83_FR_6682 83 FR 6651 - Self-Regulatory Organizations; the Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Revise the Options Clearing Corporation's Schedule of Fees

83 FR 6651 - Self-Regulatory Organizations; the Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Revise the Options Clearing Corporation's Schedule of Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 31 (February 14, 2018)

Page Range6651-6653
FR Document2018-02972

Federal Register, Volume 83 Issue 31 (Wednesday, February 14, 2018)
[Federal Register Volume 83, Number 31 (Wednesday, February 14, 2018)]
[Notices]
[Pages 6651-6653]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-02972]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82657; File No. SR-OCC-2018-005]


Self-Regulatory Organizations; the Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Revise the Options Clearing Corporation's Schedule of Fees

February 8, 2018.
    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 January 29, 2018, 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. Items 
I and II have been prepared primarily by OCC. OCC filed the proposed 
rule change pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 
19b-4(f)(2) \4\ thereunder so that the proposal was effective upon 
filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).

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[[Page 6652]]

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change by OCC would revise OCC's Schedule of Fees 
to introduce a cash management fee that would cover administrative and 
other operational expenses incurred by OCC in connection with 
maintaining cash deposits that are held in OCC's Federal Reserve bank 
account and passing-through to Clearing Members the interest earned on 
such deposits. The proposed changes to the Schedule of Fees can be 
found in Exhibit 5 to the proposed rule change. Material proposed to be 
added to OCC's Fee Schedule as currently in effect is marked by 
underlining and material proposed to be deleted is marked by 
strikethrough text; material proposed to be added to OCC's Fee Schedule 
by proposed rule change SR-OCC-2018-004 is marked by double underlining 
and material proposed to be deleted by proposed rule change SR-OCC-
2018-004 is marked by double strikethrough text. All capitalized terms 
not defined herein have the same meaning as set forth in the OCC By-
Laws and Rules.\5\
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    \5\ OCC's By-Laws and Rules can be found on OCC's public 
website: http://optionsclearing.com/about/publications/bylaws.jsp.
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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
    The purpose of this proposed rule change is to revise OCC's 
Schedule of Fees to introduce a cash management fee that would cover 
administrative and other operational expenses incurred by OCC in 
connection with maintaining cash deposits that are held in OCC's 
Federal Reserve bank account and passing-through to Clearing Members 
the interest earned on such deposits. The revised fee schedule would 
become effective on March 1, 2018.
    By way of background, on January 12, 2018, Commission approved 
changes to OCC's By-Laws and Rules that establish a new minimum cash 
contribution requirement for OCC's Clearing Fund and provide for the 
pass-through to OCC's Clearing Members of interest income earned on 
cash Clearing Fund deposits held in OCC's Federal Reserve bank 
account.\6\ As approved, the minimum cash contribution requirement will 
require OCC's Clearing Members to collectively contribute $3 billion in 
cash to OCC's Clearing Fund, with each Clearing Member's proportionate 
share of the minimum cash requirement being equal in percentage to its 
proportionate share of the Clearing Fund.\7\ In addition, OCC's 
Executive Chairman, Chief Administrative Officer, or Chief Operating 
Officer, upon providing notice to the Risk Committee of OCC's Board of 
Directors, will have the ability, under certain limited circumstances, 
to temporarily increase the amount of cash required to be maintained in 
the Clearing Fund up to an amount that includes the size of the 
Clearing Fund.\8\
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    \6\ See Securities Exchange Act Release No. 34-82502 (January 
12, 2018), 82 FR 2825 (January 19, 2018) (SR-OCC-2017-019).
    \7\ Id. Each Clearing Member's proportionate share of the 
Clearing Fund is determined by the Clearing Fund allocation 
methodology in current Rule 1001.
    \8\ See supra note 6.
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    In connection with the minimum cash Clearing Fund requirement, 
substantially all of OCC's Clearing Fund deposits consisting of cash 
will be held in OCC's Federal Reserve bank account.\9\ OCC will pass 
the interest income earned in such account through to its Clearing 
