Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Correct an Inadvertent Omission in a Prior Rule Change Filing Related to the Definition of Hedge Clearing Member, 61436-61437 [2013-24163]

Download as PDF 61436 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEARCA–2013–98 and should be submitted on or before October 24, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–24249 Filed 10–2–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70545; File No. SR–OCC– 2013–15] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Correct an Inadvertent Omission in a Prior Rule Change Filing Related to the Definition of Hedge Clearing Member September 27, 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 September 19, 2013, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change described in Items I, II and III below, which Items have been prepared primarily by OCC. OCC filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) 3 of the Act and Rule 19b–4(f)(4)(ii) 4 thereunder, so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the rule change from interested parties. tkelley on DSK3SPTVN1PROD with NOTICES I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change OCC proposes to correct an inadvertent omission in a prior rule change filing related to the definition of Hedge Clearing Member. 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 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(4)(ii). 1 15 VerDate Mar<15>2010 18:29 Oct 02, 2013 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 correct an inadvertent omission in a prior rule change filing related to the definition of ‘‘Hedge Clearing Member’’ in OCC’s By-Laws (‘‘By-Laws’’). By way of background, in 2002 OCC proposed, and the SEC approved, certain rule changes to OCC’s Stock Loan/Hedge Program (‘‘Hedge Program’’) (SR–OCC–2002–11).5 As part of that proposed rule change, OCC deleted and relocated an existing interpretation to Article V, Section 1 relating to the designation of a Hedge Clearing Member. In connection with relocating the interpretation, OCC also amended the interpretation so that designation as a Hedge Clearing Member was no longer pre-conditioned upon the Clearing Member also being a Stock Clearing Member. However, a concurrent change to the definition of Hedge Clearing Member was not made at that time, thereby creating an inconsistency between the description of Hedge Clearing Member found in Article V of the By-Laws and the definition of Hedge Clearing Member found in Article I of the By-Laws. OCC now proposes to resolve this inconsistency by making a technical correction to the definition of Hedge Clearing Member in Article I of the ByLaws so that it is consistent with the description of Hedge Clearing Member found in Article V of the By-Laws. As described above, through SR– OCC–2002–11, OCC made certain changes its Hedge Program. One such change was that OCC determined that it was no longer necessary to require that a Hedge Clearing Member initially be designated as a ‘‘Stock’’ Clearing Member and, accordingly, updated Article V of the By-Laws. However, through an inadvertent oversight, a concurrent change to Article I of the ByLaws was not made at that time. Accordingly, OCC now proposes to make a technical correction to the Article I definition of Hedge Clearing Member so that it is consistent with the description of Hedge Clearing Member 5 Securities and Exchange Act Release No. 34– 47898 (May 21, 2003), 68 FR 32164 (May 29, 2003). Jkt 232001 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 found in Article V of the By-Laws by removing the reference to ‘‘Stock’’ Clearing Member from the definition of Hedge Clearing Member. This proposed change will resolve the inconsistency within the By-Laws with respect to the definition of Hedge Clearing Member. The proposed change to OCC’s ByLaws is consistent with the purposes and requirements of Section 17A(b)(3)(F) 6 of the Act 7 and Rule 17Ad–22(d)(2) 8 thereunder because it will prevent unfair discrimination in the admission of participants, or among participants, in the use of OCC’s Hedge Program and ensure that OCC’s By-Laws are reasonably designed to have participation requirements that are objective, publicly disclosed and permit fair and open access. The proposed changes are also intended to remove potential impediments to, and will perfect the mechanism of a national system for, the prompt and accurate clearance and settlement of securities transactions. (B) Clearing Agency’s Statement on Burden on Competition OCC does not believe that the proposed rule change would impact, or impose a burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change, which will apply to all clearing members, is administrative in nature and will correct an inconsistency within OCC’s By-Laws. Accordingly, the proposed change will reduce unnecessary administrative burdens on its clearing members, including any such burdens that may impact competition. (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 The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b– 4(f)(1) 10 thereunder, the proposed rule change is filed for immediate effectiveness inasmuch as it constitutes 6 15 U.S.C. 78q–1(b)(3)(F). U.S.C. 78a et seq. 8 17 CFR 240.17Ad–22(d)(2). 