Self-Regulatory Organizations; Options Clearing Corporation; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change Concerning the Options Clearing Corporation's Collateral Haircuts and Standards for Clearing Banks and Letters of Credit, 18205-18207 [2023-06195]
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Federal Register / Vol. 88, No. 58 / Monday, March 27, 2023 / Notices
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 22 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 23
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
requested that the Commission waive
the 30-day operative delay so that the
proposed rule change may become
operative upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest. As
other exchanges offer similar products
to their members, the proposal does not
raise new or novel issues. For these
reasons, the Commission designates that
the proposed rule change to be operative
immediately upon filing.24
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 shall 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:
ddrumheller on DSK120RN23PROD with NOTICES1
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–
BOX–2023–09 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–BOX–2023–09. This file
number should be included on the
22 17
CFR 240.19b–4(f)(6).
23 17 CFR 240.19b–4(f)(6)(iii).
24 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
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19:19 Mar 24, 2023
Jkt 259001
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 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–BOX–2023–09 and should
be submitted on or before April 17,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–06193 Filed 3–24–23; 8:45 am]
18205
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matter of the closed
meeting will consist of the following
topics:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations
and enforcement proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: March 23, 2023.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023–06399 Filed 3–23–23; 4:15 pm]
BILLING CODE 8011–01–P
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
2:00 p.m. on Thursday,
March 30, 2023.
PLACE: The meeting will be held via
remote means and/or at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
TIME AND DATE:
25 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00096
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97178; File No. SR–OCC–
2022–012]
Self-Regulatory Organizations;
Options Clearing Corporation; Order
Instituting Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change Concerning the
Options Clearing Corporation’s
Collateral Haircuts and Standards for
Clearing Banks and Letters of Credit
March 21, 2023.
I. Introduction
On December 5, 2022, the Options
Clearing Corporation (‘‘OCC’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change SR–OCC–2022–
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18206
Federal Register / Vol. 88, No. 58 / Monday, March 27, 2023 / Notices
012 (‘‘Proposed Rule Change’’) pursuant
to Section 19(b) of the Securities
Exchange Act of 1934 (‘‘Exchange
Act’’) 1 and Rule 19b–4 2 thereunder to
change rules, policies, and procedures
regarding collateral haircuts, minimum
standards for clearing banks and letterof-credit issuers, and concentration
limits for letters of credit.3 The
Proposed Rule Change was published
for public comment in the Federal
Register on December 23, 2022.4 The
Commission has received comments
regarding the Proposed Rule Change.5
On February 3, 2023, pursuant to
Section 19(b)(2) of the Exchange Act,6
the Commission designated a longer
period within which to approve,
disapprove, or institute proceedings to
determine whether to approve or
disapprove the Proposed Rule Change.7
This order institutes proceedings,
pursuant to Section 19(b)(2)(B) of the
Exchange Act,8 to determine whether to
approve or disapprove the Proposed
Rule Change.
II. Summary of the Proposed Rule
Change
OCC is a central counterparty
(‘‘CCP’’), which means it interposes
itself as the buyer to every seller and
seller to every buyer for financial
transactions. As the CCP for the listed
options markets in the U.S.,9 as well as
for certain futures, OCC is exposed to
certain risks arising from its
relationships with its members as well
as the banks that support OCC’s
clearance and settlement services. Such
risks include credit risk because OCC is
obligated to perform on the contracts it
clears even where one of its members
defaults. OCC manages credit risk, in
part, by collecting collateral from
members (i.e., margin and Clearing
Fund resources) sufficient to cover
OCC’s credit exposure to Clearing
Members under a wide range of stress
scenarios. In doing so, OCC requires its
Clearing Members to deposit collateral
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Notice of Filing infra note 4, at 87 FR at
79015.
4 Securities Exchange Act Release No. 96533 (Dec.
19, 2022), 87 FR 79015 (Dec. 23, 2022) (File No. SR–
OCC–2022–012) (‘‘Notice of Filing’’).
5 Comments on the Proposed Rule Change are
available at https://www.sec.gov/comments/sr-occ2022-012/srocc2022012.htm.
6 15 U.S.C. 78s(b)(2).