Members, provided that each such Clearing Member has provided OCC with 
all tax documentation as OCC may from time to time require in order to 
effectuate such payment.\10\ Interest earned will be calculated daily 
based on each Clearing Member's pro rata share of Clearing Fund cash 
deposits.\11\ In maintaining these minimum cash balances in OCC's 
Federal Reserve bank account and facilitating the pass-through of 
interest earned on such balances, OCC will incur certain administrative 
and other operational expenses. These expenses will include the 
operation of the Federal Reserve bank account, certain systems 
enhancements needed to maintain minimum cash deposits and facilitate 
pass-through of interest earned, and staffing costs to operate the cash 
management and funding desk. In order to defray these expenses, OCC is 
proposing to implement a cash management fee.
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    \9\ See supra note 6. OCC retains discretion to maintain a small 
portion of Clearing Fund cash deposits in other accounts (e.g., 
accounts with commercial banks) for various reasons, including 
facilitating normal substitution activity by its Clearing Members.
    \10\ See supra note 6. Interest earned will be calculated daily 
based on each Clearing Member's pro rata share of Clearing Fund cash 
deposits.
    \11\ See supra note 6.
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    The proposed cash management fee would be an annual rate equal to 5 
basis points (0.05%), calculated on a 365-day calendar, and billed 
monthly on each Clearing Member's daily proportionate share of cash on 
deposit in OCC's Federal Reserve bank account.\12\ This proposed change 
is designed to provide OCC with a level of revenue sufficient to cover 
OCC's administrative and operating expenses, as described above.
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    \12\ Accordingly, a Clearing Member can determine the monthly 
amount of its cash management fee by (1) dividing the annual 
interest rate by 365; (2) then multiplying the product by the 
Clearing Member's proportionate share of cash on deposit in OCC's 
Federal Reserve bank account for each calendar day in a given month; 
and (3) taking the sum all of the products in step (2) for the given 
month.
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(2) Statutory Basis
    Section 17A(b)(3)(D) of the Act requires that the rules of a 
clearing agency provide for the equitable allocation of reasonable 
dues, fees, and other charges among its participants.\13\ The proposed 
cash management fee would cover administrative and other operational 
expenses incurred by OCC in connection with passing through to Clearing 
Members the interest earned on Clearing Fund cash deposits that are 
held in an account established by OCC at a Federal Reserve bank. OCC 
believes the proposed fee change is reasonable because the new cash 
management fee would be set at a level intended to cover OCC's expenses 
associated with maintaining a minimum amount of Clearing Fund cash 
(which requirement is designed to satisfy certain liquidity 
requirements under Rule 17Ad-22(e)(7)) and with passing-through to 
Clearing Members the interest earned on such deposits held in OCC's 
Federal Reserve bank account. Moreover, OCC believes that the proposed 
fee change would result in an equitable allocation of fees among its 
participants because it is a fee that would be equally applicable to 
all similarly situated participants (i.e., Clearing Members). As a 
result, OCC believes that the proposed fee schedule provides for the 
equitable allocation of reasonable fees in accordance with Section 
17A(b)(3)(D) of the Act.\14\ 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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    \13\ 17 U.S.C. 78q-1(b)(3)(D).
    \14\ 17 U.S.C. 78q-1(b)(3)(D).

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[[Page 6653]]

(B) Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Act \15\ requires that the rules of a 
clearing agency not impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act. OCC does not 
believe that the proposed rule change would have any impact or impose a 
burden on competition. Although this proposed rule change affects 
Clearing Members, their customers, and the markets that OCC serves, OCC 
believes that the proposed rule change would not disadvantage or favor 
any particular user of OCC's services in relationship to another user 
because the proposed cash management fee would apply equally to all 
Clearing Members. Accordingly, OCC does not believe that the proposed 
rule change would have any impact or impose a burden on competition.
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    \15\ 15 U.S.C. 78q-1(b)(3)(I).
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(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants or Others

