82 FR 44239 - Before the Securities and Exchange Commission; Securities Exchange Act of 1934; In the Matter of the The Options Clearing Corporation For an Order Granting the Approval of Proposed Rule Change Concerning a Proposed Capital Plan for Raising Additional Capital That Would Support the Options Clearing Corporation's Function as a Systemically Important Financial Market Utility; Corrected Order Scheduling Filing of Statements on Review

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 182 (September 21, 2017)

Page Range		44239-44240
FR Document		2017-20081

Federal Register, Volume 82 Issue 182 (Thursday, September 21, 2017)

[Federal Register Volume 82, Number 182 (Thursday, September 21, 2017)]
[Notices]
[Pages 44239-44240]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-20081]

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SECURITIES AND EXCHANGE COMMISSION

[File No. SR-OCC-2015-02; Release No. 81629]

Before the Securities and Exchange Commission; Securities
Exchange Act of 1934; In the Matter of the The Options Clearing
Corporation For an Order Granting the Approval of Proposed Rule Change
Concerning a Proposed Capital Plan for Raising Additional Capital That
Would Support the Options Clearing Corporation's Function as a
Systemically Important Financial Market Utility; Corrected Order
Scheduling Filing of Statements on Review

September 14, 2017.
On February 11, 2016, the Commission issued an order (``Approval
Order'') approving the plan of the Options Clearing Corporation's
(``OCC'') for raising additional capital (the ``Plan'') to support its
function as a systemically important financial market utility.\1\ BOX
Options Exchange LLC, KCG Holdings, Inc., Miami International
Securities Exchange, LLC, and Susquehanna International Group, LLP
(collectively ``petitioners'') \2\ filed a

[[Page 44240]]

petition for review of the Approval Order in the U.S. Court of Appeals
for the District of Columbia Circuit (``D.C. Circuit''), challenging
the Commission's Approval Order as inconsistent with the Exchange Act
and lacking in the reasoned decisionmaking required by the
Administrative Procedure Act.
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\1\ Exchange Act Release No. 77112, File No. SR-OCC-2015-02.
\2\ BATS Global Markets, Inc., was initially a petitioner, but
later withdrew.
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The D.C. Circuit concluded that the Approval Order did not
``represent the kind of reasoned decisionmaking required by either the
Exchange Act or the Administrative Procedure Act,'' and therefore
remanded the case to the Commission for further proceedings.\3\ In so
ruling, the court did not reach the merits of any of petitioners'
arguments that the Plan was inconsistent with the substantive
requirements of the Exchange Act.\4\
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\3\ Susquehanna Int'l Grp., LLP v. SEC, 866 F.3d 442, 443 (D.C.
Cir. 2017).
\4\ Id. at 446.
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The court specifically decided not to vacate the Approval Order
prior to remand, instead leaving the Plan in place and remanding ``to
give the SEC an opportunity to properly evaluate the Plan.'' \5\ The
D.C. Circuit's mandate, which issued on August 18, 2017, returned the
matter to the Commission for further proceedings.
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\5\ Id.
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Accordingly, to facilitate the Commission's further review of the
Plan, It is Ordered, that by October 14, 2017, OCC may file any
additional statements or information that it considers relevant to the
Commission's reconsideration, including but not limited to information
OCC's board of directors considered in approving the Plan.
Furthermore, the Commission is providing other parties and persons
thirty days to respond to any additional statements OCC may submit.
Accordingly, It is Ordered, that by November 13, 2017, any party or
other person may file any additional statement, which may include
statements previously submitted or otherwise available, or any new
information such party or other person considers relevant.
All submissions should refer to File Number SR-OCC-2015-02. The
Commission will post submissions on the Commission's Internet Web site
as they are received. Submissions received will be posted without
change; the Commission does not edit personal identifying information
from submissions. If a party or person wishes to submit information for
the Commission to consider that is confidential, Rule 83 of the
Commission Rules of Practice provides a procedure by which persons
submitting information may request that it be withheld when requested
under the Freedom of Information Act.\6\ Any party or person seeking to
submit information in this matter should make sure that their request
complies with procedures specified by Rule 83. An explanation of the
rule is available on the Commission's Web site at: https://www.sec.gov/foia/conftreat.htm.
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\6\ 17 CFR 200.83.

