Document ID: SEC-2007-0987-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Options Clearing Corp.
Posted Date: 2007-07-20T04:00Z

[Federal Register: July 20, 2007 (Volume 72, Number 139)]
[Notices]               
[Page 39869-39873]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20jy07-97]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56069; File No. SR-OCC-2006-19]

 
Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Granting Approval of a Proposed Rule Change Relating to Close-Out 
Netting Procedures

July 13, 2007.

I. Introduction

    On October 10, 2006, The Options Clearing Corporation (``OCC'') 
filed with the Securities and Exchange Commission (``Commission'') 
proposed rule change SR-OCC-2006-19 pursuant to section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'').\1\ On May 15, 2007, OCC 
amended the proposed rule change. Notice of the proposal was published 
in the Federal Register on May 29, 2007.\2\ On June 21, 2007, OCC again 
amended the proposed rule change.\3\ Three comment letters were 
received.\4\ For the reasons discussed below, the Commission is 
granting approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 55788 (May 21, 2007), 72 
FR 29569.
    \3\ Although the proposed rule change was amended after it was 
noticed for comment in the Federal Register, republication of the 
notice was not necessary because the June 21, 2007, amendment made 
only a technical change regarding the application of a financial 
accounting interpretation.
    \4\ Edward S. Grieb, Managing Director and Financial Controller, 
Lehman Brothers Holdings Inc. (June 19, 2007); Matthew Schroeder, 
Chairman, Dealer Accounting Committee, Securities Industry and 
Financial Markets Association (June 19, 2007); Gregory A. Sigrist, 
Managing Director, Morgan Stanley, New York, New York (June 19, 
2007).
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II. Description

Background

    OCC was asked by several of its Clearing Members to consider 
adopting a rule that would allow for close-out netting of obligations 
running between OCC and Clearing Members in the event of an OCC default 
or insolvency. The reason was that such a rule could reduce applicable 
capital requirements for a Clearing Member's parent company where the 
parent is a U.S. or non-U.S. bank or part of a Consolidated Supervised 
Entity (``CSE''). The absence of a netting agreement that would apply 
in a default or insolvency of OCC could cause the minimum capital 
requirement applicable to such a parent company and its subsidiaries to 
be substantially larger on a consolidated basis than it would be 
otherwise. In the absence of a netting agreement, applicable banking 
regulations generally prohibit offsetting the Clearing Member's 
liabilities to OCC on short positions in options and on other 
obligations against the Clearing Member's credits from OCC with respect 
to long options positions and from other obligations of OCC. In 
addition, OCC believes that a close-out netting rule would clarify the 
accounting treatment of obligations between OCC and its Clearing 
Members.
    The proposed rule change is designed to allow Clearing Members to 
comply with international standards under the Basel Capital Accord 
adopted by the Basel Committee on Banking Supervision relating to 
bilateral netting (``Basel Netting Standards'').\5\ It is OCC's 
understanding that the capital rules applicable to most banks following 
the Basel Netting Standards require that an enforceable netting 
agreement be in place in order for mutual obligations between a 
Clearing Member that is a bank affiliate and a counterparty such as OCC 
to be treated on a net basis. The policy behind this requirement is to 
ensure that obligations that are treated on a net basis for capital 
purposes can actually be offset against one another in the event of the 
failure of the counterparty. In the absence of an enforceable netting 
agreement, there is concern that the representative of the failed 
counterparty (i.e., OCC in this scenario) under applicable insolvency 
law might be able to ``cherry pick'' by assuming the benefit of 
contracts representing an asset to the bankruptcy estate while 
rejecting contracts representing a liability. This would force the non-
defaulting counterparty (i.e., the Clearing Member in this scenario) to 
perform in full on its liabilities while sharing with other unsecured 
creditors in any amounts available for distribution from the bankruptcy 
estate to satisfy its claims. An enforceable netting agreement 
providing for ``close-out netting'' in the event of a default or 
insolvency of OCC would avoid this potential result.
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    \5\ For more information on the Basel Committee on Banking 
Supervision and the Basel Netting Standards, see the Bank for 
International Settlement's Web site at: http://www.bis.org.

