[Federal Register Volume 65, Number 234 (Tuesday, December 5, 2000)]
[Notices]
[Pages 75992-75993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30884]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43632; File No. SR-OCC-00-08]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Instructions to Pledge and Release Pledges

November 28, 2000.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on, September 8, 2000, 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 parties.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change would allow OCC to give effect on an 
intraday basis to instructions to pledge long options positions and 
instructions to release pledges.

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 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.\2\
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    \2\ The Commission has modified the text of the summaries 
prepared by OCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to accelerate the time 
when OCC gives effect to instructions to pledge or release long options 
for purposes of determining margin requirements. Currently, such 
instructions are acted on during the nightly processing cycle for 
effect the next business day. As a result, positions that have been 
released from pledge and could be used to reduce a clearing member's 
margin requirement are ``idled'' during a business day. OCC proposes to 
act on pledge and release instructions on an intraday basis thereby 
affording clearing members more efficient use of their assets and 
potentially greater flexibility in their financing decisions. No effect 
would be given to a requested pledge to the extent that the pledge 
would cause the account not to be adequately margined.
    The proposed rule change is consistent with the requirements of 
Section 17A of the Act and the rules and regulations thereunder 
applicable to OCC because it increases the ability of clearing members 
to manage their financing arrangements while maintaining OCC's overall 
protection against default.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    OCC does not believe that the proposed rule change would 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3) of the Exchange Act and Rule 19b-4(f)(6) promulgated 
thereunder because the proposal does not significantly affect the 
protection of investors or the public interest and does not impose any 
significant burden on competition. In accordance with Rule 19b-
4(f)(6)(iii), prior to the filing date, OCC submitted written notice of 
its intent to file the proposed rule change along with a brief 
description and text of the proposed rule change. In that notice of its 
intent, OCC requested that the Commission waive the requirement that 
the rule change, by its terms, not become operative for 30 days after 
the date of the filing, as consistent with the protection of investors 
and the public interest. The Commission has decided to waive that 
requirement. Accordingly, the proposed rule change will become 
effective upon filing pursuant to Section 19(b)(3)(A) of the Act and 
Rule 19b-4(f)(6) thereunder. At any time within sixty days of the 
filing of such proposed rule change, the Commission may summarily 
abrogate 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.

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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 
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 inspection and copying in the 
Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing also will be available for 
inspection and copying at the principal office of OCC. All submissions 
should refer to File No. SR-OCC-00-08 and should be submitted by 
December 26, 2000.


[[Page 75993]]


    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-30884 Filed 12-4-00; 8:45 am]
BILLING CODE 8010-01-M