Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Proposed Rule Change To Establish a Regulatory Committee of The Options Clearing Corporation's Board of Directors, 54239-54243 [2019-22025]

Download as PDF Federal Register / Vol. 84, No. 196 / Wednesday, October 9, 2019 / Notices necessary or appropriate in furtherance of the purposes of the Act. The Exchange reiterates that the proposed rule change is being proposed in the context of a technology migration of the Cboe Affiliated Exchanges, and not as a competitive filing. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition because, largely, it does not make any substantive changes to the current Exchange Rules, and the one additional rule proposed is already an Exchange practice and is consistent with the rules of the Cboe Affiliated Exchanges. The proposed rule change merely intends to provide consolidated rules upon migration and are consistent with the terms, rules, and formatting presented in the shell Rulebook that will be in place come October 7, 2019. The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition because the proposed rules are the same as the Exchange’s current rules, and the one proposed additional rule is consistent with the rules of the Cboe Affiliated Exchanges, all of which have all been previously filed with the Commission. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing 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 for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 8 and subparagraph (f)(6) of Rule 19b–4 thereunder.9 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 10 normally does not become operative for 30 days after the date of its khammond on DSKJM1Z7X2PROD with NOTICES 8 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its 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. 10 17 CFR 240.19b–4(f)(6). 9 17 VerDate Sep<11>2014 17:13 Oct 08, 2019 Jkt 250001 filing. However, Rule 19b–4(f)(6)(iii) 11 permits the Commission to 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 it may implement the proposed rule change in connection with the technology migration on October 7, 2019. According to the Exchange, waiver of the operative delay will help to avoid any potential confusion by providing investors with a complete Exchange Rulebook upon the completion of migration. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposed rule change raises no new or novel issues and makes only non-substantive changes to the rules. Therefore, the Commission hereby waives the operative delay and designates the proposal operative upon filing.12 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 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change 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– CBOE–2019–071 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. 11 17 CFR 240.19b–4(f)(6)(iii). purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 12 For PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 54239 All submissions should refer to File Number SR–CBOE–2019–071. 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 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–CBOE–2019–071 and should be submitted on or before October 30, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–22016 Filed 10–8–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87207; File No. SR–OCC– 2019–008] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Proposed Rule Change To Establish a Regulatory Committee of The Options Clearing Corporation’s Board of Directors October 3, 2019. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 13 17 E:\FR\FM\09OCN1.SGM CFR 200.30–3(a)(12). 09OCN1 54240 Federal Register / Vol. 84, No. 196 / Wednesday, October 9, 2019 / Notices (‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 25, 2019, 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 The proposed rule change would establish the OCC Regulatory Committee (‘‘Committee’’) and adopt the OCC Regulatory Committee Charter (‘‘Committee Charter’’). The Committee Charter is being submitted in its entirety as new rule text. A corresponding proposed change to OCC’s Article III, Section 4 of the OCC By-Laws (‘‘ByLaws’’) and the OCC Board of Directors Charter and Corporate Governance Principles (‘‘Board Charter’’) would be adopted in to list the Committee among the other OCC Board of Directors (‘‘Board’’) committees. The proposed rule change does not require any changes to the text of OCC’s Rules. The proposed rule change is available on OCC’s website at https:// www.theocc.com/about/publications/ bylaws.jsp. All terms with initial capitalization that are not otherwise defined herein have the same meaning as set forth in the OCC By-Laws and Rules.3 II. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change khammond on DSKJM1Z7X2PROD with NOTICES In its filing with the Commission, OCC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. OCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 OCC’s By-Laws and Rules can be found on OCC’s public website: https://optionsclearing.com/ about/publications/bylaws.jsp. A. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Background OCC is filing this proposed rule change to establish a Board-level Regulatory Committee that would: (a) Operate separately from the current OCC Audit Committee; (b) complement the work done by independent consultants on regulatory compliance matters; (c) take over and continues the work done by the current OCC Regulatory Oversight Working Group (‘‘ROWG’’), including but not limited to OCC’s efforts to demonstrate compliance with applicable laws and regulations; and (d) be solely comprised of OCC’s Public Directors, as that term is defined in the Board Charter.4 For the avoidance of doubt, upon approval of the proposed Committee Charter, the ROWG will cease to exist. The contents of the proposed rule change are summarized as follows. Regulatory Committee Charter Committee Purpose The proposed Committee Charter would state that the OCC Board has established the Committee to assist the Board in overseeing OCC’s efforts to demonstrate compliance with its regulatory obligations with particular attention to the OCC Regulatory Compliance Oversight Group (‘‘RCOG’’), a working group established by OCC management. The proposed Committee Charter would explain that given OCC’s designation as a Systemically Important Financial Market Utility, the Board believes it is critical that OCC demonstrate its continued strong commitment to compliance with applicable regulations in the conduct of its core clearance and settlement activities. The proposed Committee Charter would also state that