80 FR 80422 - Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Concerning the Adoption of a Charter of a New Committee of The Options Clearing Corporation's Board of Directors, the Technology Committee

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 247 (December 24, 2015)

Page Range		80422-80423
FR Document		2015-32382
Federal Register, Volume 80 Issue 247 (Thursday, December 24, 2015)
[Federal Register Volume 80, Number 247 (Thursday, December 24, 2015)]
[Notices]
[Pages 80422-80423]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-32382]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76686; File No. SR-OCC-2015-018]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of a Proposed Rule Change Concerning the Adoption of a 
Charter of a New Committee of The Options Clearing Corporation's Board 
of Directors, the Technology Committee

December 18, 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 December 8, 2015, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    This proposed rule change by OCC concerns the adoption of a Charter 
for a new committee of OCC's Board of Directors (``Board''), the 
Technology Committee (``TC''). Additionally, OCC is proposing to add a 
description of the TC to its By-Laws.

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 concerns the adoption of the TC Charter 
and the addition of a description of the TC into Article III, Section 9 
of OCC's By-Laws. The Board formed the TC in order to enhance the 
Board's understanding and oversight of key technology, information 
security, and cyber-security risk issues at OCC. Consistent with OCC's 
other Board-level committee charters, the TC Charter sets forth: (i) 
The purpose, functions, and responsibilities of the TC and (ii) the 
composition and organization of the TC.
Purpose and Responsibilities of the TC
    As set forth in the TC Charter, the TC would be responsible for: 
(i) Overseeing major information technology (``IT'') related 
strategies, projects, and technology architecture decisions; (ii) 
monitoring whether OCC's IT programs effectively support OCC's business 
objectives and strategies; (iii) monitoring OCC's IT risk management 
efforts as well as the security of OCC's information systems and 
physical security of information system assets; and (iv) conferring 
with OCC's senior IT management team and informing the Board on IT 
related matters.
    Further, and with respect to the TC Charter's role in the oversight 
of OCC's IT strategy and projects, the TC Charter provides that the TC 
would be specifically tasked with: (i) Evaluating OCC's IT strategy, 
including the financial, tactical, and strategic benefits of IT 
projects and technology architecture initiatives; (ii) critically 
reviewing IT projects and technology architecture decisions, including 
review of the process related to approval of capital expenditures as 
they relate to IT projects; and (iii) making recommendations to the 
Board with respect to IT related projects and investments that require 
Board approval. In addition, the TC Charter requires that the TC: (i) 
Monitor the quality and effectiveness of OCC's IT and physical 
security, including periodically reviewing and appraising OCC's 
disaster recovery capabilities and crisis management plans; (ii) in 
coordination and cooperation with the Audit Committee of the Board, 
monitor the quality and effectiveness of OCC's IT systems and processes 
that relate to or affect OCC's internal controls and assess OCC's 
management of IT related compliance risks; (iii) report to the Board 
and the Audit Committee about IT risks and controls; and (iv) serve in 
an advisory role with respect to IT decisions at OCC. In connection 
with carrying out its responsibilities, the TC would also, in general, 
inform and make recommendations to the Board and other Board level 
committees with respect to IT related matters.
Administrative and Procedural Elements of the TC
    The TC Charter would provide that the TC be comprised of three or 
more directors, and meet at least four times per year.\3\ The TC would 
function in a manner similar to the other Board-level Committees in 
that it would have the ability to hire specialists and meet in 
executive session as well as be required to report to the Board on an 
annual basis. The TC would also have to annually confirm to the Board 
that its responsibilities, as set forth in the TC Charter, have been 
carried out and evaluate its and its members' performance on a regular 
basis.
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    \3\ Members of the TC would not need to be technology experts.
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2. Statutory Basis
    OCC's governance arrangements, which include, but are not limited 
to, the proposed TC Charter promote the effectiveness of OCC's [sic] 
Board's oversight on OCC's business and operational processes. OCC 
believes that adoption of the TC Charter would enhance the 
effectiveness of the Board's oversight on OCC's business and 
operational processes, and specifically technology related processes 
such as disaster recovery and crisis management plans as well as IT 
systems that relate to internal controls and compliance risks, as 
described above, through a dedicated Board-level committee responsible 
for oversight of such processes. As a result of the proposed rule 
change, it is more likely that OCC's technology processes work as 
expected, including those processes tied to the clearance and 
settlement of securities transactions, and therefore the proposed rule 
change promotes the prompt and accurate clearance and settlement of 
securities transactions consistent with Section 17A(b)(3)(F) of the 
Act.\4\ Furthermore, OCC believes the

