Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amended Interpretative Guidance on the New Methodology for Adjusting Option Contracts for Cash Dividends and Distributions, 9654-9655 [E9-4679]

Download as PDF 9654 Federal Register / Vol. 74, No. 42 / Thursday, March 5, 2009 / Notices 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 the Exchange. 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 publicly available. All submissions should refer to File Number SR–NYSEALTR–2009–16 and should be submitted on or before March 25, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–4678 Filed 3–4–09; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–59442; File No. SR–OCC– 2009–01] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amended Interpretative Guidance on the New Methodology for Adjusting Option Contracts for Cash Dividends and Distributions jlentini on PROD1PC65 with NOTICES February 24, 2009. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on January 6, 2009, 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. OCC filed the proposed rule change pursuant to Section 19(b)(3)(A)(i) of the Act 2 and Rule 19b–4(f)(1) thereunder 3 so that the proposal was effective upon filing with the Commission. The Commission is CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78s(b)(3)(A)(i). 3 17 CFR 240.19b–4(f)(1). 1 15 VerDate Nov<24>2008 16:13 Mar 04, 2009 Jkt 217001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change would amend previously adopted interpretative guidance regarding the administration and application of the new adjustment method for cash dividends and distributions (‘‘New Methodology’’). 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.4 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION 17 17 publishing this notice to solicit comments on the proposed rule change from interested parties. Background In File No. SR–OCC–2008–10, OCC adopted interpretative guidance developed by the OCC’s Securities Committee regarding the New Methodology.5 In File No. SR–OCC– 2008–16, OCC proposed a minor modification to the New Methodology, which was approved by the Commission on September 18, 2008.6 The purpose of this rule change is to amend the interpretative guidance to address the approved modification to the New Methodology. Amendment to Interpretative Guidance Under the New Methodology, 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 ordinarily trigger a contract adjustment provided the value of the adjustment is at least $12.50 per 4 The Commission has modified the text of the summaries prepared by OCC. 5 Securities Exchange Act Release No. 55258 (February 8, 2007), 72 FR 7701 (February 16, 2007). 6 Securities Exchange Act Release No. 58586 (September 18, 2008), 73 FR 55582 (September 25, 2008). PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 option contract.7 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 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’s Securities Committee believed that greater consistency across contracts of varying sizes could be achieved by retaining the $12.50 per contract threshold in all cases but subjects the threshold amount to a qualification providing 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. This qualification was the subject of File No. SR–OCC–2008–16. Implementation of the qualification will take effect at the same time the New Methodology is effective. OCC’s previously adopted interpretative guidance regarding the New Methodology has been amended to address the application of the qualified $12.50 per contract threshold, including examples of how the threshold will work in practice. The amended interpretative guidance is attached to the proposed rule change as Exhibit 5, and will be posted on OCC’s public Web site, made available in an information memorandum accessible to clearing members, or otherwise made available in hard copy form on request.8 The proposed rule change is consistent with the requirements of Section 17A of the Act 9 and the rules and regulations thereunder applicable to OCC because it provides market participants with interpretative guidance on the application of the New Methodology which will be applied to adjustments for cash dividends and 7 The New Methodology took effect beginning with dividends announced on and after February 1, 2009, other than for certain grandfathered options. 8 The proposed rule change, including Exhibit 5, can be found on OCC’s Web site at https:// www.theocc.com/publications/rules/ proposed_changes/sr_occ_09_01.pdf. 9 15 U.S.C. 78q–1. E:\FR\FM\05MRN1.SGM 05MRN1 Federal Register / Vol. 74, No. 42 / Thursday, March 5, 2009 / Notices 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 B. Self-Regulatory Organization’s post all comments on the Commission’s Statement on Burden on Competition Internet Web site (https://www.sec.gov/ OCC does not believe that the rules/sro.shtml). Copies of the proposed rule change would impose any submission, all subsequent burden on competition. amendments, all written statements with respect to the proposed rule C. Self-Regulatory Organization’s change that are filed with the Statement on Comments on the Commission, and all written Proposed Rule Change Received From communications relating to the Members, Participants, or Others proposed rule change between the Written comments were not and are Commission and any person, other than not intended to be