[Federal Register Volume 64, Number 22 (Wednesday, February 3, 1999)]
[Notices]
[Pages 5334-5335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2483]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40981; File No. SR-OCC 98-15]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Definition of Stock Fund Shares
January 26, 1999.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 16, 1998, 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 to solicit
comments from interested persons on the proposed rule change.
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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 modifies the definition of ``stock fund
shares.''
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 clarify the
definition of ``stock fund shares'' as currently defined in Section 1
of Article 1 of OCC's By-laws \3\ by replacing the term ``common
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stocks'' with the phrase ``equity securities'' in the definition. When
the definition was originally drafted, the term ``common stock'' was
intended to be interpreted broadly enough to include other equity
securities such as ADRs.\4\ The substitution of the term ``equity
securities'' will make it clear that stock fund shares includes
interests in entities holding portfolios or buckets of equity
securities other than common stocks.
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\3\ This definition was introduced in a recently approved rule
change. Securities Exchange Act Release No. 40595 (October 23,
1998), 63 FR 58438 [File No. SR-OCC-98-08] (order approving rule
change relating to OCC's 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 stock).
\4\ The intention to cover ADRs was apparent in the original
filing which approved a rule change permitting OCC to issue, clear,
and settle options on unit investment trust interests and investment
company shares that hold portfolios or baskets of common stock. The
filing noted that underlying stock fund shares would include World
Equity Benchmark Shares (``WEBs''). WEBs represent interests in
funds whose holdings consist of or include ADRs. Securities Exchange
Act Release No. 40132 (June 25, 1998), 63 FR 36467 [File No. SR-OCC-
97-02].
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OCC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \5\ and the rules and
regulations thereunder because it promotes the prompt and accurate
clearance and settlement of transactions in stock fund options by
eliminating any potential ambiguity as to the definition of ``stock
fund shares.''
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\5\ 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 will 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
No comments on the proposed rule change were solicited or 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) \6\ of the Act and pursuant to Rule 19b-4(e)(1) \7\
promulgated thereunder because the proposal constitutes a stated
policy, practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule. At any time within
sixty days of the filing of such rule change, the Commission may
summarily abrogate 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.
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\6\ 15 U.S.C. 78s(b)(3)(A)(i).
\7\ 17 CFR 240.19b-4(e)(1).
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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, NW., Washington, DC 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. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such filing also will be available for
inspection and copying at the principal office of OCC. All submissions
should refer to File No. SR-OCC-98-15 and should be submitted by
February 24, 1999.
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. 99-2483 Filed 2-2-99; 8:45 am]
BILLING CODE 8010-01-M
