[Federal Register Volume 75, Number 49 (Monday, March 15, 2010)]
[Notices]
[Pages 12320-12321]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5534]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61673; File No. SR-OCC-2010-02]
Self-Regulatory Organization; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Adjustment Increments Applicable to Stock Futures
March 8, 2010.
Pursuant to section 19(b)(1) of the Securities Exchange Act of
1934,\1\ notice is hereby given that on February 26, 2010, The Options
Clearing Corporation (``OCC'') filed with the Securities and Exchange
Commission the proposed rule change as described in Items I, II, and
III below, which Items have been prepared primarily by OCC. OCC filed
the proposed rule change pursuant to section 19(b)(3)(A)(iii) of the
Act \2\ and Rule 19b-4(f)(4) thereunder \3\ 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\ 15 U.S.C. 78s(b)(3)(A)(iii).
\3\ 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The proposed rule change will amend the definition of ``adjustment
increment'' applicable to stock futures.
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.
[[Page 12321]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of this rule change is to accommodate a request made by
OneChicago LLC (``ONE'') to refine the adjustment increment when stock
futures are adjusted in response to corporate actions. Currently, the
adjustment increment for stock futures is the minimum increment in
settlement prices, which is one cent ($.01). ONE desires to change the
adjustment increment for stock futures to one hundredth of a cent
($.0001). Daily settlement prices and trade prices would continue to be
expressed in pennies on a per-contract basis. This change would affect
any corporate action for which settlement prices are adjusted,
including cash distributions.\4\
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\4\ See OCC Article XII, Section 3(a), for a description of the
general rules applicable to adjustments to stock futures.
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As an example of the intended change, suppose a futures contract
settlement price needs to be adjusted to reflect a $0.125 per share
cash dividend. If the per-share settlement price is $50.00, the
adjusted settlement price would be $50.00-$0.125 = $49.8750. If the
closing settlement price the following day is $50.05, a mark-to-market
of $50.05-$49.875 = $0.1750, or $17.50 per contract, would result.
Prior to the change, the adjusted settlement price of $49.875 would
have been rounded to $49.88. The resulting next day mark-to-market
would have been $50.05-$49.88 = $0.17, or $17.00 per contract. In that
case, $0.50 in mark-to-market value would not have been accounted for.
OCC states that the proposed change is consistent with Section 17A
of the Act \5\ because it facilitates the clearance and settlement of
stock futures transactions by providing a more precise calculation of
the impact of certain adjustments. OCC also states that 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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\5\ 15 U.S.C. 78q-1.
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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
OCC has not solicited or received written comments relating to the
proposed rule change. OCC will notify the Commission of any written
comments it receives.
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)(iii) of the Act \6\ and Rule 19b-4(f)(4) \7\ thereunder
because it effects a change in an existing service of a registered
clearing agency that does not adversely affect the safeguarding of
securities or funds in the custody or control of the clearing agency or
for which it is responsible and does not significantly affect the
respective rights or obligations of the clearing agency or persons
using the service. At any time within 60 days of the filing of the
proposed rule change, the Commission may summarily abrogate such rule
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.
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\6\ 15 U.S.C. 78s(b)(3)(A)(iii).
\7\ 17 CFR 240.19b-4(f)(4).
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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 e-mail to [email protected]. Please include
File No. SR-OCC-2010-02 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File No. SR-OCC-2010-02. 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 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 Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at OCC's principal office and on OCC's Web site
at http://www.theocc.com/publications/rules/proposed_changes/proposed_changes.jspU. 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 submission should refer to File No. SR-
OCC-2010-02 and should be submitted on or before April 5, 2010.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-5534 Filed 3-12-10; 8:45 am]
BILLING CODE 8011-01-P