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OCC Earns Top Honors for Clearing House Innovation at FOW Awards

CHICAGO (December 7, 2010) - The Options Clearing Corporation (OCC) announced today that it has won the "Best Innovation by a Clearing House - Americas" Award for 2010 from FOW, a leading global derivatives publication, for its efforts in the Options Symbology Initiative (OSI).

The OSI project began in 2005 with the goal of overhauling the previous method of identifying exchange-listed options contracts from a five character alpha code to an OSI key which clearly identifies the underlying product as well as the expiration date, put/call denotation and finally uses decimal strike prices instead of fractions. The industry wide changeover was successfully implemented on February 12, 2010.

FOW's Awards for Innovation were first awarded last year and aim to recognize organizations for specific innovations that have the potential to impact the market for the better. The distinction was announced in London last week at FOW's annual ceremony marking the accomplishments over the last year by the global derivatives industry. OCC President and COO Michael Cahill accepted on behalf of OCC.

"OCC has taken great pride for many years in our ability to provide innovative solutions for the markets we serve. That's why being recognized by FOW with this award for our work on the Options Symbology Initiative is such an honor," said Michael Cahill, OCC President and COO. "However, this particular innovation would not have been accomplished without the commitment and dedication of industry professionals from the broker-dealer, exchange, vendor and clearing communities who worked together with OCC staff to make the conversion to a more intuitive symbology a reality."

The judges noted that OSI has improved the efficiency of the options market, allowing the use of such product innovations as weekly contracts to expand. The previous nomenclature used to identify exchange-listed options hindered such an offering. While standard options contracts expire monthly, the weekly expirations limit investor expenses while offering additional ways to manage risk in the short term.

About OCC

OCC is the world's largest derivatives clearing organization by contract volume and open interest. Founded in 1973, OCC operates under the jurisdiction of both the Securities and Exchange Commission (SEC) as a Registered Clearing Agency and the Commodity Futures Trading Commission (CFTC) as a Derivatives Clearing Organization. OCC now provides central counterparty (CCP) clearing and settlement services to 14 exchanges and platforms for options, financial and commodity futures, security futures and securities lending transactions.

As the CCP clearinghouse for the markets it serves, OCC assumes the counterparty risk of members involved in a trade-becoming the buyer to every seller and the seller to every buyer. OCC manages its risk of member default by collecting margin (collateral). Clearing member margin requirements are calculated using OCC's proprietary System for Theoretical Analysis and Numerical Simulations (STANS) that uses large-scale Monte Carlo simulations to forecast price moves and correlations to make those margin determinations. In 1993, OCC became the first clearinghouse to receive a 'AAA' credit rating from Standard & Poor's Corporation, and has continued to receive that high rating every year as a result of its risk management standards.

OCC operates as a utility clearinghouse, owned by several of its participant exchanges but with a Board of Directors majority drawn from its clearing members, allowing it to provide highly efficient but low-cost solutions to the markets it serves. More information about OCC is available through its Web site at