Document ID: SEC-2022-1464-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Options Clearing Corp.
Posted Date: 2022-11-14T05:00Z

[Federal Register Volume 87, Number 218 (Monday, November 14, 2022)]
[Notices]
[Pages 68206-68208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24647]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96246; File No. SR-OCC-2022-011]

Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change by 
The Options Clearing Corporation Concerning Corrections to Its By-Laws

November 7, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on October 24, 2022, The Options Clearing 
Corporation (``OCC'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as 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 on 
the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    This proposed rule change would amend OCC's By-Laws to (i) correct 
an inadvertent omission and typographical error in a prior rule filing 
and (ii) correct an erroneous cross-reference and make other conforming 
changes consistent with a reorganization effected by another prior 
proposed rule change. Amendments to OCC's By-Laws and Rules are 
included in Exhibit 5 of filing SR-OCC-2022-011. Material proposed to 
be added is marked by underlining, and material proposed to be deleted 
is marked with strikethrough text. All terms with initial 
capitalization that are not otherwise defined herein have the same 
meaning as set forth in the By-Laws and Rules.\3\
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    \3\ OCC's By-Laws and Rules can be found on OCC's public 
website: https://www.theocc.com/Company-Information/Documents-and-Archives/By-Laws-and-Rules.
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II. Clearing Agency'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.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

(1) Purpose
    As a self-regulatory organization (``SRO'') that is registered as a 
covered clearing agency under the Securities Exchange Act of 1934 
(``Exchange Act''), as amended,\4\ and a derivatives clearing 
organization (``DCO'') under the Commodity Exchange Act,\5\ OCC files 
proposed changes to its rules with the SEC and the Commodity Futures 
Trading Commission (``CFTC''), including changes to OCC's By-Laws and 
Rules.\6\ SEC and CFTC regulations require that SROs maintain clear and 
transparent governance arrangements.\7\ In order to enhance the clarity 
and transparency of its By-Laws, OCC is proposing amendments that would 
(1) correct an inadvertent omission and typographical error introduced 
by a prior rule filing and (2) correct an erroneous cross-reference and 
make other conforming changes consistent with a reorganization effected 
by another prior proposed rule change.
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    \4\ 15 U.S.C. 78s.
    \5\ 7 U.S.C. 7a-1.
    \6\ See 17 CFR 240.19b-4 (SRO proposed rule changes filed with 
the SEC); 17 CFR 40.6 (DCO self-certifications filed with the CFTC).
    \7\ See 17 CFR 240.17Ad-22(e)(2)(i) (with respect to governance 
arrangements of covered clearing agencies); 17 CFR 39.24(a)(1)(iii) 
[sic] (with respect to DCO governance arrangements).
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1. Typographical Error Correction
    First, OCC has identified an inadvertent omission and typographical 
error in the text of a prior proposed rule change submitted to the SEC:
     The reference to ``Treasurer'' in Article IV, Section 2 
would be replaced with ``Chief Financial Officer,'' consistent with the 
intent of the proposed rule change (SR-OCC-2021-010) that amended 
Section 11 of that Article to address the appointment and 
responsibilities of a Chief Financial Officer, rather than a 
Treasurer.\8\
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    \8\ See Exchange Act Release No. 93436 (Oct. 27, 2021), 86 FR 
60499, 60500 (Nov. 2, 2021) (SR-OCC-2021-010).
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     OCC would also amend Section 11 of Article IV (Chief 
Financial Officer), to correct an inadvertent reference to ``Chief 
Compliance Officer,'' rather than

[[Page 68207]]

