Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To Separate the Powers and Duties Currently Combined in the Office of OCC's Chairman Into Two Offices, Executive Chairman and President, and Create an Additional Directorship To Be Occupied by the President, 37640-37642 [2013-14791]

Download as PDF 37640 Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–14831 Filed 6–20–13; 8:45 am] (A) Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [(Release No. 34–69771; File No. SR–OCC– 2013–09] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To Separate the Powers and Duties Currently Combined in the Office of OCC’s Chairman Into Two Offices, Executive Chairman and President, and Create an Additional Directorship To Be Occupied by the President June 17, 2013. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 4, 2013, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by OCC. On June 10, 2013, OCC filed Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons. TKELLEY on DSK3SPTVN1PROD with NOTICES I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change OCC proposes to separate the powers and duties currently combined in the office of OCC’s Chairman into two offices, Executive Chairman and President, and create an additional directorship to be occupied by the President. II. Clearing Agency’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 12 17 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. CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Amendment No. 1 modified Exhibit 3A to the original filing to correct an erroneous reference contained therein. The purpose of this proposed rule change is to provide for separation of the powers and duties currently combined in the office of OCC’s Chairman into two offices, Executive Chairman and President, and create an additional directorship to be occupied by the President. These changes resulted from a review of the structure of OCC’s Board, with particular consideration given to the trend in many corporations toward separating the positions of Chief Executive Officer and Chairman of the Board. OCC’s Board of Directors ultimately determined that as a corporate governance matter dividing the powers and duties of the Chairman into two positions was desirable. Under the proposal, the Executive Chairman would be responsible for the control functions of OCC, including enterprise risk management, internal audit and compliance, as well as for external affairs, and for presiding at all meetings of the Board and the stockholders. The President would report to the Chairman and be responsible for all aspects of OCC’s business that do not report directly to the Chairman. OCC intends that the President, who would be OCC’s Chief Executive Officer,4 would focus on the effectiveness of OCC’s day-to-day operations, as well as strategic initiatives for the future, while the Chairman would provide objective oversight over the entire organization, including the President. OCC believes that the proposed change would enhance oversight of management because the Chairman will be independent of most management functions. The separation would also avoid concentrating too much power over OCC’s operations in the hands of a single individual, and heighten accountability of management to the Board. Furthermore, the Board of Directors found that separation of these offices would better align OCC’s governance structure with global standards for financial services organizations. While OCC’s Board of Directors determined that its Chairman should no longer function as its chief executive 1 15 VerDate Mar<15>2010 18:32 Jun 20, 2013 Jkt 229001 4 While the By-Laws would make it clear that the President is OCC’s Chief Executive Officer, for simplicity the officer in question would be referred to only as the ‘‘President.’’ PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 officer, in light of OCC’s status as a registered clearing organization and designated clearing organization, it concluded that the Chairman should have executive responsibilities relating to risk management, compliance and similar issues. The Board of Directors believes that the Chairman’s direct oversight of these control functions will increase independence by limiting management’s influence over them.5 The Board also believes that the significance of these control functions for a clearing organization warrants fulltime oversight, which can only be provided by an executive of OCC. To reflect the above changes in its governance structure, OCC is proposing to revise Section 7 of Article III of its By-Laws to include OCC’s President as a Management Director, along with OCC’s Chairman. Accordingly, Sections 1, 7 and 12 of Article III will also be amended to reflect the existence of an additional Management Director. Furthermore, OCC proposes to amend Section 15 of Article III to grant the President the same authority to act in the case of an emergency as the Chairman and, consequently, OCC also proposes to remove the President as one of the ‘‘Designated Officers’’ to whom such authority would devolve if certain enumerated officers are unavailable. Section 3 of Article III would also be amended to clarify the timing of the annual meetings at which the initial election of each class of Member Directors in fact occurred. OCC is proposing to revise Article IV of its By-Laws to include references to the President in certain provisions governing OCC’s officers. In particular, Section 8 of Article IV would no longer give the Board the option of