Self-Regulatory Organizations; The Options Clearing Corporation; Advance Notice Relating to the Margining of Segregated Futures Customer Accounts on a Gross Basis, 59998-60000 [2012-24038]

Download as PDF 59998 Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Notices and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Specifically, the Exchange believes the proposed rule change would expand the pool of candidates eligible for membership on the boards and committees and thereby increase the breadth of industry knowledge that will be available to it, which benefits the public interest. In addition, the Exchange would foster cooperation and coordination with other exchanges by aligning the board and committee member composition requirements with at least five other SROs.32 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 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 90 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 or disapprove the proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. mstockstill on DSK4VPTVN1PROD with NOTICES 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: 32 See supra notes 10–13, 15–20. VerDate Mar<15>2010 16:48 Sep 28, 2012 Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2012–103 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–NYSEARCA–2012–103. This file number should be included on the subject line if email 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 Web site viewing and printing in the Commission’s Public Reference Room, on business days between the hours of 10 a.m. and 3 p.m., located at 100 F Street NE., Washington, DC 20549–1090. Copies of the filing will also be available for inspection and copying at the NYSE’s principal office and on its Internet Web site at www.nyse.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– NYSEARCA–2012–103 and should be submitted on or before October 22, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–24040 Filed 9–28–12; 8:45 am] BILLING CODE 8011–01–P 33 17 Jkt 226001 PO 00000 CFR 200.30–3(a)(12). Frm 00111 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67921; File No. SR–OCC– 2012–17] Self-Regulatory Organizations; The Options Clearing Corporation; Advance Notice Relating to the Margining of Segregated Futures Customer Accounts on a Gross Basis September 25, 2012. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’)1 and Rule 19b–4(n)(1)(i),2 notice is hereby given that on September 14, 2012, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the advance notice described in Items I and II below, which Items have been prepared primarily by OCC. The Commission is publishing this notice to solicit comments on the advance notice from interested persons. I. Clearing Agency’s Statement of the Terms of Substance of the Advance Notice The proposed rule change would allow OCC to become compliant with Commodity Futures Trading Commission (‘‘CFTC’’) Rule 39.13(g)(8)(i), which requires the margining of segregated futures customer accounts on a gross basis. II. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Advance Notice In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the proposed rule change and advance notice and discussed any comments it received on the proposed rule change and advance notice. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.3 (A) Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Advance Notice The purpose of this proposed rule change is to provide for the margining of OCC segregated futures customer accounts on a gross basis, as required by CFTC Rule 39.13(g)(8)(i).4 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4(n)(i). 3 The Commission has modified the text of the summaries prepared by OCC. 4 17 CFR 39.13(g)(8)(i). 2 17 E:\FR\FM\01OCN1.SGM 01OCN1 Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Notices 59999 mstockstill on DSK4VPTVN1PROD with NOTICES The CFTC’s Customer Gross Margin Rule On October 18, 2011, the CFTC issued final regulations implementing many of the new statutory core principles for CFTC-registered derivatives clearing organizations (‘‘DCOs’’) enacted under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ‘‘DoddFrank Act’’). As a registered DCO (as well as a registered securities clearing agency), OCC has previously implemented rule changes designed to bring OCC into compliance with CFTC rules applicable to DCOs that went into effect on January 9, 2012 5 and May 7, 2012.6 OCC believes it is necessary to amend its Rules in order to ensure compliance with the gross margin rule, which requires a DCO to ‘‘collect initial margin on a gross basis for each clearing member’s customer account(s) equal to the sum of the initial margin amounts that would be required by the derivatives clearing organization for each individual customer within that account if each individual customer were a clearing member.’’ 7 The CFTC gross margin rule goes into effect on November 8, 2012; however, OCC intends to begin complying with the gross margin rule on Monday November 5, 2012 as described herein. obtained from ‘‘Monte Carlo’’ simulations designed to measure the additional asset value required in any portfolio to eliminate an unacceptable level of risk that the portfolio would liquidate to a deficit. OCC presently lacks sufficient information about individual customer positions to calculate margin at the level of each individual customer. However, OCC has been coordinating with other DCOs to establish an industry-wide mechanism for complying with the customer gross margin rule as applied to futures customer accounts. Pursuant to this new system, each DCO’s clearing members will submit data files to the DCO identifying positions by numerical customer identifiers.8 OCC will use this information to calculate margins, using STANS, for each customer identifier of a clearing member and to aggregate those margin calculations to determine the total futures customer margin requirement for the clearing member’s segregated futures customer account(s) held at OCC.9 OCC will then compare the aggregate positions reported by each clearing member with its own records and make any needed adjustments to the margin calculation to ensure all positions on OCC’s books are properly margined. calculation purposes only. Positions recorded on OCC’s books and records, but not reflected in the data file, will be attributed to this sub-account and a margin amount will be calculated for the sub-account. This margin amount will be added to a clearing member’s margin requirement. OCC has determined to adopt this conservative approach to dealing with discrepancies between its own records and clearing member data files in order to ensure that OCC does not collect an inadequate amount of margin from clearing members. * * * * * The proposed changes to OCC’s ByLaws are consistent with the purposes and requirements of Section 17A of the Exchange Act because they are designed to permit OCC to perform clearing services for products that are subject to the jurisdiction of the CFTC without adversely affecting OCC’s obligations with respect to the prompt and accurate clearance and settlement of securities transactions or the protection of securities investors and the public interest. The proposed rule change is not inconsistent with any rules of OCC. OCC’s System for Calculating Margin OCC currently calculates margin requirements for each clearing member’s segregated futures customer account held at OCC on a net basis by applying OCC’s System for Theoretical Analysis and Numerical Simulations (‘‘STANS’’). STANS calculates margin with respect to each account of a clearing member, including each clearing member’s futures