Notice2021-25624
Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Correct an Inadvertent Omission in a Prior Proposed Rule Change Concerning OCC's Schedule of Fees
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 24, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 224 (Wednesday, November 24, 2021)</title>
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[Federal Register Volume 86, Number 224 (Wednesday, November 24, 2021)]
[Notices]
[Pages 67108-67110]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25624]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93612; File No. SR-OCC-2021-012]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Correct an Inadvertent Omission in a Prior Proposed Rule Change
Concerning OCC's Schedule of Fees
November 18, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on November 8, 2021, The Options Clearing
Corporation (``OCC'') filed with the Securities and Exchange Commission
(``SEC'' or ``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)(ii) \3\ of the Act and Rule 19b-4(f)(2) \4\ thereunder so
that the proposal was effective upon filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change by OCC would correct an inadvertent
omission in OCC's schedule of fees that was the subject of a prior rule
filing. OCC's schedule of fees is included as Exhibit 5 to File No. SR-
OCC-2021-012. Material proposed to be added to OCC's schedule of fees
as currently in effect is underlined and material proposed to be
deleted is marked in strikethrough text.
[[Page 67109]]
All capitalized terms not defined herein have the same meaning as set
forth in the OCC By-Laws and Rules.\5\
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\5\ OCC's By-Laws and Rules can be found on OCC's public
website: <a href="https://www.theocc.com/Company-Information/Documents-and-Archives/By-Laws-and-Rules">https://www.theocc.com/Company-Information/Documents-and-Archives/By-Laws-and-Rules</a>.
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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 revise OCC's
schedule of fees to correct an inadvertent omission in the prior rule
filing that established a fee holiday for the period from November 1,
2021, and ending December 31, 2021.\6\ Based on OCC's financial
position as a result of historic contract volume, and consistent with
OCC's Capital Management Policy, that prior filing reduced its per
contract and per trade clearing fees to $0 for the last two months of
2021. However, through an inadvertent oversight, two line items in the
schedule of fees related to clearing fees were not reduced accordingly:
(1) The minimum monthly clearing fee of $200 and (2) a fee of $0.02 per
side for linkage transactions, capped at $55 per trade per side.\7\ OCC
is now proposing to correct the schedule of fees set forth in Exhibit 5
to File No. SR-OCC-2021-012 to reflect that OCC will not collect these
fees during the fee holiday.
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\6\ See Exchange Act Release No. 93195 (Sept. 29, 2021), 86 FR
55039 (Oct. 5, 2021) (File No. SR-OCC-2021-009).
\7\ The linkage fee was added to OCC's schedule of fees in 2012
so that OCC could, for the purposes of charging a clearing fee,
treat routing trades executed in accordance with the Options Order
Protection and Locked/Crossed Market Plan the same as market maker/
specialist scratch trades, which were subject to a reduced ``scratch
fee.'' See Exchange Act Release No. 68025 (Oct. 10, 2012), 77 FR
63398 (Oct. 16, 2012) (File No. SR-OCC-2012-18). In 2016, OCC
simplified its schedule of fees by, among other things, eliminating
the scratch fee but retained the linkage per side fee. See Exchange
Act Release No. 77336 (Mar. 10, 2016), 81 FR 14153 (Mar. 16, 2016)
(File No. SR-OCC-2016-005).
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Clearing fees effective June 1, 2021 Proposed fee holiday from November 1, 2021 to
December 31, 2021
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Linkage per side.............................. * $0.02 Linkage per side................ $0.00
Minimum Monthly Clearing Fee.................. 200.00 Minimum Monthly Clearing Fee.... 0.00
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* A Linkage transaction that includes more than 2,750 contracts will be charged a flat fee of $55.00 per trade
per side.
The listing of the fees in the schedule of fees would be reordered
to group these two fees with the other clearing fees that are subject
to the fee holiday. Like the changes to OCC's clearing fees set forth
in File No. SR-OCC-2021-009, the linkage per side fee and the minimum
monthly clearing fee will revert to the fee schedule in effect before
November 1, 2021 and OCC will remove the fee holiday from its schedule
of fees effective the first trading day of 2022.
