Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change Relating to Rate-Modified Foreign Currency Options, 17976-17978 [E7-6668]
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17976
Federal Register / Vol. 72, No. 68 / Tuesday, April 10, 2007 / Notices
or otherwise in furtherance of the
purposes of the Act.
NYSE Arca has asked the Commission
to waive the five-day pre-filing notice
requirement and the 30-day operative
delay. The Commission believes such
waivers are consistent with the
protection of investors and the public
interest because they would permit the
Exchange to codify the proposed
clarifications without further delay.11
For this reason, the Commission
designates the proposal to be operative
upon filing with the Commission.
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:
cprice-sewell on PROD1PC66 with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2007–29 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–NYSEArca–2007–29. 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 Arca.
11 For purposes only of waiving the 30-day preoperative period, the Commission has considered
the proposed rule’s impact on efficiency,
competition and capital formation. 15 U.S.C. 78c(f).
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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–NYSEArca–2007–29 and should be
submitted on or before May 1, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–6710 Filed 4–9–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55579; File No. SR–OCC–
2007–02]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing and Order Granting
Accelerated Approval of a Proposed
Rule Change Relating to Rate-Modified
Foreign Currency Options
April 4, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
March 5, 2007, The Options Clearing
Corporation (‘‘OCC’’) 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
primarily by OCC. The Commission is
publishing this notice and order to
solicit comments on the proposed rule
change from interested persons and to
grant accelerated approval of the
proposal.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change will allow
OCC to clear and settle rate-modified
foreign currency options (‘‘RateModified FCOs’’) which have been
proposed and approved for trading by
the International Securities Exchange
(‘‘ISE’’).2
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 Securities Exchange Act Release No. 55575
(April 3, 2007) (File No. SR–ISE–2006–59). For
notice of the proposal, see Securities Exchange Act
Release No. 55336 (February 23, 2007), 72 FR 9364
(March 1, 2007).
1 15
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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.3
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
The purpose of this rule change is to
accommodate a request from ISE that
OCC clear and settle Rate-Modified
FCOs. OCC’s By-Laws and Rules
currently provide for the clearance and
settlement of cash-settled foreign
currency options (‘‘Cash-Settled
FCOs’’).4 However, unlike the CashSettled FCOs currently covered by
OCC’s By-Laws and Rules, the
underlying interest for Rate-Modified
FCOs is stated in terms of the exchange
rate between a ‘‘currency pair,’’ one of
which may be the U.S. dollar or both of
which may be non-U.S. currencies, as
modified by a ‘‘rate modifier’’
determined by ISE.
The rate modifier for Rate-Modified
FCOs is selected so that the underlying
modified rate looks similar to an index.
The exchange rates underlying RateModified FCOs may or may not be
stated in the same way that they are
conventionally quoted in the spot
market. For example, exchange rates
between the U.S. dollar and the euro are
generally quoted as dollars per euro on
the spot market, but the rate modifying
a Rate-Modified FCO could be stated as
euros per dollar. The number by which
the exchange rate is multiplied to
determine the modified rate for a
particular class of options will be 1, 10
or 100 depending on the level of the
exchange rate in question.
For purposes of determining an
exercise settlement amount, RateModified FCOs would use a multiplier
3 The Commission has modified parts of these
statements.
4 The Commission recently approved a proposed
rule change filed by OCC to accommodate CashSettled FCOs traded on the Philadelphia Stock
Exchange (‘‘Phlx’’). Securities Exchange Act Release
No. 54935 (December 13, 2006), 71 FR 76417
(December 20, 2006) (File No. SR–OCC–2006–10).
The rule changes that were made with respect to the
Phlx Cash-Settled FCOs will also apply to RateModified FCOs.
