Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to Clearing Member Trade Assignment Processing, 6486-6487 [E5-474]
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Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Notices
• Send e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2005–01 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
450 Fifth Street, NW., Washington, DC
20549–0609.
All submissions should refer to File
Number SR–NYSE–2005–01. 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 (https://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. Copies of such filing will also be
available for inspection and copying at
the principal office of the NYSE. 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–NYSE–2005–01 and should
be submitted on or before February 28,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–469 Filed 2–4–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51120; File No. SR–OCC–
2004–19]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of a Proposed Rule Change
Relating to Clearing Member Trade
Assignment Processing
February 1, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934,1 notice
is hereby given that on November 1,
2004, The Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission (‘‘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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change would
amend OCC’s By-laws and Rules by
adding new clearing member trade
assignment (‘‘CMTA’’) processing
requirements.
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.2
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Since OCC amended its CMTA rules
in 2004,3 a group of clearing members,
the options exchanges, and OCC has
U.S.C. 78s(b)(1).
Commission has modified the text of the
summaries prepared by OCC.
3 Securities Exchange Act Release No. 49841
(June 9, 2004); 69 FR 34207 (June 18, 2004) [File
No. SR–OCC–2003–11]. CMTA processing enables
one clearing member (‘‘carrying clearing member’’)
to authorize another clearing member (‘‘executing
clearing member’’) to direct that exchange
transactions be transferred to an account of the
carrying clearing member for clearance and
settlement.
been collaborating to better define the
rights and obligations of the clearing
members that are parties to a CMTA
arrangement in order to increase the
regulatory and legal certainties with
respect thereto. One focus of this
working group has been to formulate
new CMTA processing rules that would
be applied to transactions that have
been executed for institutional and
other customers (‘‘CMTA customers’’)
with prime brokerage arrangements with
the carrying clearing member that serves
as a CMTA customer’s prime broker.
Under the proposed rule change, OCC
would modify Article I (‘‘Definitions’’)
of its By-Laws and Rules 401 and 403
to require clearing members that are
parties to a CMTA arrangement
involving CMTA customers to register
with OCC certain customer identifiers
that the clearing members use to process
the CMTA transactions. Specifically, the
new rules would provide that an
exchange transaction executed on behalf
of a CMTA customer that is to be
transferred by CMTA processing for
clearance and settlement will be
identified by a special indicator called
a Customer CMTA Indicator in the
matching trade information submitted
with respect to that transaction.4 For
each transaction marked with the
Customer CMTA Indicator, the
matching trade information would also
contain identification information about
the CMTA customer on whose behalf a
transaction was executed (‘‘CMTA
Customer Identifier’’) and the
introducing broker that executed or
arranged for the execution of such
transaction (‘‘IB Identifier’’).5
If a transaction is marked with the
CMTA Indicator, OCC’s systems would
verify against a database of registered
identifiers that the CMTA Customer
Identifier and the IB Identifier supplied
as a part of the trade information match
registered identifiers for purposes of the
CMTA arrangement between the
carrying and executing clearing
members to the trade. This verification
step would be in addition to the other
verifications performed by OCC’s
systems for CMTA processing. If a
transaction is marked with a Customer
CMTA Indicator but either the CMTA
Customer Identifier or the IB Identifier
is incomplete, inaccurate, or missing,
1 15
2 The
13 17
CFR 200.30–3(a)(12).
VerDate jul<14>2003
21:04 Feb 04, 2005
Jkt 205001
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
4 The same indicator would be used by all options
exchanges. OCC made various system changes to
process this indicator and other information to be
supplied with respect to CMTA customers’
transactions. Matching trade information submitted
by the options exchanges would need to include
this information that requires changes to the
exchanges’ systems.
5 If the introducing broker is also the executing
clearing member, a separate IB Identifier would still
be required.
E:\FR\FM\07FEN1.SGM
07FEN1
Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Notices
OCC’s systems would treat the
transaction as a failed CMTA and would
cause the transaction to be cleared in
the executing clearing member’s
designated or default account in
accordance with OCC Rule 403.
Under the terms of a model agreement
developed by the working group to
reflect the rights and obligations of the
carrying and executing clearing
members with respect to their customer
CMTA arrangement, the firms would
identify each CMTA covered customer.
