Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The purpose of the proposed rule change is to reduce certain clearing fees for securities option contracts, effective April 1, 2004.
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.
The principal purpose of this rule change is to reduce OCC's clearing fees for securities option contracts, effective April 1, 2004, as follows:
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.
OCC does not believe that the proposed rule change would impose any burden on competition.
Written comments were not and are not intended to be solicited with respect to the proposed rule change, and none have been received.
The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act
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:
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.