Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to an Escrow Program Fee To Be Charged to Escrow Banks, 60599-60600 [E6-16948]

Download as PDF Federal Register / Vol. 71, No. 198 / Friday, October 13, 2006 / Notices V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR–NYSEArca– 2006–64), is hereby approved on an accelerated basis.35 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.36 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–16952 Filed 10–12–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54572; File No. SR–OCC– 2006–12] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to an Escrow Program Fee To Be Charged to Escrow Banks October 4, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on July 12, 2006, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange 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 Schedule of Fees by adding a $200 escrow fee to be charged to OCC-approved banks. ycherry on PROD1PC64 with NOTICES2 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. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, 35 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 36 17 VerDate Aug<31>2005 15:21 Oct 12, 2006 Jkt 211001 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 The purpose of the proposed rule change is to amend OCC’s Schedule of Fees by adding a $200 escrow fee to be charged to OCC-approved banks. As background, OCC’s escrow deposit program allows a custodian bank that has entered into an escrow agreement with OCC (‘‘escrow bank’’) to make deposits of eligible collateral on behalf of its customers with respect to stock option contracts and index option contracts carried in short positions and to rollover and withdraw such deposits by submitting electronic instructions to OCC through OCC’s escrow deposit system.3 Escrow deposits are pledged to both the customer’s clearing member and to OCC in order to satisfy the customer’s obligation to deposit customer level margin at the clearing member and in order to satisfy the clearing member’s obligation to deposit clearing level margin at OCC with respect to a specified short position in stock or index options.4 Under OCC’s form of escrow agreement, an escrow bank is obligated to hold the deposited collateral subject to the lien of OCC and the clearing member until such liens are released. In 2005, the escrow deposit system was integrated into OCC’s clearing system, which enabled escrow banks to access the escrow system through the internet. Before the integration, escrow banks were required to lease or buy a personal computer that was configured by OCC to provide secure access to the escrow deposit system. Banks that elected the lease alternative are charged a $200.00 monthly fee of which $150.00 is an equipment leasing fee and $50.00 is an access fee.5 Banks that (i) Elected the purchase alternative or (ii) became escrow banks after the systems 2 The Commission has modified the text of the summaries prepared by OCC. 3 Escrow banks also use the escrow deposit system to receive and review OCC and relevant clearing member responses and to access reports. 4 Escrow deposits may include: (i) the underlying securities for any stock option contract; (ii) cash, short-term U.S. Government securities, and/or common stocks for any index call option contract; and (iii) cash and/or short-term U.S. Government securities for stock or index put options. 5 OCC has continued to charge current escrow banks with leased equipment the $200.00 per month total fee as they have retained such equipment as a back-up to Internet access to the escrow system. However, a different back-up solution is being implemented for all escrow banks, which is rendering the leased equipment obsolete for purposes of accessing the escrow system. PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 60599 integration are charged only the $50 access fee, which is intended to cover the costs associated with administering the escrow deposit program. Costs to administer the program include: (1) Legal costs related to addressing the contractual aspects of the program; (2) audit costs related to ensuring compliance with the external audit reporting requirements of the program; and (3) staff costs related to servicing program users (i.e., escrow banks and clearing members). In connection with reviewing different back-up solutions to Internet access, OCC also examined its costs to administer the escrow program and concluded that the costs greatly exceed the $50.00 per month access fee. Accordingly, OCC has determined to charge all escrow banks a $200.00 per month escrow program fee, which would be reflected in OCC’s Schedule of Fees. The proposed program fee will allow OCC to partially offset its escrow program administration costs but will not affect the overwhelming majority of escrow banks which already pay $200.00 per month in aggregate escrow deposit program fees. OCC believes that the proposed change is consistent with Section 17A of the Act 6 and the rules thereunder because it amends OCC’s Schedule of Fees to include a reasonable fee to be charged to escrow banks that utilize OCC’s escrow deposit system to partially offset OCC’s cost to administer the escrow program. 