7 Securities Exchange Act Release No. 96797 (Feb.
3, 2023), 88 FR 8505 (Feb. 9, 2023) (File No. SR–
OCC–2022–012).
8 15 U.S.C. 78s(b)(2)(B).
9 OCC describes itself as ‘‘the sole clearing agency
for standardized equity options listed on a national
securities exchange registered with the Commission
(‘listed options’).’’ See Notice of Filing supra note
4, 87 FR at 79015.
ddrumheller on DSK120RN23PROD with NOTICES1
2 17
VerDate Sep<11>2014
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as margin to support obligations on
short options, futures contracts, and
other obligations arising within the
members’ accounts at OCC. OCC also
requires its members to deposit
collateral serving as Clearing Fund
assets to protect OCC, should the margin
of a defaulting member be insufficient to
address the potential losses from the
defaulting member’s positions. OCC
imposes a haircut to collateral to
address the risk that such collateral may
be worth less in the future than at the
time it was pledged to OCC. With regard
to risks posed by the banks that support
OCC’s clearance and settlement
services, OCC maintains standards for
third-party relationships, such as those
with banks through which OCC
conducts settlement (‘‘Clearing Banks’’),
and banks that issue letters of credit that
Clearing Members may deposit as
margin collateral.
As described in the Notice of Filing,10
OCC proposes to revise its rules,
including certain policies,11 to make the
following three changes related to the
management of collateral haircuts and
banking relationships:
(1) Replace the current processes for
applying haircuts to Government and
Government-Sponsored Enterprise (‘‘GSE’’)
debt securities provided as collateral 12 with
a new process for applying fixed collateral
haircuts that it would set and adjust from
time to time, based on a process defined in
OCC’s Collateral Risk Management Policy;
(2) Codify internal standards for Clearing
Banks and letter-of-credit issuers in OCC’s
Rules to provide transparency on minimum
standards for banking relationships that are
critical to OCC’s clearance and settlement
services; and
(3) Authorize OCC to set more restrictive
concentration limits for letters of credit than
those limits currently codified in its Rules.
III. Proceedings To Determine Whether
To Approve or Disapprove the
Proposed Rule Change and Grounds for
Disapproval Under Consideration
The Commission is instituting
proceedings pursuant to Section
19(b)(2)(B) of the Exchange Act 13 to
determine whether the Proposed Rule
Change should be approved or
disapproved. Institution of proceedings
is appropriate at this time in view of the
legal and policy issues raised by the
10 See
Notice of Filing supra note 4.
policies include the Collateral Risk
Management Policy, Margin Policy, and System for
Theoretical Analysis and Numerical Simulation
Methodology Description. Id.
12 Generally, OCC defines, by rule, specific
haircuts for Government and GSE debt securities.
For margin collateral specifically, OCC currently
also has authority to value such securities using
Monte Carlo simulations as part of its margin
methodology.
13 15 U.S.C. 78s(b)(2)(B).
11 These
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
Proposed Rule Change. Institution of
proceedings does not indicate that the
Commission has reached any
conclusions with respect to any of the
issues involved. Rather, the Commission
seeks and encourages interested persons
to comment on the Proposed Rule
Change, providing the Commission with
arguments to support the Commission’s
analysis as to whether to approve or
disapprove the Proposed Rule Change.
Pursuant to Section 19(b)(2)(B) of the
Exchange Act,14 the Commission is
providing notice of the grounds for
disapproval under consideration. The
Commission is instituting proceedings
to allow for additional analysis of, and
input from commenters with respect to,
the Proposed Rule Change’s consistency
with Section 17A of the Exchange Act,15
and the rules thereunder, including the
following provisions:
• Section 17A(b)(3)(F) of the
Exchange Act,16 which requires, among
other things, that the rules of a clearing
agency are designed to promote the
prompt and accurate clearance and
settlement of securities transactions and
derivative agreements, contracts, and
transactions; and to assure the
safeguarding of securities and funds
which are in the custody or control of
the clearing agency or for which it is
responsible; and
• Section 17A(b)(3)(I) of the Exchange
Act,17 which requires that the rules of
a clearing agency do not impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Exchange Act.
