Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Concerning Revisions to the Titles of Certain Options Clearing Corporation Personnel, 60499-60503 [2021-23815]

Download as PDF Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93436; File No. SR–OCC– 2021–010] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Concerning Revisions to the Titles of Certain Options Clearing Corporation Personnel October 27, 2021. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on October 15, 2021, 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 primarily by OCC. OCC filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) 3 of the Act and Rule 19b4(f)(6) 4 thereunder so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule changed would: (i) Revise references to the term ‘‘Vice President’’ and its derivatives in the OCC By-Laws and Rules, including policies filed as Rules (‘‘Rule-Filed Policies’’),5 to instead reference revised 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 5 For purposes of this filing, OCC’s Rule-Filed Policies include its Capital Management Policy (Securities Exchange Act Release No. 88029 (Jan. 24, 2020), 85 FR 5500 (Jan. 20, 2020) (SR–OCC– 2019–007)), Clearing Fund Methodology Policy (Securities Exchange Act Release No. 89037 (Jun. 10, 2020), 85 FR 36442 (Jun. 16, 2020) (SR–OCC– 2020–006)), Collateral Risk Management Policy (Securities Exchange Act Release No. 90797 (Dec. 23, 2020), 85 FR 86592 (Dec. 30, 2020) (SR–OCC– 2020–014)), Default Management Policy (Securities Exchange Act Release No. 89037 (Jun. 10, 2020), 85 FR 36442 (Jun. 16, 2020) (SR–OCC–2020–006)), Liquidity Risk Management Framework (Securities Exchange Act Release No. 90797 (Dec. 23, 2020), 85 FR 86592 (Dec. 30, 2020) (SR–OCC–2020–014)), Margin Policy (Securities Exchange Act Release No. 91079 (Feb. 8, 2021), 86 FR 9410 (Feb. 12, 2021) (SR–OCC–2020–016)), Model Risk Management Policy (Securities Exchange Act Release No. 82785 (Feb. 27, 2018), 83 FR 9345 (Mar. 5, 2018) (SR– OCC–2017–011)), Risk Management Framework Policy (Securities Exchange Act Release No. 90797 (Dec. 23, 2020), 85 FR 86592 (Dec. 30, 2020) (SR– OCC–2020–014)), and Third-Party Risk Management Framework (Securities Exchange Act jspears on DSK121TN23PROD with NOTICES1 2 17 VerDate Sep<11>2014 17:42 Nov 01, 2021 Jkt 256001 titles including ‘‘Managing Director,’’ ‘‘Executive Director,’’ ‘‘Executive Principal,’’ or remove the reference, as appropriate, (ii) recognize in its ByLaws the role of its Chief Financial Officer in place of the roles of Treasurer and Controller, and (iii) make conforming and other non-substantive changes to OCC’s Rule-Filed Policies and Recovery and Orderly Wind-Down Plan (‘‘RWD Plan’’).6 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 The purpose of this rule change is to: (i) Revise references to the term ‘‘Vice President’’ and its derivatives in the OCC By-Laws, Rules, Rule-Filed Policies and RWD Plan, to instead reference revised titles including ‘‘Managing Director,’’ ‘‘Executive Director,’’ ‘‘Executive Principal,’’ or remove the reference, as appropriate; (ii) recognize in its By-Laws the role of its Chief Financial Officer in place of the roles of Treasurer and Controller; and (iii) make conforming and other nonsubstantive changes to OCC’s Rule-Filed Policies and RWD Plan. As a covered clearing agency subject to Commission Rule 17Ad–22(e)(2),7 OCC is required to establish, implement, maintain and enforce written policies and procedures reasonably designed to provide for governance arrangements that, among other things, are clear and transparent and specify clear and direct lines of responsibility. As noted by the Commission in adopting these requirements, ‘‘the Commission recognizes that there may be a number of ways to address compliance with Rule 17Ad–22(e)(2)’’ but that ‘‘a covered clearing agency generally should consider . . . whether the roles and Release No. 90797 (Dec. 23, 2020), 85 FR 86592 (Dec. 30, 2020) (SR–OCC–2020–014)). 6 See Exchange Act Release No. 90712 (Dec. 17, 2020), 85 FR 84050 (Dec. 23, 2020) (SR–OCC–2020– 013). 7 17 CFR 240.17Ad–22(e)(2). PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 60499 responsibilities of management have been clearly specified[.]’’ 8 OCC believes that the proposed changes would help promote clarity in OCC’s By-Laws, Rules, Rule-Filed Policies and RWD Plan regarding the roles and responsibilities of the relevant officers, as described below. Currently, Article IV, Section 9 of OCC’s By-Laws recognizes Vice President officers and states that they may be filled by the Board of Directors, Executive Chairman, Chief Executive Officer or Chief Operating Officer.9 OCC’s By-Laws, Rules, Rule-Filed Policies and RWD Plan currently reflect the titles of Vice President, Senior Vice President, First Vice President, and Executive Vice President. Under the proposed revised structure, these four titles will be reduced to three: ‘‘Managing Director,’’ ‘‘Executive Director,’’ and ‘‘Executive Principal.’’ Specifically, ‘‘Executive Vice President’’ and Senior Vice President’’ titles would be changed to ‘‘Managing Director,’’ and ‘‘First Vice President’’ and ‘‘Vice President’’ titles would be changed to ‘‘Executive Director’’ if the person is a manager and ‘‘Executive Principal’’ if the person has no direct reports.10 Under the proposal, there would be no delineation within the Managing Director title to indicate the previous distinction between Senior Vice Presidents and Executive Vice Presidents. OCC believes this is an appropriate simplification as the differences in responsibility between the titles that are being combined are not currently clearly defined within OCC’s internal documentation. Accordingly, OCC believes the proposed change would simplify its structure and provide for more clearly delineated ranks and associated roles and responsibilities for such officers, rather than ambiguity between similar titles. Changes to OCC’s By-Laws and Rules Specifically, OCC proposes to revise the current Vice President titles in the By-Laws and Rules as follows. OCC would amend the definition of Designated Officer in Article I of its ByLaws to replace the reference to Senior Vice President with ‘‘Managing Director.’’ This reflects that OCC 8 Exchange Act Release No. 78961 (Sept. 28, 2016), 81 FR 70786 (October 13, 2016) (File No S7– 03–14). 9 See also OCC By-Laws Article IV, Sections 1 and 2 (providing that the Board of Directors, Executive Chairman, Chief Executive Officer, and Chief Operating Officer have the authority to elect or appoint officers, which includes Vice Presidents). 10 Under OCC’s existing structure the differences in responsibilities between the titles ‘‘First Vice President’’ and ‘‘Vice President’’ are not clearly defined. E:\FR\FM\02NON1.SGM 02NON1 jspears on DSK121TN23PROD with NOTICES1 60500 Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Notices Executive Vice Presidents and Senior Vice Presidents would become ‘‘Managing Directors’’ in the proposed hierarchy. Changes would also be made to revise references from Senior Vice President to ‘‘Managing Director’’ in both: (i) Interpretation and Policy .03 to Section 1 of Article V of OCC’s By-Laws and (ii) Interpretation and Policy .01 to OCC Rule 309. References to Vice Presidents would also be replaced by ‘‘Managing Director,’’ ‘‘Executive Director,’’ and ‘‘Executive Principal,’’ as applicable, in four other By-Law provisions. Those provisions are Article IV, Section 1, Article IV, Section 9 (including the title), and Article IX, Sections 1(a) and 12. These changes are proposed because the roles and responsibilities of each Vice President would instead be carried out by an individual having the title of ‘‘Managing Director,’’ ‘‘Executive Director,’’ or ‘‘Executive Principal,’’ as applicable. OCC also proposes to delete Interpretation and Policy .01 to Article III, Section 15 of its By-Laws regarding emergency powers because the references to Vice Presidents would no longer be relevant. Instead, OCC would specify directly in the relevant subparts of Section 15 (rather than in an Interpretation and Policy) the officers who would have authority to take certain actions in an emergency in the event that the Board of Directors does not maintain a list of Designated Officers who would have such emergency authority. Proposed changes to Article III, Section 15 would also be made to clarify that the Chief Executive Officer and Chief Operating Officer are Designated Officers under the definition in Article I, Section 1.D.