[Federal Register Volume 79, Number 216 (Friday, November 7, 2014)]
[Notices]
[Pages 66440-66442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-26460]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73497; File No. SR-OCC-2014-18]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of Proposed Rule Change to Provide That the Options 
Clearing Corporation's President Will Be Its Chief Operating Officer, 
and That the President Will Not Be a Management Director

November 3, 2014.
    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 October 31, 2014, 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 by OCC. The Commission is publishing

[[Page 66441]]

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. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    This proposed rule change by OCC would revise OCC's By-Laws to 
provide that OCC's President will be its Chief Operating Officer, 
rather than its Chief Executive Officer, and that the President will 
not be a Management Director. Conforming amendments are also proposed 
to OCC's Stockholders Agreement, Board of Directors Charter and Fitness 
Standards for Directors, Clearing Members and Others.

II. Clearing Agency'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) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to provide that OCC's 
President will be its Chief Operating Officer, rather than its Chief 
Executive Officer, and that the President will not be a Management 
Director. These changes are proposed to be made in connection with the 
resignation of OCC's former President and Chief Executive Officer, a 
transition plan that includes the election of OCC's current Chief 
Operating Officer as President and Chief Operating Officer, and the 
appointment of an Ad Hoc Search Committee to identify an appropriate 
candidate to become OCC's Chief Executive Officer (collectively, the 
``Transition Plan''). OCC's Board of Directors has determined that in 
light of the resignation of the former President and Chief Executive 
Officer and the election of the current Chief Operating Officer as 
President, the positions of President and Chief Executive Officer 
should be separated and the position of President should instead be 
combined with the position of Chief Operating Officer. To reflect this 
change, OCC is proposing to revise Section 8 of Article IV of its By-
Laws to state that the President will be OCC's Chief Operating Officer, 
rather than its Chief Executive Officer.
    While OCC's existing By-Laws provide that the President, who is 
also the Chief Executive Officer, serves as a Management Director on 
OCC's Board of Directors, given the separation of the President and 
Chief Executive Officer positions and the pending search for a new 
Chief Executive Officer, OCC's Board of Directors has also determined 
that the President should not be a Management Director. Accordingly, 
OCC proposes to amend its By-Laws such that the President is not a 
Management Director. To reflect this change, OCC is proposing to revise 
Section 7 of Article III of its By-Laws to refer only to the Executive 
Chairman, and not the President, as a Management Director. OCC also 
proposes to make a conforming revision to Section 8 of Article IV of 
its By-Laws to state that the President will not preside at meetings of 
the Board of Directors or the stockholders in the absence or disability 
of the Executive Chairman and the Management Vice Chairman because the 
President will no longer serve as a Management Director.
    OCC is also proposing amendments to its Stockholder Agreement, 
Board of Directors Charter and Fitness Standards for Directors, 
Clearing Members and Others. In each case, conforming changes would be 
made to provide that only the Executive Chairman, not the President, 
will serve as a Management Director.
    Once a replacement Chief Executive Officer has been elected by the 
Board of Directors, OCC intends to reconsider the appropriate number of 
Management Directors. The currently proposed rule change represents a 
short-term measure to implement the Transition Plan, and OCC does not 
intend a permanent change in the composition of the Board of Directors. 
Therefore, once OCC's Board of Directors has elected a Chief Executive 
Officer, OCC would propose further changes to its By-Laws, Stockholders 
Agreement, Board of Directors Charter and Fitness Standards for 
Directors, Clearing Members and Others. OCC believes that the short-
term flexibility reflected in the foregoing changes will assist OCC and 
its Board of Directors in implementing the Transition Plan efficiently 
and governing OCC effectively.
2. Statutory Basis
    OCC believes the proposed rule change is consistent with Section 
17A(b)(3)(F) of the Act \3\ because the proposed rule change would 
remove impediments to and perfect the mechanism of a national system 
for the prompt and accurate clearance and settlement of securities 
transactions. As described above, recent changes at OCC have prompted 
initiation of the Transition Plan. This proposed rule change will 
promote transparency with respect to the Transition Plan because it 
will clarify who may and who may not be a Board member from a senior 
management perspective. In addition, the proposed rule change is 
consistent with Section 17A(b)(3)(I) \4\ of the Act because it will not 
impose a burden on competition. The Transition Plan will allow OCC to 
continue to provide clearance and settlement service without affecting 
competition between clearing members, clearing agencies and market 
participants because the Transition Plan will facilitate uninterrupted, 
ongoing, operations at OCC notwithstanding the above described change 
at OCC. The proposed rule change is not inconsistent with the existing 
rules of OCC, including any other rules proposed to be amended.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F).
    \4\ 15 U.S.C. 78q-1(b)(3)(I).
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(B) Clearing Agency's Statement on Burden on Competition

    OCC does not believe that the proposed rule change would impose any 
burden on competition.\5\ Changes to the rules of a clearing agency may 
have an impact on the participants in a clearing agency and the markets 
that the clearing agency serves. This proposed rule change primarily 
affects OCC in that it amends certain By-Laws governing OCC's 
management structure. The proposed modifications would not unfairly 
inhibit access to OCC's services or disadvantage or favor any 
particular user in relationship to another user because they relate to 
OCC governance issues and would not impose any additional substantive 
burden on clearing members or other OCC participants.
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    \5\ 15 U.S.C. 78q-1(b)(3)(I).
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    For the foregoing reasons, OCC believes that the proposed rule 
change is in the public interest, would be consistent with the 
requirements of the Act applicable to clearing agencies and would not 
impose a burden on competition.

(C) Clearing Agency'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

[[Page 66442]]

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-2014-18 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-OCC-2014-18. 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 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of OCC and on OCC's 
Web site http://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_14_18.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-
2014-18 and should be submitted on or before November 28, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-26460 Filed 11-6-14; 8:45 am]
BILLING CODE 8011-01-P