[Federal Register Volume 77, Number 5 (Monday, January 9, 2012)]
[Notices]
[Pages 1107-1111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-112]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66090; File No. SR-OCC-2011-19]


Self-Regulatory Organizations; Options Clearing Corporation; 
Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 
1 Thereto, Relating to the Clearance and Settlement of Over-the-Counter 
Options

January 3, 2012.
    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 December 20, 2011, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change. On January 3, 2012, OCC filed Amendment No. 1 to 
the proposed rule change. The propose rule change as amended by 
Amendment No. 1 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 the proposed rule change and Amendment 
No. 1 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.
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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 allow OCC to provide central 
clearing of OTC options beginning in the first quarter of 2012.

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 this proposed rule change is to allow OCC to provide 
central clearing of OTC options beginning in the first quarter of 2012. 
OCC will clear the proposed OTC options in a manner that is highly 
similar to the manner in which it clears listed options, with only such 
modifications as are appropriate to reflect the unique characteristics 
of OTC options.
OTC Options
    The initial OTC options to be cleared by OCC will consist of 
options on equity indices published by Standard & Poor's Financial 
Services LLC (``S&P'').\3\ OCC has entered into a license agreement 
with S&P that allows OCC to clear OTC options on the S&P 500 Index, the 
S&P MidCap 400 Index and the S&P Small Cap 600 Index. OCC may clear OTC 
options on other indices and on individual equity securities in the 
future. OTC options will have predominantly common terms and 
characteristics, but also include unique terms negotiated by the 
parties. Transactions in OTC options will not be executed through the 
facilities of any

[[Page 1108]]