(8) of the ByLaws and that the definition also includes any officer who would hold the rank of Managing Director or higher and to whom the Chief Executive Officer or Chief Operating Officer has delegated authority to perform a duty or exercise a power under the By-Laws and Rules. OCC is also proposing to remove the provisions from the By-Laws that recognize the offices of Treasurer and Controller and to instead identify that the Chief Financial Officer is an officer who has the responsibilities currently associated with the Treasurer and Controller.11 OCC believes this better represents the organization of its Corporate Finance Department. Ultimate responsibility for the Corporate Finance Department rests with the Chief Financial Officer and OCC believes this 11 OCC plans to maintain the positions of Treasurer and Controller; however, these titles will no longer be required by the By-Laws. VerDate Sep<11>2014 17:42 Nov 01, 2021 Jkt 256001 position is appropriate to identify in its By-Laws and have appointed by its Board, rather than Treasurer and Controller. The By-Laws would be revised to reflect that all responsibilities currently described in Article IV, Section 11 and Article IV, Section 12 as pertaining to the roles of Treasurer or Controller will be combined into one Article IV, Section 11 as pertaining to the role of Chief Financial Officer, which would be elected by the Board. Consistent with these changes, OCC proposes to revise references to Treasurer to ‘‘Chief Financial Officer’’ in Article IV, Section 1 and Article IV, Section 10 of the By-Laws. Additionally, OCC proposes to revise references to Treasurer and Assistant Treasurer in Article IX, Section 1(a) of the By-Laws to ‘‘Chief Financial Officer.’’ OCC also proposes to make conforming changes to the table of contents of its By-Laws to reflect certain of the changes described above. Changes to OCC’s Rule-Filed Policies In addition, OCC proposes to make corresponding changes to its Rule-Filed Policies to implement the title changes discussed above. OCC proposes to achieve this by making changes to its Rule-Filed Policies where titles are referenced. OCC proposes to remove the following non-substantive items from its Rule-Filed Policies: Repeated document titles, certain introductory information, related policies and standards, related procedures, and revision history. In cases where the title of a Rule-Filed Policy is listed twice within the document, OCC proposes to remove a second listing and maintain the title only in the header. OCC proposes to remove the ‘‘Owner’’ designations from its Rule-Filed Policies, as applicable. OCC utilizes an internal system of record to manage its policy governance, but as the designated owner of a policy is not a rule and can change, for example if titles or personnel change, OCC believes maintaining this information internally is appropriate and efficient. OCC proposes to maintain the Rule-Filed Policy’s approver and date of approval in the introductory header. As applicable, OCC proposes to remove the related policies and standards and related procedures sections from its Rule-Filed Policies. Lists of related policies, procedures and standards do not constitute a rule and eliminating this information from RuleFiled Policies will encourage OCC staff to use OCC’s internal system of record to identify the policies and procedures that are related to the specific purpose or function that they are performing PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 instead of relying on a list that may be outdated or under inclusive. Finally, OCC proposes to remove the revision history section from its Rule-Filed Policies. Similar to ‘‘Owner’’, OCC maintains revision history information in its internal system of record utilized for policy governance. Below, the above summarized proposed changes are discussed, as applicable, in relation to each of OCC’s Rule-Filed Policies. In addition, where titling changes are proposed, those changes are also described. Capital Management Policy OCC proposes to remove from its Capital Management Policy the owner listed in the header as well as the revision history section. The policy owner and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential for confusion that could arise from maintaining this information in both the system of record and the policy. Clearing Fund Methodology Policy OCC proposes to remove from its Clearing Fund Methodology Policy a redundant use of the document title, the owner listed in the header as well as the related policies and standards, related procedures, and revision history sections. The policy owner and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential for confusion that could arise from maintaining this information in both the system of record and the policy. Lists of related policies, procedures and standards do not constitute a rule and eliminating this information from the Clearing Fund Methodology Policy will encourage OCC staff to use OCC’s internal system of record to identify the policies and procedures that are related to the specific purpose or function that they are performing rather than relying on a list that may be outdated or under inclusive. Accordingly, OCC does not believe lists of related policies, standards and procedures need to be maintained separately within the Clearing Fund Methodology Policy. OCC also proposes updating two references to the ‘‘Vice President’’ title within the document to ‘‘Executive Director’’ and one reference to ‘‘EVP– E:\FR\FM\02NON1.SGM 02NON1 Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Notices FRM’’ 12 to ‘‘Chief Financial Risk Officer’’ to accurately refer to the corporate title of the person authorized therein. jspears on DSK121TN23PROD with NOTICES1 Collateral Risk Management Policy OCC proposes to remove from its Collateral Risk Management Policy a redundant use of the document title, the owner listed in the header as well as the related policies and standards, related procedures, and revision history sections. The policy owner and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential for confusion that could arise from maintaining this information in both the system of record and the policy. Lists of related policies, procedures and standards do not constitute a rule and eliminating this information from the Collateral Risk Management Policy will encourage OCC staff to use OCC’s internal system of record to identify the policies and procedures that are related to the specific purpose or function that they are performing rather than relying on a list that may be outdated or under inclusive. Accordingly, OCC does not believe lists of related policies, standards and procedures need to be maintained separately within the Collateral Risk Management Policy. Default Management Policy OCC proposes to remove from its Default Management Policy a redundant use of the document title, the owner listed in the header as well as the related policies and standards, related procedures, and revision history sections. The policy owner and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential for confusion that could arise from maintaining this information in both the system of record and the