nothing in the Committee Charter alters the existing roles and responsibilities of other Board Committees. Committee Membership and Organization Composition The proposed Committee Charter would provide that the Committee will be comprised of all OCC Public Directors, as that term is defined in the Board Charter. The proposed Committee Charter would state that (i) unless a chair of the Committee (‘‘Chair’’) is 17:13 Oct 08, 2019 Jkt 250001 Meetings The proposed Committee Charter would provide that the Committee will meet at least quarterly, or more frequently, as deemed necessary by the Committee in order to fulfill its purposes as described in the Committee Charter. The proposed Committee Charter would additionally provide that other meetings may be called by the Chair as circumstances dictate. The proposed Committee Charter would explain that the Chair or designee, in consultation with OCC management, as well as the OCC Corporate Secretary, would establish the agenda for Committee meetings. The proposed Committee Charter would state that members of the Committee may ask members of OCC management or others to attend the meeting and provide pertinent information as necessary. The proposed Committee Charter would provide that the OCC Chief Compliance Officer, or one of his or her deputies if the Chief Compliance Officer in unable to attend, shall attend all meetings of the Committee. The proposed Committee Charter would provide that the Committee may call executive sessions from which members of management and invited guests, and other Committee members to the extent the Chair determines there exists an actual or potential conflict of interest, may be excluded. The proposed Committee Charter would explain that the Chair or acting Chair, as applicable, would serve as Chair for the executive session. The proposed Committee Charter would explain that members of the Committee may participate in meetings by means of a conference telephone call or other means of communication that allows all participants in the meeting to hear each other. Quorum 2 17 VerDate Sep<11>2014 elected by the Board, the members of the Committee will designate a Chair by majority vote of the full membership, and (ii) in the absence of the Chair at any meeting of the Committee, those members of the Committee present would designate a Committee member to serve as acting Chair. The proposed Committee Charter would explain that in the event of a vacancy on the Committee, the Committee would continue to undertake its responsibilities, so long as the remaining Committee members are capable of satisfying the quorum requirement. 4 OCC’s Board Charter can be found on OCC’s website: https://www.theocc.com/about/corporateinformation/board-charter.jsp. PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 The proposed Committee Charter would state that a simple majority of the E:\FR\FM\09OCN1.SGM 09OCN1 Federal Register / Vol. 84, No. 196 / Wednesday, October 9, 2019 / Notices Committee members would constitute a quorum for the transaction of business. khammond on DSKJM1Z7X2PROD with NOTICES Minutes and Reports The proposed Committee Charter would require that the Committee maintain minutes of all Committee meetings. The proposed Committee Charter would explain that the Chair or acting Chair, as applicable, would determine whether separate minutes of executive sessions are to be recorded as well as determined by the level of detail to be included in such minutes, taking into consideration the sensitivity of the matters to be discussed and the possibility that candor might be limited if detailed minutes are recorded. The proposed Committee Charter would provide that meeting minutes would reflect that an executive session was convened and broadly describe the topic(s) discussed. The proposed Committee Charter would require that minutes of Committee meetings are circulated to the Board. The proposed Committee Charter would provide that the Committee would make such reports to the Board as deemed necessary or advisable and that the Chair is responsible for ensuring that important issues discussed at Committee meetings are reported timely to the Board. The proposed Committee Charter would require that on an annual basis, the Committee would provide a report to the Board summarizing its activities during the previous year. Committee Authority The proposed Committee Charter would provide that subject to the direction of the Board, the Committee is authorized to act on behalf of the Board with respect to any matter necessary or appropriate to the accomplishment of the purpose and responsibilities set forth in the Committee Charter. The proposed Committee Charter would further provide that in discharging its role, the Committee may inquire into any matter it considers appropriate to carry out its purpose and responsibilities, with access to all books, records, facilities and personnel of OCC and that the Committee may confer with management and other employees of OCC to the extent it may deem necessary or appropriate to fulfill its duties. The proposed Committee Charter would provide that the Committee would have the authority to hire specialists or rely upon other outside advisors, including legal advisors, to assist it in carrying out its activities. The proposed Committee Charter would also state that the Committee would have the VerDate Sep<11>2014 17:13 Oct 08, 2019 Jkt 250001 authority to approve the fees and retention terms applicable to such advisors and specialists. The proposed Committee Charter would require that the Committee’s annual report to the Board reference any engagement of specialists or outside advisors, including any fees and expenses associated therewith. Committee Functions and Responsibilities The proposed Committee Charter would state that the Committee’s role is one of oversight, and that it remains the responsibility of the RCOG to identify, manage, monitor, and report on OCC’s activities that demonstrate compliance with regulatory obligations. The proposed Committee Charter would provide that the Committee would have the following functions and responsibilities in discharging its oversight role: • The Committee would oversee, and assist the Board in evaluating, OCC’s efforts to demonstrate compliance with applicable laws and regulations, including banking and securities laws and other applicable regulatory guidance and standards, through regular reporting to the Committee by the RCOG. • The Committee would oversee OCC management’s action plans to achieve compliance with any proposed new regulation to which OCC is subject. • The Committee would oversee work performed by any