customer account(s), on a net basis, i.e., considering the positions of a clearing member, including positions held in each clearing member’s futures customer account(s), as if they are part of one portfolio and margining accordingly. STANS includes both a net asset value (‘‘NAV’’) component and a risk component. The NAV component marks all positions to market and nets long and short positions to determine the NAV of each clearing member’s portfolio of customer positions. The NAV component represents the cost to liquidate the portfolio at current prices by selling the net long positions and buying in the net short positions. The risk component is estimated by means of an expected shortfall risk measure Proposed By-Law and Rule Changes The proposed changes to OCC’s Rules provide for the calculation of margin for segregated futures customer accounts on a gross basis and mandate submission of the clearing member data files necessary to allow OCC to calculate margin at the level of each futures customer. In the event that the data included in these data files is incomplete (for example, if OCC shows positions held in a clearing member’s segregated futures accounts, but those positions are not reflected in the data file), OCC will create a separate sub-account to be used for margin OCC does not believe that the proposed changes contained in the advance notice would impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. 5 See SR–OCC–2011–18. SR–OCC–2012–06. 7 Derivatives Clearing Organization General Provisions and Core Principles, 76 FR 69334, 69439 (November 8, 2011). 6 See VerDate Mar<15>2010 16:48 Sep 28, 2012 Jkt 226001 8 The position data provided to OCC by clearing members will not include (a) information with respect to the allocation of margin assets to particular customers, nor (b) information with respect to settlement obligations arising from the exercise, assignment or maturity of cleared contracts. For this reason, OCC will treat all margin assets and settlement obligations for each account to which the gross margin rule applies as being in sub-accounts of the Clearing Member. OCC will calculate margin, using STANS, separately for each sub-account and will aggregate the calculated margin requirements at the level of the clearing member’s segregated futures customer account to which the sub-accounts relate. 9 OCC currently carries the following account types that are segregated pursuant to Section 4d of the Commodity Exchange Act: Segregated Futures Accounts, Segregated Futures Professional Accounts, non-Proprietary X–M accounts, and internal non-proprietary cross-margining accounts. All such accounts would be margined on a gross basis under the proposed amendments to Rule 601. PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 (B) Clearing Agency’s Statement on Burden on Competition (C) Clearing Agency’s Statement on Comments on the Advance Notice 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 Advance Notice and Timing for Commission Action The proposed changes contained in the advance notice may be implemented pursuant to Section 806(e)(1)(G) of Clearing Supervision Act 10 if the Commission does not object to the proposed changes within 60 days of the later of (i) the date that the advance notice was filed with the Commission or (ii) the date that any additional information requested by the Commission is received. The clearing agency shall not implement the proposed changes contained in the 10 12 E:\FR\FM\01OCN1.SGM U.S.C. 5465(e)(1)(G). 01OCN1 60000 Federal Register / Vol. 77, No. 190 / Monday, October 1, 2012 / Notices advance notice if the Commission objects to the proposed changes. The Commission may extend the period for review by an additional 60 days if the proposed changes raise novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension. Proposed changes may be implemented in fewer than 60 days from the date the advance notice is filed, or the date further information requested by the Commission is received, if the Commission notifies the clearing agency in writing that it does not object to the proposed changes and authorizes the clearing agency to implement the proposed changes on an earlier date, subject to any conditions imposed by the Commission. OCC has also filed the advance notice as a proposed rule change pursuant to Section 19(b)(1) of the Act 11 and Rule 19b-4 thereunder.12 Pursuant to those provisions, within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate 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 or disapprove the proposed rule change or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. The clearing agency shall post notice on its web site of proposed changes that are implemented. number should be included on the subject line if email 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 advance notice that are filed with the Commission, and all written communications relating to the advance notice 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 Web site viewing and printing 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 filings also will be available for inspection and copying at the principal office of OCC and on OCC’s Web site at https:// www.optionsclearing.com/components/ docs/legal/rules_and_bylaws/ sr_occ_12_17.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–2012–17 and should be submitted on or before October 22, 2012. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing. Comments may be submitted by any of the following methods: By the Commission. Kevin M. O’Neill, Deputy Secretary. mstockstill on DSK4VPTVN1PROD with NOTICES 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–2012–17 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–2012–17. This file 11 15 12 17 19:13 Sep 28, 2012 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67922; File No. SR–CME– 2012–37] Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Allow FCM Clearing Member CEOs and CFOs To Designate Authorized Representatives To Approve Certain Disbursements of Customer Funds September 25, 2012. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 [FR Doc. 2012–24038 Filed 9–28–12; 8:45 am] Jkt 226001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 24, 2012, Chicago Mercantile Exchange Inc. (‘‘CME’’) 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 CME. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and to approve the proposed rule change on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CME proposes to make amendments to CME Rule 971 regarding the CME’s segregation, secured and sequestered requirements for swaps as part of an industry wide initiative that is designed to further safeguard customer funds held at the futures commission merchant (‘‘FCM’’) level. The text of the proposed rule change is available on the CME’s Web site at https://www.cmegroup.com, at the principal office of CME, and at the Commission’s Public Reference Room. II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CME 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 III below. CME has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change CME is registered as a derivatives clearing organization with the Commodity Futures Trading Commission (‘‘CFTC’’) and operates a substantial business clearing futures and swaps contracts subject to the jurisdiction of the CFTC. CME proposes to make rule changes to CME Rule 971 in coordination with the implementation by the National Futures Association (‘‘NFA’’) of parallel revisions to NFA rules. The proposed rule changes are designed to further 1 15 2 17 E:\FR\FM\01OCN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 01OCN1

