Document ID: SEC-2021-1649-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Options Clearing Corp.
Posted Date: 2021-11-24T05:00Z

[Federal Register Volume 86, Number 224 (Wednesday, November 24, 2021)]
[Notices]
[Pages 67108-67110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25624]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93612; File No. SR-OCC-2021-012]

Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Correct an Inadvertent Omission in a Prior Proposed Rule Change 
Concerning OCC's Schedule of Fees

November 18, 2021.
    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 November 8, 2021, 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. OCC filed the proposed rule change pursuant to Section 
19(b)(3)(A)(ii) \3\ of the Act and Rule 19b-4(f)(2) \4\ thereunder 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change by OCC would correct an inadvertent 
omission in OCC's schedule of fees that was the subject of a prior rule 
filing. OCC's schedule of fees is included as Exhibit 5 to File No. SR-
OCC-2021-012. Material proposed to be added to OCC's schedule of fees 
as currently in effect is underlined and material proposed to be 
deleted is marked in strikethrough text.

[[Page 67109]]

All capitalized terms not defined herein have the same meaning as set 
forth in the OCC By-Laws and Rules.\5\
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    \5\ 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
    The purpose of this proposed rule change is to revise OCC's 
schedule of fees to correct an inadvertent omission in the prior rule 
filing that established a fee holiday for the period from November 1, 
2021, and ending December 31, 2021.\6\ Based on OCC's financial 
position as a result of historic contract volume, and consistent with 
OCC's Capital Management Policy, that prior filing reduced its per 
contract and per trade clearing fees to $0 for the last two months of 
2021. However, through an inadvertent oversight, two line items in the 
schedule of fees related to clearing fees were not reduced accordingly: 
(1) The minimum monthly clearing fee of $200 and (2) a fee of $0.02 per 
side for linkage transactions, capped at $55 per trade per side.\7\ OCC 
is now proposing to correct the schedule of fees set forth in Exhibit 5 
to File No. SR-OCC-2021-012 to reflect that OCC will not collect these 
fees during the fee holiday.
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    \6\ See Exchange Act Release No. 93195 (Sept. 29, 2021), 86 FR 
55039 (Oct. 5, 2021) (File No. SR-OCC-2021-009).
    \7\ The linkage fee was added to OCC's schedule of fees in 2012 
so that OCC could, for the purposes of charging a clearing fee, 
treat routing trades executed in accordance with the Options Order 
Protection and Locked/Crossed Market Plan the same as market maker/
specialist scratch trades, which were subject to a reduced ``scratch 
fee.'' See Exchange Act Release No. 68025 (Oct. 10, 2012), 77 FR 
63398 (Oct. 16, 2012) (File No. SR-OCC-2012-18). In 2016, OCC 
simplified its schedule of fees by, among other things, eliminating 
the scratch fee but retained the linkage per side fee. See Exchange 
Act Release No. 77336 (Mar. 10, 2016), 81 FR 14153 (Mar. 16, 2016) 
(File No. SR-OCC-2016-005).

 
----------------------------------------------------------------------------------------------------------------
 
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Clearing fees effective June 1, 2021              Proposed fee holiday from November 1, 2021 to
                                                                December 31, 2021
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Linkage per side..............................         * $0.02  Linkage per side................           $0.00
Minimum Monthly Clearing Fee..................          200.00  Minimum Monthly Clearing Fee....            0.00
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* A Linkage transaction that includes more than 2,750 contracts will be charged a flat fee of $55.00 per trade
  per side.

    The listing of the fees in the schedule of fees would be reordered 
to group these two fees with the other clearing fees that are subject 
to the fee holiday. Like the changes to OCC's clearing fees set forth 
in File No. SR-OCC-2021-009, the linkage per side fee and the minimum 
monthly clearing fee will revert to the fee schedule in effect before 
November 1, 2021 and OCC will remove the fee holiday from its schedule 
of fees effective the first trading day of 2022.
    No fees for transactions occurring within the fee holiday period 
have been collected because clearing fees are due to OCC the month 
after the fees are incurred. OCC will not collect fees for transactions 
that occurred between November 1, 2021 through the first date it may 
implement the corrected fee schedule after completing all regulatory 
actions necessary to make the proposed corrections.
(2) Statutory Basis
    Section 17A(b)(3)(D) of the Act \8\ requires that the rules of a 
clearing agency provide for the equitable allocation of reasonable 
dues, fees, and other charges among its participants. OCC believes that 
the proposed correction of inadvertent omissions to OCC's schedule of 
fees would facilitate the equitable allocation of fees among its 
participants because it would eliminate inadvertent discrepancies in 
the application of the fee holiday that might otherwise impact certain 
market participants differently depending on the business they conduct 
through OCC. The corrected fees would be equally applicable to all 
market participants. As a result, OCC believes that the proposed 
corrections would provide for the equitable allocation of reasonable 
fees in accordance with Section 17A(b)(3)(D) of the Act.\9\
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    \8\ 15 U.S.C. 78q-1(b)(3)(D).
    \9\ 15 U.S.C. 78q-1(b)(3)(D).
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    In addition, SEC Rule 17Ad-22(e)(23)(ii) \10\ provides that a 
covered clearing agency must establish, implement, maintain and enforce 
written policies and procedures reasonably designed to provide 
sufficient information to enable participants to identify and evaluate 
the risks, fees, and other material costs they incur by participating 
in the covered clearing agency. By correcting OCC's schedule of fees 
consistent with the intent of the fee holiday, OCC would eliminate 
ambiguity that might otherwise persist about whether OCC intends to 
charge the minimum monthly clearing fee and the fee for linkage 
transactions while the fee holiday is in effect, which it does not. 
Accordingly, OCC believes that the proposed corrections are reasonably 
designed to provide participants sufficient information to evaluate 
OCC's fees, in accordance with SEC Rule 17Ad-22(e)(23)(ii).\11\
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    \10\ 17 CFR 240.17AD-22(e)(23)(ii).
    \11\ 17 CFR 240.17AD-22(e)(23)(ii).
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    The proposed rule change is not inconsistent with the existing 
rules of OCC, including any other rules proposed to be amended.

(B) Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Act \12\ 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 Act. OCC does not 
believe that the proposed rule change would have any impact or impose a 
burden on competition. Although this proposed rule change affects 
clearing members, their customers, and the markets that OCC serves, OCC 
believes that the proposed rule change would not disadvantage or favor 
any particular user of OCC's services in relationship to another user 
because the proposed fee holiday with respect to these fees applies 
equally to all users of OCC. Accordingly, OCC does not believe that the 
proposed rule change would have

[[Page 67110]]

any impact or impose a burden on competition.
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    \12\ 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)(ii) \13\ of the Act, and Rule 19b-
4(f)(2) thereunder,\14\ the proposed rule change is filed for immediate 
effectiveness as it constitutes a change in fees charged to OCC's 
members. 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.\15\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 17 CFR 240.19b-4(f)(2).
    \15\ 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-2021-012 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-2021-012. 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 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.
    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-2021-012 and should be 
submitted on or before December 15, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25624 Filed 11-23-21; 8:45 am]
BILLING CODE 8011-01-P