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OCC Board Charter

The Board of Directors (the "Board") of The Options Clearing Corporation ("OCC") performs an oversight role to ensure that OCC is managed and operated in a manner consistent with the discharge of OCC's regulatory responsibilities in connection with its provision of clearance and settlement services as an industry utility and its responsibilities as a designated systemically important financial market utility. The Board is responsible for acting as a steward of OCC to make certain OCC has the critical capabilities necessary to achieve its objectives and obligations in a safe, sound, efficient and prudential manner.

Either directly or indirectly through delegating certain responsibilities to its Committees, the Board has the following functions to discharge its management oversight responsibilities:

  • Overseeing management's activities in managing, operating and developing OCC as a firm and evaluating management's performance in executing its responsibilities;
  • Selecting, overseeing and, where appropriate, replacing the Executive Chairman of the Board and the President;
  • Providing counsel and advice to the Executive Chairman and the President as well as oversight of the performance of each such officer and of OCC in order to evaluate whether the business is being appropriately managed;
  • Advising on, approving and overseeing OCC's business strategies, including expansions of clearing and settlement services to new business lines, as well as, monitoring OCC's performance in delivering clearance and settlement services;
  • Setting expectations about the tone and ethical culture of OCC, and reviewing management's efforts to instill an appropriate tone and culture throughout OCC;
  • Reviewing and approving OCC's financial objectives and strategies, capital plan and capital structure, annual budget and corporate plan, OCC's fee structure, and major corporate plans and actions, including capital expenditures, as well as, periodic review of the types and amounts of insurance coverage available in light of OCC's clearing operation;
  • Providing oversight of risk assessment and risk management monitoring processes, including with respect to systemic risk and reviewing risk tolerances submitted to the Board for approval by its Risk Committee;
  • Fostering OCC's ability to ensure compliance with applicable laws and regulations, including banking, securities and corporation laws and other applicable regulatory guidance and standards, and overseeing OCC's processes designed to conduct business in a legal and ethical manner;
  • Overseeing governance processes in a manner consistent with this Charter, including reviewing Committee charters and reports of Committee activities; effecting Committee appointments; performing an annual self-evaluation of its performance, the performance of its Committees, the performance of individual Directors and committee members; and evaluating the Corporate Governance Principles and Fitness Standards;
  • Reviewing the amount of compensation for Public Directors;
  • Providing oversight of internal and external audit processes and financial reporting, including approving major changes in auditing and accounting principles and practices;
  • Reviewing the annual study and evaluation of OCC's system of internal accounting controls;
  • Evaluating and fixing the compensation of the Executive Chairman and President, overseeing succession planning, human resource programs, and talent management processes, and overseeing the development and design of employee compensation, incentive and benefit programs;
  • Overseeing OCC's information technology strategy, infrastructure, resources and risks; and
  • Performing such other functions as the Board believes appropriate or necessary, or as otherwise prescribed by rules or regulation, including OCC's By-Laws and Rules.

The Board's Charter is reviewed annually with any changes subject to regulatory approval. The Board's Charter also refers to the Fitness Standards for Directors, Clearing Members and Others (adopted by the Board) which is attached thereto.