Document ID: SEC-2010-0175-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change To Allow Members To Deposit Customer Fully Paid or Excess Margin Securities to the Extent Permitted by No-Action Relief or Interpretive Guidance From the Commission or Interpretive Guidance From a Self-Regulatory Organization
Posted Date: 2010-02-02T05:00Z

[Federal Register: February 2, 2010 (Volume 75, Number 21)]
[Notices]               
[Page 5366-5367]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02fe10-116]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61425; File No. SR-OCC-2009-18]

 
Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Approving Proposed Rule Change To Allow Members To Deposit 
Customer Fully Paid or Excess Margin Securities to the Extent Permitted 
by No-Action Relief or Interpretive Guidance From the Commission or 
Interpretive Guidance From a Self-Regulatory Organization

January 26, 2010.

I. Introduction

    On October 23, 2009, The Options Clearing Corporation (``OCC'') 
filed with the Securities and Exchange Commission (``Commission'') 
proposed rule change SR-OCC-2009-18 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'').\1\ The proposed rule change 
was published for comment in the Federal Register on December 7, 
2009.\2\ No comment letters were received on the proposal. This order 
approves the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 61078 (November 30, 
2009), 74 FR 64116.
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II. Description

    The proposed rule change allows members to deposit customer fully 
paid or excess margin securities to the extent that activity is 
consistent with Rule 15c3-3 \3\ under the Act and is permitted by no-
action relief or interpretive guidance from the Commission or 
interpretive guidance from a Self-Regulatory Organization (``SRO'').
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    \3\ 17 CFR 240.15c3-3.
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    OCC rules currently prohibit members from depositing with OCC fully 
paid or excess margin securities that are carried for the account of a 
customer. This prohibition is intended to conform OCC's treatment of 
customer fully paid and excess margin securities to the requirements of 
Rule 15c3-3.
    Currently, a Commission no-action letter and related interpretive 
guidance from the New York Stock Exchange permit fully paid or excess 
margin securities carried in a customer account to be deposited with 
OCC in two circumstances. First, if a customer makes a specific deposit 
of fully paid or excess margin securities with a member to secure its 
obligations as an option writer \4\ then the member may in turn deposit 
the customer's securities with

[[Page 5367]]

OCC.\5\ Second, any fully paid or excess margin securities held by a 
member to secure a customer's obligations may be posted as margin with 
OCC to the extent of 140% of the difference between the daily marking 
price deposits \6\ and the original proceeds of the customer's 
transaction.\7\ This proposed rule change permits members to deposit 
customer fully paid or excess margin securities in these two 
circumstances as well as in any future circumstances identified by no-
action relief or interpretive guidance from the Commission or 
interpretive guidance from an SRO.
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    \4\ OCC Rule 610(e)-(f).
    \5\ New York Stock Exchange, New York Stock Exchange Rule 
Interpretations Handbook 505 (2004) (Interpretation 01 of Securities 
Exchange Act Rule 15c3-3(c) citing Chicago Board Options Exchange, 
Inc., SEC No-Action Letter (Feb. 19, 1975)).
    \6\ As required by OCC of its member.
    \7\ New York Stock Exchange, New York Stock Exchange Rule 
Interpretations Handbook 505 (2004)(Interpretation 020 of Securities 
Exchange Act Rule 15c3-3(c)).
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III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a registered clearing agency. In particular, 
the Commission believes that by amending its rules to allow members to 
deposit customer fully paid or excess margin securities to the extent 
that activity is consistent with Rule 15c3-3 under the Act and is 
permitted by no-action relief or interpretive guidance from the 
Commission or interpretive guidance from an SRO, the proposal is 
consistent with the requirements of Section 17A(b)(3)(F),\8\ which 
requires, among other things, that the rules of a clearing agency are 
designed to promote the prompt and accurate clearance and settlement of 
securities transactions.
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    \8\ 15 U.S.C. 78q-1(b)(3)(F).
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IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act \9\ and the 
rules and regulations thereunder.
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    \9\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (File No. SR-OCC-2009-18) be, 
and hereby is, approved.\11\
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    \10\ 15 U.S.C. 78s(b)(2).
    \11\ 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).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-2091 Filed 2-1-10; 8:45 am]
BILLING CODE 8011-01-P