    Written comments on the proposed rule change were not and are not 
intended to be solicited with respect to the proposed rule change and 
none have been received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \16\ and Rule 19b-4(f)(2) \17\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.\18\
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    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \17\ 17 CFR 240.19b-4(f)(2).
    \18\ Notwithstanding its immediate effectiveness, implementation 
of this rule change will be delayed until this change is deemed 
certified under CFTC Rule 40.6.
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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-2018-005 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-2018-005. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (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 website 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 website at 
https://www.theocc.com/about/publications/bylaws.jsp.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-OCC-2018-005 and 
should be submitted on or before March 7, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02972 Filed 2-13-18; 8:45 am]
BILLING CODE 8011-01-P



                                                                         Federal Register / Vol. 83, No. 31 / Wednesday, February 14, 2018 / Notices                                                     6651

                                               to permit unfair discrimination between                 III. Date of Effectiveness of the                        Reference Room, 100 F Street NE,
                                               customers, issuers, brokers, or dealers.                Proposed Rule Change and Timing for                      Washington, DC 20549, on official
                                                  The Exchange believes the proposed                   Commission Action                                        business days between the hours of
                                               fee change is reasonable because it                        The foregoing rule change has become                  10:00 a.m. and 3:00 p.m. Copies of the
                                               would help ensure that revenue                          effective pursuant to Section 19(b)(3)(A)                filing also will be available for
                                               collected from the ORF, in combination                  of the Act 9 and paragraph (f) of Rule                   inspection and copying at the principal
                                               with other regulatory fees and fines,                   19b–4 10 thereunder. At any time within                  office of the Exchange. All comments
                                               does not exceed the Exchange’s total                    60 days of the filing of the proposed rule               received will be posted without change.
                                               regulatory costs. Moreover, the                         change, the Commission summarily may                     Persons submitting comments are
                                               Exchange believes the ORF ensures                       temporarily suspend such rule change if                  cautioned that we do not redact or edit
                                               fairness by assessing higher fees to those              it appears to the Commission that such                   personal identifying information from
                                               TPHs that require more Exchange                         action is necessary or appropriate in the                comment submissions. You should
                                               regulatory services based on the amount                 public interest, for the protection of                   submit only information that you wish
                                                                                                       investors, or otherwise in furtherance of                to make available publicly. All
                                               of customer options business they
                                                                                                       the purposes of the Act. If the                          submissions should refer to File No.
                                               conduct. Regulating customer trading
                                                                                                       Commission takes such action, the                        SR–C2–2018–003, and should be
                                               activity is much more labor intensive                   Commission will institute proceedings
                                               and requires greater expenditure of                                                                              submitted on or before March 7, 2018.
                                                                                                       to determine whether the proposed rule
                                               human and technical resources than                      change should be approved or                               For the Commission, by the Division of
                                               regulating non-customer trading                         disapproved.                                             Trading and Markets, pursuant to delegated
                                               activity, which tends to be more                                                                                 authority.11
                                               automated and less labor-intensive. As a                IV. Solicitation of Comments
                                                                                                                                                                Eduardo A. Aleman,
                                               result, the costs associated with                         Interested persons are invited to                      Assistant Secretary.
                                               administering the customer component                    submit written data, views, and
                                                                                                                                                                [FR Doc. 2018–02980 Filed 2–13–18; 8:45 am]
                                               of the Exchange’s overall regulatory                    arguments concerning the foregoing,
                                               program are materially higher than the                  including whether the proposed rule                      BILLING CODE 8011–01–P

