Document ID: SEC-2010-0949-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Options Clearing Corp.
Posted Date: 2010-06-28T04:00Z

[Federal Register: June 28, 2010 (Volume 75, Number 123)]
[Notices]               
[Page 36724-36725]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28jn10-129]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62329; File No. SR-OCC-2010-09]

 
Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of Proposed Rule Change Relating to Sprott Physical 
Gold Shares

June 21, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ notice is hereby given that on June 7, 2010, The Options 
Clearing Corporation (``OCC'') filed with the Securities and Exchange 
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).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The proposed rule change would add an interpretation following the 
definition of ``fund share'' in Article I, Section 1(F)(8), of OCC's 
By-Laws to clarify that OCC will clear and treat as options on 
securities any option contract on Sprott Physical Gold Shares that are 
traded on a securities exchange and will clear and treat as security 
futures any futures contracts on Sprott Physical Gold Shares.

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 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 such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to clarify OCC's 
treatment of options and security futures on Sprott Physical Gold 
Shares. To accomplish this purpose, OCC is proposing to amend the 
interpretation following the definition of ``fund share'' in Article I, 
Section 1, of OCC's By-Laws to make clear that OCC will (i) clear and 
treat as securities options any option contracts on Sprott Physical 
Gold Shares that are traded on securities exchanges and (ii) clear and 
treat as security futures any futures contracts on Sprott Physical Gold 
Shares. The Commission has approved rule filings where OCC amended or 
added other interpretations with respect to its treatment and clearing 
of options and security futures on SPDR Gold Shares; iShares[supreg]-
COMEX Gold Shares and iShares[supreg] Silver Shares; ETFS Physical 
Swiss Gold Shares and ETFS Physical Silver Shares; and ETFS Palladium 
Shares and ETFS Platinum Shares.\2\
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    \2\ Securities and Exchange Commission Release Nos. 57895 (May 
30, 2008), 73 FR 32066 (June 5, 2008) (SPDR Gold Trust); 59054 (Dec. 
4, 2008), 73 FR 75159 (Dec. 10, 2008) (iShares COMEX Gold Shares and 
iShares Silver Shares); 61591 (Feb. 25, 2010), 75 FR 9979 (Mar. 4, 
2010) (ETFS Physical Gold Shares and ETFS Physical Silver Shares); 
61958 (Apr. 22, 2010), 75 FR 22673 (Apr. 29, 2010) (ETFS Palladium 
Shares And ETFS Platinum Shares).
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    In its capacity as a ``derivatives clearing organization'' 
registered as such with the Commodities Futures Trading Commission 
(``CFTC''), OCC is filing this proposed rule change for prior approval 
by the CFTC pursuant to provisions of the Commodity Exchange Act 
(``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, or the clearing of such futures as security 
futures, constitutes a violation of the CEA. The products for which 
approval is requested are essentially the same as the options and 
security futures on SPDR Gold Shares, iShares[supreg] COMEX Gold Shares 
and iShares[supreg] Silver Shares that OCC currently clears pursuant to 
the rule changes referred to above and exemptions issued by the 
CFTC.\3\ The underlying Sprott Physical Gold Shares, however, are 
structured differently from the gold and silver ETFs underlying the 
currently cleared products.\4\
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    \3\ CFTC Order Exempting the Trading and Clearing of Certain 
Products Related to SPDR Gold Trust Shares, 73 FR 31981 (June 5, 
2008); CFTC Order Exempting the Trading and Clearing of Certain 
Products Related to iShares[reg] COMEX Gold Trust Shares and 
iShares[supreg] Silver Trust Shares, 73 FR 79830 (Dec. 3, 2008).
    \4\ Sprott Physical Gold Trust May 26, 2010 Prospectus, 
available at http://www.sec.gov/edgar/searchedgar/
companysearch.html.
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    Sprott Physical Gold Trust is described by the issuer as a closed-
end mutual fund trust organized under the laws of the Province of 
Ontario, Canada. Sprott Physical Gold Shares are redeemable for 
physical gold on a monthly rather than a daily basis and have 
redemption terms that are different from the fund shares underlying the 
contracts that were the subject of the previous filings. In addition, 
unlike the underlying ETFs referred to in the previous filings, Sprott 
Physical Gold Shares cannot be created through the deposit of gold in 
``creation unit'' size transactions, and therefore the outstanding 
number of shares in the trust therefore cannot be increased through 
such a mechanism. OCC believes that these differences do not have 
jurisdictional significance for purposes of this filing. OCC believes 
that this filing raises no new regulatory or policy issues with respect 
to the options and security futures, notwithstanding the differences 
between the two products.
    OCC states that the proposed interpretation of OCC's By-Laws is 
consistent with the purposes and

[[Page 36725]]

requirements of Section 17A of the Act \5\ because it is designed to 
promote the prompt and accurate clearance and settlement of 
transactions in securities options and security futures, to foster 
cooperation and coordination with persons engaged in the clearance and 
settlement of such transactions, to remove impediments to and perfect 
the mechanism of a national system for the prompt and accurate 
clearance and settlement of such transactions, and, in general, to 
protect investors and the public interest. It accomplishes this purpose 
by making clear its treatment of options and security futures on Sprott 
Physical Gold Shares. The proposed rule change is not inconsistent with 
the By-Laws and Rules of OCC.
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    \5\ 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

    OCC has not solicited or received written comments relating to the 
proposed rule change. OCC will notify the Commission of any written 
comments it receives.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) By order approve the proposed rule change or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 No. SR-OCC-2010-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC, 20549-1090.

All submissions should refer to File No. SR-OCC-2010-09. 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 Web site 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 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at OCC's principal office and on OCC's Web site 
at http://www.theocc.com/publications/rules/proposed_changes/
proposed_changes.jsp. 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 submission should refer to File No. SR-
OCC-2010-09 and should be submitted on or before July 19, 2010.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-15539 Filed 6-25-10; 8:45 am]
BILLING CODE 8010-01-P