solicited with respect those that may be withheld from the to the proposed rule change, and none public in accordance with the have been received. provisions of 5 U.S.C. 552, will be available for inspection and copying in III. Date of Effectiveness of the the Commission’s Public Reference Proposed Rule Change and Timing for Room, 100 F Street, NE., Washington, Commission Action DC 20549, on official business days The foregoing rule change has become between the hours of 10 a.m. and 3 p.m. effective upon filing pursuant to Section The text of the proposed rule change is 19(b)(3)(A)(i) of the Act 10 and Rule 19b– available at OCC, the Commission’s 4(f)(1) 11 thereunder because the Public Reference Room, and https:// proposal constitutes an interpretation www.theocc.com/publications/rules/ with respect to the meaning, proposed_changes/sr_occ_09_01.pdf. administration, or enforcement of an All comments received will be posted existing rule of OCC. At any time within without change; the Commission does sixty days of the filing of such rule not edit personal identifying change, the Commission may summarily information from submissions. You abrogate such rule change if it appears should submit only information that to the Commission that such action is you wish to make available publicly. All necessary or appropriate in the public submissions should refer to File interest, for the protection of investors, Number SR–OCC–2009–01 and should or otherwise in furtherance of the be submitted on or before March 26, purposes of the Act. 2009. IV. Solicitation of Comments For the Commission by the Division of distributions. The proposed rule change is not inconsistent with the existing rules of OCC, including any other rules proposed to be amended. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–OCC–2009–01 on the subject line. jlentini on PROD1PC65 with NOTICES Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–OCC–2009–01. This file 10 15 11 17 U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). VerDate Nov<24>2008 16:13 Mar 04, 2009 Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–4679 Filed 3–4–09; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Government/Industry Aeronautical Charting Forum Meeting AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of public meeting. SUMMARY: This notice announces the biannual meeting of the Federal Aviation Administration (FAA) Aeronautical Charting Forum (ACF) to discuss informational content and design of aeronautical charts and related products, as well as instrument flight 12 17 Jkt 217001 PO 00000 CFR 200.30–3(a)(12). Frm 00072 Fmt 4703 Sfmt 4703 9655 procedures development policy and design criteria. DATES: The ACIF is separated into two distinct groups. The Instrument Procedures Group (IPG) will meet April 28, 2009 from 8:30 a.m. to 5 p.m. The Charting Group will meet April 29 and 30, 2009 from 8:30 a.m. to 5 p.m. ADDRESSES: The meeting will be hosted by the National Geospatial-Intelligence Agency (NGA) and held at the U.S. Geological Survey, 12201 Sunrise Valley Drive, Reston, VA 20192. FOR FURTHER INFORMATION CONTACT: For information relating to the Instrument Procedures Group, contact Thomas E. Schneider, FAA, Flight Procedures Standards Branch, AFS–420, 6500 South MacArthur Blvd., P.O. Box 25082, Oklahoma City, OK 73125; telephone (405) 954–5852; fax: (405) 954–2528. For information relating to the Charting Group, contact John A. Moore, FAA, National Aeronautical Charting Office, Requirements and Technology Team, AJW–3521, 1305 East-West Highway, SSMC4–Station 5544, Silver Spring, MD 20910; telephone: (301) 713–2631, fax: (301) 713–1960. SUPPLEMENTARY INFORMATION: Pursuant to § 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92–463; 5 U.S.C. App. II), notice is hereby given of a meeting of the FAA Aeronautical Charting Forum to be held from April 28 through April 30, from 8:30 a.m. to 5 p.m. at the National GeospatialIntelligence Agency (NGA) and held at the U.S. Geological Survey, 12201 Sunrise Valley Drive, Reston, VA 20192. The Instrument Procedures Group agenda will include briefings and discussions on recommendations regarding pilot procedures for instrument flight, as well as criteria, design, and developmental policy for instrument approach and departure procedures. The Charting Group agenda will include briefings and discussions on recommendations regarding aeronautical charting specifications, flight information products, as well as new aeronautical charting and air traffic control initiatives. Attendance is open to the interested public, but will be limited to the space available. The public must make arrangements by April 10, 2009, to present oral statements at the meeting. The public may present written statements and/or new agenda items to the committee by providing a copy to the person listed in the FOR FURTHER INFORMATION CONTACT section by April 10, 2009. Public statements will only be considered if time permits. E:\FR\FM\05MRN1.SGM 05MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 42 (Thursday, March 5, 2009)]
[Notices]
[Pages 9654-9655]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-4679]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59442; File No. SR-OCC-2009-01]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Amended Interpretative Guidance on the New Methodology for 
Adjusting Option Contracts for Cash Dividends and Distributions