                                               costs associated with administering the                 change is consistent with the Act.
                                               non-customer component (e.g., TPH                       Comments may be submitted by any of
                                               proprietary transactions) of its                        the following methods:                                   SECURITIES AND EXCHANGE
                                               regulatory program.8 The Exchange                                                                                COMMISSION
                                                                                                       Electronic Comments
                                               believes the proposed fee change is
                                               equitable and not unfairly                                • Use the Commission’s internet                        [Release No. 34–82657; File No. SR–OCC–
                                               discriminatory in that it is charged to all             comment form (http://www.sec.gov/                        2018–005]
                                               TPHs on all their transactions that clear               rules/sro.shtml); or
                                                                                                         • Send an email to rule-comments@                      Self-Regulatory Organizations; the
                                               in the customer range at the OCC.
                                                                                                       sec.gov. Please include File No. SR–C2–                  Options Clearing Corporation; Notice
                                               B. Self-Regulatory Organization’s                       2018–003 on the subject line.                            of Filing and Immediate Effectiveness
                                               Statement on Burden on Competition                      Paper Comments                                           of Proposed Rule Change To Revise
                                                                                                                                                                the Options Clearing Corporation’s
                                                  C2 Options does not believe that the                    • Send paper comments in triplicate
                                                                                                                                                                Schedule of Fees
                                               proposed rule change will impose any                    to Secretary, Securities and Exchange
                                               burden on competition that is not                       Commission, 100 F Street NE,                             February 8, 2018.
                                               necessary or appropriate in furtherance                 Washington, DC 20549–1090.
                                                                                                                                                                   Pursuant to Section 19(b)(1) of the
                                               of the purposes of the Act, because it                  All submissions should refer to File No.
                                                                                                       SR–C2–2018–003. This file number                         Securities Exchange Act of 1934
                                               applies to all TPHs. The proposed ORF
                                                                                                       should be included on the subject line                   (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                               is comparable to fees charged by other
                                                                                                       if email is used. To help the                            notice is hereby given that on January
                                               options exchanges for the same or
                                               similar service. The Exchange believes                  Commission process and review your                       29, 2018, The Options Clearing
                                               any burden on competition imposed by                    comments more efficiently, please use                    Corporation (‘‘OCC’’) filed with the
                                               the proposed rule change is outweighed                  only one method. The Commission will                     Securities and Exchange Commission
                                               by the need to help the Exchange                        post all comments on the Commission’s                    (‘‘Commission’’) the proposed rule
                                               adequately fund its regulatory activities               internet website (http://www.sec.gov/                    change as described in Items I, II, and
                                               to ensure compliance with the Exchange                  rules/sro.shtml). Copies of the                          III below. Items I and II have been
                                               Act.                                                    submission, all subsequent                               prepared primarily by OCC. OCC filed
                                                                                                       amendments, all written statements                       the proposed rule change pursuant to
                                               C. Self-Regulatory Organization’s                       with respect to the proposed rule                        Section 19(b)(3)(A)(ii) of the Act 3 and
                                               Statement on Comments on the                            change that are filed with the                           Rule 19b–4(f)(2) 4 thereunder so that the
                                               Proposed Rule Change Received From                      Commission, and all written                              proposal was effective upon filing with
                                               Members, Participants, or Others                        communications relating to the                           the Commission. The Commission is
                                                                                                       proposed rule change between the                         publishing this notice to solicit
                                                 The Exchange neither solicited nor                    Commission and any person, other than
                                               received comments on the proposed                                                                                comments on the proposed rule change
                                                                                                       those that may be withheld from the
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                                               rule change.                                                                                                     from interested persons.
                                                                                                       public in accordance with the
                                                                                                       provisions of 5 U.S.C. 552, will be
                                                 8 If the Exchange changes its method of funding
                                                                                                       available for website viewing and                          11 17 CFR 200.30–3(a)(12).
                                               regulation or if circumstances otherwise change in
                                               the future, the Exchange may decide to modify the
                                                                                                       printing in the Commission’s Public                        1 15 U.S.C. 78s(b)(1).
                                                                                                                                                                  2 17 CFR 240.19b–4.
                                               ORF or assess a separate regulatory fee on TPH
                                                                                                         9 15                                                     3 15 U.S.C. 78s(b)(3)(A)(ii).
                                               proprietary transactions if the Exchange deems it                U.S.C. 78s(b)(3)(A).
                                               advisable.                                                10 17   CFR 240.19b–4(f).                                4 17 CFR 240.19b–4(f)(2).




