Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to the Cash Dividend Threshold, 48423-48425 [E8-19132]

Download as PDF Federal Register / Vol. 73, No. 161 / Tuesday, August 19, 2008 / Notices proposed rule change is consistent with this obligation under the Act because it designed to promote the prompt and accurate clearance and settlement of transactions in realized variance/ volatility options by applying substantially the same rules and procedures to these transactions as OCC applies to similar transactions in other index options. OCC has requested that the Commission approve the proposed rule change prior to the thirtieth day after publication of the notice of filing. The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after publication because CBOE’s rule filing for realized variance/volatility options has been approved by the Commission, but CBOE will not be able to commence trading realized variance/volatility options until OCC’s rule change is approved.7 However, OCC will delay implementation of this rule change until distribution of a supplement addressing realized/variance volatility options to the options disclosure document, Characteristics and Risks of Standardized Options, is distributed. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, 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–2008–17 on the subject line. ebenthall on PRODPC60 with NOTICES Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–OCC–2008–17. 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 7 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition, and capital formation. VerDate Aug<31>2005 15:12 Aug 18, 2008 Jkt 214001 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 on official business days between the hours of 10 a.m. and 3 p.m. 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.theocc.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– 2008–17 and should be submitted on or before September 9, 2008. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (File No. SR– OCC–2008–17) be and hereby is approved on an accelerated basis. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Acting Secretary. [FR Doc. E8–19131 Filed 8–18–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58353; File No. SR–OCC– 2008–16] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to the Cash Dividend Threshold August 13, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on July 24, 2008, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change described in Items I, II, and III U.S.C. 78s(b)(2). 9 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). Frm 00061 Fmt 4703 below, which items have been prepared primarily by OCC. The Commission is publishing this notice to solicit comments from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change would mitigate inconsistencies that may result under the current policy for adjusting stock option contracts. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, OCC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. OCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.2 (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 mitigate inconsistencies that may result under the current policy for adjusting stock option contracts. In February 2007, the Commission approved rule change SR–OCC–2006– 01, which amended Section 11A of Article VI of the OCC By-Laws governing adjustments to options in response to cash dividends or distributions.3 Under the new adjustment policy, cash dividends paid by a company otherwise than pursuant to a policy or practice of paying dividends on a quarterly or other regular basis would be deemed ‘‘special’’ and would normally trigger a contract adjustment provided the value of the adjustment is at least $12.50 per option contract. This new adjustment policy will become effective for cash dividends announced on or after February 1, 2009. However, certain inconsistencies may result when the threshold of ‘‘$12.50 per option contract’’ is applied to all options on the affected underlying security. For example, if a $.10 special cash dividend is declared, the standardsize 100 share option would not be adjusted (because the value is less than $12.50). However, a previously adjusted 150 share option (reflecting a 3 for 2 2 The Commission has modified the text of the summaries prepared by OCC. 3 Securities Exchange Act Release No. 55258 (February 8, 2007), 72 FR 7701 (February 16, 2007). 8 15 PO 00000 48423 Sfmt 4703 E:\FR\FM\19AUN1.SGM 19AUN1 48424 Federal Register / Vol. 73, No. 161 / Tuesday, August 19, 2008 / Notices split) would be adjusted (because the value is $15 per contract). Adjusting some but not all options of the same class in response to the same dividend event, especially if the 100 share option is not adjusted, could be confusing to investors, and OCC’s Securities Committee (consisting of representatives of each of the options exchanges and OCC) determined that this potential confusion should be avoided. OCC considered modifying the threshold to specify $.125 per share instead of $12.50 per contract. This approach would address all standardsize (100 share) contracts that currently exist plus adjusted contracts that come into existence in response to splits, etc. However, exchanges have proposed