Self-Regulatory Organizations; OneChicago, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Nullification Policy for Error Trades and Mistrades, 36091-36092 [E7-12743]
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Federal Register / Vol. 72, No. 126 / Monday, July 2, 2007 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.42
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–12676 Filed 6–29–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISISON
[Release No. 34–55964; File No. SR–OC–
2007–01]
Self-Regulatory Organizations;
OneChicago, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to Nullification
Policy for Error Trades and Mistrades
June 26, 2007.
Pursuant to Section 19(b)(7) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–7 under the
Act,2 notice is hereby given that on June
4, 2007 OneChicago, LLC
(‘‘OneChicago’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change described in Items
I, II, and III below, which Items have
been substantially prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons. OneChicago
also has filed the proposed rule change
with the Commodity Futures Trading
Commission (‘‘CFTC’’).
OneChicago filed a written
certification with the CFTC under
Section 5c(c) of the Commodity
Exchange Act 3 on June 1, 2007.
I. Self-Regulatory Organization’s
Description of the Proposed Rule
Change
OneChicago is proposing to amend its
Error Trade Nullification Policy (‘‘Error
Trade Policy’’).
jlentini on PROD1PC65 with NOTICES
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
Exchange has prepared summaries, set
42 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(7).
2 17 CFR 240.19b–7.
3 7 U.S.C. 7a–2(c).
1 15
VerDate Aug<31>2005
22:57 Jun 29, 2007
Jkt 211001
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
OneChicago is proposing to amend its
Error Trade Policy. The proposed rule
change would make substantive changes
to update and clarify the Error Trade
Policy based on the Exchange’s
experience and make other nonsubstantive, conforming, and stylistic
changes. Among others, the proposed
rule change would amend the ‘‘no bust’’
range, add the term ‘‘Questioned
Trade’’, permit trades within the ‘‘no
bust’’ range to be busted or adjusted if
there were an Exchange system failure,
require traders or customers with a
contingency trade triggered by a trade
that is questioned to call the
OneChicago Operations Management
(‘‘OOM’’) Help Desk within five minutes
of notification of a questioned trade, and
permit the parties to make restitution by
making a reasonable cash payment to
compensate for any losses or costs
directly incurred as a result of the error.
The proposed rule change would set
the ‘‘no bust’’ range for trades that are
questioned (‘‘Questioned Trades’’) at
fixed amounts. Currently, the ‘‘no bust’’
range is tiered as follows: if the
reasonable market price is less than or
equal to $10, the ‘‘no bust’’ range is 10%
above or below the reasonable market
price; if the reasonable market price is
between $10 and $100, the ‘‘no bust’’
range is 5% above or below the
reasonable market price; and, lastly, if
the reasonable market price is higher
than $100, the ‘‘no bust’’ range is 3%
above or below the reasonable market
price. Under the proposed rule change,
the ‘‘no bust’’ range will also be tiered
and based on the reasonable market
price as set by the OOM. The new ‘‘no
bust’’ range would be as follows: if the
reasonable market price were less than
$25, the ‘‘no bust’’ range would include
any price that is no greater than $0.50
from the reasonable market price; if the
reasonable market price were equal to or
higher than $25 but less than $100, the
‘‘no bust range’’ would be any price that
is no greater than $1.00 from the
reasonable market price; and for
reasonable market prices at or above
$100, the no bust range would be any
price that is within one percent of the
reasonable market price.
The proposed rule change would also
add language that would clarify that the
Exchange may bust a trade outside the
PO 00000
Frm 00125
Fmt 4703
Sfmt 4703
36091
‘‘no bust’’ range or require that a price
adjustment be made. If OOM determines
that a price adjustment is appropriate,
the proposed rule change would permit
OOM to set or allow a price adjustment
at or near the reasonable price range
plus (in the case of a buy-side error) or
minus (in the case of sell-side error) an
amount up to and including the relevant
‘‘no bust’’ range for the contract. Under
the proposed rule change, an OOM
directed price adjustment would either
be made by having the OOM Help Desk
cancel (bust) the original trade and
reenter it at the adjusted price or by
having the members on either side of
the trade make a cash-payment directly
between them. Additional language
would be added to make it clear that
members are responsible to and for their
respective customers and that in no
event should participants to an error
trade take action to adjust the price or
make cash payment without the
knowledge and approval of OOM.