Separately, the clearing members would
assign identifiers to their CMTA
customers and introducing brokers. One
clearing member then would register the
assigned identifiers with OCC. OCC’s
systems would require the other
clearing member to approve the
identifiers before they are submitted to
OCC for registration. Identifiers would
be effectively registered when they are
accepted by OCC’s systems, subject to
OCC’s right to reject an already
registered identifier.6 OCC would retain
the right to specify criteria applicable to
the characters used to form identifiers
for systemic reasons.
The prime broker clearing members
involved in developing these
requirements believe that including
identification information about the
CMTA customer and introducing broker
to a transaction would make CMTA
processing more transparent. Since
carrying clearing members do not have
the ability to approve or reject a
transaction before it is entered into the
exchanges’ systems for reporting to
OCC, they believe having OCC verify
customer and introducing broker
information will assist in limiting the
chances that a transaction erroneously
will be transferred into one of their
clearing accounts. They also believe
having such information available on
the trade record will improve the
effectiveness of their back office efforts
to confirm that transactions cleared in
their accounts conform to the
information supplied by their customer
or its introducing broker, and thereby,
will facilitate decision making on
whether the position resulting from the
transaction is eligible for return under
their CMTA agreement and Rule 403.
OCC believes that the proposed rule
change is consistent with Section 17A of
the Act 7 because it fosters the prompt
and accurate clearance and settlement of
securities transactions, the safeguarding
of funds and securities, and the
6 Carrying and executing clearing members would
be responsible to update their respective
registrations of CMTA Customer Identifiers and IB
Identifiers including registering any changes or
deletions with respect thereto.
7 15 U.S.C. 78q–1.
VerDate jul<14>2003
21:04 Feb 04, 2005
Jkt 205001
protection of investors and the persons
facilitating transactions by and acting on
behalf of investors.
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
theProposed Rule Change Received from
Members, Participants or Others
OCC did not solicit or receive written
comments with respect to the proposed
rule change.
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 https://www.sec.gov/
rules/sro.shtml; or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–OCC–2004–19 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
450 Fifth Street, NW., Washington, DC
20549–0609.
All submissions should refer to File
Number SR–OCC–2004–19. 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
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
6487
Internet Web site https://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
Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such
filing also will be available for
inspection and copying at OCC’s
principal office and on OCC’s Web site
at https://www.optionsclearing. 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 submissions
should refer to File Number SR–OCC–
2004–19 and should be submitted on or
before February 28, 2005.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.8
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–474 Filed 2–4–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51113; File No. SR–PCX–
2005–08]
Self-Regulatory Organizations; Pacific
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Thereto Relating to a
Revision and Extension of a Limitation
on Trade Through Liability at the End
of the Options Trading Day Pilot
Program
January 31, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
26, 2005, the Pacific Exchange (‘‘PCX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\07FEN1.SGM
07FEN1
]]>Agencies
[Federal Register Volume 70, Number 24 (Monday, February 7, 2005)]
[Notices]
[Pages 6486-6487]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-474]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51120; File No. SR-OCC-2004-19]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of a Proposed Rule Change Relating to Clearing Member
Trade Assignment Processing
February 1, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ notice is hereby given that on November 1, 2004, The Options
Clearing Corporation (``OCC'') filed with the Securities and Exchange
Commission (``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change would amend OCC's By-laws and Rules by
adding new clearing member trade assignment (``CMTA'') processing
requirements.
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.\2\
---------------------------------------------------------------------------
\2\ The Commission has modified the text of the summaries
prepared by OCC.
---------------------------------------------------------------------------
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Since OCC amended its CMTA rules in 2004,\3\ a group of clearing
members, the options exchanges, and OCC has been collaborating to
better define the rights and obligations of the clearing members that
are parties to a CMTA arrangement in order to increase the regulatory
and legal certainties with respect thereto. One focus of this working
group has been to formulate new CMTA processing rules that would be
applied to transactions that have been executed for institutional and
other customers (``CMTA customers'') with prime brokerage arrangements
with the carrying clearing member that serves as a CMTA customer's
prime broker.
---------------------------------------------------------------------------
\3\ Securities Exchange Act Release No. 49841 (June 9, 2004); 69
FR 34207 (June 18, 2004) [File No. SR-OCC-2003-11]. CMTA processing
enables one clearing member (``carrying clearing member'') to
authorize another clearing member (``executing clearing member'') to
direct that exchange transactions be transferred to an account of
the carrying clearing member for clearance and settlement.