exchange, but will instead be entered into bilaterally and submitted to 
OCC for clearance through one or more providers of trade affirmation 
services.\4\
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    \3\ OCC indicated that if it intends to clear additional non-S&P 
OTC products it will file a proposed rule change with the Commission 
pursuant to Section 19(b)(2) of the Act. Telephone conference 
between Steve Szarmack, Vice President and Associate General 
Counsel, OCC, and Pamela Kesner, Special Counsel, Securities and 
Exchange Commission Division of Trading and Markets on December 22, 
2011.
    \4\ The initial provider of the trade affirmation services in 
connection with the OTC options will be MarkitServ.
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    OTC options will be similar to exchange-traded standardized equity 
index options called ``FLEX Options'' that are currently traded on 
certain options exchanges.\5\ FLEX Options are exchange-traded put and 
call options that allow for customization of certain terms. For 
example, FLEX index Options traded on the Chicago Board Options 
Exchange have six customizable terms: (1) underlying index, (2) put or 
call, (3) expiration date, (4) exercise price, (5) American or European 
exercise style, and (6) method of calculating settlement value. OCC is 
the issuer and guarantor of FLEX Options and clears FLEX Options traded 
on multiple exchanges.
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    \5\ Note that FINRA Rule 2360(a)(16) refers to FLEX Options as 
``FLEX Equity Options'', which it defines as ``any options contract 
issued, or subject to issuance by, The Options Clearing Corporation 
whereby the parties to the transaction have the ability to negotiate 
the terms of the contract consistent with the rules of the exchange 
on which the options contract is traded.'' OCC does not believe this 
definition would capture OTC options as they are not traded on any 
exchange. Nevertheless, as discussed below, OCC is working with 
FINRA to amend certain of FINRA's rules to clarify the proper 
application of such rules to OTC options.
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    Similar to FLEX Options, a limited number of variable terms of OTC 
options will be allowed for customization, with a specified range of 
values that may be assigned to each, as agreed between the buyer and 
seller. Parties submitting transactions in OTC options for clearing by 
OCC will be able to customize six discrete terms: (1) Underlying index 
\6\ (2) put or call; (3) exercise price; (4) expiration date; (5) 
American or European exercise style; and (6) method of calculating 
exercise settlement value on the expiration date.\7\ The variable terms 
and permitted values will be specified in the proposed Section 6 of 
Article XVII of the By-Laws. With respect to future OTC options 
accepted for clearing, OCC intends that such future OTC options will 
conform to the general variable terms and limits on the variable terms 
set forth in proposed Section 6 of the By-Laws, and will either amend 
the Interpretations and Policies thereunder to specify additional 
requirements for specific OTC options or publish such requirements on 
OCC's Web site.
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    \6\ Initially, however, the S&P 500 Index will be the only 
permitted underlying index.
    \7\ The expiration date of an OTC option must fall on a business 
day. The method of determining the exercise settlement value of an 
OTC option on its expiration date may be either the opening 
settlement value or the closing settlement value of the underlying 
index (calculated by S&P using the opening or closing price, as 
applicable, in the primary market of each component security of the 
underlying index on the specified expiration date), in each case as 
reported to OCC by CBOE.
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Clearing of OTC Options
    OCC proposes to clear OTC options subject to the same basic rules 
and procedures used for the clearance of listed index options. The 
proposed rules require that the counterparties to the OTC options must 
be eligible contract participants (``ECPs''), as defined in Section 
3a(65) of the Securities Exchange Act of 1934, as amended (the 
``Exchange Act'') and Section 1a(18) of the Commodity Exchange Act, as 
amended (the ``CEA'').\8\ Because an OTC option will be a ``security'' 
