March 2014 Newsletter

OCC Logo
OCC News

In This Issue

OCC to Launch OTC S&P 500 Equity Index Options

OCC will begin clearing over-the-counter (OTC) equity index options in the second quarter of 2014, bringing capital and operational efficiencies and enhanced customer protections to the OTC equity derivatives marketplace. The OTC Index Options clearing service will provide clearing for dealer-to-dealer trading in OTC S&P 500® index options that have tenors from four months to five years and meet certain notional threshholds. Both OCC clearing members and clearing members’ clients have expressed interest in the clearing service; seven large clearing member participants have completed membership expansions that will enable them to send OTC S&P* index options trades to OCC for clearing.

Strengthening risk management across the industry is a key priority with this new service offering. OTC index options positions that are held in the same account as other listed equity derivative positions at OCC will be margined under OCC’s portfolio margining system, which will recognize market offsets and may lower margin requirements and the overall cost of clearing. OCC has also enhanced its margin model for both listed and OTC options to better reflect certain risks for longer tenor options of at least three years.

Client clearing of OTC index options is expected to launch in the third quarter of 2014. Client clearing will offer clearing member client accounts the same kind of protections afforded to securities investors by the Securities Investor Protection Corporation. This enhances the protections afforded to customers in the event of a liquidation of their broker-dealer as cleared OTC index options will now benefit from SIPA protection.

For more information please contact

Back to Top

OCC Cleared Volume Reaches 4.2 Billion in 2013

2013 marked the second highest year for OCC volume, culminating with 4,170,855,768 cleared contracts. This was up 3 percent from the 2012 annual volume of 4,042,175,801 contracts. Exchange-listed options volume topped 4,111,275,659 contracts in 2013, a 3 percent increase from the 2012 volume of 4,003,871,308 contracts.

It was also a record year for futures and stock loan activity. Futures cleared by OCC totaled 59,580,109 contracts in 2013, up 56 percent from 2012 and the highest annual volume for cleared futures contracts to date. OCC cleared an average of 236,429 futures contracts per day in 2013. Stock loan activity was up 26 percent from 2012, with 1,233,708 new loan transactions in 2013, the highest annual volume for stock loan activity yet. Read more here.

Back to Top

From the Hill

The Chairman of the Senate Finance Committee is one of the most powerful people in Washington. The Committee, created way back in 1815, has jurisdiction over most health care issues, taxes, trade and most legislation that raises revenue for the government. With the Appropriations Committee losing some of its luster in the post-earmark Congressional world, many believe that the Finance Committee has solidified its place as the most powerful committee in the Senate.

"Former Chairman Max Baucus
(D-Montana) accomplished many goals, but his goal of comprehensively overhauling the tax code has eluded him."

From his perch atop the Finance Committee, former Chairman Max Baucus (D-Montana) accomplished many goals, but his goal of comprehensively overhauling the tax code has eluded him. Though his efforts were a long shot from the beginning, former Chairman Baucus worked hard on tax reform, immersing himself in the nuances of the tax code and releasing four discussion drafts and ten position papers on all aspects of tax reform. As his time as Chairman and Senator came to an end last week, after being confirmed by a 96-0 vote to become the next Ambassador to China, he stated in a press release that he was proud of his fight for "smart" tax reform and hopeful that his years-long collaboration with Ranking Member Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Dave Camp (R-Michigan) "will pave the way for further [tax reform] momentum in the years ahead."

Based on his seniority on the Finance Committee, it was long pre-ordained that Ron Wyden (D-Oregon) would become Chairman once Senator Baucus became Ambassador Baucus. Senator Wyden’s ascension to Chairman set off Committee musical chairs in the Democratic Caucus, with Mary Landrieu (D-Louisiana) replacing him at the helm of the Energy Committee and Maria Cantwell (D-Washington) taking over Senator Landrieu’s chairmanship of the Small Business Committee. Senator Wyden is not well-known even among Washington insiders, so many will be watching him closely in the upcoming months to gauge his views on tax reform.

Back to Top

Sullenberger to Keynote 2014 Industry Conference

Chesley B. “Sully” Sullenberger, IIIChesley B. “Sully” Sullenberger, III, will bring an inspiring message to attendees as keynote speaker of the 2014 Options Industry Conference on May 1 in Austin, Texas.

While he is best known for serving as Captain during what has been called the “Miracle on the Hudson,” Sullenberger is an aviation safety expert and accident investigator, serves as the CBS News Aviation and Safety Expert and is the founder and chief executive officer of Safety Reliability Methods, Inc., a company dedicated to management, safety, performance and reliability consulting.