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    Chapter XI of OCC's Rules, Suspension of a Clearing Member, 
provides in considerable detail for

[[Page 39870]]

liquidation of the accounts of an insolvent Clearing Member including 
provisions for close-out netting of the Clearing Member's obligations 
against its assets to the extent permitted by customer protection rules 
under the Act and under the Commodity Exchange Act (``CEA''). However, 
OCC's rules do not presently contain any provisions that specifically 
provide for close-out netting in the event of a default or insolvency 
of OCC. Indeed, an OCC default or insolvency has always been considered 
so unlikely that OCC's rules do not contain any provisions whatever 
contemplating such events. OCC's management does not believe that an 
OCC default or insolvency has become any more likely. On the contrary, 
OCC's long history of safe operations and continually improved methods 
of risk management suggest that such an event is more remote than ever. 
Nevertheless, the Basel Netting Standards make it desirable for OCC to 
put in place such a netting provision in order to clarify the capital 
requirements applicable on a consolidated basis to parent companies of 
Clearing Members that are subject to the Basel Netting Standards.
    The Basel Netting Standards are not directly applicable to the 
determination of net capital requirements for broker-dealers under 
Commission Rule 15c3-1.\6\ However, some Clearing Members are 
subsidiaries of banks or bank holding companies that are subject to the 
Basel Netting Standards when computing capital requirements on a 
consolidated basis. In addition, several of OCC's largest Clearing 
Members have volunteered to participate in the Commission's CSE 
program. Finally, as noted below, OCC believes that a close-out netting 
rule would also clarify the accounting treatment of obligations between 
OCC and a Clearing Member under FIN 39.\7\
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    \6\ 17 CFR 240.15c3-1.
    \7\ Financial Account Standards Board (``FASB'') Interpretation 
No. 39, Offsetting of Amounts Related to Certain Contracts. FIN 39 
specifies the circumstances in which assets and liabilities may be 
treated as offsetting in financial statements.
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    The Basel Netting Standards and FIN 39 (collectively ``Netting 
Standards'') are stated in general terms and do not contain detailed 
requirements. OCC's proposed close-out netting procedures would clearly 
permit Clearing Members to treat their obligations to OCC on a net 
basis to the fullest extent consistent with the Commission's customer 
protection rules in the event of an OCC default or insolvency. The 
proposed rule change is also intended to protect the clearing system 
from being thrown out of balance or forced into a disorderly 
liquidation by a single Clearing Member's exercise of netting rights. 
Unlike typical, purely bilateral OTC derivatives relationships, OCC's 
contractual rights and obligations, while bilateral between OCC and any 
individual Clearing Member, represent a balanced structure in which 
every obligation owed by OCC to a Clearing Member is in turn matched by 
a corresponding obligation of a Clearing Member to OCC. The creation of 
individually exercisable netting rights that could be exercised 
independently by each Clearing Member in the event of an OCC default or 
insolvency could result in unfairness and disruption if no coordination 
is imposed.

The Basel Netting Standards

    The Basel Netting Standards are contained in Basel II: 
International Convergence of Capital Measurement and Capital Standards: 
A Revised Framework--Comprehensive Version (June 2006) (``Basel II 
Accord''). The Basel Netting Standards provide that a bank \8\ may net 
transactions subject to any legally valid form of bilateral netting, 
including netting of bilateral obligations arising from novation, if 
the bank satisfies its national supervisor that it has a netting 
contract with the counterparty ``which creates a single legal 
obligation, covering all included transactions, such that the bank 
would have either a claim to receive or obligation to pay only the net 
sum of the positive and negative mark-to-market values of included 
individual transactions in the event a counterparty fails to perform 
due to any * * * default, bankruptcy, liquidation or similar 
circumstances.'' \9\
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    \8\ These same standards are also applied to bank holding 
companies.
    \9\ Basel Committee on Banking Supervision, Basel Capital 
Accord: Treatment of Potential Exposure for Off-Balance Sheet Items 
(April 1995) at Annex, p. 4. The relevant bilateral netting 
standards under this 1995 publication were not overridden by the 
Basel II Accord. Basel II Accord at p. 213. Basel II also allows 
cross-product netting.
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    The Basel Netting Standards also require that the bank have certain 
``written and reasoned legal opinions that, in the event of a legal 
challenge, the relevant courts and administrative authorities would 
find the bank's exposure to be the net amount.'' The national 
supervisor must be satisfied that the netting is enforceable under the 
laws of each relevant jurisdiction. The proposed close-out netting 
procedures are intended to support such an opinion.
    The Basel Netting Standards have been incorporated in applicable 
bank regulatory laws or regulations in various jurisdictions. For 
example, the substance of this standard appears in Article 12f of the 
Swiss Banking Ordinance. It has also been incorporated into the capital 
guidelines for various U.S. financial institutions.\10\
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    \10\ See e.g., Regulations of the Office of the Comptroller of 
the Currency applicable to national banks set forth at 12 CFR 
appendix A to part 3 section (3)(b)(5)(ii)(B) (adopted July 1, 
2002).
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FDICIA and Bankruptcy Code