as defined in the Exchange Act of 1934, the proposed rules also require 
that the transactions be cleared through a clearing member of OCC that 
is registered with the Commission as a broker-dealer or one of the 
small number of clearing members that are ``non-U.S. securities firms'' 
as defined in OCC's By-Laws.\9\ OCC is not proposing to require 
clearing members to meet any different financial standards for clearing 
OTC options. However, clearing members must be specifically approved by 
OCC to clear OTC options in order to assure operational readiness.
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    \8\ See proposed Section 6(f), Article XVII of the By-Laws.
    \9\ See proposed Interpretation and Policy .10 of Section 1, 
Article V of the By-Laws.
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    Exercise of an OTC option will be settled by payment of cash by the 
assigned writer and to the exercising holder through OCC's cash 
settlement system on the business day following exercise in exactly the 
same manner as is the case with exercise settlement of listed index 
options. As in the case of listed index options, the exercise-
settlement amount will be equal to the difference between the current 
value of the underlying interest and the exercise price of the OTC 
option, times the multiplier that determines the size of the OTC 
option. In the case of OTC index options on the S&P 500, the multiplier 
will be fixed at 1. The multipliers for additional OTC index options 
that OCC may in the future clear may be fixed at such value as OCC 
determines and provides for in its By-Laws and Rules.
    OCC will calculate clearing margin for the OTC options using its 
STANS margin system on the same basis as for listed index options. 
Because OCC currently clears listed options on all three of the 
underlying indexes on which OCC is currently licensed to clear OTC 
options, and because the customizable terms of these OTC options are 
relatively limited and the range of values that customizable terms may 
be given is limited, OCC does not believe that valuation and risk 
management for these OTC options present any difficult challenges. 
Nevertheless, as discussed further below, OCC is proposing a special 
close-out rule to be used in the unlikely event that OCC would be 
unable to close out positions in OTC options of a failed clearing 
member through existing procedures.
    OTC options may be carried in a clearing member's firm account, in 
market-maker accounts or in its securities customers' account, as 
applicable. Although customer positions in OTC options will be carried 
in the securities customers' account (an omnibus account), OCC will use 
a ``customer ID'' to identify positions of individual customers based 
on information provided by clearing members.\10\ However, positions are 
not presently intended to be carried in individual customer sub-
accounts, and positions in OTC options will be margined at OCC in the 
omnibus customers' account on the same basis as listed options. If a 
clearing member takes the other side of a transaction with its customer 
in an OTC option, the transaction will result in the creation of a long 
or short position (as applicable) in the clearing member's customers' 
account and the opposite short or long position in the clearing 
member's firm account. The positions could also be includable in the 
internal cross-margining account, subject to any necessary regulatory 
approvals.
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    \10\ Such customer IDs are necessary in order to allow OCC to 
comply with certain terms of OCC's license agreement with S&P. As 
described further below, customer IDs will be used for other 
purposes as well.
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    The trade data of an OTC option trade will be entered into the 
system of MarkitSERV or another trade affirmation vendor approved by 
OCC for this purpose (the ``OTC Trade Source''). OCC will permit 
additional OTC Trade Sources in the future in response to sufficient 
market demand from OCC's clearing members and subject to the ability of 
any such OTC Trade Source to meet OCC's requirements for operational 
readiness and interoperability with OCC's systems, as well as 
requirements with respect to relevant business experience and 
reputation, adequate personnel and expertise, financial qualification 
and such other factors as OCC deems relevant. The trade may be affirmed 
through one of two methods: (i) both