Agencies

[Federal Register Volume 77, Number 190 (Monday, October 1, 2012)]
[Notices]
[Pages 59998-60000]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24038]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67921; File No. SR-OCC-2012-17]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Advance Notice Relating to the Margining of Segregated Futures Customer 
Accounts on a Gross Basis

September 25, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')\1\ and Rule 19b-4(n)(1)(i),\2\ notice is hereby given that on 
September 14, 2012, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') the 
advance notice described in Items I and II below, which Items have been 
prepared primarily by OCC. The Commission is publishing this notice to 
solicit comments on the advance notice from interested persons.
---------------------------------------------------------------------------

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

I. Clearing Agency's Statement of the Terms of Substance of the Advance 
Notice

    The proposed rule change would allow OCC to become compliant with 
Commodity Futures Trading Commission (``CFTC'') Rule 39.13(g)(8)(i), 
which requires the margining of segregated futures customer accounts on 
a gross basis.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Advance Notice

    In its filing with the Commission, the clearing agency included 
statements concerning the purpose of and basis for the proposed rule 
change and advance notice and discussed any comments it received on the 
proposed rule change and advance notice. The text of these statements 
may be examined at the places specified in Item IV below. The clearing 
agency has prepared summaries, set forth in sections A, B and C below, 
of the most significant aspects of such statements.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified the text of the summaries 
prepared by OCC.
---------------------------------------------------------------------------

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Advance Notice

    The purpose of this proposed rule change is to provide for the 
margining of OCC segregated futures customer accounts on a gross basis, 
as required by CFTC Rule 39.13(g)(8)(i).\4\
---------------------------------------------------------------------------

    \4\ 17 CFR 39.13(g)(8)(i).

