Notice2025-19101
Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Proposed Rule Change by The Options Clearing Corporation Concerning Revisions to OCC's Schedule of Fees Effective November 1, 2025, To Implement a Decrease in Certain Clearing 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
October 1, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 188 (Wednesday, October 1, 2025)</title>
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[Federal Register Volume 90, Number 188 (Wednesday, October 1, 2025)]
[Notices]
[Pages 47489-47491]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19101]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104106; File No. SR-OCC-2025-016]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of Proposed Rule Change by The Options Clearing
Corporation Concerning Revisions to OCC's Schedule of Fees Effective
November 1, 2025, To Implement a Decrease in Certain Clearing Fees
September 26, 2025.
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 September 25, 2025, 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)
\3\ of the Act and paragraph (f) of 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
The Options Clearing Corporation is filing with the Securities and
Exchange Commission a proposed rule change to revise OCC's schedule of
fees effective November 1, 2025, to implement a decrease in certain
clearing fees. Specifically, OCC proposes to eliminate its clearing fee
for linkage transactions, currently $0.02 with a per transaction fee
cap of $55.00 for transactions of 2,751 or more contracts. The fee
change will have minimal impact on OCC's finances, and better reflect
the economic and operational reality of linkage trades. OCC filed
proposed changes to OCC's schedule of fees as Exhibit 5 to File Number
SR-OCC-2025-016. 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. 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
Founded in 1973, OCC operates as a central counterparty (``CCP'')
under the jurisdiction of both the SEC and the Commodity Futures
Trading Commission (``CFTC''). As a registered clearing agency under
the SEC's jurisdiction, OCC is the sole clearing agency for equity
options listed on national securities exchanges. As a registered
Subpart C DCO under the CFTC's jurisdiction, OCC clears and settles
transactions in futures and options on futures. OCC also provides
central counterparty clearing and settlement services for securities
lending transactions. In its role as a CCP, OCC guarantees the
performance of its Clearing Members for all transactions cleared by OCC
by becoming the buyer to every seller and the seller to every buyer.
Given OCC's critical role, OCC has been designated by the Financial
Stability Oversight Council as a systemically important financial
market utility (``SIFMU'') under Title VIII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, entitled the Payment,
Clearing and Settlement Supervision Act of 2010 (``Clearing Supervision
Act'').\6\
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\6\ 12 U.S.C. 5463.
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To support its critical role, OCC's principal source of revenue is
derived from the clearing fees that it charges for each contract
cleared through OCC. OCC currently charges a reduced clearing fee per
side for so-called ``linkage'' transactions; i.e., when one national
securities exchange routes an order for a listed options contract to
another national securities exchange that has a better priced quote
through a joint member of both exchanges (``Linkage Member'').
Historically, the Linkage Member would recoup its fees for executing
the linkage transaction, including OCC's linkage fees, from the
exchanges. To support the linkage process, OCC has rebated to the
exchanges the difference between the fee for linkage trades and the
standard clearing fee on a quarterly basis. To better reflect the
economic reality of these trades, OCC now proposes to eliminate the fee
for linkage trades, such that the fee on the Linkage Member for such
trades would be $0.00. OCC would continue to charge its standard
clearing fee to the Clearing Member on each side of the transaction
with the Linkage Member, as it does today.
1. Purpose
Background
In 2009, the national securities exchanges that list standardized
equity options filed a new plan to link the various options exchanges
and achieve intermarket order protection with the SEC.\7\ The plan was
referred to as Decentralized Linkage or Distributed Linkage and allows
the options exchanges to access other options exchanges using private
connectivity and membership. Decentralized Linkage replaced a previous
hub and spoke linkage plan where OCC operated as the hub.
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\7\ See e.g., Exchange Act Release No. 60187 (June 29, 2009); 74
FR 32664 (July 8, 2009) (File No. SR-CBOE-2009-040).