electing a President, but would make such office required, and, accordingly, Section 1 of Article IV would include the President, along with the Chairman, as an officer elected by the Board of Directors. Sections 6 and 8 would also be amended to specify the Chairman’s duties and the President’s duties, respectively, as described above. OCC also proposes to amend Sections 2, 3 and 13 of Article IV to provide that, like the Chairman, the President may appoint and remove certain officers and 5 The proposed structure of OCC’s Board, including the utilization of an executive chairman, is similar to that employed by the Depository Trust & Clearing Corporation and CME Group Inc. See Article III of the Depository Trust & Clearing Corporation’s By-Laws, effective April 2012, available at https://www.dtcc.com/legal/rules_proc/ dtc_rules.pdf, and Article V of CME Group Inc.’s Tenth Amended and Restated By-Laws, effective as of April 17, 2013, available at https:// investor.cmegroup.com/investor-relations/ groupBylaws.cfm). E:\FR\FM\21JNN1.SGM 21JNN1 Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Notices agents to carry out the functions assigned to him and may determine the salaries of these appointees and agents. Finally, OCC is proposing to amend Sections 7 and 9 to add references to the President, in addition to the Chairman, when referencing the highest-ranking officers of OCC. Amendments to Certificate of Incorporation and Stockholders Agreement OCC is proposing to amend Articles IV and V of its Certificate of Incorporation to reflect the existence of an additional Management Director.6 OCC is also proposing to amend Sections 2 and 3 of the Stockholders Agreement to provide for the election of the President, in addition to the Chairman, as a Management Director.7 Effect on Clearing Members The proposed rule change relates to OCC governance issues. OCC believes that it would affect all clearing members equally, and that it would not impose any compliance burdens on clearing members. Notice of Implementation TKELLEY on DSK3SPTVN1PROD with NOTICES Following approval of this rule change by the Commission, OCC expects to provide notice to its clearing members of the date on which it intends to implement this rule change by separating the powers and duties of OCC’s Chairman into two offices and creating the additional directorship. Such notice will be provided to clearing members through an information memo posted on OCC’s Web site. The implementation of the rule change will occur no later than December 31, 2013. OCC believes that the proposed rule change is consistent with Section 17A of the Act 8 and the rules and regulations thereunder, including Rule 17Ad– 22(d)(8), because the proposed modifications would help ensure that the rules of OCC are designed to protect investors and the public interest 9 and that OCC’s governance arrangements are clear and transparent, fulfill the public interests requirements in Section 17A, support the objectives of owners and participants and promote the effectiveness of OCC’s risk management procedures 10 by separating the powers 6 See the proposed Fifth Certificate of Amendment of Restated Certificate of Incorporation of the Options Clearing Corporation, attached hereto as Exhibit 3A. 7 See Amendment No. 10 to the Stockholders Agreement, attached hereto as Exhibit 3B. 8 15 U.S.C. 78q–1. 9 15 U.S.C. 78q–1(b)(3)(F). 10 17 CFR 240.17Ad–22(d)(8). VerDate Mar<15>2010 18:32 Jun 20, 2013 Jkt 229001 37641 and duties currently combined in the office of Chairman into two offices. the proposed rule change and none have been received. (B) Clearing Agency’s Statement on Burden on Competition 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 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 such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. OCC does not believe that the proposed rule change would impose a burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.11 With respect to any burden on competition among clearing agencies, OCC is the only clearing agency that performs central counterparty services for the options markets. Changes to the rules of a clearing agency may have an impact on the participants in a clearing agency and the markets that the clearing agency serves. However, this proposed rule change primarily affects OCC in that it separates the powers and duties of the office of OCC’s Chairman into two offices and creates an additional directorship. OCC does not believe that these changes with respect to governance would disparately treat any clearing member or group of clearing members or otherwise disparately affect access to or use of any of OCC’s facilities or disadvantage or favor any user in relationship to any other such user. In this connection, OCC notes that the provision of Section 1 of Article III of the By-Laws that requires that the number of Member Directors must exceed the sum of the number of Exchange Directors and the number of Public Directors by at least one is not being changed as a result of the proposed rule change. In addition, OCC believes that the proposed rule change would in fact allow OCC’s Board to supervise management more effectively and thereby help ensure against any particular clearing member’s exercising undue influence over management to the detriment of other clearing members. For the foregoing reasons, OCC believes that the proposed rule change is in the public interest, that it would promote transparency, fairness and competition in the options markets served by OCC, and it would not impose any burden on competition that is unnecessary or inappropriate in furtherance of the purposes of the Act.12 (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments on the proposed rule change were not and are not intended to be solicited with respect to 11 15 12 15 PO 00000 U.S.C. 78q–1(b)(3)(I). U.S.C. 78q–1(b)(3)(I). Frm 00138 Fmt 4703 Sfmt 4703 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 email to rulecomments@sec.gov. Please include File Number SR–OCC–2013–09 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. All submissions should refer to File Number SR–OCC–2013–09. 