independent compliance auditor(s) engaged by OCC and approved by the Board. • The Committee would make recommendations to the Board as it deems appropriate, and as the Board may request. • The Committee would meet with OCC’s regulators, with or without OCC management, as the Committee deems necessary, in order to discuss OCC’s efforts to enhance its regulatory compliance posture. • The Committee would review any annual regulatory compliance reports provided by OCC management. • The Committee would review any final exam report letter received from OCC’s regulators. Additionally, the Committee would review any OCC response to an exam report letter received from OCC’s regulators. The Committee would receive a briefing on OCC’s action plans, if any, in response to items identified in any final exam report letter received from OCC’s regulators. • The Committee would perform such other activities consistent with the Board Charter and By-Laws and applicable legal and regulatory PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 54241 requirements, as the Committee deems necessary or appropriate. Review Cycle The proposed Committee Charter would provide that the Committee review the Committee Charter at least once every twelve months and submit the Committee Charter to the Board for approval, with such changes, if any, as the Board deems advisable. The proposed Committee Charter would additionally provide that the Board would have the authority to diminish or eliminate the duties and obligations of the Committee as of the date of any final report of any independent compliance auditor, but in any case, no sooner than three years from the initial approval of the Committee Charter, subject to the approval of the Commission. By-Laws The proposed rule change would also adopt an amendment to the OCC ByLaws to include reference to the Regulatory Committee in Article III, Section 4 to list the Committee among the other OCC Board committees. The proposed By-Law provision would state that the Board shall appoint the Committee, having the powers and duties set forth in the By-Laws and Rules and as delegated by the Board. The proposed By-Law provision would state that the Committee members will be all OCC Public Directors. The proposed By-Law provision would state that the chairman of the Committee shall be designated by the Board or by a majority vote of the Committee membership from among the members of the Committee. Board Charter The proposed rule change would also adopt an amendment to the Committees section of the Board Charter to include reference to the Committee among the other Board committees. The proposed Board Charter amendment would state that the Board has established Boardlevel committees including: Audit, Compensation and Performance, Governance and Nominating, Regulatory, Risk and Technology. 2. Statutory Basis OCC believes the proposed rule change is consistent with Section 17A of the Act 5 and the rules thereunder applicable to OCC. Section 17A(b)(3)(A) of the Act 6 requires, among other things, that a clearing agency be so organized and have the capacity to be able to facilitate the prompt and 5 15 6 15 E:\FR\FM\09OCN1.SGM U.S.C. 78q–1. U.S.C. 78q–1(b)(3)(A). 09OCN1 khammond on DSKJM1Z7X2PROD with NOTICES 54242 Federal Register / Vol. 84, No. 196 / Wednesday, October 9, 2019 / Notices accurate clearance and settlement of securities transactions and derivatives agreements, contracts, and transactions for which it is responsible. OCC believes the proposed rule change is consistent with this requirement because the change would help ensure OCC has governance arrangements that are organized to support its ability to promptly and accurately serve Clearing Members and the markets for which it clears. For example, the proposed Committee Charter would provide that, among other things, the Committee would oversee OCC management’s action plans to achieve compliance with any proposed new regulation to which OCC is subject. OCC believes the proposed rule change is also consistent with the requirements in Rule 17Ad–22(e)(2)(i) 7 and (v) 8 to establish, implement, maintain and enforce written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent and that specify clear and direct lines of responsibility. The proposed rule change is also consistent with the requirement to have governance arrangements that specify clear and direct lines of responsibility because the Committee Charter would provide a clear statement of the functions and responsibilities of the Committee. For example, the proposed Committee Charter would provide that, among other things, the Committee would make recommendations to the Board as it deems appropriate, and as the Board may request. Additionally, the proposed Committee Charter would provide that nothing in the Committee Charter alters the existing roles and responsibilities of other Board Committees. Finally, including the Committee in the By-Laws and Board Charter provides for consistency with how other committees of the Board are represented in the ByLaws and Board Charter. OCC also believes that the proposed rule change is consistent with the requirement in Rule 17Ad–22(e)(3)(i) 9 to establish, implement, maintain and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for managing legal, credit, liquidity, operational, general business, investment, custody and other risks that arise in or are borne by OCC, including risk management policies, procedures, and systems that are designed to identify, measure, monitor, and manage such risks and that are subject to review 7 17 CFR 240.17Ad–22(e)(2)(i). CFR 240.17Ad–22(e)(2)(v). 9 17 CFR 240.17Ad–22(e)(3)(i). on a periodic basis and approved annually by the Board. For example, the Committee Charter would provide that, among other things, the Committee would oversee, and assist the Board in evaluating, OCC’s efforts to demonstrate compliance with applicable laws and regulations, including banking and securities laws and other applicable regulatory guidance and standards, through regular reporting to the Committee by the RCOG. Additionally, the Committee Charter would provide that the Committee will review the Committee Charter at least once every twelve months and submit the Committee Charter to the Board for approval, with such changes, if any, as the Committee deems advisable. The proposed rule change is not inconsistent with the existing rules of OCC, including any other rules proposed to be amended. B. Clearing Agency’s Statement on Burden on Competition OCC does not believe that the proposed rule change would impact or impose any burden on competition.10 The proposed rule change addresses one charter used in OCC’s governance structure, and all Clearing Members would be equally subject to these governance arrangements. Consequently, the Committee Charter, By-Laws and Board Charter would not provide any Clearing Member with a competitive advantage over any other Clearing Member. Further, the proposed rule change would not affect Clearing Member’s access to OCC’s services or impose any direct burdens on Clearing Members. Accordingly, the proposed rule change would not unfairly inhibit access to OCC’s services or disadvantage or favor any particular user in relationship to another user. For the foregoing reasons, OCC believes that the proposed rule change is in the public interest, would be consistent with the requirements of the Act applicable to clearing agencies, and would not impact or impose a burden on competition. C. Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were not and are not intended to be solicited with respect to the proposed rule change and none have been received. 8 17 VerDate Sep<11>2014 17:13 Oct 08, 2019 10 15 Jkt 250001 PO 00000 U.S.C. 78q–1(b)(3)(I). Frm 00141 Fmt 4703 Sfmt 4703 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 Exchange Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– OCC–2019–008 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–2019–008. 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 E:\FR\FM\09OCN1.SGM 09OCN1 Federal Register / Vol. 84, No. 196 / Wednesday, October 9, 2019 / Notices 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 Number SR–OCC–2019–008 and should be submitted on or before October 30, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Jill M. Petersen, Assistant Secretary. [FR Doc. 2019–22025 Filed 10–8–19; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration Number #16147 Disaster Number #ZZ–00015] The Entire United States and U.S. Territories; Military Reservist Economic Injury Disaster Loan Program (MREIDL) (Catalog of Federal Domestic Assistance Number 59008) U.S. Small Business Administration. ACTION: Notice. AGENCY: This is a notice of the Military Reservist Economic Injury Disaster Loan Program (MREIDL), dated 10/01/2019. DATES: Issued on 10/01/2019. MREIDL Loan Application Deadline Date: 1 year after the essential employee is discharged or released from active duty. SUMMARY: 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, (202) 205–6734. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of Public Law 106–50, the Veterans entrepreneurship and Small Business Development Act of 1999, and the Military Reservist and Veteran Small Business Reauthorization Act of 2008, this notice establishes the application filing period for the Military Reservist khammond on DSKJM1Z7X2PROD with NOTICES ADDRESSES: 11 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:13 Oct 08, 2019 Jkt 250001 Economic Injury Disaster Loan Program (MREIDL). Effective 10/01/2019, small businesses employing military reservists may apply for economic injury disaster loans if those employees are called up to active duty during a period of military conflict or have received notice of an expected call-up, and those employees are essential to the success of the small business daily operations. The purpose of the MREIDL program is to provide funds to an eligible small business to meet its ordinary and necessary operating expenses that it could have met, but is unable to meet, because an essential employee was called-up or expects to be called-up to active duty in his or her role as a military reservist. These loans are intended only to provide the amount of working capital needed by a small business to pay its necessary obligations as they mature until operations return to normal after the essential employee is released from active duty. For information/applications contact 1– 800–659–2955 or visit www.sba.gov. Applications for the Military Reservist Economic Injury Disaster Loan Program may be filed at the above address. The Interest Rate for eligible small businesses is 4.000. The number assigned is 161470. James Rivera, Associate Administrator for Disaster Assistance. 54243 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, (202) 205–6734. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the President’s major disaster declaration on 09/30/2019, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Beaufort, Berkeley, Charleston, Colleton, Dillon, Dorchester, Georgetown, Horry, Jasper, Marion, Williamsburg. The Interest Rates are: ADDRESSES: Percent For Physical Damage: Non-Profit Organizations with Credit Available Elsewhere ... Non-Profit Organizations without Credit Available Elsewhere ..................................... For Economic Injury: Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.750 2.750 2.750 [FR Doc. 2019–22040 Filed 10–8–19; 8:45 am] BILLING CODE 8026–03–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #16145 and #16146; SOUTH CAROLINA Disaster Number SC– 00060] Presidential Declaration of a Major Disaster for Public Assistance Only for the State of South Carolina U.S. Small Business Administration. ACTION: Notice. The number assigned to this disaster for physical damage is 161458 and for economic injury is 161460. (Catalog of Federal Domestic Assistance Number 59008) James Rivera, Associate Administrator for Disaster Assistance. [FR Doc. 2019–22039 Filed 10–8–19; 8:45 am] BILLING CODE 8026–03–P AGENCY: SURFACE TRANSPORTATION BOARD This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of SOUTH CAROLINA (FEMA–4464–DR), dated 09/30/2019. Incident: Hurricane Dorian. Incident Period: 08/31/2019 through 09/06/2019. DATES: Issued on 09/30/2019. Physical Loan Application Deadline Date: 11/29/2019. Economic Injury (EIDL) Loan Application Deadline Date: 06/30/2020. SUMMARY: PO 00000 Frm 00142 Fmt 4703 Sfmt 4703 [Docket No. AB 303 (Sub-No. 53X)] Wisconsin Central Ltd.— Discontinuance of Service Exemption—in Baraga County, Mich. Wisconsin Central Ltd. (WCL) has filed a verified notice of exemption under 49 CFR part 1152 subpart F— Exempt Abandonments and Discontinuances of Service to discontinue common carrier service over approximately 4.9 miles of rail line in Baraga County, Mich., extending E:\FR\FM\09OCN1.SGM 09OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 84, Number 196 (Wednesday, October 9, 2019)]
[Notices]
[Pages 54239-54243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22025]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87207; File No. SR-OCC-2019-008]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of Proposed Rule Change To Establish a Regulatory 
Committee of The Options Clearing Corporation's Board of Directors