IV. Procedure: Request for Written
Comments
The Commission requests that
interested persons provide written
submissions of their views, data, and
arguments with respect to the issues
identified above, as well as any other
concerns they may have with the
Proposed Rule Change. In particular, the
Commission invites the written views of
interested persons concerning whether
the Proposed Rule Change is consistent
with Sections 17A(b)(3)(F) and (I) of the
Exchange Act,18 or any other provision
of the Exchange Act, or the rules and
regulations thereunder. Although there
do not appear to be any issues relevant
to approval or disapproval that would
be facilitated by an oral presentation of
views, data, and arguments, the
Commission will consider, pursuant to
Rule 19b–4(g) under the Exchange
14 Id.
15 15
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(F).
17 15 U.S.C. 78q–1(b)(3)(I).
18 15 U.S.C. 78q–1(b)(3)(F) and (I).
16 15
E:\FR\FM\27MRN1.SGM
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Federal Register / Vol. 88, No. 58 / Monday, March 27, 2023 / Notices
Act,19 any request for an opportunity to
make an oral presentation.20
Interested persons are invited to
submit written data, views, and
arguments regarding whether the
Proposed Rule Change should be
approved or disapproved by April 11,
2023. Any person who wishes to file a
rebuttal to any other person’s
submission must file that rebuttal by
April 25, 2023.
The Commission asks that
commenters address the sufficiency of
OCC’s statements in support of the
Proposed Rule Change, which are set
forth in the Notice of Filing,21 in
addition to any other comments they
may wish to submit about the Proposed
Rule Change.
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–2022–012 on the subject line.
ddrumheller on DSK120RN23PROD with NOTICES1
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–2022–012. 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,
19 17
CFR 240.19b–4(g).
19(b)(2) of the Exchange Act grants to
the Commission flexibility to determine what type
of proceeding—either oral or notice and
opportunity for written comments—is appropriate
for consideration of a particular proposal by a selfregulatory organization. See Securities Act
Amendments of 1975, Senate Comm. on Banking,
Housing & Urban Affairs, S. Rep. No. 75, 94th
Cong., 1st Sess. 30 (1975).
21 See Notice of Filing, supra note 4.
20 Section
VerDate Sep<11>2014
19:19 Mar 24, 2023
Jkt 259001
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.
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–2022–012 and should
be submitted on or before April 11,
2023. Rebuttal comments should be
submitted by April 25, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Sherry R. Haywood,
Assistant Secretary.
18207
Notice is
hereby given that as a result of the
President’s major disaster declaration on
03/15/2023, 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: Erie, Genesee,
Niagara, Saint Lawrence, Suffolk
The Interest Rates are:
SUPPLEMENTARY INFORMATION:
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 .....................................
2.375
2.375
2.375
[FR Doc. 2023–06195 Filed 3–24–23; 8:45 am]
The number assigned to this disaster
for physical damage is 17814 B and for
economic injury is 17815 0.
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #17814 and #17815;
New York Disaster Number NY–00219]
Presidential Declaration of a Major
Disaster for Public Assistance Only for
the State of New York
U.S. Small Business
Administration.
ACTION: Notice.
(Catalog of Federal Domestic Assistance
Number 59008)
Francisco Sa´nchez, Jr.,
Associate Administrator, Office of Disaster
Recovery & Resilience.
[FR Doc. 2023–06204 Filed 3–24–23; 8:45 am]
BILLING CODE 8026–09–P
AGENCY:
SMALL BUSINESS ADMINISTRATION
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of New York (FEMA–4694–
DR), dated 03/15/2023.
Incident: Severe Winter Storm and
Snowstorm.
Incident Period: 12/23/2022 through
12/28/2022.
DATES: Issued on 03/15/2023.
Physical Loan Application Deadline
Date: 05/15/2023.
Economic Injury (EIDL) Loan
Application Deadline Date: 12/15/2023.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUMMARY:
22 17
PO 00000
CFR 200.30–3(a)(31).
Frm 00098
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Sfmt 4703
[Disaster Declaration #17818 and #17819;
Vermont Disaster Number VT–00045]
Presidential Declaration of a Major
Disaster for Public Assistance Only for
the State of Vermont
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Vermont (FEMA–4695–DR),
dated 03/20/2023.