February 24, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 6, 2009, 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. OCC filed the proposed rule change pursuant to Section 
19(b)(3)(A)(i) of the Act \2\ and Rule 19b-4(f)(1) thereunder \3\ so 
that the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(i).
    \3\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change would amend previously adopted 
interpretative guidance regarding the administration and application of 
the new adjustment method for cash dividends and distributions (``New 
Methodology'').

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.\4\
---------------------------------------------------------------------------

    \4\ 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

Background
    In File No. SR-OCC-2008-10, OCC adopted interpretative guidance 
developed by the OCC's Securities Committee regarding the New 
Methodology.\5\ In File No. SR-OCC-2008-16, OCC proposed a minor 
modification to the New Methodology, which was approved by the 
Commission on September 18, 2008.\6\ The purpose of this rule change is 
to amend the interpretative guidance to address the approved 
modification to the New Methodology.
---------------------------------------------------------------------------

    \5\ Securities Exchange Act Release No. 55258 (February 8, 
2007), 72 FR 7701 (February 16, 2007).
    \6\ Securities Exchange Act Release No. 58586 (September 18, 
2008), 73 FR 55582 (September 25, 2008).
---------------------------------------------------------------------------

Amendment to Interpretative Guidance
    Under the New Methodology, 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 
ordinarily trigger a contract adjustment provided the value of the 
adjustment is at least $12.50 per option contract.\7\ 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 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.
---------------------------------------------------------------------------

    \7\ The New Methodology took effect beginning with dividends 
announced on and after February 1, 2009, other than for certain 
grandfathered options.
---------------------------------------------------------------------------

    OCC's Securities Committee believed that greater consistency across 
contracts of varying sizes could be achieved by retaining the $12.50 
per contract threshold in all cases but subjects the threshold amount 
to a qualification providing 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. This qualification was the subject of File 
No. SR-OCC-2008-16. Implementation of the qualification will take 
effect at the same time the New Methodology is effective.
    OCC's previously adopted interpretative guidance regarding the New 
Methodology has been amended to address the application of the 
qualified $12.50 per contract threshold, including examples of how the 
threshold will work in practice. The amended interpretative guidance is 
attached to the proposed rule change as Exhibit 5, and will be posted 
on OCC's public Web site, made available in an information memorandum 
accessible to clearing members, or otherwise made available in hard 
copy form on request.\8\
---------------------------------------------------------------------------

    \8\ The proposed rule change, including Exhibit 5, can be found 
on OCC's Web site at https://www.theocc.com/publications/rules/
proposed_changes/sr_occ_09_01.pdf.
---------------------------------------------------------------------------

    The proposed rule change is consistent with the requirements of 
Section 17A of the Act \9\ and the rules and regulations thereunder 
applicable to OCC because it provides market participants with 
interpretative guidance on the application of the New Methodology which 
will be applied to adjustments for cash dividends and

[[Page 9655]]

distributions. The proposed rule change is not inconsistent with the 
existing rules of OCC, including any other rules proposed to be 
amended.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    OCC does not believe that the proposed rule change would impose any 
burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were not and are not intended to be solicited with 
respect to the proposed rule change, and none have been received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(i) of the Act \10\ and Rule 19b-4(f)(1) \11\ 
thereunder because the proposal constitutes an interpretation with 
respect to the meaning, administration, or enforcement of an existing 
rule of OCC. At any time within sixty days of the filing of such 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(i).
    \11\ 17 CFR 240.19b-4(f)(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 (https://
www.sec.gov/rules/sro.shtml) or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-OCC-2009-01 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-OCC-2009-01. 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 (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. The text of the proposed rule change is available 
at OCC, the Commission's Public Reference Room, and https://
www.theocc.com/publications/rules/proposed_changes/sr_occ_09_
01.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-
2009-01 and should be submitted on or before March 26, 2009.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-4679 Filed 3-4-09; 8:45 am]
BILLING CODE 8011-01-P

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