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, 100 F Street NE., E:\FR\FM\21JNN1.SGM 21JNN1 37642 Federal Register / Vol. 78, No. 120 / Friday, June 21, 2013 / Notices Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing, and the amendment thereto, also will be available for inspection and copying at the principal office of OCC and on OCC’s Web site: https:// www.theocc.com/components/docs/ legal/rules_and_bylaws/ sr_occ_13_09.pdf.https:// www.theocc.com/components/docs/ legal/rules_and_bylaws/ sr_occ_13_09_a1.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–2013–09 and should be submitted on or before July 12, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–14791 Filed 6–20–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69775; File No. SR–CBOE– 2013–061] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Penny Pilot Program June 17, 2013. TKELLEY on DSK3SPTVN1PROD with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 4, 2013, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 6.42 relating to the Penny Pilot 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Mar<15>2010 18:32 Jun 20, 2013 Jkt 229001 Program. The text of the proposed rule change is provided below. (additions are italicized; deletions are [bracketed]) * * * * * Chicago Board Options Exchange, Incorporated Rules * * * * * Rule 6.42. Minimum Increments for Bids and Offers The Board of Directors may establish minimum increments for options traded on the Exchange. When the Board of Directors determines to change the minimum increments, the Exchange will designate such change as a stated policy, practice, or interpretation with respect to the administration of Rule 6.42 within the meaning of subparagraph (3)(A) of subsection 19(b) of the Exchange Act and will file a rule change for effectiveness upon filing with the Commission. Until such time as the Board of Directors makes a change to the minimum increments, the following minimum increments shall apply to options traded on the Exchange: (1) No change. (2) No change. (3) The decimal increments for bids and offers for all series of the option classes participating in the Penny Pilot Program are: $0.01 for all option series quoted below $3 (including LEAPS), and $0.05 for all option series $3 and above (including LEAPS). For QQQQs, IWM, and SPY, the minimum increment is $0.01 for all option series. The Exchange may replace any option class participating in the Penny Pilot Program that has been delisted with the next most actively-traded, multiply-listed option class, based on national average daily volume in the preceding six calendar months, that is not yet included in the Pilot Program. Any replacement class would be added on the second trading day following [January 1, 2013] July 1, 2013. The Penny Pilot shall expire on [June 30, 2013] December 31, 2013. (4) No change. * * * Interpretations and Policies: .01–.04 No change. * * * * * The text of the proposed rule change is also available on the Exchange’s Web site (https://www.cboe.com/AboutCBOE/ CBOELegalRegulatoryHome.aspx), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Penny Pilot Program (the ‘‘Pilot Program’’) is scheduled to expire on June 30, 2013. CBOE proposes to extend the Pilot Program until December 31, 2013. CBOE believes that extending the Pilot Program will allow for further analysis of the Pilot Program and a determination of how the Pilot Program should be structured in the future. During this extension of the Pilot Program, CBOE proposes that it may replace any option class that is currently included in the Pilot Program and that has been delisted with the next most actively traded, multiply listed option class that is not yet participating in the Pilot Program (‘‘replacement class’’). Any replacement class would be determined based on national average daily volume in the preceding six months,3 and would be added on the second trading day following July 1, 2013. CBOE will employ the same parameters to prospective replacement classes as approved and applicable in determining the existing classes in the Pilot Program, including excluding high-priced underlying securities.4 CBOE will announce to its Trading Permit Holders by circular any replacement classes in the Pilot Program. CBOE is specifically authorized to act jointly with the other options exchanges participating in the Pilot Program in identifying any replacement class. 3 The month immediately preceding a replacement class’s addition to the Pilot Program (i.e. June) would not be used for purposes of the sixmonth analysis. Thus, a replacement class to be added on the second trading day following July 1, 2013 would be identified based on The Option Clearing Corporation’s trading volume data from December 1, 2012 through May 31, 2013. 4 See Securities Exchange Act Release No. 60864 (October 22, 2009) (SR–CBOE–2009–76). E:\FR\FM\21JNN1.SGM 21JNN1