By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2017-20081 Filed 9-20-17; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 182 / Thursday, September 21, 2017 / Notices 44239

the public interest.10 The party seeking the Plan would be no more difficult if date if the Commission, after conducting
a stay has the burden of establishing done after remand rather than the required analysis on remand, should
that relief is warranted.11 These factors immediately.’’ 17 They nonetheless determine to approve the Plan. Indeed,
weigh against granting petitioners’ stay argue that ‘‘[a] stay of the dividend is the court implicitly rejected this type of
request. needed to prevent distortion of the partial stay when petitioners proposed it
First, with respect to likelihood of competitive landscape from continuing in a pre-decision letter to the court 22
success on the merits, we note that the to harm competition.’’ 18 But petitioners and the court remanded without
court did not address petitioners’ provide no evidence that competitors entering such a stay. We believe, as the
arguments that the Plan was will be ‘‘driven from the marketplace’’ court did, that the better course is to
inconsistent with the Exchange Act. or that investors have ‘‘lost liquidity,’’ leave the status quo in place while we
Rather, it remanded for the Commission as petitioners claim.19 Thus, petitioners’ conduct a further review of the entirety
to ‘‘properly evaluate the Plan.’’ 12 By argument—which presumes they are of the Plan.
repeating their same arguments correct on the merits regarding the Accordingly, we decline to impose
regarding consistency with the Act in Plan’s effect on competition—is too the partial stay requested.
support of a stay, petitioners are asking speculative at this stage to be the basis For the reasons stated above, it is
the Commission to opine on their for relief. We also note that petitioners hereby:
likelihood of success before engaging in made these same arguments regarding Ordered that movants’ request for a
the further analysis directed by the competitive harm before the D.C. partial stay of the Capital Plan while the
court. We are not yet in a position to do Circuit, yet the court did not stay or Commission considers the Plan
so. Unlike the more typical situation in vacate the Plan. pursuant to the direction of the D.C.
which the Commission addresses stay Finally, petitioners have not Circuit is Denied.
motions, here there is neither a full demonstrated that the balance of harm
By the Commission.
record nor a final decision on which to to others in the absence of a stay and the
base such an analysis. Thus, we do not public interest favors a stay. Petitioners Brent J. Fields,
view this factor as weighing in favor of argue that ‘‘a stay would injur[e] Secretary.
the partial stay request. nobody,’’ 20 because they are asking [FR Doc. 2017–20080 Filed 9–20–17; 8:45 am]
Second, petitioners fail to establish only to stay the dividend component of BILLING CODE 8011–01–P
that they will be irreparably harmed in the Plan. But even setting aside the
the absence of a stay. To demonstrate impact on shareholder exchanges that
irreparable harm, petitioners ‘‘must are due the dividends under the Plan, SECURITIES AND EXCHANGE
show an injury that is ‘both certain and petitioners’ claim that the dividend COMMISSION
great’ and ‘actual and not component of the plan can be isolated
[File No. SR–OCC–2015–02; Release No.
theoretical.’ ’’ 13 ‘‘A stay ‘will not be is overly simplistic. Under the Plan, 81629]
granted [based on] something merely ‘‘OCC would not be able to pay a refund
feared as liable to occur at some on a particular date unless dividends Before the Securities and Exchange
indefinite time.’ ’’ 14 That ‘‘an applicant were paid on the same date.’’ 21 A stay Commission; Securities Exchange Act
may suffer financial detriment does not of the dividends to the shareholders of 1934; In the Matter of the The
rise to the level of irreparable injury would thus have the effect of also Options Clearing Corporation For an
warranting issuance of a stay.’’ 15 staying the payment of refunds to OCC’s Order Granting the Approval of
Petitioners acknowledge that the members. Proposed Rule Change Concerning a
monetary aspects of the Plan ‘‘are Moreover, as discussed above, the Proposed Capital Plan for Raising
readily reversible’’ 16 and that the court court squarely considered whether to Additional Capital That Would Support
concluded that ‘‘the task of unwinding vacate the Plan or leave it in effect the Options Clearing Corporation’s
during the Commission’s Function as a Systemically Important
10 Bernerd E. Young, Exchange Act Release No.
reconsideration, and decided to leave Financial Market Utility; Corrected
78440, 2016 WL 4060106, at *1 (July 29, 2016); see the Plan, including the provisions with
also Order Preliminarily Considering Whether to Order Scheduling Filing of Statements
Issue Stay Sua Sponte and Establishing Guidelines respect to dividends, in place. on Review
for Seeking Stay Applications, Exchange Act Petitioners’ request to stay that part of
Release No. 33870, 1994 WL 17920, at *1 (Apr. 7, the Plan therefore, in fact, seeks a September 14, 2017.
1994). change in the status quo that we believe On February 11, 2016, the
11 Young, Exchange Act Release No. 78440, 2016

