Document ID: SEC-2013-1679-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Options Clearing Corp.
Posted Date: 2013-09-30T04:00Z

[Federal Register Volume 78, Number 189 (Monday, September 30, 2013)]
[Notices]
[Pages 59994-59995]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23684]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70486; File No. SR-OCC-2013-12]

Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Approving Proposed Rule Change to Revise OCC By-Laws and Rules to 
Make Structural Changes to OCC's Membership/Risk Committee Regarding 
Public Directors and the Process for Designating Membership/Risk 
Committee Members

September 24, 2013.

I. Introduction

    On August 2, 2013, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change SR-OCC-2013-12 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder.\2\ The proposed rule change was published for comment in 
the Federal Register on August 21, 2013.\3\ The Commission received no 
comment letters. For the reasons discussed below, the Commission is 
granting approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Exchange Act Release No. 34-70207 (August 15, 2013), 78 FR 
51786 (August 21, 2013).
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II. Description

    OCC is amending its By-Laws and Rules to make structural changes to 
OCC's Membership/Risk Committee (``MRC'') regarding Public Directors 
\4\

[[Page 59995]]

and the process for designating MRC members. Specifically, OCC is 
amending Article III, Section 9 of OCC's By-Laws to provide that at 
least one Public Director is required to serve on the MRC. The Public 
Director(s) will be nominated to serve on the MRC by the Chairman of 
the Board and such nomination will be subject to approval by the Board 
of Directors. OCC is also amending Article III, Section 9 of OCC's By-
Laws to provide that the Chairman of the MRC will be required to be a 
Public Director. If more than one Public Director is nominated to serve 
on the MRC, the Chairman of the Board will nominate one of the Public 
Directors to serve as the MRC Chairman.
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    \4\ In relevant part, Article III, Section 6A of OCC's By-Laws 
defines a Public Director as a person who is not affiliated with any 
national securities exchange, national securities association, or 
any broker or dealer engaging in securities transactions.
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    In addition, OCC is amending Article III, Section 9 of OCC's By-
Laws to eliminate the requirement that MRC members must be designated 
at the first meeting of OCC's Board of Directors that follows each 
annual meeting. Instead, OCC's By-Laws will require MRC members to be 
designated annually.
    OCC is also amending Article III, Section 9 to eliminate specific 
references to Article V of the By-Laws and Chapter VI of the Rules in 
order to avoid any erroneous inference that those are the only 
provisions of OCC's By-Laws and Rules that set forth powers and duties 
of the MRC, which are in fact contained in a number of other provisions 
of its By-Laws and Rules as well.

III. Discussion

    Section 19(b)(2)(C) of the Act \5\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if it 
finds that the proposed rule change is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to such 
organization. Section 17A(b)(3)(F) of the Act\6\ requires that the 
rules of a registered clearing agency be designed to, among other 
things, assure the safeguarding of securities and funds which are in 
the custody or control of the clearing agency or for which it is 
responsible, and, in general, protect investors and the public 
interest. Section 17A(b)(3)(F) \7\ of the Act also requires that the 
rules of a registered clearing agency not be designed to permit unfair 
discrimination in the admission of participants or among participants 
in the use of the clearing agency.
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    \5\ 15 U.S.C. 78s(b)(2)(C).
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
    \7\ Id.
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    The Commission finds that the rule change is consistent with 
Section 17A(b)(3)(F) of the Act \8\ because amending OCC's By-Laws to 
require that OCC's Board of Directors appoints at least one Public 
Director to the MRC and designates a Public Director as Chairman of the 
MRC, should help ensure that diverse viewpoints contribute to the 
decision-making process at the MRC, which should ultimately lead to 
decisions that assure the safeguarding of securities and funds which 
are in OCC's custody or control or for which OCC is responsible, and 
generally protect investors and the public interest. Furthermore, by 
proposing rules that require the appointment of a Public Director to 
the MRC, the rule change should help diminish the likelihood of unfair 
discrimination in the evaluation of prospective OCC members and the 
treatment of current OCC members by interested participants.
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    \8\ Id.
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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-2013-12) 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).
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    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).

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-23684 Filed 9-27-13; 8:45 am]
BILLING CODE 8011-01-P