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 OCC has not solicited or received 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 6 15 E:\FR\FM\13OCN1.SGM U.S.C. 78q–1. 13OCN1 60600 Federal Register / Vol. 71, No. 198 / Friday, October 13, 2006 / Notices (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: ycherry on PROD1PC64 with NOTICES2 Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–OCC–2006–12 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–OCC–2006–12. 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 (http://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, 100 F Street, NE., 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 http://www.theocc.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 submission VerDate Aug<31>2005 15:21 Oct 12, 2006 Jkt 211001 should refer to File No. SR–OCC–2006– 12 and should be submitted on or before November 3, 2006. DEPARTMENT OF TRANSPORTATION For the Commission by the Division of Market Regulation, pursuant to delegated authority.7 Nancy M. Morris, Secretary. [FR Doc. E6–16948 Filed 10–12–06; 8:45 am] Notice of Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits Filed Under Subpart B (formerly Subpart Q) during the Week Ending September 29, 2006 BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice 5565] Arms Control and Nonproliferation Advisory Board (ACNAB) Meeting Notice Closed Meeting In accordance with section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. app 2 § 10(a)(2), the Department of State announces a meeting of the Arms Control and Nonproliferation Advisory Board (ACNAB) to take place on November 6, 2006, at the Department of State, Washington, DC. Pursuant to section 10(d) of the Federal Advisory Committee Act, 5 U.S.C. app 2 § 10(d) and 5 U.S.C. 552b (c)(1), it has been determined that this Board meeting will be closed to the public in the interest of national defense and foreign policy because the Board will be reviewing and discussing matters classified in accordance with Executive Order 12958. The purpose of the ACNAB is to provide the Department with a continuing source of independent advice on all aspects of arms control, disarmament and international security, and related aspects of public diplomacy. The agenda for this meeting includes classified discussions related to the Board’s on-going studies on current U.S. policy and issues regarding the National Strategy to Combat Weapons of Mass Destruction, Counter-Terrorism, and Space Policy. For more information, contact Matthew Zartman, Deputy Executive Director of the Arms Control and Nonproliferation Advisory Board, Department of State, Washington, DC 20520, telephone: (202) 736–4244. Dated: September 29, 2006. George W. Look, Executive Director of the Arms Control and Nonproliferation Advisory Board, Department of State. [FR Doc. E6–17022 Filed 10–12–06; 8:45 am] BILLING CODE 4710–27–P 7 17 PO 00000 CFR 200.30–3(a)(12). Frm 00140 Fmt 4703 Sfmt 4703 Office of the Secretary The following Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits were filed under Subpart B (formerly Subpart Q) of the Department of Transportation’s Procedural Regulations (See 14 CFR 301.201 et seq.). The due date for Answers, Conforming Applications, or Motions to Modify Scope are set forth below for each application. Following the Answer period DOT may process the application by expedited procedures. Such procedures may consist of the adoption of a show-cause order, a tentative order, or in appropriate cases a final order without further proceedings. Docket Number: OST–2006–25982. Date Filed: September 28, 2006. Due Date for Answers, Conforming Applications, or Motion to Modify Scope: October 19, 2006. Description: Application of Avior Airlines, C.A. requesting a foreign air carrier permit in order to engage in scheduled foreign air transportation of persons, property and mail between Venezuela and the United States. Renee V. Wright Program Manager, Docket Operations, Federal Register Liaison. [FR Doc. E6–16993 Filed 10–12–06; 8:45 am] BILLING CODE 4910–9X–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Docket No. FAA–2004–16944] Operating Limitations at Chicago O’Hare International Airport; Notice of Order Federal Aviation Administration (FAA), DOT. ACTION: Notice of Order. AGENCY: SUMMARY: On September 22, 2006, the FAA issued an order to show cause, which solicited written views on modifying the August 2004 Order temporarily limiting scheduled operations at O’Hare International Airport (O’Hare) to allow carriers to trade and transfer scheduled arrivals for consideration for the remaining duration of the Order. The FAA is E:\FR\FM\13OCN1.SGM 13OCN1

