Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to Cash-Settled Foreign Currency Options, 67004-67005 [E6-19419]
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Federal Register / Vol. 71, No. 222 / Friday, November 17, 2006 / Notices
The Exchange has represented that it
has an adequate surveillance program in
place for options on the Fund Shares, as
defined by the Exchange’s proposal, and
it intends to apply those same program
procedures that it applies to options on
Fund Shares currently traded on the
Exchange. In addition, under proposed
NYSE Arca Rule 5.3(g)(2)(D), before
listing and trading options on Fund
Shares based on a non-U.S. currency,
the Exchange must have entered into an
appropriate comprehensive surveillance
sharing agreement with the applicable
marketplace or marketplaces with last
sale reporting that represent(s) the
highest volume in derivatives (options
or futures) on the specified non-U.S.
currency. This provision means that the
options exchange listing options on the
Fund Shares must utilize the same
comprehensive surveillance sharing
arrangements utilized by the equity
markets that list and trade the Fund
Shares. Through its membership in the
ISG, the Exchange is able to obtain
trading information regarding trading of
listed foreign currency derivative
products from other marketplaces that
are members or affiliates of the ISG.
With respect to the Euro Shares, the
Commission notes that the Exchange
can obtain such information from the
Phlx in connection with euro options
trading on the Phlx and from the CME
and the LIFFE in connection with euro
futures trading on those exchanges.23
of the Act,26 to approve the proposed
rule change, as amended, on an
accelerated basis.
V. Conclusion
For the foregoing reasons, the
Commission finds that the proposed
rule change, as amended, is consistent
with the Act and rules and regulations
thereunder applicable to the national
securities exchange.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,27 that the
proposed rule change (SR–NYSEArca2006–04), as amended, is hereby
approved on an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.28
Nancy M. Morris,
Secretary.
[FR Doc. E6–19418 Filed 11–16–06; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54721; File No. SR–OCC–
2006–10]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of a Proposed Rule Change
Relating to Cash-Settled Foreign
Currency Options
jlentini on PROD1PC65 with NOTICES
Accelerated Approval
November 8, 2006.
The Commission finds good cause for
approving the proposed rule change, as
amended, prior to the thirtieth day after
the date of publication of the notice of
the filing thereof in the Federal Register
pursuant to Section 19(b)(2) of the
Act.24 The Exchange has requested
accelerated approval of the proposed
rule change. The proposal implements
rules for the listing and trading of
options on Fund Shares representing an
interest in a specified non-U.S. currency
that are substantially similar to listing
standards recently adopted by the ISE.25
Inasmuch as options on Fund Shares are
already listed and traded on other
exchanges, the Commission does not
believe that the Exchange’s proposal
raises any novel regulatory issues.
Granting accelerated approval to the
proposal will enable the Exchange to
immediately list and trade options on
ETFs holding non-U.S. currency.
Therefore, the Commission finds good
cause, consistent with Section 19(b)(2)
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
June 8, 2006, The Options Clearing
Corporation (‘‘OCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) and on October 26,
2006, amended 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
enable OCC to accommodate a request
from the Philadelphia Stock Exchange,
Inc. (‘‘Phlx’’) that OCC clear and settle
cash-settled foreign currency options
(‘‘Cash-Settled FCOs’’).
26 15
U.S.C. 78s(b)(2).
id.
28 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
23 See
supra note 13.
24 15 U.S.C. 78s(b)(2).
25 See supra note 6.
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16:31 Nov 16, 2006
27 See
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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
The purpose of the proposed rule
change is to enable OCC to
accommodate a request from the
Philadelphia Stock Exchange, Inc.
(‘‘Phlx’’) that OCC clear and settle CashSettled FCOs. OCC’s By-Laws and Rules
currently provide for the clearance and
settlement of Cash-Settled FCOs
although no such options are currently
traded, but changes to OCC’s By-Laws
are needed in connection with the CashSettled FCOs proposed to be traded by
Phlx.3 The first change is to reflect the
different expiration date of the CashSettled FCOs as compared with the date
provided for in OCC’s By-Laws. The
definition of ‘‘expiration date’’ in
Article XXII, Section 1 of OCC’s ByLaws provides that Cash-Settled FCOs
generally expire on the Monday
specified by the relevant exchange at or
before trading begins. To accommodate
the Cash-Settled FCOs proposed to be
traded by Phlx, the definition will need
to be amended to provide for an
expiration date of the Saturday
following the third Friday of the
expiration month, which is the same as
the expiration date for equity and index
options. OCC is also proposing to
provide for expirations on such other
dates as an exchange may determine,
which is consistent with the definition
of ‘‘expiration date’’ applicable to index
options. The next proposed change, to
Article VI, Section 22 of OCC’s By-Laws,
is intended to make it clear that CashSettled FCOs will not clear through
OCC’s International Clearing System.4
2 The Commission has modified parts of these
statements.
