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OCC Announces SEC Order Confirms CCP Capital Benefits for Securities Lending Marketplace

CHICAGO (April 14, 2011) OCC announced today the Securities and Exchange Commission has approved a rule change clarifying the net capital treatment of certain stock loan transactions processed through OCC, confirming the central counterparty clearing benefits OCC brings to this marketplace.

SEC rules governing securities lending require broker-dealers to take a capital charge associated with collateral posted in certain stock borrow transactions. In December, OCC filed the rule change to clarify the regulatory treatment under Rule 15c3-1 of collateral and margin posted by clearing members for transactions through their participation in one of OCC's stock loan programs. The rule change means firms would not be required to take a deduction from net capital for stock loan transactions while participating in OCC's Stock Loan/Hedge or Market Loan programs as the collateral related to the loaned stock is secured and offset in OCC's margin system.

This rule change is part of OCC's continuing effort to enhance capital efficiency for its clearing members. When added to the security afforded by OCC's risk management, it provides a greater incentive for firms to conduct the securities lending transactions in a cleared environment.

About OCC

OCC is the world's largest equity derivatives clearing organization. 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 15 exchanges and trading platforms for options, financial and commodity futures, security futures and securities lending transactions. 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. More information about OCC is available at www.theocc.com.