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                                               6652                      Federal Register / Vol. 83, No. 31 / Wednesday, February 14, 2018 / Notices

                                               I. Clearing Agency’s Statement of the                   OCC’s By-Laws and Rules that establish                pass-through of interest earned, and
                                               Terms of Substance of the Proposed                      a new minimum cash contribution                       staffing costs to operate the cash
                                               Rule Change                                             requirement for OCC’s Clearing Fund                   management and funding desk. In order
                                                  The proposed rule change by OCC                      and provide for the pass-through to                   to defray these expenses, OCC is
                                               would revise OCC’s Schedule of Fees to                  OCC’s Clearing Members of interest                    proposing to implement a cash
                                               introduce a cash management fee that                    income earned on cash Clearing Fund                   management fee.
                                               would cover administrative and other                    deposits held in OCC’s Federal Reserve                  The proposed cash management fee
                                               operational expenses incurred by OCC                    bank account.6 As approved, the                       would be an annual rate equal to 5 basis
                                               in connection with maintaining cash                     minimum cash contribution                             points (0.05%), calculated on a 365-day
                                               deposits that are held in OCC’s Federal                 requirement will require OCC’s Clearing               calendar, and billed monthly on each
                                               Reserve bank account and passing-                       Members to collectively contribute $3                 Clearing Member’s daily proportionate
                                               through to Clearing Members the                         billion in cash to OCC’s Clearing Fund,               share of cash on deposit in OCC’s
                                               interest earned on such deposits. The                   with each Clearing Member’s                           Federal Reserve bank account.12 This
                                               proposed changes to the Schedule of                     proportionate share of the minimum                    proposed change is designed to provide
                                               Fees can be found in Exhibit 5 to the                   cash requirement being equal in                       OCC with a level of revenue sufficient
                                               proposed rule change. Material                          percentage to its proportionate share of              to cover OCC’s administrative and
                                               proposed to be added to OCC’s Fee                       the Clearing Fund.7 In addition, OCC’s                operating expenses, as described above.
                                               Schedule as currently in effect is                      Executive Chairman, Chief
                                               marked by underlining and material                      Administrative Officer, or Chief                      (2) Statutory Basis
                                               proposed to be deleted is marked by                     Operating Officer, upon providing
                                                                                                       notice to the Risk Committee of OCC’s                    Section 17A(b)(3)(D) of the Act
                                               strikethrough text; material proposed to                                                                      requires that the rules of a clearing
                                               be added to OCC’s Fee Schedule by                       Board of Directors, will have the ability,
                                                                                                       under certain limited circumstances, to               agency provide for the equitable
                                               proposed rule change SR–OCC–2018–                                                                             allocation of reasonable dues, fees, and
                                               004 is marked by double underlining                     temporarily increase the amount of cash
                                                                                                       required to be maintained in the                      other charges among its participants.13
                                               and material proposed to be deleted by                                                                        The proposed cash management fee
                                               proposed rule change SR–OCC–2018–                       Clearing Fund up to an amount that
                                                                                                       includes the size of the Clearing Fund.8              would cover administrative and other
                                               004 is marked by double strikethrough                                                                         operational expenses incurred by OCC
                                               text. All capitalized terms not defined                   In connection with the minimum cash
                                                                                                       Clearing Fund requirement,                            in connection with passing through to
                                               herein have the same meaning as set                                                                           Clearing Members the interest earned on
                                               forth in the OCC By-Laws and Rules.5                    substantially all of OCC’s Clearing Fund
                                                                                                       deposits consisting of cash will be held              Clearing Fund cash deposits that are