Agencies

[Federal Register Volume 71, Number 198 (Friday, October 13, 2006)]
[Notices]
[Pages 60599-60600]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-16948]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54572; File No. SR-OCC-2006-12]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of a Proposed Rule Change Relating to an Escrow 
Program Fee To Be Charged to Escrow Banks

October 4, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on July 12, 2006, The Options 
Clearing Corporation (``OCC'') filed with the Securities and Exchange 
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 Schedule of Fees by 
adding a $200 escrow fee to be charged to OCC-approved banks.

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. The self-regulatory organization 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

    The purpose of the proposed rule change is to amend OCC's Schedule 
of Fees by adding a $200 escrow fee to be charged to OCC-approved 
banks.
    As background, OCC's escrow deposit program allows a custodian bank 
that has entered into an escrow agreement with OCC (``escrow bank'') to 
make deposits of eligible collateral on behalf of its customers with 
respect to stock option contracts and index option contracts carried in 
short positions and to rollover and withdraw such deposits by 
submitting electronic instructions to OCC through OCC's escrow deposit 
system.\3\ Escrow deposits are pledged to both the customer's clearing 
member and to OCC in order to satisfy the customer's obligation to 
deposit customer level margin at the clearing member and in order to 
satisfy the clearing member's obligation to deposit clearing level 
margin at OCC with respect to a specified short position in stock or 
index options.\4\ Under OCC's form of escrow agreement, an escrow bank 
is obligated to hold the deposited collateral subject to the lien of 
OCC and the clearing member until such liens are released.
---------------------------------------------------------------------------

    \3\ Escrow banks also use the escrow deposit system to receive 
and review OCC and relevant clearing member responses and to access 
reports.
    \4\ Escrow deposits may include: (i) the underlying securities 
for any stock option contract; (ii) cash, short-term U.S. Government 
securities, and/or common stocks for any index call option contract; 
and (iii) cash and/or short-term U.S. Government securities for 
stock or index put options.
---------------------------------------------------------------------------

    In 2005, the escrow deposit system was integrated into OCC's 
clearing system, which enabled escrow banks to access the escrow system 
through the internet. Before the integration, escrow banks were 
required to lease or buy a personal computer that was configured by OCC 
to provide secure access to the escrow deposit system. Banks that 
elected the lease alternative are charged a $200.00 monthly fee of 
which $150.00 is an equipment leasing fee and $50.00 is an access 
fee.\5\ Banks that (i) Elected the purchase alternative or (ii) became 
escrow banks after the systems integration are charged only the $50 
access fee, which is intended to cover the costs associated with 
administering the escrow deposit program. Costs to administer the 
program include: (1) Legal costs related to addressing the contractual 
aspects of the program; (2) audit costs related to ensuring compliance 
with the external audit reporting requirements of the program; and (3) 
staff costs related to servicing program users (i.e., escrow banks and 
clearing members).
---------------------------------------------------------------------------

    \5\ OCC has continued to charge current escrow banks with leased 
equipment the $200.00 per month total fee as they have retained such 
equipment as a back-up to Internet access to the escrow system. 
However, a different back-up solution is being implemented for all 
escrow banks, which is rendering the leased equipment obsolete for 
purposes of accessing the escrow system.
---------------------------------------------------------------------------

    In connection with reviewing different back-up solutions to 
Internet access, OCC also examined its costs to administer the escrow 
program and concluded that the costs greatly exceed the $50.00 per 
month access fee. Accordingly, OCC has determined to charge all escrow 
banks a $200.00 per month escrow program fee, which would be reflected 
in OCC's Schedule of Fees. The proposed program fee will allow OCC to 
partially offset its escrow program administration costs but will not 
affect the overwhelming majority of escrow banks which already pay 
$200.00 per month in aggregate escrow deposit program fees.
    OCC believes that the proposed change is consistent with Section 
17A of the Act \6\ and the rules thereunder because it amends OCC's 
Schedule of Fees to include a reasonable fee to be charged to escrow 
banks that utilize OCC's escrow deposit system to partially offset 
OCC's cost to administer the escrow program. 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

    OCC has not solicited or received 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

[[Page 60600]]

(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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-OCC-2006-12 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-OCC-2006-12. 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 (http://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, 100 F Street, 
NE., 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 http://www.theocc.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 submission should refer to File No. SR-
OCC-2006-12 and should be submitted on or before November 3, 2006.
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
Nancy M. Morris,
Secretary.
 [FR Doc. E6-16948 Filed 10-12-06; 8:45 am]
BILLING CODE 8011-01-P