80 FR 13936 - Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Concerning the Account From Which Certain Clearing Members May Fund the Additional Margin Requirement Associated With Overnight Trading Sessions
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 51 (March 17, 2015)
Federal Register Volume 80, Issue 51 (March 17, 2015)
| Page Range | 13936-13938 | |
| FR Document | 2015-06019 |
[Federal Register Volume 80, Number 51 (Tuesday, March 17, 2015)] [Notices] [Pages 13936-13938] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-06019] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74476; File No. SR-OCC-2015-005] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Concerning the Account From Which Certain Clearing Members May Fund the Additional Margin Requirement Associated With Overnight Trading Sessions March 11, 2015. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder \2\ notice is hereby given that on February 26, 2015, 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 by OCC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change This proposed rule change by The Options Clearing Corporation (``OCC'') would permit an OCC clearing member that is a registered futures commission merchant (``FCM'') that has been [[Page 13937]] approved to clear customer futures transaction, but that has not been approved to clear proprietary futures transactions, to participate in overnight trading sessions by allowing such a clearing member to post additional margin equal to the lesser of $10 million or 10% of the clearing member's net capital (``Additional Margin'') with OCC in the clearing member's customer segregated futures account instead of its proprietary account. 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 This proposed rule change would permit an OCC clearing member that is a registered FCM that has been approved to clear futures customer transactions, but that has not been approved to clear proprietary futures transactions (i.e., is not authorized to maintain a firm account with OCC), to participate in overnight trading sessions by depositing the Additional Margin required to participate in overnight trading sessions in the clearing members' segregated futures account at OCC, instead of requiring such a clearing member to establish and maintain a proprietary account solely for this purpose. By way of background, OCC recently submitted a proposal to the Commission that allows for the clearance of confirmed trades that are executed in overnight trading sessions and are offered by exchanges for which OCC provides clearance and settlement services (``Prior Filing'').\3\ Pursuant to the Prior Filing, OCC would impose an Additional Margin requirement on clearing members eligible to participate in overnight trading sessions. The Prior Filing states that the Additional Margin must be posted by participating clearing members in their proprietary account. The Additional Margin requirement is designed to ensure that, if a clearing member's credit risk increases during an overnight trading session, OCC will have access to the Additional Margin notwithstanding that OCC will not be able to draft a clearing member's bank account for funds because settlement banks are closed during overnight hours.\4\ OCC believes that requiring clearing members that are registered FCMs, and are only approved to carry customer accounts, to establish and maintain proprietary accounts solely for the purpose of posting Additional Margin to participate in overnight trading sessions would be an inefficient use of OCC's and the clearing members' resources and would lead to unnecessary operational complexity. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 74268 (February 12, 2015), 80 FR 8917 (February 19, 2015) (SR-OCC-2014-24). See also Securities Exchange Act Release No. 74241 (February 10, 2015), 80 FR 8383 (February 17, 2015) (SR-OCC-2014-812). This rule change has been approved by the Commission. OCC implemented the Prior Filing on March 2, 2015. \4\ Additional details about such Additional Margin, including the manner in which OCC will calculate the required amount of Additional Margin, are included in the Prior Filing. --------------------------------------------------------------------------- A small number of OCC clearing members are registered FCMs that only carry customer accounts and therefore do not currently maintain a proprietary account at OCC. Pursuant to the Prior Filing, if an FCM that only carries customer accounts wants to participate, or continue participating,\5\ in overnight trading sessions it must establish a proprietary account at OCC solely for the purpose of posting Additional Margin. Such an FCM would be required to go through the process that OCC clearing members must complete in order to be approved to maintain a proprietary account that, by the nature of FMC business, would not carry positions.\6\ Additionally, in the event of a clearing member default, all or a portion of the Additional Margin would be transferred from the defaulting clearing member's proprietary account to its customer segregated futures account. These additional steps would not be required if the clearing member posts Additional Margin in its customer segregated futures account. Therefore, OCC is proposing to allow FCMs participating in overnight trading sessions that do not currently maintain a proprietary account at OCC to post any required Additional Margin in their customer segregated futures account. --------------------------------------------------------------------------- \5\ Several OCC clearing members that are FCMs that only carry customer accounts have been participating in overnight trading sessions on CBOE Futures Exchange, LLC. \6\ See OCC By-Laws Article V, section 1. In order to be approved for a proprietary account, FCMs would subject to OCC's business expansion process that takes approximately three months to complete. --------------------------------------------------------------------------- OCC is not proposing to alter in any way the manner in which Additional Margin is calculated or any other procedures governing overnight trading sessions. Rather, OCC is only proposing to allow FCM clearing members that do not maintain proprietary accounts with OCC to deposit Additional Margin in a customer segregated futures account.