[Federal Register Volume 72, Number 60 (Thursday, March 29, 2007)]
[Notices]
[Pages 14844-14845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-5753]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55504; File No. SR-OCC-2006-15]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of a Proposed Rule Change Relating to the Approval of
Fund Shares Deposited as Margin
March 21, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 31, 2006, The
Options Clearing Corporation (``OCC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which items have been prepared
primarily by OCC. 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change would eliminate the requirement that the
Membership/Risk Committee approve classes of fund shares (e.g., ETFs)
for deposit as margin.
II. Self-Regulatory Organization'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 such
statements.\2\
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\2\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The proposed rule change would delete Interpretation and Policy .11
to Rule 604, Forms of Margin, which requires that OCC's Membership/Risk
Committee approve classes of fund shares for deposit as margin.
Committee approval was deemed to be a prudent safeguard when OCC began
accepting fund shares for deposit in 1996 because fund shares had only
been trading since 1993, and OCC was not as familiar with them as it is
today. In 1997, OCC began clearing options on fund shares. Since then,
fund shares have become a widely used investment tool, and OCC has
developed a broad understanding of the fund share marketplace. In light
of these developments, OCC believes that fund shares should be accepted
as margin under the same conditions that apply to the deposit of other
equity securities without the need for Committee approval.
The proposed change is consistent with Section 17A of the Act
because it eliminates an unwarranted approval process for the
acceptance of fund shares as a form of margin asset while employing the
same safeguards that apply to the deposit of other equity securities as
margin in order to assure the safeguarding of securities which are in
OCC's custody or control. The proposed rule change is not inconsistent
with the existing rules of OCC, including any other rules proposed to
be amended.
(B) Self-Regulatory Organization's Statement on Burden on Competition
OCC does not believe that the proposed rule change would impose any
burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments were not and are not intended to be solicited with
respect to the proposed rule change, and none have been received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve the proposed rule change or
(B) Institute proceedings to determine whether the proposed rule
change should be 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 Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) or
Send an e-mail to [email protected]. Please include
File Number SR-OCC-2006-15 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-OCC-2006-15. This file
number should be included on the subject line if e-mail 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
[[Page 14845]]
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 inspection and copying in the Commission's Public
Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of
such filing also will be available for inspection and copying at the
principal office of OCC and on OCC's Web site at http://www.optionsclearing.com. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-OCC-2006-15 and should be submitted on or before April 19, 2007.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\3\
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\3\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-5753 Filed 3-28-07; 8:45 am]
BILLING CODE 8010-01-P