Self-Regulatory Organizations; The Options Clearing Corporation; Order Instituting Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Concerning Updates to and Formalization of OCC's Recovery and Orderly Wind-Down Plan, 13176-13178 [2018-06106]

Download as PDF 13176 Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices amozie on DSK30RV082PROD with NOTICES higher tiers of Market Maker Plus. More specifically, this change is designed to permit Market Makers to aim for a higher tier at the end of month without potentially removing one of those trading days from the calculation if it is the Market Maker’s best quoting day for the month. The Exchange believes that this will allow Market Makers to quote more aggressively at the end of the month in order to qualify for a higher tier of Market Maker Plus, and thereby contribute to market quality in Select Symbols. Furthermore, with the change described above, the Exchange believes that it is reasonable and equitable now to remove the language about removing the day only when doing so will qualify the Market Maker for the rebate. This language is no longer needed since removing the worst day will always be better for the Market Maker. Finally, the Exchange believes that these changes are equitable and not unfairly discriminatory as all Market Makers will be subject to the same qualification criteria for Market Maker Plus. The proposed fee changes described in this proposed rule change are applicable solely to Market Makers as the Market Maker Plus program, which is designed to encourage Market Makers to maintain quality markets, applies only to these members. The Exchange continues to believe that it is not unfairly discriminatory to offer rebates under this program only to Market Makers since Market Makers, and, in particular, those Market Makers that achieve Market Maker Plus status, are subject to additional requirements and obligations (such as quoting requirements) that other market participants are not. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed fee changes are procompetitive as they are designed to encourage Market Makers to make quality markets in Select Symbols. The Exchange believes that the Market Maker Plus program will continue to encourage competition by incentivizing Market Makers to provide liquidity and maintain tight markets in Select Symbols. The Exchange operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its VerDate Sep<11>2014 18:07 Mar 26, 2018 Jkt 244001 fees to remain competitive. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,15 and Rule 19b–4(f)(2) 16 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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– ISE–2018–20 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–ISE–2018–20. 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 15 15 16 17 PO 00000 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). Frm 00058 Fmt 4703 Sfmt 4703 only one method. The Commission will post all comments on the Commission’s internet website (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 website 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2018–20 and should be submitted on or before April 17, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–06099 Filed 3–26–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–82927; File No. SR–OCC– 2017–021] Self-Regulatory Organizations; The Options Clearing Corporation; Order Instituting Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Concerning Updates to and Formalization of OCC’s Recovery and Orderly Wind-Down Plan March 22, 2018. I. Introduction On December 8, 2017, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–OCC–2017– 021 (‘‘Proposed Rule Change’’), pursuant to Section 19(b) of the Securities Exchange Act of 1934 17 17 E:\FR\FM\27MRN1.SGM CFR 200.30–3(a)(12). 27MRN1 Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices (‘‘Act’’),1 and Rule 19b–4 thereunder.2 The Proposed Rule Change was published for comment in the Federal Register on December 26, 2017.3 On January 25, 2018, the Comission designated a longer period within which to approve the Proposed Rule Change, disapprove the Proposed Rule Change, or institute proceedings to determine whether to approve or disapprove the Proposed Rule Change.4 The Commission is publishing this order pursuant to Section 19(b)(2)(B) of the Act 5 to institute proceedings to determine whether to approve or disapprove the Proposed Rule Change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to the Proposed Rule Change, nor does it mean that the Commission will ultimately disapprove the Proposed Rule Change. Rather, as discussed below, the Commission seeks additional input on the Proposed Rule Change and issues presented by the proposal. II. Description of the Proposed Rule Change 6 The Proposed Rule Change would formalize and update OCC’s Recovery and Wind-Down (‘‘RWD’’) Plan. In its proposal,7 OCC stated that the purpose of the proposed RWD Plan is to (i) demonstrate that OCC has considered the scenarios which may potentially prevent it from being able to provide its ‘‘Critical Services’’ (defined below) as a 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Securities Exchange Act Release No. 82352 (Dec. 19, 2017), 82 FR 61072 (Dec. 26, 2017) (SR–OCC– 2017–021) (‘‘Notice’’). On December 8, 2017, OCC also filed a related advance notice (SR–OCC–2017– 810) with the Commission pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled the Payment, Clearing, and Settlement Supervision Act of 2010 and Rule 19b–4(n)(1)(i) under the Act (‘‘Advance Notice’’). 