Self-Regulatory Organization; The Options Clearing Corporation; Notice of Filing of Proposed Rule Change To Make The Options Clearing Corporation's Existing Policy Concerning Specified Concentration Limits Related to Deposits of Certain Letters of Credit Applicable to All Letters of Credit, 32801-32803 [2014-13203]
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Federal Register / Vol. 79, No. 109 / Friday, June 6, 2014 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 6 and Rule
19b–4(f)(6) thereunder.7 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 8 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),9 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest because waiver would
allow the Exchange to implement its
new price protection functionality,
which has already been subject to notice
and comment and approved by the
Commission, without further delay.
Specifically, the current proposal
extends MIAX’s price protection and
order monitor functionality to
additional trading processes and also
applies MIAX’s cap on responses for
purposes of pro rata allocation to the
route timer and liquidity refresh pause
timer in a manner that does not raise
new or novel issues and should
facilitate executions on MIAX in a
manner consistent with the protection
of investors and the public interest.
Accordingly, the Commission hereby
grants the Exchange’s request and
wreier-aviles on DSK5TPTVN1PROD with NOTICES
6 15
U.S.C. 78s(b)(3)(A)(iii).
7 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
8 17 CFR 240.19b–4(f)(6).
9 17 CFR 240.19b–4(f)(6)(iii).
VerDate Mar<15>2010
13:59 Jun 05, 2014
Jkt 232001
designates the proposal operative upon
filing.10
At any time within 60 days of the
filing of this proposed rule change, the
Commission summarily may
temporarily suspend this 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.
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–
MIAX–2014–17 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–MIAX–2014–17. 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 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.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of this
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
10 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
PO 00000
Frm 00111
Fmt 4703
Sfmt 4703
32801
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
publicly available. All submissions
should refer to File Number SR–MIAX–
2014–17 and should be submitted on or
before June 27, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–13105 Filed 6–5–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72294; File No. SR–OCC–
2014–12]
Self-Regulatory Organization; The
Options Clearing Corporation; Notice
of Filing of Proposed Rule Change To
Make The Options Clearing
Corporation’s Existing Policy
Concerning Specified Concentration
Limits Related to Deposits of Certain
Letters of Credit Applicable to All
Letters of Credit
June 2, 2014.
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 May 20,
2014, The Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below, which Items
have been prepared by OCC. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
OCC proposes to amend Rule 604 in
order to make OCC’s existing policy
concerning specified concentration
limits related to deposits of certain
letters of credit applicable to all letters
of credit.
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
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\06JNN1.SGM
06JNN1
32802
Federal Register / Vol. 79, No. 109 / Friday, June 6, 2014 / Notices
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
wreier-aviles on DSK5TPTVN1PROD with NOTICES
1. Purpose
The purpose of this proposed rule
change is to make OCC’s existing policy
concerning concentrated margin
deposits of certain issuers of letters of
credit (‘‘LC’’) applicable to all LC
issuers. Currently, OCC imposes
concentration limits on clearing member
margin deposits of LCs issued by certain
non-U.S. institutions.3 Specifically,
OCC limits the concentration of a
clearing member’s margin deposits of
LCs issued by such non-U.S. institutions
to no more than 50% of a clearing
member’s total margin deposit at any
given time, and no more than 20% of a
clearing member’s margin deposit may
include an LC issued by any one of
these non-U.S. institutions.4
OCC’s Risk Committee recently
requested a review of those aspects of
OCC’s risk management framework that
are designed to mitigate the risks
associated with accepting LCs for
margin purposes, including the risk that
an issuer of an LC will not honor its
commitment to effect timely payment
following an OCC demand therefor.5
Such review identified two instances in
which over 50% of a clearing member’s
total margin on deposit was satisfied by
LCs. OCC’s Risk Committee determined
this level of exposure to LCs to be
excessive. Therefore, OCC proposes to
make the existing concentration limits
related to the deposit of LCs, as set forth
in OCC Rule 604, Interpretation and
Policy .02, applicable to all margin
deposits of LCs regardless of issuer. As
a result of this change, no more than
50% of a clearing member’s margin on
3 These concentration limits, however, are not
currently applied to LCs issued by non-U.S.
institutions that qualify as financial holding
companies under Regulation Y or have an affiliate
that is so qualified. In order to be deemed a
financial holding company under Regulation Y,
among other things, the institution must make
certain certifications regarding the capitalization of
the depository institutions controlled by the
holding company. See OCC Rule 604, Interpretation
and Policy .02. See also Securities Exchange Act
Release No. 5037 (November 6, 2001), 66 FR 57143
(November 14, 2001) (SR–OCC–2001–03).
4 Id.
5 Pursuant to the terms of the LCs accepted by
OCC as well as OCC’s Rules, issuers of LCs are
required to satisfy any demand for payment within
sixty minutes after receipt of such demand. See
OCC Rule 604(c)(1).
