Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), notice is hereby given that on May 15, 2002, The Options Clearing Corporation (“OCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed 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 persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The proposed rule change consists of the Security Futures Agreement for Clearing and Settlement Services entered into between OCC and The Island Futures Exchange, LLC (“IFX”).
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.
(A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
OCC is preparing to clear security futures for a number of markets. One such market is IFX. As it represented in a previous rule filing, OCC intends to file with the Commission the agreements it enters into with these markets when negotiated. This filing concerns the Security Futures Agreement for Clearing and Settlement services that OCC has entered into with IFX (“IFX Clearing Agreement”).
The terms of the IFX Clearing Agreement are based on the terms of the Agreement for Clearing and Settlement Services entered into with Nasdaq Liffe Markets, LLC, formerly Nasdaq LIFFE, LLC, (“NqLX Clearing Agreement”) which has been approved by the Commission. The terms of the IFX Clearing Agreement are substantially the same as the terms of the NqLX Clearing Agreement. The notable differences are as follows:
Section 5, “Comparison of Security Futures Transactions; Settlement Prices,” has been modified to specify the parties' agreements with respect to setting a daily settlement price if OCC does not accept IFX's reported price. New paragraph (c) has been added to address OCC's right to determine a final settlement price under certain circumstances. Section 5 also makes explicit that the parties' agreements establishing such settlement prices must be consistent with OCC's by-laws and rules. New paragraph (c) is added to Section 16, “Indemnification,” to cover intellectual property claims. New language in Section 19, “Breach of Agreement-Termination,” provides additional grounds for termination. The parties' agreements on confidentiality of information have been incorporated in a letter agreement between the parties.
OCC believes that the proposed rule change is consistent with the purposes and requirements of Section 17A of the Act because the proposed rule change will foster cooperation and coordination with persons engaged in the clearance and settlement of securities transactions and will remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions.
(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. Start Printed Page 41288
(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 pursuant to Section 19(b)(3)(A)(i) of the Act  and Rule 19b-4(f)(1)  thereunder because it constitutes a stated policy, practice or interpretation with respect to the meaning, enforcement or administration of an existing rule. At any time within sixty days of the filing of the 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.
VI. 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. 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. 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 No. SR-OCC-2002-08 and should be submitted by July 8, 2002.Start Signature
For the Commission by the Division of Market Regulation, pursuant to delegated authority.
Jill M. Peterson,
2. The Commission has modified parts of these statements.Back to Citation
3. See Securities Exchange Act Release No. 44727, (August 20, 2001), 66 FR 45351 [File No. SR-OCC-2001-07] (order approving comprehensive set of rule changes pertaining to clearance and settlement of security futures transactions). OCC also has filed a proposed rule change with the Commission [File No. SR-OCC-2002-07] requesting approval of clearing agreements with OneChicago and the Chicago Mercantile Exchange.Back to Citation
4. Id.Back to Citation
5. Article XII, Sections 5 and 6; Rule 1301(d).Back to Citation
[FR Doc. 02-15135 Filed 6-14-02; 8:45 am]
BILLING CODE 8010-01-P