October 3, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 54240]]

(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on September 25, 2019, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change would establish the OCC Regulatory 
Committee (``Committee'') and adopt the OCC Regulatory Committee 
Charter (``Committee Charter''). The Committee Charter is being 
submitted in its entirety as new rule text. A corresponding proposed 
change to OCC's Article III, Section 4 of the OCC By-Laws (``By-Laws'') 
and the OCC Board of Directors Charter and Corporate Governance 
Principles (``Board Charter'') would be adopted in to list the 
Committee among the other OCC Board of Directors (``Board'') 
committees. The proposed rule change does not require any changes to 
the text of OCC's Rules.
    The proposed rule change is available on OCC's website at https://www.theocc.com/about/publications/bylaws.jsp. All terms with initial 
capitalization that are not otherwise defined herein have the same 
meaning as set forth in the OCC By-Laws and Rules.\3\
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    \3\ OCC's By-Laws and Rules can be found on OCC's public 
website: https://optionsclearing.com/about/publications/bylaws.jsp.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, OCC included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. OCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.

A. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
Background
    OCC is filing this proposed rule change to establish a Board-level 
Regulatory Committee that would: (a) Operate separately from the 
current OCC Audit Committee; (b) complement the work done by 
independent consultants on regulatory compliance matters; (c) take over 
and continues the work done by the current OCC Regulatory Oversight 
Working Group (``ROWG''), including but not limited to OCC's efforts to 
demonstrate compliance with applicable laws and regulations; and (d) be 
solely comprised of OCC's Public Directors, as that term is defined in 
the Board Charter.\4\ For the avoidance of doubt, upon approval of the 
proposed Committee Charter, the ROWG will cease to exist.
---------------------------------------------------------------------------