the Chief Financial Officer, also consistent with the intent of that 
proposed rule change.\9\
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    \9\ Id.
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2. Correcting an Erroneous Cross-Reference
    OCC has also identified an erroneous cross-reference to provisions 
that had been relocated by a prior rule change. Specifically, in a 
proposed rule change filing concerning the Board's ability to appoint a 
non-executive Chairman (SR-OCC-2021-007), OCC also revised the 
provision of the By-Laws concerning the Member Vice Chairman of the 
Board by relocating the second and third sentence of Article IV, 
Section 1 (concerning the appointment of the Vice Chairman) to Article 
IV, Section 7 (concerning the responsibilities of the Vice 
Chairman).\10\ By relocating the second sentence of Section 1, the 
change orphaned a cross-reference to that sentence in Article XI, 
Section 1, which concerns those By-Laws that require stockholder 
approval to amend.
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    \10\ See Exchange Act Release No. 93102 (Sept. 22, 2021), 86 FR 
53718, 53720 (Sept. 28, 2021) (SR-OCC-2021-007).
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    To correct the erroneous cross reference in Article XI, OCC 
proposes to move current Article IV, Section 7 in its entirety to 
Article III, which is the Article that concerns the make-up of the 
Board and the responsibilities of directors. Article IV, Section 7 
would be re-titled ``Member Vice Chairman of the Board'' \11\ and 
become Article III, Section 9A, consistent with the establishment of 
Article III, Section 9 (Chairman of the Board) by File No. SR-OCC-2021-
007.\12\ Accordingly, the proposed change would consolidate provisions 
concerning the appointment and responsibilities of the Chairman and 
Member Vice Chairman of the Board into a single By-Law Article. In 
turn, OCC would amend Article XI, Section 1 by deleting the current 
cross-reference to the second sentence of Article IV, Section 1. No 
additional cross-reference to the relocated provisions would be 
necessary because Article XI, Section 1 already applies to Article III 
in its entirety.
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    \11\ As provided by current Article IV, Section 7, the Vice 
Chairman of the Board is selected from the Member Directors and is 
referred to as the ``Member Vice Chairman.''
    \12\ Id. at 53719. [sic]
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(2) Statutory Basis
    OCC believes the proposed rule changes are consistent with Section 
17A of the Exchange Act and the rules and regulations thereunder. 
Section 17A(b)(3)(F) \13\ of the Exchange 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 and 
derivatives transactions and protect investors and the public interest. 
By correcting an inadvertent omission, typographical error, and 
erroneous cross-references in OCC's By-Laws and Rules, the proposed 
rule changes facilitate the administration of existing SRO rules 
designed to promote the prompt and accurate clearance and settlement of 
securities and derivatives transactions and protect investors and the 
public interest.
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    \13\ 15 U.S.C. 78q-1(b)(3)(F).
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    In addition, Rule 17Ad-22(e)(2)(i) requires OCC to maintain written 
policies and procedures reasonably designed to, among other things, 
provide for governance arrangements that are clear and transparent.\14\ 
By correcting errors and applying conforming changes consistent with 
certain reorganization of the By-Laws effected by SR-OCC-2021-007, the 
changes discussed above are intended to support the maintenance of 
OCC's By-Laws and improve the clarity and transparency of the 
governance arrangements addressed therein.
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    \14\ 17 CFR 240.17Ad-22(e)(2)(i).
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(B) Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Exchange Act requires that the rules of 
a clearing agency not impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Exchange Act.\15\ As 
discussed above, the proposed changes would correct an inadvertent 
omission, typographical error, and erroneous cross-references, and 
apply conforming edits to the provisions concerning the Member Vice 
Chairman consistent with a recent reorganization of the provisions 
concerning the Chairman. These proposed changes are technical in nature 
and would not impact the rights or obligations of Clearing Members or 
other participants in a way that would benefit or disadvantage any 
participant versus another participant. Accordingly, OCC does not 
believe that the proposed corrections to its By-Laws and Rules have any 
impact, or impose any burden, on competition.
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    \15\ 15 U.S.C. 78q-1(b)(3)(I).
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(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants or Others

    Written comments on the proposed rule change 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

    Pursuant to Section 19(b)(3)(A)(i) \16\ of the Act, and Rule 19b-
4(f)(1) thereunder,\17\ the proposed rule change is filed for immediate 
effectiveness. At any time within 60 days of the filing of the 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. The proposal shall 
not take effect until all regulatory actions required with respect to 
the proposal are completed.\18\
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    \16\ 15 U.S.C. 78s(b)(3)(A)(i).
    \17\ 17 CFR 240.19b-4(f)(1).
    \18\ Notwithstanding its immediate effectiveness, implementation 
of this rule change will be delayed until this change is deemed 
certified under CFTC Regulation 40.6.
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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 [email protected]. Please include 
File Number SR-OCC-2022-011 on the subject line.

Paper Comments

     Send paper comments in triplicate to Vanessa Countryman, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-OCC-2022-011. 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 website (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

[[Page 68208]]

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 website 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 filing also will be available for inspection and copying at the 
principal office of OCC and on OCC's website at https://www.theocc.com/Company-Information/Documents-and-Archives/By-Laws-and-Rules.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-OCC-2022-011 and 
should be submitted on or before December 5, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-24647 Filed 11-10-22; 8:45 am]
BILLING CODE 8011-01-P