No fees for transactions occurring within the fee holiday period
have been collected because clearing fees are due to OCC the month
after the fees are incurred. OCC will not collect fees for transactions
that occurred between November 1, 2021 through the first date it may
implement the corrected fee schedule after completing all regulatory
actions necessary to make the proposed corrections.
(2) Statutory Basis
Section 17A(b)(3)(D) of the Act \8\ requires that the rules of a
clearing agency provide for the equitable allocation of reasonable
dues, fees, and other charges among its participants. OCC believes that
the proposed correction of inadvertent omissions to OCC's schedule of
fees would facilitate the equitable allocation of fees among its
participants because it would eliminate inadvertent discrepancies in
the application of the fee holiday that might otherwise impact certain
market participants differently depending on the business they conduct
through OCC. The corrected fees would be equally applicable to all
market participants. As a result, OCC believes that the proposed
corrections would provide for the equitable allocation of reasonable
fees in accordance with Section 17A(b)(3)(D) of the Act.\9\
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\8\ 15 U.S.C. 78q-1(b)(3)(D).
\9\ 15 U.S.C. 78q-1(b)(3)(D).
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In addition, SEC Rule 17Ad-22(e)(23)(ii) \10\ provides that a
covered clearing agency must establish, implement, maintain and enforce
written policies and procedures reasonably designed to provide
sufficient information to enable participants to identify and evaluate
the risks, fees, and other material costs they incur by participating
in the covered clearing agency. By correcting OCC's schedule of fees
consistent with the intent of the fee holiday, OCC would eliminate
ambiguity that might otherwise persist about whether OCC intends to
charge the minimum monthly clearing fee and the fee for linkage
transactions while the fee holiday is in effect, which it does not.
Accordingly, OCC believes that the proposed corrections are reasonably
designed to provide participants sufficient information to evaluate
OCC's fees, in accordance with SEC Rule 17Ad-22(e)(23)(ii).\11\
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\10\ 17 CFR 240.17AD-22(e)(23)(ii).
\11\ 17 CFR 240.17AD-22(e)(23)(ii).
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The proposed rule change is not inconsistent with the existing
rules of OCC, including any other rules proposed to be amended.
(B) Clearing Agency's Statement on Burden on Competition
Section 17A(b)(3)(I) of the Act \12\ requires that the rules of a
clearing agency not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act. OCC does not
believe that the proposed rule change would have any impact or impose a
burden on competition. Although this proposed rule change affects
clearing members, their customers, and the markets that OCC serves, OCC
believes that the proposed rule change would not disadvantage or favor
any particular user of OCC's services in relationship to another user
because the proposed fee holiday with respect to these fees applies
equally to all users of OCC. Accordingly, OCC does not believe that the
proposed rule change would have
[[Page 67110]]
any impact or impose a burden on competition.
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\12\ 15 U.S.C. 78q-1(b)(3)(I).
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(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 the proposed rule change and
none have been received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A)(ii) \13\ of the Act, and Rule 19b-
4(f)(2) thereunder,\14\ the proposed rule change is filed for immediate
effectiveness as it constitutes a change in fees charged to OCC's
members. At any time within 60 days of the filing of the proposed 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. The proposal shall
not take effect until all regulatory actions required with respect to
the proposal are completed.\15\
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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 17 CFR 240.19b-4(f)(2).
\15\ Notwithstanding its immediate effectiveness, implementation
of this rule change will be delayed until this change is deemed
certified under CFTC Regulation 40.6.
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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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#d7a5a2bbb2fab4b8babab2b9a3a497a4b2b4f9b0b8a1"><span class="__cf_email__" data-cfemail="493b3c252c642a2624242c273d3a093a2c2a672e263f">[email protected]</span></a>. Please include
File Number SR-OCC-2021-012 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Vanessa Countryman,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-OCC-2021-012. 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 website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 website 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 filing also will be available for inspection
and copying at the principal office of OCC.
All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-OCC-2021-012 and should be
submitted on or before December 15, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25624 Filed 11-23-21; 8:45 am]
BILLING CODE 8011-01-P
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