Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change To Permit the Executive Chairman, the President or a Delegate of Such Officer To Approve Requests by a Hedge Clearing Member To Become a Market Loan Clearing Member, 73128-73129 [2014-28766]

Download as PDF 73128 Federal Register / Vol. 79, No. 236 / Tuesday, December 9, 2014 / Notices Clear Europe considers the proposed revision to further its goal in the existing policy of assuring that Clearing Members unwind firm trades on a competitive basis. If Clearing Members were permitted to unwind firm trades non-competitively at the original firm trade price, thereby alleviating the firm trade’s impact to their portfolio, the incentive to provide accurate price submissions would be diminished. Given the significance of accurate submission to the end-of-day pricing process, ICE Clear Europe believes the proposed revision both clarifies and enhances its CDS Pricing Policy. As such, the amendments will facilitate the prompt and accurate clearance and settlement of the CDS Contracts cleared by the Clearing House, and are therefore consistent with the requirements of 17A(b)(3)(F) of the Act and the rules thereunder. rljohnson on DSK3VPTVN1PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition ICE Clear Europe does not believe the proposed amendments would have any impact, or impose any burden, on competition not necessary or appropriate in furtherance of the purpose of the Act. The enhancements to the end-of-day price discovery process apply uniformly across all CDS Clearing Members. ICE Clear Europe does not anticipate that these enhancements will materially affect the cost of clearing or adversely affect the ability of Clearing Members or other market participants to continue to clear CDS Contracts. ICE Clear Europe also does not believe the enhancements will limit the availability of clearing in CDS products for Clearing Members or their customers or otherwise limit market participants’ choices for selecting clearing services in CDS. Therefore, ICE Clear Europe does not believe the proposed rule change imposes any burden on competition that is not appropriate in furtherance of the purpose of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments relating to the amendments to the CDS Pricing Policy have not been solicited or received. ICE Clear Europe will notify the Commission of any written comments received by ICE Clear Europe. 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 VerDate Sep<11>2014 14:48 Dec 08, 2014 Jkt 235001 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 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– ICEEU–2014–20 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–ICEEU–2014–20. 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 such filings will also be available for inspection and copying at the principal office of ICE Clear Europe and on ICE Clear Europe’s Web site at https:// www.theice.com/clear-europe/ regulation. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 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–ICEEU–2014–20 and should be submitted on or before December 30, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–28772 Filed 12–8–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73725; File No. SR–OCC– 2014–19] Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change To Permit the Executive Chairman, the President or a Delegate of Such Officer To Approve Requests by a Hedge Clearing Member To Become a Market Loan Clearing Member December 3, 2014. On October 24, 2014, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–OCC–2014–19 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal Register on November 3, 2014.3 The Commission did not receive any comments on the proposed rule change. This order approves the proposed rule change. I. Description The purpose of OCC’s rule change is permit OCC’s Executive Chairman, the President or their delegate to approve business expansion requests of Hedge Clearing Members 4 to become Market Loan Clearing Members.5 Delegates of 7 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 73449 (October 28, 2014), 79 FR 65277 (November 3, 2014) (SR–OCC–2014–19). 4 See OCC By-Laws, Article 1.H(1). See also, OCC By-Laws, Article V, Section 1, Interpretation and Policy .07. 5 See OCC By-Laws, Article 1.M(4). See also, OCC By-Laws, Article V, Section 1, Interpretation and Policy .07A. 1 15 E:\FR\FM\09DEN1.SGM 09DEN1 rljohnson on DSK3VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 236 / Tuesday, December 9, 2014 / Notices the Executive Chairman and/or the President must be an officer of the rank of Senior Vice President or higher. Currently, OCC’s By-Laws require that requests of a Hedge Clearing Member to become a Market Loan Clearing Member be processed through OCC’s business expansion process, which involves review and approval by OCC’s Risk Committee (‘‘Committee’’). As described below, this type of business expansion request is operational and administrative in nature and OCC does not believe review and approval of this type of business expansion request requires the Committee to assess the risk of such designation. Accordingly, OCC is amending its rules to permit the Executive Chairman, the President, or their delegate to approve business expansion requests of Hedge Clearing Members to become Market Loan Clearing Members without further review by the Committee, provided that any delegate be an officer of the rank