[Federal Register: March 24, 2004 (Volume 69, Number 57)]
[Notices]
[Page 13932-13933]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24mr04-120]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-49436; File No. SR-OCC-2004-01]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Related to Clearing Fees for Securities Option Contracts
March 17, 2004.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on February 23, 2004, The
Options Clearing Corporation (``OCC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change 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 from interested parties.
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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 purpose of the proposed rule change is to reduce certain
clearing fees for securities option contracts, effective April 1, 2004.
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 these
statements.\2\
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\2\ The Commission has modified the text of the summaries
prepared by OCC.
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[[Page 13933]]
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The principal purpose of this rule change is to reduce OCC's
clearing fees for securities option contracts, effective April 1, 2004,
as follows:
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Current per April 1, 2004
Contracts per trade contract per contract per
trade fee trade fee
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0-500............................... $0.09 $0.0825
501-1,000........................... 0.07 0.0675
1,001-2,000......................... 0.06 0.0575
2,000................... 110.00 (capped) 110.00 (capped)
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In addition to the foregoing, OCC will expand what is considered to
be a ``market maker scratch trade.'' Currently, OCC considers market
maker scratch trades to be the same day purchase and sale of identical
option contracts in the same quantity and price by a market maker on a
single exchange. Such trades are subject to a reduced clearing fee of
$.02 per contract in recognition of a market maker's obligation to
continuously maintain a fair and orderly market, which often may result
in near simultaneous breakeven purchase and sale transactions.
Effective April 1, 2004, OCC will no longer require that the condition
that the purchase and sale transactions take place on a single exchange
in order to be treated as a market maker scratch trade. As a result of
this change, a greater number of contracts will be eligible for
clearance at the $.02 per contract rate.
OCC believes that the foregoing changes will financially benefit
clearing members without adversely affecting OCC's ability to meet its
expenses and maintain an acceptable level of retained earnings.
(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
The foregoing rule change has become effective upon filing pursuant
to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)\4\
thereunder because the proposed rule establishes or changes a due, fee,
or other charge. 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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\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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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 20549-0609.
Comments may also be submitted electronically at the following e-mail
address: rule-comments@sec.gov. All comment letters should refer to
File No. SR-OCC-2004-01. This file number should be included on the
subject line if e-mail is used. To help the Commission process and
review your comments more efficiently, comments should be sent in
either hardcopy or by e-mail but not by both methods. 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, NW, Washington, DC 20549-
0609. Copies of such filing also will be available for inspection and
copying at the principal office of OCC and on OCC's Web site at http://www.optionsclearing.com.
All submissions should refer to File No. SR-
OCC-2004-01 and should be submitted by April 14, 2004.
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\5\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-6597 Filed 3-23-04; 8:45 am]
BILLING CODE 8010-01-P