\7\ Moreover, the proposed rule change would not increase risk presented to OCC because, in the case of FCM clearing members that do not maintain proprietary accounts with OCC, all positions of the clearing member cleared by OCC would be held in the customer segregated futures account. --------------------------------------------------------------------------- \7\ Under the Prior Filing, because the Additional Margin would be deposited in respect of a proprietary account, the source of the Additional Margin would by necessity consist of proprietary funds. Under the proposed rule change the source of the Additional Margin could be customer funds to the extent permitted by applicable regulations. --------------------------------------------------------------------------- 2. Statutory Basis OCC believes that the proposed rule change is consistent with section 17A(b)(3)(F) of the Securities Exchange Act of 1934, as amended (the ``Act''),\8\ because it would protect investors and the public interest by permitting customers of FCMs that do not maintain proprietary accounts at OCC with the ability to participate in overnight trading sessions. As described above, pursuant to the Prior Filing, FCM clearing members that do not maintain proprietary accounts with OCC would be required to establish a proprietary account in order to participate, or continue participating, in overnight trading sessions. Since these FCMs do not maintain proprietary accounts with OCC, their participation in overnight trading sessions is necessarily on behalf of their customers. OCC believes that these FCM clearing members may cease participating in overnight trading sessions on behalf of their customers if they were required to take the steps necessary to establish and maintain a proprietary account solely for the purposes of participating in overnight trading sessions for their customers. OCC believes that preventing this outcome, while still requiring the Additional Margin to cover potential increased credit risk during overnight trading sessions, protects investors engaging in overnight trading sessions and furthers the public interest of permitting FCM customers to continue to avail themselves of overnight trading sessions. As mentioned above, the proposed rule change does not affect the protections afforded by the Additional Margin, because the manner in which Additional Margin is calculated is not [[Page 13938]] proposed to be changed, and OCC is not proposing to change any other aspect of its procedures governing overnight trading, which have previously been approved by the Commission. Finally, the proposed change is not inconsistent with the existing rules of OCC, including any other rules proposed to be amended. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- (B) Clearing Agency's Statement on Burden on Competition OCC does not believe that the proposed rule change would impose a burden on competition.\9\ The proposed rule change concerns operational changes that are designed to reduce OCC's exposure to risk as a result of clearing member activities during overnight trading sessions and is protective in nature. This change will be applied uniformly across all clearing members participating in overnight trading sessions. Accordingly, OCC does not believe that the proposed rule change would impose a burden on competition. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78q-1(b)(3)(I). --------------------------------------------------------------------------- (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 The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 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. 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-OCC-2015-005 on the subject line. Paper Comments 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-2015-005. 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 Web site (http://www.sec.gov/rules/sro.shtml). 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 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 Web site viewing and printing in the Commission's Public Reference Section, 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 Web site at http://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_15_005.pdf. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-OCC-2015-005 and should be submitted on or before April 7, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\ --------------------------------------------------------------------------- \10\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-06019 Filed 3-16-15; 8:45 am] BILLING CODE 8011-01-P
![13936 Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices
The Exchange believes that the C. Self-Regulatory Organization’s printing in the Commission’s Public
proposed rule change would benefit Statement on Comments on the Reference Room, 100 F Street NE.,
market participants because it would Proposed Rule Change Received From Washington, DC 20549, on official
provide them with a limited amount of Members, Participants, or Others business days between the hours of
additional time to report ECRP No written comments were solicited 10:00 a.m. and 3:00 p.m. Copies of such
transactions. First, the change will allow or received with respect to the proposed filing also will be available for
CFE to stay competitive with other rule change. inspection and copying at the principal
futures exchanges that currently provide offices of the Exchange. All comments
market participants with additional time III. Date of Effectiveness of the received will be posted without change;
to report these transactions.10 Second, Proposed Rule Change and Timing for the Commission does not edit personal
the extension takes into account the Commission Action identifying information from
logistical aspects associated with these The proposed rule change will submissions. You should submit only
transactions, which entail related become effective on March 11, 2015. information that you wish to make
transactions in two different At any time within 60 days of the date available publicly. All submissions
instruments. Specifically, ECRP of effectiveness of the proposed rule should refer to File Number SR–CFE–
transactions involve contra-parties change, the Commission, after 2015–002, and should be submitted on
operating on a trading floor instead of consultation with the CFTC, may or before April 7, 2015.
an office setting. In addition, the summarily abrogate the proposed rule For the Commission, by the Division of
required recordkeeping presents change and require that the proposed Trading and Markets, pursuant to delegated
logistical issues as each contra-party to rule change be refiled in accordance authority.12
an ECRP must coordinate with an with the provisions of Section 19(b)(1) Brent J. Fields,
Authorized Reporter to report to the of the Act.11 Secretary.
