82 FR 13688 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 7.46 To Modify the Date of Appendix B Web site Data Publication Pursuant to the Regulation NMS Plan To Implement a Tick Size Pilot Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 48 (March 14, 2017)
Federal Register Volume 82, Issue 48 (March 14, 2017)
| Page Range | 13688-13690 | |
| FR Document | 2017-04924 |
[Federal Register Volume 82, Number 48 (Tuesday, March 14, 2017)] [Notices] [Pages 13688-13690] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-04924] [[Page 13688]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80175; File No. SR-NYSEARCA-2017-19] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 7.46 To Modify the Date of Appendix B Web site Data Publication Pursuant to the Regulation NMS Plan To Implement a Tick Size Pilot Program March 8, 2017. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on February 28, 2017, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to Rule 7.46 to modify the date of Appendix B Web site data publication pursuant to the Regulation NMS Plan to Implement a Tick Size Pilot Program (``Plan''). The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Rule 7.46(b) (Compliance with Data Collection Requirements) \4\ implements the data collection and Web site publication requirements of the Plan.\5\ Supplementary Material .70 to Rule 7.46 provides, among other things, that the requirement that the Exchange or their DEA make certain data publicly available on the Exchange's or DEA's Web site pursuant to Appendix B and C to the Plan shall commence at the beginning of the Pilot Period,\6\ and that the Exchange or their DEA shall make data for the Pre-Pilot Period publicly available on the Exchange's or DEA's Web site pursuant to Appendix B and C of the Plan by February 28, 2017.\7\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 77484 (March 31, 2016), 81 FR 20024 (April 4, 2016) (Immediate Effectiveness of Proposed Rule Change Adopting Requirements for the Collection and Transmission of Data Pursuant to Appendices B and C of Regulation NMS Plan to Implement a Tick Size Pilot Program) (SR-NYSEARCA-2016- 52); see also Securities Exchange Act Release No. 78814 (September 12, 2016), 81 FR 63818 (September 16, 2016) (Immediate Effectiveness of Proposed Rule Change to Amend Rule 7.46 to Modify Certain Data Collection Requirements of the Regulation NMS Plan to Implement a Tick Size Pilot Program) (SR-NYSEARCA-2016-124); see also Letter from John C. Roeser, Associate Director, Division of Trading and Markets, Commission, to Sherry Sandler, Associate General Counsel, NYSE Arca, dated April 4, 2016. \5\ The Participants filed the Plan to comply with an order issued by the Commission on June 24, 2014. See Letter from Brendon J. Weiss, Vice President, Intercontinental Exchange, Inc., to Secretary, Commission, dated August 25, 2014 (``SRO Tick Size Plan Proposal''). See Securities Exchange Act Release No 72460 (June 24, 2014), 79 FR 36840 (June 30, 2014); see also Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015). \6\ Unless otherwise defined herein, capitalized terms have the meaning ascribed to them in the Plan. \7\ On November 30, 2016, the SEC granted exemptive relief to the Participants to, among other things, delay the publication of Web site data pursuant to Appendices B and C to the Plan until February 28, 2017, and to delay the ongoing Web site publication by ninety days such that data would be published within 120 calendar days following the end of the month. See Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Marcia E. Asquith, Senior Vice President and Corporate Secretary, Financial Industry Regulatory Authority, Inc. (``FINRA''), dated November 30, 2016; see also Securities Exchange Act Release No. 79476 (December 6, 2016), 81 FR 89529 (December 12, 2016) (Notice of Filing and Immediate Effectiveness of File No. SR- NYSEARCA-2016-159). --------------------------------------------------------------------------- The Exchange is proposing amendments to Supplementary Material .70 to Rule 7.46 to delay the date by which Pre-Pilot and Pilot Appendix B data is to be made publicly available on the Exchange's or DEA's Web site from February 28, 2017, until April 28, 2017. Appendix C data for the Pre-Pilot Period through the month of January 2017 will be published on the Exchange's or DEA's Web site on February 28, 2017, and, thereafter, on the original 30-day schedule. In the SRO Tick Size Plan Proposal, the Participants stated that the public data will be made available for free ``on a disaggregated basis by trading center'' on the Web sites of the Participants and the Designated Examining Authorities.\8\ However, market participants have expressed confidentiality concerns regarding this approach for over- the-counter (``OTC'') data.\9\ Thus, the Exchange is filing the instant proposed rule change to provide additional time to assess a means of addressing the confidentiality concerns raised in connection with the publication of Appendix B data related to OTC activity in furtherance of the objectives of the Plan.