Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Revise its Cross-Margining Agreement With The Clearing Corporation, 11295-11296 [E5-967]
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Federal Register / Vol. 70, No. 44 / Tuesday, March 8, 2005 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.21
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–969 Filed 3–7–05; 8:45 am]
and (C) below, of the most significant
aspects of these statements.2
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51291; File No. SR–OCC–
2005–01]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change to Revise its
Cross-Margining Agreement With The
Clearing Corporation
March 2, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
February 1, 2005, 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 on the proposed rule change
from interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change would
revise the Amended and Restated CrossMargining Agreement between OCC and
The Clearing Corporation (‘‘CCorp’’)
(‘‘X–M Agreement’’), formerly known as
Board of Trade Clearing Corporation,
that governs the OCC–CCorp crossmargin program as well as the
agreements governing the participation
of clearing members and market
professionals therein.
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),
21 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
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19:54 Mar 07, 2005
Jkt 205001
The proposed rule change revises the
‘‘X–M Agreement.3 Specifically, OCC
and CCorp have executed an
amendment that revises the X–M
Agreement to: (1) Reflect CCorp’s
change in name and address along with
OCC’s change in address; (2) modify the
description of the contract markets for
which CCorp provides clearance and
settlement services and, as a result
thereof, make a conforming change to
the definition of the term ‘‘market
professional’’; (3) as permitted under
OCC Rule 705, add GovernmentSponsored Enterprise (GSE) debt
securities as an eligible form of initial
margin and make conforming changes to
various provisions in the X–M
Agreement; (4) eliminate common stock
as an eligible form of initial margin as
clearing members have never deposited
such collateral in the cross-margin
program; (5) subject to OCC Rule 705,
permit the clearing organizations to
agree to use the valuation rate of one or
the other clearing organizations in
valuing Government and GSE debt
securities; 4 (6) update certain contact
information; and (7) update Exhibit A,
which contains the list of contracts
eligible under the OCC–CCorp crossmargining program.
In addition, OCC and CCorp have
amended the agreements governing the
cross-margining accounts of clearing
members and market professionals that
participate in the OCC–CCorp crossmargining program. The amendments to
these agreements: (1) Reflect CCorp’s
change in name; (2) reflect the revised
definition of the term ‘‘market
professional’’; (3) make other non2 The Commission has modified the text of the
summaries prepared by OCC.
3 For a description of the existing agreement, see
Release No. 34–39203 (October 3, 1997), 62 FR
53371, [File No. SR–OCC–97–14] (order approving
amendments to the cross-margining agreements and
the forms of agreements governing the cross-margin
accounts of clearing members and market
professionals that participate in OCC/CCorp crossmargining); Release No. 34–32681 (July 27, 1993),
58 FR 41302 [File No. SR–OCC–92–24] (order
approving expansion of cross-margining program
between OCC and CCorp to include non-proprietary
positions); and Release No. 34–29888 (October 31,
1991), 56 FR 56680 [File No. SR–OCC–91–07]
(order approving establishment of cross-margining
program between OCC and CCorp).
4 The amendment to the X–M Agreement
provides OCC with the flexibility to agree with
CCorp to apply the valuation rates of one or the
other clearing organization in the event Rule 705 is
amended accordingly.
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
11295
substantive, technical changes; 5 and (4)
eliminate the requirement that clearing
members and market professionals
furnish the clearing organizations with
financing statements relating to
positions, collateral and property
maintained with respect to accounts
subject to cross-margining. The
adoption by all 50 states of the 1999
revisions to Articles 8 and 9 of the
Uniform Commercial Code has rendered
the financing statement requirement
obsolete.
