
[Federal Register Volume 78, Number 232 (Tuesday, December 3, 2013)]
[Notices]
[Pages 72729-72731]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28847]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70947; File No. SR-OCC-2013-21]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Make Technical Changes to OCC's By-Laws and Rules in Connection with 
the Modification of the Individual Registration Categories of the 
Investment Industry Regulatory Organization of Canada

November 26, 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 November 20, 2013, The Options Clearing Corporation (``OCC'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change described in Items I and II below, which Items 
have been prepared primarily by OCC. OCC has designated the proposed 
rule change as constituting a ``non-controversial'' rule change under 
paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which renders the 
proposal was effective upon filing with the Commission. The Commission 
is publishing this notice to solicit comments on the rule change from 
interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(4)(ii).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    This proposed rule change by The Options Clearing Corporation 
(``OCC'') would make technical changes to OCC's By-Laws and Rules in 
connection with the modification of the individual registration 
categories of the Investment Industry Regulatory Organization of Canada 
(``IIROC'') under which every Canadian clearing member or applicant 
seeking to become a Canadian clearing member would be required to 
employ at least one associated person registered as a Chief Financial 
Officer (``CFO'') with IIROC.

II. Clearing Agency'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

[[Page 72730]]

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 these statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    In connection with a change made by IIROC to its individual 
registration categories, OCC is proposing to make technical changes to 
its By-Laws and Rules under which every Canadian clearing member or 
applicant seeking to become a Canadian clearing member would be 
required to employ at least one associated person registered as the 
Clearing Member's CFO. OCC's membership standards include conditions 
designed to assess the overall quality and character of the personnel 
of an applicant. These conditions include a requirement that at least 
one associated person of the applicant be registered as a Financial and 
Operations Principal (``FINOP'') with FINRA and at least two key 
operations staff be full-time employees of the applicant. For Canadian 
members, OCC has permitted this requirement to be satisfied where any 
principal, director or officer of the firm is also registered as a 
Designated Registered Options Principal (``DROP'') with the IIROC. 
However, as a result of IIROC's modification of its registration 
categories the DROP has supervisory authority with respect to options 
transactions but no responsibilities over the books and records of the 
IIROC member.
    Under IIROC's rules, the registered CFO is responsible for 
monitoring the investment dealer's adherence with the financial rules 
of IIROC as well as establishing and maintaining policies and 
procedures related to financial requirements, which in OCC's view 
equates to that of the function of FINOP under the rules for membership 
standards. Accordingly, the proposed changes to Article V and Section 
(a) of Rule 214 takes into account the regulatory changes made by IIROC 
with respect to the DROP by requiring every Canadian clearing member or 
applicant seeking to become a Canadian clearing member to employ at 
least one associated person registered as the Canadian clearing 
member's CFO, in place of the current requirement that at least one 
employee be a Principal/Director/Officer and a DROP. OCC is also 
proposing to replace outdated references in the By-Laws and Rules to 
the Investment Dealers Association of Canada to IIROC, which is its 
successor.\4\
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    \4\ IIROC was established on June 1, 2008 through the 
consolidation of the Investment Dealers Association of Canada and 
Market Regulation Services Inc.
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2. Statutory Basis
    OCC believes the proposed rule change is consistent with Section 
17A(b)(3)(F) of the Act \5\ and the rules and regulations thereunder, 
including Rules 17Ad-22(d)(1) and 17Ad-22(d)(2), because the proposed 
modifications would help ensure that the By-Laws and Rules of OCC 
provide for a well-founded, transparent, and enforceable legal 
framework for each aspect of its activities in all relevant 
jurisdictions \6\ and require participants to have robust operational 
capacity to meet obligations arising from participation in the clearing 
agency and to have procedures in place to monitor that participation 
requirements are met on an ongoing basis.\7\ 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.
    \6\ 17 CFR 240.17Ad-22(d)(1).
    \7\ 17 CFR 240.17Ad-22(d)(2).
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(B) Clearing Agency's Statement on Burden on Competition

    OCC does not believe that the proposed rule change would impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.\8\ Changes to the rules of a 
clearing agency may have an impact on the participants in a clearing 
agency and the markets that the clearing agency serves. This proposed 
rule change affects only Canadian clearing members or applicants 
seeking to become a Canadian clearing member and OCC believes that the 
proposed modifications would not unfairly inhibit access to OCC's 
services or disadvantage or favor any particular user in relationship 
to another user because the proposed modifications are technical in 
nature and designed to take into account changes in regulations 
applicable to Canadian broker-dealers and would apply equally to all 
Canadian clearing members.
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    \8\ 15 U.S.C. 78q-1(b)(3)(I).
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(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants or Others

    Written comments on the proposed rule change 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

    Because the proposed change does not (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6)(iii) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(6)(iii), OCC provided the Commission with written notice of its 
intent to file the proposed rule change, along with a brief 
description and the text of the proposed rule change, at least five 
business days prior to the date of filing of the proposed change, or 
such shorter time as designated by the Commission.
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    OCC has requested that the Commission waive the 30 day operative 
delay contained in Rule 19b-4(f)(6)(iii) under the Act so that the 
proposal may become operative immediately upon filing.\11\ The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, as 
the proposed rule change is technical in nature and waiver of the 
operative delay will help ensure that OCC's By-Laws and Rules provide 
for a well-founded, transparent, and enforceable legal framework for 
each aspect of its activities in all relevant jurisdictions.\12\ For 
this reason, the Commission designates the proposed rule change to be 
operative upon filing.\13\
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    \11\ Id.
    \12\ Notwithstanding the foregoing, OCC has noted that 
implementation of this rule change will be delayed until this rule 
change is deemed certified under CFTC Regulation Sec.  40.6.
    \13\ For purposes of waiving the 30-day operative delay, the 
Commission has also considered the proposed rule's impact on 
efficiency competition, and capital formation. See 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of such 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.

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:

[[Page 72731]]

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 Number SR-OCC-2013-21 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-2013-21. 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 of submission. 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 Section, 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_21.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-2013-21 and 
should be submitted on or before December 24, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated Authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-28847 Filed 12-2-13; 8:45 am]
BILLING CODE 8011-01-P


