[Federal Register Volume 74, Number 146 (Friday, July 31, 2009)]
[Notices]
[Pages 38242-38244]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18273]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60380; File No. SR-OCC-2009-12]


Self-Regulatory Organizations; the Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Clearing Cash-Settled Foreign Currency Index Options

July 23, 2009.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on July 12, 2009, 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. OCC filed the proposed rule change pursuant to Section 
19(b)(3)(A)(i) of the Act \2\ and Rule 19b-4(f)(1) \3\ thereunder so 
that the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(i).
    \3\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change would clarify that index options cleared 
by OCC may include options on foreign currency indexes, including 
options on the International Securities Exchange (``ISE'') Leveraged 
USD Basket Index.

[[Page 38243]]

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 such 
statements.\4\
---------------------------------------------------------------------------

    \4\ The Commission has modified parts of these statements.
---------------------------------------------------------------------------

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

    ISE has proposed for trading cash-settled foreign currency index 
options (``Currency Index Options'') on the ISE USD Leveraged Basket 
Index (``ISE FX Index''). In its rule filing, ISE states that the ISE 
FX Index, which is a foreign currency index, tracks two times the 
performance, relative to the U.S. Dollar, of a basket of the official 
currencies associated with the other ``Group of 10'' countries (``G-
10'').\5\ The ISE FX Index was created by ISE and will be maintained 
and calculated by an index calculation agent based on a methodology 
developed by ISE. The ISE FX Index is intended as a benchmark for 
investors interested in the performance of the US Dollar versus the 
currencies of other G-10 countries. OCC may clear options on other 
foreign currency indexes in the future.
---------------------------------------------------------------------------

    \5\ Although there are eleven countries in the G-10, because 
several of these countries are members of the European Union and use 
the Euro as their currency. As a result, there are only seven 
currencies associated with the G-10: US Dollar, Euro, Japanese Yen, 
British Pound, Canadian Dollar, Swiss Franc and Swedish Krona.
---------------------------------------------------------------------------

    Currency Index Options are similar to other index options cleared 
by OCC. Therefore, OCC believes that the provisions of its By-Laws and 
Rules governing index options, as they are currently in effect, are 
sufficient to support the clearance and settlement of Currency Index 
Options. The purpose of this rule change is to make a purely technical 
amendment to the definition of ``index component'' in Article XVII of 
the By-Laws to make it more transparent that index options cleared by 
OCC may include options on foreign currency indexes.
    The proposed rule change is consistent with the purposes and 
requirements of Section 17A of the Act because it is designed to 
promote the prompt and accurate clearance and settlement of 
transactions in, including exercises of, foreign currency index 
options, and to foster cooperation and coordination with persons 
engaged in the clearance and settlement of such transactions, to remove 
impediments to and perfect the mechanism of a national system for the 
prompt and accurate clearance and settlement of such transactions, and, 
in general, to protect investors and the public interest. The proposed 
rule change accomplishes this purpose by applying the same rules and 
procedures to these transactions as OCC applies to transactions in 
other index options. The proposed rule change is not inconsistent with 
the existing rules of OCC, including any 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.

(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)(A)(i) of the Act \6\ and Rule 19b-4(f)(1) \7\ promulgated 
thereunder because the proposed rule change constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule. However, OCC will 
not begin to clear and settle foreign currency index options until 
distribution of a supplement to the options disclosure document, 
Characteristics and Risks of Standardized Options, addressing such 
options. At any time within sixty days of the filing of the 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2009-12 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-OCC-2009-12. 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. 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-2009-12 and should be 
submitted on or before August 21, 2009.


[[Page 38244]]


    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-18273 Filed 7-30-09; 8:45 am]
BILLING CODE 8010-01-P