12 U.S.C. 5465(e)(1) and 17 CFR 240.19b–4(n)(1)(i), respectively. The Advance Notice was published in the Federal Register on January 23, 2018. Securities Exchange Act Release No. 82513 (Jan. 17, 2018), 83 FR 3224 (Jan. 23, 2018) (SR–OCC–2017–810). The Financial Stability Oversight Council designated OCC a systemically important financial market utility on July 18, 2012. See Financial Stability Oversight Council 2012 Annual Report, Appendix A, available at https://www.treasury.gov/ initiatives/fsoc/Documents/2012%20 Annual%20Report.pdf. Therefore, OCC is required to comply with the Payment, Clearing and Settlement Supervision Act and file advance notices with the Commission. See 12 U.S.C. 5465(e). 4 Securities Exchange Act Release No. 82586 (Jan. 25, 2018), 83 FR 4527 (Jan. 31, 2018) (File No. SR– OCC–2017–021). 5 15 U.S.C. 78s(b)(2)(B). 6 The description of the Proposed Rule Change is substantially excerpted from the Notice. See Notice, supra note 3, 82 FR at 61073–80. 7 See id. at 61073. amozie on DSK30RV082PROD with NOTICES 2 17 VerDate Sep<11>2014 18:07 Mar 26, 2018 Jkt 244001 going-concern,8 (ii) provide appropriate plans for OCC’s recovery or orderly wind-down based on the results of such consideration; 9 and (iii) impart to relevant authorities the information reasonably anticipated to be necessary for purposes of recovery and orderly wind-down planning.10 The proposed RWD Plan consists of eight chapters.11 Chapter 1 of the RWD Plan would provide an executive summary and overview of the proposed Plan.12 Chapter 2 of the proposed RWD Plan is designed to impart information that OCC believes would be essential to relevant authorities for purposes of recovery and orderly wind-down planning, as well as to provide readers of the RWD Plan with necessary context for the subsequent discussion and analysis of OCC’s ‘‘Critical Services’’ and ‘‘Critical Support Functions’’ in Chapter 4 (discussed below) and of OCC’s resolution process in Chapter 6 (discussed below).13 In Chapter 3 of the proposed RWD Plan, OCC would identify each of its fourteen different internal support functions and provide a brief description of the activities performed by each such support function.14 The primary purpose of Chapter 4 of the proposed RWD Plan would be to identify OCC’s ‘‘Critical Services’’ and ‘‘Critical Support Functions.’’ 15 Chapter 5 of OCC’s proposed RWD Plan would constitute OCC’s Recovery Plan.16 the purpose of Chapter 5 would be to demonstrate that OCC has considered scenarios which may potentially prevent it from being able to provide its Critical Services as a goingconcern and that, based on the scenarios considered, OCC has prepared appropriate plans for its recovery.17 8 As defined by Rule 17Ad–22(e)(3)(ii), those scenarios are: ‘‘credit losses, liquidity shortfalls, losses from general business risks and other losses.’’ 17 CFR 240.17Ad–22(e)(3)(ii). 9 See Standards for Covered Clearing Agencies, 81 FR 70786, 70810 (Oct. 13, 2016). 10 Id. 11 Notice, supra note 3, 82 FR at 61073. 12 Id. 13 Id. at 61074. 14 Id. 15 Id. The RWD Plan would define a ‘‘Critical Service’’ as a service provided by OCC that, if interrupted, would likely have a material negative impact on participants or significant third parties, give rise to contagion, or undermine the general confidence of markets the FMU serves. Id. 16 Id. at 61075. 17 Id. For the purposes of the RWD Plan, OCC would define ‘‘recovery’’ consistent with the definition advanced by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions, which is ‘‘the actions of [a Financial Market Utility (‘‘FMI’’)], consistent with its rules, procedures, and other exante contractual arrangements, to address any uncovered credit loss, liquidity shortfall, capital PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 13177 Chapter 6 of OCC’s proposed RWD Plan would constitute OCC’s Wind-Down Plan (‘‘WDP’’).18 Chapter 6 would demonstrate that OCC has considered scenarios which may potentially prevent it from being able to provide its Critical Services as a going-concern and that OCC has adequately evaluated plans for its orderly wind-down.19 Chapter 7 of OCC’s proposed Plan would memorialize the prior governance for approval of the earlier drafts of OCC’s recovery and orderly wind-down plan and would establish an internal governance process for the maintenance, review and approval of the proposed RWD Plan.20 III. Proceedings To Determine Whether To Approve or Disapprove File No. SR– OCC–2017–021 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether the Proposed Rule Change should be approved or disapproved.21 Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the Proposed Rule Change. As noted above, institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, the Commission seeks and encourages interested persons to provide additional comment on the Proposed Rule Change and provide arguments to support the Commission’s analysis as to whether to approve or disapprove the Proposed Rule Change. Pursuant to Section 19(b)(2)(B) of the Act,22 the Commission is providing notice of the grounds for disapproval under consideration. The Commission is inadequacy, or business, operational or other structural weakness, including the replenishment of any depleted pre-funded financial resources and liquidity arrangements, as necessary to maintain the FMI’s viability as a going concern.’’ Id., note 30 (citation omitted). 18 Id. at 61080. 