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

[[Page 59999]]

The CFTC's Customer Gross Margin Rule

    On October 18, 2011, the CFTC issued final regulations implementing 
many of the new statutory core principles for CFTC-registered 
derivatives clearing organizations (``DCOs'') enacted under the Dodd-
Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank 
Act''). As a registered DCO (as well as a registered securities 
clearing agency), OCC has previously implemented rule changes designed 
to bring OCC into compliance with CFTC rules applicable to DCOs that 
went into effect on January 9, 2012 \5\ and May 7, 2012.\6\ OCC 
believes it is necessary to amend its Rules in order to ensure 
compliance with the gross margin rule, which requires a DCO to 
``collect initial margin on a gross basis for each clearing member's 
customer account(s) equal to the sum of the initial margin amounts that 
would be required by the derivatives clearing organization for each 
individual customer within that account if each individual customer 
were a clearing member.'' \7\ The CFTC gross margin rule goes into 
effect on November 8, 2012; however, OCC intends to begin complying 
with the gross margin rule on Monday November 5, 2012 as described 
herein.
---------------------------------------------------------------------------

    \5\ See SR-OCC-2011-18.
    \6\ See SR-OCC-2012-06.
    \7\ Derivatives Clearing Organization General Provisions and 
Core Principles, 76 FR 69334, 69439 (November 8, 2011).
---------------------------------------------------------------------------

OCC's System for Calculating Margin

    OCC currently calculates margin requirements for each clearing 
member's segregated futures customer account held at OCC on a net basis 
by applying OCC's System for Theoretical Analysis and Numerical 
Simulations (``STANS''). STANS calculates margin with respect to each 
account of a clearing member, including each clearing member's futures 
customer account(s), on a net basis, i.e., considering the positions of 
a clearing member, including positions held in each clearing member's 
futures customer account(s), as if they are part of one portfolio and 
margining accordingly. STANS includes both a net asset value (``NAV'') 
component and a risk component. The NAV component marks all positions 
to market and nets long and short positions to determine the NAV of 
each clearing member's portfolio of customer positions. The NAV 
component represents the cost to liquidate the portfolio at current 
prices by selling the net long positions and buying in the net short 
positions. The risk component is estimated by means of an expected 
shortfall risk measure obtained from ``Monte Carlo'' simulations 
designed to measure the additional asset value required in any 
portfolio to eliminate an unacceptable level of risk that the portfolio 
would liquidate to a deficit.
    OCC presently lacks sufficient information about individual 
customer positions to calculate margin at the level of each individual 
customer. However, OCC has been coordinating with other DCOs to 
establish an industry-wide mechanism for complying with the customer 
gross margin rule as applied to futures customer accounts. Pursuant to 
this new system, each DCO's clearing members will submit data files to 
the DCO identifying positions by numerical customer identifiers.\8\ OCC 
will use this information to calculate margins, using STANS, for each 
customer identifier of a clearing member and to aggregate those margin 
calculations to determine the total futures customer margin requirement 
for the clearing member's segregated futures customer account(s) held 
at OCC.\9\ OCC will then compare the aggregate positions reported by 
each clearing member with its own records and make any needed 
adjustments to the margin calculation to ensure all positions on OCC's 
books are properly margined.
---------------------------------------------------------------------------

    \8\ The position data provided to OCC by clearing members will 
not include (a) information with respect to the allocation of margin 
assets to particular customers, nor (b) information with respect to 
settlement obligations arising from the exercise, assignment or 
maturity of cleared contracts. For this reason, OCC will treat all 
margin assets and settlement obligations for each account to which 
the gross margin rule applies as being in sub-accounts of the 
Clearing Member. OCC will calculate margin, using STANS, separately 
for each sub-account and will aggregate the calculated margin 
requirements at the level of the clearing member's segregated 
futures customer account to which the sub-accounts relate.
    \9\ OCC currently carries the following account types that are 
segregated pursuant to Section 4d of the Commodity Exchange Act: 
Segregated Futures Accounts, Segregated Futures Professional 
Accounts, non-Proprietary X-M accounts, and internal non-proprietary 
cross-margining accounts. All such accounts would be margined on a 
gross basis under the proposed amendments to Rule 601.
---------------------------------------------------------------------------