Agencies

[Federal Register Volume 78, Number 120 (Friday, June 21, 2013)]
[Notices]
[Pages 37640-37642]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14791]


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

SECURITIES AND EXCHANGE COMMISSION

[(Release No. 34-69771; File No. SR-OCC-2013-09]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 
1, To Separate the Powers and Duties Currently Combined in the Office 
of OCC's Chairman Into Two Offices, Executive Chairman and President, 
and Create an Additional Directorship To Be Occupied by the President

June 17, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 4, 2013, The Options Clearing Corporation (``OCC'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II below, which Items have been 
prepared by OCC. On June 10, 2013, OCC filed Amendment No. 1 to the 
proposed rule change.\3\ The Commission is publishing this notice to 
solicit comments on the proposed rule change, as modified by Amendment 
No. 1, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 modified Exhibit 3A to the original filing 
to correct an erroneous reference contained therein.
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    OCC proposes to separate the powers and duties currently combined 
in the office of OCC's Chairman into two offices, Executive Chairman 
and President, and create an additional directorship to be occupied by 
the President.

II. Clearing Agency'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.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    The purpose of this proposed rule change is to provide for 
separation of the powers and duties currently combined in the office of 
OCC's Chairman into two offices, Executive Chairman and President, and 
create an additional directorship to be occupied by the President. 
These changes resulted from a review of the structure of OCC's Board, 
with particular consideration given to the trend in many corporations 
toward separating the positions of Chief Executive Officer and Chairman 
of the Board. OCC's Board of Directors ultimately determined that as a 
corporate governance matter dividing the powers and duties of the 
Chairman into two positions was desirable. Under the proposal, the 
Executive Chairman would be responsible for the control functions of 
OCC, including enterprise risk management, internal audit and 
compliance, as well as for external affairs, and for presiding at all 
meetings of the Board and the stockholders. The President would report 
to the Chairman and be responsible for all aspects of OCC's business 
that do not report directly to the Chairman. OCC intends that the 
President, who would be OCC's Chief Executive Officer,\4\ would focus 
on the effectiveness of OCC's day-to-day operations, as well as 
strategic initiatives for the future, while the Chairman would provide 
objective oversight over the entire organization, including the 
President.
---------------------------------------------------------------------------

    \4\ While the By-Laws would make it clear that the President is 
OCC's Chief Executive Officer, for simplicity the officer in 
question would be referred to only as the ``President.''
---------------------------------------------------------------------------

    OCC believes that the proposed change would enhance oversight of 
management because the Chairman will be independent of most management 
functions. The separation would also avoid concentrating too much power 
over OCC's operations in the hands of a single individual, and heighten 
accountability of management to the Board. Furthermore, the Board of 
Directors found that separation of these offices would better align 
OCC's governance structure with global standards for financial services 
organizations.
    While OCC's Board of Directors determined that its Chairman should 
no longer function as its chief executive officer, in light of OCC's 
status as a registered clearing organization and designated clearing 
organization, it concluded that the Chairman should have executive 
responsibilities relating to risk management, compliance and similar 
issues. The Board of Directors believes that the Chairman's direct 
oversight of these control functions will increase independence by 
limiting management's influence over them.\5\ The Board also believes 
that the significance of these control functions for a clearing 
organization warrants full-time oversight, which can only be provided 
by an executive of OCC.
---------------------------------------------------------------------------

    \5\ The proposed structure of OCC's Board, including the 
utilization of an executive chairman, is similar to that employed by 
the Depository Trust & Clearing Corporation and CME Group Inc. See 
Article III of the Depository Trust & Clearing Corporation's By-
Laws, effective April 2012, available at https://www.dtcc.com/legal/rules_proc/dtc_rules.pdf, and Article V of CME Group Inc.'s Tenth 
Amended and Restated By-Laws, effective as of April 17, 2013, 
available at https://investor.cmegroup.com/investor-relations/groupBylaws.cfm).
---------------------------------------------------------------------------

    To reflect the above changes in its governance structure, OCC is 
proposing to revise Section 7 of Article III of its By-Laws to include 
OCC's President as a Management Director, along with OCC's Chairman. 
Accordingly, Sections 1, 7 and 12 of Article III will also be amended 
to reflect the existence of an additional Management Director. 
Furthermore, OCC proposes to amend Section 15 of Article III to grant 
the President the same authority to act in the case of an emergency as 
the Chairman and, consequently, OCC also proposes to remove the 
President as one of the ``Designated Officers'' to whom such authority 
would devolve if certain enumerated officers are unavailable. Section 3 
of Article III would also be amended to clarify the timing of the 
annual meetings at which the initial election of each class of Member 
Directors in fact occurred.
    OCC is proposing to revise Article IV of its By-Laws to include 
references to the President in certain provisions governing OCC's 
officers. In particular, Section 8 of Article IV would no longer give 
the Board the option of electing a President, but would make such 
office required, and, accordingly, Section 1 of Article IV would 
include the President, along with the Chairman, as an officer elected 
by the Board of Directors. Sections 6 and 8 would also be amended to 
specify the Chairman's duties and the President's duties, respectively, 
as described above. OCC also proposes to amend Sections 2, 3 and 13 of 
Article IV to provide that, like the Chairman, the President may 
appoint and remove certain officers and

