Throughout 2018, OCC operated in a robust and resilient manner, clearing over 20 million contracts a day for our highest ever annual cleared volume, while providing the U.S. equity options and futures markets with unparalleled financial integrity.
We achieved this as we continue to transform from being a cost-efficient provider of transaction processing services to support the growth of the options market, to providing highly resilient risk management, clearance and settlement services as the foundation for secure markets.
In 2018, we continued to make progress to meet our heightened expectations as a Systemically Important Financial Market Utility (SIFMU). Enhancing OCC's resiliency is critical to our continued ability to reduce systemic risk, increase market transparency, and provide capital and collateral efficiencies for the users of the U.S. options markets.
This progress included regulatory approval of the following OCC initiatives:
- Phase One of our Financial Safeguards Framework;
- Recovery tools and Recovery and Orderly Wind-down Plan;
- Minimum cash requirement in the OCC Clearing Fund;
- Margin and model risk management policies;
- Rule changes to clarify OCC's trade acceptance and novation practices, and;
- Rule changes to calibrate our margin coverage for all risk factors in STANS on a daily basis.
Our new Financial Safeguards Framework enhances OCC's resiliency by resizing the Clearing Fund to cover the simultaneous default of our two largest clearing firms ("Cover Two") versus a default by our single largest clearing firm ("Cover One"). This exceeds U.S. regulatory requirements and allows OCC to meet international standards, which will be important as we continue to pursue recognition as a "Qualified Central Counterparty" in Europe. It also allowed us to return $3 billion in capital efficiencies to our clearing firms.
Meeting this Cover Two requirement also allowed OCC to maintain its exceptional AA+/Stable credit rating by Standard & Poor's (S&P). Of the over 9,000 global entities and sovereigns rated by S&P, only one percent have a AA+/Stable rating like OCC, which reflects well on our efforts to strengthen our Financial Safeguards Framework and promote stability and market integrity through effective and efficient clearance, settlement and risk management services.
As an industry advocate, OCC continues to play a leading role with the U.S. Securities Markets Coalition to educate domestic and international policymakers on the importance of the exchange-listed options industry to investors. This effort helped secure passage of the Options Markets Stability Act by the U.S. House of Representatives. We will continue to advocate for policies that support a healthy and vibrant options industry, including engaging on issues relative to capital and market regulation, taxation and risk management.
In 2018, The Options Industry Council (OIC), an industry resource managed by OCC, continued to provide unbiased education to retail investors, financial advisors, and institutions about the benefits and risks of exchange-listed options as risk management solutions. OIC reached about 10,000 investors through its webinar and simulcast series, which has contributed to the increased use of options by investors.
We continued to transform our governance structure by adding and re-electing five financial services experts to our board of directors, and we enhanced our team by adding capability to our Enterprise Risk Management, Security Services, Financial Risk Management, Compliance and Internal Audit functions. Following on the successful move of our Dallas colleagues in 2017, we moved our Chicago colleagues into brand new office space, providing them with an open and collaborative work environment and making OCC a more attractive destination for the best talent.
As we look ahead, OCC is working to modernize its technology infrastructure, in what will be the most important effort we will undertake to better serve market participants. While the ENCORE technology clearing system has served OCC well for over two decades, change is required if we are to continue to meet our obligations as a SIFMU, become increasingly innovative and agile as an organization, and grow as a business. During this modernization effort, we will continue to invest in ENCORE and deliver effective and efficient clearance and settlement services in a manner that minimizes any impact to our current operations.
Everyone at OCC remains committed to strengthening our resiliency and risk management capabilities, to ensure confidence in the financial markets and the broader economy, and to continue to clear the path for growth in the U.S. exchange-listed options industry.
To learn more about OCC's thought leadership on industry issues, visit OCC's Blog.