\10\ Pursuant to this amendment, Appendix B data publication will be delayed until April 28, 2017. The Participants anticipate filing additional proposed rule changes in the near future to address Appendix B data publication. --------------------------------------------------------------------------- \8\ See Securities Exchange Act Release No. 73511 (November 3, 2014), 79 FR 66423 (November 7, 2014) (Notice of Filing of Proposed National Market System Plan to Implement a Tick Size Pilot Program on a One-Year Pilot Basis, File No. 4-657) (``Tick Size Plan Proposal''). \9\ See letters from Adam C. Cooper, Senior Managing Director and Chief Legal Officer, Citadel Securities, to Brent J. Fields, Secretary, Commission, dated December 21, 2016 (``Citadel letter''); and William Hebert, Managing Director, Financial Information Forum, to Robert W. Errett, Deputy Secretary, Commission, dated December 21, 2016 (``FIF letter''). \10\ FINRA, on behalf of the Participants, also is submitting an exemptive request to the SEC in connection with the instant filing. --------------------------------------------------------------------------- As noted in Item 2 of this filing, the Exchange has filed the proposed rule change for immediate effectiveness and has requested that the Commission waive the 30-day operative delay. If the Commission waives the 30-day operative delay, the operative date of the proposed rule change will be the date of filing. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\11\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\12\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in [[Page 13689]] general, to protect investors and the public interest. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f(b). \12\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Plan is designed to allow the Commission, market participants, and the public to study and assess the impact of increment conventions on the liquidity and trading of the common stock of small- capitalization companies. The Exchange believes that this proposal is consistent with the Act because it is in furtherance of the objectives of Section VII(A) of the Plan in that it is designed to provide the Exchange with additional time to assess a means of addressing the confidentiality concerns raised in connection with the publication of Appendix B data, to comply with the Plan's requirements that the data made publicly available will not identify the trading center that generated the data. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposed rule change implements the provisions of the Plan, and is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b- 4(f)(6) thereunder.\14\ --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(3)(A). \14\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19(b)-4(f)(6) normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has filed the proposed rule change for immediate effectiveness and has requested that the Commission waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing so that it may become operative on February 28, 2017. The Exchange notes that the proposed rule change is intended to address confidentiality concerns raised in connection with the publication of over-the-counter (``OTC'') Appendix B data by permitting the Exchange to delay Web site publication of its Appendix B data from February 28, 2017 to April 28, 2017.\15\ The Exchange notes that the delay would provide additional time to assess a means of addressing the confidentiality concerns. The Exchange notes that it expects Participants to file a proposed rule changes related to publishing Appendix B data. --------------------------------------------------------------------------- \15\ See supra note 9. The Commission notes that FINRA has submitted a proposed rule change to delay the publication of OTC Appendix B data. See SR-FINRA-2017-005. --------------------------------------------------------------------------- The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it will allow the Exchange to delay publication of its Appendix B data until April 28, 2017. As noted above, commenters continue to raise concerns about the publication of OTC Appendix B data.\16\ Delaying publication of Exchange's Appendix B data \17\ will prevent the publication of partial (i.e., Exchange-only) Appendix B data required under the Plan. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative on February 28, 2017.\18\ --------------------------------------------------------------------------- \16\ The Commission notes that FINRA has filed a proposed rule change that is intended to mitigate confidentiality concerns raised by commenters regarding the publication of OTC Appendix B data. See SR-FINRA-2017-006. \17\ The Commission notes that other Participants have proposed to delay the publication of their Appendix B data until April 28, 2017. See SR-BatsBYX-2017-05; SR-BatsBZX-2017-15; SR BatsEDGA-2017- 05; SR-BatsEDGX-2017-13; SR-BX-2017-016; SR-CHX-2017-05; SR-FINRA- 2017-005; SR-IEX-2017-07; SR-NASDAQ-2017-024; SR-Phlx-2017-22; SR- NYSE-2017-10; SR-NYSEMKT-2017-11. \18\ For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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-NYSEARCA-2017-19 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-NYSEARCA-2017-19. 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 the Exchange. 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-NYSEARCA-2017-19 and should be submitted on or before April 4, 2017. [[Page 13690]] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-04924 Filed 3-13-17; 8:45 am] BILLING CODE 8011-01-P
![13688 Federal Register / Vol. 82, No. 48 / Tuesday, March 14, 2017 / Notices
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s February 28, 2017, until April 28, 2017.
COMMISSION Statement of the Purpose of, and the Appendix C data for the Pre-Pilot Period
Statutory Basis for, the Proposed Rule through the month of January 2017 will
[Release No. 34–80175; File No. SR–
Change be published on the Exchange’s or
DEA’s Web site on February 28, 2017,
NYSEARCA–2017–19] 1. Purpose
and, thereafter, on the original 30-day
Rule 7.46(b) (Compliance with Data schedule.
