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Notice

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

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Start Preamble March 26, 2009.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on March 6, 2009, 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. OCC filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act [2] and Rule 19b-4(f)(2) [3] thereunder so that the proposal was effective upon filing with the Commission. 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 implements changes to OCC's Schedule of Fees, effective May 1, 2009, to reflect the adoption of a fee for transactions in OCC's Stock Loan/Hedge and Market Loan Programs.

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.[4]

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

OCC's Stock Loan/Hedge Program, which allows approved Clearing Members to register their privately negotiated securities lending transactions with OCC, benefits OCC's Clearing Members and the industry by reducing the cost of credit, increasing operational efficiency, and providing stability through a central counterparty guarantee. Transactions have been free to Stock Loan/Hedge participants since the program's inception nearly fifteen years ago.

On January 31, 2009, OCC launched its Market Loan Program to create a framework for OCC to provide clearing services for stock loan and borrow transactions effected through electronic trading systems, such as the market operated by Automated Equity Finance Markets, Inc. (“AQS”), a wholly-owned subsidiary of Quadriserve, Inc.[5] Although receiving securities lending transactions executed through electronic trading markets will expand the number of securities lending transactions that will be cleared and settled by OCC, OCC also anticipates that such expansion will cause OCC to incur higher ongoing administrative, maintenance, and systems costs.

In order to adequately cover costs of operating the Programs, effective May 1, 2009, OCC will implement a one dollar ($1.00) transaction fee against all new loan activity that will be assessed to each lender and borrower participating in OCC's Stock and Market Loan Programs. The transaction fee will be calculated daily, will be billed monthly, will only apply to new loans, and will not be assessed to recall and return transactions.

The proposed rule change is consistent with Section 17A of the Act because it benefits clearing members and other market participants by keeping fees associated with OCC's Stock and Market Loan Programs as low as possible while allowing OCC to adequately cover the ongoing administrative costs. The Programs, in Start Printed Page 15574turn, benefit OCC's Clearing Members and the industry by reducing the cost of credit, increasing operational efficiency, and providing stability through a central counterparty guarantee. The proposed rule change is not inconsistent with the existing rules of OCC, including any other 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 pursuant to Section 19(b)(3)(A)(ii) of the Act [6] and Rule 19b-4(f)(2) [7] promulgated thereunder because the proposal changes a due, fee, or other charge applicable only to a member. 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.

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 Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-OCC-2009-03. 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 Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of OCC. 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-2009-03 and should be submitted on or before April 27, 2009.

Start Signature

For the Commission by the Division of Trading and Markets, pursuant to delegated authority.[8]

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble

Footnotes

2.  15 U.S.C. 78s-1(b)(3)(A)(ii).

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4.  The Commission has modified parts of these statements.

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5.  See Securities Exchange Act Release No. 59294 (January 23, 2009), 74 FR 5954 (February 3, 2009) (File No. SR-OCC-2008-20). OCC's By-Laws and Rules governing the Market Loan Program and the provisions governing the Stock Loan/Hedge Program are substantively the same, except where differences are clearly intended or where the context requires a different interpretation based on the nature of the transaction.

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6.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. E9-7581 Filed 4-3-09; 8:45 am]

BILLING CODE 8011-01-P