    The proposed close-out netting procedures are designed to take 
advantage of the netting provisions of Title IV of the Federal Deposit 
Insurance Corporation Improvement Act of 1991 (``FDICIA'') and of the 
applicable provisions of the United States Bankruptcy Code. Section 404 
of FDICIA generally validates netting contracts among members of 
clearing organizations notwithstanding any other provision of law.\11\ 
In order to qualify for this benefit, the ``netting contract'' must be 
between ``members'' of a ``clearing organization,'' as each of these 
terms is defined in FDICIA. OCC meets the definition of ``clearing 
organization'' under FDICIA, and both it and its Clearing Members meet 
the definition of ``members.'' Under FDICIA, the rules of a clearing 
organization are expressly included within the definition of ``netting 
contract.'' Accordingly, under section 404 of FDICIA, the netting 
provisions of OCC's By-Laws and Rules, including the proposed revised 
netting procedures, will be given effect in the event of OCC's default 
or insolvency.
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    \11\ 12 U.S.C. 4403.
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    Section 362(b) of the United States Bankruptcy Code \12\ exempts 
from the automatic stay provisions of the Bankruptcy Code the setoff 
by, among other parties, stockbrokers, commodity brokers, or clearing 
agencies of mutual debts or claims under commodity or securities 
contracts. This section preserves OCC's ability to net obligations 
between OCC and a suspended Clearing Member and similarly would protect 
the ability of Clearing Members to net obligations under the proposed 
netting procedures in the event of OCC's default or insolvency. In 
addition, the Bankruptcy Abuse Prevention and Consumer Protection Act 
of 2005 (``BAPCPA'') \13\ added to the Bankruptcy Code new subsection 
362(o) which provides that the right of setoff and other relevant 
rights may not be stayed by any order of a court or administrative 
agency in any proceeding under the Bankruptcy Code.\14\ This addition 
was a significant expansion of the protections for

[[Page 39871]]

financial contracts under the Bankruptcy Code.
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    \12\ 11 U.S.C. 362(b).
    \13\ Public Law 109-8, 119 Stat. 23 (2005).
    \14\ 11 U.S.C. 362(o).
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Prior Netting Filing and Clearing Member Comments

