Notice2025-21775
Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by The Options Clearing Corporation Concerning the Implementation of a Fee Holiday for the Period Beginning December 1, 2025, and Ending December 31, 2025
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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
December 3, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 230 (Wednesday, December 3, 2025)</title>
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[Federal Register Volume 90, Number 230 (Wednesday, December 3, 2025)]
[Notices]
[Pages 55768-55771]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21775]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104274; File No. SR-OCC-2025-019]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change by
The Options Clearing Corporation Concerning the Implementation of a Fee
Holiday for the Period Beginning December 1, 2025, and Ending December
31, 2025
November 28, 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 November 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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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\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 implement a fee holiday for the
period beginning December 1, 2025, and ending December 31, 2025.
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
[[Page 55769]]
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'').\5\
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\5\ 12 U.S.C. 5463.
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Beginning in January 2025, OCC increased its clearing fee to $0.025
per contract in part to cover increased capital expenditures and
decreasing interest income. Over the past several years, OCC has
incurred significant expenses due to investments in a modernized
technology infrastructure tied to the development and future launch of
OCC's new clearing system, Ovation. This new system will improve
efficiency both for the industry and OCC. This has come with increased
costs, however, with expense growth in cloud technology, hardware,
software, data centers, and disaster recovery; headcount increases and
wage inflation; and increased costs related to regulatory obligations.
However, given the high clearing volumes over the first half of 2025,
OCC's LNAFBE exceeds 110% of its Target Capital Requirement and appears
likely to remain above that mark for the remainder of 2025 and 2026.
OCC is therefore using the tools outlined in its Capital Management
Policy and returning capital to market participants by implementing a
fee holiday for December 2025.
1. Purpose
Background
As the sole clearing agency for standardized equity options listed
on national securities exchanges registered with the Commission, and
with respect to OCC's clearance and settlement of futures and stock
loan transactions, OCC maintains policies and procedures to manage the
risks borne by OCC as a central counterparty. One such risk that OCC
manages is general business risk--that is, the risk of potential
impairment to OCC's financial position resulting from a decline in
revenues or an increase in expenses. To manage this risk and help to
ensure that OCC can continue operations and services as a going concern
if general business losses materialize, OCC has adopted its Capital
Management Policy,\6\ which provides the framework by which OCC manages
its capital. Amending OCC's schedule of fees is one action used by OCC
to manage its capital.
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\6\ See Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Concerning Updates to OCC's Capital Management Policy,
Exchange Act Release No. 101151 (Sep. 24, 2024), 89 FR 79668 (Sep.
30, 2024) (File No. SR-OCC-2024-012); Order Approving Proposed Rule
Change to Establish OCC's Persistent Minimum Skin-In-The-Game,
Exchange Act Release No. 92038 (May 27, 2021), 86 FR 29861 (June 3,
2021) (File No. SR-OCC-2021-003); Order Approving Proposed Rule
Change, as Modified by Partial Amendment No. 1, Concerning a
Proposed Capital Management Policy That Would Support the Option
Clearing Corporation's Function as a Systemically Important
Financial Market Utility, Exchange Act Release No. 88029 (Jan. 24,
2020), 85 FR 5500 (Jan. 30, 2020) (File No. SR-OCC-2019-007); see
also Notice of Filing of Partial Amendment No. 1 and Notice of No
Objection to Advance Notice, as Modified by Partial Amendment No. 1,
Concerning a Proposed Capital Management Policy That Would Support
the Options Clearing Corporation's Function as a Systemically
Important Financial Market Utility, Exchange Act Release No. 87257
(Oct. 8, 2019), 84 FR 55194 (Oct. 15, 2019) (File No. SR-OCC-2019-
805).
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Pursuant to OCC's rule-filed Capital Management Policy, and as
required by Exchange Act rules applicable to OCC,\7\ OCC must maintain
LNAFBE \8\ sufficient to cover at least six months of operating
expenses, among other measures (``Target Capital Requirement'').