3 For a description of the Phlx proposed rule
change, see Securities Exchange Act Release No.
54652 (October 26, 2006) 71 FR 64597 (November
2, 2006) [File No. SR–Phlx–2006–34].
4 Interpretation .02 under Article VI, Section 22
of OCC’s By-Laws currently provides, ‘‘All classes
of foreign currency options and cross-rate foreign
currency options are cleared through ICS.’’
E:\FR\FM\17NON1.SGM
17NON1
jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 71, No. 222 / Friday, November 17, 2006 / Notices
OCC amended the proposed rule
change on October 26, 2006, to propose
amending Article XXII, Section 4 of
OCC’s By-Laws to conform the
provisions relating to unavailability or
inaccuracy of the spot price for CashSettled FCOs to the comparable
provisions of Article XVII of OCC’s ByLaws relating to the unavailability or
inaccuracy of the current index value or
other value or price used to determine
the exercise settlement amount for
index options. The primary conforming
changes are the proposed addition of
procedures under which the exercise
settlement amount would be established
by an adjustment panel in the event of
the unavailability or inaccuracy of the
spot price and a modification of normal
expiration date exercise procedures in
situations in which the adjustment
panel delays the fixing of the exercise
settlement amount beyond the last
trading day for the affected series.
This amendment also proposes to
amend Rule 2302 of OCC’s Rules in
connection with a change in the
expiration date exercise procedures for
Cash-Settled FCOs. As originally filed,
the rules for Cash-Settled FCOs would
have provided for true automatic
exercise without the opportunity for
clearing members to give non-exercise
instructions. Phlx has subsequently
informed OCC that Cash-Settled FCOs
should be subject to the same ‘‘exerciseby-exception’’ procedures that apply to
many other OCC-issued options. Under
‘‘exercise-by-exception’’ procedures, a
Cash-Settled FCO would be deemed to
be exercised at expiration if the exercise
settlement value is at least $1.00 per
contract unless the clearing member
instructs OCC not to exercise it. OCC is
also proposing to add an interpretation
to Rule 2302 to note that the normal
expiration date exercise procedures do
not apply in circumstances in which the
fixing of the exercise settlement amount
is delayed beyond the last trading day
before expiration of cash-settled foreign
currency options.
OCC believes that the proposed rule
change is consistent with Section 17A of
the Act because it is designed to
promote the prompt and accurate
clearance and settlement of derivative
transactions in Cash-Settled FCOs, to
foster cooperation and coordination
with persons engaged in the clearance
and settlement of such transactions, to
remove impediments to and perfect the
mechanism of a national system for the
prompt and accurate clearance and
settlement of such transactions, and, in
general, protect investors and the public
interest.
VerDate Aug<31>2005
16:31 Nov 16, 2006
Jkt 211001
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
Within 35 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
90 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 the 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–2006–10 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
Number SR–OCC–2006–10. 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
PO 00000
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Fmt 4703
Sfmt 4703
67005
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 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–2006–10 and should
be submitted on or before December 8,
2006.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.5
Nancy M. Morris,
Secretary.
[FR Doc. E6–19419 Filed 11–16–06; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54734; File No. SR–SCCP–
2006–02]
Self-Regulatory Organizations; Stock
Clearing Corporation of Philadelphia;
Order Granting Approval of a
Proposed Rule Change Relating to the
Definition of a Margin Member
November 9, 2006.
I. Introduction
On August 14, 2006, Stock Clearing
Corporation of Philadelphia (‘‘SCCP’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) proposed
rule change SR–SCCP–2006–02
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’).1 Notice of the proposal was
published in the Federal Register on
September 29, 2006.2 No comment
letters were received. For the reasons
discussed below, the Commission is
5 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 Securities Exchange Act Release No. 54488,
(September 22, 2006), 71 FR 57598.
1 15
E:\FR\FM\17NON1.SGM
17NON1
]]>Agencies
[Federal Register Volume 71, Number 222 (Friday, November 17, 2006)]
[Notices]
[Pages 67004-67005]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19419]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54721; File No. SR-OCC-2006-10]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of a Proposed Rule Change Relating to Cash-Settled
Foreign Currency Options
November 8, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on June 8, 2006, The Options
Clearing Corporation (``OCC'') filed with the Securities and Exchange
Commission (``Commission'') and on October 26, 2006, amended 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 enable OCC to accommodate a request
from the Philadelphia Stock Exchange, Inc. (``Phlx'') that OCC clear
and settle cash-settled foreign currency options (``Cash-Settled
FCOs'').