    OCC previously submitted and subsequently withdrew a proposed rule 
change with respect to close-out netting (``Prior Netting 
Filing'').\15\ After reviewing the Prior Netting Filing, some Clearing 
Members questioned whether the netting procedures set forth in that 
filing satisfied the Netting Standards. Specifically, Clearing Members 
questioned whether:
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    \15\ File No. SR-OCC-2005-17.
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    1. The definition of insolvency in the Prior Netting Filing, which 
covered only voluntary or involuntary cases under Chapter 7, needed to 
be expanded to include other types of bankruptcies, particularly 
Chapter 11 cases, and non-bankruptcy defaults;
    2. The procedures set forth in the Prior Netting Filing complied 
with the Netting Standards in light of the inability of the Clearing 
Members as the non-defaulting parties to initiate the netting process; 
and
    3. The proposed procedures gave Clearing Members the ability to 
promptly net and to close-out positions as required to comply with the 
Netting Standards given the degree of control that OCC reserved to 
itself in the process.
    After considering the Clearing Members' comments, OCC withdrew the 
Prior Netting Filing and made modifications to the proposed netting 
provisions which are reflected in the current filing. The primary 
differences between the currently-proposed close-out netting procedures 
and those contained in the Prior Netting Filing are that the currently-
proposed procedures:
    1. Significantly expand the definition of insolvency to include 
non-bankruptcy defaults, specifically any failure by OCC to comply with 
an undisputed obligation to deliver money or property to a Clearing 
Member for a period of thirty days after the obligation becomes due, 
and to include bankruptcy or insolvency proceedings under statutory 
provisions other than Chapter 11 of the U.S. Bankruptcy Code;
    2. Provide that upon the occurrence of an event of default or 
insolvency, any Clearing Member that is neither suspended nor in 
default with regard to an obligation to OCC may provide a notice to OCC 
of its intention to terminate all cleared contracts and stock loan and 
borrow positions in all of its accounts; and
    3. Establish a fixed termination time for all cleared contracts and 
stock loan and borrow positions, which would be the close of business 
on the third business day after OCC's receipt of the prescribed notice 
from a Clearing Member unless a different time is mandated by the 
Bankruptcy Code, and provide that the liquidation settlement date will 
occur as promptly as practicable after the termination time (the 
original provisions granted OCC the discretion to establish the 
termination time and provided that the liquidation settlement date 
would occur no earlier than the business day following the termination 
date).
    OCC believes that the above modifications address the Clearing 
Members' concerns while still permitting the liquidation process to 
proceed in an orderly manner and the clearance system to remain in 
balance.

Overview of Proposed Rule Change

    The proposed rule change consists of a single new Section 27, 
Close-Out Netting, of Article VI of OCC's By-Laws, Clearance of 
Exchange Transactions. Consistent with the requirements of the Basel 
Netting Standards, the netting provision is applicable in the event 
that OCC fails to perform its obligations with respect to cleared 
contracts as the result of defaults by OCC in performing its 
obligations under its rules or as the result of bankruptcy, a 
liquidation of OCC, or similar circumstances. The close-out netting 
procedures are drafted in such a way that they would only be triggered 
by an event of default, as defined in new section 27(a). The procedures 
would not be triggered by any delay in performance that is permitted 
under OCC's By-Laws or Rules. For example, section 19 of Article VI of 
OCC's By-Laws permits OCC to take specified actions, including 
suspension of settlement obligations, in the event of a shortage of 
underlying securities. These delays would not be considered an event of 
default under section 27 and therefore would not allow a Clearing 
Member to initiate the close-out netting procedures.
    Under the proposed close-out netting procedures, in the event of a 
default or insolvency by OCC, OCC would be required to provide notice 
of the default or insolvency to the Commission, the CFTC, all Clearing 
Members, any clearing organizations with which OCC has cross-margining 
or cross-guarantee agreements, and all markets for which OCC clears 
transactions. The proposed procedures further provide that in the event 
of an OCC default, any Clearing Member, so long as it is not suspended 
or in default, may provide a written notice to OCC of its intent to 
initiate the liquidation process with regard to its own contracts and 
stock loan and borrow positions. This notice would, however, trigger a 
liquidation of cleared contracts and positions of all Clearing Members. 
This procedure is necessary because liquidating contracts and positions 
of less than all Clearing Members would result in an imbalance of the 
clearing system and therefore would be unworkable. The proposed 
procedures establish the close of business on the third business day 
after OCC's receipt of the liquidation notice from a Clearing Member as 
the termination time unless the Bankruptcy Code prescribes a different 
time.
    The proposed close-out netting procedures provide that when a 
triggering event occurs, rights and obligations within and between 
accounts of each Clearing Member will be netted to the same extent as 
if the Clearing Member had been suspended and its accounts were being 
liquidated under Chapter XI of the Rules. This is appropriate in that 
those rules generally provide for the netting of assets against 
liabilities to the extent permitted under applicable law, including the 
customer protection rules referred to above. Assets remaining after all 
legally permissible offsets would be returned to the Clearing Member 
entitled to them. The Clearing Member would remain obligated to OCC 
only to the extent of any remaining net liabilities following such 
permitted offsets.
    If close-out netting were ever required because of the default or 
insolvency of OCC, it seems likely that there would be no market 
available in which to liquidate positions in cleared contracts through 
market transactions. Accordingly, the proposed procedures contain a 
provision for valuation of open cleared contracts based upon market 
values of underlying interests and provide a reasonable means for OCC 
to fix all necessary values of assets and liabilities for purposes of 
the netting. Under the procedures, OCC is to provide valuations as 
promptly as practicable but in any event within thirty days of the 
termination time. Valuations would be based upon available market 
information.