VerDate Mar<15>2010
13:59 Jun 05, 2014
Jkt 232001
deposit may include LCs and no more
than 20% of a clearing member’s margin
may include an LC from a single issuer.
This proposed change is intended to
reduce OCC’s overall credit risk
exposure to LCs deposited as margin by
a single clearing member and the
potential adverse consequences should
an LC issuer not perform upon its
payment commitment after receiving a
demand for payment.
OCC believes that the proposed
change will have a minimal impact on
its clearing members because LCs
comprise less than one percent of OCC’s
total margin deposits and are currently
used by only 13 clearing members. OCC
estimates that the proposed change will
impact three clearing members and
.13% of OCC’s total margin deposits.
Each of these three clearing members
has been advised of the proposed
change and has indicated that it will be
able to modify its margin deposit
practices to reduce its LC deposits
without undue difficulty. Moreover,
OCC is not proposing to modify any of
its other rules, policies or procedures
concerning LCs.
Prior to implementation of this
proposed rule change, OCC will publish
an information memorandum to inform
all clearing members of the proposed
rule change. In addition, clearing
members that are directly affected by
the proposed rule change have been
contacted regarding this filing and all
clearing members (even if not directly
affected by this proposal) will have
access to information, as necessary, to
better understand any potential impact
the proposed rule change may have on
their margin deposits at OCC.
2. Statutory Basis
OCC believes that the proposed rule
change is consistent with Section
17A(b)(3)(F) of the Act 6 because it will
assure the safeguarding of securities and
funds which are in the custody and
control of OCC. In addition, the
proposed rule change will promote the
prompt and accurate clearance and
settlement of securities transactions for
which it is responsible. OCC believes
that the proposed changes to its existing
concentration limit policy for LCs, as
described above, will reduce certain
credit risks associated with the deposit
by a clearing member of LCs as a form
of margin asset and make it less likely
that such margin asset would not be
available to OCC should OCC need to
use it to close-out positions of a
defaulted clearing member. For the
same reasons, the proposed rule change
will promote confidence that OCC will
6 15
PO 00000
U.S.C. 78q-1(b)(3)(F).
Frm 00112
Fmt 4703
Sfmt 4703
be able to timely meet its settlement
obligations because the changes to
OCC’s concentration limit policy for LCs
will reduce the likelihood that a
percentage of a defaulting clearing
member’s margin assets would not be
available to OCC in the event of a
clearing member default. The proposed
rule change is not inconsistent with any
rules of OCC, including any other rules
proposed to be amended.
(B) Clearing Agency’s Statement on
Burden on Competition
OCC believes that the proposed rule
change would impose a minimal burden
on competition, and that such burden is
appropriate in furtherance of the
purposes of the Act.7 As stated above,
this proposed rule change affects certain
clearing members who deposit LCs as a
form of margin asset at OCC because
they would be required to modify their
business practices and potentially incur
certain costs in doing so. However, OCC
believes that any burden imposed upon
such clearing members is necessary in
furtherance of the purposes of the Act
and is minimal in nature. The proposed
rule change will reduce OCC’s credit
exposure to those clearing members
who deposit LCs as a form of margin
asset thereby better ensuring that OCC
safeguards the securities and funds in
OCC’s custody and control as well as
promoting the prompt and accurate
clearance and settlement of securities
transactions for which OCC is
responsible. In addition, OCC believes
that the proposed rule change will have
a minimal impact on its clearing
members. LCs comprise less than one
percent of OCC’s total margin deposits
and OCC anticipates that the proposed
rule change will impact three clearing
members, each of which has indicated
that it is able to comply with the change
without undue difficulty. Moreover,
clearing members are able to deposit a
large variety of asset types to satisfy
their margin requirement at OCC
including, but not limited to, common
stocks, government securities and
money market funds.
For the foregoing reasons, OCC
believes that the proposed rule change
imposes a minimal burden on
competition, but such burden is
appropriate in furtherance of the
purposes of the Act.
(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
7 15
E:\FR\FM\06JNN1.SGM
U.S.C. 78q-1(b)(3)(I).
06JNN1
Federal Register / Vol. 79, No. 109 / Friday, June 6, 2014 / Notices
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
the 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:
wreier-aviles on DSK5TPTVN1PROD with NOTICES
Electronic Comments
• Use the Commissions 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–2014–12 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–OCC–2014–12. 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 Section, 100 F Street NE.,
Washington, DC 20549, on official
VerDate Mar<15>2010
13:59 Jun 05, 2014
Jkt 232001
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://theocc.com/components/docs/
legal/rules_and_bylaws/sr_occ_14_
12.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–2014–12 and should
be submitted on or before June 27, 2014.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
Authority.8
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–13203 Filed 6–5–14; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #14007 and #14008]
NEBRASKA Disaster #NE–00057
This is a notice of an
Administrative declaration of a disaster
for the State of NEBRASKA dated 05/
30/2014.