Self-Regulatory Organizations; NYSE
Collection Requirements) 4 implements In the SRO Tick Size Plan Proposal,
Arca, Inc.; Notice of Filing and
the data collection and Web site the Participants stated that the public
Immediate Effectiveness of Proposed
publication requirements of the Plan.5 data will be made available for free ‘‘on
Rule Change Amending Rule 7.46 To Supplementary Material .70 to Rule 7.46 a disaggregated basis by trading center’’
Modify the Date of Appendix B Web provides, among other things, that the on the Web sites of the Participants and
site Data Publication Pursuant to the requirement that the Exchange or their the Designated Examining Authorities.8
Regulation NMS Plan To Implement a DEA make certain data publicly However, market participants have
Tick Size Pilot Program available on the Exchange’s or DEA’s expressed confidentiality concerns
March 8, 2017.
Web site pursuant to Appendix B and C regarding this approach for over-the-
to the Plan shall commence at the counter (‘‘OTC’’) data.9 Thus, the
Pursuant to Section 19(b)(1) 1 of the beginning of the Pilot Period,6 and that Exchange is filing the instant proposed
Securities Exchange Act of 1934 (the the Exchange or their DEA shall make rule change to provide additional time
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 data for the Pre-Pilot Period publicly to assess a means of addressing the
notice is hereby given that, on February available on the Exchange’s or DEA’s confidentiality concerns raised in
28, 2017, NYSE Arca, Inc. (the Web site pursuant to Appendix B and C connection with the publication of
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with of the Plan by February 28, 2017.7 Appendix B data related to OTC activity
the Securities and Exchange The Exchange is proposing in furtherance of the objectives of the
Commission (the ‘‘Commission’’) the amendments to Supplementary Material Plan.10 Pursuant to this amendment,
proposed rule change as described in .70 to Rule 7.46 to delay the date by Appendix B data publication will be
Items I and II below, which Items have which Pre-Pilot and Pilot Appendix B delayed until April 28, 2017. The
been prepared by the self-regulatory data is to be made publicly available on Participants anticipate filing additional
organization. The Commission is the Exchange’s or DEA’s Web site from proposed rule changes in the near future
publishing this notice to solicit to address Appendix B data publication.
4 See Securities Exchange Act Release No. 77484
comments on the proposed rule change As noted in Item 2 of this filing, the
(March 31, 2016), 81 FR 20024 (April 4, 2016)
from interested persons. (Immediate Effectiveness of Proposed Rule Change
Exchange has filed the proposed rule
Adopting Requirements for the Collection and change for immediate effectiveness and
I. Self-Regulatory Organization’s Transmission of Data Pursuant to Appendices B and has requested that the Commission
Statement of the Terms of Substance of C of Regulation NMS Plan to Implement a Tick Size waive the 30-day operative delay. If the
Pilot Program) (SR–NYSEARCA–2016–52); see also
the Proposed Rule Change Securities Exchange Act Release No. 78814 Commission waives the 30-day
(September 12, 2016), 81 FR 63818 (September 16, operative delay, the operative date of
The Exchange proposes to Rule 7.46 2016) (Immediate Effectiveness of Proposed Rule the proposed rule change will be the
to modify the date of Appendix B Web Change to Amend Rule 7.46 to Modify Certain Data date of filing.
site data publication pursuant to the Collection Requirements of the Regulation NMS
Plan to Implement a Tick Size Pilot Program) (SR– 2. Statutory Basis
Regulation NMS Plan to Implement a NYSEARCA–2016–124); see also Letter from John
Tick Size Pilot Program (‘‘Plan’’). The C. Roeser, Associate Director, Division of Trading The Exchange believes that its
proposed rule change is available on the and Markets, Commission, to Sherry Sandler, proposal is consistent with Section 6(b)
Associate General Counsel, NYSE Arca, dated April
Exchange’s Web site at www.nyse.com, 4, 2016.
of the Act,11 in general, and furthers the
at the principal office of the Exchange, 5 The Participants filed the Plan to comply with objectives of Section 6(b)(5) of the Act,12
and at the Commission’s Public an order issued by the Commission on June 24, in particular, in that it is designed to
Reference Room. 2014. See Letter from Brendon J. Weiss, Vice prevent fraudulent and manipulative
President, Intercontinental Exchange, Inc., to acts and practices, to promote just and
II. Self-Regulatory Organization’s Secretary, Commission, dated August 25, 2014
(‘‘SRO Tick Size Plan Proposal’’). See Securities equitable principles of trade, to remove
Statement of the Purpose of, and Exchange Act Release No 72460 (June 24, 2014), 79 impediments to and perfect the
Statutory Basis for, the Proposed Rule FR 36840 (June 30, 2014); see also Securities mechanism of a free and open market
Change Exchange Act Release No. 74892 (May 6, 2015), 80 and a national market system, and, in
FR 27513 (May 13, 2015).