19 Id. For the purposes of the RWD Plan, OCC would frame its wind-down objective consistent with the objective advanced by the Financial Stability Board for CCP resolution: ‘‘CCP resolution should have as its objective the pursuit of financial stability and ensure the continuity of critical CCP functions in all jurisdictions where those functions are critical and without exposing taxpayers to risk of loss. . . .The objectives of CCP resolution can be achieved either by: (i) Restoring the ability of the CCP to continue to perform its critical functions as a going concern; or (ii) ensuring continued performance of those functions by another entity or arrangement (including a bridge entity established by the resolution authority) coupled with the orderly wind-down of the residual CCP in resolution.’’ Id., note 54 (citation omitted). 20 Id. at 61080. 21 15 U.S.C. 78s(b)(2)(B). 22 Id. E:\FR\FM\27MRN1.SGM 27MRN1 13178 Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / Notices instituting proceedings to allow for additional analysis, and input from, commenters with respect to the Proposed Rule Change’s consistency with the Act and the rules thereunder, including the following: • Section 17A(b)(3)(F) of the Act,23 which requires, in part, that the rules of a clearing agency be designed to promote the prompt and accurate clearnance and settlement of securities transactions, assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible, and, in general, to protect investors and the public interest; and • Rule 17Ad–22(e)(3)(ii) of the Act,24 which requires a covered clearing agency to establish, implement, maintain and enforce written policies and procedures reasonably designed to plan for the recovery and orderly winddown of the covered clearing agency necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses. IV. Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the Proposed Rule Change with respect to the issues identified above, as well as any other concerns they may have with the Proposed Rule Change. In particular, the Commission invites the written views of interested persons concerning whether the Proposed Rule Change is consistent with Section 17A(b)(3)(F) and Rule 17Ad–22(e)(3)(ii) under the Act, cited above, or any other provision of the Act, rules, and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4, any request for an opportunity to make an oral presentation.25 Interested persons are invited to submit written data, views, and arguments regarding whether the Proposed Rule Change should be approved or disapproved by April 17, 23 15 U.S.C. 78q–1(b)(3)(F). CFR 17Ad–22(e)(3)(ii). 25 Section 19(b)(2) of the Act, as amended by the Securities Acts Amendments of 1975, Public Law 94–29, 89 Stat. 97 (1975), grants the Commission flexibility to determine what type of proceeding— either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Acts Amendments of 1975, Report of the Senate Committee on Banking, Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). amozie on DSK30RV082PROD with NOTICES 24 17 VerDate Sep<11>2014 18:07 Mar 26, 2018 Jkt 244001 2018. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by May 1, 2018. Comments may be submitted by any of the following methods: • 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 No. SR– OCC–2017–020 on the subject line. Paper Comments All submissions should refer to File No. SR–OCC–2017–020. 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 website (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 website 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 filing also will be available for inspection and copying at the principal office of OCC and on OCC’s website at https://www.theocc.com/about/ publications/bylaws.jsp. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–OCC–2017–021 and should be submitted on or before April 17, 2018. If comments are received, any rebuttal comments should be submitted on or before May 1, 2018. Fmt 4703 DEPARTMENT OF THE TREASURY Agency Information Collection Activities; Submission for OMB Review; Comment Request; Multiple IRS Information Collection Requests Departmental Offices, U.S. Department of the Treasury. ACTION: Notice. AGENCY: • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. Frm 00060 [FR Doc. 2018–06106 Filed 3–26–18; 8:45 am] BILLING CODE 8011–01–P Electronic Comments PO 00000 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Eduardo A. Aleman, Assistant Secretary. Sfmt 4703 The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on these requests. DATES: Comments should be received on or before April 26, 2018 to be assured of consideration. ADDRESSES: Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at OIRA_Submission@ OMB.EOP.gov and (2) Treasury PRA Clearance Officer, 1750 Pennsylvania Ave. NW, Suite 8142, Washington, DC 20220, or email at PRA@treasury.gov. FOR FURTHER INFORMATION CONTACT: Copies of the submissions may be obtained from Jennifer Quintana by emailing PRA@treasury.gov, calling (202) 622–0489, or viewing the entire information collection request at www.reginfo.gov. SUMMARY: SUPPLEMENTARY INFORMATION: Internal Revenue Service (IRS) 1. Title: Mortgage Credit Certificates (MCCs). OMB Control Number: 1545–0922. Type of Review: Extension without change of a currently approved collection. Abstract: Mortgage Credit Certificates provide qualified holders of the certificates with a credit against income 26 17 E:\FR\FM\27MRN1.SGM CFR 200.30–3(a)(12). 27MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 83, Number 59 (Tuesday, March 27, 2018)]
[Notices]
[Pages 13176-13178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06106]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82927; File No. SR-OCC-2017-021]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Instituting Proceedings To Determine Whether To Approve or 
Disapprove the Proposed Rule Concerning Updates to and Formalization of 
OCC's Recovery and Orderly Wind-Down Plan

