Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving 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, Chairman and President, and Create an Additional Directorship To Be Occupied by the President, 47449-47450 [2013-18761]

Download as PDF Federal Register / Vol. 78, No. 150 / Monday, August 5, 2013 / Notices At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551–5400. Dated: August 1, 2013. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–18933 Filed 8–1–13; 4:15 pm] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70076; File No. SR–OCC– 2013–09] Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving 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, Chairman and President, and Create an Additional Directorship To Be Occupied by the President July 30, 2013. I. Introduction On June 4, 2013 The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–OCC–2013–09 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 On June 10, 2013, OCC filed Amendment No. 1 to the proposed rule change.3 The proposed rule change, as modified by Amendment No. 1, was published for comment in the Federal Register on June 21, 2013.4 The Commission received no comment letters. For the reasons discussed below, the Commission is granting approval of the proposed rule change. mstockstill on DSK4VPTVN1PROD with NOTICES II. Description The purpose of this rule change is to provide for separation of the powers and duties currently combined in the office of OCC’s Chairman of the Board of Directors into two offices, Chairman 5 and President, and create an additional 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 corrects an administrative oversight related to a sentence reference in OCC’s Certificate of Incorporation. 4 Release No. 34–69771 (June 17, 2013), 78 FR 37640 (June 21, 2013). 5 Pursuant to Article IV, Section 6, of OCC’s ByLaws, the Chairman of the Board is also the Executive Chairman. 2 17 VerDate Mar<15>2010 19:07 Aug 02, 2013 Jkt 229001 directorship to be occupied by the President. Proposal Overview In the course of OCC’s review of the structure of the Board of Directors, OCC determined that dividing the powers and duties of the Chairman of the Board into two positions, Chairman and President, would enhance oversight of OCC management by making the Chairman independent of most management functions. Pursuant to the rule change, the Chairman will be responsible for oversight of: (i) The control functions of OCC, including enterprise risk management, internal audit and compliance; (ii) external affairs; and (iii) presiding at all meetings of OCC’s Board of Directors and OCC’s stockholders. The President will report to the Chairman and be responsible for all aspects of OCC’s business that do not report directly to the Chairman. Under OCC’s rule change, OCC’s President, who will also serve as Chief Executive Officer, will focus on the effectiveness of OCC’s day-to-day operations, as well as strategic initiatives for the future. OCC expects that the Chairman’s direct oversight of control functions will increase independence by limiting management’s influence over such functions. In addition, OCC notes that the significance of these control functions for a clearing agency warrants full-time oversight, which can only be provided by an executive of OCC. To reflect the above changes in its governance structure, OCC will revise Section 7 of Article III of its By-Laws to include OCC’s President as a Management Director, along with OCC’s Chairman.6 OCC will also revise Article IV of its By-Laws to include references to the President in certain provisions governing OCC’s officers.7 OCC will also 6 Sections 1, 7 and 12 of Article III will also be amended to reflect the existence of an additional Management Director. Furthermore, OCC will 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 will remove the President as one of the ‘‘Designated Officers’’ to whom such authority would devolve if certain enumerated officers are unavailable. 7 The amended Section 1 of Article IV will include the President, along with the Chairman, as an officer required to be elected by the Board of Directors. Section 8 of Article IV, as amended, will no longer give the Board the option of electing a President, but will make such office required. Sections 6 and 8 of Article IV will be amended to specify the duties of the Chairman and President, respectively. Sections 2, 3, and 13 of Article IV will be amended to give the President power, like the Chairman, to appoint and remove certain officers and agents to carry out the functions assigned to him and may determine the salaries of these appointees and agents. Sections 7 and 9 will be amended to add references to the President, in PO 00000 Frm 00179 Fmt 4703 Sfmt 4703 47449 amend Articles IV and V of its Certificate of Incorporation to reflect the existence of an additional Management Director. Finally, OCC will also 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. Implementation Timeframe OCC will notify members of the date on which it intends to implement the rule change through the posting of an information memo on the OCC Web site. The change will not take effect until such date OCC designates as the date of implementation. OCC expects to implement the rule change no later than December 31, 2013. III. Discussion Section 19(b)(2)(C) of the Act 8 directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. Section 17A(b)(3)(A) of the Act 9 requires that a clearing agency that is registered with the Commission be organized and have the capacity to be able to, among other things, facilitate the prompt and accurate clearance and settlement of securities transactions. The Commission finds that the rule change is consistent with Section 17A(b)(3)(A) of the Act 10 because by separating the powers and duties currently combined in the office of OCC’s Chairman into two offices, the rule change should enhance oversight of management by ensuring that the Chairman is independent of most management functions and that the separation of powers and duties over OCC operations is not overly concentrated in the hands of a single individual, thereby promoting greater accountability of management to the Board of Directors. In so doing, OCC’s rule change should improve its corporate governance structure and provide for an appropriate checks and balance between oversight by OCC’s Board of Directors and OCC management of day-to-day operations, which in turn, should facilitate the prompt and accurate clearance and settlement of securities transactions. addition to the Chairman, when referencing the highest-ranking officers of OCC. 8 15 U.S.C. 78s(b)(2)(C). 