Document ID: SEC-2011-1803-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Options Clearing Corp.
Posted Date: 2011-11-23T05:00Z

[Federal Register Volume 76, Number 226 (Wednesday, November 23, 2011)]
[Notices]
[Pages 72483-72484]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30227]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65789; File No. SR-OCC-2011-14]

Self-Regulatory Organizations; Options Clearing Corporation; 
Order Approving Proposed Rule Change Relating to Clearing Options on 
the CBOE Silver Volatility Index

November 18, 2011.

I. Introduction

    On September 27, 2011, the Options Clearing Corporation (``OCC'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change SR-OCC-2011-14 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder.\2\ The Commission received no comment letters on the 
proposed rule change. This order approves the proposed rule change as 
amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

II. Description

    The purpose of the proposed rule change is to remove any potential 
cloud on the jurisdictional status of options on the CBOE Silver ETF 
Volatility Index, which is an index that measures the implied 
volatility of options on the iShares Silver Trust, an exchange-traded 
fund designed to reflect the performance of the price of silver.\3\ To 
accomplish this purpose, OCC is proposing to amend the interpretation 
and policy following the introduction in Article XVII of OCC's By-Laws 
to clarify that OCC will clear and treat as securities options any 
option contracts on the CBOE Silver ETF Volatility Index. On June 14, 
2010, the Commission approved rule filing SR-OCC-2010-07, which added 
the existing interpretation, which relates to the treatment and 
clearing of options on the CBOE Gold ETF Volatility Index.\4\
---------------------------------------------------------------------------

    \3\ The staff notes that on August 11, 2011, the Commission 
issued an Order granting approval of a proposed rule change to trade 
options on the CBOE Silver ETF Volatility Index. See Securities 
Exchange Act Release No. 34-65116, 76 FR 51099 (August 17, 2011).
    \4\ Securities Exchange Act Release No. 62290 (June 14, 2010), 
75 FR 35861 (June 23, 2010).
---------------------------------------------------------------------------

    In its capacity as a ``derivatives clearing organization'' 
registered as such with the CFTC, OCC has filed this proposed rule 
change for prior approval by the CFTC pursuant to provisions of the 
Commodity Exchange Act (the ``CEA'') in order to foreclose any 
potential liability under the CEA based on an argument that the 
clearing by OCC of such options as securities options constitutes a 
violation of the CEA.

III. Discussion

    Section 17A(b)(3)(F) of the Act requires, among other things, that 
the rules of a clearing agency be designed to promote the prompt and 
accurate clearance and settlement of securities transactions and 
derivative transactions.\5\ The proposed rule change is similar to a 
proposed rule change the Commission approved previously with respect to 
the jurisdictional status CBOE Gold ETF Volatility Index and clarifies 
that OCC will clear and treat as securities any relative performance 
index, including in situations in which one of the reference securities 
of a relative performance index is an ETF designed to measure the 
return of gold

[[Page 72484]]

or silver. Any uncertainty regarding the jurisdictional status of a 
product could presumably interfere with OCC's ability to provide 
clearance and settlement services with respect to the product. The 
proposed rule change, by allowing OCC confirm in its rules the 
treatment of a relative performance index, should facilitate the 
clearance and settlement of such products and, thus, should help 
promote the prompt and accurate clearance and settlement of securities 
transactions and of derivative transactions.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78a-1(b)(3)(F).
---------------------------------------------------------------------------

IV. 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 \6\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (File No. SR-OCC-2011-14) be, and 
hereby is, approved.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2).
    \8\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact of efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30227 Filed 11-22-11; 8:45 a.m.]
BILLING CODE 8011-01-P