[[Page 37641]]

agents to carry out the functions assigned to him and may determine the 
salaries of these appointees and agents. Finally, OCC is proposing to 
amend Sections 7 and 9 to add references to the President, in addition 
to the Chairman, when referencing the highest-ranking officers of OCC.
Amendments to Certificate of Incorporation and Stockholders Agreement
    OCC is proposing to amend Articles IV and V of its Certificate of 
Incorporation to reflect the existence of an additional Management 
Director.\6\ OCC is also proposing to amend Sections 2 and 3 of the 
Stockholders Agreement to provide for the election of the President, in 
addition to the Chairman, as a Management Director.\7\
---------------------------------------------------------------------------

    \6\ See the proposed Fifth Certificate of Amendment of Restated 
Certificate of Incorporation of the Options Clearing Corporation, 
attached hereto as Exhibit 3A.
    \7\ See Amendment No. 10 to the Stockholders Agreement, attached 
hereto as Exhibit 3B.
---------------------------------------------------------------------------

Effect on Clearing Members
    The proposed rule change relates to OCC governance issues. OCC 
believes that it would affect all clearing members equally, and that it 
would not impose any compliance burdens on clearing members.
Notice of Implementation
    Following approval of this rule change by the Commission, OCC 
expects to provide notice to its clearing members of the date on which 
it intends to implement this rule change by separating the powers and 
duties of OCC's Chairman into two offices and creating the additional 
directorship. Such notice will be provided to clearing members through 
an information memo posted on OCC's Web site. The implementation of the 
rule change will occur no later than December 31, 2013.
    OCC believes that the proposed rule change is consistent with 
Section 17A of the Act \8\ and the rules and regulations thereunder, 
including Rule 17Ad-22(d)(8), because the proposed modifications would 
help ensure that the rules of OCC are designed to protect investors and 
the public interest \9\ and that OCC's governance arrangements are 
clear and transparent, fulfill the public interests requirements in 
Section 17A, support the objectives of owners and participants and 
promote the effectiveness of OCC's risk management procedures \10\ by 
separating the powers and duties currently combined in the office of 
Chairman into two offices.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1.
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
    \10\ 17 CFR 240.17Ad-22(d)(8).
---------------------------------------------------------------------------

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

    OCC does not believe that the proposed rule change would impose a 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.\11\ With respect to any burden 
on competition among clearing agencies, OCC is the only clearing agency 
that performs central counterparty services for the options markets.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

    Changes to the rules of a clearing agency may have an impact on the 
participants in a clearing agency and the markets that the clearing 
agency serves. However, this proposed rule change primarily affects OCC 
in that it separates the powers and duties of the office of OCC's 
Chairman into two offices and creates an additional directorship. OCC 
does not believe that these changes with respect to governance would 
disparately treat any clearing member or group of clearing members or 
otherwise disparately affect access to or use of any of OCC's 
facilities or disadvantage or favor any user in relationship to any 
other such user. In this connection, OCC notes that the provision of 
Section 1 of Article III of the By-Laws that requires that the number 
of Member Directors must exceed the sum of the number of Exchange 
Directors and the number of Public Directors by at least one is not 
being changed as a result of the proposed rule change. In addition, OCC 
believes that the proposed rule change would in fact allow OCC's Board 
to supervise management more effectively and thereby help ensure 
against any particular clearing member's exercising undue influence 
over management to the detriment of other clearing members.
    For the foregoing reasons, OCC believes that the proposed rule 
change is in the public interest, that it would promote transparency, 
fairness and competition in the options markets served by OCC, and it 
would not impose any burden on competition that is unnecessary or 
inappropriate in furtherance of the purposes of the Act.\12\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

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

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

    Within 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 such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-OCC-2013-09 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.

All submissions should refer to File Number SR-OCC-2013-09. 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, 100 F Street NE.,

[[Page 37642]]

Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing, and the amendment 
thereto, also will be available for inspection and copying at the 
principal office of OCC and on OCC's Web site: https://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_13_09.pdf.https://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_13_09_a1.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-2013-09 
and should be submitted on or before July 12, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14791 Filed 6-20-13; 8:45 am]
BILLING CODE 8011-01-P
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