9 15 U.S.C. 78s(b)(3). 10 17 CFR 240.19b–4(f)(1). 7 15 E:\FR\FM\03OCN1.SGM 03OCN1 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices a stated policy, practice or interpretation with respect to the meaning, administration or enforcement of an existing rule. OCC will delay the implementation of the rule change until it is deemed certified under CFTC Regulation § 40.6. At any time within 60 days of the filing of such rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.11 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: tkelley on DSK3SPTVN1PROD with NOTICES 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–2013–15 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–2013–15. 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 of submission. 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 Section, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for 11 15 U.S.C. 78s(b)(3)(C). VerDate Mar<15>2010 18:29 Oct 02, 2013 Jkt 232001 inspection and copying at the principal office of OCC and on OCC’s Web site at https://www.theocc.com/components/ docs/legal/rules_and_bylaws/sr_occ_13_ 15.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–2013–15 and should be submitted on or before October 24, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated Authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–24163 Filed 10–2–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70558; File No. SR–CME– 2013–22] Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to the Liquidity Factor of CME’s CDS Margin Methodology September 30, 2013. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 19, 2013, Chicago Mercantile Exchange Inc. (‘‘CME’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change described in Items I and II below, which Items have been prepared primarily by CME. CME filed the proposal pursuant to Section 19(b)(3)(A) of the Act,3 and Rule 19b– 4(f)(4)(ii) thereunder,4 so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change for interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CME proposes to make an adjustment to one particular component of its current CDS margin model. The proposed rule change is described 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(4)(ii). 1 15 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 61437 below. Italicized text indicates additions; bracketed text indicates deletions. * * * * * CME CDS Liquidity Margin Factor Calculation Methodology The Liquidity Factor will be calculated as the sum of two components: (1) A concentration charge for market exposure as a function of absolute Spread DV01 (a portfolio sensitivity to 1% par spread shock); and (2) A concentration charge for portfolio basis exposure as a function of Residual Spread DV01 (which is the difference between the Gross Spread DV01 and the Net Spread DV01 of the portfolio). CME will also establish a floor component to the Liquidity Factor using the current Gross Notional Function with the following modifications: (1) the concentration scalar will be removed; and (2) the maximum DST would be replaced by series-tenor specific DST values based on the series and tenor of the relevant HY and IG positions, as applicable. * * * * * II. Self-Regulatory Organization’s 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 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. 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’s currently approved credit default swap margin methodology utilizes a ‘‘multi-factor’’ portfolio model to determine margin requirements for the credit default swap (‘‘CDS’’) index products accepted for clearing at CME. The model incorporates risk-based factors that are designed to represent the different risks inherent to CDS products. The factors are aggregated to determine the total amount of margin required to protect a portfolio against exposures resulting from daily changes in CDS spreads. For both total and minimum margin calculations, CME evaluates each CDS contract held within a portfolio. These positions are E:\FR\FM\03OCN1.SGM 03OCN1