[[Page 80423]]

proposed rule change contributes to OCC's objective to have governance 
arrangements that are clear and transparent that: (i) fulfill the 
public interest requirements, (ii) support the objectives of OCC's 
owners and participants; and, (iii) promote the effectiveness of OCC's 
risk management procedures, consistent with Rule 17Ad-22(d)(8), as the 
TC Charter further delineates governance responsibilities for Board-
level committees, because the TC Charter is made available to the 
public on OCC's Web site and the TC Charter provides for a dedicated 
Board-level committee that would reduce IT related risk at OCC.\5\ 
Finally, the proposed rule change is not inconsistent with the existing 
rules of OCC, including any other rules proposed to be amended.
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    \4\ 15 U.S.C. 78q-1(b)(3)(F).
    \5\ 17 CFR 240.17Ad-22(d)(8).
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(B) Clearing Agency's Statement on Burden on Competition

    OCC does not believe that the proposed rule change would impose any 
burden on competition.\6\ OCC's adoption of the TC Charter would not 
unfairly inhibit access to OCC's services or disadvantage or favor any 
particular user in relationship to another user because it relates to 
the governance structure of OCC, which affects all users, and does not 
relate directly to any particular service or particular use of OCC's 
facilities.
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    \6\ 15 U.S.C. 78q-1(b)(3)(I).
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    For the foregoing reasons, OCC believes that the proposed rule 
change is in the public interest, would be consistent with the 
requirements of the Act applicable to clearing agencies and would not 
impose a burden on competition.

(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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.
    The proposal shall not take effect until all regulatory actions 
required with respect to the proposal are completed.

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

     Use 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-2015-018 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-2015-018. 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 Room, 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 the filing also will be available 
for inspection and copying at the principal office of OCC and on OCC's 
Web site at: http://www.optionsclearing.com/components/docs/legal/rules_and_bylaws/sr_occ_15_018.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-2015-018 and should be submitted on 
or before January 14, 2016.
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-32382 Filed 12-23-15; 8:45 am]
 BILLING CODE 8011-01-P
80422 Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / Notices