CFE Help Desk its ECRP transaction as [FR Doc. 2015–06013 Filed 3–16–15; 8:45 am]
well as conduct the required IV. Solicitation of Comments
BILLING CODE 8011–01–P
recordkeeping manually. CFE believes Interested persons are invited to
extending the timeframe from ten to submit written data, views, and
thirty minutes represents a sound arguments concerning the foregoing, SECURITIES AND EXCHANGE
balance that takes into account the including whether the proposed rule COMMISSION
above competitive and logistical change is consistent with the Act.
considerations while remaining Comments may be submitted by any of [Release No. 34–74476; File No. SR–OCC–
sufficiently limited in duration so as not the following methods: 2015–005]
to be detrimental to CFE’s market. Electronic Comments Self-Regulatory Organizations; The
In addition, the proposed rule change
• Use the Commission’s Internet Options Clearing Corporation; Notice
benefits market participants by
comment form (http://www.sec.gov/ of Filing and Immediate Effectiveness
clarifying to them that their Authorized
rules/sro.shtml); or of a Proposed Rule Change
Reporters will receive written
transactions summaries: (i) Regarding • Send an email to rule-comments@ Concerning the Account From Which
sec.gov. Please include File Number SR– Certain Clearing Members May Fund
ECRP transactions on either the
CFE–2015–002 on the subject line. the Additional Margin Requirement
business day for which the contract leg
Associated With Overnight Trading
of the ECRP transaction is submitted for Paper Comments Sessions
clearing or the calendar day of the
transaction; and (ii) regarding block • Send paper comments in triplicate
March 11, 2015.
trades, on either the business day for to Secretary, Securities and Exchange
Pursuant to section 19(b)(1) of the
which the block trade is submitted for Commission, 100 F Street NE.,
Securities Exchange Act of 1934
clearing or on the calendar day of the Washington, DC 20549–1090.
(‘‘Act’’) 1 and Rule 19b–4 thereunder 2
transaction. All submissions should refer to File notice is hereby given that on February
Number SR–CFE–2015–002. This file 26, 2015, The Options Clearing
B. Self-Regulatory Organization’s number should be included on the
Statement on Burden on Competition Corporation (‘‘OCC’’) filed with the
subject line if email is used. To help the Securities and Exchange Commission
CFE does not believe that the Commission process and review your (‘‘Commission’’) the proposed rule
proposed rule change will impose any comments more efficiently, please use change as described in Items I, II, and
burden on competition not necessary or only one method. The Commission will III below, which Items have been
appropriate in furtherance of the post all comments on the Commission’s prepared by OCC. The Commission is
purposes of the Act. Specifically, the Internet Web site (http://www.sec.gov/ publishing this notice to solicit
Exchange believes that the proposed rules/sro.shtml). Copies of the comments on the proposed rule change
rule change will not burden competition submission, all subsequent from interested persons.
because the new ECRP reporting amendments, all written statements
timeframe and timeframe for receiving with respect to the proposed rule I. Clearing Agency’s Statement of the
written summaries of ECRP transactions change that are filed with the Terms of Substance of the Proposed
and block trades will apply to all Commission, and all written Rule Change
persons and the revised rule provisions communications relating to the This proposed rule change by The
mstockstill on DSK4VPTVN1PROD with NOTICES
do not discriminate between market proposed rule change between the Options Clearing Corporation (‘‘OCC’’)
participants. Commission and any person, other than would permit an OCC clearing member
those that may be withheld from the that is a registered futures commission
10 See CME Group, Market Regulation Advisory
public in accordance with the merchant (‘‘FCM’’) that has been
Notice (Aug. 4, 2014), Q&A22, available athttp:// provisions of 5 U.S.C. 552, will be
www.cmegroup.com/rulebook/files/ra1311-5r.pdf;
ICE Futures U.S., EFRP FAQs (Sept. 5, 2014), Q&A available for Web site viewing and 12 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
17, available athttp://www.theice.com/publicdocs/
futures_us/EFRP_FAQ.pdf. 11 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4.
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![13938 Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices
proposed to be changed, and OCC is not • Send an email to rule-comments@ SECURITIES AND EXCHANGE
proposing to change any other aspect of sec.gov. Please include File Number SR– COMMISSION
its procedures governing overnight OCC–2015–005 on the subject line.
[Release No. 34–74478; File No. SR–MIAX–
trading, which have previously been 2015–16]
approved by the Commission. Finally, Paper Comments
the proposed change is not inconsistent • Send paper comments in triplicate Self-Regulatory Organizations; The
with the existing rules of OCC, to Secretary, Securities and Exchange Miami International Securities
including any other rules proposed to be Exchange LLC; Notice of Filing and
Commission, 100 F Street NE.,
amended. Immediate Effectiveness of a Proposed
Washington, DC 20549–1090.
