[Federal Register Volume 77, Number 218 (Friday, November 9, 2012)]
[Notices]
[Pages 67429-67431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-27354]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68151; File No. SR-OCC-2012-20]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Clarify the Applicability of OCC's Rules Governing Delivery of Treasury 
Securities Underlying Treasury Futures Contracts to Futures on Treasury 
Securities With Maturities of Greater Than 25 Years

November 5, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and
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    \1\ 15 U.S.C. 78s(b)(1).
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    Rule 19b-4 thereunder \2\ notice is hereby given that on October 
22, 2012, The Options
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    \2\ 17 CFR 240.19b-4.
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    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) \3\ of the Act and Rule 19b-4(f)(4) \4\ thereunder 
so that the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the rule 
change from interested parties.
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    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    OCC proposes to clarify the applicability of OCC's rules governing 
delivery of Treasury securities underlying Treasury futures contracts 
to futures on Treasury securities with maturities of greater than 25 
years.

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

[[Page 67430]]

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.\5\
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    \5\ 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 purpose of this proposed rule change is to clarify the 
applicability of OCC's Rules governing delivery of Treasury securities 
underlying Treasury futures contracts to futures on Treasury securities 
with maturities of greater than 25 years, which are currently traded on 
ELX Futures, L.P. (``ELX'').
    Clearing members that are, or that represent, the seller of a 
physically-settled Treasury future must make delivery of the underlying 
Treasury security in accordance with the procedures set forth in Rule 
1302B. A clearing member need not deliver Treasury securities of a 
particular issue to satisfy a delivery obligation.\6\ Instead, 
Interpretation and Policy .02 to Rule 1302B sets forth criteria for 
specific Treasury securities that may be delivered in settlement of 
Treasury futures contracts. For example, for a Treasury futures 
contract with an underlying interest that is a Treasury bond, a 
clearing member may deliver Treasury bonds, if not callable, with a 
remaining term of at least fifteen years or, if callable, that are not 
callable for at least 15 years.
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    \6\ Subject to the condition that all Treasury securities 
delivered against a single physically-settled Treasury futures 
contract be of the same issue.
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    ELX trades futures on Treasury securities of various maturities, 
including futures on treasury bonds with a maturity of greater than 25 
years (``Ultra-Long Treasury Futures''). Under the rules of ELX, 
delivery obligations on Ultra-Long Treasury Futures may be satisfied by 
delivering Treasury bonds that, if not callable, have a remaining term 
of at least 25 years, or if callable, are not callable for at least 25 
years. Interpretation and Policy .02 does not specifically address the 
delivery of Treasury bonds with maturities of 25 years or greater 
against Ultra-Long Treasury Futures. Accordingly, OCC is proposing to 
amend Interpretation and Policy .02 to Rule 1302B to provide that the 
characteristics of Treasury securities that may be delivered in 
settlement of futures on Treasury securities will be as set forth in 
the relevant exchange rules and reflected in OCC's procedures. This 
amendment will clarify the applicability of Rule 1302B to Ultra-Long 
Treasury Futures, as well as accommodate futures on other Treasury 
securities that may be introduced by an exchange at a later date that 
allow for delivery of Treasury securities with different maturity dates 
than those currently listed in Interpretation and Policy .02.
    OCC believes that the proposed rule change is consistent with the 
purposes and requirements of Section 17A of the Securities Exchange Act 
of 1934, because they are designed to permit OCC to perform clearing 
services for products that are subject to the jurisdiction of the 
Commodity Futures Trading Commission (``CFTC'') without adversely 
affecting OCC's obligations with respect to the prompt and accurate 
clearance and settlement of securities transactions or the protection 
of investors and the public interest. The proposed rule change is not 
inconsistent with any rules of OCC, including any that are proposed to 
be amended.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    OCC does not believe 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 on the proposed rule change 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 upon filing pursuant 
to Section 19(b)(3)(A)(iii) \7\ of the Act and Rule 19b-4(f)(4)(ii) \8\ 
thereunder because it affects a change in an existing service of a 
registered clearing agency that primarily affects the futures clearing 
operations of the clearing agency with respect to futures that are not 
security futures and it does not significantly affect any securities 
clearing operations of the clearing agency or any related rights or 
obligations of the clearing agency or persons using such service. OCC 
will delay the implementation of the rule change until it is deemed 
certified under CFTC Regulation Sec.  40.6. At any time within 60 days 
of the filing of such rule change, the Commission summarily may 
temporarily suspend 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(4)(ii).
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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-2012-20 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-2012-20. 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 10:00 a.m. and 3:00 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/components/docs/legal/rules_and_bylaws/sr_occ_12_20.pdf).
    All comments received will be posted without change; the Commission 
does

[[Page 67431]]

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-2012-20 and should be 
submitted on or before November 30, 2012.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27354 Filed 11-8-12; 8:45 am]
BILLING CODE 8011-01-P