
[Federal Register Volume 78, Number 40 (Thursday, February 28, 2013)]
[Notices]
[Pages 13715-13716]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-04552]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68962; File No. SR-OCC-2013-01]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Provide Clarifying Language To Conform Interpretive Guidance Concerning 
Options Overlying Fund Shares With OCC's By-Laws Governing Adjustments

February 21, 2013.
    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 February 14, 2013, The Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') the rule 
change described in Items I, II and III below, which items have been 
prepared primarily by OCC. OCC filed the proposal pursuant to Section 
19(b)(3)(A)(i) of the Act,\3\ and Rule 19b-4(f)(1) \4\ thereunder so 
that the proposal was effective upon filing with the Commission. The 
Commission is publishing this Notice to solicit comments on the 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)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of Terms of Substance of 
the Proposed Rule Change

    OCC is providing clarifying language to conform interpretive 
guidance concerning options on fund shares with certain By-Law 
provisions that govern adjustments of contracts.

II. Self-Regulatory Organization's Statement of 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 rule change and discussed 
any comments it received on the 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.\5\
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    \5\ The Commission has modified the text of the summaries 
prepared by OCC.

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[[Page 13716]]

A. Self-Regulatory Organization's Statement of Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the rule change is to make a technical correction in 
Interpretation and Policy .08 to Article VI, Section 11A 
(``Interpretation and Policy .08'') that relates to OCC's amendment of 
Section 11A in connection with equity options that are originally 
listed with a unit of trading of 10 shares (``Mini Options''), which 
was previously approved by the Commission.\6\ The correction to 
Interpretation and Policy .08 clarifies that the same adjustment 
treatment thresholds that were added to Article VI, Section 11A(c)(ii), 
by Commission approval of SR-OCC-2012-16 (``Mini Options Rule 
Change''), are also meant to extend to options contracts overlying fund 
shares.
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    \6\ Securities Exchange Act Release No. 34-68104 (October 25, 
2012); 77 FR 65917 (October 31, 2012) (SR-OCC-2012-16) (Securities 
and Exchange Commission Order Granting Accelerated Approval of 
Proposed Rule Change To Accommodate Equity Options That Have a Unit 
of Trading of 10 Shares).
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    Commission approval of SR-OCC-2012-16 amended Section 11A(c)(ii) to 
provide that it is the general rule that no adjustment will be made for 
a cash dividend or distribution by the issuer of the underlying 
security if such dividend or distribution is less than $.0125 per 
share, provided that if a contract is originally listed with a unit of 
trading larger than 100 shares the applicable threshold is $12.50 per 
contract. The rule change to Interpretation and Policy .08 specifically 
addresses the adjustment treatment of distributions on contracts 
overlying fund shares. Interpretation and Policy .08 currently does not 
expressly indicate that options on fund shares are subject to the same 
adjustment treatment thresholds that are set out in Article VI, Section 
11A(c)(ii) as a result of the Mini Options Rule Change. The rule change 
clarifies that the adjustment thresholds are the same.
    In connection with the Mini Options Rule Change, the Commission 
approved an amendment of the options disclosure document (``ODD''), 
Characteristics and Risks of Standardized Options, to reflect the 
adjustment thresholds specified in Article VI, Section 11A(c)(ii).\7\ 
No further supplementation of the ODD is necessary since this rule 
change is consistent with those adjustment thresholds.
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    \7\ Securities Exchange Act Release No. 34-68368 (December 6, 
2012); 77 FR 74043 (December 12, 2012) (SR-ODD-2012-02).
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    OCC believes that the rule change is consistent with Section 17A of 
the Act \8\, and the rules and regulations thereunder, because the 
modifications clarify that the rules concerning adjustments of 
contracts overlying fund shares are meant to be consistent with the 
rules governing options on shares of common preferred stock. OCC 
believes that this clarification helps to ensure that the rules of OCC 
are designed to foster cooperation and coordination with persons 
engaged in the clearance and settlement of securities transactions and 
thereby promotes the prompt and accurate clearance and settlement of 
securities transactions.\9\
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    \8\ 15 U.S.C. 78q-1.
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    OCC does not believe the rule change would impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments on the rule change were not and are not intended 
to be solicited 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)(i) \10\ of the Act and Rule 19b-4(f)(1) \11\ thereunder 
because it constitutes a stated policy, practice, or interpretation 
with respect to the meaning, administration, or enforcement of an 
existing rule. OCC will delay the implementation of the rule change 
until it is deemed certified under CFTC Regulation Sec.  40.6. At any 
time within 60 days of the filing of the 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.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(i).
    \11\ 17 CFR 240.19b-4(f)(1).
    \12\ 15 U.S.C. 78s(b)(3)(C).
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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 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 rule-comments@sec.gov. Please include 
File No. SR-OCC-2013-01 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC, 20549-1090.
All submissions should refer to File Number SR-OCC-2013-01. 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 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 Web site 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 
Web site at http://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_13_01.pdf.
    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-2013-01 
and should be submitted on or before March 21, 2013.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary .
[FR Doc. 2013-04552 Filed 2-27-13; 8:45 am]
BILLING CODE 8011-01-P