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Federal Register / Vol. 72, No. 68 / Tuesday, April 10, 2007 / Notices
of $100 (i.e., the exercise settlement
amount will be the difference between
the strike price and the exercise
settlement value of the underlying
modified rate times the multiplier). The
multiplier, which always has a value of
$100, is not the same thing as the rate
modifier. Similarly, premium quotations
would be multiplied by $100 to obtain
the aggregate premium amount for a
single option.
The exercise settlement amount for
Rate-Modified FCOs will be based on
the noon buying rates for the underlying
currencies as published by the Federal
Reserve Bank of New York. If the
Federal Reserve Bank does not publish
a noon buying rate for a particular
currency pair, ISE will use a rate
obtained by a market data vendor. OCC
will ordinarily look to ISE to supply the
final value of the underlying for exercise
settlement purposes, but OCC will
retain its customary authority to set a
value if none is available from ISE.
Trading of Rate-Modified FCOs will
ordinarily cease at 12:00 noon Eastern
Time on the business day before the
expiration date.
Rate-Modified FCOs are to be
European style and will expire on the
Saturday following the third Friday of
the expiration month. Rate-Modified
FCOs will have up to three near-term
expiration months followed by three
calendar quarter-end expiration months.
To accommodate Rate-Modified
FCOs, OCC is proposing to add or
modify certain defined terms in Article
XXII of the By-Laws. Definitions of
‘‘multiplier,’’ ‘‘rate-modified foreign
currency options,’’ ‘‘underlying
currency pair,’’ and ‘‘underlying
modified rate’’ will be added, and the
definitions of ‘‘call,’’ ‘‘exercise price,’’
‘‘exercise settlement amount,’’
‘‘premium,’’ ‘‘put,’’ ‘‘reporting
authority,’’ ‘‘series of options’’ and
‘‘spot price’’ will be amended to reflect
the use of a modified exchange rate as
the underlying interest for RateModified FCOs. In addition, Section 5 of
Article XXII of the By-Laws relating to
the time for determination of the spot
price will be amended for clarification.
OCC will delete the definition of
‘‘aggregate exercise price,’’ which is no
longer used in OCC’s By-Laws or Rules
with respect to Cash-Settled FCOs.
The introduction to Chapter XXIII of
the Rules will be amended to make a
non-substantive change to conform to
the terminology in Article XXII of the
By-Laws.
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 transactions in Rate-
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Modified FCOs by applying the same
basic rules and procedures to such
options as are applied to other cashsettled foreign currency options. The
proposed rule change is not inconsistent
with the existing rules of OCC,
including those 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
Section 17A(b)(3)(F) of the Act
requires, among other things, that the
rules of a clearing agency be designed to
promote the prompt and accurate
clearance and settlement of securities
transactions.5 The purpose of the
proposed rule change is to amend OCC’s
By-Laws and Rules so that OCC may
clear and settle the new Rate-Modified
FCO product to be listed and traded on
ISE. Accordingly, the proposed rule
change should promote the prompt and
accurate clearance and settlement of
securities transactions.
OCC has requested that the
Commission approve the proposed rule
prior to the thirtieth day after
publication of the notice of the filing.
The Commission finds good cause for
approving the proposed rule change
prior to the thirtieth day after the
publication of notice because such
approval will allow ISE to commence
trading of Rate-Modified FCOs without
any unnecessary delay.
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
5 15
PO 00000
U.S.C. 78q–1(b)(3)(F).
Frm 00162
Fmt 4703
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17977
Number SR–OCC–2007–02 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–2007–02. 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–2007–02 and should
be submitted on or before May 1, 2007.
V. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and in
particular Section 17A of the Act and
the rules and regulations thereunder.6
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
proposed rule change (File No. SR–
OCC–2007–02) be and hereby is
approved.
6 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
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17978
Federal Register / Vol. 72, No. 68 / Tuesday, April 10, 2007 / Notices
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–6668 Filed 4–9–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55582; File No. SR–ODD–
2007–01]
Self-Regulatory Organizations; The
Options Clearing Corporation; Order
Granting Approval of Accelerated
Delivery of Supplement to the Options
Disclosure Document Reflecting
Certain Changes to Disclosure
Regarding Rate-Modified Cash-Settled
Foreign Currency Options
April 4, 2007.