The proposed rule change would
eliminate the requirement that OOM
may only provide assistance to
Registered Trading Privilege Holders
(‘‘RTPH’’) for error trades. The Exchange
believes it is appropriate to permit OOM
to provide assistance to RTPHs and
other persons.
Currently, if a Questioned Trade is
inside the no bust range, the trade will
not be busted. The proposed rule change
would permit a Questioned Trade
within the no bust range to be busted if
there were an Exchange system failure.
The proposed rule change would also
add new language that would
emphasize to the parties of a Questioned
Trade that they should not assume that
a trade would be busted or not busted
until the OOM makes a final decision.
The contingency portion of the Error
Trade Policy would be amended to
place a time limit on requests by traders
to bust or adjust a contingent trade
triggered by a Questioned Trade. Under
the proposed rule change, the traders or
customers on either side of a contingent
trade would be required to call the OOM
Help Desk no later than 5 minutes after
the OOM initially notified the market
that the triggering trade was in question.
The proposed amendment to the
contingency provision would also
permit adjusting the price of the trade.
The proposed rule change would also
add language that would make it clear
that the party responsible for a mistrade
would be required to report to the OOM
Help Desk the details of any
transactions conducted pursuant to Part
A or B of the Error Trade Policy that
occurred outside of the OneChicago
system.
E:\FR\FM\02JYN1.SGM
02JYN1
jlentini on PROD1PC65 with NOTICES
36092
Federal Register / Vol. 72, No. 126 / Monday, July 2, 2007 / Notices
The proposed amendments to Part B.1
of the Error Trade Policy, (trades not
brought to the attention of OOM within
eight minutes or within five minutes for
contingency trades), would permit
restitution in the form of a reasonable
cash payment, if the parties agreed to do
so in order to compensate for any losses
or costs directly incurred as a result of
the error. Under the proposed rule
change, the parties to the trade could
also agree to retain the trade but make
reasonable cash payment to compensate
for any losses or costs caused by the
error. The proposed rule change would
also add new language to this Part
clearly stating that in no event should
participants take action to adjust the
price or make cash payment without the
knowledge of OOM.
Part B.2 of the Error Trade Policy
dealing with arbitration of disputes
would be amended to require that a
written notice of arbitration claim be
given to the National Futures
Association in addition to the OOM
Help Desk. The proposed rule change
would delete portions of Part B.2
requiring the owner of the account on
the other side of an error to be a RTPH
or subject to OOM’s jurisdiction to bring
an arbitration claim and limiting the
recovery under arbitration to the
difference between the error trade price
and the true market price for the
relevant contract immediately before the
error trade occurred.
Part C of the current Error Trade
Policy dealing with voluntary
adjustment of trade price for those
trades outside the ‘‘no bust’’ range
reported within eight minutes would be
deleted and the current Part D, Schedule
of Administrative Fees, would be
renumbered to be Part C. Since the
proposed rule change would permit the
OOM to direct the traders to make a
price adjustment, this provision is no
longer necessary. Therefore, the parties
may no longer independently decide to
keep and adjust trades that are reported
within eight minutes of when the trade
occurred or within five minutes of when
the trade was questioned for
contingency trades and outside of the
‘‘no bust’’ range. This adjustment must
be made by the Exchange.
The Schedule of Administrative fees
would be amended to make
administrative fees permissive rather
than mandatory. Under the proposed
rule change, if OneChicago adopts an
administration fee schedule, the party
responsible for the Questioned Trade
would be required to pay a fee in
accordance with the fee schedule. The
proposed rule change would also add
two new provisions, Part D, which
would permit the Exchange to bust any
VerDate Aug<31>2005
22:57 Jun 29, 2007
Jkt 211001
trades affected by a system failure or
partial failure whether or not the trades
occurred within the ‘‘no bust’’ range and
Part E, which would permit the
Exchange to bust or adjust any trades
that are in violation of OneChicago
rules.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 4 in general and
Section 6(b)(5) of the Act 5 in particular
in that it is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, and, in general, to
protect investors and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
OneChicago does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become effective pursuant to
Section 19(b)(7) of the Act.6 Within 60
days of the date of effectiveness of the
proposed rule change, the Commission,
after consultation with the CFTC, may
summarily abrogate the proposed rule
change and require that the proposed
rule change be refiled in accordance
with the provisions of Section 19(b)(1)
of the Act.7
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 rulecomments@sec.gov. Please include File
Fmt 4703
• 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–OC–2007–01. 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 (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
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of OneChicago. 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–OC–2007–01 and should be
submitted on or before July 23, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–12743 Filed 6–29–07; 8:45 am]
BILLING CODE 8010–01–P
SOCIAL SECURITY ADMINISTRATION
[Docket No. SSA–2007–0049]
Privacy Act of 1974 as Amended;
Computer Matching Program (SSA/
Railroad Retirement Board (RRB))—
Match Number 1308
AGENCY:
Social Security Administration
(SSA).
