81 FR 17231 - Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to the Voluntary Termination by Offset and Re-Matching of Matched-Book Positions in the Stock Loan/Hedge Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 59 (March 28, 2016)
Federal Register Volume 81, Issue 59 (March 28, 2016)
| Page Range | 17231-17234 | |
| FR Document | 2016-06862 |
[Federal Register Volume 81, Number 59 (Monday, March 28, 2016)] [Notices] [Pages 17231-17234] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-06862] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77415; File No. SR-OCC-2016-006] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to the Voluntary Termination by Offset and Re-Matching of Matched-Book Positions in the Stock Loan/Hedge Program March 22, 2016. 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 March 15, 2016, The Options Clearing Corporation (``OCC'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared primarily by OCC. OCC filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) \3\ of the Act and Rule 19b-4(f)(4)(i) \4\ thereunder so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A)(iii). \4\ 17 CFR 240.19b-4(f)(4)(i). --------------------------------------------------------------------------- I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change The purpose of this proposed rule change is to enhance the overall resilience of OCC's Stock Loan/Hedge Program \5\ by allowing OCC to close out the Matched-Book Positions (as defined herein) of Hedge Clearing Members requesting an orderly wind down of Matched-Book Positions through the termination by offset and ``re-matching'' of such positions without requiring the transfer of securities against the payment of settlement prices as currently required under OCC's rules. All capitalized terms not defined herein have the same meaning as in OCC's By-Laws and Rules.\6\ --------------------------------------------------------------------------- \5\ See Article XXI of OCC's By-Laws and Chapter XXII of OCC's Rules. It is also noted that no changes are being proposed to Article XXIA of OCC's By-Laws or Chapter XXIIA of OCC's Rules, which address OCC's Market Loan Program. \6\ Staff has inserted this sentence based on OCC's request to clarify the use of capitalized terms by OCC in these statements prepared by OCC. --------------------------------------------------------------------------- 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 OCC proposes amendments to its By-Laws and Rules designed to enhance the overall resilience of OCC's Stock Loan/Hedge Program by allowing OCC to close out the Matched-Book Positions of a Hedge Clearing Member requesting an orderly wind down of Matched-Book Positions through the termination by offset and re-matching of such positions without requiring the transfer of securities against the payment of settlement prices as currently required under OCC's rules. The proposed termination by offset and re-matching of stock loan and borrow positions is designed to leave the affected Clearing Members with the same net position in such stock loan and borrow positions as prior to the adjustment. Background In the Stock Loan/Hedge Program, OCC acts as a central counterparty (``CCP'') for Hedge Loans that are directly negotiated by Hedge Clearing Members and sent to OCC for clearance and settlement. A prospective Lending Clearing Member and a prospective Borrowing Clearing Member identify each other (independent of OCC) and agree on the terms of the stock loan. The Hedge Clearing Members then send the details of the stock loan to The Depository Trust Company (``Depository'') with a certain ``reason code,'' \7\ which designates the stock loan as a Hedge Loan for guaranty and clearance at OCC. The Lending Clearing Member instructs the Depository to transfer a specified number of shares of Eligible Stock to the account of the Borrowing Clearing Member, and the Borrowing Clearing Member instructs the Depository to transfer the appropriate amount of cash collateral to the account of the Lending Clearing Member.\8\ The Depository then sends the Hedge Loan information to OCC via an end-of-day report.\9\ After OCC receives the report from the Depository, OCC validates and novates the stock loan transaction and becomes the lender to the Borrowing Clearing Member and the borrower to the Lending Clearing Member.\10\ --------------------------------------------------------------------------- \7\ Unique reason codes were created by the Depository for Clearing Members to designate stock loan transactions intended to be sent to OCC for novation and guarantee. \8\ See OCC Rule 2202(a). \9\ See OCC Rule 2202(b). \10\ Id. --------------------------------------------------------------------------- After novation, as part of the guaranty, OCC makes Mark-to-Market Payments for all Hedge Loans on a daily basis to collateralize all loans to the negotiated levels.\11\ As the CCP, OCC guarantees the return of the full value of cash collateral to a Borrowing Clearing Member and the Loaned Stock, or value of that Loaned Stock, to the Lending [[Page 17232]] Clearing Member. Settlements generally are combined and netted against other OCC settlement obligations in a Hedge Clearing Member's account, including trade premiums and margin deficits. A Hedge Clearing Member's open positions in the Stock Loan/Hedge Program are factored into the Hedge Clearing Member's overall Margin \12\ and Clearing Fund contribution requirements.