policy. Lists of related policies, procedures and standards do not constitute a rule and eliminating this information from the Default Management Policy will encourage OCC staff to use OCC’s internal system of record to identify the policies and procedures that are related to the specific purpose or function that 12 EVP means Executive Vice President and FRM means OCC’s Financial Risk Management Department. VerDate Sep<11>2014 17:42 Nov 01, 2021 Jkt 256001 they are performing rather than relying on a list that may be outdated or under inclusive. Accordingly, OCC does not believe a list of related policies, standards and procedures need to be maintained separately within the Default Management Policy. In addition, OCC proposes adding a header to separately identify existing language describing the applicability and scope of the Default Management Policy. The proposal also includes several non-substances changes intended to correct typographical errors and clarify certain aspects of the policy. OCC also proposes updating one reference to ‘‘Executive Vice President— Financial Risk Management (‘‘EVP– FRM’’)’’ to ‘‘Chief Financial Risk Officer (‘‘CFRO’’)’’ in the definition of Designated Officer and deleting a redundant definition of Designated Officer. Finally, OCC proposes updating all uses of ‘‘EVP–FRM’’ within the Default Management Policy to ‘‘CFRO.’’ Liquidity Risk Management Framework OCC proposes to remove from its Liquidity Risk Management Framework a redundant use of the document title, the owner listed in the header as well as the revision history section. The policy owner and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential for confusion that could arise from maintaining this information in both the system of record and the policy. OCC also proposes updating one reference to ‘‘EVP–FRM’’ to ‘‘Chief Financial Risk Officer’’ and simplifying a reference to the ‘‘FRM vice president that chairs the STWG’’ 13 to the ‘‘chair of the STWG.’’ Margin Policy OCC proposes to remove from its Margin Policy the owner, rule-filed designation and version number listed in the header as well as the related policies and standards, related procedures, and revision history sections. The policy owner, rule-filed designation, version number and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential 13 Defined in the Default Management Policy as Stress Test Working Group. PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 60501 for confusion that could arise from maintaining this information in both the system of record and the policy. Lists of related policies, procedures and standards do not constitute a rule and eliminating this information from the Margin Policy will encourage OCC staff to use OCC’s internal system of record to identify the policies and procedures that are related to the specific purpose or function that they are performing rather than relying on a list that may be outdated or under inclusive. Accordingly, OCC does not believe the list of related documents needs to be maintained separately within the Margin Policy. OCC also proposes updating one reference to ‘‘Executive Vice President (‘‘EVP’’)–FRM’’ to ‘‘Chief Financial Risk Officer (‘‘CFRO’’).’’ Consistent with the change in acronym from ‘‘EVP–FRM’’ to ‘‘CFRO,’’ OCC proposes updating all uses of ‘‘EVP–FRM’’ within the Margin Policy to ‘‘CFRO.’’ Finally, OCC proposes updating three references to the ‘‘Vice President’’ title within the document to ‘‘Executive Director.’’ Model Risk Management Policy OCC proposes to remove from its Model Risk Management Policy a redundant use of the document title, the owner listed in the header as well as the related policies and standards, related procedures, and revision history sections. The policy owner and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential for confusion that could arise from maintaining this information in both the system of record and the policy. Lists of related policies, procedures and standards do not constitute a rule and eliminating this information from the Model Risk Management Policy will encourage OCC staff to use OCC’s internal system of record to identify the policies and procedures that are related to the specific purpose or function that they are performing rather than relying on a list that may be outdated or under inclusive. Accordingly, OCC does not believe lists of related policies, standards and procedures need to be maintained separately within the Model Risk Management Policy. OCC also proposes updating one reference to ‘‘Executive Vice President, Financial Risk Management (‘‘EVP– FRM’’)’’ within the Model Risk Management Policy to ‘‘Chief Financial Risk Officer (‘‘CFRO’’).’’ Consistent with the change in acronym from ‘‘EVP– E:\FR\FM\02NON1.SGM 02NON1 60502 Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Notices FRM’’ to ‘‘CFRO,’’ OCC proposes updating all uses of ‘‘EVP–FRM’’ within the Model Risk Management Policy to ‘‘CFRO.’’ OCC proposes updating three references to the ‘‘First Vice President’’ title within the document to ‘‘Executive Director.’’ Finally, OCC proposes to allow the CFRO to select a delegate for reviewing and approving Risk Model documentation. The purpose of this change is to allow the CFRO to select the person best suited to review and approve Risk Model documentation. Risk Management Framework Policy OCC proposes to remove from its Risk Management Framework Policy a redundant use of the document title, the owner listed in the header as well as the revision history section. The policy owner and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential for confusion that could arise from maintaining this information in both the system of record and the policy. OCC also proposes to make several administrative changes to the Risk Management Framework Policy, including correcting typographical errors and updating several cross-references to other policies and procedures. jspears on DSK121TN23PROD with NOTICES1 Third-Party Risk Management Framework OCC proposes to remove from its Third-Party Risk Management Framework the owner, document type and rule-filed designation listed in the header as well as the revision history section. The policy owner, document type, rule-filed designation and revision history do not constitute a rule and will continue to be reflected in an internal system of record that OCC uses to manage its policy governance. OCC believes maintaining this information in a single system of record is appropriate, efficient and will reduce the potential for confusion that could arise from maintaining this information in both the system of record and the policy. OCC also proposes updating one reference to the ‘‘Vice President’’ title within the document to instead refer to Article IV (Officers) of OCC’s By-Laws. Changes to the RWD Plan OCC also proposes to make corresponding changes to its RWD Plan to implement the title changes described above. This includes: Updating references to ‘‘Treasurer’’ to ‘‘Chief Financial Officer;’’ updating references VerDate Sep<11>2014 17:42 Nov 01, 2021 Jkt 256001 to ‘‘Vice President’’ to ‘‘Managing Directors, Executive Directors, or Executive Principals;’’ revising reference to the members of OCC’s Corporate Department to refer to members of OCC’s Management Committee, rather than the title of ‘‘Senior Vice President;’’ updating references to ‘‘Executive Vice President—Financial Risk Management’’ and ‘‘EVP–FRM’’ to ‘‘Chief Financial Risk Officer;’’ removing references to ‘‘EVP’’ and ‘‘SVP’’ that are no longer included in titles of OCC’s officers with ‘‘Chief’’ in their title; removing reference to the SVP, Corporate Communications as a direct report to the Executive Chairman as the leader of Corporate Communications now reports to the Chief External Relations Officer; updating references to ‘‘General Counsel’’ to ‘‘Chief Legal Officer and General