Notice of the renewal of an
existing computer matching program
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
6 15 U.S.C. 78s(b)(7).
7 15 U.S.C. 78s(b)(1).
5 15
Frm 00126
Paper Comments
ACTION:
4 15
PO 00000
Number SR–OC–2007–01 on the subject
line.
8 17
Sfmt 4703
E:\FR\FM\02JYN1.SGM
CFR 200.30–3(a)(73).
02JYN1
]]>Agencies
[Federal Register Volume 72, Number 126 (Monday, July 2, 2007)]
[Notices]
[Pages 36091-36092]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-12743]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISISON
[Release No. 34-55964; File No. SR-OC-2007-01]
Self-Regulatory Organizations; OneChicago, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change Relating to
Nullification Policy for Error Trades and Mistrades
June 26, 2007.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-7 under the Act,\2\ notice is hereby given
that on June 4, 2007 OneChicago, LLC (``OneChicago'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change described in Items I, II, and III below, which
Items have been substantially prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons. OneChicago also has filed the proposed
rule change with the Commodity Futures Trading Commission (``CFTC'').
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(7).
\2\ 17 CFR 240.19b-7.
---------------------------------------------------------------------------
OneChicago filed a written certification with the CFTC under
Section 5c(c) of the Commodity Exchange Act \3\ on June 1, 2007.
---------------------------------------------------------------------------
\3\ 7 U.S.C. 7a-2(c).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Description of the Proposed Rule
Change
OneChicago is proposing to amend its Error Trade Nullification
Policy (``Error Trade Policy'').
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 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
OneChicago is proposing to amend its Error Trade Policy. The
proposed rule change would make substantive changes to update and
clarify the Error Trade Policy based on the Exchange's experience and
make other non-substantive, conforming, and stylistic changes. Among
others, the proposed rule change would amend the ``no bust'' range, add
the term ``Questioned Trade'', permit trades within the ``no bust''
range to be busted or adjusted if there were an Exchange system
failure, require traders or customers with a contingency trade
triggered by a trade that is questioned to call the OneChicago
Operations Management (``OOM'') Help Desk within five minutes of
notification of a questioned trade, and permit the parties to make
restitution by making a reasonable cash payment to compensate for any
losses or costs directly incurred as a result of the error.
The proposed rule change would set the ``no bust'' range for trades
that are questioned (``Questioned Trades'') at fixed amounts.
Currently, the ``no bust'' range is tiered as follows: if the
reasonable market price is less than or equal to $10, the ``no bust''
range is 10% above or below the reasonable market price; if the
reasonable market price is between $10 and $100, the ``no bust'' range
is 5% above or below the reasonable market price; and, lastly, if the
reasonable market price is higher than $100, the ``no bust'' range is
3% above or below the reasonable market price. Under the proposed rule
change, the ``no bust'' range will also be tiered and based on the
reasonable market price as set by the OOM. The new ``no bust'' range
would be as follows: if the reasonable market price were less than $25,
the ``no bust'' range would include any price that is no greater than
$0.50 from the reasonable market price; if the reasonable market price
were equal to or higher than $25 but less than $100, the ``no bust
range'' would be any price that is no greater than $1.00 from the
reasonable market price; and for reasonable market prices at or above
$100, the no bust range would be any price that is within one percent
of the reasonable market price.
The proposed rule change would also add language that would clarify
that the Exchange may bust a trade outside the ``no bust'' range or
require that a price adjustment be made. If OOM determines that a price
adjustment is appropriate, the proposed rule change would permit OOM to
set or allow a price adjustment at or near the reasonable price range
plus (in the case of a buy-side error) or minus (in the case of sell-
side error) an amount up to and including the relevant ``no bust''
range for the contract. Under the proposed rule change, an OOM directed
price adjustment would either be made by having the OOM Help Desk
cancel (bust) the original trade and reenter it at the adjusted price
or by having the members on either side of the trade make a cash-
payment directly between them. Additional language would be added to
make it clear that members are responsible to and for their respective
customers and that in no event should participants to an error trade
take action to adjust the price or make cash payment without the
knowledge and approval of OOM.
