Notice2025-19068
Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by The Options Clearing Corporation Concerning Amendments to OCC's By-Laws and Rules To Remove the Numerical Designation of Paragraphs in Those Articles of the By-Laws and Sections of the Rules That List Definitions, in Favor of Maintaining the Paragraphs in Alphabetical Order
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Published
September 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
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[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 46946-46948]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19068]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104089; File No. SR-OCC-2025-014]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change by
The Options Clearing Corporation Concerning Amendments to OCC's By-Laws
and Rules To Remove the Numerical Designation of Paragraphs in Those
Articles of the By-Laws and Sections of the Rules That List
Definitions, in Favor of Maintaining the Paragraphs in Alphabetical
Order
September 26, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
the (``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\
notice is hereby given that on September 18, 2025 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. OCC
filed the proposed rule change pursuant to Section 19(b)(3)(A) \3\ of
the Act and paragraph (f) or Rule 19b-4 \4\ thereunder, such that the
proposed rule change was immediately 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).
\4\ 17 CFR 240.19b-4(f).
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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 and Rules to
remove the numerical designation of the paragraphs in those Articles of
the By-Laws and Sections of the Rules that list definitions, in favor
of maintaining the paragraphs in alphabetical order.
OCC filed proposed amendments to OCC's current By-Laws and Rules as
Exhibit 5A and 5B to File No. SR-OCC-2025-014, respectively. However,
OCC has received approval for proposed rule changes with future
implementation dates that touch on the sections proposed to be amended
here.\5\ OCC proposes to amend such approved, but not yet implemented,
rules to ensure consistency following implementation. Pending
amendments to OCC's By-Laws and Rules that were approved by the
Commission in File Nos. SR-OCC-2024-011 and SR-OCC-2024-013 in
connection with the upcoming launch of OCC's new clearance and
settlement system, Ovation, are filed as Exhibits 5C and 5D to File No.
SR-OCC-2025-014, respectively. OCC filed as Exhibit 5E to File No. SR-
OCC-2025-014 amendments to the Default Management Policy (the
``Policy''). 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.\6\
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\5\ See Securities Exchange Act Release Nos. 101754 (Nov. 26,
2024), 89 FR 95878 (Dec. 3, 2024) (SR-OCC-2024-011); 101621 (Nov.
14, 2024), 89 FR 991825 (Nov. 20, 2024) (SR-OCC-2024-013).
\6\ 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.
[[Page 46947]]
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Purpose
Proposed Change
As a self-regulatory organization (``SRO'') that is registered as a
covered clearing agency (``CCA'') under the Securities Exchange Act of
1934 (``Exchange Act''), as amended,\7\ and a derivatives clearing
organization (``DCO'') under the Commodity Exchange Act,\8\ OCC is
required to provide for a well-founded, clear, transparent, and
enforceable legal basis for each aspect of its activities.\9\ OCC's
legal framework is inclusive of its By-Laws and Rules, which constitute
a part of the terms and conditions of each cleared contract issued by
OCC.\10\ Currently, the By-Laws and Rules contain definition sections
that list defined terms in numerated paragraphs. OCC proposes to remove
the paragraph numbering, which is unnecessary to locate or reference
definitions in an alphabetized definitions section.
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\7\ 15 U.S.C. 78s.
\8\ 7 U.S.C. 7a-1.
\9\ See 17 CFR 240.17ad-22(e)(1) (legal framework requirements
applicable to OCC as a CCA); 17 CFR 39.27(b) (legal framework
requirements applicable to OCC as a DCO).
\10\ See OCC By-Laws Art. VI, Section 10; OCC Rule 204(b)(3).