[[Page 1109]]

sides of the trade enter the trade details into the system of the OTC 
Trade Source and the trade details are compared and matched by the OTC 
Trade Source; or (ii) one party to the trade enters the trade details 
into the system of the OTC Trade Source and the other party to the 
trade then views the information and affirms it if it is correct. 
Whichever method is used, OCC will receive a matched trade from the OTC 
Trade Source. Note that, in either case, the OTC Trade Source merely 
acts as a messaging system among the parties and OCC to affirm the 
terms that are agreed to by the parties bilaterally and to transmit 
that information to OCC. It will be permissible for parties to submit 
trades for clearance that were entered into bilaterally at any time in 
the past, provided that the eligibility for clearance will be 
determined as of the date the trade is submitted to OCC for 
clearance.\11\ The OTC Trade Source will process the trade and submit 
it as a matched trade to OCC for clearing. If OCC accepts the trade, 
OCC will so notify the OTC Trade Source, which will notify the 
submitting parties. Customers of clearing members may have direct 
access to the OTC Trade Source for purposes of entering or affirming 
trade data and receiving communications regarding the status of 
transactions, in which case mechanisms will be put in place for a 
clearing member to authorize a customer to enter a trade for the 
clearing member's customers' account or for the clearing member to 
affirm a trade once entered.
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    \11\ OCC's license agreement with S&P imposes certain minimum 
requirements relating to time remaining to expiration of the OTC 
option, as detailed in proposed Interpretation and Policy .01 of 
Section 6, Article XVII of the By-Laws.
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    In order for a clearing member to be approved for clearing OTC 
options, the clearing member must enter into a standard agreement with 
MarkitServ (or another OTC Trade Source, if and when OCC enters into 
arrangements with other OTC Trade Sources). At launch, OTC options will 
not be subject to the same clearing member trade assignment rules and 
procedures through which exchange-traded options can be cleared by a 
clearing member other than the executing clearing member. This 
functionality may be added at a later date. OCC and MarkitSERV will 
adopt procedures to permit a customer that has an account with Clearing 
Member A (``CM A'') to enter into an OTC option transaction with 
Clearing Member B (``CM B'') and have the position included in its 
account at CM A and cleared in CM A's customers' account at OCC.
    OTC options will be fungible with each other to the extent that 
there are OTC options in the system with identical terms. However, OCC 
will not treat OTC options as fungible with index options listed on any 
exchange, even if an OTC option has terms identical to the terms of the 
exchange-listed option.
    Clearing members that carry customer positions in cleared OTC 
options will be subject to all OCC rules governing OCC-cleared options 
generally, as well as all applicable rules of the SEC and of any self-
regulatory organization, including the Financial Industry Regulatory 
Authority (``FINRA''), of which they are a member.
Regulatory Status of the OTC Options
    An OTC option will be a ``security'' as defined in both the 
Securities Act of 1933, as amended (the ``Securities Act'') and, as 
noted above, the Exchange Act. OCC will be the ``issuer'' of the OTC 
options. The OTC options will be neither ``swaps'' nor ``security-based 
swaps'' for purposes of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (``Dodd-Frank'').\12\
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    \12\ Section 1a(47)(A)(i) of CEA, as added by Section 721(a)(21) 
of Dodd-Frank, defines ``swaps'' broadly to include options on 
indices. However, Section 1a(47)(B)(iii) of the CEA excludes from 
the ``swap'' definition any option on any index of securities that 
is subject to the Securities Act and the Exchange Act. A contract 
that is excluded from the definition of a ``swap'' under Section 
1a(47)(B) (other than Section 1a(47)(B)(x)) is not a ``security-
based swap'' for purposes of Section 3a(68) of the Exchange Act.
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    Most of OCC's clearing members are members of FINRA and subject to 
FINRA's rules, which have different provisions for ``listed'' and ``OTC 
options'' and contain various definitions distinguishing between the 
two. In some cases, OTC options would fall into neither category under 
FINRA's definitions and in other cases, they would fall within what OCC 
perceives to be the wrong category. OCC has suggested to FINRA that it 
amend certain of its rules to clarify the proper application of such 
rules to cleared OTC options.
Proposed By-Law and Rule Changes
    The specific proposed changes to OCC's By-Laws and Rules to provide 
for the clearing of OTC options relate primarily to: (i) Specification 
of customizable terms; (ii) procedures for submission and acceptance of 
trades for clearance; and (iii) specification of criteria for 
eligibility of clearing members to clear transactions in OTC options 
and limitation of the types of customers for whom clearing members may 
effect transactions in OTC options. Otherwise, the currently proposed 
OTC options will be cleared and settled under the same provisions 
applicable to clearance of listed index options. Many of the proposed 
amendments are self-explanatory, and we have therefore attempted to 
confine the following discussion to a broad overview with specific 
explanation only where the reasons for the change may be less obvious.
    Article I of the By-Laws contains defined terms used throughout the 
By-Laws and Rules. OCC proposes to modify certain existing definitions 
and include certain new definitions in order to incorporate OTC options 
into existing rules and facilitate the creation of new provisions 
unique to OTC options. Throughout the By-Laws and Rules, OCC proposes 
to replace the term ``Exchange transaction,'' which is currently 
defined in Article I, in relevant part, as ``a transaction on or 
through the facilities of an exchange for the purchase, writing or sale 
of a cleared contract'' with the term ``matched trade'' so as to make 
the relevant portions of the By-Laws and Rules applicable to 
transactions in OTC options as well as listed options. ``Matched 
trade'' is proposed to be defined in Article I to include transactions 
``effected on or through the facilities of an exchange'' or ``affirmed 
through the facilities of an OTC Trade Source'' in order to include 
transactions in both listed options and OTC options. The current 
definition of ``matched trade'' in Rule 101 is proposed to be deleted 
as unnecessary given the new definition. Much of the length of this 
rule filing is attributable to the fact that the term ``Exchange 
transaction'' is used so many places in the rules. OCC has entered into 
agreements in the past which reference the term ``Exchange 
transaction'' or ``exchange transaction.'' OCC is also proposing to add 
an Interpretation and Policy to the new definition of ``matched trade'' 
in order to avoid any ambiguity concerning how such terms should be 
interpreted in any such agreement.
    OCC proposes to add a new Interpretation and Policy .10 to Section 
1 of Article V of the By-Laws, providing the additional criteria that 
must be met by a Clearing Member in order to clear OTC index options. 
Among these new criteria are that Clearing Member seeking to clear OTC 
index options on underlying indices published by Standard & Poor's 
Financial Services LLC (``S&P'') must execute and maintain in effect a 
short-form license agreement in such form as specified from time to 
time by S&P. The current form of S&P

[[Page 1110]]