\13\ --------------------------------------------------------------------------- \11\ Mark-to-Market Payments are based on the value of the loaned securities and made between Clearing Members using OCC's cash settlement system. The percentage of the value of the loaned securities, either 100% or 102%, is dependent upon the agreement between the two Hedge Clearing Members party to the transaction. \12\ See OCC Rules 601 and 2203. \13\ See OCC Rule 1001. --------------------------------------------------------------------------- A significant portion of the activity in OCC's stock lending programs relates to what is often referred to as matched-book activity where a Hedge Clearing Member maintains in an account a stock loan position for a specified number of shares of an Eligible Stock reflecting a stock lending transaction with one Hedge Clearing Member (the Borrowing Clearing Member) and also maintains in that same account a stock borrow position for the same number, or lesser number, of shares of the same Eligible Stock with another Hedge Clearing Member (the Lending Clearing Member) (such positions being ``Matched-Book Positions''). From a daily mark-to-market settlement perspective, there are typically no obligations related to Matched-Book Positions because the member is simultaneously borrowing and lending the same securities (and quantity), which are marked to the same price. OCC's margin process recognizes this and currently nets loans and borrows in the same security prior to calculating exposure, resulting in no margin on a perfectly matched position. Currently, in order for a Hedge Clearing Member to close out its stock loan positions, including Matched-Book Positions, the Hedge Clearing Member is required to terminate its loans through instructions issued to the Depository to transfer a specified quantity of the loaned stock against payment of the settlement price in accordance with the process prescribed in Rule 2208. Borrowing and Lending Clearing Member counterparties to the Matched-Book Positions that wish to maintain equivalent stock loan positions at OCC would then be required to initiate new stock loans, through the process described above, in accordance with Rule 2202. Throughout this process of terminating and reestablishing stock loan positions, a number of operational steps are required to effectuate and settle those transactions, which introduce the potential for market disruption. For example, because OCC maintains stock loan inventory on a bilateral basis (i.e., maintains the borrower and lender to a transaction) and guarantees the return of cash collateral and the Loaned Stock, or price of the Loaned Stock, if a Hedge Clearing Member with Matched-Book Positions fails to fulfill its obligations for the recall of loans and return of borrowed shares, there would be a temporary imbalance of the previously ``matched-book'' position. In addition, the successful initiation of new replacement stock loans for the Borrowing or Lending Clearing Members could be subject to disruption by operational or execution risks, with the result that one ``leg'' of the initiating transaction would fail. Moreover, the Borrowing and Lending Clearing Members lose the protections afforded by OCC's guaranty of their stock loan positions until the newly initiated stock loan positions have been accepted, novated, and guaranteed by OCC. The proposed rule change would permit a Hedge Clearing Member to request the orderly wind down of Matched-Book Positions, subject to the agreement of all affected Borrowing and Lending Clearing Members, without requiring the transfer of securities against the payment of settlement prices as currently required under OCC Rules 2202, 2208 and 2209. OCC believes the proposed rule change would eliminate the potential risks described above associated with the transfer of securities and funds and provide the overall marketplace with more stability with respect to the process of voluntarily closing out Matched-Book Positions in the Stock Loan/Hedge Program. Voluntary Termination by Offset and Re-Matching OCC proposes to amend its By-Laws and Rules to permit a Hedge Clearing Member to request an orderly wind down of its Matched-Book Positions, contingent upon the explicit agreement of the requesting Hedge Clearing Member, its counterparty Borrowing Clearing Member, and counterparty Lending Clearing Member, and at the sole discretion of OCC, without requiring the transfer of securities against the payment of settlement prices as currently required under OCC's rules. First, OCC proposes to amend Article I of its By-Laws to add new defined terms ``Matched-Book Borrowing Clearing Member,'' which would mean, with respect to any Matched-Book Positions, the Hedge Clearing Member that borrows Eligible Stock from a Hedge Clearing Member maintaining Matched-Book Positions in that Eligible Stock and ``Matched-Book Lending Clearing Member,'' which would mean, with respect to any Matched-Book Positions, the Hedge Clearing Member that lends Eligible Stock to a Hedge Clearing Member maintaining Matched-Book Positions in that Eligible Stock. OCC also proposes to add a new definition for ``Matched-Book Positions,'' which would be defined as Hedge Loan positions in which a single Hedge Clearing Member borrows Eligible Stock from its Matched-Book Lending Clearing Member and lends an equal or lesser amount of the same Eligible Stock to its Matched-Book Borrowing Clearing Member. In addition, OCC proposes to amend Rule 2208 to adopt