inspection and copying at the principal the purpose of and basis for the crisis management plans; (ii) in
office of the Exchange. All comments proposed rule change and discussed any coordination and cooperation with the
received will be posted without change; comments it received on the proposed Audit Committee of the Board, monitor
the Commission does not edit personal rule change. The text of these statements the quality and effectiveness of OCC’s IT
identifying information from may be examined at the places specified systems and processes that relate to or
submissions. You should submit only in Item IV below. OCC has prepared affect OCC’s internal controls and assess
information that you wish to make summaries, set forth in sections (A), (B), OCC’s management of IT related
available publicly. All submissions and (C) below, of the most significant compliance risks; (iii) report to the
should refer to File No. SR–BYX–2015– aspects of these statements. Board and the Audit Committee about
50 and should be submitted on or before IT risks and controls; and (iv) serve in
(A) Clearing Agency’s Statement of the an advisory role with respect to IT
January 14, 2016.
Purpose of, and Statutory Basis for, the decisions at OCC. In connection with
For the Commission, by the Division of Proposed Rule Change
Trading and Markets, pursuant to delegated carrying out its responsibilities, the TC
authority.17 1. Purpose would also, in general, inform and make
Robert W. Errett, This proposed rule change concerns recommendations to the Board and
Deputy Secretary. the adoption of the TC Charter and the other Board level committees with
[FR Doc. 2015–32385 Filed 12–23–15; 8:45 am] addition of a description of the TC into respect to IT related matters.
BILLING CODE 8011–01–P Article III, Section 9 of OCC’s By-Laws. Administrative and Procedural
The Board formed the TC in order to Elements of the TC
enhance the Board’s understanding and The TC Charter would provide that
SECURITIES AND EXCHANGE oversight of key technology, information
COMMISSION the TC be comprised of three or more
security, and cyber-security risk issues directors, and meet at least four times
[Release No. 34–76686; File No. SR–OCC– at OCC. Consistent with OCC’s other per year.3 The TC would function in a
2015–018] Board-level committee charters, the TC manner similar to the other Board-level
Charter sets forth: (i) The purpose, Committees in that it would have the
Self-Regulatory Organizations; The functions, and responsibilities of the TC ability to hire specialists and meet in
Options Clearing Corporation; Notice and (ii) the composition and executive session as well as be required
of Filing of a Proposed Rule Change organization of the TC. to report to the Board on an annual
Concerning the Adoption of a Charter
Purpose and Responsibilities of the TC basis. The TC would also have to
of a New Committee of The Options
annually confirm to the Board that its
Clearing Corporation’s Board of As set forth in the TC Charter, the TC
responsibilities, as set forth in the TC
Directors, the Technology Committee would be responsible for: (i) Overseeing
Charter, have been carried out and
major information technology (‘‘IT’’)
December 18, 2015. evaluate its and its members’
related strategies, projects, and
Pursuant to Section 19(b)(1) of the performance on a regular basis.
technology architecture decisions; (ii)
Securities Exchange Act of 1934 monitoring whether OCC’s IT programs 2. Statutory Basis
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 effectively support OCC’s business
notice is hereby given that on December OCC’s governance arrangements,
objectives and strategies; (iii) which include, but are not limited to,
8, 2015, The Options Clearing monitoring OCC’s IT risk management
Corporation (‘‘OCC’’) filed with the the proposed TC Charter promote the
efforts as well as the security of OCC’s effectiveness of OCC’s [sic] Board’s
Securities and Exchange Commission information systems and physical
(‘‘Commission’’) the proposed rule oversight on OCC’s business and
security of information system assets; operational processes. OCC believes that
change as described in Items I and II and (iv) conferring with OCC’s senior IT
below, which Items have been prepared adoption of the TC Charter would
management team and informing the enhance the effectiveness of the Board’s
by OCC. The Commission is publishing Board on IT related matters.
this notice to solicit comments on the oversight on OCC’s business and
Further, and with respect to the TC operational processes, and specifically
proposed rule change from interested Charter’s role in the oversight of OCC’s
persons. technology related processes such as
IT strategy and projects, the TC Charter disaster recovery and crisis management
I. Clearing Agency’s Statement of the provides that the TC would be plans as well as IT systems that relate
Terms of Substance of the Proposed specifically tasked with: (i) Evaluating to internal controls and compliance
Rule Change OCC’s IT strategy, including the risks, as described above, through a
financial, tactical, and strategic benefits dedicated Board-level committee
This proposed rule change by OCC
of IT projects and technology responsible for oversight of such
concerns the adoption of a Charter for
architecture initiatives; (ii) critically processes. As a result of the proposed
a new committee of OCC’s Board of
reviewing IT projects and technology rule change, it is more likely that OCC’s
Directors (‘‘Board’’), the Technology
architecture decisions, including review technology processes work as expected,
Committee (‘‘TC’’). Additionally, OCC is
of the process related to approval of including those processes tied to the
proposing to add a description of the TC
capital expenditures as they relate to IT clearance and settlement of securities
to its By-Laws.
projects; and (iii) making transactions, and therefore the proposed
II. Clearing Agency’s Statement of the recommendations to the Board with rule change promotes the prompt and
Purpose of, and Statutory Basis for, the
mstockstill on DSK4VPTVN1PROD with NOTICES

respect to IT related projects and accurate clearance and settlement of
Proposed Rule Change investments that require Board securities transactions consistent with
In its filing with the Commission, approval. In addition, the TC Charter Section 17A(b)(3)(F) of the Act.4
OCC included statements concerning requires that the TC: (i) Monitor the Furthermore, OCC believes the
quality and effectiveness of OCC’s IT
17 17 CFR 200.30–3(a)(12). and physical security, including 3 Members of the TC would not need to be
1 15 U.S.C. 78s(b)(1). periodically reviewing and appraising technology experts.
2 17 CFR 240.19b–4. OCC’s disaster recovery capabilities and 4 15 U.S.C. 78q–1(b)(3)(F).

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Document Created: 2015-12-24 02:25:59
Document Modified: 2015-12-24 02:25:59
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 80422