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With decentralized linkage, when another exchange has a better
priced quote, an options exchange is required to fill an order from its
own order book at the better price from the other options exchange
through a Linkage Member. In these cases, the Linkage Member executes a
transaction at the better price on the other exchange and then fills
the initial order, again at the better price, on the first exchange. As
a result, there are two trades cleared at OCC for every linkage
transaction, one on the ``away''' exchange between the Linkage Member
and a counterparty and a second one on the ``initiating''' exchange
between the Linkage Member and the original order submitter. Both of
these trades are cleared separately at OCC as standalone transactions.
Historically, the Linkage Member passed their fees back to the
exchanges, including the OCC clearing fee. The
[[Page 47490]]
exchanges asked OCC to consider charging these linkage trades at a
reduced rate, making the argument that these trades represent a service
to the national options market and should be discounted similar to
Market Maker scratch trades. OCC agreed and implemented a process to
identify the linkage trades and rebate the difference between the
standard clearing rate and the linkage rate back to the routing firm on
a quarterly basis.
Proposed Fee Change
OCC proposes to eliminate the linkage fee effective November 1,
2025, to better reflect the economic and operational reality of the
trade. From an economic perspective, the Linkage Member is performing a
service and is not trading for its own economic gain. The Linkage
Member enters into the two trades at the same price leaving it in the
same economic position it was before the transactions. The SEC has
similarly acknowledged this reality and exempted riskless principal
sales, which include linkage transactions, from SEC Section 31 fees.\8\
Operationally, linkage transactions do not require margining, corporate
actions or any other post-settlement services provided by OCC because
the Linkage Member's legs of the transactions net off on settlement.
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\8\ See 17 CFR 240.31(a)(11)(viii) (exempting any recognized
riskless principal sale as defined in rule 31(a)(14).
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Additionally, OCC can remain compliant with its target capital
level as defined by OCC's Capital Management Policy following the
removal of the linkage fee. Regulation 17ad-22(e)(15), in part,
requires OCC to maintain liquid net assets funded by equity
(``LNAFBE'') in an amount equal to, among other things, 6 months of
OCC's current operating expenses.\9\ OCC's capital management plan
requires OCC to set fees based on its projected operating expenses,
LNAFBE target and other capital needs, and projected trading volume.
Based on previous years, OCC anticipates the financial impact of
removing the linkage fee will be approximately $3 million per year.\10\
For 2024, the fees collected for linkage trades (approximately $2.1
million) amounted to less than 0.5% of clearing fee revenue
(approximately $477.9 million).\11\ As of June 30, 2025, OCC's LNAFBE
was $401.70 million,\12\ which is above OCC's Target Capital
Requirement of $286 million. Based on projected trading volumes,
projected expenses, and OCC's LNAFBE target, OCC does not believe that
eliminating the linkage fee will have any effect on OCC's ability to
meet its regulatory requirements.\13\
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\9\ 17 CFR 240.17ad-22(e)(15)(ii).
\10\ OCC has filed data concerning prior years' linkage fees as
confidential Exhibit 3A to File No. SR-OCC-2025-016.
\11\ OCC's income statement for 2024 can be found on its public
website: <a href="https://annualreport.theocc.com">https://annualreport.theocc.com</a>.
\12\ This measurement of LNAFBE is based on unaudited financials
as of June 30, 2025.
\13\ OCC has filed a chart showing projected cash flow outflows
and LNAFBE compared to OCC's Target Capital Requirement as Exhibit
3B to File No. SR-OCC-2025-016.
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To implement the proposed changes, OCC would update its schedule of
fees as set out below.
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Current fee schedule Proposed fee schedule
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Linkage per side Linkage per side
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$0.02 $0.02 $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.
2. Statutory Basis
OCC believes the proposed rule change is consistent with the Act
\14\ and the rules and regulations thereunder.
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\14\ 15 U.S.C. 78a, et seq.
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Compliance With Section 17A(b)(3)(D) of the Act
OCC believes that the proposed fee change is consistent with
Section 17A(b)(3)(D) of the Act,\15\ which requires that the rules of a
clearing agency provide for the equitable allocation of reasonable
dues, fees, and other charges among its participants.