Counsel;’’ updating reference to ‘‘VP Business Continuity’’ to ‘‘Business Continuity Department;’’ and revising exhibits 2–4, 2–5, and 2–6 to reflect revisions to titles as well as reorganization of certain reporting lines. The proposed revisions promote clarity regarding the responsibilities of OCC’s officers and will help ensure that the RWD Plan accurately reflects the titles and reporting lines for OCC’s staff. (2) Statutory Basis OCC believes the proposed rule change is consistent with Section 17A of the Exchange Act 14 and the rules thereunder applicable to OCC. Section 17A(b)(3)(F) of the Exchange Act 15 requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions and to assure the safeguarding of securities and funds which are in the custody or control of the clearing or agency or for which it is responsible. The proposed rule change is designed to align the OCC By-Laws, Rules, and Rule-Filed Policies with OCC’s governance structure and otherwise enhance the accuracy, clarity, and consistency of the Rule-Filed Policies. The proposed changes would, among other things, help effectuate an organizational design process that OCC has undertaken to enhance the effective operation of OCC’s core clearance, settlement, and risk management activities. By ensuring that the OCC ByLaws, Rules, and Rule-Filed Policies accurately reflect the titles and responsibilities for OCC’s officers, the proposed changes will support the improved efficacy that this process is expected to achieve. In turn, Exchange Act Rules 17Ad–22(e)(2)(i) and (iv) 16 require each covered clearing agency to establish, implement, maintain, and enforce written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent and specify clear and direct lines of responsibility. OCC believes that the proposed revisions would help promote clear and transparent governance arrangements in OCC’s By-Laws, Rules, and Rule-Filed Policies. OCC aims to achieve this by restructuring the four titles of officers who currently serve as Vice Presidents to three titles. OCC also proposes to recognize in the By-Laws the role of OCC’s Chief Financial Officer instead of the roles of Treasurer or Controller to represent the structure of its Corporate Finance Department more clearly. Additionally, OCC believes that it can avoid potential future confusion by removing from its Rule-Filed Policies information that OCC maintains in its system of record and that does not constitute substantive content of the Rule-Filed Policies. These changes involve elements of Rule-Filed Policies that are neither rules nor stated policies, practices or interpretations and removing this information from the Rule-Filed Policies will eliminate inconsistencies that could arise from maintaining it in multiple places with different approval processes. In this way, OCC believes that the proposed rule change is therefore designed, in general, to promote the prompt and accurate clearance and settlement of securities and derivatives transactions and assure the safeguarding of securities and funds which are in the custody or control of OCC or for which it is responsible in accordance with the requirements of Section 17A(b)(3)(F) of the Exchange Act 17 and Rules 17Ad– 22(e)(2)(i) and (iv) thereunder.18 In addition, Exchange Act Rule 17Ad– 22(e)(3)(ii) requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by the covered clearing agency, which includes plans for the recovery and orderly winddown of the covered clearing agency 16 17 14 15 U.S.C. 78q–1. 15 15 U.S.C. 78q–1(b)(3)(F). PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 CFR 240.17Ad–22(e)(2)(i). U.S.C. 78q–1(b)(3)(F). 18 17 CFR 240.17Ad–22(e)(2)(i), (iv). 17 15 E:\FR\FM\02NON1.SGM 02NON1 Federal Register / Vol. 86, No. 209 / Tuesday, November 2, 2021 / Notices necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses.19 OCC believes that the proposed changes to the RWD Plan are consistent with Rule 17Ad– 22(e)(3)(ii) 20 because they will help ensure that the plan accurately reflects the titles, responsibilities and reporting lines for OCC’s staff. (B) Clearing Agency’s Statement on Burden of Competition Section 17A(b)(3)(I) of the Act 21 requires that the rules of a clearing agency not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. OCC does not believe that the proposed rule change would have any impact or impose any burden on competition. The proposal relates only to changes to OCC’s internal management structure with respect to officers who hold the title of Vice President and its derivatives and to recognize OCC’s ‘‘Chief Financial Officer’’ and have no effect on OCC clearing members. OCC does not believe the proposal would affect access to OCC’s services. jspears on DSK121TN23PROD with NOTICES1 (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 Pursuant to Section 19(b)(3)(A) 22 of the Act, and Rule 19b–4(f)(6) thereunder,23 the proposed rule change is filed for immediate effectiveness because it does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) by its terms would not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate. As described above, the proposal would narrowly revise the titles of officers within OCC who are Vice Presidents or derivatives of Vice Presidents. In addition, the changes related to identifying the Chief Financial Officer 19 See Securities Exchange Act Release No. 34– 78961 (Oct. 13, 2016), 81 FR 70786, 70808 (Oct. 13, 2016) (File No. S7–03–14). 20 17 CFR 240.17Ad–22(e)(3)(ii). 21 15 U.S.C. 78q–1(b)(3)(I). 22 15 U.S.C. 78s(b)(3)(A)(iii). 23 17 CFR 240.19b–4(f)(6). VerDate Sep<11>2014 17:42 Nov 01, 2021 Jkt 256001 rather than Controller and Treasurer within the By-Laws serve to clarify the officer role that is responsible for OCC’s Corporate Finance Department. Furthermore, the proposed changes to OCC’s Rule-Filed Policies to align with the revised titles as well as make nonsubstantive updates do not impact the function of the Rule-Filed Policies. Accordingly, the proposal would not significantly affect the protection of investors or the public interest or impose any significant burden on competition because it is a change to OCC officer structure that has no direct effect on Clearing Members or other users of OCC’s services. Additionally, OCC provided the Commission with 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. 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.24 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: 60503 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/CompanyInformation/Documents-and-Archives/ By-Laws-and-Rules#rule-filings. 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–2021–010 and should be submitted on or before November 23, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 J. Matthew DeLesDernier, Assistant Secretary. Electronic Comments [FR Doc. 2021–23815 Filed 11–1–21; 8:45 am] • 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–2021–010 on the subject line. BILLING CODE 8011–01–P 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–2021–010. 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 24 Notwithstanding its immediate effectiveness, implementation of this rule change will be delayed until this change is deemed certified under CFTC Regulation 40.6. PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93433; File No. SR–OCC– 2021–802] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Extension of Review Period of Advance Notice Relating to OCC’s Adoption of Cloud Infrastructure for New Clearing, Risk Management, and Data Management Applications October 27, 2021. Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled Payment, Clearing and 25 17 E:\FR\FM\02NON1.SGM CFR 200.30–3(a)(12). 02NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 86, Number 209 (Tuesday, November 2, 2021)]
[Notices]
[Pages 60499-60503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23815]