                                               II. Clearing Agency’s Statement of the                  in OCC’s Federal Reserve bank                         held in an account established by OCC
                                               Purpose of, and Statutory Basis for, the                account.9 OCC will pass the interest                  at a Federal Reserve bank. OCC believes
                                               Proposed Rule Change                                    income earned in such account through                 the proposed fee change is reasonable
                                                                                                       to its Clearing Members, provided that                because the new cash management fee
                                                 In its filing with the Commission,                                                                          would be set at a level intended to cover
                                               OCC included statements concerning                      each such Clearing Member has
                                                                                                       provided OCC with all tax                             OCC’s expenses associated with
                                               the purpose of and basis for the                                                                              maintaining a minimum amount of
                                               proposed rule change and discussed any                  documentation as OCC may from time
                                                                                                       to time require in order to effectuate                Clearing Fund cash (which requirement
                                               comments it received on the proposed                                                                          is designed to satisfy certain liquidity
                                               rule change. The text of these statements               such payment.10 Interest earned will be
                                                                                                       calculated daily based on each Clearing               requirements under Rule 17Ad–22(e)(7))
                                               may be examined at the places specified                                                                       and with passing-through to Clearing
                                               in Item IV below. OCC has prepared                      Member’s pro rata share of Clearing
                                                                                                       Fund cash deposits.11 In maintaining                  Members the interest earned on such
                                               summaries, set forth in sections (A), (B),                                                                    deposits held in OCC’s Federal Reserve
                                               and (C) below, of the most significant                  these minimum cash balances in OCC’s
                                                                                                       Federal Reserve bank account and                      bank account. Moreover, OCC believes
                                               aspects of these statements.                                                                                  that the proposed fee change would
                                                                                                       facilitating the pass-through of interest
                                               (A) Clearing Agency’s Statement of the                  earned on such balances, OCC will                     result in an equitable allocation of fees
                                               Purpose of, and Statutory Basis for, the                incur certain administrative and other                among its participants because it is a fee
                                               Proposed Rule Change                                    operational expenses. These expenses                  that would be equally applicable to all
                                                                                                       will include the operation of the Federal             similarly situated participants (i.e.,
                                               (1) Purpose                                                                                                   Clearing Members). As a result, OCC
                                                                                                       Reserve bank account, certain systems
                                                  The purpose of this proposed rule                    enhancements needed to maintain                       believes that the proposed fee schedule
                                               change is to revise OCC’s Schedule of                   minimum cash deposits and facilitate                  provides for the equitable allocation of
                                               Fees to introduce a cash management                                                                           reasonable fees in accordance with
                                               fee that would cover administrative and                   6 See Securities Exchange Act Release No. 34–       Section 17A(b)(3)(D) of the Act.14 The
                                               other operational expenses incurred by                  82502 (January 12, 2018), 82 FR 2825 (January 19,     proposed rule change is not inconsistent
                                               OCC in connection with maintaining                      2018) (SR–OCC–2017–019).                              with the existing rules of OCC,
                                                                                                         7 Id. Each Clearing Member’s proportionate share
                                               cash deposits that are held in OCC’s                                                                          including any other rules proposed to be
                                                                                                       of the Clearing Fund is determined by the Clearing
                                               Federal Reserve bank account and                        Fund allocation methodology in current Rule 1001.     amended.
                                               passing-through to Clearing Members                       8 See supra note 6.