short-form index license agreement is attached hereto as Exhibit A.
    The Interpretations and Policies under Section 1, Article VI allow 
clearing members to adjust their positions with OCC for certain 
enumerated reasons. OCC proposes to amend the Interpretations and 
Policies to clarify that, consistent with industry conventions in the 
OTC markets, adjustment of positions in OTC options will be effected 
through a manual process (as opposed to the electronic process 
available to post-trade adjustments in listed options), to the extent 
permitted by OCC. For the same reason, OCC is proposing to amend Rule 
403 to prohibit clearing member trade assignment (``CMTA'') 
transactions in OTC options. Trade ``give-ups'' that are effected 
through the CMTA process in the case of listed options will, in the 
case of OTC options, be effected through MarkitSERV before the trades 
are submitted to OCC for clearing.
    Article XVII of the By-Laws governs index options in general and 
OCC is proposing amendments to Article XVII in order to set forth the 
terms applicable to the initial OTC options proposed to be cleared by 
OCC--options on equity indices published by S&P--and to differentiate 
OTC index options from other index options cleared by OCC. For example, 
certain amendments to the definitions are necessary because OTC options 
will be permitted to have a much wider range of expiration dates and 
expiration times than exchange-traded options. Additional definitional 
amendments ensure that OTC index options will constitute a separate 
class of options from other cash-settled index options even if both 
index options have the same terms and cover the same underlying 
interest.
    Section 3 of Article XVII provides for adjustment of the terms of 
outstanding index options as necessary to reflect possible changes in 
the underlying index--such as those creating a discontinuity in the 
level of the index--that could theoretically make an adjustment 
necessary to protect the legitimate expectations of holders and writers 
of options on the index. Pursuant to paragraph (g) of Section 3, most 
but not all such adjustments would be made, in the case of listed index 
options, by an adjustment panel consisting of representatives of the 
exchanges on which the options are traded. In the case of OTC options, 
any such adjustments will be made by OCC in its sole discretion. 
However, in exercising that discretion, OCC may take into consideration 
adjustment made by the adjustment panel with respect to exchange-traded 
options covering the same underlying index.\13\
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    \13\ Because index options, unlike options on individual stocks, 
rarely, if ever, require adjustments, allocation of the adjustment 
authority may have little practical significance.
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    OCC proposes to add a new Section 6 to Article XVII to set forth 
certain provisions unique to OTC index options, including the variable 
terms allowed for OTC index options and the general limitations on such 
variable terms. In general, all OTC index options must conform to the 
terms and limitations set forth in Section 6, and additional specific 
requirements applicable to specific OTC index options will either be 
set forth in the Interpretations and Policies under Section 6 or 
published separately on OCC's Web site. Section 6 also makes clear that 
although OTC index options are not fungible with exchange-traded index 
options, OTC index options of the same series (i.e., options having 
identical terms) will be fungible with each other. In addition to the 
terms and limitations applicable to OTC index options, Section 6 will 
establish that clearing members will be deemed to have made a number of 
representations and warranties in connection with their activities in 
OTC options each time they affirm a matched trade entered into an OTC 
Trade Source.
    Chapter IV of the Rules sets forth the requirements for reporting 
of matched trades to OCC, and Rule 401 thereunder governs reporting of 
transactions in listed options by participant Exchanges. OCC is 
proposing to add new Rule 404 to govern the details of reporting of 
matched trades in OTC options by an OTC Trade Source.
    As discussed above, positions in OTC options will generally be 
margined in the same manner as positions in listed options using STANS 
and pursuant to Chapter VI of the Rules. However, OCC proposes to amend 
Rule 611 to establish different procedures for the segregation of long 
positions in OTC options for margining purposes. Long positions in 
listed options are held in a clearing member's customers' account or 
firm non-lien account and by default are deemed to be ``segregated,'' 
meaning that they are not subject to OCC's lien and are given no 
collateral value when determining the margin requirement in the 
account. Such positions may be unsegregated only when a clearing member 
instructs OCC to unsegregate a long position and represents to OCC that 
the long position is part of a spread transaction carried for a single 
customer whose margin requirement on the corresponding short position 
has been reduced in recognition of the spread. OCC will then 
unsegregate the long position and so reduce OCC's margin requirement. 
However, in case of long positions in OTC options that are carried in a 
clearing member's customers' account and for which OCC has received a 
customer ID, OCC proposes that it will automatically unsegregate such 
long positions if OCC identifies a qualifying short position in OTC 
options carried under the same customer ID. Clearing members will not 
be required to give an affirmative instruction to OCC to unsegregate a 
long position in OTC options or make a separate representation 
regarding the spread transaction. Instead, by carrying a qualifying 
spread position in a customer account, clearing members are deemed to 
have represented to OCC that the customer's margin has been reduced in 
recognition of the spread. Based on discussion with the clearing 
members, it is OCC's understanding that, in practice, broker-dealers 
reduce customers' margin requirements to reflect spread positions. 
Therefore, OCC believes that automatic recognition of such spreads by 
OCC together with the deemed representation will greatly increase 
operational efficiency while providing equal assurance that long 
positions in OTC options will be unsegregated only if an identified 
customer will receive the benefit of the reduced margin required for 
spread transactions.
    Rule 1001 sets forth the amount of the contribution that each 
clearing member is required to make to the clearing fund. OCC proposes 
to amend Rule 1001(c) so that, for purposes of calculating the daily 
average number of cleared contracts held by a clearing member in open 
positions with OCC during a calendar month (which number is used in 
turn to determine the clearing member's contribution to the clearing 
fund), open positions in OTC options will be adjusted as needed to 
account for any differences between the multiplier or unit of trading 
with respect to OTC options relative to non-OTC options covering the 
same underlying index or interest so that OTC options and non-OTC 
options are given comparable weight in the computation.\14\
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    \14\ For example, the index multiplier applicable to OTC index 
options on the S&P 500 Index will be fixed at 1. See proposed 
Interpretation and Policy .01 of Section 6, Article XVII of the By-
Laws. In comparison, the index multiplier applicable to listed index 
options is 100.
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    In general, the rules in Chapter XI governing the suspension of a 
clearing member will apply equally to clearing members that transact in 
OTC options. Rule 1106 provides broad authority for

