[Federal Register Volume 63, Number 210 (Friday, October 30, 1998)]
[Notices]
[Pages 58438-58439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29118]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40595; File No. SR-0CC-98-08]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Order Granting Accelerated Approval of a Proposed
Rule Change Regarding Stock Fund Options
October 23, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on July 22, 1998, The Options
Clearing Corp. (``OCC'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II below, which items have been prepared primarily by OCC.
The Commission is publishing this notice to solicit comments from
interested persons and to grant accelerated approval of the proposal.
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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
Under the proposed rule change, OCC will amend its rules and by-
laws which govern options on publicly traded interests in unit
investment trusts, investment companies, or similar entities holding
portfolios or baskets of common stocks.
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 the text of the summaries
prepared by OCC
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to modify OCC's rules
and by-laws governing the issuance, clearance, and settlement of
options on publicly traded interests in unit investment trusts,
investment companies, or similar entities holding portfolios or baskets
of common stocks.\3\ Specifically, the proposed rule change will
introduce a defined term ``stock fund shares'' to cover such publicly
traded interests and a defined term ``stock fund option'' to cover the
options thereon and will substitute these defined terms where
appropriate in the by-laws and rules. For example, the proposed rule
change will abbreviate Interpretation and Policy .01 under Section 9 of
Article VI of the by-laws through the use of the newly defined term
stock fund option.
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\3\ The Commission approved OCC's issuance, clearance, and
settlement of such options in Securities Exchange Act Release No.
40132 (June 25, 1998), 63 FR 36467 [File No. SR-OCC-97-02].
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In addition, the proposed rule change will provide for adjustments
to the terms of stock fund options for distributions of capital gains
with respect to the underlying stock fund shares. The proposed rule
change will add Interpretation and Policy .08 to Section 11 of Article
VI of the by-laws to reflect that the terms of stock fund options will
be adjusted for all capital gains distributions, regardless of size, by
the issuer of the underlying stock fund shares.
OCC believes that the proposed rule change is consistent with
Section 17A of the Act \4\ because the proposed changes will promote
the prompt and accurate clearance and settlement of transactions in
stock fund options.
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\4\ 15 U.S.C. 78q-1.
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(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
Section 17A(b)(3)(F) of the Act \5\ requires that the rules of a
clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions. The Commission
believes that the proposed rule change is consistent with this
obligation because the amendments should make it clear that stock fund
options are stock option contracts for all purposes under OCC's rules
and by-laws. Furthermore, the rule change should promote the prompt and
accurate clearance and settlement of stock fund options by providing
for adjustments to the terms of stock fund options for capital gains
distributions with respect to the underlying stock fund shares.
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\5\ 15 U.S.C. 78q-1(b)(3)(F).
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The Commission finds good cause for approving the proposed rule
change prior to the thirtieth day after the publication of notice of
the filing. Pursuant to File No. OCC-97-02, OCC amended its rules to
provide for the clearance and settlement of stock fund options as
proposed for trading by the American Stock Exchange (``AMEX'').\6\ The
changes proposed in this rule filing will make technical changes that
will facilitate the clearance and settlement of AMEX's product which is
scheduled to begin trading in November, 1998.
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\6\ Supra, note 3.
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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 proposed rule
change is consistent with the Act. 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 also will be available
for inspection and copying at the principal office of OCC. All
submissions should
[[Page 58439]]
refer to File No. SR-OCC-98-08 and should be submitted by November 20,
1998.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\7\ that the proposed rule change (File No. SR-OCC-98-08) be and
hereby is approved.
\7\ 15 U.S.C. 78s(b)(2).
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For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-29118 Filed 10-29-98; 8:45 am]
BILLING CODE 8010-01-M