                                               the interest earned on such deposits.                     9 See supra note 6. OCC retains discretion to         12 Accordingly, a Clearing Member can determine
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                                               The revised fee schedule would become                   maintain a small portion of Clearing Fund cash        the monthly amount of its cash management fee by
                                               effective on March 1, 2018.                             deposits in other accounts (e.g., accounts with       (1) dividing the annual interest rate by 365; (2) then
                                                                                                       commercial banks) for various reasons, including      multiplying the product by the Clearing Member’s
                                                  By way of background, on January 12,                 facilitating normal substitution activity by its      proportionate share of cash on deposit in OCC’s
                                               2018, Commission approved changes to                    Clearing Members.                                     Federal Reserve bank account for each calendar day
                                                                                                         10 See supra note 6. Interest earned will be        in a given month; and (3) taking the sum all of the
                                                 5 OCC’s By-Laws and Rules can be found on             calculated daily based on each Clearing Member’s      products in step (2) for the given month.
                                               OCC’s public website: http://optionsclearing.com/       pro rata share of Clearing Fund cash deposits.          13 17 U.S.C. 78q–1(b)(3)(D).

                                               about/publications/bylaws.jsp.                            11 See supra note 6.                                  14 17 U.S.C. 78q–1(b)(3)(D).




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                                                                         Federal Register / Vol. 83, No. 31 / Wednesday, February 14, 2018 / Notices                                                      6653

                                               (B) Clearing Agency’s Statement on                      Electronic Comments                                    SECURITIES AND EXCHANGE
                                               Burden on Competition                                                                                          COMMISSION
                                                                                                         • Use the Commission’s internet
                                                  Section 17A(b)(3)(I) of the Act 15                   comment form (http://www.sec.gov/                      [Release No. 34–82669; File Nos. SR–DTC–
                                               requires that the rules of a clearing                   rules/sro.shtml); or                                   2017–021; SR–FICC–2017–021; SR–NSCC–
                                                                                                                                                              2017–017)
                                               agency not impose any burden on                           • Send an email to rule-comments@
                                               competition not necessary or                            sec.gov. Please include File Number SR–                Self-Regulatory Organizations; The
                                               appropriate in furtherance of the                       OCC–2018–005 on the subject line.                      Depository Trust Company; Fixed
                                               purposes of the Act. OCC does not                                                                              Income Clearing Corporation; National
                                                                                                       Paper Comments
                                               believe that the proposed rule change                                                                          Securities Clearing Corporation;
                                               would have any impact or impose a                         • Send paper comments in triplicate                  Notice of Designation of Longer Period
                                               burden on competition. Although this                    to Brent J. Fields, Secretary, Securities              for Commission Action on Proposed
                                               proposed rule change affects Clearing                   and Exchange Commission, 100 F Street                  Rule Changes To Adopt a Recovery &
                                               Members, their customers, and the                       NE, Washington, DC 20549–1090.                         Wind-Down Plan and Related Rules
                                               markets that OCC serves, OCC believes                   All submissions should refer to File
                                               that the proposed rule change would not                                                                        February 8, 2018.
                                                                                                       Number SR–OCC–2018–005. This file
                                               disadvantage or favor any particular                    number should be included on the                          On December 18, 2017, The
                                               user of OCC’s services in relationship to               subject line if email is used. To help the             Depository Trust Company (‘‘DTC’’),
                                               another user because the proposed cash                  Commission process and review your                     Fixed Income Clearing Corporation
                                               management fee would apply equally to                   comments more efficiently, please use                  (‘‘FICC’’), and National Securities
                                               all Clearing Members. Accordingly, OCC                  only one method. The Commission will                   Clearing Corporation (‘‘NSCC’’)
                                               does not believe that the proposed rule                 post all comments on the Commission’s                  (collectively, ‘‘Clearing Agencies’’), each
                                               change would have any impact or                         internet website (http://www.sec.gov/                  filed with the Securities and Exchange
                                               impose a burden on competition.                         rules/sro.shtml). Copies of the                        Commission (‘‘Commission’’) a
                                                                                                       submission, all subsequent                             proposed rule change to adopt a
                                               (C) Clearing Agency’s Statement on                                                                             recovery and wind-down plan and
                                               Comments on the Proposed Rule                           amendments, all written statements
                                                                                                       with respect to the proposed rule                      related rules (SR–DTC–2017–021, SR–
                                               Change Received From Members,                                                                                  FICC–2017–021, and SR–NSCC–2017–
                                               Participants or Others                                  change that are filed with the
                                                                                                       Commission, and all written                            017), respectively (‘‘Proposed Rule
                                                 Written comments on the proposed                      communications relating to the                         Changes’’), pursuant to Section 19(b)(1)
                                                                                                       proposed rule change between the                       of the Securities Exchange Act of 1934
                                               rule change were not and are not
                                                                                                       Commission and any person, other than                  (‘‘Act’’) 1 and Rule 19b–4 thereunder.2
                                               intended to be solicited with respect to
                                                                                                       those that may be withheld from the                    The Proposed Rule Changes were