Agencies

[Federal Register Volume 78, Number 192 (Thursday, October 3, 2013)]
[Notices]
[Pages 61436-61437]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24163]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70545; File No. SR-OCC-2013-15]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Correct an Inadvertent Omission in a Prior Rule Change Filing Related 
to the Definition of Hedge Clearing Member

September 27, 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 September 19, 2013, The Options Clearing Corporation (``OCC'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change described in Items I, II and III below, which 
Items have been prepared primarily by OCC. OCC filed the proposed rule 
change pursuant to Section 19(b)(3)(A)(iii) \3\ of the Act and Rule 
19b-4(f)(4)(ii) \4\ thereunder, so that the proposal was effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the rule change from interested parties.
---------------------------------------------------------------------------

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

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

    OCC proposes to correct an inadvertent omission in a prior rule 
change filing related to the definition of Hedge Clearing Member.

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 correct an 
inadvertent omission in a prior rule change filing related to the 
definition of ``Hedge Clearing Member'' in OCC's By-Laws (``By-Laws''). 
By way of background, in 2002 OCC proposed, and the SEC approved, 
certain rule changes to OCC's Stock Loan/Hedge Program (``Hedge 
Program'') (SR-OCC-2002-11).\5\ As part of that proposed rule change, 
OCC deleted and relocated an existing interpretation to Article V, 
Section 1 relating to the designation of a Hedge Clearing Member. In 
connection with relocating the interpretation, OCC also amended the 
interpretation so that designation as a Hedge Clearing Member was no 
longer pre-conditioned upon the Clearing Member also being a Stock 
Clearing Member. However, a concurrent change to the definition of 
Hedge Clearing Member was not made at that time, thereby creating an 
inconsistency between the description of Hedge Clearing Member found in 
Article V of the By-Laws and the definition of Hedge Clearing Member 
found in Article I of the By-Laws. OCC now proposes to resolve this 
inconsistency by making a technical correction to the definition of 
Hedge Clearing Member in Article I of the By-Laws so that it is 
consistent with the description of Hedge Clearing Member found in 
Article V of the By-Laws.
---------------------------------------------------------------------------

    \5\ Securities and Exchange Act Release No. 34-47898 (May 21, 
2003), 68 FR 32164 (May 29, 2003).
---------------------------------------------------------------------------

    As described above, through SR-OCC-2002-11, OCC made certain 
changes its Hedge Program. One such change was that OCC determined that 
it was no longer necessary to require that a Hedge Clearing Member 
initially be designated as a ``Stock'' Clearing Member and, 
accordingly, updated Article V of the By-Laws. However, through an 
inadvertent oversight, a concurrent change to Article I of the By-Laws 
was not made at that time. Accordingly, OCC now proposes to make a 
technical correction to the Article I definition of Hedge Clearing 
Member so that it is consistent with the description of Hedge Clearing 
Member found in Article V of the By-Laws by removing the reference to 
``Stock'' Clearing Member from the definition of Hedge Clearing Member. 
This proposed change will resolve the inconsistency within the By-Laws 
with respect to the definition of Hedge Clearing Member.
    The proposed change to OCC's By-Laws is consistent with the 
purposes and requirements of Section 17A(b)(3)(F) \6\ of the Act \7\ 
and Rule 17Ad-22(d)(2) \8\ thereunder because it will prevent unfair 
discrimination in the admission of participants, or among participants, 
in the use of OCC's Hedge Program and ensure that OCC's By-Laws are 
reasonably designed to have participation requirements that are 
objective, publicly disclosed and permit fair and open access. The 
proposed changes are also intended to remove potential impediments to, 
and will perfect the mechanism of a national system for, the prompt and 
accurate clearance and settlement of securities transactions.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1(b)(3)(F).
    \7\ 15 U.S.C. 78a et seq.
    \8\ 17 CFR 240.17Ad-22(d)(2).
---------------------------------------------------------------------------

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

    OCC does not believe that the proposed rule change would impact, or 
impose a burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed change, which will 
apply to all clearing members, is administrative in nature and will 
correct an inconsistency within OCC's By-Laws. Accordingly, the 
proposed change will reduce unnecessary administrative burdens on its 
clearing members, including any such burdens that may impact 
competition.

(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

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(1) \10\ 
thereunder, the proposed rule change is filed for immediate 
effectiveness inasmuch as it constitutes

[[Page 61437]]

a stated policy, practice or interpretation with respect to the 
meaning, administration or enforcement of an existing rule. OCC will 
delay the implementation of the rule change until it is deemed 
certified under CFTC Regulation Sec.  40.6. At any time within 60 days 
of the filing of such rule change, the Commission summarily may 
temporarily suspend such rule change if it appears to the Commission 
that such action is necessary or appropriate in the public interest, 
for the protection of investors, or otherwise in furtherance of the 
purposes of the Act.\11\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3).
    \10\ 17 CFR 240.19b-4(f)(1).
    \11\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-2013-15 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-2013-15. 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 of submission. 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 Section, 100 
F Street NE., Washington, DC 20549, on official business days between 
the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will 
be available for inspection and copying at the principal office of OCC 
and on OCC's Web site at https://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_13_15.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-2013-15 and 
should be submitted on or before October 24, 2013.

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

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24163 Filed 10-2-13; 8:45 am]
BILLING CODE 8011-01-P
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