[[Page 60499]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93436; File No. SR-OCC-2021-010]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Concerning Revisions to the Titles of Certain Options Clearing 
Corporation Personnel

October 27, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on October 15, 2021, 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 primarily by OCC. OCC 
filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) \3\ 
of the Act and Rule 19b4(f)(6) \4\ thereunder so that the proposal was 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule changed would: (i) Revise references to the term 
``Vice President'' and its derivatives in the OCC By-Laws and Rules, 
including policies filed as Rules (``Rule-Filed Policies''),\5\ to 
instead reference revised titles including ``Managing Director,'' 
``Executive Director,'' ``Executive Principal,'' or remove the 
reference, as appropriate, (ii) recognize in its By-Laws the role of 
its Chief Financial Officer in place of the roles of Treasurer and 
Controller, and (iii) make conforming and other non-substantive changes 
to OCC's Rule-Filed Policies and Recovery and Orderly Wind-Down Plan 
(``RWD Plan'').\6\
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    \5\ For purposes of this filing, OCC's Rule-Filed Policies 
include its Capital Management Policy (Securities Exchange Act 
Release No. 88029 (Jan. 24, 2020), 85 FR 5500 (Jan. 20, 2020) (SR-
OCC-2019-007)), Clearing Fund Methodology Policy (Securities 
Exchange Act Release No. 89037 (Jun. 10, 2020), 85 FR 36442 (Jun. 
16, 2020) (SR-OCC-2020-006)), Collateral Risk Management Policy 
(Securities Exchange Act Release No. 90797 (Dec. 23, 2020), 85 FR 
86592 (Dec. 30, 2020) (SR-OCC-2020-014)), Default Management Policy 
(Securities Exchange Act Release No. 89037 (Jun. 10, 2020), 85 FR 
36442 (Jun. 16, 2020) (SR-OCC-2020-006)), Liquidity Risk Management 
Framework (Securities Exchange Act Release No. 90797 (Dec. 23, 
2020), 85 FR 86592 (Dec. 30, 2020) (SR-OCC-2020-014)), Margin Policy 
(Securities Exchange Act Release No. 91079 (Feb. 8, 2021), 86 FR 
9410 (Feb. 12, 2021) (SR-OCC-2020-016)), Model Risk Management 
Policy (Securities Exchange Act Release No. 82785 (Feb. 27, 2018), 
83 FR 9345 (Mar. 5, 2018) (SR-OCC-2017-011)), Risk Management 
Framework Policy (Securities Exchange Act Release No. 90797 (Dec. 
23, 2020), 85 FR 86592 (Dec. 30, 2020) (SR-OCC-2020-014)), and 
Third-Party Risk Management Framework (Securities Exchange Act 
Release No. 90797 (Dec. 23, 2020), 85 FR 86592 (Dec. 30, 2020) (SR-
OCC-2020-014)).
    \6\ See Exchange Act Release No. 90712 (Dec. 17, 2020), 85 FR 
84050 (Dec. 23, 2020) (SR-OCC-2020-013).
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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
    The purpose of this rule change is to: (i) Revise references to the 
term ``Vice President'' and its derivatives in the OCC By-Laws, Rules, 
Rule-Filed Policies and RWD Plan, to instead reference revised titles 
including ``Managing Director,'' ``Executive Director,'' ``Executive 
Principal,'' or remove the reference, as appropriate; (ii) recognize in 
its By-Laws the role of its Chief Financial Officer in place of the 
roles of Treasurer and Controller; and (iii) make conforming and other 
non-substantive changes to OCC's Rule-Filed Policies and RWD Plan. As a 
covered clearing agency subject to Commission Rule 17Ad-22(e)(2),\7\ 
OCC is required to establish, implement, maintain and enforce written 
policies and procedures reasonably designed to provide for governance 
arrangements that, among other things, are clear and transparent and 
specify clear and direct lines of responsibility. As noted by the 
Commission in adopting these requirements, ``the Commission recognizes 
that there may be a number of ways to address compliance with Rule 
17Ad-22(e)(2)'' but that ``a covered clearing agency generally should 
consider . . . whether the roles and responsibilities of management 
have been clearly specified[.]'' \8\ OCC believes that the proposed 
changes would help promote clarity in OCC's By-Laws, Rules, Rule-Filed 
Policies and RWD Plan regarding the roles and responsibilities of the 
relevant officers, as described below.
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    \7\ 17 CFR 240.17Ad-22(e)(2).
    \8\ Exchange Act Release No. 78961 (Sept. 28, 2016), 81 FR 70786 
(October 13, 2016) (File No S7-03-14).
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    Currently, Article IV, Section 9 of OCC's By-Laws recognizes Vice 
President officers and states that they may be filled by the Board of 
Directors, Executive Chairman, Chief Executive Officer or Chief 
Operating Officer.\9\ OCC's By-Laws, Rules, Rule-Filed Policies and RWD 
Plan currently reflect the titles of Vice President, Senior Vice 
President, First Vice President, and Executive Vice President. Under 
the proposed revised structure, these four titles will be reduced to 
three: ``Managing Director,'' ``Executive Director,'' and ``Executive 
Principal.'' Specifically, ``Executive Vice President'' and Senior Vice 
President'' titles would be changed to ``Managing Director,'' and 
``First Vice President'' and ``Vice President'' titles would be changed 
to ``Executive Director'' if the person is a manager and ``Executive 
Principal'' if the person has no direct reports.\10\ Under the 
proposal, there would be no delineation within the Managing Director 
title to indicate the previous distinction between Senior Vice 
Presidents and Executive Vice Presidents. OCC believes this is an 
appropriate simplification as the differences in responsibility between 
the titles that are being combined are not currently clearly defined 
within OCC's internal documentation. Accordingly, OCC believes the 
proposed change would simplify its structure and provide for more 
clearly delineated ranks and associated roles and responsibilities for 
such officers, rather than ambiguity between similar titles.
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    \9\ See also OCC By-Laws Article IV, Sections 1 and 2 (providing 
that the Board of Directors, Executive Chairman, Chief Executive 
Officer, and Chief Operating Officer have the authority to elect or 
appoint officers, which includes Vice Presidents).
    \10\ Under OCC's existing structure the differences in 
responsibilities between the titles ``First Vice President'' and 
``Vice President'' are not clearly defined.
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Changes to OCC's By-Laws and Rules
    Specifically, OCC proposes to revise the current Vice President 
titles in the By-Laws and Rules as follows. OCC would amend the 
definition of Designated Officer in Article I of its By-Laws to replace 
the reference to Senior Vice President with ``Managing Director.'' This 
reflects that OCC