Prior to gaining worldwide attention, Sullenberger was a safety advocate throughout his four-decade long career. He was selected to perform accident investigation duties for the United States Air Force, and served as an Air Line Pilots Association (ALPA) representative during a National Transportation Safety Board investigation. Sullenberger served as a Local Air Safety Chairman for ALPA, and was a member of one of their national technical committees, where he contributed to the creation of a Federal Aviation Administration Advisory Circular. He was also instrumental in developing and implementing the Crew Resource Management course used by US Airways.

Back to Top

OIC Introduces New Education Initiatives

Options Education ProgramThe Options Industry Council announced a new education initiative to kick off the New Year, the Options Education Program (OEP). OEP offers a comprehensive platform for investors to learn about options for free.

The program provides investors, whether novice or advanced, access to leading industry professionals and a structured educational platform where they can learn at their own pace. OIC’s MyPath assessment tool is a core component of the program, allowing investors to create a customized learning path of courses, podcasts and videos based on their level of options knowledge. As individuals progress through the program, they can also take advantage of in-person learning by attending live seminars and events, ranging from basics to advanced topics, hosted by experienced instructors.

OIC also recently released a new mobile app for iOS devices. The app features an interactive strategy section, select online courses and convenient in-app registration for OIC's upcoming seminars and events. OIC plans to expand the educational content and mobile course offerings in later versions of the app.

Visit for more information.

Back to Top

New Formatted RBH/CPM FIXML Files Available

OCC developed versions of the Risk Based Haircut/Customer Portfolio Margin (RBH/CPM) theoretical profit and loss values files formatted in FIXML. The FIXML files are now available via DDS (Data Distribution Service) subscription and are valid for regulatory capital and margin calculations. The FIXML transmission will ultimately replace the existing flat file, though OCC will continue to support the current format until March 5, 2015.

The new FIXML formatted files contain theoretical profit and loss values for all products currently included on the existing flat file format. Whereas the existing flat files are delineated by account type, including Customer Portfolio Margin (CPM), Broker-Dealer and Market Maker, the FIXML formatted files are delineated by product type and translational purpose.

The following FIXML files are available for subscription:

  • RBH/CPM Parameters File
  • RBH/CPM Theoreticals File
  • Foreign Marginable Securities (FMS) Theoreticals File
  • FMS Translation File
  • OTC Theoreticals File

Additional information can be obtained by e-mailing

Back to Top

Upcoming Changes to Directory of Listed Products and Series Download Data

Effective March 28, 2014, OCC is changing the “Underlying Name” data field label to “Symbol Name” on the Directory of Listed Products and Series Download reports in order to better represent the data provided. Changes will affect the following reports:

Detailed changes are available in Information Memo #34026.

Back to Top

2013 OCC Charity Efforts Culminate in Success

Each year, employees at the Chicago and Keller offices work to raise money for two charities that can benefits from the company’s outreach efforts.

Chicago - OCC's Chicago office selected The Opportunity Knocks, which is dedicated to providing opportunities and resources for individuals with developmental and intellectual disabilities so they may pursue their educational, occupational and social interests. Numerous fundraising events held by OCC, executive lunch auction, White Sox/Cubs jersey day, raffles, supported The Opportunity Knocks and yielded a contribution of more than $30,000. The money raised went to the charity's Life Shop Program, which serves young adults who are 22 years and older who have an intellectual disability.

Keller - OCC employees in the Keller office supported Rocky Top Therapy Center. More than $22,000 was raised in support of the organization that blends equine therapy and compassionate counseling to heal and enable clients of all ages and abilities. Employees collected funds through jeans day, a bake sale, grill Friday event and silent auctions to provide equine therapy services to children whose insurance benefits do not cover services and also to a returned veteran.

Back to Top

*Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

Save the Date!

Register for the 2014 Options Industry Conference. This can't miss event takes place April 30-May 2 in Austin, Texas.

Clearing News & Resources

Volume Update
Interested in reading about what is happening with options volume? Click here for OCC's monthly volume press release.

OCC News Archive

Click here for prior issues.

One North Wacker Drive, Suite 500, Chicago, IL 60606     (312) 322-6200     Email OCC

The information contained in this newsletter is for general information purposes only. Although every attempt is made to ensure the accuracy of the information, OCC assumes no responsibility for any errors or omissions. All materials pertaining to rules and specifications are made subject to and are superseded by the By-Laws and Rules of OCC.