new rules for the voluntary termination by offset and re-matching of Matched-Book Positions. Specifically, OCC proposes to adopt new Rule 2208(e)(1), which would provide that a Hedge Clearing Member may submit a written request to OCC to effect one or more position adjustments to terminate by offset all or some of its Matched-Book Positions if the following conditions are met. First, the requesting Hedge Clearing Member, its Matched-Book Lending Clearing Member, and its Matched-Book Borrowing Clearing Member have furnished to the Corporation their written agreement to (i) the termination by offset of such Matched-Book Positions maintained in the requesting Hedge Clearing Member's account and (ii) the Corporation's re-matching the stock borrow position for the same number of shares in the same Eligible Stock maintained in a designated account of the Matched-Book Borrowing Clearing Member against the stock loan position for the same number of shares in the same Eligible Stock maintained in a designated account of the Matched- Book Lending Clearing Member. Second, the written agreement furnished by the requesting Hedge Clearing Member, the Matched-Book Borrowing Clearing Member, and the Matched-Book Lending Clearing Member must be in the form specified by OCC. Third, the written request to terminate by offset and to re-match stock loan and borrow positions may be for less than the total number of shares of the Eligible Stock that is the subject of the stock loan and borrow positions maintained, as applicable, by the requesting Hedge Clearing Member, the Matched-Book Borrowing Clearing Member, and Matched-Book Lending Clearing Member, but must be for an equal number of shares. Additionally, proposed Rule 2208(e)(2) would provide that, if OCC in its sole discretion approves the requested termination by offset and re-matching of positions, the requesting Hedge Clearing Member, the Matched-Book Borrowing Clearing Member, and Matched-Book Lending Clearing [[Page 17233]] Member would not be required to issue instructions to the Depository to terminate such stock loans and stock borrow positions maintained in the Stock Loan/Hedge Program or to initiate new stock lending transactions for inclusion in the Stock Loan/Hedge Program as currently required under Rules 2202(a) and 2208(a). Proposed Rules 2208(e)(3) and (4) would provide that, from and after the time OCC has completed the requested position adjustments to terminate by offset and re-match the specified stock loan and borrow positions, the requesting Hedge Clearing Member would have no further obligation under the By-Laws and Rules with respect to such positions; however, the Borrowing Clearing Member with re-matched stock borrow positions remains obligated as a Borrowing Clearing Member and the Lending Clearing Member with re-matched stock loan positions remains obligated as a Lending Clearing Member with respect to the re-matched positions as specified in the By-Laws and Rules applicable to the Stock Loan/Hedge Program. Proposed Rule 2208(e)(5) would require the requesting Hedge Clearing Member and re-matched Borrowing Clearing Member and Lending Clearing Member to make any necessary bookkeeping entries at the Depository necessitated by the termination by offset and re-matching upon notification that the termination by offset and re-matching has been completed as set forth in proposed Rule 2209(h). In addition, OCC proposes to adopt new Rule 2209(h) to specify that, in the event of a termination by offset and re-matching of a stock loan under proposed Rule 2208(e), such termination by offset and re-match shall be complete upon OCC completing all position adjustments in the accounts of the requesting Hedge Clearing Member, the Matched- Book Borrowing Clearing Member, and the Matched-Book Lending Clearing Member in accordance with Rule 2208(e) and the earlier of (i) communicating confirmation of the transaction in the form of direct written communications with the requesting Hedge Clearing Member, the Matched-Book Borrowing Clearing Member, and the Matched-Book Lending Clearing Member or (ii) when systems reports are produced and provided to the Clearing Members reflecting the transaction. OCC also proposes conforming and clean-up changes to Article XXI, Sections 2, 3 and 4 of its By-Laws. Article XXI, Section 2 would be revised to (i) account for the netting of stock loan and stock borrow positions during the voluntary termination by offset and re-matching of Matched-Book Positions in accordance with proposed Rule 2208(e) and (ii) make clean-up changes to ensure the consistent use of the defined term ``Eligible Stock.'' Additionally, Article XXI, Sections 3 and 4 would be revised to state that the voluntary termination by offset of Matched-Book Positions in accordance with proposed Rule 2208(e) would be excluded from the requirement to pay the settlement price against delivery of the Loaned Stock as currently required for all terminations under OCC's existing rules. 