9 15 U.S.C. 78q–1(b)(3)(A). 10 Id. E:\FR\FM\05AUN1.SGM 05AUN1 47450 Federal Register / Vol. 78, No. 150 / Monday, August 5, 2013 / Notices IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 11 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,12 that the proposed rule change (File No. SR– OCC–2013–09) be and hereby is APPROVED.13 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.14 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–18761 Filed 8–2–13; 8:45 am] BILLING CODE 8011–01–P Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Modifying the Content of the NYSE MKT Trades Digital Media Data Feed July 30, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on July 18, 2013, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 self-regulatory organization. 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 mstockstill on DSK4VPTVN1PROD with NOTICES The Exchange proposes to revise the description of the NYSE MKT Trades Digital Media data feed. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, U.S.C. 78q–1. U.S.C. 78s(b)(2). 13 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 14 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. VerDate Mar<15>2010 19:07 Aug 02, 2013 Jkt 229001 In its filing with the Commission, the self-regulatory organization 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 those 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 parts of such statements. 1. Purpose [Release No. 34–70065; File No. SR– NYSEMKT–2013–64] 12 15 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION 11 15 at the principal office of the Exchange, and at the Commission’s Public Reference Room. The Exchange proposes to revise the description of the NYSE MKT Trades Digital Media data feed. In 2010, the Securities and Exchange Commission (‘‘Commission’’) approved the NYSE MKT Trades data feed and certain fees for it.4 NYSE MKT Trades is a NYSE MKT-only market data feed that allows a vendor to redistribute on a real-time basis the same last sale information that the Exchange reports under the Consolidated Tape Association (‘‘CTA’’) Plan for inclusion in the CTA Plan’s consolidated data streams and certain other related data elements. Specifically, NYSE MKT Trades includes the real-time last sale price, time, size, and bid/ask quotations for each security traded on the Exchange and a stock summary message. The stock summary message updates every minute and includes NYSE MKT’s opening price, high price, low price, closing price, and cumulative volume for the security. In April 2013, the Exchange began offering a new version of NYSE MKT Trades called ‘‘NYSE MKT Trades Digital Media,’’ which was described as including the real-time last sale price, time, size, and stock summary message for each security traded on the Exchange, but not including access to the bid/ask quotation included with the NYSE MKT Trades product.5 At that time, the Exchange believed that it 4 See Securities Exchange Act Release No. 62187 (May 27, 2010), 75 FR 31500 (June 3, 2010) (SR– NYSEAmex–2010–35). 5 See Securities Exchange Act Release No. 69273 (Apr. 2, 2013), 78 FR 20969 (Apr. 8, 2013) (SR– NYSEMKT–2013–30). PO 00000 Frm 00180 Fmt 4703 Sfmt 4703 could efficiently remove the bid/ask information from the feed but has since determined that the time and resources required to do so would be significant and not commensurate with the need for the change. As such, the NYSE MKT Trades Digital Media product is offered with the bid/ask component included, and as such does not have different content than the regular NYSE MKT Trades data fee. The only difference between the products is the permitted distribution channels. NYSE MKT Trades Digital Media permits market data vendors, television broadcasters, Web site and mobile device service providers, and others to distribute the data product to their customers for viewing via television, Web site, and mobile devices. They are not be [sic] permitted to provide NYSE MKT Trades Digital Media in a context in which a trading or order routing decision can be implemented unless CTA data is available in an equivalent manner, must label the products as NYSE MKT-only data, and must provide a hyperlinked notice similar to the one provided for CTA delayed data. These restrictions do not apply to the NYSE MKT Trades product. No other changes to the data components, terms, or pricing of any product are proposed. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) 6 of the Act, in general, and furthers the objectives of Section 6(b)(5) 7 of the Act, in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in 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, and it is not designed to permit unfair discrimination among customers, brokers, or dealers. The Exchange offers the NYSE MKT Trades Digital Media data product in recognition of the demand for a more seamless and easier-to-administer data distribution model that takes into account the expanded variety of media and communication devices that investors utilize today. As described above, the Exchange has determined that the expense of creating and monitoring a new feed without the bidask element is not warranted. No other 6 15 7 15 E:\FR\FM\05AUN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(5). 05AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 78, Number 150 (Monday, August 5, 2013)]
[Notices]
[Pages 47449-47450]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18761]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70076; File No. SR-OCC-2013-09]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Approving 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, Chairman and President, and Create an 
Additional Directorship To Be Occupied by the President