Incident: Severe Storm and Flooding.
Incident Period: 12/22/2022 through
12/24/2022.
DATES: Issued on 03/20/2023.
Physical Loan Application Deadline
Date: 05/19/2023.
Economic Injury (EIDL) Loan
Application Deadline Date: 12/20/2023.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
SUMMARY:
E:\FR\FM\27MRN1.SGM
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]]>Agencies
[Federal Register Volume 88, Number 58 (Monday, March 27, 2023)]
[Notices]
[Pages 18205-18207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06195]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97178; File No. SR-OCC-2022-012]
Self-Regulatory Organizations; Options Clearing Corporation;
Order Instituting Proceedings To Determine Whether To Approve or
Disapprove a Proposed Rule Change Concerning the Options Clearing
Corporation's Collateral Haircuts and Standards for Clearing Banks and
Letters of Credit
March 21, 2023.
I. Introduction
On December 5, 2022, the Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change SR-OCC-2022-
[[Page 18206]]
012 (``Proposed Rule Change'') pursuant to Section 19(b) of the
Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
\2\ thereunder to change rules, policies, and procedures regarding
collateral haircuts, minimum standards for clearing banks and letter-
of-credit issuers, and concentration limits for letters of credit.\3\
The Proposed Rule Change was published for public comment in the
Federal Register on December 23, 2022.\4\ The Commission has received
comments regarding the Proposed Rule Change.\5\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Notice of Filing infra note 4, at 87 FR at 79015.
\4\ Securities Exchange Act Release No. 96533 (Dec. 19, 2022),
87 FR 79015 (Dec. 23, 2022) (File No. SR-OCC-2022-012) (``Notice of
Filing'').
\5\ Comments on the Proposed Rule Change are available at
https://www.sec.gov/comments/sr-occ-2022-012/srocc2022012.htm.
---------------------------------------------------------------------------
On February 3, 2023, pursuant to Section 19(b)(2) of the Exchange
Act,\6\ the Commission designated a longer period within which to
approve, disapprove, or institute proceedings to determine whether to
approve or disapprove the Proposed Rule Change.\7\ This order
institutes proceedings, pursuant to Section 19(b)(2)(B) of the Exchange
Act,\8\ to determine whether to approve or disapprove the Proposed Rule
Change.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(2).
\7\ Securities Exchange Act Release No. 96797 (Feb. 3, 2023), 88
FR 8505 (Feb. 9, 2023) (File No. SR-OCC-2022-012).
\8\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
II. Summary of the Proposed Rule Change
OCC is a central counterparty (``CCP''), which means it interposes
itself as the buyer to every seller and seller to every buyer for
financial transactions. As the CCP for the listed options markets in
the U.S.,\9\ as well as for certain futures, OCC is exposed to certain
risks arising from its relationships with its members as well as the
banks that support OCC's clearance and settlement services. Such risks
include credit risk because OCC is obligated to perform on the
contracts it clears even where one of its members defaults. OCC manages
credit risk, in part, by collecting collateral from members (i.e.,
margin and Clearing Fund resources) sufficient to cover OCC's credit
exposure to Clearing Members under a wide range of stress scenarios. In
doing so, OCC requires its Clearing Members to deposit collateral as
margin to support obligations on short options, futures contracts, and
other obligations arising within the members' accounts at OCC. OCC also
requires its members to deposit collateral serving as Clearing Fund
assets to protect OCC, should the margin of a defaulting member be
insufficient to address the potential losses from the defaulting
member's positions. OCC imposes a haircut to collateral to address the
risk that such collateral may be worth less in the future than at the
time it was pledged to OCC. With regard to risks posed by the banks
that support OCC's clearance and settlement services, OCC maintains
standards for third-party relationships, such as those with banks
through which OCC conducts settlement (``Clearing Banks''), and banks
that issue letters of credit that Clearing Members may deposit as
margin collateral.
---------------------------------------------------------------------------
\9\ OCC describes itself as ``the sole clearing agency for
standardized equity options listed on a national securities exchange
registered with the Commission (`listed options').'' See Notice of
Filing supra note 4, 87 FR at 79015.