Incident: Severe Weather and a
Tornado.
Incident Period: 05/11/2014.
Effective Date: 05/30/2014.
Physical Loan Application Deadline
Date: 07/29/2014.
Economic Injury (EIDL) Loan
Application Deadline Date: 03/02/2015.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration,
applications for disaster loans may be
filed at the address listed above or other
locally announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
8 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00113
Fmt 4703
Sfmt 4703
Primary Counties: Seward.
Contiguous Counties:
Nebraska: Butler, Fillmore, Lancaster,
Polk, Saline, York.
The Interest Rates are:
Percent
For Physical Damages:
Homeowners with Credit Available Elsewhere ........................
Homeowners
without
Credit
Available Elsewhere ................
Businesses with Credit Available
Elsewhere ................................
Businesses without Credit Available Elsewhere ........................
Non-Profit Organizations with
Credit Available Elsewhere .....
Non-Profit Organizations without
Credit Available Elsewhere .....
For Economic Injury:
Businesses & Small Agricultural
Cooperatives without Credit
Available Elsewhere ................
Non-Profit Organizations without
Credit Available Elsewhere .....
4.375
2.188
6.000
4.000
2.625
2.625
4.000
2.625
The number assigned to this disaster
for physical damage is 14007 C and for
economic injury is 14008 0.
The State which received an EIDL
Declaration # is Nebraska.
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
SUMMARY:
32803
Dated: May 30, 2014.
Maria Contreras-Sweet,
Administrator.
[FR Doc. 2014–13106 Filed 6–5–14; 8:45 am]
BILLING CODE 8025–01–P
DEPARTMENT OF STATE
[Public Notice: 8760]
30-Day Notice of Proposed Information
Collection: Technology Security/
Clearance Plans, Screening Records,
and Non-Disclosure Agreements
Notice of request for public
comment and submission to the Office
of Management and Budget of proposed
collection of information.
ACTION:
The Department of State has
submitted the information collection
described below to the Office of
Management and Budget (OMB) for
approval. In accordance with the
Paperwork Reduction Act of 1995, we
are requesting comments on this
collection from all interested
individuals and organizations. The
purpose of this notice is to allow 30
days for public comment.
DATES: Submit comments directly to
OMB up to July 7, 2014.
ADDRESSES: Direct comments to the
Department of State Desk Officer in the
SUMMARY:
E:\FR\FM\06JNN1.SGM
06JNN1
Agencies
[Federal Register Volume 79, Number 109 (Friday, June 6, 2014)]
[Notices]
[Pages 32801-32803]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-13203]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72294; File No. SR-OCC-2014-12]
Self-Regulatory Organization; The Options Clearing Corporation;
Notice of Filing of Proposed Rule Change To Make The Options Clearing
Corporation's Existing Policy Concerning Specified Concentration Limits
Related to Deposits of Certain Letters of Credit Applicable to All
Letters of Credit
June 2, 2014.
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 May 20, 2014, The Options Clearing Corporation (``OCC'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II and III below, which Items have
been prepared by OCC. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
OCC proposes to amend Rule 604 in order to make OCC's existing
policy concerning specified concentration limits related to deposits of
certain letters of credit applicable to all letters of credit.
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
[[Page 32802]]
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
1. Purpose
The purpose of this proposed rule change is to make OCC's existing
policy concerning concentrated margin deposits of certain issuers of
letters of credit (``LC'') applicable to all LC issuers. Currently, OCC
imposes concentration limits on clearing member margin deposits of LCs
issued by certain non-U.S. institutions.\3\ Specifically, OCC limits
the concentration of a clearing member's margin deposits of LCs issued
by such non-U.S. institutions to no more than 50% of a clearing
member's total margin deposit at any given time, and no more than 20%
of a clearing member's margin deposit may include an LC issued by any
one of these non-U.S. institutions.\4\
---------------------------------------------------------------------------
\3\ These concentration limits, however, are not currently
applied to LCs issued by non-U.S. institutions that qualify as
financial holding companies under Regulation Y or have an affiliate
that is so qualified. In order to be deemed a financial holding
company under Regulation Y, among other things, the institution must
make certain certifications regarding the capitalization of the
depository institutions controlled by the holding company. See OCC
Rule 604, Interpretation and Policy .02. See also Securities
Exchange Act Release No. 5037 (November 6, 2001), 66 FR 57143
(November 14, 2001) (SR-OCC-2001-03).
\4\ Id.
