

[Federal Register: November 28, 2006 (Volume 71, Number 228)]
[Notices]               
[Page 68872-68874]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28no06-101]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54786; File No. SR-OCC-2006-16]

 
Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of a Proposed Rule Change Relating to the Definition 
of Fund Share

November 20, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 21, 2006, The 
Options

[[Page 68873]]

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 amend the definition of ``fund 
share'' in OCC's By-Laws.

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

    OCC issues and clears options on ``fund shares'' which are defined 
in Article I of OCC's By-Laws as a publicly traded interest in a trust, 
investment company, or other entity holding portfolios or baskets of 
securities.\3\ The proposed rule change would amend the definition of 
``fund shares'' in order to accommodate requests from OCC participant 
exchanges that OCC clear and settle options on exchange traded fund 
(``ETF'') shares that represent interests in an entity holding euros 
and investing the euros in time deposits.\4\ Specifically, the proposed 
rule change would amend the definition to include interests in entities 
holding portfolios or baskets of currencies, including single 
currencies. The definition would also be revised to make it clear that 
(i) it includes entities with actively managed portfolios and (ii) it 
applies only to entities principally engaged in holding portfolios or 
baskets of securities or currencies and not entities that do so as an 
incident to some other business.
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    \3\ Securities Exchange Act Release No. 46914 (November 26, 
2002), 67 FR 72261 (December 4, 2002) [File No. SR-OCC-2002-22].
    \4\ Securities and Exchange Act Release Nos. 54087 (June 30, 
2006), 71 FR 38918 (July 10, 2006) [File No. SR-ISE-2005-60] (Order 
approving a proposed rule change of the International Stock Exchange 
to allow listing and trading of fund shares that hold specified non-
U.S. currency options, futures or options on futures on such 
currency, or any other derivatives based on such currency.) The 
American Stock Exchange has filed a similar proposal [File No. SR-
AMEX-2006-87], which has not yet been published for notice and 
comment.
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    If approved by the Commission, the proposed rule change would not 
be implemented until definitive copies of an appropriate supplement to 
the options disclosure document, Characteristics and Risks of 
Standardized Options, are available for distribution.
    OCC believes that the proposed rule change is consistent with the 
purposes and requirements of Section 17A of the Act because it promotes 
the prompt and accurate clearance and settlement of securities 
transactions, fosters cooperation and coordination with persons engaged 
in the clearance and settlement of securities transactions, removes 
impediments to and perfects the mechanism of a national system for the 
prompt and accurate clearance and settlement of securities 
transactions, and, in general, protects investors and the public 
interest. The proposed rule change is not inconsistent with the 
existing rule 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 rule-comments@sec.gov. Please include 

File Number SR-OCC-2006-16 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-2006-16. 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 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-2006-16 
and should be submitted on or before December 19, 2006.


[[Page 68874]]


    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-20053 Filed 11-27-06; 8:45 am]

BILLING CODE 8011-01-P