---------------------------------------------------------------------------
As described in the Notice of Filing,\10\ OCC proposes to revise
its rules, including certain policies,\11\ to make the following three
changes related to the management of collateral haircuts and banking
relationships:
---------------------------------------------------------------------------
\10\ See Notice of Filing supra note 4.
\11\ These policies include the Collateral Risk Management
Policy, Margin Policy, and System for Theoretical Analysis and
Numerical Simulation Methodology Description. Id.
(1) Replace the current processes for applying haircuts to
Government and Government-Sponsored Enterprise (``GSE'') debt
securities provided as collateral \12\ with a new process for
applying fixed collateral haircuts that it would set and adjust from
time to time, based on a process defined in OCC's Collateral Risk
Management Policy;
---------------------------------------------------------------------------
\12\ Generally, OCC defines, by rule, specific haircuts for
Government and GSE debt securities. For margin collateral
specifically, OCC currently also has authority to value such
securities using Monte Carlo simulations as part of its margin
methodology.
---------------------------------------------------------------------------
(2) Codify internal standards for Clearing Banks and letter-of-
credit issuers in OCC's Rules to provide transparency on minimum
standards for banking relationships that are critical to OCC's
clearance and settlement services; and
(3) Authorize OCC to set more restrictive concentration limits
for letters of credit than those limits currently codified in its
Rules.
III. Proceedings To Determine Whether To Approve or Disapprove the
Proposed Rule Change and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Exchange Act \13\ to determine whether the Proposed
Rule Change should be approved or disapproved. Institution of
proceedings is appropriate at this time in view of the legal and policy
issues raised by the Proposed Rule Change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to any of the issues involved. Rather, the Commission seeks and
encourages interested persons to comment on the Proposed Rule Change,
providing the Commission with arguments to support the Commission's
analysis as to whether to approve or disapprove the Proposed Rule
Change.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Exchange Act,\14\ the
Commission is providing notice of the grounds for disapproval under
consideration. The Commission is instituting proceedings to allow for
additional analysis of, and input from commenters with respect to, the
Proposed Rule Change's consistency with Section 17A of the Exchange
Act,\15\ and the rules thereunder, including the following provisions:
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\14\ Id.
\15\ 15 U.S.C. 78q-1.
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Section 17A(b)(3)(F) of the Exchange Act,\16\ which
requires, among other things, that the rules of a clearing agency are
designed to promote the prompt and accurate clearance and settlement of
securities transactions and derivative agreements, contracts, and
transactions; and to assure the safeguarding of securities and funds
which are in the custody or control of the clearing agency or for which
it is responsible; and
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\16\ 15 U.S.C. 78q-1(b)(3)(F).
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Section 17A(b)(3)(I) of the Exchange Act,\17\ which
requires that the rules of a clearing agency do not impose any burden
on competition not necessary or appropriate in furtherance of the
purposes of the Exchange Act.
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\17\ 15 U.S.C. 78q-1(b)(3)(I).
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IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the Proposed Rule Change. In particular, the Commission invites
the written views of interested persons concerning whether the Proposed
Rule Change is consistent with Sections 17A(b)(3)(F) and (I) of the
Exchange Act,\18\ or any other provision of the Exchange Act, or the
rules and regulations thereunder. Although there do not appear to be
any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4(g) under the Exchange
[[Page 18207]]
Act,\19\ any request for an opportunity to make an oral
presentation.\20\
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\18\ 15 U.S.C. 78q-1(b)(3)(F) and (I).
\19\ 17 CFR 240.19b-4(g).
\20\ Section 19(b)(2) of the Exchange Act grants to the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Act Amendments of 1975, Senate Comm. on
Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the Proposed Rule Change should be approved
or disapproved by April 11, 2023. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
April 25, 2023.
The Commission asks that commenters address the sufficiency of
OCC's statements in support of the Proposed Rule Change, which are set
forth in the Notice of Filing,\21\ in addition to any other comments
they may wish to submit about the Proposed Rule Change.
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\21\ See Notice of Filing, supra note 4.
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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-2022-012 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-2022-012. 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.
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-2022-012 and
should be submitted on or before April 11, 2023. Rebuttal comments
should be submitted by April 25, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(31).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06195 Filed 3-24-23; 8:45 am]
BILLING CODE 8011-01-P
