[Federal Register Volume 78, Number 245 (Friday, December 20, 2013)]
[Notices]
[Pages 77181-77183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30268]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71083; File No. SR-OCC-2013-807]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Advance Notice Concerning the Governance Committee Charter

December 16, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4(n)(1)(i),\2\ notice is hereby given that 
on September 14, 2012, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') the 
advance notice described in Items I and II below, which Items have been 
prepared by OCC. The Commission is publishing this notice to solicit 
comments on the advance notice from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
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I. Clearing Agency's Statement of the Terms of Substance of the Advance 
Notice

    This advance notice concerns the charter of the Governance 
Committee (``GC Charter'') of OCC's Board of Directors (``Board'').

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Advance Notice

    In its filing with the Commission, OCC included statements 
concerning the purpose of and basis for the advance notice and 
discussed any comments it received on the advance notice. 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) and (B) 
below, of the most significant aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Advance Notice

    This advance notice concerns the GC Charter. The Board authorized 
formation of the Governance Committee (``GC'') at its May 21, 2013, 
meeting and approved the GC Charter at its September 24, 2013, meeting. 
As set forth in the GC Charter, the purpose of the GC is to review the 
overall corporate governance of OCC and recommend improvements to OCC's 
Board. The GC Charter describes the role the GC plays in assisting the 
Board in fulfilling its responsibilities, as described in OCC's By-Laws 
and Rules, as well as specifying the policies and procedures governing 
the membership and organization, scope of authority, and specific 
functions and responsibilities of the GC. In addition, the guidelines 
for the composition of the GC as well as the policies regarding its 
meeting schedule, quorum rules, minute-keeping and reporting 
requirements are set forth in the GC Charter and conform to applicable 
requirements specified in OCC's By-Laws and Rules.
    The GC is composed of not fewer than five Directors with at least 
one Public Director, one Exchange Director and one Member Director. 
Management Directors will not be members of the GC. The Board will 
designate a GC Chair and if the Chair is not present at a meeting, the 
members who are present will designate a member to serve as the Acting 
Chair. The GC will meet at least four times a year and a majority of 
the GC members

[[Page 77182]]

constitutes a quorum. The GC is permitted to call executive sessions 
from which guests of the GC may be excluded, and GC members are 
permitted to participate in all meetings by conference telephone call 
or other means of communication that permit all meeting participants to 
hear each other. The GC Chair, or the Chair's designee, will report 
regularly to the Board on the GC's activities.
    The GC Charter sets forth certain functions and responsibilities 
for the GC including, but not limited to, the following: Review the 
composition of the Board as a whole, including the Board's balance of 
participant and non-participant directors, business specialization, 
technical skills, diversity and other desired qualifications; review 
the Board's Charter for consistency with regulatory requirements, 
transparency of the governance process and other sound governance 
practice and recommend changes to the Board, where appropriate; review 
the committee structure of the Board, including the GC, and recommend 
changes to the Board, where appropriate; review OCC's policies and 
procedures for identifying and reviewing Board nominee candidates, 
including the criteria for Board nominees; develop and recommend to the 
Board a periodic process of self-evaluation of the role and performance 
of the Board, its committees and management in the governance of OCC; 
review OCC's policies on conflicts of interest of directors, including 
the OCC Directors Code of Conduct and recommend changes, where 
appropriate; and, review OCC's new director orientation program as well 
as OCC's training and education programs for Board members and 
recommend changes, where appropriate. In addition to the foregoing, the 
GC may undertake other and different activities, as appropriate, or as 
may be delegated to it by the Board. In discharging its role, the GC 
shall confer with management and other employees of OCC to the extent 
the GC deems it necessary to so to fulfill its duties.\3\
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    \3\ The GC, subject to the approval of the Board, is permitted 
to hire specialists or rely on outside advisors or specialists to 
assist it in carrying out the GC's activities. The GC has the 
authority to approve the fees and retention terms of such advisors 
and specialists.
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    This advance notice is consistent with Section 806(e)(1)(A) \4\ of 
the Clearing Supervision Act because the proposed change could be 
deemed to materially affect the nature or level of risks presented by 
OCC. The implementation of the GC may result in changes that will 
improve OCC's overall risk management process. In addition, the 
adoption of the GC Charter will reduce the amount of systemic risk OCC 
presents to the financial system because it will enhance the 
transparency of OCC's governance arrangements. The advance notice is 
not inconsistent with any existing OCC By-Laws or Rules.
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    \4\ 12 U.S.C. 5465(e)(1)(A).
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(B) Clearing Agency's Statement on Comments on the Advance Notice 
Received From Members, Participants, or Others

    Written comments on the advance notice were not and are not 
intended to be solicited with respect to the advance notice and none 
have been received.

III. Date of Effectiveness of the Advance Notice and Timing for 
Commission Action

    The proposed changes contained in the advance notice may be 
implemented pursuant to Section 806(e)(1)(G) of Clearing Supervision 
Act \5\ if the Commission does not object to the proposed changes 
within 60 days of the later of (i) the date that the advance notice was 
filed with the Commission or (ii) the date that any additional 
information requested by the Commission is received. The clearing 
agency shall not implement the proposed changes contained in the 
advance notice if the Commission objects to the proposed changes.
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    \5\ 12 U.S.C. 5465(e)(1)(G).
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    The Commission may extend the period for review by an additional 60 
days if the proposed changes raise novel or complex issues, subject to 
the Commission providing the clearing agency with prompt written notice 
of the extension. Proposed changes may be implemented in fewer than 60 
days from the date the advance notice is filed, or the date further 
information requested by the Commission is received, if the Commission 
notifies the clearing agency in writing that it does not object to the 
proposed changes and authorizes the clearing agency to implement the 
proposed changes on an earlier date, subject to any conditions imposed 
by the Commission.
    OCC has also filed the advance notice as a proposed rule change 
pursuant to Section 19(b)(1) of the Act \6\ and Rule 19b-4 
thereunder.\7\ Pursuant to those provisions, 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.
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    \6\ 15 U.S.C. 78s(b)(1).
    \7\ 17 CFR 240.19b-4.
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    The clearing agency shall post notice on its Web site of proposed 
changes that are implemented.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. 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-2013-807 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-2013-807. 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 advance notice that are filed 
with the Commission, and all written communications relating to the 
advance notice 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, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filings 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/about/publications/bylaws.jsp.
    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

[[Page 77183]]

submissions should refer to File Number SR-OCC-2013-807 and should be 
submitted on or before January 10, 2014.

    By the Commission.
Kevin O'Neill,
Deputy Secretary.
[FR Doc. 2013-30268 Filed 12-19-13; 8:45 am]
BILLING CODE 8011-01-P