[Federal Register Volume 75, Number 82 (Thursday, April 29, 2010)]
[Notices]
[Page 22673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9940]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61958; File No. SR-OCC-2010-03]
Self-Regulatory Organizations; The Options Clearing Corporation;
Order Granting Approval of a Proposed Rule Change Relating to ETFS
Palladium Shares and ETFS Platinum Shares
April 22, 2010.
I. Introduction
On March 1, 2010, The Options Clearing Corporation (``OCC'') filed
with the Securities and Exchange Commission the proposed rule change
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder \2\ to add ETFS Palladium
Shares and ETFS Platinum Shares to the interpretation following the
definition of ``fund share'' in Article I, Section 1 of OCC's By-Laws.
The proposed rule change was published for comment in the Federal
Register on March 18, 2010.\3\ No comment letters were received on the
proposal. This order approves the proposal.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 61254 (Mar. 11, 2010),
75 FR 13169.
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II. Description of the Proposal
The proposed rule change will add ETFS Palladium Shares and ETFS
Platinum Shares to the interpretation following the definition of
``fund share'' in Article I, Section 1 of OCC's By-Laws. The purpose of
this rule change is to remove any potential cloud on the jurisdictional
status of options or security futures on ETFS Palladium Shares or ETFS
Platinum Shares.\4\
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\4\ The Commission recently approved a related rule change by
the Chicago Board Options Exchange to enable the listing and trading
of options on the EFTS Palladium Trust and the EFTS Platinum Trust.
Securities Exchange Act Release No. 61892 (Apr. 13, 2010), 75 FR
20649.
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Under the current proposed rule change, OCC will (i) clear and
treat as securities options any option contracts on ETFS Palladium
Shares and ETFS Platinum Shares that are traded on securities exchanges
and (ii) clear and treat as security futures any futures contracts on
ETFS Palladium Shares and ETFS Platinum Shares.
In addition, in its capacity as a ``derivatives clearing
organization'' registered with the Commodity Futures Trading Commission
(``CFTC''), OCC also filed this proposal for prior approval by the CFTC
pursuant to provisions of the Commodity Exchange Act (``CEA'') in order
to foreclose any potential liability under the CEA based on an argument
that the clearing by OCC of such options as securities options or the
clearing of such futures as security futures constitutes a violation of
the CEA.
The products that are affected by this approval order are
essentially the same as the options and security futures on SPDR Gold
Shares, iShares COMEX Gold Shares, iShares Silver Shares, ETFS Physical
Swiss Gold Shares, and ETFS Physical Silver Shares that OCC currently
clears pursuant to rule changes approved by the Commission.\5\
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\5\ Securities Exchange Act Release Nos. 57895 (May 30, 2008),
73 FR 32066 (June 5, 2008); 59054 (Dec. 4, 2008), 73 FR 75159 (Dec.
10, 2008); 61591 (Feb. 25, 2010), 75 FR 9981 (Mar. 4, 2010).
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III. Discussion
Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of a clearing agency be designed to promote the prompt and
accurate clearance and settlement of securities transactions and
derivative transactions.\6\ By amending its By-Laws to help clarify
that options on ETFS Palladium Shares and ETFS Platinum Shares that are
traded on securities exchanges will be treated and cleared as
securities options and that futures on ETFS Palladium and ETFS Platinum
shares will be treated as security futures, OCC's rule change should
help clarify the jurisdictional status of such contracts and
accordingly should help to promote the prompt and accurate clearance
and settlement of securities transactions and of derivative
transactions. In accordance with the Memorandum of Understanding
entered into between the CFTC and the Commission on March 11, 2008, and
in particular the addendum thereto concerning Principles Governing the
Review of Novel Derivative Products, the Commission believes that novel
derivative products that implicate areas of overlapping regulatory
concern should be permitted to trade in either a CFTC or Commission-
regulated environment or both in a manner consistent with laws and
regulations (including the appropriate use of all available exemptive
and interpretive authority).
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\6\ 15 U.S.C. 78q-1(b)(3)(F).
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IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular Section 17A of the Act \7\ and the rules and regulations
thereunder.
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\7\ 15 U.S.C. 78q-1.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (File No. SR-OCC-2010-03) be and
hereby is approved.\9\
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\8\ 15 U.S.C. 78s(b)(2).
\9\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-9940 Filed 4-28-10; 8:45 am]
BILLING CODE 8011-01-P