Notice2024-03776
Self-Regulatory Organizations; Options Clearing Corporation; Notice of Designation of Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Partial Amendment No. 1 and Amendment No. 2, Concerning Modifications to the Amended and Restated Stock Options and Futures Settlement Agreement Between the Options Clearing Corporation and the National Securities Clearing Corporation
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
February 26, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 38 (Monday, February 26, 2024)</title>
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[Federal Register Volume 89, Number 38 (Monday, February 26, 2024)]
[Notices]
[Pages 14121-14122]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-03776]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99568; File No. SR-OCC-2023-007]
Self-Regulatory Organizations; Options Clearing Corporation;
Notice of Designation of Longer Period for Commission Action on
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change, as Modified by Partial Amendment No. 1 and Amendment No.
2, Concerning Modifications to the Amended and Restated Stock Options
and Futures Settlement Agreement Between the Options Clearing
Corporation and the National Securities Clearing Corporation
February 20, 2024.
On August 10, 2023, the Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change SR-OCC-2023-007 (``Proposed Rule Change'')
pursuant to section 19(b) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 \2\ thereunder to modify the
Amended and Restated Stock Options and Futures Settlement Agreement
dated August 5, 2017, between OCC and National Securities Clearing
Corporation (``NSCC''), OCC's rules related to liquidity risk
management, and OCC's rules related to default management in connection
with the proposed modifications to the Existing Accord.\3\ The Proposed
Rule Change was published for public comment in the Federal Register on
August 30, 2023.\4\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Notice of Filing infra note 4, at 88 FR 59976.
\4\ Securities Exchange Act Release No. 98215 (Aug. 24, 2023),
88 FR 59976 (Aug. 30, 2023) (File No. SR-OCC-2023-007) (``Notice of
Filing''). OCC also filed a related advance notice (SR-OCC-2023-801)
(``Advance Notice'') with the Commission pursuant to Section
806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, entitled the Payment, Clearing, and
Settlement Supervision Act of 2010 and Rule 19b-4(n)(1)(i) under the
Exchange Act. 12 U.S.C. 5465(e)(1). 15 U.S.C. 78s(b)(1) and 17 CFR
240.19b-4, respectively. The Advance Notice was published in the
Federal Register on August 30, 2023. Securities Exchange Act Release
No. 98214 (Aug. 24, 2023), 88 FR 59988 (Aug. 30, 2023) (File No. SR-
OCC-2023-801).
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On September 25, 2023, pursuant to section 19(b)(2) of the Exchange
Act,\5\ the Commission designated a longer period within which to
approve, disapprove, or institute proceedings to determine whether to
approve or
[[Page 14122]]
disapprove the Proposed Rule Change.\6\ On November 8, 2023, OCC filed
a Partial Amendment No. 1 to the Proposed Rule Change.\7\ On November
14, 2023, the Commission published notice of Partial Amendment No. 1
and instituted proceedings, pursuant to section 19(b)(2)(B) of the
Exchange Act,\8\ to determine whether to approve or disapprove the
proposed rule change, as modified by the Partial Amendment No. 1.\9\ On
January 23, 2024, OCC filed Amendment No. 2 to the Proposed Rule
Change, which was published in the Federal Register for public comment
on January 30, 2024.\10\ The Commission has received comments regarding
the Proposed Rule Change.\11\
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\5\ 15 U.S.C. 78s(b)(2).
\6\ Securities Exchange Act Release No. 98508 (Sep. 25, 2023),
88 FR 67407 (Sep. 29, 2023) (File No. SR-OCC-2023-007).
\7\ Partial Amendment No. 1 delays implementation of the
proposed change; however, Partial Amendment No. 1 was amended and
replaced by Amendment No. 2. See Notice of Amendment infra note 10,
at 89 FR 5974.
\8\ 15 U.S.C. 78s(b)(2)(B).
\9\ See Securities Exchange Act Release No. 98932 (Nov. 14,
2023), 88 FR 80781 (Nov. 20, 2023) (File No. SR-OCC-2023-007).
\10\ See Securities Exchange Act Release No. 99426 (Jan. 24,
2024), 89 FR 5974 (Jan. 30, 2024) (File No. SR-OCC-2023-007)
(``Notice of Amendment''). Amendment No. 2 adds a second phase of
changes to the proposed rule change. The changes added in Phase 2
include improved information sharing between OCC and NSCC and are
designed to facilitate the shortening of the standard settlement
cycle for most broker-dealer transactions from T+2 to T+1. See
Securities Exchange Act Release No. 96930 (Feb. 15, 2023), 88 FR
13872 (Mar. 6, 2023) (File No. S7-05-22).
\11\ Comments on the Advance Notice are available at <a href="https://www.sec.gov/comments/sr-occ-2023-801/srocc2023801.htm">https://www.sec.gov/comments/sr-occ-2023-801/srocc2023801.htm</a>. The
Commission received one comment supporting the proposed changes. See
comment from John P. Davidson, Principal, Pirnie Advisory (Oct. 4,
2023), available at <a href="https://www.sec.gov/comments/sr-occ-2023-801/srocc2023801-268179-645042.htm">https://www.sec.gov/comments/sr-occ-2023-801/srocc2023801-268179-645042.htm</a>. Since the proposal contained in the
Advance Notice was also filed as a proposed rule change, all public
comments received on the proposal are considered regardless of
whether the comments are submitted on the Proposed Rule Change or
the Advance Notice. Comments on the Proposed Rule Change are
available at <a href="https://www.sec.gov/comments/sr-occ-2023-007/srocc2023007.htm">https://www.sec.gov/comments/sr-occ-2023-007/srocc2023007.htm</a>. The Commission received comments on the proposed
rule change that express concerns unrelated to the substance of the
filing. See, e.g., comment from Gregory Englebert (Feb. 2, 2024)
(raising concerns about a conflict of interest in the role of
Financial Risk Management Officers as well as margin calls) comment
from Curtis H. (Feb. 3, 2024) (referencing short selling and
margin), and comment from CK Kashyap (Feb. 5, 2024) (referring to
broker risk management in response to margin).
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Section 19(b)(2) of the Exchange Act \12\ provides that proceedings
to determine whether to approve or disapprove a proposed rule change
must be concluded within 180 days of the date of publication of notice
of filing of the proposed rule change. The time for conclusion of the
proceedings may be extended for up to 60 days if the Commission
determines that a longer period is appropriate and publishes the
reasons for such determination.\13\ The 180th day after publication of
the Notice in the Federal Register is February 26, 2024.
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\12\ 15 U.S.C. 78s(b)(2).
\13\ 15 U.S.C 78s(b)(2)(B)(ii)(II).
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The Commission is extending the period for Commission action on the
Proposed Rule Change, as modified by Partial Amendment No. 1 and
Amendment No. 2 (hereinafter, the ``Proposed Rule Change''). The
Commission finds that it is appropriate to designate a longer period
within which to take action on the Proposed Rule Change so that the
Commission has sufficient time to consider the issues raised by the
Proposed Rule Change and to take action on the Proposed Rule Change.
Accordingly, pursuant to section 19(b)(2)(B)(ii)(II) of the Exchange
Act,\14\ the Commission designates April 26, 2024, as the date by which
the Commission should either approve or disapprove the Proposed Rule
Change SR-OCC-2023-007.
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\14\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-03776 Filed 2-23-24; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on February 26, 2024.
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