Proposed By-Law and Rule Changes
    The proposed changes to OCC's Rules provide for the calculation of 
margin for segregated futures customer accounts on a gross basis and 
mandate submission of the clearing member data files necessary to allow 
OCC to calculate margin at the level of each futures customer. In the 
event that the data included in these data files is incomplete (for 
example, if OCC shows positions held in a clearing member's segregated 
futures accounts, but those positions are not reflected in the data 
file), OCC will create a separate sub-account to be used for margin 
calculation purposes only. Positions recorded on OCC's books and 
records, but not reflected in the data file, will be attributed to this 
sub-account and a margin amount will be calculated for the sub-account. 
This margin amount will be added to a clearing member's margin 
requirement. OCC has determined to adopt this conservative approach to 
dealing with discrepancies between its own records and clearing member 
data files in order to ensure that OCC does not collect an inadequate 
amount of margin from clearing members.
* * * * *
    The proposed changes to OCC's By-Laws are consistent with the 
purposes and requirements of Section 17A of the Exchange Act because 
they are designed to permit OCC to perform clearing services for 
products that are subject to the jurisdiction of the CFTC without 
adversely affecting OCC's obligations with respect to the prompt and 
accurate clearance and settlement of securities transactions or the 
protection of securities investors and the public interest. The 
proposed rule change is not inconsistent with any rules of OCC.

(B) Clearing Agency's Statement on Burden on Competition

    OCC does not believe that the proposed changes contained in the 
advance notice would impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act.

(C) Clearing Agency's Statement on Comments on the Advance Notice 
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 Advance Notice and Timing for 
Commission Action

    The proposed changes contained in the advance notice may be 
implemented pursuant to Section 806(e)(1)(G) of Clearing Supervision 
Act \10\ if the Commission does not object to the proposed changes 
within 60 days of the later of (i) the date that the advance notice was 
filed with the Commission or (ii) the date that any additional 
information requested by the Commission is received. The clearing 
agency shall not implement the proposed changes contained in the

[[Page 60000]]

advance notice if the Commission objects to the proposed changes.
---------------------------------------------------------------------------

    \10\ 12 U.S.C. 5465(e)(1)(G).
---------------------------------------------------------------------------

    The Commission may extend the period for review by an additional 60 
days if the proposed changes raise novel or complex issues, subject to 
the Commission providing the clearing agency with prompt written notice 
of the extension. Proposed changes may be implemented in fewer than 60 
days from the date the advance notice is filed, or the date further 
information requested by the Commission is received, if the Commission 
notifies the clearing agency in writing that it does not object to the 
proposed changes and authorizes the clearing agency to implement the 
proposed changes on an earlier date, subject to any conditions imposed 
by the Commission.
    OCC has also filed the advance notice as a proposed rule change 
pursuant to Section 19(b)(1) of the Act \11\ and Rule 19b-4 
thereunder.\12\ Pursuant to those provisions, within 45 days of the 
date of publication of this notice in the Federal Register or within 
such longer period up to 90 days (i) as the Commission may designate 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 or disapprove the 
proposed rule change or (B) Institute proceedings to determine whether 
the proposed rule change should be disapproved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(1).
    \12\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    The clearing agency shall post notice on its web site of proposed 
changes that are implemented.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. 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-2012-17 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-2012-17. This file 
number should be included on the subject line if email 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 advance notice that are filed 
with the Commission, and all written communications relating to the 
advance notice 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 Web site viewing and printing 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 filings also will be available for inspection and 
copying at the principal office of OCC and on OCC's Web site at https://www.optionsclearing.com/components/docs/legal/rules_and_bylaws/sr_occ_12_17.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-2012-17 
and should be submitted on or before October 22, 2012.

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24038 Filed 9-28-12; 8:45 am]
BILLING CODE 8011-01-P
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