In its filing with the Commission, the 6 Unless otherwise defined herein, capitalized
8 See Securities Exchange Act Release No. 73511
self-regulatory organization included terms have the meaning ascribed to them in the
Plan. (November 3, 2014), 79 FR 66423 (November 7,
statements concerning the purpose of, 7 On November 30, 2016, the SEC granted 2014) (Notice of Filing of Proposed National Market
and basis for, the proposed rule change System Plan to Implement a Tick Size Pilot Program
exemptive relief to the Participants to, among other
on a One-Year Pilot Basis, File No. 4–657) (‘‘Tick
and discussed any comments it received things, delay the publication of Web site data
Size Plan Proposal’’).
on the proposed rule change. The text pursuant to Appendices B and C to the Plan until 9 See letters from Adam C. Cooper, Senior
February 28, 2017, and to delay the ongoing Web
of those statements may be examined at site publication by ninety days such that data Managing Director and Chief Legal Officer, Citadel
the places specified in Item IV below. Securities, to Brent J. Fields, Secretary,
asabaliauskas on DSK3SPTVN1PROD with NOTICES
would be published within 120 calendar days
following the end of the month. See Letter from Commission, dated December 21, 2016 (‘‘Citadel
The Exchange has prepared summaries, letter’’); and William Hebert, Managing Director,
David S. Shillman, Associate Director, Division of
set forth in sections A, B, and C below, Trading and Markets, Commission, to Marcia E. Financial Information Forum, to Robert W. Errett,
of the most significant parts of such Asquith, Senior Vice President and Corporate Deputy Secretary, Commission, dated December 21,
2016 (‘‘FIF letter’’).
statements. Secretary, Financial Industry Regulatory Authority,
10 FINRA, on behalf of the Participants, also is
Inc. (‘‘FINRA’’), dated November 30, 2016; see also
Securities Exchange Act Release No. 79476 submitting an exemptive request to the SEC in
1 15 U.S.C. 78s(b)(1). connection with the instant filing.
(December 6, 2016), 81 FR 89529 (December 12,
2 15 U.S.C. 78a. 11 15 U.S.C. 78f(b).
2016) (Notice of Filing and Immediate Effectiveness
3 17 CFR 240.19b–4. of File No. SR–NYSEARCA–2016–159). 12 15 U.S.C. 78f(b)(5).
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![13690 Federal Register / Vol. 82, No. 48 / Tuesday, March 14, 2017 / Notices
For the Commission, by the Division of withdraw from a Clearing Member’s the event of another Hedge or Market
Trading and Markets, pursuant to delegated account the value of any difference Loan Clearing Member suspension as
authority.19 between the price reported by a Clearing applicable); (5) providing OCC with the
Eduardo A. Aleman, Member instructed to execute a buy-in authority to withdraw from a Clearing
Assistant Secretary. or sell-out of loaned stock as a result of Member’s account the value of any
[FR Doc. 2017–04924 Filed 3–13–17; 8:45 am] another Clearing Member suspension difference between the price reported by
BILLING CODE 8011–01–P and the price that OCC determines to be a Clearing Member instructed to execute
reasonable; and (6) allow OCC to close a buy-in or sell-out of loaned stock as
out the Matched-Book Positions of a result of another Clearing Member
SECURITIES AND EXCHANGE suspended Hedge Clearing Members suspension and the price that OCC
COMMISSION through the termination by offset and determines to be reasonable; and (6)
[Release No. 34–80171; File No. SR–OCC–
‘‘re-matching’’ of such positions without allowing OCC to close out the Matched-
2017–004] requiring the transfer of securities Book Positions of suspended Hedge
against the payment of settlement prices Clearing Members through the
Self-Regulatory Organizations; the as currently required under OCC’s rules. termination by offset and re-matching of
Options Clearing Corporation; Notice All terms with initial capitalization such positions without requiring the
of Filing of Proposed Rule Change not defined herein have the same transfer of securities against the
Concerning Enhancements to OCC’s meaning as set forth in OCC’s By-Laws payment of settlement prices as
Stock Loan Programs and Rules.3 currently required under OCC’s rules.
