Self-Regulatory Organizations; The Options Clearing Corporation; Order Granting Approval of a Proposed Rule Change Relating to the Cash Dividend Threshold, 55582-55584 [E8-22488]

Download as PDF 55582 Federal Register / Vol. 73, No. 187 / Thursday, September 25, 2008 / Notices mstockstill on PROD1PC66 with NOTICES 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 Because the foregoing proposed rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b–4(f)(6) thereunder.10 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. NYSE Arca has requested the Commission to waive the 30-day operative delay. The Commission hereby grants NYSE Arca’s request.11 The Commission notes that the Exchange is proposing that certain of its rules relating to membership requirements be temporarily suspended so that BCI can be provisionally approved as an NYSE Arca OTP Holder. The proposed relief does not exempt BCI from Exchange rule requirements governing member organizations. BCI would have a 60-day grace period within which to apply for and be approved under relevant Exchange rules. Moreover, the Commission believes that immediate effectiveness is appropriate to ensure a smooth transition of the LBI businesses to another entity. In particular, with respect to BCI, time is of the essence as it has been announced that BCI may succeed to LBI’s assets as early as September 19, 2008. Therefore, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest and designates the 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 11 For purposes of waiving the 30-day operative delay, the Commission has considered the proposal’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 17 VerDate Aug<31>2005 17:50 Sep 24, 2008 Jkt 214001 proposed rule change as operative upon filing. 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 Number SR–NYSEArca–2008–101 on the subject line. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Jill M. Peterson, Assistant Secretary. [FR Doc. E8–22504 Filed 9–24–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58586; File No. SR–OCC– 2008–16] Self-Regulatory Organizations; The Options Clearing Corporation; Order Granting Approval of a Proposed Rule Change Relating to the Cash Dividend Threshold September 18, 2008. I. Introduction On July 24, 2008, The Options Clearing Corporation (‘‘OCC’’) filed with • Send paper comments in triplicate the Securities and Exchange to Secretary, Securities and Exchange Commission (‘‘Commission’’) proposed Commission, 100 F Street, NE., rule change SR–OCC–2008–16 pursuant Washington, DC 20549–1090. to Section 19(b)(1) of the Securities All submissions should refer to File Exchange Act of 1934 (‘‘Act’’).1 Notice Number SR–NYSEArca–2008–101. This of the proposal was published in the Federal Register on August 19, 2008.2 file number should be included on the subject line if e-mail is used. To help the No comment letters were received. For the reasons discussed below, the Commission process and review your Commission is approving the proposed comments more efficiently, please use only one method. The Commission will rule change. post all comments on the Commission’s II. Description Internet Web site (http://www.sec.gov/ The purpose of the proposed rule rules/sro.shtml). Copies of the change is to mitigate inconsistencies submission, all subsequent that may result under the current policy amendments, all written statements for adjusting stock option contracts. In with respect to the proposed rule February 2007, the Commission change that are filed with the approved rule change SR–OCC–2006– Commission, and all written 01, which amended Section 11A of communications relating to the Article VI of the OCC By-Laws proposed rule change between the governing adjustments to options as a Commission and any person, other than result of cash dividends or those that may be withheld from the distributions.3 Under the new public in accordance with the adjustment policy, cash dividends paid provisions of 5 U.S.C. 552, will be by a company other than pursuant to a available for inspection and copying in policy or practice of paying dividends the Commission’s Public Reference on a quarterly or other regular basis Room between the hours of 10 a.m. and would be deemed ‘‘special’’ and would 3 p.m. Copies of the filing will also be normally trigger a contract adjustment available for inspection and copying at provided the value of the adjustment is NYSE Arca’s principal office and on its at least $12.50 per option contract. This Internet Web site at http:// new adjustment policy will become www.nyse.com. All comments received effective for cash dividends announced will be posted without change; the on or after February 1, 2009. Commission does not edit personal However, certain inconsistencies may identifying information from result when the threshold of ‘‘$12.50 per submissions. You should submit only option contract’’ is applied to all information that you wish to make 12 17 CFR 200.30–3(a)(12). available publicly. All submissions 1 15 U.S.C. 78s(b)(1). should refer to File Number SR– 2 Securities Exchange Act Release No. 58353 NYSEArca–2008–101 and should be (August 13, 2008), 73 FR 48423. submitted on or before October 16, 3 Securities Exchange Act Release No. 55258 2008. (February 8, 2007), 72 FR 7701 (February 16, 2007). Paper Comments PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\25SEN1.SGM 25SEN1 55583 Federal Register / Vol. 73, No. 187 / Thursday, September 25, 2008 / Notices 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 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. 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 will 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 will be referred back to the 100 share option. A 1,500 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 .......................................................................................... $.09 dividend ($value) 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 share option (previously adjusted for a 3 for 2 split) will 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) mstockstill on PROD1PC66 with NOTICES Shares Option 133 ............................................................................................ 150 ............................................................................................ 10 .............................................................................................. 177 ............................................................................................ 1000 .......................................................................................... 1500 .......................................................................................... 4/3 split ........ 3/2 split ........ Spinoff .......... Merger .......... Standard ...... 3/2 split ........ VerDate Aug<31>2005 17:50 Sep 24, 2008 Jkt 214001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 11.97 13.50 0.90 15.93 90.00 135.00 Adjust? NO ................ YES .............. NO ................ YES .............. YES .............. YES .............. E:\FR\FM\25SEN1.SGM 25SEN1 $.13 dividend ($value) 17.29 19.50 1.30 23.01 130.00 195 Adjust? YES. YES. NO. YES. YES. YES. 55584 Federal Register / Vol. 73, No. 187 / Thursday, September 25, 2008 / Notices 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, 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. III. Discussion 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.4 The Commission finds the proposed rule change to be consistent with this requirement because it should reduce inconsistencies in the adjustment of stock option contracts. As a result, OCC’s proposed rule change should promote the prompt and accurate clearance and settlement of securities transactions. IV. 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. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR– OCC–2008–16) be and hereby is approved.5 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.6 J. Lynn Talyor, Assistant Secretary. [FR Doc. E8–22488 Filed 9–24–08; 8:45 am] disaster for Public Assistance Only for the State of Maine ( FEMA–1788–DR), dated 09/09/2008. Incident: Severe Storms, Flooding, and Tornadoes. Incident Period: 07/18/2008 through 08/16/2008. Effective Date: 09/09/2008. Physical Loan Application Deadline Date: 11/10/2008. Economic Injury (EIDL) Loan Application Deadline Date: 06/10/2009. DATES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. ADDRESSES: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. FOR FURTHER INFORMATION CONTACT: Notice is hereby given that as a result of the President’s major disaster declaration on 09/09/2008, Private Non-Profit organizations that provide essential services of governmental nature may file disaster loan applications at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: SUPPLEMENTARY INFORMATION: Primary Counties: Androscoggin, Cumberland, York. Contiguous Counties (Economic Injury Loans Only): Maine: Franklin, Kennebec, Oxford, Sagadahoc. New Hampshire: Carroll, Strafford. The Interest Rates are: Percent BILLING CODE 8010–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #11434] Maine Disaster #ME–00014 U.S. Small Business Administration. ACTION: Notice. mstockstill on PROD1PC66 with NOTICES AGENCY: VerDate Aug<31>2005 17:50 Sep 24, 2008 Jkt 214001 4.000 Background James E. Rivera, Acting Associate Administrator for Disaster Assistance. [FR Doc. E8–22520 Filed 9–24–08; 8:45 am] BILLING CODE 8025–01–P PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law (Pub. L.) 104–13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes a revision to an OMB-approved information collection. SSA is soliciting comments on the accuracy of the agency’s burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize the burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, e-mail, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and the SSA Reports Clearance Officer to the addresses or fax numbers listed below. (OMB), Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202–395–6974, E-mail address: OIRA_Submission@omb.eop.gov . (SSA), Social Security Administration, DCBFM, Attn: Reports Clearance Officer, 1333 Annex Building, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410–965–6400, E-mail address: OPLM.RCO@ssa.gov. The information collection below is pending at SSA. SSA will submit it to OMB within 60 days from the date of this notice. Therefore, your comments would be most helpful if you submit them to SSA within 60 days from the date of this publication. Individuals can obtain copies of the collection instrument by calling the SSA Reports Clearance Officer at 410–965–0454 or by writing to the e-mail address listed above. 1. Accelerated Benefits Demonstration Project—0960–0747 (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) U.S.C. 78q–1(b)(3)(F). approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 6 17 CFR 200.30–3(a)(12). 5 In Agency Information Collection Activities: Proposed Request 5.250 The number assigned to this disaster for physical damage and for economic injury is 11434. SUMMARY: This is a Notice of the Presidential declaration of a major 4 15 Other (Including Non-Profit Organizations) with Credit Available Elsewhere ................................... Businesses and Non-Profit Organizations without Credit Available Elsewhere ................................... SOCIAL SECURITY ADMINISTRATION In early 2007, SSA obtained OMB approval for the Accelerated Benefits Demonstration Project. This multi-phase study, conducted by SSA’s research contractors and health care experts, will assess if providing new Social Security Disability Insurance (SSDI) recipients with health care and other benefits would stabilize or improve their health and help them return to work early. In this long-term study, SSA’s contractor divided new SSDI recipients into three E:\FR\FM\25SEN1.SGM 25SEN1

