[Federal Register Volume 73, Number 161 (Tuesday, August 19, 2008)]
[Notices]
[Pages 48419-48420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19116]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58347; File No. SR-OCC-2008-09]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of a Proposed Rule Change Relating to Eligible Margin 
Assets

August 12, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 15, 2008, 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 from 
interested persons.
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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 eliminate foreign currencies and 
letters of credit denominated in a foreign currency as eligible margin 
assets.

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 primary purpose of this rule change is to eliminate, as 
eligible forms of margin assets, foreign currency and letters of credit 
denominated in a foreign currency.
Background
    The Philadelphia Stock Exchange, Inc. (``Phlx'') has delisted all 
physical delivery foreign currency and cross-rate foreign currency 
options (collectively, ``currency options'') and has advised OCC that 
it does not presently plan to list contracts requiring foreign currency 
delivery. To support premium and exercise settlement for such currency 
options, OCC has maintained in various countries bank accounts that 
also have been used from time to time to hold margin deposits in 
foreign currencies. With the delisting of physical delivery currency 
options, these accounts are no longer needed for operational reasons. 
Few clearing members have deposited foreign currencies as margin with 
OCC and only then in de minimis amounts, and no such deposits are 
currently held by OCC. In light of the limited and infrequent use of 
this margin asset class by clearing members, OCC has determined to 
close its foreign currency accounts for cost saving purposes. Closing 
these accounts means that OCC will no longer have the operational 
capability to accept foreign currency for margin purposes, and 
accordingly, OCC proposes to modify its rules to delete this asset 
class. Letters of credit denominated in a foreign currency have never 
been posted with OCC by clearing members, and their acceptance will be 
eliminated as well.
Rule Changes
    To eliminate these forms of margin assets OCC would amend Rule 604. 
Specifically, references to deposits of foreign currencies would be 
deleted from paragraph (a), which relates to cash margin deposits. 
References to letters of credit denominated in a foreign currency would 
be deleted from paragraph (c). Other technical, conforming changes 
would be made to paragraph (c) to reflect such deletion. Because 
amended paragraph (c) would specify that letters of credit are to be 
denominated in U.S. dollars, specific references to U.S. dollar 
denominated letters of credit would be removed from Interpretations and 
Policies .03 and .08 under Rule 604. Interpretation and Policy .09 
would be deleted in its entirety as it solely relates to deposits of 
letters of credit denominated in a foreign currency.
    For rule transparency purposes, OCC also proposes to insert a 
notice at the beginning of the By-Law articles and Rule chapters that 
relate to physical delivery currency options (i.e., Articles XV and XXI 
and Chapters XVI and XXII) to inform readers that such provisions are 
inoperative until further notice by OCC.
    OCC believes that the proposed change is consistent with the Act 
because it removes the eligibility of asset classes for margin purposes 
that either are not currently used or have never been used by clearing 
members in order to reduce OCC's operating costs. The proposed rule 
change is not inconsistent with the existing rules of OCC, including 
any other rules proposed to be amended.

(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.

[[Page 48420]]

(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 such 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, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) or
     Send an e-mail to [email protected]. Please include 
File Number SR-OCC-2008-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-OCC-2008-09. 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, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. 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.theocc.com/publications/rules/proposed_changes/sr_occ_08_09.pdf. All comments received will be posted without change; 
the Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-OCC-
2008-09 and should be submitted on or before September 9, 2008.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\3\
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    \3\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-19116 Filed 8-18-08; 8:45 am]
BILLING CODE 8010-01-P