to introduce ‘‘maxi’’ size contracts. Applying the same per share threshold to a 1,000 and 100 share option could sometimes result in significant value being left on the table in the case of the 1,000 share option. Taking the same example of a $.10 per share special dividend, neither option would be adjusted if the threshold were $.125 per share. This would result in a loss of only $10 per contract for the 100 share option, but the loss would be $100 per contract for the 1,000 share option. For this reason, a per share threshold is not being proposed. Greater consistency across contracts of varying sizes can be achieved by retaining the $12.50 per contract threshold in all cases but adding a qualification specifying that if a corresponding standard-size contract exists on the underlying security, previously adjusted contracts will be adjusted only if the corresponding standard-size contract is also adjusted. For example, if a 100 share option and a 150 share option (previously adjusted for a 3 for 2 split) exist, the 150 share option would be adjusted for a special cash dividend only if the 100 share standard option would also be adjusted for that dividend. Stated differently, OCC proposes to refer back to the preadjustment standard-size option (if any exist) in deciding whether or not to adjust a previously adjusted option. Thus a 150 share option that was derived from a 100 share option as a result of a 3 for 2 split would be referred back to the 100 share option. A 1,500 share option (previously adjusted for a $.09 Dividend ($Value) Shares Contract 100 ................................. 133 ................................. 150 ................................. 10 ................................... 177 ................................. 1000 ............................... 1500 ............................... Standard ................................................................ 4/3 split .................................................................. 3/2 split .................................................................. Spinoff .................................................................... Merger .................................................................... Standard ................................................................ 3/2 split .................................................................. Shares Contract 100 ................................. 133 ................................. 150 ................................. 10 ................................... 177 ................................. 1000 ............................... 1500 ............................... Standard ................................................................ 4/3 split .................................................................. 3/2 split .................................................................. Spinoff .................................................................... Merger .................................................................... Standard ................................................................ 3/2 split .................................................................. 9.00 11.97 13.50 0.90 15.93 90.00 135.00 $.02 Dividend ($Value) 2.00 2.66 3.00 0.20 3.54 20.00 30.00 3 for 2 split) would be referred back to the 1,000 share option (the ‘‘standard’’ size option for a ‘‘maxi’’ contract). Thus, the qualification specifies ‘‘only if the corresponding standard-size option contract is also adjusted.’’ This qualification achieves greater consistency because in most cases all contracts on the same underlying security would be adjusted if the 100 share contract is adjusted. The qualification also would allow a 1,000 share ‘‘standard’’ contract to be adjusted independently of a 100 share contract. Also, it could happen that an adjusted contract exists but not the corresponding standard contract, or a contract calling for delivery of fewer than 100 shares may exist (e.g., as a result of a spinoff adjustment). In these cases, the qualification would be inapplicable and a straightforward application of the $12.50 threshold would determine whether an adjustment would be made. The following are examples of the qualification to the $12.50 per contract threshold. (A) If a corresponding standard size contract exists: Adjust? NO ............... NO ............... NO ............... NO ............... NO ............... YES ............. YES ............. Adjust? NO ............... NO ............... NO ............... NO ............... NO ............... YES ............. YES ............. $.13 Dividend ($Value) 13.00 17.29 19.50 1.30 23.01 130.00 195 $.01 Dividend ($Value) 1.00 1.33 1.50 0.10 1.77 10.00 15.00 Adjust? YES. YES. YES. NO. YES. YES. YES. Adjust? NO. NO. NO. NO. NO. NO. NO. (B) If the 100 share standard size contract does not exist: $.09 Dividend ($Value) ebenthall on PRODPC60 with NOTICES Shares Option 133 ................................. 150 ................................. 10 ................................... 177 ................................. 1000 ............................... 1500 ............................... 4/3 split .................................................................. 