---------------------------------------------------------------------------
OCC's Risk Committee recently requested a review of those aspects
of OCC's risk management framework that are designed to mitigate the
risks associated with accepting LCs for margin purposes, including the
risk that an issuer of an LC will not honor its commitment to effect
timely payment following an OCC demand therefor.\5\ Such review
identified two instances in which over 50% of a clearing member's total
margin on deposit was satisfied by LCs. OCC's Risk Committee determined
this level of exposure to LCs to be excessive. Therefore, OCC proposes
to make the existing concentration limits related to the deposit of
LCs, as set forth in OCC Rule 604, Interpretation and Policy .02,
applicable to all margin deposits of LCs regardless of issuer. As a
result of this change, no more than 50% of a clearing member's margin
on deposit may include LCs and no more than 20% of a clearing member's
margin may include an LC from a single issuer. This proposed change is
intended to reduce OCC's overall credit risk exposure to LCs deposited
as margin by a single clearing member and the potential adverse
consequences should an LC issuer not perform upon its payment
commitment after receiving a demand for payment.
---------------------------------------------------------------------------
\5\ Pursuant to the terms of the LCs accepted by OCC as well as
OCC's Rules, issuers of LCs are required to satisfy any demand for
payment within sixty minutes after receipt of such demand. See OCC
Rule 604(c)(1).
---------------------------------------------------------------------------
OCC believes that the proposed change will have a minimal impact on
its clearing members because LCs comprise less than one percent of
OCC's total margin deposits and are currently used by only 13 clearing
members. OCC estimates that the proposed change will impact three
clearing members and .13% of OCC's total margin deposits. Each of these
three clearing members has been advised of the proposed change and has
indicated that it will be able to modify its margin deposit practices
to reduce its LC deposits without undue difficulty. Moreover, OCC is
not proposing to modify any of its other rules, policies or procedures
concerning LCs.
Prior to implementation of this proposed rule change, OCC will
publish an information memorandum to inform all clearing members of the
proposed rule change. In addition, clearing members that are directly
affected by the proposed rule change have been contacted regarding this
filing and all clearing members (even if not directly affected by this
proposal) will have access to information, as necessary, to better
understand any potential impact the proposed rule change may have on
their margin deposits at OCC.
2. Statutory Basis
OCC believes that the proposed rule change is consistent with
Section 17A(b)(3)(F) of the Act \6\ because it will assure the
safeguarding of securities and funds which are in the custody and
control of OCC. In addition, the proposed rule change will promote the
prompt and accurate clearance and settlement of securities transactions
for which it is responsible. OCC believes that the proposed changes to
its existing concentration limit policy for LCs, as described above,
will reduce certain credit risks associated with the deposit by a
clearing member of LCs as a form of margin asset and make it less
likely that such margin asset would not be available to OCC should OCC
need to use it to close-out positions of a defaulted clearing member.
For the same reasons, the proposed rule change will promote confidence
that OCC will be able to timely meet its settlement obligations because
the changes to OCC's concentration limit policy for LCs will reduce the
likelihood that a percentage of a defaulting clearing member's margin
assets would not be available to OCC in the event of a clearing member
default. The proposed rule change is not inconsistent with any rules of
OCC, including any other rules proposed to be amended.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
OCC believes that the proposed rule change would impose a minimal
burden on competition, and that such burden is appropriate in
furtherance of the purposes of the Act.\7\ As stated above, this
proposed rule change affects certain clearing members who deposit LCs
as a form of margin asset at OCC because they would be required to
modify their business practices and potentially incur certain costs in
doing so. However, OCC believes that any burden imposed upon such
clearing members is necessary in furtherance of the purposes of the Act
and is minimal in nature. The proposed rule change will reduce OCC's
credit exposure to those clearing members who deposit LCs as a form of
margin asset thereby better ensuring that OCC safeguards the securities
and funds in OCC's custody and control as well as promoting the prompt
and accurate clearance and settlement of securities transactions for
which OCC is responsible. In addition, OCC believes that the proposed
rule change will have a minimal impact on its clearing members. LCs
comprise less than one percent of OCC's total margin deposits and OCC
anticipates that the proposed rule change will impact three clearing
members, each of which has indicated that it is able to comply with the
change without undue difficulty. Moreover, clearing members are able to
deposit a large variety of asset types to satisfy their margin
requirement at OCC including, but not limited to, common stocks,
government securities and money market funds.
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\7\ 15 U.S.C. 78q-1(b)(3)(I).
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For the foregoing reasons, OCC believes that the proposed rule
change imposes a minimal burden on competition, but such burden is
appropriate in furtherance of the purposes of the Act.
(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
[[Page 32803]]
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 the 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 Commissions 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-2014-12 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-OCC-2014-12. 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 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://theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_14_12.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-2014-12
and should be submitted on or before June 27, 2014.
For the Commission by the Division of Trading and Markets,
pursuant to delegated Authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13203 Filed 6-5-14; 8:45 am]
BILLING CODE 8011-01-P