WL 4060106, at *1.
is unsupported at this time. Granting Commission issued an order (‘‘Approval
12 866 F.3d at 451. petitioners’ request would require Order’’) approving the plan of the
13 Kenny A. Akindemowo, Exchange Act Release piecemeal suspension of portions of the Options Clearing Corporation’s (‘‘OCC’’)
No. 78352, 2016 WL 3877888, at *2 (July 18, 2016) Plan, while leaving others in place, for raising additional capital (the
(quoting Donald L. Koch, Exchange Act Release No. despite at least the possibility of having ‘‘Plan’’) to support its function as a
72443, 2014 WL 2800778, at *2 (June 20, 2014));
accord Wis. Gas Co. v. FERC, 758 F.2d 669, 674
to reinstitute those provisions at a later systemically important financial market
(D.C. Cir. 1985). utility.1 BOX Options Exchange LLC,
14 Akindemowo, 2016 WL 3877888, at *2 (quoting 17 Mot. at 16. KCG Holdings, Inc., Miami International
18 Id.
Koch, 2014 WL 2800778, at *2); accord Wis. Gas Securities Exchange, LLC, and
Co., 758 F.2d at 674. 19 Id. Petitioners cite the acquisition of BATS by
Susquehanna International Group, LLP
CBOE Holdings, Inc.—which, we note, closed on
asabaliauskas on DSKBBXCHB2PROD with NOTICES

15 Robert J. Prager, Exchange Act Release No.

50634, 2004 WL 2480717, at *1 (Nov. 4, 2004); see February 28, 2017—in support of their argument, (collectively ‘‘petitioners’’) 2 filed a
also William Timpinaro, Exchange Act Release No. stating that there has been consolidation in the
29927, 1991 WL 288326, at *3 (Nov. 12, 1991) exchange marketplace while the Capital Plan has 22 See Fed. R. App. P. 28(j) letter from petitioners,

(recognizing that ‘‘[m]ere injuries, however been in effect. But they supply no evidence of a dated April 17, 2017 (asking the court ‘‘at a
substantial, in terms of money, time, and energy causal relationship between that acquisition and the minimum, to stay operation of the dividend
necessarily expended in the absence of a stay, are Capital Plan or the dividends at issue. component of the Plan during a remand’’).
not enough’’ to constitute irreparable harm) 20 Mot. at 16. 1 Exchange Act Release No. 77112, File No. SR–

(quoting Va. Petroleum Jobbers Ass’n v. FPC, 259 21 Exchange Act Release No. 74136 (Notice of OCC–2015–02.
F.2d 921, 925 (D.C. Cir. 1958)). Proposed Rule Change) at 15, File No. SR–OCC– 2 BATS Global Markets, Inc., was initially a
16 Mot. at 1. 2015–02. petitioner, but later withdrew.

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44240 Federal Register / Vol. 82, No. 182 / Thursday, September 21, 2017 / Notices

