[Federal Register Volume 60, Number 5 (Monday, January 9, 1995)]
[Notices]
[Pages 2415-2416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-382]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35185; File No. SR-OCC-94-12]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change Amending By-Laws Relating to the Holiday Expiration Date
for Cash-Settled Foreign Currency Options
December 30, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 12, 1994, The
Options 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 and order to
solicit comments on the proposed rule change from interested persons
and to grant accelerated approval of the proposed rule change.
\1\15 U.S.C. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change will amend OCC's by-laws to change the
holiday expiration date for cash-settled foreign currency options.
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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
OCC proposes to amend its by-laws to change the holiday expiration
date for cash-settled foreign currency options. On December 13, 1994,
the Commission approved a Philadelphia Stock Exchange (``PHLX'') rule
change proposing to change the holiday expiration date for cash-settled
foreign currency options.\2\ Currently, cash-settled foreign currency
options expire on Mondays. However, if Monday is a PHLX holiday or a
designated bank holiday, the expiration date reverts to the preceding
business day, which is usually Friday, but on some occasions may be
Thursday.
\2\Securities Exchange Act Release No. 35097, (December 13,
1994) [File No. SR-PHLX-94-54] (order granting accelerated approval
of proposed rule change filed by the Philadelphia Stock Exchange,
Inc., relating to the holiday expiration date for cash/spot foreign
currency options).
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Under PHLX's rule change, if the regular Monday expiration occurs
on a PHLX holiday or a designated bank holiday, the cash-settled
foreign currency options expire on the following business day rather
than the preceding business day. Accordingly, when the regular Monday
expiration occurs on a holiday, the expiration will usually occur on
Tuesday, but on some occasions will occur on Wednesday.\3\ The proposed
change will allow cash-settled foreign currency option users to capture
weekend risk.
\3\For example, Monday, December 26, 1994 is a PHLX holiday
(Christmas); therefore, under the proposed change, expiration will
occur on Tuesday. However, Tuesday, December 27, 1994, is a
designated bank holiday (Boxing Day), so expiration will occur on
Wednesday, December 28, 1994.
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To accommodate the change proposed by PHLX, OCC is proposing to
modify the definition of ``Expiration Date'' contained in OCC by-laws,
Article XXII, Section 1E. Under OCC's proposed change, if the regular
Monday expiration occurs on an exchange designated bank holiday or a
day that is not a business day, expiration will occur on the following
business day rather than the preceding business day.
B. Self-Regulatory Organization's Statement on Burden on Competition
OCC does not believe that the proposed rule change will 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 [[Page 2416]] to the proposed rule change, and none have been
received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Section 17A(b)(3)(F)\4\ of the Act requires the rules of a clearing
agency be designed to foster cooperation and coordination with persons
engaged in the clearance and settlement of securities transactions. The
Commission believes that OCC's proposed change is consistent with
Section 17A(b)(3)(F) of the Act because it works in conjunction with
the PHLX rule change to better coordinate and to promote cooperation in
the issuance, clearance, and settlement of these options.
\4\15 U.S.C. 78q-1(b)(3)(F) (1988).
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OCC has requested that the Commission find good cause for approving
the proposed rule change prior to the thirtieth day after the date of
publication of notice of the filing. The Commission finds good cause
for so approving the proposed rule change because accelerated approval
will allow OCC to coordinate its holiday expiration dates for cash-
settled foreign currency options with the holiday expiration dates for
cash-settled foreign currency options with the holiday expiration dates
set by the PHLX.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
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, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing will also be available
for inspection and copying at the principal office of OCC. All
submissions should refer to the file No. SR-OCC-94-12 and should be
submitted within January 30, 1995.
On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act, particularly
with Section 17A(b)(3)(F) of the Act, and the rules and regulations
thereunder.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-OCC-94-12) be, and hereby
is, approved.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
\5\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-382 Filed 1-6-95; 8:45 am]
BILLING CODE 8010-01-M
