Document ID: SEC-2010-0629-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Options Clearing Corp.
Posted Date: 2010-04-29T04:00Z

[Federal Register: April 29, 2010 (Volume 75, Number 82)]
[Notices]               
[Page 22673]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29ap10-134]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61958; File No. SR-OCC-2010-03]

 
Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Granting Approval of a Proposed Rule Change Relating to ETFS 
Palladium Shares and ETFS Platinum Shares

April 22, 2010.

I. Introduction

    On March 1, 2010, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission the proposed rule change 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder \2\ to add ETFS Palladium 
Shares and ETFS Platinum Shares to the interpretation following the 
definition of ``fund share'' in Article I, Section 1 of OCC's By-Laws. 
The proposed rule change was published for comment in the Federal 
Register on March 18, 2010.\3\ 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\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 61254 (Mar. 11, 2010), 
75 FR 13169.
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II. Description of the Proposal

    The proposed rule change will add ETFS Palladium Shares and ETFS 
Platinum Shares to the interpretation following the definition of 
``fund share'' in Article I, Section 1 of OCC's By-Laws. The purpose of 
this rule change is to remove any potential cloud on the jurisdictional 
status of options or security futures on ETFS Palladium Shares or ETFS 
Platinum Shares.\4\
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    \4\ The Commission recently approved a related rule change by 
the Chicago Board Options Exchange to enable the listing and trading 
of options on the EFTS Palladium Trust and the EFTS Platinum Trust. 
Securities Exchange Act Release No. 61892 (Apr. 13, 2010), 75 FR 
20649.
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    Under the current proposed rule change, OCC will (i) clear and 
treat as securities options any option contracts on ETFS Palladium 
Shares and ETFS Platinum Shares that are traded on securities exchanges 
and (ii) clear and treat as security futures any futures contracts on 
ETFS Palladium Shares and ETFS Platinum Shares.
    In addition, in its capacity as a ``derivatives clearing 
organization'' registered with the Commodity Futures Trading Commission 
(``CFTC''), OCC also filed this proposal 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 that are affected by this approval order are 
essentially the same as the options and security futures on SPDR Gold 
Shares, iShares COMEX Gold Shares, iShares Silver Shares, ETFS Physical 
Swiss Gold Shares, and ETFS Physical Silver Shares that OCC currently 
clears pursuant to rule changes approved by the Commission.\5\
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    \5\ Securities Exchange Act Release Nos. 57895 (May 30, 2008), 
73 FR 32066 (June 5, 2008); 59054 (Dec. 4, 2008), 73 FR 75159 (Dec. 
10, 2008); 61591 (Feb. 25, 2010), 75 FR 9981 (Mar. 4, 2010).
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III. Discussion

    Section 17A(b)(3)(F) of the Act requires, among other things, that 
the rules of a clearing agency be designed to promote the prompt and 
accurate clearance and settlement of securities transactions and 
derivative transactions.\6\ By amending its By-Laws to help clarify 
that options on ETFS Palladium Shares and ETFS Platinum Shares that are 
traded on securities exchanges will be treated and cleared as 
securities options and that futures on ETFS Palladium and ETFS Platinum 
shares will be treated as security futures, OCC's rule change should 
help clarify the jurisdictional status of such contracts and 
accordingly should help to promote the prompt and accurate clearance 
and settlement of securities transactions and of derivative 
transactions. In accordance with the Memorandum of Understanding 
entered into between the CFTC and the Commission on March 11, 2008, and 
in particular the addendum thereto concerning Principles Governing the 
Review of Novel Derivative Products, the Commission believes that novel 
derivative products that implicate areas of overlapping regulatory 
concern should be permitted to trade in either a CFTC or Commission-
regulated environment or both in a manner consistent with laws and 
regulations (including the appropriate use of all available exemptive 
and interpretive authority).
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    \6\ 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 
proposed rule change is consistent with the requirements of the Act and 
in particular Section 17A of the Act \7\ and the rules and regulations 
thereunder.
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    \7\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (File No. SR-OCC-2010-03) be and 
hereby is approved.\9\
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 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.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-9940 Filed 4-28-10; 8:45 am]
BILLING CODE 8011-01-P