[[Page 60500]]

Executive Vice Presidents and Senior Vice Presidents would become 
``Managing Directors'' in the proposed hierarchy. Changes would also be 
made to revise references from Senior Vice President to ``Managing 
Director'' in both: (i) Interpretation and Policy .03 to Section 1 of 
Article V of OCC's By-Laws and (ii) Interpretation and Policy .01 to 
OCC Rule 309. References to Vice Presidents would also be replaced by 
``Managing Director,'' ``Executive Director,'' and ``Executive 
Principal,'' as applicable, in four other By-Law provisions. Those 
provisions are Article IV, Section 1, Article IV, Section 9 (including 
the title), and Article IX, Sections 1(a) and 12. These changes are 
proposed because the roles and responsibilities of each Vice President 
would instead be carried out by an individual having the title of 
``Managing Director,'' ``Executive Director,'' or ``Executive 
Principal,'' as applicable.
    OCC also proposes to delete Interpretation and Policy .01 to 
Article III, Section 15 of its By-Laws regarding emergency powers 
because the references to Vice Presidents would no longer be relevant. 
Instead, OCC would specify directly in the relevant subparts of Section 
15 (rather than in an Interpretation and Policy) the officers who would 
have authority to take certain actions in an emergency in the event 
that the Board of Directors does not maintain a list of Designated 
Officers who would have such emergency authority. Proposed changes to 
Article III, Section 15 would also be made to clarify that the Chief 
Executive Officer and Chief Operating Officer are Designated Officers 
under the definition in Article I, Section 1.D.(8) of the By-Laws and 
that the definition also includes any officer who would hold the rank 
of Managing Director or higher and to whom the Chief Executive Officer 
or Chief Operating Officer has delegated authority to perform a duty or 
exercise a power under the By-Laws and Rules.
    OCC is also proposing to remove the provisions from the By-Laws 
that recognize the offices of Treasurer and Controller and to instead 
identify that the Chief Financial Officer is an officer who has the 
responsibilities currently associated with the Treasurer and 
Controller.\11\ OCC believes this better represents the organization of 
its Corporate Finance Department. Ultimate responsibility for the 
Corporate Finance Department rests with the Chief Financial Officer and 
OCC believes this position is appropriate to identify in its By-Laws 
and have appointed by its Board, rather than Treasurer and Controller. 
The By-Laws would be revised to reflect that all responsibilities 
currently described in Article IV, Section 11 and Article IV, Section 
12 as pertaining to the roles of Treasurer or Controller will be 
combined into one Article IV, Section 11 as pertaining to the role of 
Chief Financial Officer, which would be elected by the Board. 
Consistent with these changes, OCC proposes to revise references to 
Treasurer to ``Chief Financial Officer'' in Article IV, Section 1 and 
Article IV, Section 10 of the By-Laws. Additionally, OCC proposes to 
revise references to Treasurer and Assistant Treasurer in Article IX, 
Section 1(a) of the By-Laws to ``Chief Financial Officer.''
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    \11\ OCC plans to maintain the positions of Treasurer and 
Controller; however, these titles will no longer be required by the 
By-Laws.
---------------------------------------------------------------------------

    OCC also proposes to make conforming changes to the table of 
contents of its By-Laws to reflect certain of the changes described 
above.
Changes to OCC's Rule-Filed Policies
    In addition, OCC proposes to make corresponding changes to its 
Rule-Filed Policies to implement the title changes discussed above. OCC 
proposes to achieve this by making changes to its Rule-Filed Policies 
where titles are referenced. OCC proposes to remove the following non-
substantive items from its Rule-Filed Policies: Repeated document 
titles, certain introductory information, related policies and 
standards, related procedures, and revision history.
    In cases where the title of a Rule-Filed Policy is listed twice 
within the document, OCC proposes to remove a second listing and 
maintain the title only in the header. OCC proposes to remove the 
``Owner'' designations from its Rule-Filed Policies, as applicable. OCC 
utilizes an internal system of record to manage its policy governance, 
but as the designated owner of a policy is not a rule and can change, 
for example if titles or personnel change, OCC believes maintaining 
this information internally is appropriate and efficient. OCC proposes 
to maintain the Rule-Filed Policy's approver and date of approval in 
the introductory header.
    As applicable, OCC proposes to remove the related policies and 
standards and related procedures sections from its Rule-Filed Policies. 
Lists of related policies, procedures and standards do not constitute a 
rule and eliminating this information from Rule-Filed Policies will 
encourage OCC staff to use OCC's internal system of record to identify 
the policies and procedures that are related to the specific purpose or 
function that they are performing instead of relying on a list that may 
be outdated or under inclusive. Finally, OCC proposes to remove the 
revision history section from its Rule-Filed Policies. Similar to 
``Owner'', OCC maintains revision history information in its internal 
system of record utilized for policy governance.
    Below, the above summarized proposed changes are discussed, as 
applicable, in relation to each of OCC's Rule-Filed Policies. In 
addition, where titling changes are proposed, those changes are also 
described.
Capital Management Policy
    OCC proposes to remove from its Capital Management Policy the owner 
listed in the header as well as the revision history section. The 
policy owner and revision history do not constitute a rule and will 
continue to be reflected in an internal system of record that OCC uses 
to manage its policy governance. OCC believes maintaining this 
information in a single system of record is appropriate, efficient and 
will reduce the potential for confusion that could arise from 
maintaining this information in both the system of record and the 
policy.
Clearing Fund Methodology Policy
    OCC proposes to remove from its Clearing Fund Methodology Policy a 
redundant use of the document title, the owner listed in the header as 
well as the related policies and standards, related procedures, and 
revision history sections. The policy owner and revision history do not 
constitute a rule and will continue to be reflected in an internal 
system of record that OCC uses to manage its policy governance. OCC 
believes maintaining this information in a single system of record is 
appropriate, efficient and will reduce the potential for confusion that 
could arise from maintaining this information in both the system of 
record and the policy. Lists of related policies, procedures and 
standards do not constitute a rule and eliminating this information 
from the Clearing Fund Methodology Policy will encourage OCC staff to 
use OCC's internal system of record to identify the policies and 
procedures that are related to the specific purpose or function that 
they are performing rather than relying on a list that may be outdated 
or under inclusive. Accordingly, OCC does not believe lists of related 
policies, standards and procedures need to be maintained separately 
within the Clearing Fund Methodology Policy.
    OCC also proposes updating two references to the ``Vice President'' 
title within the document to ``Executive Director'' and one reference 
to ``EVP-

[[Page 60501]]

FRM'' \12\ to ``Chief Financial Risk Officer'' to accurately refer to 
the corporate title of the person authorized therein.
---------------------------------------------------------------------------

    \12\ EVP means Executive Vice President and FRM means OCC's 
Financial Risk Management Department.
---------------------------------------------------------------------------

