[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Notices]
[Pages 15559-15560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8223]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38421; File No. SR-OCC-97-03]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change Modifying The Options Clearing Corporation's Restated
Certificate of Incorporation and By-Laws
March 19, 1997.
Pursuant to Section 19(b)(1)\1\ of the Securities Exchange Act of
1934 (``Act''), notice is hereby given that on February 18, 1997, The
Options Clearing Corporation (``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 and order to
solicit comments from interested persons on the proposed rule change
and to grant accelerated approval of 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 OCC's Restated Certificate of
Incorporation and By-Laws to extend each public director's term on
OCC's Board of Directors (``Board'') from a maximum of four consecutive
years to a maximum of six consecutive years.
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 Restated
Certificate of Incorporation and By-Laws in order to provide greater
continuity of leadership and more meaningful representation on OCC's
Board by
[[Page 15560]]
extending each public director's term on the Board from a maximum of
four consecutive years to a maximum of six consecutive years. Under the
proposed rule change, public directors elected prior to 1999 shall
serve a maximum of three consecutive two-year terms, and public
directors elected in 1999 or thereafter shall serve a maximum of two
consecutive three-year terms. On October 16, 1992, the Commission
approved a proposed rule change extending a public director's term from
one two-year term to two consecutive two-year terms.\3\ OCC believes
that the reasons supporting Commission approval of that proposed rule
change are very similar to the reasons for the present proposed rule
change. In particular, OCC`s business has been and continues to be
increasingly complex. A public director may find that two two-year
terms are still insufficient time to prepare for meaningful
administration and interpretation of OCC's rules, operations, and
policies and for input of meaningful guidance once the public director
has gained the necessary knowledge and expertise. Because each public
director's term would be limited to a total of six consecutive years,
diversity in that position will still be preserved.
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\3\ Securities Exchange Act Release No. 31329 (October 16,
1992), 57 FR 48414.
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OCC believes the proposed rule change is consistent with the
requirements of Section 17A of the Act \4\ and the rules and
regulations thereunder because the proposed rule change enhances the
ability of public directors to have meaningful input on the Board and
contributes to the fair representation of OCC's members in the
selection of its directors and administration of its affairs.
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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 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 comment 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)(C) of the Act states that the rules of a clearing
agency must assure a fair representation of its shareholders and
participants in the selection of its directors and administration of
its affairs.\5\ The Commission believes that the proposed modification
to OCC's Restated Certificate of Incorporation and By-Laws to extend
each public director's term on the Board from a maximum of four
consecutive years to a maximum of six consecutive years is consistent
with OCC's obligations under Section 17A of the Act. The proposed rule
change should result in OCC's Board having greater continuity of
leadership and more meaningful representation. Due to the increasing
complexity of OCC's business, continuity of leadership has become more
important to the proper functioning of OCC. Allowing a public
director's maximum tenure to extend to six consecutive years will
enhance the continuity of leadership on OCC's Board and still preserve
the requirement of fair representation under the Act.
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\5\ 15 U.S.C. 78q-1(b)(3)(C).
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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 approving the proposed rule change prior to the thirtieth day after
the date of publication of notice of the filing because accelerated
approval will allow OCC to implement the new term structure without
disrupting the current composition of the OCC Board.
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 also will be available
for inspection and copying at the principal office of OCC. All
submissions should refer to File No. SR-OCC-97-03 and should be
submitted by June 22, 1997.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-OCC-97-03) be and hereby is
approved on an accelerated basis.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-8223 Filed 3-31-97; 8:45 am]
BILLING CODE 8010-01-M