July 30, 2013.

I. Introduction

    On June 4, 2013 The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change SR-OCC-2013-09 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder.\2\ On June 10, 2013, OCC filed Amendment No. 1 to the 
proposed rule change.\3\ The proposed rule change, as modified by 
Amendment No. 1, was published for comment in the Federal Register on 
June 21, 2013.\4\ The Commission received no comment letters. For the 
reasons discussed below, the Commission is granting approval of the 
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 corrects an administrative oversight related 
to a sentence reference in OCC's Certificate of Incorporation.
    \4\ Release No. 34-69771 (June 17, 2013), 78 FR 37640 (June 21, 
2013).
---------------------------------------------------------------------------

II. Description

    The purpose of this rule change is to provide for separation of the 
powers and duties currently combined in the office of OCC's Chairman of 
the Board of Directors into two offices, Chairman \5\ and President, 
and create an additional directorship to be occupied by the President.
---------------------------------------------------------------------------

    \5\ Pursuant to Article IV, Section 6, of OCC's By-Laws, the 
Chairman of the Board is also the Executive Chairman.
---------------------------------------------------------------------------

Proposal Overview

    In the course of OCC's review of the structure of the Board of 
Directors, OCC determined that dividing the powers and duties of the 
Chairman of the Board into two positions, Chairman and President, would 
enhance oversight of OCC management by making the Chairman independent 
of most management functions. Pursuant to the rule change, the Chairman 
will be responsible for oversight of: (i) The control functions of OCC, 
including enterprise risk management, internal audit and compliance; 
(ii) external affairs; and (iii) presiding at all meetings of OCC's 
Board of Directors and OCC's stockholders. The President will report to 
the Chairman and be responsible for all aspects of OCC's business that 
do not report directly to the Chairman. Under OCC's rule change, OCC's 
President, who will also serve as Chief Executive Officer, will focus 
on the effectiveness of OCC's day-to-day operations, as well as 
strategic initiatives for the future.
    OCC expects that the Chairman's direct oversight of control 
functions will increase independence by limiting management's influence 
over such functions. In addition, OCC notes that the significance of 
these control functions for a clearing agency warrants full-time 
oversight, which can only be provided by an executive of OCC.
    To reflect the above changes in its governance structure, OCC will 
revise Section 7 of Article III of its By-Laws to include OCC's 
President as a Management Director, along with OCC's Chairman.\6\ OCC 
will also revise Article IV of its By-Laws to include references to the 
President in certain provisions governing OCC's officers.\7\ OCC will 
also amend Articles IV and V of its Certificate of Incorporation to 
reflect the existence of an additional Management Director. Finally, 
OCC will also 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.
---------------------------------------------------------------------------

    \6\ Sections 1, 7 and 12 of Article III will also be amended to 
reflect the existence of an additional Management Director. 
Furthermore, OCC will 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 will remove the President as one 
of the ``Designated Officers'' to whom such authority would devolve 
if certain enumerated officers are unavailable.
    \7\ The amended Section 1 of Article IV will include the 
President, along with the Chairman, as an officer required to be 
elected by the Board of Directors. Section 8 of Article IV, as 
amended, will no longer give the Board the option of electing a 
President, but will make such office required. Sections 6 and 8 of 
Article IV will be amended to specify the duties of the Chairman and 
President, respectively. Sections 2, 3, and 13 of Article IV will be 
amended to give the President power, like the Chairman, to appoint 
and remove certain officers and agents to carry out the functions 
assigned to him and may determine the salaries of these appointees 
and agents. Sections 7 and 9 will be amended to add references to 
the President, in addition to the Chairman, when referencing the 
highest-ranking officers of OCC.
---------------------------------------------------------------------------

Implementation Timeframe

    OCC will notify members of the date on which it intends to 
implement the rule change through the posting of an information memo on 
the OCC Web site. The change will not take effect until such date OCC 
designates as the date of implementation. OCC expects to implement the 
rule change no later than December 31, 2013.

III. Discussion

    Section 19(b)(2)(C) of the Act \8\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if it 
finds that such proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to such organization. Section 17A(b)(3)(A) of the Act \9\ 
requires that a clearing agency that is registered with the Commission 
be organized and have the capacity to be able to, among other things, 
facilitate the prompt and accurate clearance and settlement of 
securities transactions.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(2)(C).
    \9\ 15 U.S.C. 78q-1(b)(3)(A).
---------------------------------------------------------------------------

    The Commission finds that the rule change is consistent with 
Section 17A(b)(3)(A) of the Act \10\ because by separating the powers 
and duties currently combined in the office of OCC's Chairman into two 
offices, the rule change should enhance oversight of management by 
ensuring that the Chairman is independent of most management functions 
and that the separation of powers and duties over OCC operations is not 
overly concentrated in the hands of a single individual, thereby 
promoting greater accountability of management to the Board of 
Directors. In so doing, OCC's rule change should improve its corporate 
governance structure and provide for an appropriate checks and balance 
between oversight by OCC's Board of Directors and OCC management of 
day-to-day operations, which in turn, should facilitate the prompt and 
accurate clearance and settlement of securities transactions.
---------------------------------------------------------------------------

    \10\ Id.

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

[[Page 47450]]

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act \11\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (File No. SR-OCC-2013-09) be and 
hereby is APPROVED.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2).
    \13\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-18761 Filed 8-2-13; 8:45 am]
BILLING CODE 8011-01-P

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