March 8, 2017. II. Clearing Agency’s Statement of the The proposed amendments to the By-
Pursuant to Section 19(b)(1) of the Purpose of, and Statutory Basis for, the Laws and Rules are discussed in more
Securities Exchange Act of 1934 Proposed Rule Change detail below.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 In its filing with the Commission, Background
notice is hereby given that on February OCC included statements concerning
28, 2017, The Options Clearing the purpose of and basis for the OCC currently operates two Stock
Corporation (‘‘OCC’’) filed with the proposed rule change and discussed any Loan Programs: The Hedge Program and
Securities and Exchange Commission comments it received on the proposed the Market Loan Program. In the Hedge
(‘‘Commission’’) the proposed rule rule change. The text of these statements Program, OCC acts as the principal
change as described in Items I, II and III may be examined at the places specified counterparty for stock loans that are
below, which Items have been prepared in Item IV below. OCC has prepared executed bilaterally outside of OCC and
by OCC. The Commission is publishing summaries, set forth in sections (A), (B), sent to OCC for clearance and
this notice to solicit comments on the and (C) below, of the most significant settlement. In the case of a Hedge Loan,
proposed rule change from interested aspects of these statements. prospective Lending and Borrowing
persons. Clearing Members identify each other
(A) Clearing Agency’s Statement of the
(independent of OCC), agree to
I. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the
bilaterally negotiated terms of the Hedge
Terms of Substance of the Proposed Proposed Rule Change
Loan, and then send the details of the
Rule Change 1. Purpose stock loan to the Depository with a
This proposed rule change by OCC is OCC proposes a number of certain ‘‘reason code,’’ 4 which
designed to enhance the overall amendments to its By-Laws and Rules designates the stock loan as a Hedge
resilience of OCC’s Stock Loan/Hedge designed to enhance the overall Loan for guaranty and clearance at OCC.
Program (‘‘Hedge Program’’) and Market resilience of its Stock Loan/Hedge The Lending Clearing Member then
Loan Program (collectively, the ‘‘Stock Program (‘‘Hedge Program’’) and Market instructs the Depository to transfer a
Loan Programs’’). The proposed rule Loan Program (collectively, the ‘‘Stock specified number of shares of Eligible
change would, among other things: (1) Loan Programs’’). Specifically, the Stock to the account of the Borrowing
Require Clearing Members to have proposed rule change would improve Clearing Member, and the Borrowing
robust processes in place to reconcile risk management in the Stock Loan Clearing Member instructs the
open interest in the Stock Loan Programs by, among other things: (1) Depository to transfer the appropriate
Programs at least once per stock loan Requiring Clearing Members to have amount of cash collateral to the account
business day; (2) provide further clarity robust processes in place to reconcile of the Lending Clearing Member.
and certainty regarding the formal open interest in the Stock Loan In the Market Loan Program, stock
record of stock loan positions being Programs at least once per stock loan loans are initiated through the matching
guaranteed by OCC at any given time business day; (2) providing further of bids and offers that are either agreed
(‘‘golden copy’’ rules); (3) further clarify clarity and certainty regarding the upon by the Market Loan Clearing
that stock loan positions at OCC are not formal record of stock loan positions Members or matched anonymously
terminated until the records of OCC being guaranteed by OCC at any given through a Loan Market. In order to
reflect the termination of such stock time (‘‘golden copy’’ rules); (3) further initiate a Market Loan, the Loan Market
loan; (4) provide a specific timeframe in clarifying that stock loan positions at sends a matched transaction to OCC,
which Clearing Members in the Stock OCC are not terminated until the which in turn sends two separate but
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Loan Programs must buy-in or sell-out records of OCC reflect the termination of linked settlement instructions to the
of stock loan positions in the event of such stock loan; (4) providing a specific Depository to effect the movement of
another Hedge or Market Loan Clearing timeframe in which Clearing Members Eligible Stock and cash collateral
Member suspension (as applicable); (5) in the Stock Loan Programs must buy- between the accounts of the Market
provide OCC with the authority to in or sell-out of stock loan positions in
4 Unique reason codes were created by the
19 17 CFR 200.30–3(a)(12). 3 OCC’sBy-Laws and Rules can be found on Depository for Clearing Members to designate stock
1 15 U.S.C. 78s(b)(1).
OCC’s public Web site: http://optionsclearing.com/ loan transactions intended to be sent to OCC for
2 17 CFR 240.19b–4. about/publications/bylaws.jsp. novation and guarantee.
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Document Created: 2017-03-14 02:51:59
Document Modified: 2017-03-14 02:51:59
| 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 | 82 FR 13688 |
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