OCC Files Motion with SEC to Lift Automatic Stay of Approval Order of Capital Plan

April 02, 2015
Chicago -

OCC, the world's largest equity derivatives clearing organization, today said it has filed a motion with the U.S. Securities and Exchange Commission to lift the current stay of the approval order of its proposed capital plan. Under the SEC's rules, the stay was instituted automatically after petitions were filed and is part of the SEC's approval process.

"OCC is seeking to lift the stay of the approval order and move forward with the implementation of our capital plan. We are hopeful that this matter will be resolved promptly as we believe no new issues were raised by the petitions and that the benefits of OCC's capital plan are exceedingly valuable to market participants," said Craig Donohue, OCC Executive Chairman. "OCC's capital plan is a balanced approach, designed in the best interest of our clearing members, their customers, the exchanges and OCC. While significantly strengthening our capital base, it allows us to meet the heightened capital requirements critical for SIFMUs like OCC in a timely manner," he added.

On February 26 the SEC issued a "notice of no objection" to OCC's advance notice describing its capital plan, in which the SEC stated that the plan "contributes to reducing systemic risks and supporting the stability of the broader financial system." On March 6, after extensive consideration of industry comments, the SEC approved OCC's proposed rule change in support of the plan, which was approved by the SEC through delegated authority to its staff. Even with the approvals, the SEC's rules of practice permit petitions requesting review of the approval order.

The OCC capital plan was designed to strengthen OCC's capital base and facilitate its compliance with proposed SEC regulations for Systemically Important Financial Market Utilities as well as international standards applicable to financial market infrastructures. When the plan was approved, OCC announced a refund of $33.3 million from 2014 fees to its clearing members and the return to a lower fee schedule with reductions by approximately 19 percent. The implementation of the refunds and fee reductions was automatically stayed by the filing of the petitions until the SEC orders otherwise, and OCC intends to implement them as soon as the SEC allows.

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