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Self-Regulatory Organizations; Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fees and Changes

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Start Preamble January 12, 2000.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on September 30, 1999, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) the Start Printed Page 3516proposed 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 on the proposed rule change from interested parties.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

Under the proposed rule change, OCC will reduce the clearing fees it charges to clearing members.

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]

(A) Self-Regulatory Organization's Statement of the Propose of, and Statutory Basis for, the Proposed Rule Change

Under the proposed rule change, OCC reduced the levels of clearing fees that it charges for established products for the last quarter of 1999. During the first three quarters of 1999, OCC experienced a record volume of options cleared. As a result, OCC proposes to reduce its levels of clearing fees beginning on October 1, 1999, as follows:

Contract trade levelCurrent discounted clearing fee (as of July 1, 1999)Proposed clearing fee
>2000100.00 flat fee80.00 flat fee.

OCC believes that the foregoing fee change will assure each clearing member a discount on clearing fees. The proposed discounted fee schedule change will ensure that clearing members can immediately realize the benefits of reduced fees (rather than waiting for OCC's rebate of clearing fees) without adversely affecting OCC's ability to maintain an acceptable level of retained earnings. Commencing the first trading day of 2000, these clearing fees will revert to the 1999 levels in effect before July 1, 1999. [3]

OCC believes that the proposed rule change is consistent with the requirements of Section 17A(b0(30(D) of the Act [4] and the rules and regulations thereunder applicable to OCC, because it provides for the equitable allocation of reasonable dues, fees, and other charges among OCC's participants.

(B) Self-Regulatory Organization's Statement on Burden on Competition

OCC does not believe that the proposed rule change will have any impact or 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 relating to the proposed rule change have not yet been solicited or received. OCC will notify the Commission of any written comments recieved by OCC.

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)(ii) [5] of the Act and Rule 19b 4(f)(2) [6] promulgated thereunder because the proposal establishes or changes a due, fee, or other charge imposed by OCC. At any time within sixty days of the filing of such proposed 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.

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, N.W., Washington, D.C. 20549-0609. 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-99-10 and should be submitted by February 11, 2000.

For the Commission by the Division of Market Regulation, pursuant to delegated authority.[7]

Start Signature

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


2.  The Commission has modified the text of the summaries prepared by OCC.

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3.  Refer to Securities Exchange Act Release No. 41736 (August 19, 1999), 64 FR 45295 [File No. SR-OCC-99-8] for fees in effect before July 1, 1999.

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5.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 00-1465 Filed 1-20-00; 8:45 am]