                                               the proposed rule change and none have
                                                                                                       public in accordance with the                          published for comment in the Federal
                                               been received.
                                                                                                       provisions of 5 U.S.C. 552, will be                    Register on January 8, 2018.3 The
                                               III. Date of Effectiveness of the                       available for website viewing and                      Commission did not receive any
                                               Proposed Rule Change and Timing for                     printing in the Commission’s Public                    comments on the Proposed Rule
                                               Commission Action                                       Reference Room, 100 F Street NE,                       Changes.
                                                                                                                                                                 Section 19(b)(2) of the Act 4 provides
                                                  The foregoing rule change has become                 Washington, DC 20549, on official
                                                                                                                                                              that within 45 days of the publication of
                                               effective pursuant to Section                           business days between the hours of
                                                                                                                                                              notice of the filing of a proposed rule
                                               19(b)(3)(A)(ii) of the Act 16 and Rule                  10:00 a.m. and 3:00 p.m. Copies of such
                                                                                                                                                              change, or within such longer period up
                                               19b–4(f)(2) 17 thereunder. At any time                  filing also will be available for
                                                                                                                                                              to 90 days as the Commission may
                                               within 60 days of the filing of the                     inspection and copying at the principal
                                                                                                                                                              designate if it finds such longer period
                                               proposed rule change, the Commission                    office of OCC and on OCC’s website at
                                                                                                                                                              to be appropriate and publishes its
                                               summarily may temporarily suspend                       https://www.theocc.com/about/
                                                                                                                                                              reasons for so finding or as to which the
                                                                                                       publications/bylaws.jsp.
                                               such rule change if it appears to the                                                                          self-regulatory organization consents,
                                               Commission that such action is                             All comments received will be posted                the Commission shall either approve the
                                               necessary or appropriate in the public                  without change. Persons submitting                     proposed rule change, disapprove the
                                               interest, for the protection of investors,              comments are cautioned that we do not                  proposed rule change, or institute
                                               or otherwise in furtherance of the                      redact or edit personal identifying                    proceedings to determine whether the
                                               purposes of the Act.18                                  information from comment submissions.                  proposed rule change should be
                                                                                                       You should submit only information                     disapproved. The 45th day after
                                               IV. Solicitation of Comments                            that you wish to make available                        publication of the notices for the
                                                                                                       publicly.                                              Proposed Rule Changes is February 22,
                                                 Interested persons are invited to
                                               submit written data, views and                             All submissions should refer to File                2018.
                                               arguments concerning the foregoing,                     Number SR–OCC–2018–005 and should                         The Commission is extending the 45-
                                               including whether the proposed rule                     be submitted on or before March 7,                     day time period for Commission action
                                               change is consistent with the Act.                      2018.                                                  on the Proposed Rule Changes. The
                                               Comments may be submitted by any of                       For the Commission, by the Division of
                                                                                                                                                                1 15  U.S.C. 78s(b)(1).
                                               the following methods:                                  Trading and Markets, pursuant to delegated
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                                                                                2 17  CFR 240.19b–4.
                                                                                                       authority.19
                                                                                                                                                                 3 Securities Exchange Act Release No. 82432
                                                 15 15 U.S.C. 78q–1(b)(3)(I).                          Eduardo A. Aleman,
                                                                                                                                                              (January 2, 2018), 83 FR 884 (January 8, 2018) (SR–
                                                 16 15 U.S.C. 78s(b)(3)(A)(ii).                        Assistant Secretary.                                   DTC–2017–021); Securities Exchange Act Release
                                                 17 17 CFR 240.19b–4(f)(2).                                                                                   No. 82431 (January 2, 2018), 83 FR 871 (January 8,
                                                                                                       [FR Doc. 2018–02972 Filed 2–13–18; 8:45 am]
                                                 18 Notwithstanding its immediate effectiveness,                                                              2018) (SR–FICC–2017–021); Securities Exchange
                                                                                                       BILLING CODE 8011–01–P
                                               implementation of this rule change will be delayed                                                             Act Release No. 82430 (January 2, 2018), 83 FR 841
                                               until this change is deemed certified under CFTC                                                               (January 8, 2018) (SR–NSCC–2017–017).
                                               Rule 40.6.                                                19 17   CFR 200.30–3(a)(12).                            4 15 U.S.C. 78s(b)(2).




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Document Created: 2018-02-14 03:59:34
Document Modified: 2018-02-14 03:59:34
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 6651 

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