FIN 39: Offsetting of Amounts Related to Certain Contracts

    In addition to the potential benefit of the proposed close-out 
netting procedures with respect to capital requirements applicable to 
certain Clearing Members and their affiliates on a consolidated basis 
under the Basel Netting Standards, OCC believes that the proposed 
close-out netting procedures should also clarify the accounting 
treatment of mutual

[[Page 39872]]

obligations running between OCC and its Clearing Members. OCC's 
Clearing Members most commonly prepare their financial statements using 
United States Generally Accepted Accounting Principles (``US GAAP''). 
FIN 39 responds to certain questions relating to the circumstances in 
which assets and liabilities may be treated as offsetting in financial 
statements. FIN 39 is an interpretation of Accounting Principles Board 
(``APB'') Opinion No. 10, which states that ``it is a general principle 
of accounting that the offsetting of assets and liabilities in the 
balance sheet is improper except where a right of setoff exists.'' FIN 
39 provides a definition of a right of setoff and a statement of the 
conditions under which a right of setoff exists. FIN 39 states, ``A 
right of setoff is a debtor's legal right, by contract or otherwise, to 
discharge all or a portion of the debt owed to another party by 
applying against the debt an amount that the other party owes to the 
debtor.'' FIN 39 sets forth the following four conditions which must be 
met for there to exist a right of setoff:
    (1) Each of two parties owes the other determinable amounts.
    (2) The reporting party has the right to set off the amount owed 
with the amount owed by the other party.
    (3) The reporting party intends to set off.
    (4) The right of setoff is enforceable at law.

It is the obligation of each Clearing Members to determine its proper 
application of U.S. GAAP but OCC believes that proposed new section 27 
will enable Clearing Members to conclude that conditions (1), (2), and 
(4) have been met. (Condition (3) deals with intent, which is a factual 
question.)

Discussion of Specific Provisions of Section 27

    The text of proposed new section 27 of Article VI of the By-Laws is 
largely self-explanatory in light of the foregoing discussion of its 
purpose. A few comments may nevertheless be helpful.
    Under proposed sections 27(a) and (b), if OCC should ever give 
notice of its default or insolvency and a Clearing Member in turn 
provide a notice of termination, the termination time may be later than 
the time at which a Clearing Member's liquidation notice is given.\16\ 
This leaves open at least the theoretical possibility that, if there 
are trading days or hours left between the time the notice is given and 
the termination time, market participants could attempt to engage in 
closing transactions at prices determined in the market to avoid being 
subject to a forced liquidation at prices fixed by OCC.\17\
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    \16\ Under proposed section 27(b), the termination time would be 
the close of business on the third business day following a Clearing 
Member's liquidation notice unless the Bankruptcy Code prescribes a 
different time. Under section 502(b) of the Bankruptcy Code, claims 
against a debtor are valued as of the date of the filing of the 
bankruptcy petition. Accordingly, in the event of a bankruptcy the 
termination time would be on the date of the filing of the petition.
    \17\ 17 Such activity of market participants could start at the 
time of OCC's default notice rather than the time of the liquidation 
notice although as a practical matter a liquidation notice would 
likely closely follow the default notice.
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    Proposed section 27(b) provides that in the event of a default or 
insolvency and the requisite notice by a Clearing Member, positions of 
all Clearing Members will be liquidated to the maximum extent permitted 
by law and the By-Laws and Rules. The limitations on netting under 
OCC's By-Laws and Rules are in general those mandated by applicable 
law, such as the Commission's Rule 15c3-3. For example, where a 
Clearing Member carries both proprietary and customer accounts netting 
across accounts could cause the Clearing Member to be in violation of 
Rule 15c3-3 and other customer protection rules. Accordingly, section 
27 generally provides for netting within and not across different 
accounts with specific exceptions set forth in section 27(d). In 
addition, CEA segregation rules require separate segregation of 
customer funds of futures customers. Accordingly, netting across 
futures segregated funds accounts and other accounts is also generally 
prohibited. Otherwise, the provisions of section 27(d) are intended to 
maximize netting where consistent with customer protection rules. While 
securities market-makers and specialists are generally not customers 
within the meaning of Rule 15c3-3, they are ordinarily ``customers'' 
within the meaning of the Commission's hypothecation rules.\18\ OCC has 
historically not permitted setoff between market-maker accounts and 
customer accounts in which positions of other securities customers are 
carried. This separation has been preserved in section 27(d)(3).
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    \18\ 17 CFR 240.8c-1 and 240.15c2-1.
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III. Comments

