73128 Federal Register / Vol. 79, No. 236 / Tuesday, December 9, 2014 / Notices 

7 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. 73449 

(October 28, 2014), 79 FR 65277 (November 3, 2014) 

(SR–OCC–2014–19). 

4See OCC By-Laws, Article 1.H(1). See also, OCC 

By-Laws, Article V, Section 1, Interpretation and 

Policy .07. 

5See OCC By-Laws, Article 1.M(4). See also, OCC 

By-Laws, Article V, Section 1, Interpretation and 

Policy .07A. 

Clear Europe considers the proposed 

revision to further its goal in the 

existing policy of assuring that Clearing 

Members unwind firm trades on a 

competitive basis. If Clearing Members 

were permitted to unwind firm trades 

non-competitively at the original firm 

trade price, thereby alleviating the firm 

trade’s impact to their portfolio, the 

incentive to provide accurate price 

submissions would be diminished. 

Given the significance of accurate 

submission to the end-of-day pricing 

process, ICE Clear Europe believes the 

proposed revision both clarifies and 

enhances its CDS Pricing Policy. 

As such, the amendments will 

facilitate the prompt and accurate 

clearance and settlement of the CDS 

Contracts cleared by the Clearing House, 

and are therefore consistent with the 

requirements of 17A(b)(3)(F) of the Act 

and the rules thereunder. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

ICE Clear Europe does not believe the 

proposed amendments would have any 

impact, or impose any burden, on 

competition not necessary or 

appropriate in furtherance of the 

purpose of the Act. The enhancements 

to the end-of-day price discovery 

process apply uniformly across all CDS 

Clearing Members. ICE Clear Europe 

does not anticipate that these 

enhancements will materially affect the 

cost of clearing or adversely affect the 

ability of Clearing Members or other 

market participants to continue to clear 

CDS Contracts. ICE Clear Europe also 

does not believe the enhancements will 

limit the availability of clearing in CDS 

products for Clearing Members or their 

customers or otherwise limit market 

participants’ choices for selecting 

clearing services in CDS. Therefore, ICE 

Clear Europe does not believe the 

proposed rule change imposes any 

burden on competition that is not 

appropriate in furtherance of the 

purpose of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments relating to the 

amendments to the CDS Pricing Policy 

have not been solicited or received. ICE 

Clear Europe will notify the 

Commission of any written comments 

received by ICE Clear Europe. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate 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 or disapprove 

the 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 email to rule-comments@

sec.gov. Please include File Number SR– 

ICEEU–2014–20 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–ICEEU–2014–20. 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 such 

filings will also be available for 

inspection and copying at the principal 

office of ICE Clear Europe and on ICE 

Clear Europe’s Web site at https://

www.theice.com/clear-europe/

regulation. 

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–ICEEU–2014–20 and 

should be submitted on or before 

December 30, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28772 Filed 12–8–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73725; File No. SR–OCC– 

2014–19] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Approving Proposed Rule Change To 

Permit the Executive Chairman, the 

President or a Delegate of Such Officer 

To Approve Requests by a Hedge 

Clearing Member To Become a Market 

Loan Clearing Member 

December 3, 2014. 

On October 24, 2014, The Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2014–19 

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

Securities Exchange Act of 1934 

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

The proposed rule change was 

published for comment in the Federal 

Register on November 3, 2014.3 The 

Commission did not receive any 

comments on the proposed rule change. 

This order approves the proposed rule 

change. 

I. Description 

The purpose of OCC’s rule change is 

permit OCC’s Executive Chairman, the 

President or their delegate to approve 

business expansion requests of Hedge 

Clearing Members 4 to become Market 

Loan Clearing Members.5 Delegates of 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 236 / Tuesday, December 9, 2014 / Notices 73129 

6See OCC By-Laws, Article V, Section 1, 

Interpretation and Policy .03(e). 

7See OCC By-Laws, Article 1.L(5). 

8See, OCC By-Laws, Article V, Section 1, 

Interpretation and Policy .07A. 

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

10 15 U.S.C. 78q–1(b)(3)(F). 

11 Id. 

12See id. 

13 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). 

14 15 U.S.C. 78s(b)(2). 

15 17 CFR 200.30–3(a)(12). 

the Executive Chairman and/or the 

President must be an officer of the rank 

of Senior Vice President or higher. 

Currently, OCC’s By-Laws require that 

requests of a Hedge Clearing Member to 

become a Market Loan Clearing Member 

be processed through OCC’s business 

expansion process, which involves 

review and approval by OCC’s Risk 

Committee (‘‘Committee’’). As described 

below, this type of business expansion 

request is operational and 

administrative in nature and OCC does 

not believe review and approval of this 

type of business expansion request 

requires the Committee to assess the risk 

of such designation. Accordingly, OCC 

is amending its rules to permit the 

Executive Chairman, the President, or 

their delegate to approve business 

expansion requests of Hedge Clearing 

Members to become Market Loan 

Clearing Members without further 

review by the Committee, provided that 

any delegate be an officer of the rank of 

Senior Vice President or higher. 