Because OCC is required to maintain such funds, the LNAFBE used to meet
the Target Capital Requirement cannot be used to cover operational
expenses and any increase in expenses must be covered by current
revenue or cash held in excess of the Target Capital Requirement. The
Capital Management Plan further sets 110% of the Target Capital
Requirement as an early warning threshold. If LNAFBE falls below the
early warning threshold, OCC management and board must discuss whether
a fee increase is necessary.
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\7\ See 17 CFR 240.17ad-22(e)(15)(ii).
\8\ While the relevant rules under the Exchange Act do not
define the term, the Commission-approved Capital Management Policy
defines LNFABE as the level of cash and cash equivalents, no greater
than shareholders' equity, less any approved adjustments. These
approved adjustments exclude cash that would not be available to
cover general business expenses, including (1) cash collected by OCC
in an agency-related capacity, including the SEC Section 31 fees
that OCC collects monthly and transmits to the Commission bi-
annually on behalf of the options exchanges, and (2) OCC's Minimum
Corporate Contribution, which is the minimum level of OCC funds
(often referred to as ``skin-in-the-game'') maintained exclusively
to cover credit losses or liquidity shortfalls arising from a
Clearing Member default.
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In the filing to implement the 2025 fee increase (2025 Fee
Filing''),\9\ OCC projected that its LNAFBE would fall below OCC's
Target Capital Requirement by the end of Q1 2025 and took action prior
to hitting the early warning threshold. At the time, OCC stated it did
not believe it would be prudent, given its designation as a SIFMU to
allow its LNAFBE to decline past the Early Warning threshold prior to
taking action to ensure that OCC maintains sufficient LNAFBE to satisfy
its regulatory requirements and so that it may continue to operate as a
going concern if it were to experience general business losses.\10\
However, in the 2025 Fee Filing, OCC emphasized its commitment to
aligning its revenues with its costs and capital needs and stated that,
consistent with its past practice, if revenues exceed costs and OCC's
LNAFBE is above the Early Warning threshold, OCC would consider
utilizing tools to lower the cost of clearing for market participants,
as provided under its Capital Management Policy.\11\ Today, OCC is
doing just that and instituting a fee holiday for December 2025.
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\9\ Exchange Act Release No. 102437 (Feb. 18, 2025) (File No.
SR-OCC-2025-002), 19b-4 Information, at 8, available at <a href="https://www.sec.gov/files/rules/sro/occ/2025/34-102437-19b-4.pdf">https://www.sec.gov/files/rules/sro/occ/2025/34-102437-19b-4.pdf</a>.
\10\ See 19b-4 Information, at 8 (File No. SR-OCC-2025-002),
available at <a href="https://www.sec.gov/files/rules/sro/occ/2025/34-102437-19b-4.pdf">https://www.sec.gov/files/rules/sro/occ/2025/34-102437-19b-4.pdf</a>.
\11\ Id. at 20-21.
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Proposed Fee Holiday
OCC proposes to implement a fee holiday for the month of December
2025. OCC has in place policies and procedures, including the Capital
Management Policy, to control costs and regularly review fees and
operating expenses, including during its annual budgeting process.
While, consistent with the Capital Management Policy, OCC set its
clearing fees based on factors including OCC's annual budgeted or
forecasted operating expenses and projected revenue, clearing volume,
and therefore revenue, have outpaced projections and OCC currently has
LNAFBE in excess of its early warning threshold. The fee holiday will
allow OCC to return excess capital to market participants and clearing
members while still maintaining sufficient capital to maintain
compliance with the Capital
[[Page 55770]]
Management Policy and regulatory requirements.
In evaluating its current LNAFBE and projections for 2026, OCC
determined that a fee holiday is warranted for December 2025. Based on
recent volumes, OCC estimates that the fee holiday for the month of
December will lead to approximately $59.4 million in lost revenue.