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OCC believes that removing the numbering will enable the more
efficient maintenance of the By-Laws and Rules.\11\ OCC often has
multiple and sometimes overlapping proposed changes pending with the
Commission at the same time in which OCC proposes to add or delete such
definitions. Moreover, certain changes may be subject to delayed
implementation for a period during which system changes may be
required, such as the approved rule changes that OCC filed in
connection with the implementation of Ovation, File Nos. SR-OCC-2024-
011 and SR-OCC-2024-013, for which implementation is delayed until that
system goes live. Removing the numbering would help to avoid situations
in which the resulting re-number from one proposed change may conflict
with the numbering in another proposed rule change. In addition, this
proposed change is consistent with changes that the Commission recently
made to the definition section for the Standards for Covered Clearing
Agencies, Exchange Act Rule 17ad-22(a),\12\ to remove paragraph
numbering in favor of an alphabetized list.\13\
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\11\ Definitions in the By-Laws are found at Article I, Section
1; Article XIII, Section 1; Article XIV, Section 1; Article XV,
Section 1; Article XVI, Section 1; Article XVII, Section 1; Article
XXI, Section 1; Article XXIA, Section 1; Article XXII, Section 1;
Article XXIV, Section 1; and Article XXVI, Section 1. Definitions
the Rules are found at Rule 101.
\12\ 17 CFR 240.17ad-22(a).
\13\ See Standards for Covered Clearing agencies for U.S.
Treasury Securities and Application of the Broker-Dealer Customer
Protection Rule With Respect to U.S. Treasury Securities, Exchange
Act Release No. 99149 (Dec. 13, 2023), 89 FR 2714, 2829 (Jan. 16,
2024) (S7-23-22).
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In connection with the removal of the paragraph numbering, OCC
would also amend cross-references to those definitions that reference
the paragraph numbering in the By-Laws,\14\ and other rule-filed
documents.\15\ Specifically, OCC would replace such numerical cross-
references with a reference to the term as defined in the applicable
definition section. In addition, OCC would standardize the way each
definition is introduced by replacing instances of ``shall mean'' in
the By-Laws and Rules with ``means'' within the definition sections to
improve clarity and remove any ambiguity. OCC would also add new
definitions for the ``Securities Exchange Act'' and the ``Commodity
Exchange Act'' to establish a consistent meaning for these terms within
OCC's the By-Laws and Rules. OCC proposes global changes throughout the
By-Laws and Rules to apply these new defined terms.\16\ Separately, OCC
proposes to standardize the use of abbreviated defined terms for the
``SEC'' and the ``CFTC'' \17\ to improve clarity and consistency of the
By-Laws and Rules. OCC would also remove the definition of the term
``statutory disqualification'' from the By-Laws because that term is
defined in greater detail in the existing Rules and is not used
elsewhere in the By-Laws following the consolidation of provisions
governing membership under the Rules.\18\ Removing the definition of
that term in the By-Laws would prevent ambiguity about which definition
applies. The changes also include some minor and non-substantive
revisions and corrections. Collectively, these proposed changes are
technical in nature and do not modify or alter the substance of OCC's
By-Laws and Rules; instead, they are designed to improve the clarity of
OCC's By-Laws and Rule by ensuring greater internal consistency and
reducing ambiguity throughout the rule text.
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\14\ OCC proposes to delete cross references to paragraph
numbers throughout the By-Laws including from: (i) the definition of
``Related person'' in Article I, Section 1 of the By-Laws, (ii) the
parenthetical found at the end of Article XIII, Section 3, (iii) the
definition of ``Expiration Time'' in Article XV, Section 1 (iv) the
definition of ``Series of Options'' in Article XVII, Section 1, and
(v) Article XVII Section 5(a).
\15\ The Default Management Policy includes footnote with a
cross-reference to the definition of ``Designated Officer'' from
Article I, Section 1 of the By-Laws that will be deleted
accordingly.
\16\ See OCC By-Laws Article I, Section 1 (``Appropriate
Regulatory Agency'', ``Designated Examining Authority''; ``Fund
Share''; ``Futures Customer''; ``International Market''; ``Limited
Cross-Guaranty Agreement''; ``Market-Maker''; ``Non-Customer''
``Rules''; ``Security Future''; ``Security Futures Market'';
``Statutory Rules''); Article VI, Sections 3, 25; Article VIIA,
Sections 1, 5; Article VIIB, Sections 1, 5; OCC Rules 101 (``Non-
U.S. Securities Firm''; ``Regulatory Organization''; ``Statutory
Disqualification''); 201, 204, 301; 302; 405; 604; 1102; 1202; 1203.
