[Federal Register Volume 65, Number 164 (Wednesday, August 23, 2000)]
[Notices]
[Page 51390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21520]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43167; File No. SR-ODD-00-03]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Granting Approval to Proposed Supplement to Options Disclosure 
Document Regarding Risks of Options Positions

August 17, 2000.
    On June 26, 2000, the Options Clearing Corporation (``OCC'') 
submitted to the Securities and Exchange Commission (``SEC'' or 
``Commission''), pursuant to Rule 9b-1 under the Securities Exchange 
Act of 1934 (``Act''),\1\ five definitive copies of a Supplement to its 
options disclosure document (``ODD''), which describes, among other 
things, the principal risks of options positions. In particular, the 
Supplement amends certain parts of Chapter 10 that describe the effect 
of unusual circumstances on the settlement procedures for standardized 
options.\2\
---------------------------------------------------------------------------

    \1\ 17 CFR 240.9b-1.
    \2\ See Letter from James C. Yong, First Vice President and 
Deputy General Counsel, OCC, to Elizabeth King, Associate Director, 
Division of Market Regulation, Commission, dated June 26, 2000.
---------------------------------------------------------------------------

    The ODD currently contains general disclosures on the 
characteristics and risks of trading standardized options. The 
Commission has approved OCC rule proposals that change or clarify the 
settlement procedures for options positions in unusual circumstances, 
such as when a primary market for component securities of an index 
option is not open on the last trading day before expiration.\3\ The 
proposed Supplement incorporates descriptions of these changes or 
clarifications into the ODD.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 42769 (May 9, 2000), 
65 FR 31036 (May 15, 2000) (order approving SR-OCC-00-01); 
Securities Exchange Act Release No. 42769 (June 1, 2000), 65 FR 
36489 (June 8, 2000) (order approving SR-OCC-99-16).
---------------------------------------------------------------------------

    The Commission has reviewed the ODD Supplement and finds that it 
complies with Rule 9b-1 under the Act.\4\ The Supplement is intended to 
be read in conjunction with the ODD, which discusses the 
characteristics and risks of options generally. The ODD, along with the 
Supplement, provides information regarding the principal risks of 
options positions, including the effect of unusual circumstances on the 
settlement procedures for standardized options. Rule 9b-1 provides that 
an options market must file five preliminary copies of an amended ODD 
with the Commission at least 30 days prior to the date definitive 
copies of the ODD are furnished to customers, unless the Commission 
determines otherwise, having due regard for the adequacy of information 
disclosed and the protection of investors.\5\ The Commission has 
reviewed the Supplement, and finds that it is consistent with the 
protection of investors and in the public interest to allow the 
distribution of the Supplement as of the date of this order.
---------------------------------------------------------------------------

    \4\ 17 CFR 240.9b-1.
    \5\ This provision is intended to permit the Commission either 
to accelerate or extend the time period in which definitive copies 
of a disclosure document may be distributed to the public.
---------------------------------------------------------------------------

    It Is Therefore Ordered, pursuant to Rule 9b-1 under the Act,\6\ 
that the proposed Supplement regarding special settlement procedures 
(SR-ODD-00-03) is approved on an accelerated basis.
---------------------------------------------------------------------------

    \6\ 17 CFR 240.9b-1.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(39).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-21520 Filed 8-22-00; 8:45 am]
BILLING CODE 8010-01-M