Despite this, OCC believes it will remain above the 2025 early warning
threshold ($314.6 million) as well as its projected early warning
threshold for 2026 ($330.3 million). To make this determination, OCC
evaluated revenue and LNAFBE under a wide range of volume scenarios
including current average daily volume (``ADV''), 49 million ADV, and -
2% ADV growth. In all scenarios, OCC remained above its early warning
threshold through the end of 2026 even with the fee holiday.\12\
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\12\ OCC has filed a chart showing projected cash outflows and
LNAFBE compared to OCC's Target Capital Requirement as Exhibit 3
[sic] to File No. SR-OCC-019.
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To enact the proposed changes, OCC would update its schedule of
fees as set out below.
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Proposed fee schedule (fee
Current fee schedule (clearing fees) holiday December 2025)
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All Transactions $0.025/contract.......... All transactions $0.00/
contract
Minimum Monthly Clearing Fee $200......... $0.00
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OCC proposes to make the removal of the $.025 fee per contract
effective December 1, 2025. The removal of the minimum monthly fee of
$200 will be made once OCC receives all necessary regulatory approvals.
Effective the first trading day of 2026, clearing fees will revert to
the fee schedule in effect before December 1, 2025 and OCC will remove
the fee holiday from its schedule of fees.
2. Statutory Basis
OCC believes the proposed rule change is consistent with the Act
\13\ and the rules and regulations thereunder.
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\13\ 15 U.S.C. 78a, et seq.
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Compliance With Section 17A(b)(3)(D) of the Act
In particular, OCC believes that the proposed fee change is
consistent with Section 17A(b)(3)(D) of the Act,\14\ which requires
that the rules of a clearing agency provide for the equitable
allocation of reasonable dues, fees, and other charges among its
participants. OCC believes that the proposed fee holiday is reasonable
because it is designed to decrease the cost of clearing while
maintaining sufficient LNAFBE to cover OCC's operating expenses and
address potential business or operational losses so that OCC can
continue to meet its obligations as a SIFMU. The reasonableness of the
proposal is supported by oversight, transparency, and OCC's past
practice, wherever circumstances allow, to utilize tools to lower the
cost of clearing for participants.
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\14\ 15 U.S.C. 78q-1(b)(3)(D).
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First, OCC's funding and operations are subject to oversight by
OCC's Board and the Commission. OCC's annual budget, compensation for
senior management, and capital initiatives are reviewed and approved by
its Board-level CPC. As discussed above, OCC's Board is made up of a
broad cross-section of options market participants, including public
representatives, Clearing Member representatives from Clearing Members
of various sizes, and options exchange representatives. At least a
majority of the CPC is composed of independent directors, consistent
with Commission Rule 17ad-25(e) \15\ and the judgment of the Board.
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\15\ 17 CFR 17ad-25(e).
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OCC is also supervised by the Commission throughout the year.
Pursuant to Section 807(a) of the Clearing Supervision Act, the
Commission's Division of Examinations conducts annual examinations of
OCC to determine, among other things, (1) the nature of the operations
of, and the risks borne, by OCC; (2) the financial and operational
risks presented by OCC to financial institutions, critical markets, or
the broader financial system; and (3) the resources and capabilities of
OCC to monitor and control such risks.\16\ In addition, changes to
OCC's rules, procedures and operations that could materially affect the
nature or level of risk presented by OCC are also subject to review by
the Commission, in consultation with the Federal Reserve, under Section
806(e) of the Clearing Supervision Act.\17\ Furthermore, the SEC
publishes such proposed changes for public comment.
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\16\ 12 U.S.C. 5466.
\17\ 12 U.S.C. 5465(e).
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Second, OCC's commitment to reasonable funding is further supported
by the transparency it provides on an ongoing basis regarding its
financial performance. Each year, OCC publishes its Annual Report,
inclusive of its audited financial statements prepared in accordance
with generally accepted accounting principles. OCC maintains a
dedicated website that consolidates its annual reports in a readily
accessible place.\18\ On a quarterly basis, OCC also provides unaudited
information concerning its total revenues, average daily contract
volume and LNAFBE on its ``Schedule of Fees'' website to aid Clearing
Members in assessing the risk associated with a potential Operational
Loss Fee in accordance with OCC's capital replenishment plan under its
Capital Management Policy.\19\
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\18\ OCC's audited financials are available <a href="https://www.theocc.com/company-information/documents-and-archives/annual-reports">https://www.theocc.com/company-information/documents-and-archives/annual-reports</a>.
