Document ID: SEC-2008-0262-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Options Clearing Corp.
Posted Date: 2008-02-19T05:00Z

[Federal Register: February 19, 2008 (Volume 73, Number 33)]
[Notices]               
[Page 9155-9156]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19fe08-96]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57304; File No. SR-OCC-2008-01]

 
Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of a Proposed Rule Change Relating to Its Facilities 
Management Agreements

February 11, 2008.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 9, 2008, 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. The Commission is publishing this notice to solicit comments 
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 Substance 
of the Proposed Rule Change

    The proposed rule change would amend OCC Rule 309 to permit 
expedited review of a facilities management agreement proposed to be 
entered into by an existing clearing member that desires to become a 
managed clearing member.

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 these 
statements.\2\
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    \2\ 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 purpose of the proposed rule change is to provide an expedited 
process for reviewing a facilities management agreement proposed to be 
entered into by an operationally capable clearing member that desires 
to become a managed clearing member. A managed clearing member is one 
that outsources certain of its obligations as a clearing member to 
another clearing member (``managing clearing member'').
    Rule 309 prohibits a clearing member that proposes to enter into an 
outsourcing agreement with a managing clearing member from implementing 
the agreement without the prior approval of the Membership/Risk 
Committee (``Committee'').\3\ In 2006 and 2007, the Committee reviewed 
three requests to approve such outsourcing arrangements. However, none 
of the three clearing member's desired time frame for implementing its 
facilities management arrangement coincided with a regularly scheduled 
meeting of the Committee, and each firm was required to defer executing 
its outsourcing plans until after a meeting occurred.
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    \3\ See Rule 309(f). See also Securities Exchange Act Release 
No. 55686 (May 1, 2007), 72 FR 26191 (May 8, 2007) [SR-OCC-2006-21].
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    To provide for a more timely review of certain outsourcing 
agreements, OCC proposes to modify Rule 309. Under the proposal, a 
managed clearing member would be permitted to request an expedited 
review of its outsourcing agreement, and if OCC consented to an 
expedited review, the Chairman, the Management Vice Chairman, or the 
President would be authorized to determine whether the agreement meets 
applicable requirements and to approve or disapprove the agreement. At 
the next regularly scheduled Committee meeting, the Committee would 
independently review the outsourcing agreement and would determine de 
novo whether to approve or disapprove it. In the event the Committee's 
decision would result in a modification or a reversal of the action 
taken by the Chairman, the Management Vice Chairman, or President, no 
actions taken by OCC or the clearing member prior to the modification 
or reversal would be invalidated and no rights of any person arising 
out of such actions would be affected. In the unlikely event that the 
Committee disapproved an agreement previously approved by OCC, the 
clearing member would be given a reasonable time either to enter into 
an appropriately revised outsourcing agreement or to cease to be a 
Managed Clearing Member.
    This proposed process is comparable to the process used when 
clearing members request expedited approval to clear a new type or kind 
of transaction.\4\ OCC believes that the proposed expedited review 
process strikes a reasonable balance between meeting the business 
requirements of clearing

[[Page 9156]]

members and continuing to ensure appropriate review of the operational 
and financial aspects of outsourcing arrangements.
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    \4\ Article V, Section 1, Interpretation & Policy .03e. See also 
Securities Exchange Act Release No. 30169 (January 8, 1992) 57 FR 
1776 [SR-OCC-91-06].
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    The expedited review process would become Interpretation & Policy 
.01 under Rule 309. The existing Interpretation and Policy .01, which 
required managing clearing members as of October 1, 2003, to meet 
revised capital requirements by October 1, 2004, is no longer 
applicable and is therefore being deleted. In addition, a technical 
change is being made to paragraph (f) of Rule 309 to more closely 
parallel the language used in a cross-referenced By-law provision.
    OCC believes that the proposed change is consistent with the Act 
because it promotes the prompt and accurate clearance and settlement of 
securities transactions by providing an expedited review process for 
facilities management agreements proposed to be entered into by OCC 
clearing members. The proposed rule change is not inconsistent with the 
existing rules of OCC, including any other rules proposed to be 
amended.

(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

    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 such 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 Number SR-OCC-2008-01 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 20549-1090.

All submissions should refer to File Number SR-OCC-2008-01. 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 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 the principal office of OCC and on OCC's Web 
site at: http://www.theocc.com/publications/rules/proposed_changes/sr_occ_08_01.pdf.
 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-2008-01 and should be submitted on or before March 11, 2008.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-2903 Filed 2-15-08; 8:45 am]

BILLING CODE 8011-01-P