Notice2022-24647
Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by The Options Clearing Corporation Concerning Corrections to Its By-Laws
Primary source
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Published
November 14, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 218 (Monday, November 14, 2022)</title>
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[Federal Register Volume 87, Number 218 (Monday, November 14, 2022)]
[Notices]
[Pages 68206-68208]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-24647]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96246; File No. SR-OCC-2022-011]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change by
The Options Clearing Corporation Concerning Corrections to Its By-Laws
November 7, 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 October 24, 2022, 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. 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 OCC's By-Laws to (i) correct
an inadvertent omission and typographical error in a prior rule filing
and (ii) correct an erroneous cross-reference and make other conforming
changes consistent with a reorganization effected by another prior
proposed rule change. Amendments to OCC's By-Laws and Rules are
included in Exhibit 5 of filing SR-OCC-2022-011. Material proposed to
be added is marked by underlining, and material proposed to be deleted
is marked with 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.\3\
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\3\ 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
As a self-regulatory organization (``SRO'') that is registered as a
covered clearing agency under the Securities Exchange Act of 1934
(``Exchange Act''), as amended,\4\ and a derivatives clearing
organization (``DCO'') under the Commodity Exchange Act,\5\ OCC files
proposed changes to its rules with the SEC and the Commodity Futures
Trading Commission (``CFTC''), including changes to OCC's By-Laws and
Rules.\6\ SEC and CFTC regulations require that SROs maintain clear and
transparent governance arrangements.\7\ In order to enhance the clarity
and transparency of its By-Laws, OCC is proposing amendments that would
(1) correct an inadvertent omission and typographical error introduced
by a prior rule filing and (2) correct an erroneous cross-reference and
make other conforming changes consistent with a reorganization effected
by another prior proposed rule change.
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\4\ 15 U.S.C. 78s.
\5\ 7 U.S.C. 7a-1.
\6\ See 17 CFR 240.19b-4 (SRO proposed rule changes filed with
the SEC); 17 CFR 40.6 (DCO self-certifications filed with the CFTC).
\7\ See 17 CFR 240.17Ad-22(e)(2)(i) (with respect to governance
arrangements of covered clearing agencies); 17 CFR 39.24(a)(1)(iii)
[sic] (with respect to DCO governance arrangements).
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1. Typographical Error Correction
First, OCC has identified an inadvertent omission and typographical
error in the text of a prior proposed rule change submitted to the SEC:
<bullet> The reference to ``Treasurer'' in Article IV, Section 2
would be replaced with ``Chief Financial Officer,'' consistent with the
intent of the proposed rule change (SR-OCC-2021-010) that amended
Section 11 of that Article to address the appointment and
responsibilities of a Chief Financial Officer, rather than a
Treasurer.\8\
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\8\ See Exchange Act Release No. 93436 (Oct. 27, 2021), 86 FR
60499, 60500 (Nov. 2, 2021) (SR-OCC-2021-010).
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<bullet> OCC would also amend Section 11 of Article IV (Chief
Financial Officer), to correct an inadvertent reference to ``Chief
Compliance Officer,'' rather than
[[Page 68207]]
the Chief Financial Officer, also consistent with the intent of that
proposed rule change.\9\
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\9\ Id.
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2. Correcting an Erroneous Cross-Reference
OCC has also identified an erroneous cross-reference to provisions
that had been relocated by a prior rule change. Specifically, in a
proposed rule change filing concerning the Board's ability to appoint a
non-executive Chairman (SR-OCC-2021-007), OCC also revised the
provision of the By-Laws concerning the Member Vice Chairman of the
Board by relocating the second and third sentence of Article IV,
Section 1 (concerning the appointment of the Vice Chairman) to Article
IV, Section 7 (concerning the responsibilities of the Vice
Chairman).\10\ By relocating the second sentence of Section 1, the
change orphaned a cross-reference to that sentence in Article XI,
Section 1, which concerns those By-Laws that require stockholder
approval to amend.
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\10\ See Exchange Act Release No. 93102 (Sept. 22, 2021), 86 FR
53718, 53720 (Sept. 28, 2021) (SR-OCC-2021-007).
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To correct the erroneous cross reference in Article XI, OCC
proposes to move current Article IV, Section 7 in its entirety to
Article III, which is the Article that concerns the make-up of the
Board and the responsibilities of directors. Article IV, Section 7
would be re-titled ``Member Vice Chairman of the Board'' \11\ and
become Article III, Section 9A, consistent with the establishment of
Article III, Section 9 (Chairman of the Board) by File No. SR-OCC-2021-
007.\12\ Accordingly, the proposed change would consolidate provisions
concerning the appointment and responsibilities of the Chairman and
Member Vice Chairman of the Board into a single By-Law Article. In
turn, OCC would amend Article XI, Section 1 by deleting the current
cross-reference to the second sentence of Article IV, Section 1. No
additional cross-reference to the relocated provisions would be
necessary because Article XI, Section 1 already applies to Article III
in its entirety.
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\11\ As provided by current Article IV, Section 7, the Vice
Chairman of the Board is selected from the Member Directors and is
referred to as the ``Member Vice Chairman.''
\12\ Id. at 53719. [sic]
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(2) Statutory Basis
OCC believes the proposed rule changes are consistent with Section
17A of the Exchange Act and the rules and regulations thereunder.
Section 17A(b)(3)(F) \13\ 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 correcting an inadvertent omission, typographical error, and
erroneous cross-references in OCC's By-Laws and Rules, the proposed
rule changes facilitate the administration of existing SRO rules
designed 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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\13\ 15 U.S.C. 78q-1(b)(3)(F).
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In addition, Rule 17Ad-22(e)(2)(i) requires OCC to maintain written
policies and procedures reasonably designed to, among other things,
provide for governance arrangements that are clear and transparent.\14\
By correcting errors and applying conforming changes consistent with
certain reorganization of the By-Laws effected by SR-OCC-2021-007, the
changes discussed above are intended to support the maintenance of
OCC's By-Laws and improve the clarity and transparency of the
governance arrangements addressed therein.
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\14\ 17 CFR 240.17Ad-22(e)(2)(i).
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(B) Clearing Agency's Statement on Burden on Competition
Section 17A(b)(3)(I) of the Exchange Act 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 Exchange Act.\15\ As
discussed above, the proposed changes would correct an inadvertent
omission, typographical error, and erroneous cross-references, and
apply conforming edits to the provisions concerning the Member Vice
Chairman consistent with a recent reorganization of the provisions
concerning the Chairman. These proposed changes are technical in nature
and would not impact the rights or obligations of Clearing Members or
other participants in a way that would benefit or disadvantage any
participant versus another participant. Accordingly, OCC does not
believe that the proposed corrections to its By-Laws and Rules have any
impact, or impose any burden, on competition.
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\15\ 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)(i) \16\ of the Act, and Rule 19b-
4(f)(1) thereunder,\17\ 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.\18\
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\16\ 15 U.S.C. 78s(b)(3)(A)(i).
\17\ 17 CFR 240.19b-4(f)(1).
\18\ 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#c8babda4ade5aba7a5a5ada6bcbb88bbadabe6afa7be"><span class="__cf_email__" data-cfemail="3b494e575e16585456565e554f487b485e58155c544d">[email protected]</span></a>. Please include
File Number SR-OCC-2022-011 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-2022-011. 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
[[Page 68208]]
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 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-2022-011 and
should be submitted on or before December 5, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-24647 Filed 11-10-22; 8:45 am]
BILLING CODE 8011-01-P
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