March 22, 2018.

I. Introduction

    On December 8, 2017, The Options Clearing Corporation (``OCC'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change SR-OCC-2017-021 (``Proposed Rule Change''), 
pursuant to Section 19(b) of the Securities Exchange Act of 1934

[[Page 13177]]

(``Act''),\1\ and Rule 19b-4 thereunder.\2\ The Proposed Rule Change 
was published for comment in the Federal Register on December 26, 
2017.\3\ On January 25, 2018, the Comission designated a longer period 
within which to approve the Proposed Rule Change, disapprove the 
Proposed Rule Change, or institute proceedings to determine whether to 
approve or disapprove the Proposed Rule Change.\4\ The Commission is 
publishing this order pursuant to Section 19(b)(2)(B) of the Act \5\ to 
institute proceedings to determine whether to approve or disapprove the 
Proposed Rule Change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 82352 (Dec. 19, 2017), 
82 FR 61072 (Dec. 26, 2017) (SR-OCC-2017-021) (``Notice''). On 
December 8, 2017, OCC also filed a related advance notice (SR-OCC-
2017-810) with the Commission pursuant to Section 806(e)(1) of Title 
VIII of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act, entitled the Payment, Clearing, and Settlement Supervision Act 
of 2010 and Rule 19b-4(n)(1)(i) under the Act (``Advance Notice''). 
12 U.S.C. 5465(e)(1) and 17 CFR 240.19b-4(n)(1)(i), respectively. 
The Advance Notice was published in the Federal Register on January 
23, 2018. Securities Exchange Act Release No. 82513 (Jan. 17, 2018), 
83 FR 3224 (Jan. 23, 2018) (SR-OCC-2017-810).
    The Financial Stability Oversight Council designated OCC a 
systemically important financial market utility on July 18, 2012. 
See Financial Stability Oversight Council 2012 Annual Report, 
Appendix A, available at https://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf. Therefore, OCC is required to 
comply with the Payment, Clearing and Settlement Supervision Act and 
file advance notices with the Commission. See 12 U.S.C. 5465(e).
    \4\ Securities Exchange Act Release No. 82586 (Jan. 25, 2018), 
83 FR 4527 (Jan. 31, 2018) (File No. SR-OCC-2017-021).
    \5\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Institution of proceedings does not indicate that the Commission 
has reached any conclusions with respect to the Proposed Rule Change, 
nor does it mean that the Commission will ultimately disapprove the 
Proposed Rule Change. Rather, as discussed below, the Commission seeks 
additional input on the Proposed Rule Change and issues presented by 
the proposal.