The proposed change is consistent
with Section 17A of the Act 6 and the
rules and regulations thereunder
applicable to OCC because it updates
agreements used in connection with a
longstanding cross-margining program
that provides lower clearing margins to
clearing members while enhancing the
safety of the clearing system. 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
The foregoing rule change has become
effective upon filing pursuant to Section
19(b)(3)(A)(iii) of the Act 7 and Rule
19b–4(f)(4)8 thereunder because the
proposed rule does not significantly
affect the respective rights or obligations
of the clearing agency or persons using
the service and does not adversely affect
the safeguarding of securities or funds
in the custody or control of OCC or for
which it is responsible. At any time
within sixty days of the filing of such
rule change, the Commission may
summarily abrogate such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
5 Such changes include, for example, describing
firms as ‘‘participants’’ in CCorp rather than as
‘‘clearing members.’’
6 15 U.S.C. 78q–1.
7 15 U.S.C. 78s(b)(3)(A)(iii).
8 17 CFR 240.19b–4(f)(4).
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11296
Federal Register / Vol. 70, No. 44 / Tuesday, March 8, 2005 / Notices
investors, or otherwise in furtherance of
the purposes of the Act.
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:
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.9
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–967 Filed 3–7–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
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–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–OCC–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
Section, 450 Fifth Street, NW.,
Washington, DC 20549. 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
https://www.optionsclearing.com. 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–2005–01 and should
be submitted on or before March 29,
2005.
VerDate jul<14>2003
19:54 Mar 07, 2005
Jkt 205001
[Release No. 34–51281; File No. SR–PCX–
2005–21]
Self-Regulatory Organizations; Pacific
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to the Deletion
of Certain Obsolete or Unnecessary
Rules
March 1, 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 February
9, 2005, the Pacific Exchange, Inc.
(‘‘PCX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in items I and II
below, which items have been prepared
by the PCX. The Exchange has filed the
proposal as a ‘‘non-controversial’’ rule
change pursuant to section 19(b)(3)(A)
of the Act,3 and Rule 19b–4(f)(6)
thereunder,4 which renders the proposal
effective upon filing with the
Commission.5 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 PCX is proposing to amend its
rules to delete certain rules, or portions
thereof, which have been determined as
obsolete or unnecessary. The text of the
proposed rule change is available on the
PCX’s Web site at https://
www.pacificex.com, at the Exchange’s
Office of the Secretary, and at the
Commission’s Public Reference Room.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 The PCX asked the Commission to waive the 30day operative delay and the five-day pre-filing
notice requirement. See Rule 19b–4(f)(6)(iii).
PO 00000
9 17
1 15
Frm 00104
Fmt 4703
Sfmt 4703
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
PCX 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. The Exchange has
prepared summaries, set forth in
sections A, B, and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On December 9, 2003, the Exchange
responded to a request by the
Commission’s Office of Compliance
Inspections and Examinations for
section 19(g) obligation compliance
under the Act.6 As part of its
compliance, the Exchange performed a
complete review of the PCX rules, as
well as the surveillance procedures
thereof, and found a number of rules
that are obsolete or superfluous in the
current market structure. Thus, the
Exchange proposes to delete these
inapplicable rules, or portions thereof,
at this time. The proposed rules, or
portions thereof, to be deleted are:
• PCX Rule 4.1, Commentary .02—
This commentary relates to trading in
gold and silver bullion. This
commentary is obsolete because the
Exchange no longer trades gold and
silver bullion.
• PCX Rule 6.91—This rule sets forth
the pilot program for the Intermarket
Linkage Program. This rule is no longer
necessary as the permanent Intermarket
Linkage Program (PCX Rules 6.92–6.96)
has been implemented.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) of the Act,7 in general, and
furthers the objectives of section
6(b)(5),8 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
6 15
U.S.C. 78s(g).
U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
7 15
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]]>Agencies
[Federal Register Volume 70, Number 44 (Tuesday, March 8, 2005)]
[Notices]
[Pages 11295-11296]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-967]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51291; File No. SR-OCC-2005-01]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Revise its Cross-Margining Agreement With The Clearing Corporation
March 2, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on February 1, 2005, 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 on
the proposed rule change from interested parties.
---------------------------------------------------------------------------
\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 revise the Amended and Restated
Cross-Margining Agreement between OCC and The Clearing Corporation
(``CCorp'') (``X-M Agreement''), formerly known as Board of Trade
Clearing Corporation, that governs the OCC-CCorp cross-margin program
as well as the agreements governing the participation of clearing
members and market professionals therein.