2. Statutory Basis OCC believes the proposed rule change is consistent with Section 17A(b)(3)(F) of the Securities Exchange Act of 1934, as amended (the ``Act''),\14\ and the rules thereunder applicable to OCC. The proposed rule change would allow OCC to close out the Matched-Book Positions of Hedge Clearing Members, which could include distressed Hedge Clearing Members or Hedge Clearing Members otherwise wishing to wind down their Matched-Book Positions in an orderly manner, through the termination by offset and re-matching of such positions. As described above, under OCC's existing rules, the close out of Matched-Book Positions requires the transfer of securities against the payment of settlement prices. Moreover, to the extent Borrowing and Lending Clearing Member counterparties to the Matched-Book Positions wish to continue to maintain equivalent stock loan positions at OCC, those members would be required to initiate new stock loans to replace the closed out positions. Throughout this process of terminating and reestablishing stock loan positions, a number of operational steps are required to effectuate and settle those transactions, which introduce the potential for execution and operational risks and thereby pose risks to the prompt and accurate clearance and settlement of securities transactions and the safeguarding of securities and funds associated therewith. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- The proposed rule change would eliminate these risks by allowing OCC and its Hedge Clearing Members to close out Matched-Book Positions through a process of termination by offset and re-matching without requiring the transfer of securities and funds. Moreover, due to the nature of Matched-Book Positions, the proposed position adjustments would enable the requesting Hedge Clearing Member to orderly wind down its Matched-Book Positions while ensuring the Matched-Book Borrowing and Matched-Book Lending Clearing Members' positions are continuously protected by OCC's guaranty. OCC therefore believes the proposed rule change is designed to promote the prompt and accurate clearance of settlement of securities transactions, the safeguarding of securities and funds in the custody or control of OCC or for which it is responsible and, in general, to protect investors and the public interest in accordance with Section 17A(b)(3)(F) of the Act.\15\ --------------------------------------------------------------------------- \15\ Id. --------------------------------------------------------------------------- (B) Clearing Agency's Statement on Burden on Competition OCC does not believe that the proposed rule change would have any impact or impose any burden on competition.\16\ The proposed rules would be equally applicable to all Hedge Clearing Members at OCC. The proposed rule change is designed to allow for the termination by offset and re-matching of Matched-Book Positions without requiring the transfer of securities and funds between Hedge Clearing Members and exposing OCC's members to the risks attendant to such transfers (as described in detail above). Accordingly, OCC does not believe that the proposed rule change would have any impact or impose any burden on competition. --------------------------------------------------------------------------- \16\ 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 upon filing \17\ pursuant to Section 19(b)(3)(A)(iii) of the Act \18\ and Rule 19b- 4(f)(4)(i) thereunder \19\ as it effects a change in an existing service of a registered clearing agency that (1) does not adversely affect the safeguarding of securities or funds in the custody or control of the clearing agency or for which it is responsible and (2) does not significantly affect the respective rights [[Page 17234]] or obligations of the clearing agency or persons using the service. 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. --------------------------------------------------------------------------- \17\ Notwithstanding its immediate effectiveness, implementation of this rule change will be delayed until this change is deemed certified under CFTC Regulation Sec. 40.6. \18\ 15 U.S.C. 78s(b)(3)(A)(iii). \19\ 17 CFR 240.19b-4(f)(4)(i). --------------------------------------------------------------------------- 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-2016-006 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-OCC-2016-006. 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 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_16_006.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-2016-006 and should be submitted on or before April 18, 2016. --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\ Brent J. Fields, Secretary. [FR Doc. 2016-06862 Filed 3-25-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 59 / Monday, March 28, 2016 / Notices 17231
post all comments on the Commission’s in Items I, II, and III below, which Items offset and re-matching of such positions
Internet Web site (http://www.sec.gov/ have been prepared primarily by OCC. without requiring the transfer of
rules/sro.shtml). Copies of the OCC filed the proposed rule change securities against the payment of
submission, all subsequent pursuant to Section 19(b)(3)(A)(iii) 3 of settlement prices as currently required
amendments, all written statements the Act and Rule 19b–4(f)(4)(i) 4 under OCC’s rules. The proposed
with respect to the proposed rule thereunder so that the proposal was termination by offset and re-matching of
change that are filed with the effective upon filing with the stock loan and borrow positions is
Commission, and all written Commission. The Commission is designed to leave the affected Clearing
communications relating to the publishing this notice to solicit Members with the same net position in
proposed rule change between the comments on the rule change from such stock loan and borrow positions as
Commission and any person, other than interested persons. prior to the adjustment.