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 parts of these statements.
---------------------------------------------------------------------------
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 enable OCC to
accommodate a request from the Philadelphia Stock Exchange, Inc.
(``Phlx'') that OCC clear and settle Cash-Settled FCOs. OCC's By-Laws
and Rules currently provide for the clearance and settlement of Cash-
Settled FCOs although no such options are currently traded, but changes
to OCC's By-Laws are needed in connection with the Cash-Settled FCOs
proposed to be traded by Phlx.\3\ The first change is to reflect the
different expiration date of the Cash-Settled FCOs as compared with the
date provided for in OCC's By-Laws. The definition of ``expiration
date'' in Article XXII, Section 1 of OCC's By-Laws provides that Cash-
Settled FCOs generally expire on the Monday specified by the relevant
exchange at or before trading begins. To accommodate the Cash-Settled
FCOs proposed to be traded by Phlx, the definition will need to be
amended to provide for an expiration date of the Saturday following the
third Friday of the expiration month, which is the same as the
expiration date for equity and index options. OCC is also proposing to
provide for expirations on such other dates as an exchange may
determine, which is consistent with the definition of ``expiration
date'' applicable to index options. The next proposed change, to
Article VI, Section 22 of OCC's By-Laws, is intended to make it clear
that Cash-Settled FCOs will not clear through OCC's International
Clearing System.\4\
---------------------------------------------------------------------------
\3\ For a description of the Phlx proposed rule change, see
Securities Exchange Act Release No. 54652 (October 26, 2006) 71 FR
64597 (November 2, 2006) [File No. SR-Phlx-2006-34].
\4\ Interpretation .02 under Article VI, Section 22 of OCC's By-
Laws currently provides, ``All classes of foreign currency options
and cross-rate foreign currency options are cleared through ICS.''
---------------------------------------------------------------------------
[[Page 67005]]
OCC amended the proposed rule change on October 26, 2006, to
propose amending Article XXII, Section 4 of OCC's By-Laws to conform
the provisions relating to unavailability or inaccuracy of the spot
price for Cash-Settled FCOs to the comparable provisions of Article
XVII of OCC's By-Laws relating to the unavailability or inaccuracy of
the current index value or other value or price used to determine the
exercise settlement amount for index options. The primary conforming
changes are the proposed addition of procedures under which the
exercise settlement amount would be established by an adjustment panel
in the event of the unavailability or inaccuracy of the spot price and
a modification of normal expiration date exercise procedures in
situations in which the adjustment panel delays the fixing of the
exercise settlement amount beyond the last trading day for the affected
series.
This amendment also proposes to amend Rule 2302 of OCC's Rules in
connection with a change in the expiration date exercise procedures for
Cash-Settled FCOs. As originally filed, the rules for Cash-Settled FCOs
would have provided for true automatic exercise without the opportunity
for clearing members to give non-exercise instructions. Phlx has
subsequently informed OCC that Cash-Settled FCOs should be subject to
the same ``exercise-by-exception'' procedures that apply to many other
OCC-issued options. Under ``exercise-by-exception'' procedures, a Cash-
Settled FCO would be deemed to be exercised at expiration if the
exercise settlement value is at least $1.00 per contract unless the
clearing member instructs OCC not to exercise it. OCC is also proposing
to add an interpretation to Rule 2302 to note that the normal
expiration date exercise procedures do not apply in circumstances in
which the fixing of the exercise settlement amount is delayed beyond
the last trading day before expiration of cash-settled foreign currency
options.
OCC believes that the proposed rule change is consistent with
Section 17A of the Act because it is designed to promote the prompt and
accurate clearance and settlement of derivative transactions in Cash-
Settled FCOs, to foster cooperation and coordination with persons
engaged in the clearance and settlement of such transactions, to remove
impediments to and perfect the mechanism of a national system for the
prompt and accurate clearance and settlement of such transactions, and,
in general, protect investors and the public interest.
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
Within 35 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 90 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 the 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-2006-10 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 Number SR-OCC-2006-10. 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, 100 F Street,
NE., 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-2006-10
and should be submitted on or before December 8, 2006.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
---------------------------------------------------------------------------
\5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-19419 Filed 11-16-06; 8:45 am]
BILLING CODE 8011-01-P