of Senior Vice President or higher. According to OCC, the Committee is responsible for reviewing and approving clearing member requests to clear a type or a kind of transaction for which it is not currently approved to clear through OCC (i.e., a business expansion request).6 The Committee has delegated the Executive Chairman, the Management Vice Chairman, the President, or their delegate with authority to review and approve business expansion requests in response to requests by clearing members for expedited review. Such approval is then subject to the Committee’s review and ratification at its next regularly scheduled meeting. If a clearing member does not request expedited review of a business expansion request then such request will be reviewed by the Committee at a regularly scheduled meeting of the Committee, and not by the Executive Chairman, the Management Vice Chairman, the President, or their delegate. In the case of a Hedge Clearing Member requesting a business expansion in order to be approved as Market Loan Clearing Member, the clearing member will have already been subject a robust risk review by the Committee concerning such clearing member’s ability to participate in stock loan activity at OCC. Accordingly, the review of the Market Loan business expansion request by either the Committee and/or the Executive Chairman, the Management Vice Chairman, the President, or their delegate would be primarily operational 6 See OCC By-Laws, Article V, Section 1, Interpretation and Policy .03(e). VerDate Sep<11>2014 14:48 Dec 08, 2014 Jkt 235001 in nature and involve ensuring that the clearing member: (1) Is a U.S. Clearing Member, (2) is a member of a Loan Market,7 (3) is a participant of the Depository Trust Company and has executed certain agreements with the Depository Trust Company, and (4) executes applicable agreements with OCC.8 The Committee and/or the Executive Chairman, the Management Vice Chairman, the President, or their delegate would also review the current financial risk profile of the clearing member in connection with the business expansion request in order to verify that the clearing member continues to meet OCC’s financial requirements. OCC believes that a second risk review by the Committee would be duplicative because the Committee has already analyzed and approved the clearing member’s ability to participate in stock loan activity at OCC. In addition, OCC does not believe that review and approval of this type of business expansion request is an appropriate use of the Committee’s time given other, more substantive, issues the Committee must consider. Therefore, OCC is amending Article V, Section 1, Interpretation and Policy .03 of its ByLaws to provide the Executive Chairman, the President, or their delegate with the authority to approve the business expansion requests of Hedge Clearing Members to become Market Loan Clearing Members without further review by the Committee, provided that any delegate be an officer of the rank of Senior Vice President or higher. According to OCC, it will implement appropriate procedures to ensure that Hedge Clearing Members meet the requirements to become Market Loan Clearing Members and participate and the Market Loan Program. II. Discussion and Commission Findings Section 19(b)(2)(C) of the Act 9 directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. The Commission finds that the proposed rule change is consistent with Section 17A(b)(3)(F) of the Act,10 which requires the rules of a registered clearing agency to, among other things, remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transitions. OCC’s rule is consistent with Section 17A(b)(3)(F) of the Act 11 because by providing the Executive Chairman, the President or their delegate, provided the delegate is a Senior Vice President or higher, the authority to review and approve the business expansion requests of Hedge Clearing Members that would like to become Market Loan Clearing Members without further review by the Committee, the Committee can have more time to focus on more substantive matters. As discussed above, the Committee will have already analyzed and approved the clearing member’s ability to meet OCC’s financial requirements when it approved the clearing member as a Hedge Clearing Member. This business expansion review and approval process can be accomplished by OCC’s Executive Chairman, the President, or their delegate, provided that the delegate is an officer of the rank of Senior Vice President or higher, because it is primarily administrative in nature and includes a verification that the clearing member still meets OCC’s financial requirements. By giving the Committee more time to focus on more substantive matters, this rule is consistent with removing impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transitions.12 III. 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 13 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,14 that the proposed rule change (SR–OCC–2014– 19) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–28766 Filed 12–8–14; 8:45 am] BILLING CODE 8011–01–P 11 Id. 12 See id. approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 14 15 U.S.C. 78s(b)(2). 15 17 CFR 200.30–3(a)(12). 13 In 7 See OCC By-Laws, Article 1.L(5). OCC By-Laws, Article V, Section 1, Interpretation and Policy .07A. 9 15 U.S.C. 78s(b)(2)(C). 10 15 U.S.C. 78q–1(b)(3)(F). 8 See, PO 00000 Frm 00104 Fmt 4703 Sfmt 9990 73129 E:\FR\FM\09DEN1.SGM 09DEN1