those that may be withheld from the I. Clearing Agency’s Statement of the Background
public in accordance with the Terms of Substance of the Proposed
provisions of 5 U.S.C. 552, will be In the Stock Loan/Hedge Program,
Rule Change OCC acts as a central counterparty
available for Web site viewing and
printing in the Commission’s Public The purpose of this proposed rule (‘‘CCP’’) for Hedge Loans that are
Reference Room, 100 F Street NE., change is to enhance the overall directly negotiated by Hedge Clearing
Washington, DC 20549, on official resilience of OCC’s Stock Loan/Hedge Members and sent to OCC for clearance
business days between the hours of Program 5 by allowing OCC to close out and settlement. A prospective Lending
10:00 a.m. and 3:00 p.m. Copies of the the Matched-Book Positions (as defined Clearing Member and a prospective
filing also will be available for herein) of Hedge Clearing Members Borrowing Clearing Member identify
inspection and copying at the principal requesting an orderly wind down of each other (independent of OCC) and
office of the Exchange. All comments Matched-Book Positions through the agree on the terms of the stock loan. The
received will be posted without change; termination by offset and ‘‘re-matching’’ Hedge Clearing Members then send the
the Commission does not edit personal of such positions without requiring the details of the stock loan to The
identifying information from transfer of securities against the Depository Trust Company
submissions. You should submit only payment of settlement prices as (‘‘Depository’’) with a certain ‘‘reason
information that you wish to make currently required under OCC’s rules. code,’’ 7 which designates the stock loan
available publicly. All submissions All capitalized terms not defined herein as a Hedge Loan for guaranty and
have the same meaning as in OCC’s By- clearance at OCC. The Lending Clearing
should refer to File Number SR–
Laws and Rules.6 Member instructs the Depository to
BatsEDGX–2016–01, and should be
transfer a specified number of shares of
submitted on or before April 18,2016. II. Clearing Agency’s Statement of the Eligible Stock to the account of the
For the Commission, by the Division Purpose of, and Statutory Basis for, the Borrowing Clearing Member, and the
of Trading and Markets, pursuant to Proposed Rule Change Borrowing Clearing Member instructs
delegated authority.46
In its filing with the Commission, the Depository to transfer the
Brent J. Fields, OCC included statements concerning appropriate amount of cash collateral to
Secretary. the purpose of and basis for the the account of the Lending Clearing
[FR Doc. 2016–06863 Filed 3–25–16; 8:45 am] proposed rule change and discussed any Member.8 The Depository then sends
BILLING CODE 8011–01–P
comments it received on the proposed the Hedge Loan information to OCC via
rule change. The text of these statements an end-of-day report.9 After OCC
may be examined at the places specified receives the report from the Depository,
SECURITIES AND EXCHANGE in Item IV below. OCC has prepared OCC validates and novates the stock
COMMISSION summaries, set forth in sections (A), (B), loan transaction and becomes the lender
and (C) below, of the most significant to the Borrowing Clearing Member and
[Release No. 34–77415; File No. SR–OCC–
aspects of these statements. the borrower to the Lending Clearing
2016–006]
(A) Clearing Agency’s Statement of the Member.10
Self-Regulatory Organizations; The After novation, as part of the
Purpose of, and Statutory Basis for, the
Options Clearing Corporation; Notice guaranty, OCC makes Mark-to-Market
Proposed Rule Change
of Filing and Immediate Effectiveness Payments for all Hedge Loans on a daily
of Proposed Rule Change Related to 1. Purpose basis to collateralize all loans to the
the Voluntary Termination by Offset OCC proposes amendments to its By- negotiated levels.11 As the CCP, OCC
and Re-Matching of Matched-Book Laws and Rules designed to enhance the guarantees the return of the full value of
Positions in the Stock Loan/Hedge overall resilience of OCC’s Stock Loan/ cash collateral to a Borrowing Clearing
Program Hedge Program by allowing OCC to Member and the Loaned Stock, or value
close out the Matched-Book Positions of of that Loaned Stock, to the Lending
March 22, 2016. a Hedge Clearing Member requesting an
Pursuant to Section 19(b)(1) of the orderly wind down of Matched-Book
7 Unique reason codes were created by the
Securities Exchange Act of 1934 Depository for Clearing Members to designate stock
Positions through the termination by loan transactions intended to be sent to OCC for
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 novation and guarantee.
