[Federal Register Volume 77, Number 136 (Monday, July 16, 2012)]
[Notices]
[Pages 41835-41836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17208]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67392; File No. SR-OCC-2012-10]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of Proposed Rule Change To Amend OCC's By-Laws and 
Rules To Terminate OCC's Pledge Program

July 10, 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 June 28, 2012, 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. The Commission is publishing this 
notice to solicit comments on 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 terminate OCC's pledge program 
(``Program''). Since implementation of the Program, only a limited 
number of clearing members participated and those that did participate 
did so on a sporadic basis.

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.

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 terminate OCC's 
pledge program. Since implementation of the Program, only a limited 
number of clearing members participated and those that did participate 
did so on a sporadic basis. OCC now proposes to eliminate the Program 
in its entirety.
    The Program was adopted by OCC in the early 1980s to facilitate the 
ability of an OCC clearing member to finance positions by permitting 
the clearing member to pledge unsegregated long positions in cleared 
securities (other than securities futures) for a loan of cash. The 
Program was initially designed for, and used by, firms clearing market 
maker business; however, use of the Program diminished as market making 
operations were acquired by larger wire houses. While OCC occasionally 
receives an inquiry regarding the Program, it has been essentially 
dormant for some time. OCC recently reviewed the Program and determined 
that any potential benefits that OCC may gain through updating the 
Program are greatly offset by the resources required for such 
modernization. Accordingly, OCC plans to terminate the Program in its 
entirety.
    OCC proposes to eliminate Rule 614 in its entirety as well as 
references to the Program and Rule 614 in its Rules and in its By-Laws.
    OCC believes that the proposed changes to OCC's Rules and By-Laws 
are consistent with the purposes and requirements of Section 17A of the 
Act \3\ and the rules and regulations thereunder applicable to OCC 
because they will allow OCC to remove a rarely used operational 
function and focus its resources on core clearing operations. Moreover, 
OCC believes that elimination of the Program will not materially affect 
clearing members given its limited and infrequent use. The proposed 
rule change is not inconsistent with any rules of OCC, including any 
proposed to be amended.
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    \3\ 15 U.S.C. 78q-1.
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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 41836]]

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 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 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 email to [email protected]. Please include 
File Number SR-OCC-2012-10 on the subject line.

Paper Comments

     Paper comments should be sent 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-2012-10. 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 Room, 100 F Street NE., 
Washington, DC 20549-1090, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such filing 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_12_10.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-2012-10 and should be submitted on or before August 
6, 2012.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Kevin O'Neill,
Deputy Secretary.
[FR Doc. 2012-17208 Filed 7-13-12; 8:45 am]
BILLING CODE 8011-01-P