---------------------------------------------------------------------------
Under the proposed rule change, OCC would modify Article I
(``Definitions'') of its By-Laws and Rules 401 and 403 to require
clearing members that are parties to a CMTA arrangement involving CMTA
customers to register with OCC certain customer identifiers that the
clearing members use to process the CMTA transactions. Specifically,
the new rules would provide that an exchange transaction executed on
behalf of a CMTA customer that is to be transferred by CMTA processing
for clearance and settlement will be identified by a special indicator
called a Customer CMTA Indicator in the matching trade information
submitted with respect to that transaction.\4\ For each transaction
marked with the Customer CMTA Indicator, the matching trade information
would also contain identification information about the CMTA customer
on whose behalf a transaction was executed (``CMTA Customer
Identifier'') and the introducing broker that executed or arranged for
the execution of such transaction (``IB Identifier'').\5\
---------------------------------------------------------------------------
\4\ The same indicator would be used by all options exchanges.
OCC made various system changes to process this indicator and other
information to be supplied with respect to CMTA customers'
transactions. Matching trade information submitted by the options
exchanges would need to include this information that requires
changes to the exchanges' systems.
\5\ If the introducing broker is also the executing clearing
member, a separate IB Identifier would still be required.
---------------------------------------------------------------------------
If a transaction is marked with the CMTA Indicator, OCC's systems
would verify against a database of registered identifiers that the CMTA
Customer Identifier and the IB Identifier supplied as a part of the
trade information match registered identifiers for purposes of the CMTA
arrangement between the carrying and executing clearing members to the
trade. This verification step would be in addition to the other
verifications performed by OCC's systems for CMTA processing. If a
transaction is marked with a Customer CMTA Indicator but either the
CMTA Customer Identifier or the IB Identifier is incomplete,
inaccurate, or missing,
[[Page 6487]]
OCC's systems would treat the transaction as a failed CMTA and would
cause the transaction to be cleared in the executing clearing member's
designated or default account in accordance with OCC Rule 403.
Under the terms of a model agreement developed by the working group
to reflect the rights and obligations of the carrying and executing
clearing members with respect to their customer CMTA arrangement, the
firms would identify each CMTA covered customer. Separately, the
clearing members would assign identifiers to their CMTA customers and
introducing brokers. One clearing member then would register the
assigned identifiers with OCC. OCC's systems would require the other
clearing member to approve the identifiers before they are submitted to
OCC for registration. Identifiers would be effectively registered when
they are accepted by OCC's systems, subject to OCC's right to reject an
already registered identifier.\6\ OCC would retain the right to specify
criteria applicable to the characters used to form identifiers for
systemic reasons.
---------------------------------------------------------------------------
\6\ Carrying and executing clearing members would be responsible
to update their respective registrations of CMTA Customer
Identifiers and IB Identifiers including registering any changes or
deletions with respect thereto.
---------------------------------------------------------------------------
The prime broker clearing members involved in developing these
requirements believe that including identification information about
the CMTA customer and introducing broker to a transaction would make
CMTA processing more transparent. Since carrying clearing members do
not have the ability to approve or reject a transaction before it is
entered into the exchanges' systems for reporting to OCC, they believe
having OCC verify customer and introducing broker information will
assist in limiting the chances that a transaction erroneously will be
transferred into one of their clearing accounts. They also believe
having such information available on the trade record will improve the
effectiveness of their back office efforts to confirm that transactions
cleared in their accounts conform to the information supplied by their
customer or its introducing broker, and thereby, will facilitate
decision making on whether the position resulting from the transaction
is eligible for return under their CMTA agreement and Rule 403.
OCC believes that the proposed rule change is consistent with
Section 17A of the Act \7\ because it fosters the prompt and accurate
clearance and settlement of securities transactions, the safeguarding
of funds and securities, and the protection of investors and the
persons facilitating transactions by and acting on behalf of investors.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
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 theProposed
Rule Change Received from Members, Participants or Others
OCC did not solicit or receive written comments with respect to the
proposed rule change.
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 https://
www.sec.gov/rules/sro.shtml; or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-OCC-2004-19 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-OCC-2004-19. 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 https://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 Section, 450 Fifth
Street, NW., Washington, DC 20549. Copies of such filing also will be
available for inspection and copying at OCC's principal office and on
OCC's Web site at https://www.optionsclearing.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 submissions
should refer to File Number SR-OCC-2004-19 and should be submitted on
or before February 28, 2005.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-474 Filed 2-4-05; 8:45 am]
BILLING CODE 8010-01-P