notice is hereby given that on March 15, 3 15 U.S.C. 78s(b)(3)(A)(iii). 8 See OCC Rule 2202(a).
2016, The Options Clearing Corporation 4 17 CFR 240.19b–4(f)(4)(i). 9 See OCC Rule 2202(b).
Lhorne on DSK5TPTVN1PROD with NOTICES
(‘‘OCC’’) filed with the Securities and 5 See Article XXI of OCC’s By-Laws and Chapter 10 Id.
Exchange Commission (‘‘Commission’’) XXII of OCC’s Rules. It is also noted that no changes 11 Mark-to-Market Payments are based on the
are being proposed to Article XXIA of OCC’s By- value of the loaned securities and made between
the proposed rule change as described Laws or Chapter XXIIA of OCC’s Rules, which Clearing Members using OCC’s cash settlement
address OCC’s Market Loan Program. system. The percentage of the value of the loaned
46 17 CFR 200.30–3(a)(12). 6 Staff has inserted this sentence based on OCC’s securities, either 100% or 102%, is dependent upon
1 15 U.S.C. 78s(b)(1). request to clarify the use of capitalized terms by the agreement between the two Hedge Clearing
2 17 CFR 240.19b–4. OCC in these statements prepared by OCC. Members party to the transaction.
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![17234 Federal Register / Vol. 81, No. 59 / Monday, March 28, 2016 / Notices
or obligations of the clearing agency or not edit personal identifying SMALL BUSINESS ADMINISTRATION
persons using the service. At any time information from submissions. You
[License No. 04/04–0324]
within 60 days of the filing of the should submit only information that
proposed rule change, the Commission you wish to make available publicly. All Plexus Fund III, L.P.; Notice Seeking
summarily may temporarily suspend submissions should refer to File Exemption Under Section 312 of the
such rule change if it appears to the Number SR–OCC–2016–006 and should Small Business Investment Act,
Commission that such action is be submitted on or before April Conflicts of Interest
necessary or appropriate in the public 18, 2016.
interest, for the protection of investors, Notice is hereby given that Plexus
or otherwise in furtherance of the For the Commission, by the Division of Fund III, L.P., 200 Providence Road,
purposes of the Act. Trading and Markets, pursuant to delegated Suite 210, Charlotte, NC 28207, a
authority.20 Federal Licensee under the Small
IV. Solicitation of Comments Brent J. Fields, Business Investment Act of 1958, as
Interested persons are invited to Secretary. amended (‘‘the Act’’), in connection
submit written data, views, and [FR Doc. 2016–06862 Filed 3–25–16; 8:45 am] with the financing of Mission Critical
arguments concerning the foregoing, Electronics, Inc., 2911 West Garry
BILLING CODE 8011–01–P
including whether the proposed rule Avenue, Santa Ana, CA 92704, has
change is consistent with the Act. sought an exemption under Section 312
Comments may be submitted by any of of the Act and 13 CFR 107.730
the following methods: financings which constitute conflicts of
SMALL BUSINESS ADMINISTRATION
Electronic Comments interest of the Small Business
Administration (‘‘SBA’’) Rules and
• Use the Commission’s Internet [License No. 04/04–0325]
Regulations. Plexus Fund III, L.P.
comment form (http://www.sec.gov/
Plexus Fund QP III, L.P.; Notice proposes to provide debt financing to
rules/sro.shtml); or
• Send an email to rule-comments@ Seeking Exemption Under Section 312 Mission Critical Electronics, Inc., that
sec.gov. Please include File Number SR– of the Small Business Investment Act, will be used to discharge an obligation
OCC–2016–006 on the subject line. Conflicts of Interest to Plexus Fund II, L.P., an associate.