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\15\ 15 U.S.C. 78q-1(b)(3)(D).
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OCC believes that the proposed fee change is reasonable. As
described above, removing the fee for linkage transactions accurately
reflects the economic reality of the transaction. The Linkage Member is
performing a service rather than entering into a transaction for their
own economic gain. Further, the linkage trades are offset immediately
upon settlement and are not transactions that OCC needs to margin and
otherwise risk manage. Therefore, it is reasonable that linkage legs
would not be subject to a clearing fee.
OCC further believes that removing the fee for linkage transactions
represents an equitable allocation of its fees. When entering into a
linkage transaction, the Linkage Member is not pursuing an options
strategy for its own gain, but rather is performing a service for the
options markets. By entering into the linkage trade, Linkage Members
ensure that traders can access the best price for an option regardless
of the exchange the trader uses. Performing this service free from an
OCC fee is an equitable result. The options exchanges have long
recognized this reality and rebated the fee paid for linkage
transactions. Similarly, the SEC has exempted these trades from section
31 fees.\16\
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\16\ See 17 CFR 240.31(a)(11).
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As a result, OCC believes that the proposed change to OCC's fee
schedule provides for the equitable allocation of reasonable fees in
accordance with Section 17A(b)(3)(D) of the Act.\17\
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\17\ 15 U.S.C. 78q-1(b)(3)(D).
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Compliance With Rule 17ad-22(e)(15)
In addition, OCC believes that the proposed rule change is
consistent with Rule 17ad-22(e)(15), which requires that OCC establish,
implement, maintain and enforce written policies and procedures
reasonably designed to identify, monitor, and manage OCC's general
business risk and hold sufficient liquid net assets funded by equity to
cover potential general business losses so that OCC can continue
operations and services as a going concern if those losses
materialize.\18\ The Rule also requires OCC to hold LNAFBE equal to at
least six months of OCC's current operating expenses, among other
measures.\19\ As described above, OCC will be able to continue to meet
its ongoing obligations and hold the required amount of LNAFBE
following the fee reduction. Linkage fees have made up less than 0.3%
of fee revenue for 2025 and OCC will be able to remain compliant with
its Target Capital Requirement after the reduction in fee revenue.
Therefore, OCC believes that the proposed changes to OCC's schedule of
fees are consistent with Rule 17ad-22(e)(15).\20\
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\18\ 17 CFR 240.17ad-22(e)(15).
\19\ 17 CFR 250.17ad-22(e)(15)(ii).
\20\ Id.
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[[Page 47491]]
(B) Clearing Agency's Statement on Burden on Competition
Section 17A(b)(3)(I) of the Act \21\ 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. Linkage transactions are not competitive trades
but are the operational process that allows a trader to access a better
price for an option contract that is quoted on a second exchange.
Notably, the trader in this scenario and the seller on the second
exchange still pay the same clearing fee as any other transaction. It
is only the extra two legs that link the two exchanges that will not
pay a fee. Further, the fee removal applies to any type of market
participant that is serving as the Linkage Member and will not give any
particular type of market participant a competitive advantage. In
addition, the linkage fee will be eliminated for linkage transactions
between any of OCC's participant exchanges, regardless of whether the
exchange is an OCC stockholder. Accordingly, OCC does not believe that
the proposed rule change would have any impact or impose a burden on
competition.
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\21\ 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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \22\ and paragraph (f) of Rule 19b-4 \23\
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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\22\ 15 U.S.C. 78s(b)(3)(A).
\23\ 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.\24\
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\24\ 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#047671686129676b6969616a7077447761672a636b72"><span class="__cf_email__" data-cfemail="1b696e777e36787476767e756f685b687e78357c746d">[email protected]</span></a>. Please include
file number SR-OCC-2025-016 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-2025-016. 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-2025-016 and
should be submitted on or before October 22, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-19101 Filed 9-30-25; 8:45 am]
BILLING CODE 8011-01-P
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