[[Page 1111]]

OCC to close out open positions in options carried by a suspended 
clearing member ``in the most orderly manner practicable.'' OCC is 
proposing to amend Rule 1106 to add an additional provision with 
respect to positions in OTC options. The Commission has recently 
approved an OCC rule change providing OCC the authority to use an 
auction process as one of the means by which OCC may close out open 
positions in listed options carried by a suspended clearing member.\15\ 
OCC anticipates it will use this auction process for OTC options as 
well. As an additional protection, however, OCC is proposing to amend 
Rule 1106 to give OCC the authority, in extraordinary circumstances, to 
fix a liquidation value for open OTC options positions of a suspended 
clearing member if OCC determines that fixing a close-out value is the 
most orderly manner of closing out such positions. This procedure would 
mean that one or more clearing members having the opposite side of 
options of the same series as those held by the defaulting clearing 
member could have their positions involuntarily closed out and would be 
required to accept or pay the close-out value of the positions as 
determined by OCC. OCC anticipates that the likelihood of having to 
exercise this authority is small, and that the authority would only be 
exercised in the event that OCC is unable to find a counterparty 
willing to purchase, or assume the obligations of, open long and short 
positions of the suspended clearing member at an appropriate value 
either through the regular OTC market or through the auction process. 
Nevertheless, in view of the fact that positions in OTC index options 
are expected to be large and that there may be no active trading market 
in options with terms precisely identical to the terms of the OTC index 
options in question, OCC believes that this is an appropriate failsafe 
provision.
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    \15\ See Securities Exchange Act Release 65654 (October 28, 
2011), 76 FR 68238 (November 3, 2011).
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    OCC believes that the proposed changes to OCC's By-Laws are 
consistent with the purposes and requirements of Section 17A of the 
Exchange Act because they are designed to permit OCC to perform 
clearing services for products that are subject to the jurisdiction of 
the CFTC without adversely affecting OCC's obligations with respect to 
the prompt and accurate clearance and settlement of securities 
transactions or the protection of securities investors and the public 
interest. The proposed rule change is not inconsistent with any 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 relating to the proposed rule change have not been 
solicited or received. OCC will notify the Commission of any written 
comments received by OCC.

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.

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-2011-19 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-2011-19. 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_19_a_1.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-2011-19 and should be submitted on 
or before January 30, 2012.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-112 Filed 1-6-12; 8:45 am]
BILLING CODE 8011-01-P