Therefore this transaction is considered
Paper Comments Notice is hereby given that Plexus a conflict of interest requiring SBA’s
• Send paper comments in triplicate Fund QP III, L.P., 200 Providence Road, prior written exemption.
to Brent J. Fields, Secretary, Securities Suite 210, Charlotte, NC 28207, a Notice is hereby given that any
and Exchange Commission, 100 F Street Federal Licensee under the Small interested person may submit written
NE., Washington, DC 20549–1090. Business Investment Act of 1958, as comments on the transaction, within
All submissions should refer to File amended (‘‘the Act’’), in connection fifteen days of the date of this
Number SR–OCC–2016–006. This file with the financing of Mission Critical publication, to the Associate
number should be included on the Administrator for Investment, U.S.
Electronics, Inc., 2911 West Garry
subject line if email is used. To help the Small Business Administration, 409
Avenue, Santa Ana, CA 92704, has
Commission process and review your Third Street SW., Washington, DC
sought an exemption under Section 312
comments more efficiently, please use 20416.
of the Act and 13 CFR 107.730
only one method. The Commission will financings which constitute conflicts of Mark Walsh,
post all comments on the Commission’s interest of the Small Business Associate Administrator for Office of
Internet Web site (http://www.sec.gov/ Administration (‘‘SBA’’) Rules and Investment and Innovation.
rules/sro.shtml). Copies of the Regulations. Plexus Fund QP III, L.P. [FR Doc. 2016–06878 Filed 3–25–16; 8:45 am]
submission, all subsequent proposes to provide debt financing to BILLING CODE P
amendments, all written statements Mission Critical Electronics, Inc., that
with respect to the proposed rule will be used to discharge an obligation
change that are filed with the to Plexus Fund II, L.P., an associate. SMALL BUSINESS ADMINISTRATION
Commission, and all written Therefore this transaction is considered
communications relating to the [Disaster Declaration #14675 and #14676]
a conflict of interest requiring SBA’s
proposed rule change between the prior written exemption. Texas Disaster #TX–00465
Commission and any person, other than
those that may be withheld from the Notice is hereby given that any AGENCY: U.S. Small Business
public in accordance with the interested person may submit written Administration.
provisions of 5 U.S.C. 552, will be comments on the transaction, within
ACTION: Notice.
available for Web site viewing and fifteen days of the date of this
printing in the Commission’s Public publication, to the Associate SUMMARY: This is a Notice of the
Reference Room, 100 F Street NE., Administrator for Investment, U.S. Presidential declaration of a major
Washington, DC 20549, on official Small Business Administration, 409 disaster for the State of Texas (FEMA–
business days between the hours of Third Street SW., Washington, DC 4266–DR), dated 03/19/2016.
10:00 a.m. and 3:00 p.m. Copies of such 20416. Incident: Severe Storms, Tornadoes,
filing also will be available for and Flooding.
Mark Walsh,
Lhorne on DSK5TPTVN1PROD with NOTICES
inspection and copying at the principal Incident Period: 03/07/2016 and
office of OCC and on OCC’s Web site at Associate Administrator for Office of continuing.
Investment and Innovation. Effective Date: 03/19/2016.
http://www.theocc.com/components/
[FR Doc. 2016–06879 Filed 3–25–16; 8:45 am] Physical Loan Application Deadline
docs/legal/rules_and_bylaws/sr_occ_16_
006.pdf. BILLING CODE P Date: 05/18/2016.
All comments received will be posted Economic Injury (EIDL) Loan
without change; the Commission does 20 17 CFR 200.30–3(a)(12). Application Deadline Date: 12/19/2016.
VerDate Sep<11>2014 14:52 Mar 25, 2016 Jkt 238001 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 E:\FR\FM\28MRN1.SGM 28MRN1](https://thefederalregister.org/doc/81_FR_17290/page/4.svg)
Document Created: 2016-03-26 00:13:10
Document Modified: 2016-03-26 00:13:10
| 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 | 81 FR 17231 |
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