.jsp . 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 No. OCC–2008–15 

and should be submitted on or before 

September 9, 2008. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–19129 Filed 8–18–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58352; File No. SR–OCC–

2008–17] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Order Granting 

Accelerated Approval of Proposed 

Rule Change To Permit the Clearance 

and Settlement of Options on the 

Realized Variance and Realized 

Volatility of an Index 

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 30, 2008, The Options Clearing 

Corporation (‘‘OCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which items have been prepared 

by OCC. The Commission is publishing 

this notice and order to solicit 

comments from interested persons and 

to grant accelerated approval of the 

proposed rule change from interested 

parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

OCC is seeking to clear and settle 

options on the realized variance and 

realized volatility of an index. 


ebenthall on PRODPC60 with NOTICES