II. Description of the Proposed Rule Change ^\6\
---------------------------------------------------------------------------

    \6\ The description of the Proposed Rule Change is substantially 
excerpted from the Notice. See Notice, supra note 3, 82 FR at 61073-
80.
---------------------------------------------------------------------------

    The Proposed Rule Change would formalize and update OCC's Recovery 
and Wind-Down (``RWD'') Plan. In its proposal,\7\ OCC stated that the 
purpose of the proposed RWD Plan is to (i) demonstrate that OCC has 
considered the scenarios which may potentially prevent it from being 
able to provide its ``Critical Services'' (defined below) as a going-
concern,\8\ (ii) provide appropriate plans for OCC's recovery or 
orderly wind-down based on the results of such consideration; \9\ and 
(iii) impart to relevant authorities the information reasonably 
anticipated to be necessary for purposes of recovery and orderly wind-
down planning.\10\
---------------------------------------------------------------------------

    \7\ See id. at 61073.
    \8\ As defined by Rule 17Ad-22(e)(3)(ii), those scenarios are: 
``credit losses, liquidity shortfalls, losses from general business 
risks and other losses.'' 17 CFR 240.17Ad-22(e)(3)(ii).
    \9\ See Standards for Covered Clearing Agencies, 81 FR 70786, 
70810 (Oct. 13, 2016).
    \10\ Id.
---------------------------------------------------------------------------

    The proposed RWD Plan consists of eight chapters.\11\ Chapter 1 of 
the RWD Plan would provide an executive summary and overview of the 
proposed Plan.\12\ Chapter 2 of the proposed RWD Plan is designed to 
impart information that OCC believes would be essential to relevant 
authorities for purposes of recovery and orderly wind-down planning, as 
well as to provide readers of the RWD Plan with necessary context for 
the subsequent discussion and analysis of OCC's ``Critical Services'' 
and ``Critical Support Functions'' in Chapter 4 (discussed below) and 
of OCC's resolution process in Chapter 6 (discussed below).\13\ In 
Chapter 3 of the proposed RWD Plan, OCC would identify each of its 
fourteen different internal support functions and provide a brief 
description of the activities performed by each such support 
function.\14\ The primary purpose of Chapter 4 of the proposed RWD Plan 
would be to identify OCC's ``Critical Services'' and ``Critical Support 
Functions.'' \15\
---------------------------------------------------------------------------

    \11\ Notice, supra note 3, 82 FR at 61073.
    \12\ Id.
    \13\ Id. at 61074.
    \14\ Id.
    \15\ Id. The RWD Plan would define a ``Critical Service'' as a 
service provided by OCC that, if interrupted, would likely have a 
material negative impact on participants or significant third 
parties, give rise to contagion, or undermine the general confidence 
of markets the FMU serves. Id.
---------------------------------------------------------------------------

    Chapter 5 of OCC's proposed RWD Plan would constitute OCC's 
Recovery Plan.\16\ the purpose of Chapter 5 would be to demonstrate 
that OCC has considered scenarios which may potentially prevent it from 
being able to provide its Critical Services as a going-concern and 
that, based on the scenarios considered, OCC has prepared appropriate 
plans for its recovery.\17\ Chapter 6 of OCC's proposed RWD Plan would 
constitute OCC's Wind-Down Plan (``WDP'').\18\ Chapter 6 would 
demonstrate that OCC has considered scenarios which may potentially 
prevent it from being able to provide its Critical Services as a going-
concern and that OCC has adequately evaluated plans for its orderly 
wind-down.\19\ Chapter 7 of OCC's proposed Plan would memorialize the 
prior governance for approval of the earlier drafts of OCC's recovery 
and orderly wind-down plan and would establish an internal governance 
process for the maintenance, review and approval of the proposed RWD 
Plan.\20\
---------------------------------------------------------------------------

    \16\ Id. at 61075.
    \17\ Id. For the purposes of the RWD Plan, OCC would define 
``recovery'' consistent with the definition advanced by the 
Committee on Payments and Market Infrastructures and the 
International Organization of Securities Commissions, which is ``the 
actions of [a Financial Market Utility (``FMI'')], consistent with 
its rules, procedures, and other ex-ante contractual arrangements, 
to address any uncovered credit loss, liquidity shortfall, capital 
inadequacy, or business, operational or other structural weakness, 
including the replenishment of any depleted pre-funded financial 
resources and liquidity arrangements, as necessary to maintain the 
FMI's viability as a going concern.'' Id., note 30 (citation 
omitted).
    \18\ Id. at 61080.
    \19\ Id. For the purposes of the RWD Plan, OCC would frame its 
wind-down objective consistent with the objective advanced by the 
Financial Stability Board for CCP resolution: ``CCP resolution 
should have as its objective the pursuit of financial stability and 
ensure the continuity of critical CCP functions in all jurisdictions 
where those functions are critical and without exposing taxpayers to 
risk of loss. . . .The objectives of CCP resolution can be achieved 
either by: (i) Restoring the ability of the CCP to continue to 
perform its critical functions as a going concern; or (ii) ensuring 
continued performance of those functions by another entity or 
arrangement (including a bridge entity established by the resolution 
authority) coupled with the orderly wind-down of the residual CCP in 
resolution.'' Id., note 54 (citation omitted).
    \20\ Id. at 61080.
---------------------------------------------------------------------------