    The Commission received three comment letters to the proposed rule 
change.\19\ All three comment letters support the proposed rule change. 
Two of the comment letters, one from the Dealer Accounting Committee of 
the Securities Industry and Financial Markets Association and one from 
Lehman Brothers Holdings, Inc., state that the commenters support the 
proposed rule change because it is designed to allow OCC's members to 
comply with the Basel Capital Accord standards relating to bilateral 
netting and because it will clarify the accounting treatment of 
obligations between OCC and its clearing members. The third comment 
letter, from Morgan Stanley, states that Morgan Stanley believes the 
proposed rule change would result in significant improvement in 
financial reporting, would better align financial reporting with risk 
management practices, and would result in presenting the net credit 
risk exposure related to derivative instruments cleared through the 
OCC.
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    \19\ Supra note 4.
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IV. Discussion

    Section 17A(b)(3)(F) of the Act requires, among other things, that 
the rules of a clearing agency be designed to remove impediments to and 
perfect the mechanism of a national system for the prompt and accurate 
clearance and settlement of securities transactions.\20\ The proposed 
rule change should help to reduce uncertainty by establishing the 
procedures OCC and its Clearing Members must follow in the event of an 
OCC default or insolvency. Accordingly, because the proposed rule 
change establishes procedures that should reduce uncertainty and 
streamline the final clearance and settlement process in the event OCC 
defaults on it obligations to its members or otherwise becomes 
insolvent, we find that the proposed rule change is designed to remove 
impediments to and perfect the mechanism of a national system for the 
prompt and accurate clearance and settlement of securities 
transactions.
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    \20\ 5 U.S.C. 78q-1(b)(3)(F).
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    Although the proposed rule change applies in the event of the 
default or insolvency of OCC, OCC considers such an event to be 
unlikely. OCC's purpose in making the rule change is to allow its 
Clearing Members and certain affiliates of its Clearing Members to 
obtain better treatment under regulatory and financial standards where 
such better treatment requires that close-out netting procedures are in 
place. The close-out netting procedures are intended to allow Clearing 
Members to (1) reduce the applicable capital requirements for the 
Clearing Member's parent company where the parent is a U.S. or non-U.S. 
bank or part of a CSE under the Basel Netting Standards; (2) take 
advantage of the netting provisions of FDICIA and the applicable 
provisions of the United States Bankruptcy Code; and (3) clarify the 
accounting treatment of obligations

[[Page 39873]]

between OCC and each Clearing Member under FIN 39. While the Commission 
believes that these intended benefits of the proposed rule change are 
not inconsistent with our finding above that the proposed rule change 
is designed to remove impediments to and perfect the mechanism of a 
national system for the prompt and accurate clearance and settlement of 
securities transactions under section 17A the Act, we note that this 
order relates only to OCC's obligations under section 17A of the Act 
and neither makes any findings nor expresses any opinion with respect 
to OCC's representations and interpretations regarding the application 
of the Basel Netting Standards, FDCIA, Bankruptcy Code, or FIN 39.

V. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular section 17A of the Act and the rules and regulations 
thereunder.\21\
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    \21\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).
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    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-OCC-2006-19) be and hereby 
is approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-14019 Filed 7-19-07; 8:45 am]

BILLING CODE 8010-01-P