Collateral Risk Management Policy
    OCC proposes to remove from its Collateral Risk Management Policy a 
redundant use of the document title, the owner listed in the header as 
well as the related policies and standards, related procedures, and 
revision history sections. The policy owner and revision history do not 
constitute a rule and will continue to be reflected in an internal 
system of record that OCC uses to manage its policy governance. OCC 
believes maintaining this information in a single system of record is 
appropriate, efficient and will reduce the potential for confusion that 
could arise from maintaining this information in both the system of 
record and the policy. Lists of related policies, procedures and 
standards do not constitute a rule and eliminating this information 
from the Collateral Risk Management Policy will encourage OCC staff to 
use OCC's internal system of record to identify the policies and 
procedures that are related to the specific purpose or function that 
they are performing rather than relying on a list that may be outdated 
or under inclusive. Accordingly, OCC does not believe lists of related 
policies, standards and procedures need to be maintained separately 
within the Collateral Risk Management Policy.
Default Management Policy
    OCC proposes to remove from its Default Management Policy a 
redundant use of the document title, the owner listed in the header as 
well as the related policies and standards, related procedures, and 
revision history sections. The policy owner and revision history do not 
constitute a rule and will continue to be reflected in an internal 
system of record that OCC uses to manage its policy governance. OCC 
believes maintaining this information in a single system of record is 
appropriate, efficient and will reduce the potential for confusion that 
could arise from maintaining this information in both the system of 
record and the policy. Lists of related policies, procedures and 
standards do not constitute a rule and eliminating this information 
from the Default Management Policy will encourage OCC staff to use 
OCC's internal system of record to identify the policies and procedures 
that are related to the specific purpose or function that they are 
performing rather than relying on a list that may be outdated or under 
inclusive. Accordingly, OCC does not believe a list of related 
policies, standards and procedures need to be maintained separately 
within the Default Management Policy.
    In addition, OCC proposes adding a header to separately identify 
existing language describing the applicability and scope of the Default 
Management Policy. The proposal also includes several non-substances 
changes intended to correct typographical errors and clarify certain 
aspects of the policy. OCC also proposes updating one reference to 
``Executive Vice President--Financial Risk Management (``EVP-FRM'')'' 
to ``Chief Financial Risk Officer (``CFRO'')'' in the definition of 
Designated Officer and deleting a redundant definition of Designated 
Officer. Finally, OCC proposes updating all uses of ``EVP-FRM'' within 
the Default Management Policy to ``CFRO.''
Liquidity Risk Management Framework
    OCC proposes to remove from its Liquidity Risk Management Framework 
a redundant use of the document title, the owner listed in the header 
as well as the revision history section. The policy owner and revision 
history do not constitute a rule and will continue to be reflected in 
an internal system of record that OCC uses to manage its policy 
governance. OCC believes maintaining this information in a single 
system of record is appropriate, efficient and will reduce the 
potential for confusion that could arise from maintaining this 
information in both the system of record and the policy.
    OCC also proposes updating one reference to ``EVP-FRM'' to ``Chief 
Financial Risk Officer'' and simplifying a reference to the ``FRM vice 
president that chairs the STWG'' \13\ to the ``chair of the STWG.''
---------------------------------------------------------------------------

    \13\ Defined in the Default Management Policy as Stress Test 
Working Group.
---------------------------------------------------------------------------

Margin Policy
    OCC proposes to remove from its Margin Policy the owner, rule-filed 
designation and version number listed in the header as well as the 
related policies and standards, related procedures, and revision 
history sections. The policy owner, rule-filed designation, version 
number and revision history do not constitute a rule and will continue 
to be reflected in an internal system of record that OCC uses to manage 
its policy governance. OCC believes maintaining this information in a 
single system of record is appropriate, efficient and will reduce the 
potential for confusion that could arise from maintaining this 
information in both the system of record and the policy. Lists of 
related policies, procedures and standards do not constitute a rule and 
eliminating this information from the Margin Policy will encourage OCC 
staff to use OCC's internal system of record to identify the policies 
and procedures that are related to the specific purpose or function 
that they are performing rather than relying on a list that may be 
outdated or under inclusive. Accordingly, OCC does not believe the list 
of related documents needs to be maintained separately within the 
Margin Policy.
    OCC also proposes updating one reference to ``Executive Vice 
President (``EVP'')-FRM'' to ``Chief Financial Risk Officer 
(``CFRO'').'' Consistent with the change in acronym from ``EVP-FRM'' to 
``CFRO,'' OCC proposes updating all uses of ``EVP-FRM'' within the 
Margin Policy to ``CFRO.'' Finally, OCC proposes updating three 
references to the ``Vice President'' title within the document to 
``Executive Director.''
Model Risk Management Policy
    OCC proposes to remove from its Model Risk Management Policy a 
redundant use of the document title, the owner listed in the header as 
well as the related policies and standards, related procedures, and 
revision history sections. The policy owner and revision history do not 
constitute a rule and will continue to be reflected in an internal 
system of record that OCC uses to manage its policy governance. OCC 
believes maintaining this information in a single system of record is 
appropriate, efficient and will reduce the potential for confusion that 
could arise from maintaining this information in both the system of 
record and the policy. Lists of related policies, procedures and 
standards do not constitute a rule and eliminating this information 
from the Model Risk Management Policy will encourage OCC staff to use 
OCC's internal system of record to identify the policies and procedures 
that are related to the specific purpose or function that they are 
performing rather than relying on a list that may be outdated or under 
inclusive. Accordingly, OCC does not believe lists of related policies, 
standards and procedures need to be maintained separately within the 
Model Risk Management Policy.
    OCC also proposes updating one reference to ``Executive Vice 
President, Financial Risk Management (``EVP-FRM'')'' within the Model 
Risk Management Policy to ``Chief Financial Risk Officer (``CFRO'').'' 
Consistent with the change in acronym from ``EVP-

[[Page 60502]]