    \4\ OCC's Board Charter can be found on OCC's website: https://www.theocc.com/about/corporate-information/board-charter.jsp.
---------------------------------------------------------------------------

    The contents of the proposed rule change are summarized as follows.
Regulatory Committee Charter
Committee Purpose
    The proposed Committee Charter would state that the OCC Board has 
established the Committee to assist the Board in overseeing OCC's 
efforts to demonstrate compliance with its regulatory obligations with 
particular attention to the OCC Regulatory Compliance Oversight Group 
(``RCOG''), a working group established by OCC management. The proposed 
Committee Charter would explain that given OCC's designation as a 
Systemically Important Financial Market Utility, the Board believes it 
is critical that OCC demonstrate its continued strong commitment to 
compliance with applicable regulations in the conduct of its core 
clearance and settlement activities. The proposed Committee Charter 
would also state that nothing in the Committee Charter alters the 
existing roles and responsibilities of other Board Committees.
Committee Membership and Organization
Composition
    The proposed Committee Charter would provide that the Committee 
will be comprised of all OCC Public Directors, as that term is defined 
in the Board Charter. The proposed Committee Charter would state that 
(i) unless a chair of the Committee (``Chair'') is elected by the 
Board, the members of the Committee will designate a Chair by majority 
vote of the full membership, and (ii) in the absence of the Chair at 
any meeting of the Committee, those members of the Committee present 
would designate a Committee member to serve as acting Chair. The 
proposed Committee Charter would explain that in the event of a vacancy 
on the Committee, the Committee would continue to undertake its 
responsibilities, so long as the remaining Committee members are 
capable of satisfying the quorum requirement.
Meetings
    The proposed Committee Charter would provide that the Committee 
will meet at least quarterly, or more frequently, as deemed necessary 
by the Committee in order to fulfill its purposes as described in the 
Committee Charter. The proposed Committee Charter would additionally 
provide that other meetings may be called by the Chair as circumstances 
dictate. The proposed Committee Charter would explain that the Chair or 
designee, in consultation with OCC management, as well as the OCC 
Corporate Secretary, would establish the agenda for Committee meetings. 
The proposed Committee Charter would state that members of the 
Committee may ask members of OCC management or others to attend the 
meeting and provide pertinent information as necessary. The proposed 
Committee Charter would provide that the OCC Chief Compliance Officer, 
or one of his or her deputies if the Chief Compliance Officer in unable 
to attend, shall attend all meetings of the Committee. The proposed 
Committee Charter would provide that the Committee may call executive 
sessions from which members of management and invited guests, and other 
Committee members to the extent the Chair determines there exists an 
actual or potential conflict of interest, may be excluded. The proposed 
Committee Charter would explain that the Chair or acting Chair, as 
applicable, would serve as Chair for the executive session. The 
proposed Committee Charter would explain that members of the Committee 
may participate in meetings by means of a conference telephone call or 
other means of communication that allows all participants in the 
meeting to hear each other.
Quorum
    The proposed Committee Charter would state that a simple majority 
of the

[[Page 54241]]