Agencies

[Federal Register Volume 73, Number 187 (Thursday, September 25, 2008)]
[Notices]
[Pages 55582-55584]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-22488]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58586; File No. SR-OCC-2008-16]


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

September 18, 2008.

I. Introduction

    On July 24, 2008, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') proposed 
rule change SR-OCC-2008-16 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'').\1\ Notice of the proposal 
was published in the Federal Register on August 19, 2008.\2\ No comment 
letters were received. For the reasons discussed below, the Commission 
is approving the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 58353 (August 13, 2008), 
73 FR 48423.
---------------------------------------------------------------------------

II. Description

    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 as a result of cash 
dividends or distributions.\3\ Under the new adjustment policy, cash 
dividends paid by a company other 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

[[Page 55583]]

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 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. 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 will 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 will be referred 
back to the 100 share option. A 1,500 share option (previously adjusted 
for a 3 for 2 split) will 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.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 55584]]

    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, 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.

III. Discussion

    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.\4\ The 
Commission finds the proposed rule change to be consistent with this 
requirement because it should reduce inconsistencies in the adjustment 
of stock option contracts. As a result, OCC's proposed rule change 
should promote the prompt and accurate clearance and settlement of 
securities transactions.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

IV. 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.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-OCC-2008-16) be and hereby 
is approved.\5\
---------------------------------------------------------------------------

    \5\ 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).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Talyor,
Assistant Secretary.
[FR Doc. E8-22488 Filed 9-24-08; 8:45 am]
BILLING CODE 8010-01-P