[Federal Register Volume 66, Number 103 (Tuesday, May 29, 2001)]
[Notices]
[Page 29193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-13330]



[[Page 29193]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44333; File No. SR-ODD-00-04]


Self-Regulatory Organizations; Canadian Derivatives Clearing 
Corporation; Order Approving Proposed Amendments to Options Disclosure 
Document

May 22, 2001.
    On May 17, 2001, the Canadian Derivatives Clearing Corporation 
(``CDCC'') \1\ and Bourse de Montreal, Inc. (``Bourse de Montreal'') 
submitted to the Securities and Exchange Commission (``SEC'' or 
``Commission''), pursuant to Rule 9b-1 under the Securities Exchange 
Act of 1934 (``Act''),\2\ five definitive copies of an amended options 
disclosure document (``ODD''), which describes the risks and 
characteristics of Canadian exchange-traded put and call options traded 
on the Bourse de Montreal.\3\
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    \1\ The CDCC was formerly known as Trans Canada Options Inc. 
(``TCO''). The name of the corporation was changed in January 1996.
    \2\ 17 CFR 240.19b-1.
    \3\ The Commission initially approved the use and distribution 
of the TCO ODD in 1984. See Securities Exchange Act Release No. 
21365 (October 2, 1984), 49 FR 39400 (October 5, 1984). The 
Commission subsequently approved several amended versions of the TCO 
ODD, and after 1996, the CDCC ODD. See Securities Exchange Act 
Release Nos. 37569 (August 14, 1996), 61 FR 43281 (August 21, 1996); 
29033 (April 1, 1991), 56 FR 14407 (April 9, 1991); 24480 (May 19, 
1987), 52 FR 20179 (May 29, 1987); and 22349 (August 21, 1985), 50 
FR 34956 (August 28, 1985).
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    The Commission has reviewed the amended ODD and finds that it 
complies with Rule 9b-1 under the Act.\4\ Among other things, the CDCC 
and Bourse de Montreal have revised the ODD to describe changes in the 
Canadian marketplace. Previously, options cleared and settled by the 
CDCC were purchased and sold in transactions on the Montreal Exchange 
(now the Bourse de Montreal), the Toronto Stock Exchange (``TSE''), the 
Toronto Futures Exchange (``TFE''), and the Vancouver Stock Exchange 
(``VSE''). Under a Memorandum of Agreement dated March 15, 1999, the 
Alberta Stock Exchange (``ASE''), the Bourse de Montreal, the TSE, and 
the VSE agreed that the ASE and the VSE would combine to create a 
single junior equities market, that all senior equities would be 
transferred to the TSE, and that the Bourse de Montreal would trade all 
exchange-traded derivative products, including any type of option 
contracts. Under this agreement, derivative products traded on the TFE 
were transformed to the Bourse de Montreal.
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    \4\ 17 CFT 240.9b-1.
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    Other revisions to the ODD include: a discussion of Enhanced 
Capital Monitoring,\5\ which was introduced in October 2000; a 
clarification of certain U.S. federal income tax aspects of options 
transactions; and the addition of new terms to the ODD glossary. The 
revised ODD further states that the CDCC is now issuing options on the 
S&P/TSE 60 Index and deletes reference to the TSE 35 Index options and 
TSE 100 Index options, which the CDCC no longer issues.
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    \5\ Enhanced Capital Monitoring is a process designed to assess 
and mitigate the credit risk of a CDCC Clearing Member to which the 
CDCC is exposed.
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    Rule 9b-1 under the Act 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 when definitive copies of the ODD are 
furnished to customers, unless the Commission determines otherwise, 
having due regard to the adequacy of information disclosed and the 
protection of investors.\6\ The Commission has reviewed the amended 
ODD, and finds that it is consistent with the protection of investors 
and in the public interest to allow the distribution of the disclosure 
document as of the date of this order.\7\
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    \6\ 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.
    \7\ Rule 9b-1 under the Act provides that the use of an ODD 
shall not be permitted unless the options class to which the 
documents relates is the subject of an effective registration 
statement on Form S-20 under the Securities Act of 1933. On April 
20, 2001, the Commission, pursuant to delegated authority, declared 
effective the CDCC's most recent Post-Effective Amendment to its 
Form S-20 registration statement. See File No. 2-69458.
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    It is therefore ordered, pursuant to Rule 9b-1 under the Act,\8\ 
that the proposed amendment to the CDCC and Bourse de Montreal ODD (SR-
ODD-00-04) is approved on an accelerated basis.
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    \8\ 17 CFR 240.9b-1.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(39)(i).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-13330 Filed 5-25-01; 8:45 am]
BILLING CODE 8010-01-M