3/2 split .................................................................. Spinoff .................................................................... Merger .................................................................... Standard ................................................................ 3/2 split .................................................................. The new adjustment policy approved in File No. SR–OCC–2006–01 will take VerDate Aug<31>2005 15:12 Aug 18, 2008 Jkt 214001 11.97 13.50 0.90 15.93 90.00 135.00 effect beginning with dividends announced on and after February 1, PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 Adjust? NO ............... YES ............. NO ............... YES ............. YES ............. YES ............. $.13 Dividend ($Value) 17.29 19.50 1.30 23.01 130.00 195 Adjust? YES. YES. NO. YES. YES. YES. 2009. OCC intends this proposed rule change to take effect at the same time, E:\FR\FM\19AUN1.SGM 19AUN1 Federal Register / Vol. 73, No. 161 / Tuesday, August 19, 2008 / Notices but these changes will not be implemented until the exchanges have conducted appropriate educational efforts and definitive copies of an appropriate supplement to the options disclosure document, Characteristics and Risks of Standardized Options, are available for distribution. OCC believes that the proposed rule change is consistent with the purposes and requirements of the Act because it is designed to promote the prompt and accurate clearance and settlement of transactions in securities options, 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, to protect investors and the public interest. It accomplishes this by reducing inconsistencies in the adjustment of stock option contracts. The proposed rule change is not inconsistent with the existing By-Laws and Rules of OCC, including any 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 material 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. ebenthall on PRODPC60 with NOTICES 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 (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: VerDate Aug<31>2005 15:12 Aug 18, 2008 Jkt 214001 48425 Electronic Comments SMALL BUSINESS ADMINISTRATION • 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–2008–16 on the subject line. National Women’s Business Council Paper Comments SUMMARY: The SBA is issuing this notice to announce the location, date, time, and agenda for the next meeting of the National Women’s Business Council (NWBC). The meeting will be open to the public. • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–OCC–2008–16. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. 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.theocc.com/publications/rules/ proposed_changes/sr_occ_08_16.pdf. 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–2008–16 and should be submitted on or before September 3, 2008. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.4 Florence E. Harmon, Acting Secretary. [FR Doc. E8–19132 Filed 8–18–08; 8:45 am] BILLING CODE 8010–01–P 4 17 PO 00000 CFR 200.30–3(a)(12). Frm 00063 Fmt 4703 Sfmt 4703 U.S. Small Business Administration. AGENCY: Notice of open Federal advisory committee meeting. ACTION: The meeting will be held on September 11, 2008 from approximately 8:30 a.m. to 3 p.m. EST. DATES: The meeting will be held at the U.S. Small Business Administration, 409 Third Street, SW., Eisenhower Conference Room, Washington, DC 20416. ADDRESSES: Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C. appendix 2), SBA announces the meeting of the National Women’s Business Council. The National Women’s Business Council is tasked with providing issues of importance to women business owners to the President, Congress, and the SBA Administrator. The purpose of the meeting is to introduce the NWBC’s agenda and action items for fiscal year 2009 included but not limited to procurement, access to capital, access to training and technical assistance, and affordable health care. The topics to be discussed will include: H.R. 5050 20th anniversary celebration; update on FY 2008 projects; swearing in of new members; upcoming Town Hall Meeting on November 6, in San Francisco, CA; and future projects. SUPPLEMENTARY INFORMATION: The meeting is open to the public; however, advance notice of attendance is requested. Anyone wishing to attend or make a presentation to the NWBC must contact Katherine Stanley by Friday, September 5, 2008, by fax or e-mail in order to be placed on the agenda. Katherine Stanley, Operations Manager, NWBC, 409 Third Street, SW., Suite 210, Washington, DC 20416, telephone 202–205–6695, fax 202–205–6825, email Katherine.stanley@nwbc.gov. Additionally, if you need accommodations because of a disability or require additional information, please contact Katherine Stanley at the above information. FOR FURTHER INFORMATION CONTACT: E:\FR\FM\19AUN1.SGM 19AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 161 (Tuesday, August 19, 2008)]
[Notices]
[Pages 48423-48425]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-19132]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58353; File No. SR-OCC-2008-16]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of a Proposed Rule Change Relating to the Cash
Dividend Threshold

