[Federal Register Volume 59, Number 138 (Wednesday, July 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17584]
[[Page Unknown]]
[Federal Register: July 20, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34360; International Series Release No. 683; File No.
SR-OCC-94-07]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of a Proposed Rule Change Relating to Flexibly
Structured Cross-Rate Foreign Currency Options
July 13, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on June 6, 1994, 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. 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 (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule change is to enable OCC to issue,
clear, and settle new flexibly structured cross-rate foreign currency
option contracts.
II. Self-Regulatory Organization'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. 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 such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of this filing is to enable OCC to issue, clear, and
settle new flexibly structured cross-rate foreign currency option
contracts proposed for trading by the Philadelphia Stock Exchange
(``PHLX'').\2\ In OCC's original cross-rate foreign currency options
filing, OCC sought and obtained approval to issue, clear, and settle
the following cross-rate option contracts: (1) options on German
Deutsche marks with exercise prices in Japanese yen (``DM/JY''
options); (2) options on British pounds with exercise prices in
Japanese yen (``BP/JY options''); and (3) options on British pounds
with exercise prices in German Deutsche marks (``BP/DM options'').\3\
In that filing, OCC advised the Commission that it anticipated clearing
additional cross-rate option contracts in the future, including cross-
rate option contracts involving different combinations of currencies.
OCC stated that it would submit a rule filing with the Commission
before issuing any new cross-rate option products.
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\2\For a description of the PHLX proposed rule change, refer to
Securities Exchange Act Release No. 34308 (July 5, 1994), 59 FR
35551, [File No. SR-PHLX-94-18] (notice of filing of proposed rule
change).
\3\Securities Exchange Act Release No. 29920 (November 7, 1991),
56 FR 58105 [File No. SR-OCC-91-04] (order approving proposed rule
change establishing cross-rate foreign currency options).
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OCC was recently advised by the PHLX that it is proposing to trade
new flexibly structured cross-rate options through the PHLX's
customized option facility. Under the PHLX proposal, options may be
traded on any combination of currencies underlying existing foreign
currency option contracts.\4\ For example, options on British pounds
with exercise prices in French francs (``BP/FF options'') may be
traded.
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\4\The following currencies underlie existing foreign currency
options contracts: (1) Australian dollars (``AUD''), (2) British
pounds (``BP''), (3) Canadian dollars (``CD''), (4) German Deutsche
marks (``DM''), (5) European Economic Community currency units
(``ECU''), (6) French francs (``FF''), (7) Japanese yen (``JY'') and
(8) Swiss francs (``SF'').
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Accordingly, OCC is proposing to issue, clear, and settle these new
cross-rate option contracts. OCC has reviewed its By-Laws and Rules and
has determined that no changes are necessary to accommodate these new
products because they will be margined and settled like the existing
cross-rate option contracts.
The proposed rule change is consistent with the purposes and
requirements of Section 17A of the Securities Exchange Act of 1934, as
amended, because it will provide for the prompt and accurate settlement
of transactions in new cross-rate foreign currency option contracts and
for the safeguarding of related securities and funds. The proposed rule
change meets such requirements by establishing a framework in which
existing, reliable OCC systems, rules, and procedures will be extended
to the processing of such cross-rate foreign currency options.
B. Self-Regulatory Organization's Statement on Burden on Competition
OCC does not believe that the proposed rule change will impose any
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
Written comments were not and are not intended to be solicited with
respect to the proposed rule change, and none have been received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five days of the date of publication of this notice
in the Federal Register or within such longer period (i) as the
Commission may designate up to ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding or (ii) as to which the self-regulatory organization consents,
the Commission will:
(A) by order approve the proposed rule change or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.
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. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of the above-referenced
self-regulatory organization.
All submissions should refer to File No. SR-OCC-94-07 and should be
submitted by August 10, 1994.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-17584 Filed 7-19-94; 8:45 am]
BILLING CODE 8010-01-M