Committee members would constitute a quorum for the transaction of 
business.
Minutes and Reports
    The proposed Committee Charter would require that the Committee 
maintain minutes of all Committee meetings. The proposed Committee 
Charter would explain that the Chair or acting Chair, as applicable, 
would determine whether separate minutes of executive sessions are to 
be recorded as well as determined by the level of detail to be included 
in such minutes, taking into consideration the sensitivity of the 
matters to be discussed and the possibility that candor might be 
limited if detailed minutes are recorded. The proposed Committee 
Charter would provide that meeting minutes would reflect that an 
executive session was convened and broadly describe the topic(s) 
discussed. The proposed Committee Charter would require that minutes of 
Committee meetings are circulated to the Board.
    The proposed Committee Charter would provide that the Committee 
would make such reports to the Board as deemed necessary or advisable 
and that the Chair is responsible for ensuring that important issues 
discussed at Committee meetings are reported timely to the Board. The 
proposed Committee Charter would require that on an annual basis, the 
Committee would provide a report to the Board summarizing its 
activities during the previous year.
Committee Authority
    The proposed Committee Charter would provide that subject to the 
direction of the Board, the Committee is authorized to act on behalf of 
the Board with respect to any matter necessary or appropriate to the 
accomplishment of the purpose and responsibilities set forth in the 
Committee Charter. The proposed Committee Charter would further provide 
that in discharging its role, the Committee may inquire into any matter 
it considers appropriate to carry out its purpose and responsibilities, 
with access to all books, records, facilities and personnel of OCC and 
that the Committee may confer with management and other employees of 
OCC to the extent it may deem necessary or appropriate to fulfill its 
duties.
    The proposed Committee Charter would provide that the Committee 
would have the authority to hire specialists or rely upon other outside 
advisors, including legal advisors, to assist it in carrying out its 
activities. The proposed Committee Charter would also state that the 
Committee would have the authority to approve the fees and retention 
terms applicable to such advisors and specialists. The proposed 
Committee Charter would require that the Committee's annual report to 
the Board reference any engagement of specialists or outside advisors, 
including any fees and expenses associated therewith.
Committee Functions and Responsibilities
    The proposed Committee Charter would state that the Committee's 
role is one of oversight, and that it remains the responsibility of the 
RCOG to identify, manage, monitor, and report on OCC's activities that 
demonstrate compliance with regulatory obligations.
    The proposed Committee Charter would provide that the Committee 
would have the following functions and responsibilities in discharging 
its oversight role:
     The Committee would oversee, and assist the Board in 
evaluating, OCC's efforts to demonstrate compliance with applicable 
laws and regulations, including banking and securities laws and other 
applicable regulatory guidance and standards, through regular reporting 
to the Committee by the RCOG.
     The Committee would oversee OCC management's action plans 
to achieve compliance with any proposed new regulation to which OCC is 
subject.
     The Committee would oversee work performed by any 
independent compliance auditor(s) engaged by OCC and approved by the 
Board.
     The Committee would make recommendations to the Board as 
it deems appropriate, and as the Board may request.
     The Committee would meet with OCC's regulators, with or 
without OCC management, as the Committee deems necessary, in order to 
discuss OCC's efforts to enhance its regulatory compliance posture.
     The Committee would review any annual regulatory 
compliance reports provided by OCC management.
     The Committee would review any final exam report letter 
received from OCC's regulators. Additionally, the Committee would 
review any OCC response to an exam report letter received from OCC's 
regulators. The Committee would receive a briefing on OCC's action 
plans, if any, in response to items identified in any final exam report 
letter received from OCC's regulators.
     The Committee would perform such other activities 
consistent with the Board Charter and By-Laws and applicable legal and 
regulatory requirements, as the Committee deems necessary or 
appropriate.
Review Cycle
    The proposed Committee Charter would provide that the Committee 
review the Committee Charter at least once every twelve months and 
submit the Committee Charter to the Board for approval, with such 
changes, if any, as the Board deems advisable. The proposed Committee 
Charter would additionally provide that the Board would have the 
authority to diminish or eliminate the duties and obligations of the 
Committee as of the date of any final report of any independent 
compliance auditor, but in any case, no sooner than three years from 
the initial approval of the Committee Charter, subject to the approval 
of the Commission.
By-Laws
    The proposed rule change would also adopt an amendment to the OCC 
By-Laws to include reference to the Regulatory Committee in Article 
III, Section 4 to list the Committee among the other OCC Board 
committees. The proposed By-Law provision would state that the Board 
shall appoint the Committee, having the powers and duties set forth in 
the By-Laws and Rules and as delegated by the Board. The proposed By-
Law provision would state that the Committee members will be all OCC 
Public Directors. The proposed By-Law provision would state that the 
chairman of the Committee shall be designated by the Board or by a 
majority vote of the Committee membership from among the members of the 
Committee.
Board Charter
    The proposed rule change would also adopt an amendment to the 
Committees section of the Board Charter to include reference to the 
Committee among the other Board committees. The proposed Board Charter 
amendment would state that the Board has established Board-level 
committees including: Audit, Compensation and Performance, Governance 
and Nominating, Regulatory, Risk and Technology.
2. Statutory Basis
    OCC believes the proposed rule change is consistent with Section 
17A of the Act \5\ and the rules thereunder applicable to OCC. Section 
17A(b)(3)(A) of the Act \6\ requires, among other things, that a 
clearing agency be so organized and have the capacity to be able to 
facilitate the prompt and