The proposed rule change would eliminate the requirement that OOM
may only provide assistance to Registered Trading Privilege Holders
(``RTPH'') for error trades. The Exchange believes it is appropriate to
permit OOM to provide assistance to RTPHs and other persons.
Currently, if a Questioned Trade is inside the no bust range, the
trade will not be busted. The proposed rule change would permit a
Questioned Trade within the no bust range to be busted if there were an
Exchange system failure. The proposed rule change would also add new
language that would emphasize to the parties of a Questioned Trade that
they should not assume that a trade would be busted or not busted until
the OOM makes a final decision.
The contingency portion of the Error Trade Policy would be amended
to place a time limit on requests by traders to bust or adjust a
contingent trade triggered by a Questioned Trade. Under the proposed
rule change, the traders or customers on either side of a contingent
trade would be required to call the OOM Help Desk no later than 5
minutes after the OOM initially notified the market that the triggering
trade was in question. The proposed amendment to the contingency
provision would also permit adjusting the price of the trade.
The proposed rule change would also add language that would make it
clear that the party responsible for a mistrade would be required to
report to the OOM Help Desk the details of any transactions conducted
pursuant to Part A or B of the Error Trade Policy that occurred outside
of the OneChicago system.
[[Page 36092]]
The proposed amendments to Part B.1 of the Error Trade Policy,
(trades not brought to the attention of OOM within eight minutes or
within five minutes for contingency trades), would permit restitution
in the form of a reasonable cash payment, if the parties agreed to do
so in order to compensate for any losses or costs directly incurred as
a result of the error. Under the proposed rule change, the parties to
the trade could also agree to retain the trade but make reasonable cash
payment to compensate for any losses or costs caused by the error. The
proposed rule change would also add new language to this Part clearly
stating that in no event should participants take action to adjust the
price or make cash payment without the knowledge of OOM.
Part B.2 of the Error Trade Policy dealing with arbitration of
disputes would be amended to require that a written notice of
arbitration claim be given to the National Futures Association in
addition to the OOM Help Desk. The proposed rule change would delete
portions of Part B.2 requiring the owner of the account on the other
side of an error to be a RTPH or subject to OOM's jurisdiction to bring
an arbitration claim and limiting the recovery under arbitration to the
difference between the error trade price and the true market price for
the relevant contract immediately before the error trade occurred.
Part C of the current Error Trade Policy dealing with voluntary
adjustment of trade price for those trades outside the ``no bust''
range reported within eight minutes would be deleted and the current
Part D, Schedule of Administrative Fees, would be renumbered to be Part
C. Since the proposed rule change would permit the OOM to direct the
traders to make a price adjustment, this provision is no longer
necessary. Therefore, the parties may no longer independently decide to
keep and adjust trades that are reported within eight minutes of when
the trade occurred or within five minutes of when the trade was
questioned for contingency trades and outside of the ``no bust'' range.
This adjustment must be made by the Exchange.
The Schedule of Administrative fees would be amended to make
administrative fees permissive rather than mandatory. Under the
proposed rule change, if OneChicago adopts an administration fee
schedule, the party responsible for the Questioned Trade would be
required to pay a fee in accordance with the fee schedule. The proposed
rule change would also add two new provisions, Part D, which would
permit the Exchange to bust any trades affected by a system failure or
partial failure whether or not the trades occurred within the ``no
bust'' range and Part E, which would permit the Exchange to bust or
adjust any trades that are in violation of OneChicago rules.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \4\ in general and Section 6(b)(5) of the
Act \5\ in particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
OneChicago does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective pursuant to
Section 19(b)(7) of the Act.\6\ Within 60 days of the date of
effectiveness of the proposed rule change, the Commission, after
consultation with the CFTC, may summarily abrogate the proposed rule
change and require that the proposed rule change be refiled in
accordance with the provisions of Section 19(b)(1) of the Act.\7\
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(7).
\7\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
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 Number SR-OC-2007-01 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-OC-2007-01. 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 (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 Room. Copies of such
filing also will be available for inspection and copying at the
principal office of OneChicago. 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-OC-2007-01 and should be submitted on or before July 23,
2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(73).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-12743 Filed 6-29-07; 8:45 am]
BILLING CODE 8010-01-P