August 13, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on July 24, 2008, The Options
Clearing Corporation (``OCC'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change described in Items
I, II, and III below, which items have been prepared primarily by OCC.
The Commission is publishing this notice to solicit comments 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 mitigate inconsistencies that may
result under the current policy for adjusting stock option contracts.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, OCC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. OCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.\2\
---------------------------------------------------------------------------

\2\ The Commission has modified the text of the summaries
prepared by OCC.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

The purpose of the proposed rule change is to mitigate
inconsistencies that may result under the current policy for adjusting
stock option contracts. In February 2007, the Commission approved rule
change SR-OCC-2006-01, which amended Section 11A of Article VI of the
OCC By-Laws governing adjustments to options in response to cash
dividends or distributions.\3\ Under the new adjustment policy, cash
dividends paid by a company otherwise than pursuant to a policy or
practice of paying dividends on a quarterly or other regular basis
would be deemed ``special'' and would normally trigger a contract
adjustment provided the value of the adjustment is at least $12.50 per
option contract. This new adjustment policy will become effective for
cash dividends announced on or after February 1, 2009.
---------------------------------------------------------------------------

\3\ Securities Exchange Act Release No. 55258 (February 8,
2007), 72 FR 7701 (February 16, 2007).
---------------------------------------------------------------------------

However, certain inconsistencies may result when the threshold of
``$12.50 per option contract'' is applied to all options on the
affected underlying security. For example, if a $.10 special cash
dividend is declared, the standard-size 100 share option would not be
adjusted (because the value is less than $12.50). However, a previously
adjusted 150 share option (reflecting a 3 for 2

[[Page 48424]]

split) would be adjusted (because the value is $15 per contract).
Adjusting some but not all options of the same class in response to the
same dividend event, especially if the 100 share option is not
adjusted, could be confusing to investors, and OCC's Securities
Committee (consisting of representatives of each of the options
exchanges and OCC) determined that this potential confusion should be
avoided.
OCC considered modifying the threshold to specify $.125 per share
instead of $12.50 per contract. This approach would address all
standard-size (100 share) contracts that currently exist plus adjusted
contracts that come into existence in response to splits, etc. However,
exchanges have proposed to introduce ``maxi'' size contracts. Applying
the same per share threshold to a 1,000 and 100 share option could
sometimes result in significant value being left on the table in the
case of the 1,000 share option. Taking the same example of a $.10 per
share special dividend, neither option would be adjusted if the
threshold were $.125 per share. This would result in a loss of only $10
per contract for the 100 share option, but the loss would be $100 per
contract for the 1,000 share option. For this reason, a per share
threshold is not being proposed.
Greater consistency across contracts of varying sizes can be
achieved by retaining the $12.50 per contract threshold in all cases
but adding a qualification specifying that if a corresponding standard-
size contract exists on the underlying security, previously adjusted
contracts will be adjusted only if the corresponding standard-size
contract is also adjusted. For example, if a 100 share option and a 150
share option (previously adjusted for a 3 for 2 split) exist, the 150
share option would be adjusted for a special cash dividend only if the
100 share standard option would also be adjusted for that dividend.
Stated differently, OCC proposes to refer back to the preadjustment
standard-size option (if any exist) in deciding whether or not to
adjust a previously adjusted option. Thus a 150 share option that was
derived from a 100 share option as a result of a 3 for 2 split would be
referred back to the 100 share option. A 1,500 share option (previously
adjusted for a 3 for 2 split) would be referred back to the 1,000 share
option (the ``standard'' size option for a ``maxi'' contract). Thus,
the qualification specifies ``only if the corresponding standard-size
option contract is also adjusted.''
This qualification achieves greater consistency because in most
cases all contracts on the same underlying security would be adjusted
if the 100 share contract is adjusted. The qualification also would
allow a 1,000 share ``standard'' contract to be adjusted independently
of a 100 share contract. Also, it could happen that an adjusted
contract exists but not the corresponding standard contract, or a
contract calling for delivery of fewer than 100 shares may exist (e.g.,
as a result of a spinoff adjustment). In these cases, the qualification
would be inapplicable and a straightforward application of the $12.50
threshold would determine whether an adjustment would be made. The
following are examples of the qualification to the $12.50 per contract
threshold.
(A) If a corresponding standard size contract exists:

--------------------------------------------------------------------------------------------------------------------------------------------------------
$.09 Dividend $.13 Dividend
Shares Contract ($Value) Adjust? ($Value) Adjust?
--------------------------------------------------------------------------------------------------------------------------------------------------------
100................................... Standard................. 9.00 NO........................ 13.00 YES.
133................................... 4/3 split................ 11.97 NO........................ 17.29 YES.
150................................... 3/2 split................ 13.50 NO........................ 19.50 YES.
10.................................... Spinoff.................. 0.90 NO........................ 1.30 NO.
177................................... Merger................... 15.93 NO........................ 23.01 YES.
1000.................................. Standard................. 90.00 YES....................... 130.00 YES.
1500.................................. 3/2 split................ 135.00 YES....................... 195 YES.
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
$.02 Dividend $.01 Dividend
Shares Contract ($Value) Adjust? ($Value) Adjust?
--------------------------------------------------------------------------------------------------------------------------------------------------------
100................................... Standard................. 2.00 NO........................ 1.00 NO.
133................................... 4/3 split................ 2.66 NO........................ 1.33 NO.
150................................... 3/2 split................ 3.00 NO........................ 1.50 NO.
10.................................... Spinoff.................. 0.20 NO........................ 0.10 NO.
177................................... Merger................... 3.54 NO........................ 1.77 NO.
1000.................................. Standard................. 20.00 YES....................... 10.00 NO.
1500.................................. 3/2 split................ 30.00 YES....................... 15.00 NO.
--------------------------------------------------------------------------------------------------------------------------------------------------------

(B) If the 100 share standard size contract does not exist:

--------------------------------------------------------------------------------------------------------------------------------------------------------
$.09 Dividend $.13 Dividend
Shares Option ($Value) Adjust? ($Value) Adjust?
--------------------------------------------------------------------------------------------------------------------------------------------------------
133................................... 4/3 split................ 11.97 NO........................ 17.29 YES.
150................................... 3/2 split................ 13.50 YES....................... 19.50 YES.
10.................................... Spinoff.................. 0.90 NO........................ 1.30 NO.
177................................... Merger................... 15.93 YES....................... 23.01 YES.
1000.................................. Standard................. 90.00 YES....................... 130.00 YES.
1500.................................. 3/2 split................ 135.00 YES....................... 195 YES.
--------------------------------------------------------------------------------------------------------------------------------------------------------

The new adjustment policy approved in File No. SR-OCC-2006-01 will
take effect beginning with dividends announced on and after February 1,
2009. OCC intends this proposed rule change to take effect at the same
time,

[[Page 48425]]

but these changes will not be implemented until the exchanges have
conducted appropriate educational efforts and definitive copies of an
appropriate supplement to the options disclosure document,
Characteristics and Risks of Standardized Options, are available for
distribution.
OCC believes that the proposed rule change is consistent with the
purposes and requirements of the Act because it is designed to promote
the prompt and accurate clearance and settlement of transactions in
securities options, 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, to protect investors
and the public interest. It accomplishes this by reducing
inconsistencies in the adjustment of stock option contracts. The
proposed rule change is not inconsistent with the existing By-Laws and
Rules of OCC, including any 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
material 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 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 (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 (https://
www.sec.gov/rules/sro.shtml) or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-OCC-2008-16 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-OCC-2008-16. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. 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.theocc.com/publications/rules/proposed_changes/sr_
occ_08_16.pdf. 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-
2008-16 and should be submitted on or before September 3, 2008.

For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\4\
---------------------------------------------------------------------------

\4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-19132 Filed 8-18-08; 8:45 am]
BILLING CODE 8010-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.