III. Proceedings To Determine Whether To Approve or Disapprove File No. 
SR-OCC-2017-021 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Act to determine whether the Proposed Rule Change 
should be approved or disapproved.\21\ Institution of proceedings is 
appropriate at this time in view of the legal and policy issues raised 
by the Proposed Rule Change. As noted above, institution of proceedings 
does not indicate that the Commission has reached any conclusions with 
respect to any of the issues involved. Rather, the Commission seeks and 
encourages interested persons to provide additional comment on the 
Proposed Rule Change and provide arguments to support the Commission's 
analysis as to whether to approve or disapprove the Proposed Rule 
Change.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\22\ the Commission is 
providing notice of the grounds for disapproval under consideration. 
The Commission is

[[Page 13178]]

instituting proceedings to allow for additional analysis, and input 
from, commenters with respect to the Proposed Rule Change's consistency 
with the Act and the rules thereunder, including the following:
---------------------------------------------------------------------------

    \22\ Id.
---------------------------------------------------------------------------

     Section 17A(b)(3)(F) of the Act,\23\ which requires, in 
part, that the rules of a clearing agency be designed to promote the 
prompt and accurate clearnance and settlement of securities 
transactions, assure the safeguarding of securities and funds which are 
in the custody or control of the clearing agency or for which it is 
responsible, and, in general, to protect investors and the public 
interest; and
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

     Rule 17Ad-22(e)(3)(ii) of the Act,\24\ which requires a 
covered clearing agency to establish, implement, maintain and enforce 
written policies and procedures reasonably designed to plan for the 
recovery and orderly wind-down of the covered clearing agency 
necessitated by credit losses, liquidity shortfalls, losses from 
general business risk, or any other losses.
---------------------------------------------------------------------------

    \24\ 17 CFR 17Ad-22(e)(3)(ii).
---------------------------------------------------------------------------

IV. Request for Written Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
Proposed Rule Change with respect to the issues identified above, as 
well as any other concerns they may have with the Proposed Rule Change. 
In particular, the Commission invites the written views of interested 
persons concerning whether the Proposed Rule Change is consistent with 
Section 17A(b)(3)(F) and Rule 17Ad-22(e)(3)(ii) under the Act, cited 
above, or any other provision of the Act, rules, and regulations 
thereunder.
    Although there do not appear to be any issues relevant to approval 
or disapproval that would be facilitated by an oral presentation of 
views, data, and arguments, the Commission will consider, pursuant to 
Rule 19b-4, any request for an opportunity to make an oral 
presentation.\25\
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    \25\ Section 19(b)(2) of the Act, as amended by the Securities 
Acts Amendments of 1975, Public Law 94-29, 89 Stat. 97 (1975), 
grants the Commission flexibility to determine what type of 
proceeding--either oral or notice and opportunity for written 
comments--is appropriate for consideration of a particular proposal 
by a self-regulatory organization. See Securities Acts Amendments of 
1975, Report of the Senate Committee on Banking, Housing and Urban 
Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess. 
30 (1975).
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    Interested persons are invited to submit written data, views, and 
arguments regarding whether the Proposed Rule Change should be approved 
or disapproved by April 17, 2018. Any person who wishes to file a 
rebuttal to any other person's submission must file that rebuttal by 
May 1, 2018.
    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 [email protected]. Please include 
File No. SR-OCC-2017-020 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-OCC-2017-020. 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 website (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 website 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 filing also will be available for inspection 
and copying at the principal office of OCC and on OCC's website at 
https://www.theocc.com/about/publications/bylaws.jsp.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File No. SR-OCC-2017-021 and should 
be submitted on or before April 17, 2018. If comments are received, any 
rebuttal comments should be submitted on or before May 1, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-06106 Filed 3-26-18; 8:45 am]
 BILLING CODE 8011-01-P

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