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Notice

Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Margin Deposits for a Customers' Lien Account

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Information about this document as published in the Federal Register.

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Start Preamble December 1, 2005

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”,[1] notice is hereby given that on November 9, 2005, 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. OCC filed the proposed rule change pursuant to Section 19(b)(3)(A)(i) of the Act [2] and Rule 19b-4(f)(1) thereunder [3] so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit Start Printed Page 73045comments on the proposed rule change from interested parties.

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

The proposed rule change would clarify that securities held for the account of a securities customer (other than a market maker) may be deposited as margin in a customers' lien account.

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.[4]

Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

The proposed rule change would clarify that securities held for the account of a securities customer (other than a market maker) may be deposited as margin in a customers' lien account. In July 2005, the Commission approved an OCC proposed rule change that permitted clearing members to clear trades of certain securities customers in a new type of account, called a customers' lien account, which is subject to portfolio margining.[5] Although it was clearly intended that clearing members be permitted to deposit securities held for the account of securities customers participating in portfolio margining in customers' lien accounts, the necessary conforming change to OCC Rule 604(b)(5) was inadvertently omitted. The purpose of this rule filing is to make that conforming change.

OCC believes the proposed changes are consistent with Section 17A of the Act [6] and the rules and regulations thereunder applicable to OCC because such changes promote the prompt and accurate clearance and settlement of securities transactions by making a conforming change to OCC's rules. The proposed rule change is not inconsistent with OCC's rules, including any rules proposed to be amended.

(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)(i) of the Act [7] and Rule 19b-4(f)(1) [8] thereunder because it constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule. 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.

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. Comments may be submitted by any of the following methods:

Electronic Comments

Paper Comments

  • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303.

All submissions should refer to File Number SR-OCC-2005-18. 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, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/​rules/​sro.shtml). 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, 100 F Street, NE., Washington, DC 20549. 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 comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-OCC-2005-18 and should be submitted on or before December 29, 2005.

Start Signature

For the Commission by the Division of Market Regulation, pursuant to delegated authority.[9]

Jonathan G. Katz,

Secretary.

End Signature End Preamble

Footnotes

2.  15 U.S.C. 78s(b)(3)(A)(i).

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

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5.  See Securities Exchange Act Release No. 52030 (July 14, 2005), 70 42405 (July 22, 2005) [File No. SR-OCC-2003-04].

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7.  15 U.S.C. 78s(b)(3)(A)(i).

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[FR Doc. 05-23801 Filed 12-7-05; 8:45 am]

BILLING CODE 8010-01-M