Document ID: SEC-2006-0662-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Options Clearing Corp.
Posted Date: 2006-05-23T04:00Z

[Federal Register: May 23, 2006 (Volume 71, Number 99)]
[Notices]               
[Page 29699-29700]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23my06-96]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53812; No. SR-OCC-2006-03]

 
Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Effect Certain Fee Changes to Ancillary Services Program

May 16, 2006.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 13, 2006, The 
Options Clearing Corporation (``OCC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change 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) of the Act \2\ and Rule 19b-4(f)(2) \3\ thereunder so 
that the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the rule 
change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \3\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The principal purpose of the rule change is to effect certain fee 
changes to OCC's ancillary services program.

II. Self-Regulatory Organization'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

[[Page 29700]]

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.\4\
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    \4\ The Commission has modified the text of the summaries 
prepared by OCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The principal purpose of the rule change is to effect certain fee 
changes with respect to OCC's ancillary services program.
    In addition to clearance and settlement services, OCC provides its 
clearing members with a number of ancillary services ranging from on-
line access to OCC systems to report and data distribution offerings. 
Hardware and communication lines support these ancillary service 
offerings. In August, 2002, OCC implemented a four-tiered fee structure 
for its ancillary services with a different bundle of services offered 
at a fixed cost for each tier.\5\
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    \5\ Securities Exchange Act Release No. 34-46339 (August 12, 
2002), 67 FR 53828-01 (August 19, 2002) [File No. SR-OCC-2002-17]. 
The ancillary services associated with each membership tier are 
described later in this filing.
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    In September, 2005, OCC's board of directors authorized a plan to 
eliminate the requirement that clearing members use OCC-supplied 
equipment and dial-up interface system (``EMCI platform'') as the 
primary approved means to access ENCORE, OCC's clearing system, which 
is available on the Internet.\6\ In connection with completing plan 
details, OCC reviewed its ancillary services program and decided to 
make certain fee adjustments. A detailed listing of these changes to 
OCC's ancillary fees can be found at http://www.theocc.com/ 

publications/ rules/ proposed--changes/ sr--occ--06--03.pdf.
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    \6\ Clearing members will be required to use an OCC approved 
alternative to access ENCORE through the Internet.
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    Accordingly, effective April, 2006, OCC will reduce the fixed 
monthly ancillary fees charged to Tier I, II, and III clearing members 
by $300.00/month and the cost of maintaining an additional clearing 
member number by $100.00/month. These fee reductions reflect the 
elimination of the ECMI platform and are further intended to offset 
additional costs that will be incurred by clearing members in deploying 
the required Internet access. OCC intends to increase the ancillary 
service fee charged to Tier IV members by $150.00/month to reflect the 
cost of supporting secure Web-based access to the Stock Loan system by 
Tier IV clearing members.
    Finally, OCC intends to reduce the fee charged to subscribing 
clearing members for OCC-provided leased lines (which provide for 
secure point-to-point communications) by $1,000/month in order to pass 
on the lower line charges OCC has negotiated with its telephone 
providers.\7\
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    \7\ In addition, OCC intends to make conforming changes to the 
Supplement to the Agreement for OCC Services: Ancillary Services and 
the Supplement to the Agreement for OCC Services: Communication 
Options. C/MACS references are eliminated because that system is no 
longer used. 56.0 kb line references are eliminated because that 
line speed is no longer supported.
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    OCC believes the proposed rule change is consistent with section 
17A of the Act,\8\ as amended, because it clarifies and updates OCC's 
fee schedule. As such, it provides for the equitable allocation of fees 
among its participants and aligns fees for services with the associated 
cost to deliver the service.
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    \8\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    OCC does not believe that the proposed rule change would impose any 
burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Written comments 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

    The foregoing proposed rule change has become effective upon filing 
pursuant to section 19(b)(3)(A)(ii) of the Act \9\ and Rule 19b-4(f)(2) 
\10\ thereunder because the rule establishes a due, fee, or other 
charge. At any time within sixty days of the filing of the proposed 
rule change, the Commission may summarily abrogate 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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 e-mail to rule-comments@sec.gov. Please include 

File Number SR-OCC-2006-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-OCC-2006-03. This 
file number should be included on the subject line if e-mail 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 inspection 
and copying in the Commission's Public Reference Section, 100 F Street, 
NE., Washington, DC 20549. Copies of such filings also will be 
available for inspection and copying at the principal office of OCC and 
on OCC's Web site at http://www.optionsclearing.com. 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-OCC-2006-03 and should be 
submitted on or before June 13, 2006.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-7804 Filed 5-22-06; 8:45 am]

BILLING CODE 8010-01-P