On March 13, 2007, The Options
Clearing Corporation (‘‘OCC’’) submitted
to the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Rule 9b–1 under the Securities
Exchange Act of 1934 (‘‘Act’’),1 five
preliminary copies of a supplement to
its options disclosure document
(‘‘ODD’’) reflecting certain changes to
disclosure regarding rate-modified cashsettled foreign currency options (‘‘RateModified FCOs’’).2 On April 3, 2007, the
OCC submitted to the Commission five
definitive copies of the supplement.3
The ODD currently provides general
disclosures on the characteristics and
risks of trading standardize options.
Recently, an options exchange amended
its rules to permit the listing and trading
of Rate-Modified FCOs.4 The proposed
supplement, which supersedes and
replaces the January 2007 Supplement
to the ODD,5 provides disclosure on the
characteristics of non-rate modified
cash-settled foreign currency options
(‘‘Non-Rate Modified FCOs’’) and adds
new disclosure on the characteristics of
Rate-Modified FCOs.
In addition to providing new
disclosure on the characteristics of RateCFR 200.30–3(a)(12).
CFR 240.9b–1.
2 See letter from Jean M. Cawley, First Vice
President and Deputy General Counsel, OCC, to
Sharon Lawson, Senior Special Counsel, Division of
Market Regulation (‘‘Division’’), Commission, dated
March 5, 2007.
3 See letter from Jean M. Cawley, First Vice
President and Deputy General Counsel, OCC, to
Sharon Lawson, Senior Special Counsel, Division,
Commission, dated April 3, 2007.
4 See Securities Exchange Act Release No. 55575
(April 3, 2007) (approving File No. SR–ISE–2006–
59).
5 See Securities Exchange Act Release No. 55035
(December 29, 2006), 72 FR 1358 (January 11, 2007)
(SR–ODD–2006–01) (‘‘January 2007 Supplement’’).
Modified FCOs, the proposed
supplement to the ODD also reorganizes
the January 2007 Supplement to
distinguish disclosures regarding NonRate Modified FCOs from Rate-Modified
FCOs, as well as providing a separate
heading for certain disclosures
pertaining to all dollar-denominated
cash-settled foreign currency options.
Further, the proposed supplement adds
new clarification regarding exercise
settlement values of Rate-Modified
FCOs. The proposed supplement is
intended to be read in conjunction with
the more general ODD, which, as
described above, discusses the
characteristics and risks of options
generally.6
Rule 9b–1(b)(2)(i) under the Act 7
provides that an options market must
file five copies of an amendment or
supplement to the ODD with the
Commission at least 30 days prior to the
date definitive copies are furnished to
customers, unless the Commission
determines otherwise, having due
regard to the adequacy of information
disclosed and the public interest and
protection of investors.8 In addition,
five copies of the definitive ODD, as
amended or supplemented, must be
filed with the Commission not later than
the date the amendment or supplement,
or the amended options disclosure
document, is furnished to customers.
The Commission has reviewed the
proposed supplement and finds, having
due regard to the adequacy of
information disclosed and the public
interest and protection of investors, that
the proposed supplement may be
furnished to customers as of the date of
this order.
It is therefore ordered, pursuant to
Rule 9b–1 under the Act,9 that
definitive copies of the proposed
supplement to the ODD (SR–ODD–
2007–01), reflecting disclosure
regarding Non-Rate Modified FCOs and
adding disclosure regarding RateModified FCOs, may be furnished to
customers as of the date of this order.
7 17
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1 17
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6 The Commission notes that the options markets
must continue to ensure that the ODD is in
compliance with the requirements of Rule 9b–
1(b)(2)(i) under the Act, 17 CFR 240.9b–1(b)(2)(i),
including when future changes are made regarding
Non-Rate Modified FCOs and Rate-Modified FCOs.