FRM'' to ``CFRO,'' OCC proposes updating all uses of ``EVP-FRM'' within 
the Model Risk Management Policy to ``CFRO.'' OCC proposes updating 
three references to the ``First Vice President'' title within the 
document to ``Executive Director.'' Finally, OCC proposes to allow the 
CFRO to select a delegate for reviewing and approving Risk Model 
documentation. The purpose of this change is to allow the CFRO to 
select the person best suited to review and approve Risk Model 
documentation.
Risk Management Framework Policy
    OCC proposes to remove from its Risk Management Framework Policy a 
redundant use of the document title, the owner listed in the header as 
well as the revision history section. The policy owner and revision 
history do not constitute a rule and will continue to be reflected in 
an internal system of record that OCC uses to manage its policy 
governance. OCC believes maintaining this information in a single 
system of record is appropriate, efficient and will reduce the 
potential for confusion that could arise from maintaining this 
information in both the system of record and the policy. OCC also 
proposes to make several administrative changes to the Risk Management 
Framework Policy, including correcting typographical errors and 
updating several cross-references to other policies and procedures.
Third-Party Risk Management Framework
    OCC proposes to remove from its Third-Party Risk Management 
Framework the owner, document type and rule-filed designation listed in 
the header as well as the revision history section. The policy owner, 
document type, rule-filed designation and revision history do not 
constitute a rule and will continue to be reflected in an internal 
system of record that OCC uses to manage its policy governance. OCC 
believes maintaining this information in a single system of record is 
appropriate, efficient and will reduce the potential for confusion that 
could arise from maintaining this information in both the system of 
record and the policy. OCC also proposes updating one reference to the 
``Vice President'' title within the document to instead refer to 
Article IV (Officers) of OCC's By-Laws.
Changes to the RWD Plan
    OCC also proposes to make corresponding changes to its RWD Plan to 
implement the title changes described above. This includes: Updating 
references to ``Treasurer'' to ``Chief Financial Officer;'' updating 
references to ``Vice President'' to ``Managing Directors, Executive 
Directors, or Executive Principals;'' revising reference to the members 
of OCC's Corporate Department to refer to members of OCC's Management 
Committee, rather than the title of ``Senior Vice President;'' updating 
references to ``Executive Vice President--Financial Risk Management'' 
and ``EVP-FRM'' to ``Chief Financial Risk Officer;'' removing 
references to ``EVP'' and ``SVP'' that are no longer included in titles 
of OCC's officers with ``Chief'' in their title; removing reference to 
the SVP, Corporate Communications as a direct report to the Executive 
Chairman as the leader of Corporate Communications now reports to the 
Chief External Relations Officer; updating references to ``General 
Counsel'' to ``Chief Legal Officer and General Counsel;'' updating 
reference to ``VP Business Continuity'' to ``Business Continuity 
Department;'' and revising exhibits 2-4, 2-5, and 2-6 to reflect 
revisions to titles as well as reorganization of certain reporting 
lines. The proposed revisions promote clarity regarding the 
responsibilities of OCC's officers and will help ensure that the RWD 
Plan accurately reflects the titles and reporting lines for OCC's 
staff.
(2) Statutory Basis
    OCC believes the proposed rule change is consistent with Section 
17A of the Exchange Act \14\ and the rules thereunder applicable to 
OCC. Section 17A(b)(3)(F) of the Exchange Act \15\ requires, among 
other things, that the rules of a clearing agency be designed to 
promote the prompt and accurate clearance and settlement of securities 
transactions and, to the extent applicable, derivative agreements, 
contracts, and transactions and to assure the safeguarding of 
securities and funds which are in the custody or control of the 
clearing or agency or for which it is responsible. The proposed rule 
change is designed to align the OCC By-Laws, Rules, and Rule-Filed 
Policies with OCC's governance structure and otherwise enhance the 
accuracy, clarity, and consistency of the Rule-Filed Policies. The 
proposed changes would, among other things, help effectuate an 
organizational design process that OCC has undertaken to enhance the 
effective operation of OCC's core clearance, settlement, and risk 
management activities. By ensuring that the OCC By-Laws, Rules, and 
Rule-Filed Policies accurately reflect the titles and responsibilities 
for OCC's officers, the proposed changes will support the improved 
efficacy that this process is expected to achieve. In turn, Exchange 
Act Rules 17Ad-22(e)(2)(i) and (iv) \16\ require each covered clearing 
agency to establish, implement, maintain, and enforce written policies 
and procedures reasonably designed to provide for governance 
arrangements that are clear and transparent and specify clear and 
direct lines of responsibility. OCC believes that the proposed 
revisions would help promote clear and transparent governance 
arrangements in OCC's By-Laws, Rules, and Rule-Filed Policies. OCC aims 
to achieve this by restructuring the four titles of officers who 
currently serve as Vice Presidents to three titles. OCC also proposes 
to recognize in the By-Laws the role of OCC's Chief Financial Officer 
instead of the roles of Treasurer or Controller to represent the 
structure of its Corporate Finance Department more clearly. 
Additionally, OCC believes that it can avoid potential future confusion 
by removing from its Rule-Filed Policies information that OCC maintains 
in its system of record and that does not constitute substantive 
content of the Rule-Filed Policies. These changes involve elements of 
Rule-Filed Policies that are neither rules nor stated policies, 
practices or interpretations and removing this information from the 
Rule-Filed Policies will eliminate inconsistencies that could arise 
from maintaining it in multiple places with different approval 
processes. In this way, OCC believes that the proposed rule change is 
therefore designed, in general, to promote the prompt and accurate 
clearance and settlement of securities and derivatives transactions and 
assure the safeguarding of securities and funds which are in the 
custody or control of OCC or for which it is responsible in accordance 
with the requirements of Section 17A(b)(3)(F) of the Exchange Act \17\ 
and Rules 17Ad-22(e)(2)(i) and (iv) thereunder.\18\
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    \14\ 15 U.S.C. 78q-1.
    \15\ 15 U.S.C. 78q-1(b)(3)(F).
    \16\ 17 CFR 240.17Ad-22(e)(2)(i).
    \17\ 15 U.S.C. 78q-1(b)(3)(F).
    \18\ 17 CFR 240.17Ad-22(e)(2)(i), (iv).
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    In addition, Exchange Act Rule 17Ad-22(e)(3)(ii) requires that a 
covered clearing agency establish, implement, maintain, and enforce 
written policies and procedures reasonably designed to maintain a sound 
risk management framework for comprehensively managing legal, credit, 
liquidity, operational, general business, investment, custody, and 
other risks that arise in or are borne by the covered clearing agency, 
which includes plans for the recovery and orderly winddown of the 
covered clearing agency

[[Page 60503]]

necessitated by credit losses, liquidity shortfalls, losses from 
general business risk, or any other losses.\19\ OCC believes that the 
proposed changes to the RWD Plan are consistent with Rule 17Ad-
22(e)(3)(ii) \20\ because they will help ensure that the plan 
accurately reflects the titles, responsibilities and reporting lines 
for OCC's staff.
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    \19\ See Securities Exchange Act Release No. 34-78961 (Oct. 13, 
2016), 81 FR 70786, 70808 (Oct. 13, 2016) (File No. S7-03-14).
    \20\ 17 CFR 240.17Ad-22(e)(3)(ii).
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(B) Clearing Agency's Statement on Burden of Competition

    Section 17A(b)(3)(I) of the Act \21\ requires that the rules of a 
clearing agency not impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act. OCC does not 
believe that the proposed rule change would have any impact or impose 
any burden on competition. The proposal relates only to changes to 
OCC's internal management structure with respect to officers who hold 
the title of Vice President and its derivatives and to recognize OCC's 
``Chief Financial Officer'' and have no effect on OCC clearing members. 
OCC does not believe the proposal would affect access to OCC's 
services.
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    \21\ 15 U.S.C. 78q-1(b)(3)(I).
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(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

    Pursuant to Section 19(b)(3)(A) \22\ of the Act, and Rule 19b-
4(f)(6) thereunder,\23\ the proposed rule change is filed for immediate 
effectiveness because it does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) by its terms would not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate. As described above, the 
proposal would narrowly revise the titles of officers within OCC who 
are Vice Presidents or derivatives of Vice Presidents. In addition, the 
changes related to identifying the Chief Financial Officer rather than 
Controller and Treasurer within the By-Laws serve to clarify the 
officer role that is responsible for OCC's Corporate Finance 
Department. Furthermore, the proposed changes to OCC's Rule-Filed 
Policies to align with the revised titles as well as make non-
substantive updates do not impact the function of the Rule-Filed 
Policies. Accordingly, the proposal would not significantly affect the 
protection of investors or the public interest or impose any 
significant burden on competition because it is a change to OCC officer 
structure that has no direct effect on Clearing Members or other users 
of OCC's services. Additionally, OCC provided the Commission with 
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.
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    \22\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \23\ 17 CFR 240.19b-4(f)(6).
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    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.\24\
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    \24\ Notwithstanding its immediate effectiveness, implementation 
of this rule change will be delayed until this change is deemed 
certified under CFTC Regulation 40.6.
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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 [email protected]. Please include 
File Number SR-OCC-2021-010 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-2021-010. 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/Company-Information/Documents-and-Archives/By-Laws-and-Rules#rule-filings.
    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-2021-010 and 
should be submitted on or before November 23, 2021.
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    \25\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-23815 Filed 11-1-21; 8:45 am]
BILLING CODE 8011-01-P

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