petition for review of the Approval by which persons submitting OFFICE OF THE UNITED STATES
Order in the U.S. Court of Appeals for information may request that it be TRADE REPRESENTATIVE
the District of Columbia Circuit (‘‘D.C. withheld when requested under the
[Docket No. USTR–2017–0017]
Circuit’’), challenging the Commission’s Freedom of Information Act.6 Any party
Approval Order as inconsistent with the or person seeking to submit information 2017 Special 301 Out-of-Cycle Review
Exchange Act and lacking in the in this matter should make sure that of Thailand: Request for Comments
reasoned decisionmaking required by their request complies with procedures
the Administrative Procedure Act. specified by Rule 83. An explanation of AGENCY: Office of the United States
The D.C. Circuit concluded that the the rule is available on the Trade Representative.
Approval Order did not ‘‘represent the Commission’s Web site at: https:// ACTION: Request for comments.
kind of reasoned decisionmaking www.sec.gov/foia/conftreat.htm.
required by either the Exchange Act or SUMMARY: The Office of the United
By the Commission. States Trade Representative (USTR) is
the Administrative Procedure Act,’’ and
Brent J. Fields, conducting a Special 301 Out-of-Cycle
therefore remanded the case to the
Secretary. Review of Thailand. USTR requests
Commission for further proceedings.3 In
so ruling, the court did not reach the [FR Doc. 2017–20081 Filed 9–20–17; 8:45 am] written comments concerning any act,
merits of any of petitioners’ arguments BILLING CODE 8011–01–P policy, or practice that is relevant to the
that the Plan was inconsistent with the decision regarding whether and how
substantive requirements of the USTR should identify Thailand based
Exchange Act.4 SURFACE TRANSPORTATION BOARD on Thailand’s protection for intellectual
The court specifically decided not to property rights or market access
vacate the Approval Order prior to [Docket No. EP 290 (Sub-No. 5) (2017–4)] Thailand provides to U.S. persons who
remand, instead leaving the Plan in rely on intellectual property protection.
Quarterly Rail Cost Adjustment Factor
place and remanding ‘‘to give the SEC DATES:
an opportunity to properly evaluate the AGENCY: Surface Transportation Board. October 20, 2017, at 11:59 p.m.
Plan.’’ 5 The D.C. Circuit’s mandate, ACTION: Approval of rail cost adjustment Eastern Time: Deadline for submission
which issued on August 18, 2017, factor. of written comments.
returned the matter to the Commission October 27, 2017, at 11:59 p.m.
for further proceedings. SUMMARY: The Board approves the Eastern Time: Deadline for submission
Accordingly, to facilitate the fourth quarter 2017 Rail Cost of written comments from foreign
Commission’s further review of the Adjustment Factor (RCAF) and cost governments.
Plan, It is Ordered, that by October 14, index filed by the Association of ADDRESSES: You should submit written
2017, OCC may file any additional American Railroads. The fourth quarter comments through the Federal
statements or information that it 2017 RCAF (Unadjusted) is 0.889. The eRulemaking Portal: http://
considers relevant to the Commission’s fourth quarter 2017 RCAF (Adjusted) is www.regulations.gov. Follow the
reconsideration, including but not 0.367. The fourth quarter 2017 RCAF–5 instructions for submitting comments in
limited to information OCC’s board of is 0.350. section III below. For alternatives to on-
directors considered in approving the DATES: Applicability Date: October 1, line submissions, please contact USTR
Plan. 2017. at Special301@ustr.eop.gov before
Furthermore, the Commission is transmitting a comment and in advance
providing other parties and persons FOR FURTHER INFORMATION CONTACT:
Pedro Ramirez, (202) 245–0333. Federal of the relevant deadline.
thirty days to respond to any additional FOR FURTHER INFORMATION CONTACT:
statements OCC may submit. Information Relay Service (FIRS) for the
hearing impaired: (800) 877–8339. Daniel Lee, Deputy Assistant U.S. Trade
Accordingly, It is Ordered, that by
Representative for Innovation and
November 13, 2017, any party or other SUPPLEMENTARY INFORMATION:
Intellectual Property, at Special301@
person may file any additional Additional information is contained in
ustr.eop.gov or (202) 395–4510. You can
statement, which may include the Board’s decision, which is available
find information about the Special 301
statements previously submitted or on our Web site, http://www.stb.gov.
Review at www.ustr.gov.
otherwise available, or any new Copies of the decision may be
information such party or other person purchased by contacting the Office of SUPPLEMENTARY INFORMATION:
considers relevant. Public Assistance, Governmental I. Background
All submissions should refer to File Affairs, and Compliance at (202) 245–
Number SR–OCC–2015–02. The Pursuant to Section 182 of the Trade
0238. Assistance for the hearing
Commission will post submissions on Act of 1974 (19 U.S.C. 2242), USTR
impaired is available through FIRS at
the Commission’s Internet Web site as must identify countries that deny
(800) 877–8339.
they are received. Submissions received adequate and effective protection for
This action will not significantly
will be posted without change; the intellectual property rights (IPR) or deny
affect either the quality of the human
Commission does not edit personal fair and equitable market access to U.S.
environment or energy conservation.
identifying information from persons who rely on intellectual
By the Board, Board Members Begeman, property protection. USTR will identify
submissions. If a party or person wishes Elliott, and Miller.
asabaliauskas on DSKBBXCHB2PROD with NOTICES

to submit information for the the countries that have the most onerous
Commission to consider that is or egregious acts, policies, or practices
Decided: September 18, 2017. and whose acts, policies, or practices
confidential, Rule 83 of the Commission Marline Simeon,
Rules of Practice provides a procedure have the greatest adverse impact (actual
Clearance Clerk. or potential) on relevant U.S. products
3 Susquehanna Int’l Grp., LLP v. SEC, 866 F.3d
[FR Doc. 2017–20136 Filed 9–20–17; 8:45 am] as Priority Foreign Countries. Acts,
442, 443 (D.C. Cir. 2017). BILLING CODE 4915–01–P policies, or practices that are the basis
4 Id. at 446. of a country’s designation as a Priority
5 Id. 6 17 CFR 200.83. Foreign Country normally are the

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Document Created: 2018-10-24 14:36:03
Document Modified: 2018-10-24 14:36:03

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 44239