\19\ Schedule of Fees, OCC Capital Management Report, available
at <a href="https://www.theocc.com/company-information/schedule-of-fees">https://www.theocc.com/company-information/schedule-of-fees</a>.
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Third, OCC is committed to aligning its revenues with its costs and
capital needs. Consistent with OCC's past practice, if revenues exceed
costs and OCC's LNAFBE is above the Early Warning threshold, OCC would
consider utilizing tools to lower the cost of clearing for market
participants, as provided under its Capital Management Policy. Such
tools may include fee decreases like those OCC implemented in 2020 and
2021,\20\ fee holidays like the one OCC implemented from November
through December of 2021 \21\ and proposed to be implemented in
December 2025, or fee refunds like the $156 million refund in 2020 and
the $76.3 million refund in 2021.
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\20\ See Exchange Act Release Nos. 89534 (Aug. 12, 2020), 85 FR
50858 (Aug. 18, 2020) (File No. SR-OCC-2020-009); 91920 (May 18,
2021), 86 FR 27916 (May 24, 2021) (File No. SR-OCC-2021-006).
\21\ See Exchange Act Release Nos. 93195 (Sept. 29, 2021), 86 FR
55039 (Oct. 5, 2021) (File No. SR-OCC-2021-009); 93612 (Nov. 18,
2021), 86 FR 67108 (Nov. 24, 2021) (File No. SR-OCC-2021-012).
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Finally, OCC believes that the fee holiday would be equitably
allocated because it applies equally to all transaction types and
clearing members.
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
[[Page 55771]]
identify, monitor, and manage OCC's general business risk and hold
sufficient LNAFBE to cover potential general business losses so that
OCC can continue operations and services as a going concern if those
losses materialize.\22\ The Rule also requires OCC to hold LNAFBE equal
to at least six months of OCC's current operating expenses, among other
measures.\23\ As described above, OCC will be able to continue to meet
its ongoing obligations and hold the required amount of LNAFBE
following the fee holiday. OCC estimates that the fee holiday will
result in approximately $59.4 million in missed revenue. Nonetheless,
based on a wide range of trading volume projections, OCC expects to
remain above its Target Capital Requirement and early warning threshold
throughout 2026 following the fee holiday.\24\
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\22\ 17 CFR 240.17ad-22(e)(15).
\23\ 17 CFR 240.17ad-22(e)(15)(ii).
\24\ OCC has filed Exhibit 3 [sic] to File No. SR-OCC-019
showing projected cash outflows and LNAFBE compared to OCC's Target
Capital Requirement.
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(B) Clearing Agency's Statement on Burden on Competition
Section 17A(b)(3)(I) of the Act \25\ requires that the rules of a
clearing agency not to 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. OCC believes that the proposed rule change would
not disadvantage or favor any particular user of OCC's services in
relationship to another user because the proposed fee holiday would
apply equally to all Clearing Members. Accordingly, OCC does not
believe that the proposed rule change would have any impact or impose a
burden on competition.
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\25\ 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 \26\ and paragraph (f) of Rule 19b-4 \27\
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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\26\ 15 U.S.C. 78s(b)(3)(A).
\27\ 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.\28\
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\28\ 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-regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking</a>);
or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#493b3c252c642a2624242c273d3a093a2c2a672e263f"><span class="__cf_email__" data-cfemail="6012150c054d030f0d0d050e1413201305034e070f16">[email protected]</span></a>. Please include
file number SR-OCC-2025-019 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-2025-019. 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-regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking</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-2025-019 and
should be submitted on or before December 24, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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\29\ 17 CFR 200.30-3(a)(12).
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Stephanie Fouse,
Assistant Secretary.
[FR Doc. 2025-21775 Filed 12-2-25; 8:45 am]
BILLING CODE 8011-01-P
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