[Federal Register Volume 61, Number 97 (Friday, May 17, 1996)]
[Notices]
[Pages 24995-24996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12470]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37203; File No. SR-OCC-95-20]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of an Amendment to a Proposed Rule Change Relating to
the Issuance, Clearance, and Settlement of Buy-Write Options Unitary
Derivatives
May 10, 1996.
On December 27, 1995, The Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change (File No. SR-OCC-95-20) pursuant to Section
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') relating to
the issuance, clearance, and settlement of Buy-Write Options Unitary
Derivatives (``BOUND'').\1\ On February 5, 1996, OCC filed Amendment
No. 1 to the proposed rule change.\2\ Notice of the proposed rule
change, as amended, was published in the Federal Register on March 20,
1996.\3\ On March 20, 1996, OCC filed Amendment No. 2.\4\ Amendment No.
2 is 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 on the proposed rule change, as amended, from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ Letter from James C. Yong, First Vice President and General
Counsel, OCC, to Jerry W. Carpenter, Assistant Director, Division of
Market Regulation (``Division''), Commission (February 5, 1996).
\3\ Securities Exchange Act Release No. 36960 (March 13, 1996),
61 FR 11458.
\4\ Letter from James C. Yong, First Vice President and General
Counsel, OCC, to Jerry W. Carpenter, Assistant Director, Division,
Commission (March 19, 1996).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of Amendment No. 2 to the proposed rule change is to
add a provision to Article XXIV, Section 6 of OCC's By-Laws to specify
that the closing price for the underlying security of a BOUND is
conclusively presumed to be accurate and shall be final for purposes of
determining settlement rights and obligations with respect to that
BOUND.
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 that 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.\5\
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\5\ The Commission has modified the text of the summaries
submitted 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 Amendment No. 2 to the proposed rule change is to
add a provision to Article XXIV, Section 6 of
[[Page 24996]]
OCC's By-Laws to specify that the closing price \6\ for the underlying
security of a BOUND is conclusively presumed to be accurate and shall
be final for purposes of determining settlement rights and obligations
with respect to that BOUND. The amendment also proposes to add an
interpretation to Section 6 to provide that, except in extraordinary
circumstances, OCC will not adjust an officially reported closing price
for exercise settlement purposes even if the closing price is
subsequently found to have been erroneous.
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\6\ The term ``closing price'' is defined under proposed Article
XXIV, Section 1(C)(2) of the proposed rule change.
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OCC believes the proposed rule change, as amended, is consistent
with the requirements of Section 17A of the Act and the rules and
regulations thereunder because the proposal should facilitate the
prompt and accurate clearance and settlement of BOUNDs.
(B) Self-Regulatory Organization's Statement on Burden on Competition
OCC does not believe that the proposed rule change as amended will
impact or impose a 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 solicited with respect to the proposed
rule change as amended and none have been received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five days of the date of publication of this notice
in the Federal Register or within such longer period (i) as the
Commission may designate up to ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding or (ii) as to which OCC consents, the Commission will:
(a) By order approve such proposed rule change or
(b) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Room, 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 number SR-OCC-95-20 and should be
submitted by June 7, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-12470 Filed 5-16-96; 8:45 am]
BILLING CODE 80-01-M