Any future changes to the rules of the options
markets would need to be submitted to the
Commission under Section 19(b) of the Act. 15
U.S.C. 78s(b).
7 17 CFR 240.9b–1(b)(2)(i).
8 This provision permits the Commission to
shorten or lengthen the period of time which must
elapse before definitive copies may be furnished to
customers.
9 17 CFR 240.9b–1.
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For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–6709 Filed 4–9–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55569; File No. SR–Phlx–
2007–031]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Remove References to
Intermarket Trading System (‘‘ITS’’)
Plan
April 2, 2007.
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 March 27,
2007, the Philadelphia Stock Exchange,
Inc. (‘‘Phlx’’ or ‘‘Exchange’’) 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 substantially by the
Exchange.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange is proposing to amend
Phlx Rules 452 and 607 and the XLE Fee
Schedule to remove references to the
Intermarket Trading System (‘‘ITS’’)
Plan and to delete Phlx Rules 2000–
2002, which implemented the ITS Plan
trading rules on the Exchange.
The text of the proposed rule change
is available at Phlx, the Commission’s
Public Reference Room and https://
www.phlx.com.
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
Exchange 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
Phlx has prepared summaries, set forth
in Sections A, B, and C below, of the
10 17
CFR 200.30–3(a)(39).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 72, Number 68 (Tuesday, April 10, 2007)]
[Notices]
[Pages 17976-17978]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-6668]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55579; File No. SR-OCC-2007-02]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Order Granting Accelerated Approval of a Proposed
Rule Change Relating to Rate-Modified Foreign Currency Options
April 4, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 5, 2007, The Options
Clearing Corporation (``OCC'') 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 primarily by OCC.
The Commission is publishing this notice and order to solicit comments
on the proposed rule change from interested persons and to grant
accelerated approval of the proposal.
---------------------------------------------------------------------------
\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 will allow OCC to clear and settle rate-
modified foreign currency options (``Rate-Modified FCOs'') which have
been proposed and approved for trading by the International Securities
Exchange (``ISE'').\2\
---------------------------------------------------------------------------
\2\ Securities Exchange Act Release No. 55575 (April 3, 2007)
(File No. SR-ISE-2006-59). For notice of the proposal, see
Securities Exchange Act Release No. 55336 (February 23, 2007), 72 FR
9364 (March 1, 2007).
---------------------------------------------------------------------------
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.\3\
---------------------------------------------------------------------------
\3\ 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 this rule change is to accommodate a request from
ISE that OCC clear and settle Rate-Modified FCOs. OCC's By-Laws and
Rules currently provide for the clearance and settlement of cash-
settled foreign currency options (``Cash-Settled FCOs'').\4\ However,
unlike the Cash-Settled FCOs currently covered by OCC's By-Laws and
Rules, the underlying interest for Rate-Modified FCOs is stated in
terms of the exchange rate between a ``currency pair,'' one of which
may be the U.S. dollar or both of which may be non-U.S. currencies, as
modified by a ``rate modifier'' determined by ISE.
---------------------------------------------------------------------------
\4\ The Commission recently approved a proposed rule change
filed by OCC to accommodate Cash-Settled FCOs traded on the
Philadelphia Stock Exchange (``Phlx''). Securities Exchange Act
Release No. 54935 (December 13, 2006), 71 FR 76417 (December 20,
2006) (File No. SR-OCC-2006-10). The rule changes that were made
with respect to the Phlx Cash-Settled FCOs will also apply to Rate-
Modified FCOs.