According to OCC, the Committee is 

responsible for reviewing and approving 

clearing member requests to clear a type 

or a kind of transaction for which it is 

not currently approved to clear through 

OCC (i.e., a business expansion 

request).6 The Committee has delegated 

the Executive Chairman, the 

Management Vice Chairman, the 

President, or their delegate with 

authority to review and approve 

business expansion requests in response 

to requests by clearing members for 

expedited review. Such approval is then 

subject to the Committee’s review and 

ratification at its next regularly 

scheduled meeting. If a clearing member 

does not request expedited review of a 

business expansion request then such 

request will be reviewed by the 

Committee at a regularly scheduled 

meeting of the Committee, and not by 

the Executive Chairman, the 

Management Vice Chairman, the 

President, or their delegate. 

In the case of a Hedge Clearing 

Member requesting a business 

expansion in order to be approved as 

Market Loan Clearing Member, the 

clearing member will have already been 

subject a robust risk review by the 

Committee concerning such clearing 

member’s ability to participate in stock 

loan activity at OCC. Accordingly, the 

review of the Market Loan business 

expansion request by either the 

Committee and/or the Executive 

Chairman, the Management Vice 

Chairman, the President, or their 

delegate would be primarily operational 

in nature and involve ensuring that the 

clearing member: (1) Is a U.S. Clearing 

Member, (2) is a member of a Loan 

Market,7 (3) is a participant of the 

Depository Trust Company and has 

executed certain agreements with the 

Depository Trust Company, and (4) 

executes applicable agreements with 

OCC.8 The Committee and/or the 

Executive Chairman, the Management 

Vice Chairman, the President, or their 

delegate would also review the current 

financial risk profile of the clearing 

member in connection with the business 

expansion request in order to verify that 

the clearing member continues to meet 

OCC’s financial requirements. OCC 

believes that a second risk review by the 

Committee would be duplicative 

because the Committee has already 

analyzed and approved the clearing 

member’s ability to participate in stock 

loan activity at OCC. In addition, OCC 

does not believe that review and 

approval of this type of business 

expansion request is an appropriate use 

of the Committee’s time given other, 

more substantive, issues the Committee 

must consider. Therefore, OCC is 

amending Article V, Section 1, 

Interpretation and Policy .03 of its ByLaws to provide the Executive 

Chairman, the President, or their 

delegate with the authority to approve 

the business expansion requests of 

Hedge Clearing Members to become 

Market Loan Clearing Members without 

further review by the Committee, 

provided that any delegate be an officer 

of the rank of Senior Vice President or 

higher. According to OCC, it will 

implement appropriate procedures to 

ensure that Hedge Clearing Members 

meet the requirements to become 

Market Loan Clearing Members and 

participate and the Market Loan 

Program. 

II. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act 9 directs 

the Commission to approve a proposed 

rule change of a self-regulatory 

organization if it finds that the proposed 

rule change 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,10 which 

requires the rules of a registered clearing 

agency to, among other things, remove 

impediments to and perfect the 

mechanism of a national system for the 

prompt and accurate clearance and 

settlement of securities transitions. 

OCC’s rule is consistent with Section 

17A(b)(3)(F) of the Act 11 because by 

providing the Executive Chairman, the 

President or their delegate, provided the 

delegate is a Senior Vice President or 

higher, the authority to review and 

approve the business expansion 

requests of Hedge Clearing Members 

that would like to become Market Loan 

Clearing Members without further 

review by the Committee, the 

Committee can have more time to focus 

on more substantive matters. As 

discussed above, the Committee will 

have already analyzed and approved the 

clearing member’s ability to meet OCC’s 

financial requirements when it 

approved the clearing member as a 

Hedge Clearing Member. This business 

expansion review and approval process 

can be accomplished by OCC’s 

Executive Chairman, the President, or 

their delegate, provided that the 

delegate is an officer of the rank of 

Senior Vice President or higher, because 

it is primarily administrative in nature 

and includes a verification that the 

clearing member still meets OCC’s 

financial requirements. By giving the 

Committee more time to focus on more 

substantive matters, this rule is 

consistent with removing impediments 

to and perfect the mechanism of a 

national system for the prompt and 

accurate clearance and settlement of 

securities transitions.12

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 13 and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,14 that the 

proposed rule change (SR–OCC–2014– 

19) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28766 Filed 12–8–14; 8:45 am] 

BILLING CODE 8011–01–P 


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