Agencies

[Federal Register Volume 79, Number 236 (Tuesday, December 9, 2014)]
[Notices]
[Pages 73128-73129]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-28766]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73725; File No. SR-OCC-2014-19]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Approving Proposed Rule Change To Permit the Executive Chairman, 
the President or a Delegate of Such Officer To Approve Requests by a 
Hedge Clearing Member To Become a Market Loan Clearing Member

December 3, 2014.
    On October 24, 2014, The Options Clearing Corporation (``OCC'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change SR-OCC-2014-19 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder.\2\ The proposed rule change was published for comment in 
the Federal Register on November 3, 2014.\3\ The Commission did not 
receive any comments on the proposed rule change. This order approves 
the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 73449 (October 28, 
2014), 79 FR 65277 (November 3, 2014) (SR-OCC-2014-19).
---------------------------------------------------------------------------

I. Description

    The purpose of OCC's rule change is permit OCC's Executive 
Chairman, the President or their delegate to approve business expansion 
requests of Hedge Clearing Members \4\ to become Market Loan Clearing 
Members.\5\ Delegates of

[[Page 73129]]

the Executive Chairman and/or the President must be an officer of the 
rank of Senior Vice President or higher. Currently, OCC's By-Laws 
require that requests of a Hedge Clearing Member to become a Market 
Loan Clearing Member be processed through OCC's business expansion 
process, which involves review and approval by OCC's Risk Committee 
(``Committee''). As described below, this type of business expansion 
request is operational and administrative in nature and OCC does not 
believe review and approval of this type of business expansion request 
requires the Committee to assess the risk of such designation. 
Accordingly, OCC is amending its rules to permit the Executive 
Chairman, the President, or their delegate to approve business 
expansion requests of Hedge Clearing Members to become Market Loan 
Clearing Members without further review by the Committee, provided that 
any delegate be an officer of the rank of Senior Vice President or 
higher.
---------------------------------------------------------------------------

    \4\ See OCC By-Laws, Article 1.H(1). See also, OCC By-Laws, 
Article V, Section 1, Interpretation and Policy .07.
    \5\ See OCC By-Laws, Article 1.M(4). See also, OCC By-Laws, 
Article V, Section 1, Interpretation and Policy .07A.
---------------------------------------------------------------------------

    According to OCC, the Committee is responsible for reviewing and 
approving clearing member requests to clear a type or a kind of 
transaction for which it is not currently approved to clear through OCC 
(i.e., a business expansion request).\6\ The Committee has delegated 
the Executive Chairman, the Management Vice Chairman, the President, or 
their delegate with authority to review and approve business expansion 
requests in response to requests by clearing members for expedited 
review. Such approval is then subject to the Committee's review and 
ratification at its next regularly scheduled meeting. If a clearing 
member does not request expedited review of a business expansion 
request then such request will be reviewed by the Committee at a 
regularly scheduled meeting of the Committee, and not by the Executive 
Chairman, the Management Vice Chairman, the President, or their 
delegate.
---------------------------------------------------------------------------