[[Page 54242]]

accurate clearance and settlement of securities transactions and 
derivatives agreements, contracts, and transactions for which it is 
responsible. OCC believes the proposed rule change is consistent with 
this requirement because the change would help ensure OCC has 
governance arrangements that are organized to support its ability to 
promptly and accurately serve Clearing Members and the markets for 
which it clears. For example, the proposed Committee Charter would 
provide that, among other things, the Committee would oversee OCC 
management's action plans to achieve compliance with any proposed new 
regulation to which OCC is subject.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78q-1(b)(3)(A).
---------------------------------------------------------------------------

    OCC believes the proposed rule change is also consistent with the 
requirements in Rule 17Ad-22(e)(2)(i) \7\ and (v) \8\ to establish, 
implement, maintain and enforce written policies and procedures 
reasonably designed to provide for governance arrangements that are 
clear and transparent and that specify clear and direct lines of 
responsibility. The proposed rule change is also consistent with the 
requirement to have governance arrangements that specify clear and 
direct lines of responsibility because the Committee Charter would 
provide a clear statement of the functions and responsibilities of the 
Committee. For example, the proposed Committee Charter would provide 
that, among other things, the Committee would make recommendations to 
the Board as it deems appropriate, and as the Board may request. 
Additionally, the proposed Committee Charter would provide that nothing 
in the Committee Charter alters the existing roles and responsibilities 
of other Board Committees. Finally, including the Committee in the By-
Laws and Board Charter provides for consistency with how other 
committees of the Board are represented in the By-Laws and Board 
Charter.
---------------------------------------------------------------------------

    \7\ 17 CFR 240.17Ad-22(e)(2)(i).
    \8\ 17 CFR 240.17Ad-22(e)(2)(v).
---------------------------------------------------------------------------

    OCC also believes that the proposed rule change is consistent with 
the requirement in Rule 17Ad-22(e)(3)(i) \9\ to establish, implement, 
maintain and enforce written policies and procedures reasonably 
designed to maintain a sound risk management framework for managing 
legal, credit, liquidity, operational, general business, investment, 
custody and other risks that arise in or are borne by OCC, including 
risk management policies, procedures, and systems that are designed to 
identify, measure, monitor, and manage such risks and that are subject 
to review on a periodic basis and approved annually by the Board. For 
example, the Committee Charter would provide that, among other things, 
the Committee would oversee, and assist the Board in evaluating, OCC's 
efforts to demonstrate compliance with applicable laws and regulations, 
including banking and securities laws and other applicable regulatory 
guidance and standards, through regular reporting to the Committee by 
the RCOG. Additionally, the Committee Charter would provide that the 
Committee will review the Committee Charter at least once every twelve 
months and submit the Committee Charter to the Board for approval, with 
such changes, if any, as the Committee deems advisable.
---------------------------------------------------------------------------

    \9\ 17 CFR 240.17Ad-22(e)(3)(i).
---------------------------------------------------------------------------

    The proposed rule change is not inconsistent with the existing 
rules of OCC, including any other rules proposed to be amended.

B. Clearing Agency's Statement on Burden on Competition

    OCC does not believe that the proposed rule change would impact or 
impose any burden on competition.\10\ The proposed rule change 
addresses one charter used in OCC's governance structure, and all 
Clearing Members would be equally subject to these governance 
arrangements. Consequently, the Committee Charter, By-Laws and Board 
Charter would not provide any Clearing Member with a competitive 
advantage over any other Clearing Member. Further, the proposed rule 
change would not affect Clearing Member's access to OCC's services or 
impose any direct burdens on Clearing Members. Accordingly, the 
proposed rule change would not unfairly inhibit access to OCC's 
services or disadvantage or favor any particular user in relationship 
to another user.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

    For the foregoing reasons, OCC believes that the proposed rule 
change is in the public interest, would be consistent with the 
requirements of the Act applicable to clearing agencies, and would not 
impact or impose a burden on competition.

C. Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants or Others

    Written comments on the proposed rule change were not and are not 
intended to be solicited with respect to the proposed rule change and 
none have been received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    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 Exchange 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 [email protected]. Please include 
File Number SR-OCC-2019-008 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-2019-008. 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

[[Page 54243]]

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 Number SR-OCC-2019-008 and 
should be submitted on or before October 30, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
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Jill M. Petersen,
Assistant Secretary.
[FR Doc. 2019-22025 Filed 10-8-19; 8:45 am]
 BILLING CODE 8011-01-P

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