94-12743. Self-Regulatory Organizations; Delta Government Options Corp.; Order Approving a Proposed Rule Change Modifying the Definition of Expiration Date

[Federal Register Volume 59, Number 100 (Wednesday, May 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12743]


[[Page Unknown]]

[Federal Register: May 25, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34082; File No. SR-DGOC-94-01]

 

Self-Regulatory Organizations; Delta Government Options Corp.; 
Order Approving a Proposed Rule Change Modifying the Definition of 
Expiration Date

May 18, 1994.
    On January 18, 1994, pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ Delta Government Options Corp. 
(``DGOC'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change that modifies the definition of 
expiration date. On March 31, 1994, the Commission published notice of 
the proposed rule change in the Federal Register to solicit comment 
from interested persons.\2\ No comments were received. This order 
approves the proposal.
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    \1\15 U.S.C. 78s(b)(1) (1988).
    \2\Securities Exchange Act Release No. 33805 (March 23, 1994), 
59 FR 15249.
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I. Description

    The proposed rule change amends DGOC's definition of ``expiration 
date,'' found in Article I of DGOC's Procedures, to provide that the 
expiration date may occur on any business day on or before the second 
anniversary of the writing of the option contract.\3\ The proposal is a 
response to DGOC participants' requests that DGOC afford them the 
opportunity to select expiration dates that match more precisely the 
tenor of other financial contracts developed in the over-the-counter 
market and in other trading environments. The proposal enables 
participants to submit for processing at DGOC treasury options trades 
that prior to this proposal could not have been submitted to DGOC 
because their stated expiration dates were not available through DGOC.
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    \3\Previously, DGOC's rules provided that the expiration date 
could have been on any Friday that occurred not later than the last 
Friday of the month in which the second anniversary of the writing 
of the option occurred.
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II. Discussion

    Section 17A(b)(3)(F) of the Act that the rules of a clearing agency 
must promote the prompt and accurate clearance and settlement of 
securities transactions and must remove impediments to and must perfect 
the mechanism of a national system for the prompt and accurate 
clearance and settlement of securities transactions.\4\ The proposal 
enlarges the class of treasury option trades eligible for clearance and 
settlement at DGOC. By potentially increasing the number of trades that 
will be cleared and settled through DGOC, which is a registered 
clearing agency with automated clearance and settlement procedures, the 
proposal facilitates the prompt and accurate clearance and settlement 
of securities transaction. Furthermore, more trades can be processed 
through the national clearance and settlement system that otherwise 
would have to be settled through decentralized and more inefficient 
operations.
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    \4\15 U.S.C. 78q-1(b)(3)(F) (1988).
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    In addition, the proposal affords DGOC participants with additional 
flexibility to adjust duration in relation to their overall treasury 
security portfolios. This will enable participants to manage their 
risks more effectively.

III. Conclusion

    For the reasons stated above, the Commission finds that the 
proposed rule change is consistent with section 17A of the Act.
    It is therefore ordered, Pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-DGOC-94-01) be, and hereby 
is, approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-12743 Filed 5-24-94; 8:45 am]
BILLING CODE 8010-01-M