[Federal Register Volume 69, Number 57 (Wednesday, March 24, 2004)]
[Notices]
[Pages 13932-13933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6597]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49436; File No. SR-OCC-2004-01]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Related to Clearing Fees for Securities Option Contracts

March 17, 2004.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 23, 2004, The 
Options Clearing Corporation (``OCC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change 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 purpose of the proposed rule change is to reduce certain 
clearing fees for securities option contracts, effective April 1, 2004.

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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[[Page 13933]]

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The principal purpose of this rule change is to reduce OCC's 
clearing fees for securities option contracts, effective April 1, 2004, 
as follows:

------------------------------------------------------------------------
                                         Current per      April 1, 2004
         Contracts per trade            contract per      contract per
                                          trade fee         trade fee
------------------------------------------------------------------------
0-500...............................    $0.09             $0.0825
501-1,000...........................     0.07              0.0675
1,001-2,000.........................     0.06              0.0575
 2,000...................   110.00 (capped)   110.00 (capped)
------------------------------------------------------------------------

    In addition to the foregoing, OCC will expand what is considered to 
be a ``market maker scratch trade.'' Currently, OCC considers market 
maker scratch trades to be the same day purchase and sale of identical 
option contracts in the same quantity and price by a market maker on a 
single exchange. Such trades are subject to a reduced clearing fee of 
$.02 per contract in recognition of a market maker's obligation to 
continuously maintain a fair and orderly market, which often may result 
in near simultaneous breakeven purchase and sale transactions. 
Effective April 1, 2004, OCC will no longer require that the condition 
that the purchase and sale transactions take place on a single exchange 
in order to be treated as a market maker scratch trade. As a result of 
this change, a greater number of contracts will be eligible for 
clearance at the $.02 per contract rate.
    OCC believes that the foregoing changes will financially benefit 
clearing members without adversely affecting OCC's ability to meet its 
expenses and maintain an acceptable level of retained earnings.

(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 upon filing pursuant 
to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)\4\ 
thereunder because the proposed rule establishes or changes a due, fee, 
or other charge. At any time within sixty days of the filing of such 
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.
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    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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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. 
Comments may also be submitted electronically at the following e-mail 
address: [email protected]. All comment letters should refer to 
File No. SR-OCC-2004-01. This file number should be included on the 
subject line if e-mail is used. To help the Commission process and 
review your comments more efficiently, comments should be sent in 
either hardcopy or by e-mail but not by both methods. 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-
0609. Copies of such filing also will be available for inspection and 
copying at the principal office of OCC and on OCC's Web site at http://www.optionsclearing.com. All submissions should refer to File No. SR-
OCC-2004-01 and should be submitted by April 14, 2004.
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    \5\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-6597 Filed 3-23-04; 8:45 am]
BILLING CODE 8010-01-P