---------------------------------------------------------------------------
The rate modifier for Rate-Modified FCOs is selected so that the
underlying modified rate looks similar to an index. The exchange rates
underlying Rate-Modified FCOs may or may not be stated in the same way
that they are conventionally quoted in the spot market. For example,
exchange rates between the U.S. dollar and the euro are generally
quoted as dollars per euro on the spot market, but the rate modifying a
Rate-Modified FCO could be stated as euros per dollar. The number by
which the exchange rate is multiplied to determine the modified rate
for a particular class of options will be 1, 10 or 100 depending on the
level of the exchange rate in question.
For purposes of determining an exercise settlement amount, Rate-
Modified FCOs would use a multiplier
[[Page 17977]]
of $100 (i.e., the exercise settlement amount will be the difference
between the strike price and the exercise settlement value of the
underlying modified rate times the multiplier). The multiplier, which
always has a value of $100, is not the same thing as the rate modifier.
Similarly, premium quotations would be multiplied by $100 to obtain the
aggregate premium amount for a single option.
The exercise settlement amount for Rate-Modified FCOs will be based
on the noon buying rates for the underlying currencies as published by
the Federal Reserve Bank of New York. If the Federal Reserve Bank does
not publish a noon buying rate for a particular currency pair, ISE will
use a rate obtained by a market data vendor. OCC will ordinarily look
to ISE to supply the final value of the underlying for exercise
settlement purposes, but OCC will retain its customary authority to set
a value if none is available from ISE. Trading of Rate-Modified FCOs
will ordinarily cease at 12:00 noon Eastern Time on the business day
before the expiration date.
Rate-Modified FCOs are to be European style and will expire on the
Saturday following the third Friday of the expiration month. Rate-
Modified FCOs will have up to three near-term expiration months
followed by three calendar quarter-end expiration months.
To accommodate Rate-Modified FCOs, OCC is proposing to add or
modify certain defined terms in Article XXII of the By-Laws.
Definitions of ``multiplier,'' ``rate-modified foreign currency
options,'' ``underlying currency pair,'' and ``underlying modified
rate'' will be added, and the definitions of ``call,'' ``exercise
price,'' ``exercise settlement amount,'' ``premium,'' ``put,''
``reporting authority,'' ``series of options'' and ``spot price'' will
be amended to reflect the use of a modified exchange rate as the
underlying interest for Rate-Modified FCOs. In addition, Section 5 of
Article XXII of the By-Laws relating to the time for determination of
the spot price will be amended for clarification. OCC will delete the
definition of ``aggregate exercise price,'' which is no longer used in
OCC's By-Laws or Rules with respect to Cash-Settled FCOs.
The introduction to Chapter XXIII of the Rules will be amended to
make a non-substantive change to conform to the terminology in Article
XXII of the By-Laws.
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 transactions in Rate-Modified FCOs by applying the same
basic rules and procedures to such options as are applied to other
cash-settled foreign currency options. The proposed rule change is not
inconsistent with the existing rules of OCC, including those 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
Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of a clearing agency be designed to promote the prompt and
accurate clearance and settlement of securities transactions.\5\ The
purpose of the proposed rule change is to amend OCC's By-Laws and Rules
so that OCC may clear and settle the new Rate-Modified FCO product to
be listed and traded on ISE. Accordingly, the proposed rule change
should promote the prompt and accurate clearance and settlement of
securities transactions.
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\5\ 15 U.S.C. 78q-1(b)(3)(F).
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OCC has requested that the Commission approve the proposed rule
prior to the thirtieth day after publication of the notice of the
filing. The Commission finds good cause for approving the proposed rule
change prior to the thirtieth day after the publication of notice
because such approval will allow ISE to commence trading of Rate-
Modified FCOs without any unnecessary delay.
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-2007-02 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-2007-02. 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-2007-02
and should be submitted on or before May 1, 2007.
V. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular Section 17A of the Act and the rules and regulations
thereunder.\6\
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\6\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
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It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-OCC-2007-02) be and hereby
is approved.
[[Page 17978]]
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-6668 Filed 4-9-07; 8:45 am]
BILLING CODE 8010-01-P
