[Federal Register Volume 76, Number 229 (Tuesday, November 29, 2011)]
[Notices]
[Pages 73752-73753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30719]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65807 File No. SR-OCC-2011-13]


Self-Regulatory Organizations; Options Clearing Corporation; 
Notice of Filing of Amendment No. 2 and Amendment No. 3 to Proposed 
Rule Relating to Relative Performance Indexes

November 22, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder \2\ notice is hereby given that 
on September 21, 2011, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change. On October 4, 2011, OCC filed Amendment No. 1 to 
the proposed rule change. The proposed rule change, as modified by 
Amendment No. 1, was published for comment in the Federal Register on 
October 11, 2011.\3\ On November 17, 2011, OCC filed Amendment No. 2 
and Amendment No. 3 to the proposed rule change. The proposed rule 
change as amended by Amendment Nos. 1, 2 and 3 is 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 Amendment 
Nos. 2 and 3 to the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 65483 (October 4, 2011), 
76 FR 62981 (October 11, 2011).
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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 remove any potential cloud on the 
jurisdictional status of relative performance indexes.

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.

(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 remove any potential 
cloud on the jurisdictional status of relative performance indexes. 
NASDAQ OMX PHLX has proposed to trade options on indexes (``Alpha Index 
Options'') that measure the relative total returns of a stock or 
exchange-traded fund (``ETF'') against another stock or ETF, including 
where one of the reference ETFs measured by the index is a gold- or 
silver-based ETF.\4\ Generally, a relative performance index should be 
considered to be an index of securities since the components of a 
relative performance index are ETFs or other securities. However, OCC 
would like to confirm the jurisdictional treatment of relative 
performance indexes in situations in which one of the reference 
securities of an underlying relative performance index is an ETF 
designed to measure the return of gold or silver. To accomplish this 
purpose, OCC is proposing to add an interpretation following Section 2 
in Article XVII of OCC's By-Laws,\5\ clarifying that OCC will clear and 
treat as securities any

[[Page 73753]]

relative performance index, including in situations in which one of the 
reference securities of a relative performance. The Commission and 
Commodity Futures Trading Commission (``CFTC'') have previously 
approved changes to OCC's By-Laws clarifying that options on the CBOE 
Gold ETF Volatility Index will be cleared and treated as securities.\6\
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    \4\ The staff notes that on August 17, 2011, the Commission 
issued an Order granting approval this proposed rule change. See 
Securities Exchange Act Release No. 34-65149, 76 FR 52729 (August 
23, 2011).
    \5\ The staff notes that OCC is also adding a definition of 
``relative performance index'' to Section 1, which will be defined 
as an index designed to measure the relative performance of a 
reference security or reference index in relation to another 
reference security or reference index.
    \6\ See Securities Exchange Act Release No. 34-62290, 75 FR 
35861 (June 23, 2010); CFTC Order Exempting the Trading and Clearing 
of Certain Products Related to the CBOE Gold ETF Volatility Index 
and Similar Products, 75 FR 81977 (December 29, 2010).
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    In its capacity as a ``derivatives clearing organization'' 
registered as such with the CFTC, OCC is filing this proposed rule 
change for prior approval by the CFTC pursuant to provisions of the 
Commodity Exchange Act (the ``CEA'') in order to foreclose any 
potential liability under the CEA based on an argument that the 
clearing by OCC of such options as securities options constitutes a 
violation of the CEA. The rule filing has been amended at the request 
of the CFTC. The CFTC requested that the rule filing be amended to 
clarify that OCC will clear and treat as options on securities any 
options on relative performance indexes for which a reference security 
is an exchange-traded fund designed to measure the return of gold or 
silver.\7\
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    \7\ The staff notes that Amendment Nos. 2 and 3 provide that the 
interpretation will not include options on relative performance 
indexes for which a reference security is an exchange-traded fund 
designed to measure the return of a commodity other than gold or 
silver.
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    OCC believes that the proposed interpretation of OCC's By-Laws is 
consistent with the purposes and requirements of Section 17A of the 
Exchange Act because it is designed to promote the prompt and accurate 
clearance and settlement of transactions in securities options, 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. It accomplishes 
this purpose by reducing the likelihood of a dispute as to the 
Commission's jurisdiction over relative performance indexes in 
situations where one of the reference securities of an underlying 
relative performance index is a gold- or silver-based ETF. The proposed 
rule change is not inconsistent with the By-Laws and Rules of OCC.

(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 as amended and none have been 
received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) As the 
Commission may designate 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 or disapprove the 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 as amended is consistent with the Act. Comments may be submitted 
by any of the following methods:

Electronic Comments

     Use the Commissions Internet comment form (http://www.sec.gov/rules/sro.shtml) or send an email to [email protected]. 
Please include File Number SR-OCC-2011-13 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-2011-13. This file 
number should be included on the subject line if email 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 Web site viewing and 
printing in the Commission's Public Reference Section, 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 filings will also be available for 
inspection and copying at the principal office of OCC and on OCC's Web 
site at http://www.optionsclearing.com/components/docs/legal/rules_and_bylaws/sr_occ_11_13_a_3.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-2011-13 
and should be submitted on or before December 20, 2011.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30719 Filed 11-28-11; 8:45 am]
BILLING CODE 8011-01-P