\17\ See OCC By-Laws Article I, Section 1 (``Affiliate'';
``Commodity Futures''; ``Commodity Option''; ``Designated Examining
Authority''; ``Futures Customer''; ``Futures Market''; ``JBO
Participant''; ``Proprietary Market-Maker; Proprietary Market-Maker
Account''; ``Proprietary Market Professional''; ``Statutory
Rules''); Article III, Sections 6A, 15; Article VI, Sections 3, 18,
24, 25, 27; Article VIIA, Sections 1, 5; Article VIIB, Sections 1,
5; Article XII, Section 6; OCC Rules 101 (``Non-U.S. Securities
Firm''; ``Regulatory Organization''); 201; 301; 305; 306A; 601; 604;
609A; 905; 1102; 1202; 1203; 1301A; 2202; 2202A.
\18\ See Exchange Act Release No. 97439 (May 5, 2023), 88 FR
30373, 30373 n.10 (May 11, 2023) (SR-OCC-2023-002).
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Implementation Timeframe
The changes in Exhibits 5A, 5B, and 5E would become effective upon
OCC's receipt of all necessary regulatory approval. Notwithstanding the
immediate effectiveness of those changes, OCC would not implement
changes to the rule changes in Exhibits 5C and 5D that OCC filed in
connection with the implementation of Ovation, until the implementation
of the related changes approved in File Nos. SR-OCC-2024-011 and SR-
OCC-2024-013.
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) \19\ 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 removing paragraph numbering and reorganizing the definitions
sections in alphabetical order throughout OCC's By-Laws and Rules, the
proposed rule change facilitates the efficient administration of
existing SRO rules that removes any potential confusion. For these
reasons, the proposed changes are reasonably designed to promote the
prompt and accurate clearance and settlement of securities transactions
and to protect investors and the public
[[Page 46948]]
interest in accordance with Section 17A(b)(3)(F) of the Act.\20\
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\19\ 15 U.S.C. 78q-1(b)(3)(F).
\20\ Id.
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Rule 17ad-22(e)(1) requires OCC to establish, implement, maintain
and enforce written policies and procedures reasonably designed to
provide for a well-founded, clear, transparent and enforceable legal
basis for each aspect of its activities in all relevant jurisdictions.
As discussed above, the proposed rule change updates OCC By-Laws and
Rules to remove unnecessary numbering used throughout the definition
sections and make other minor non-substantive changes intended to
improve the clarity and transparency of OCC's By-Laws and Rule. These
changes would ensure that OCC's By-Laws and Rules continue to provide a
well-founded, clear, transparent, and enforceable legal framework. For
those reasons, OCC believes that the proposal is consistent with Rule
17ad-22(e)(1).
(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. As
discussed above, the proposed changes would remove unnecessary
numbering by reorganizing the definition sections in alphabetical order
and make non-substantive revisions and corrections. These proposed
changes are technical in nature and would have no impact on the rights
or obligations of Clearing Members or other participants in a way that
would benefit or disadvantage any one participant over another.
Accordingly, OCC does not believe that the proposed corrections to its
By-Laws and Rules have any impact or would impose any burden on
competition.
(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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \21\ and paragraph (f) of Rule 19b-4 \22\
thereunder. 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.
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\21\ 15 U.S.C. 78s(b)(3)(A).
\22\ 17 CFR 240.19b-4(f).
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The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.\23\
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\23\ 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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#94e6e1f8f1b9f7fbf9f9f1fae0e7d4e7f1f7baf3fbe2"><span class="__cf_email__" data-cfemail="681a1d040d450b0705050d061c1b281b0d0b460f071e">[email protected]</span></a>. Please include
file number SR-OCC-2025-014 on the subject line.
Paper Comments
<bullet> 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-2025-014. 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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of such filing 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>. Do not include personal identifiable information in submissions;
you should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to file number SR-OCC-2025-014 and
should be submitted on or before October 21, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-19068 Filed 9-29-25; 8:45 am]
BILLING CODE 8011-01-P
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