Notice2022-12741
Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Concerning the Implementation of Changes to Settlement Timing Previously Approved in File No. SR-OCC-2022-004
Primary source
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Published
June 14, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 114 (Tuesday, June 14, 2022)</title>
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[Federal Register Volume 87, Number 114 (Tuesday, June 14, 2022)]
[Notices]
[Pages 36028-36030]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-12741]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95073; File No. SR-OCC-2022-007]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Concerning the Implementation of Changes to Settlement Timing
Previously Approved in File No. SR-OCC-2022-004
June 8, 2022.
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 May 26, 2022, 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. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
This proposed rule change would amend the By-Laws and Rules to
provide for delayed implementation of the prosed [sic] changes approved
by the Commission in File No. SR-OCC-2022-004.\3\ The proposed changes
to OCC's By-Laws and Rules are attached to File No. SR-OCC-2022-007 as
Exhibit 5a and Exhibit 5b, respectively. Proposed changes to the
Clearing Fund Methodology Policy and Liquidity Risk Management
Framework are attached to File No. SR-OCC-2022-007 as confidential
Exhibit 5c and confidential Exhibit 5d, respectively. Material added by
File No. SR-OCC-2022-004 is marked by underlining and material deleted
is marked with strikethrough text. Material proposed to be added to
OCC's By-Laws and Rules as currently in effect is marked by double
underlining and material proposed to be deleted is marked with double
strikethrough text. All terms with initial capitalization that are not
otherwise defined herein have the same meaning as set forth in the By-
Laws and Rules.\4\
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\3\ See Notice of Filing of Partial Amendment No. 1 and Order
Granting Accelerated Approval of a Proposed Rule Change, as Modified
by Partial Amendment No. 1, by The Options Clearing Corporation
Concerning Settlement Timing, available at <a href="https://www.sec.gov/rules/sro/occ/2022/34-94950.pdf">https://www.sec.gov/rules/sro/occ/2022/34-94950.pdf</a>.
\4\ 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
Background
On May 19, 2022, the Commission approved a proposed rule change by
OCC to change the time frame for collecting margin and Clearing Fund
deficits as well as increases in the Clearing Fund cash requirement. As
OCC announced in Information Memo 50390, OCC currently plans to
implement the changes to the time for collecting margin and general
Clearing Fund deficits on the morning of Monday, June 27, 2022, and
changes to the collection of Clearing Fund deficit resulting from the
monthly re-sizing of the Clearing Fund on the morning of Friday, July
1, 2022.\5\
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\5\ See Information Memo 50390, available at <a href="https://infomemo.theocc.com/infomemos?number=50390">https://infomemo.theocc.com/infomemos?number=50390</a>. Any changes to the dates
announced in that memo would be communicated via a subsequent
Information Memo.
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[[Page 36029]]
Proposed Change
Because the proposed changes as described in File No. SR-OCC-2022-
004 did not discuss delayed implementation of those proposed rule
changes, OCC is proposing to amend its By-Laws and Rules to retain the
marked changes from File No. SR-OCC-2022-004 in its By-Laws and Rules
until after the settlement time on the business day before the
implementation date, which OCC will announce no less than two weeks
prior to the implementation date. As discussed above, the
implementation date will be no earlier than June 27, 2022. For clarity,
OCC is also proposing a note to be placed before the affected By-Law
and Rules provisions disclosing that the marked changes are not
effective until that time, after which OCC will apply the marked
changes and the notes automatically will be deleted.\6\ At that time,
OCC will also implement the changes to the Clearing Fund Methodology
Policy and the Liquidity Risk Management Framework discussed in File
No. SR-OCC-2022-004. For purposes of this filing, OCC is proposing to
add the same note to those policies.
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\6\ The affected By-Laws are the definition of ``settlement
time'' in Article I, Section 1 and Article XV, Section 1. The
affected Rules are OCC Rules 101, 605, 1002, 1004, 1005, and 1006.
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(2) Statutory Basis
OCC believes the proposed rule changes are consistent with Section
17A of the Securities Exchange Act and the rules and regulations
thereunder. Section 17A(b)(3)(F) \7\ of the Exchange Act requires,
among other things, that the rules of a clearing agency be designed to
promote the prompt and accurate clearance and settlement of securities
and derivatives transactions and protect investors and the public
interest. By clarifying that certain By-Laws and Rules changes approved
by the Commission are not yet implemented, the proposed rule changes
facilitate the administration of existing rules intended to promote the
prompt and accurate clearance and settlement of securities and
derivatives transactions and protect investors and the public interest.
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\7\ 15 U.S.C. 78q-1(b)(3)(F).
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In addition, Rule 17Ad-22(e)(1) requires OCC to, among other
things, maintain written policies and procedures reasonably designed to
ensure a well-founded, clear, transparent, and enforceable legal basis
for each aspect of OCC's activities.\8\ By clarifying that the By-Laws
and Rules in effect prior to File No. SR-OCC-2022-004 will remain in
effect until the implementation of the changes approved therein, OCC
would ensure that it maintains a well-founded, clear, transparent and
enforceable legal basis for the collection of margin and Clearing Fund
deficits prior to implementation of the changes approved in File No.
SR-OCC-2022-004.
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\8\ 17 CFR 240.17Ad-22(e)(1).
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(B) Clearing Agency's Statement on Burden on Competition
Section 17A(b)(3)(I) of the Act \9\ requires that the rules of a
clearing agency not impose any burden on competition not necessary or
appropriate in furtherance of the Act. OCC does not believe that the
proposed rule change would impact or impose any burden on competition.
The proposed rule change would provide for the By-Laws and Rules
governing collection of margin and Clearing Fund deposits that existed
prior to File No. SR-OCC-2022-004 to persist until the changes from
that filing are ready to be implemented. The proposed rule change would
not affect the competitive dynamics between Clearing Members in that it
would apply to all Clearing Members equally. The proposed rule change
also would not inhibit access to OCC's services or disadvantage or
favor any particular user in relationship to another. In this regard,
as described above, the proposed rule change is designed to further
facilitate the prompt and accurate clearance and settlement of
securities transactions.
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\9\ 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 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)(i) \10\ of the Act, and Rule 19b-
4(f)(1) thereunder,\11\ the proposed rule change is filed for immediate
effectiveness. 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.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A)(i).
\11\ 17 CFR 240.19b-4(f)(1).
\12\ 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#087a7d646d256b6765656d667c7b487b6d6b266f677e"><span class="__cf_email__" data-cfemail="0d7f786168206e6260606863797e4d7e686e236a627b">[email protected]</span></a>. Please include
File Number SR-OCC-2022-007 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-2022-007. 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 and on OCC's website at
<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>.
All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying
[[Page 36030]]
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-2022-007 and
should be submitted on or before July 5, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-12741 Filed 6-13-22; 8:45 am]
BILLING CODE 8011-01-P
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