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\
---------------------------------------------------------------------------
\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
The proposed rule change revises the ``X-M Agreement.\3\
Specifically, OCC and CCorp have executed an amendment that revises the
X-M Agreement to: (1) Reflect CCorp's change in name and address along
with OCC's change in address; (2) modify the description of the
contract markets for which CCorp provides clearance and settlement
services and, as a result thereof, make a conforming change to the
definition of the term ``market professional''; (3) as permitted under
OCC Rule 705, add Government-Sponsored Enterprise (GSE) debt securities
as an eligible form of initial margin and make conforming changes to
various provisions in the X-M Agreement; (4) eliminate common stock as
an eligible form of initial margin as clearing members have never
deposited such collateral in the cross-margin program; (5) subject to
OCC Rule 705, permit the clearing organizations to agree to use the
valuation rate of one or the other clearing organizations in valuing
Government and GSE debt securities; \4\ (6) update certain contact
information; and (7) update Exhibit A, which contains the list of
contracts eligible under the OCC-CCorp cross-margining program.
---------------------------------------------------------------------------
\3\ For a description of the existing agreement, see Release No.
34-39203 (October 3, 1997), 62 FR 53371, [File No. SR-OCC-97-14]
(order approving amendments to the cross-margining agreements and
the forms of agreements governing the cross-margin accounts of
clearing members and market professionals that participate in OCC/
CCorp cross-margining); Release No. 34-32681 (July 27, 1993), 58 FR
41302 [File No. SR-OCC-92-24] (order approving expansion of cross-
margining program between OCC and CCorp to include non-proprietary
positions); and Release No. 34-29888 (October 31, 1991), 56 FR 56680
[File No. SR-OCC-91-07] (order approving establishment of cross-
margining program between OCC and CCorp).
\4\ The amendment to the X-M Agreement provides OCC with the
flexibility to agree with CCorp to apply the valuation rates of one
or the other clearing organization in the event Rule 705 is amended
accordingly.
---------------------------------------------------------------------------
In addition, OCC and CCorp have amended the agreements governing
the cross-margining accounts of clearing members and market
professionals that participate in the OCC-CCorp cross-margining
program. The amendments to these agreements: (1) Reflect CCorp's change
in name; (2) reflect the revised definition of the term ``market
professional''; (3) make other non-substantive, technical changes; \5\
and (4) eliminate the requirement that clearing members and market
professionals furnish the clearing organizations with financing
statements relating to positions, collateral and property maintained
with respect to accounts subject to cross-margining. The adoption by
all 50 states of the 1999 revisions to Articles 8 and 9 of the Uniform
Commercial Code has rendered the financing statement requirement
obsolete.
---------------------------------------------------------------------------
\5\ Such changes include, for example, describing firms as
``participants'' in CCorp rather than as ``clearing members.''
---------------------------------------------------------------------------
The proposed change is consistent with Section 17A of the Act \6\
and the rules and regulations thereunder applicable to OCC because it
updates agreements used in connection with a longstanding cross-
margining program that provides lower clearing margins to clearing
members while enhancing the safety of the clearing system. The proposed
rule change is not inconsistent with the existing rules of OCC,
including any other rules proposed to be amended.
---------------------------------------------------------------------------
\6\ 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 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
The foregoing rule change has become effective upon filing pursuant
to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(4)\8\
thereunder because the proposed rule does not significantly affect the
respective rights or obligations of the clearing agency or persons
using the service and does not adversely affect the safeguarding of
securities or funds in the custody or control of OCC or for which it is
responsible. At any time within sixty days of the filing of such rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of
[[Page 11296]]
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------
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-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-OCC-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 Section, 450 Fifth
Street, NW., Washington, DC 20549. 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 https://www.optionsclearing.com. 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-2005-01 and should be
submitted on or before March 29, 2005.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-967 Filed 3-7-05; 8:45 am]
BILLING CODE 8010-01-P