    \6\ See OCC By-Laws, Article V, Section 1, Interpretation and 
Policy .03(e).
---------------------------------------------------------------------------

    In the case of a Hedge Clearing Member requesting a business 
expansion in order to be approved as Market Loan Clearing Member, the 
clearing member will have already been subject a robust risk review by 
the Committee concerning such clearing member's ability to participate 
in stock loan activity at OCC. Accordingly, the review of the Market 
Loan business expansion request by either the Committee and/or the 
Executive Chairman, the Management Vice Chairman, the President, or 
their delegate would be primarily operational in nature and involve 
ensuring that the clearing member: (1) Is a U.S. Clearing Member, (2) 
is a member of a Loan Market,\7\ (3) is a participant of the Depository 
Trust Company and has executed certain agreements with the Depository 
Trust Company, and (4) executes applicable agreements with OCC.\8\ The 
Committee and/or the Executive Chairman, the Management Vice Chairman, 
the President, or their delegate would also review the current 
financial risk profile of the clearing member in connection with the 
business expansion request in order to verify that the clearing member 
continues to meet OCC's financial requirements. OCC believes that a 
second risk review by the Committee would be duplicative because the 
Committee has already analyzed and approved the clearing member's 
ability to participate in stock loan activity at OCC. In addition, OCC 
does not believe that review and approval of this type of business 
expansion request is an appropriate use of the Committee's time given 
other, more substantive, issues the Committee must consider. Therefore, 
OCC is amending Article V, Section 1, Interpretation and Policy .03 of 
its By-Laws to provide the Executive Chairman, the President, or their 
delegate with the authority to approve the business expansion requests 
of Hedge Clearing Members to become Market Loan Clearing Members 
without further review by the Committee, provided that any delegate be 
an officer of the rank of Senior Vice President or higher. According to 
OCC, it will implement appropriate procedures to ensure that Hedge 
Clearing Members meet the requirements to become Market Loan Clearing 
Members and participate and the Market Loan Program.
---------------------------------------------------------------------------

    \7\ See OCC By-Laws, Article 1.L(5).
    \8\ See, OCC By-Laws, Article V, Section 1, Interpretation and 
Policy .07A.
---------------------------------------------------------------------------

II. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \9\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if it 
finds that the proposed rule change is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to such 
organization.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2)(C).
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent 
with Section 17A(b)(3)(F) of the Act,\10\ which requires the rules of a 
registered clearing agency to, among other things, remove impediments 
to and perfect the mechanism of a national system for the prompt and 
accurate clearance and settlement of securities transitions. OCC's rule 
is consistent with Section 17A(b)(3)(F) of the Act \11\ because by 
providing the Executive Chairman, the President or their delegate, 
provided the delegate is a Senior Vice President or higher, the 
authority to review and approve the business expansion requests of 
Hedge Clearing Members that would like to become Market Loan Clearing 
Members without further review by the Committee, the Committee can have 
more time to focus on more substantive matters. As discussed above, the 
Committee will have already analyzed and approved the clearing member's 
ability to meet OCC's financial requirements when it approved the 
clearing member as a Hedge Clearing Member. This business expansion 
review and approval process can be accomplished by OCC's Executive 
Chairman, the President, or their delegate, provided that the delegate 
is an officer of the rank of Senior Vice President or higher, because 
it is primarily administrative in nature and includes a verification 
that the clearing member still meets OCC's financial requirements. By 
giving the Committee more time to focus on more substantive matters, 
this rule is consistent with removing impediments to and perfect the 
mechanism of a national system for the prompt and accurate clearance 
and settlement of securities transitions.\12\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78q-1(b)(3)(F).
    \11\ Id.
    \12\ See id.
---------------------------------------------------------------------------

III. 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 \13\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \13\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change (SR-OCC-2014-19) be, and it 
hereby is, approved.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-28766 Filed 12-8-14; 8:45 am]
BILLING CODE 8011-01-P
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