(B) Clearing Agency’s Statement on Rule Change To Amend Its Fee
All submissions should refer to File Schedule
Burden on Competition
Number SR–OCC–2015–005. This file
OCC does not believe that the number should be included on the March 11, 2015
proposed rule change would impose a subject line if email is used. To help the Pursuant to the provisions of Section
burden on competition.9 The proposed 19(b)(1) of the Securities Exchange Act
Commission process and review your
rule change concerns operational of 1934 (‘‘Act’’) 1 and Rule 19b–4
comments more efficiently, please use
changes that are designed to reduce thereunder,2 notice is hereby given that
only one method. The Commission will on February 27, 2015, Miami
OCC’s exposure to risk as a result of
post all comments on the Commission’s International Securities Exchange LLC
clearing member activities during
Internet Web site (http://www.sec.gov/ (‘‘MIAX’’ or ‘‘Exchange’’) filed with the
overnight trading sessions and is
rules/sro.shtml). Copies of the Securities and Exchange Commission
protective in nature. This change will be
applied uniformly across all clearing submission, all subsequent (‘‘Commission’’) a proposed rule change
members participating in overnight amendments, all written statements as described in Items I, II, and III below,
trading sessions. Accordingly, OCC does with respect to the proposed rule which Items have been prepared by the
not believe that the proposed rule change that are filed with the Exchange. The Commission is
change would impose a burden on Commission, and all written publishing this notice to solicit
competition. communications relating to the comments on the proposed rule change
proposed rule change between the from interested persons.
(C) Clearing Agency’s Statement on Commission and any person, other than
Comments on the Proposed Rule I. Self-Regulatory Organization’s
those that may be withheld from the Statement of the Terms of Substance of
Change Received From Members, public in accordance with the
Participants or Others the Proposed Rule Change
provisions of 5 U.S.C. 552, will be
Written comments on the proposed The Exchange is filing a proposal to
available for Web site viewing and
rule change were not and are not amend the MIAX Options Fee Schedule.
printing in the Commission’s Public The text of the proposed rule change
intended to be solicited with respect to Reference Section, 100 F Street NE.,
the proposed rule change and none have is available on the Exchange’s Web site
Washington, DC 20549, on official at http://www.miaxoptions.com/filter/
been received. business days between the hours of wotitle/rule_filing, at MIAX’s principal
III. Date of Effectiveness of the 10:00 a.m. and 3:00 p.m. Copies of such office, and at the Commission’s Public
Proposed Rule Change and Timing for filing also will be available for Reference Room.
Commission Action inspection and copying at the principal
office of OCC and on OCC’s Web site at II. Self-Regulatory Organization’s
The foregoing rule change has become Statement of the Purpose of, and
effective pursuant to section 19(b)(3)(A) http://www.theocc.com/components/
Statutory Basis for, the Proposed Rule
of the Act and paragraph (f) of Rule docs/legal/rules_and_bylaws/sr_occ_15_
Change
19b–4 thereunder. At any time within 005.pdf.
In its filing with the Commission, the
60 days of the filing of the proposed rule All comments received will be posted Exchange included statements
change, the Commission summarily may without change; the Commission does concerning the purpose of and basis for
temporarily suspend such rule change if not edit personal identifying the proposed rule change and discussed
it appears to the Commission that such information from submissions. You any comments it received on the
action is necessary or appropriate in the should submit only information that proposed rule change. The text of these
public interest, for the protection of you wish to make available publicly. All statements may be examined at the
investors, or otherwise in furtherance of submissions should refer to File places specified in Item IV below. The
the purposes of the Act. Number SR–OCC–2015–005 and should Exchange has prepared summaries, set
IV. Solicitation of Comments be submitted on or before April 7, 2015. forth in sections A, B, and C below, of
Interested persons are invited to For the Commission, by the Division of the most significant aspects of such
submit written data, views, and Trading and Markets, pursuant to delegated statements.
arguments concerning the foregoing, authority.10 A. Self-Regulatory Organization’s
including whether the proposed rule Brent J. Fields, Statement of the Purpose of, and
change is consistent with the Act. Secretary. Statutory Basis for, the Proposed Rule
Comments may be submitted by any of [FR Doc. 2015–06019 Filed 3–16–15; 8:45 am] Change
mstockstill on DSK4VPTVN1PROD with NOTICES
the following methods:
BILLING CODE 8011–01–P 1. Purpose
Electronic Comments The Exchange proposes to amend its
• Use the Commission’s Internet Fee Schedule to: (i) Increase the
comment form (http://www.sec.gov/ transaction fees for Public Customers
rules/sro.shtml); or
1 15 U.S.C. 78s(b)(1).
9 15 U.S.C. 78q–1(b)(3)(I). 10 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.
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Document Created: 2015-12-18 12:01:18
Document Modified: 2015-12-18 12:01:18
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 80 FR 13936 |
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