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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Notices deposited by Clearing Members. OCC
intended to remove that limitation when it eliminated preferred stock as a form of margin asset.10 Consequently, the Interpretation and Policys application of that now defunct provision to subaccounts is no longer relevant.
Rule 705 would be amended to reflect that interests or gains received or accrued on the investment of margins deposited in respect of cross margin accounts shall belong to the Corporation or the Participating CCOs rather than and as may be determined by mutual agreement between the parties, consistent with unmarked changes in the text as filed in connection with a prior proposed rule change.11
Interpretation and Policy .02 to Rule 1106 would be renumbered as .01, consistent with the deletion of the immediately Interpretation and Policy by a previous proposed rule change.12
Rule 2205 would be amended to reflect that OCC shall make available, rather than issue, information concerning stock loan positions and stock borrow positions resulting from Stock Loans, consistent with unmarked changes in the text as filed in connection with prior proposed rule changes.13
3. Correcting Erroneous CrossReferences
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Third, OCC has identified erroneous cross-references to provisions that have been renumbered by prior rule changes.
This proposed rule change would correct these erroneous crossreferences.14 In the case of erroneous 10 See Exchange Act Release No. 72206 May 21, 2014, 79 FR 30674, 30675 May 28, 2014 File No.
SROCC201407. As OCC explained, the limitation on margin credit was no longer necessary after eliminating preferred stock as an acceptable form of margin asset because additional charges for concentration positions are already determined under OCCs System for Theoretical Analysis and Numerical Simulations STANS.
11 See Exchange Act Release No. 58258 July 30, 2008, 73 FR 46133 Aug. 7, 2008 File No. SR
OCC200812.
12 See Exchange Act Release No. 67835 Sept. 12, 2012, 77 FR 57602 Sept. 18, 2012 File No. SR
OCC201214.
13 See Exchange Act Release No. 80171 Mar. 8, 2017, 82 FR 13690 Mar. 14, 2017 File No. SR
OCC2017004; Exchange Act Release No. 59294
Jan. 23, 2009, 74 FR 5958 Feb. 3, 2009 File No.
SROCC200820.
14 Specifically, OCC would update the crossreferences in the bracketed parentheticals that identify By-Laws or Rules supplemented or replaced by Article XII, Section 4A; Article XIII, Sections 1 and 3; Article XV, Section 1; Article XVI, Section 1; and Article XVII, Section 1 of the ByLaws and Rules 1401, 1402, 1403, 1404, 1503, 1703, 1704, 1805, and 2704. OCC would also amend erroneous cross-references in Rules 101, 304a, 309f, and 803 and Article XV, Section 1 of the ByLaws. The rationale for these amendments and the identification of the intervening rule filings that
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cross-references to definitions found in Article I of the By-Laws or Rule 101, OCC is proposing to replace citations to numbered paragraphs with references to the defined term. OCC believes citations to numbered paragraphs are unnecessary for definition sections that are alphabetized,15 and referring to the definitions by term rather than number will help avoid the need to update cross-references whenever the definition sections are amended.
4. Amendments to CMTA Processes Finally, OCC is proposing to remove references to certain identifiers related to the Clearing Member Trade Assignment CMTA process that were never implemented. Specifically, the provisions related to the Customer CMTA Indicator, CMTA Customer Identifier, and IB Identifier in Article I
of the By-Laws, Rule 401, and Rule 407
contemplated that participant exchanges would adopt rules to implement them, which did not occur.16 OCC proposes to remove the changes applied when it added the capacity for those identifiers.17
OCC would also clarify Rule 407b to address situations where the account designated by the Carrying Clearing Member to receive confirmed trades is not approved to hold a specific confirmed trade. Rule 407b does not provide for what happens in this event.
In such cases, it is OCCs practice to default to the Carrying Clearing Members customer or segregated futures account, as applicable, or, if the Carrying Clearing Member does not maintain such an account, to the Carrying Clearing Members firm account. In addition, OCC would delete the last sentence of Rule 407b, which provides for default accounts if an Executing Clearing Member failed to designate a default account for failed transactions. Executing Clearing Members are required to make a renumbered the referenced provisions is included in Exhibit 3 to File No. SROCC2021008.
Notwithstanding the amendments to Article XV, that Article remains inoperative until further notice by OCC. See Exchange Act Release No. 58977 Nov.
19, 2008, 73 FR 72097, 72098 Nov. 26, 2008 File No. SROCC200809.
15 The practice of referring to definition sections by number dates to OCCs original practice of adding new definitions sequentially to the end of the definition sections, which OCC ceased when it alphabetized the definition sections. See Exchange Act Release No. 30327 Jan. 31, 1992, 57 FR 4785
01 Feb. 7, 1992 File No. SROCC924.
16 See OCC Rule 401a Such confirmed trade information shall also include a Customer CMTA
Indicator, a CMTA Customer Identifier, and an IB
Identifier to the extent required under applicable Exchange rules..
17 See Exchange Act Release No. 51350 Mar. 9, 2005, 70 FR 12934 Mar. 16, 2005 File No. SR
OCC200419.

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designation prior to engaging in transactions, so the situation this provision is intended to address could not occur. Therefore, this last sentence is unnecessary and can be eliminated.
OCC believes that these proposed changes help to clarify OCCs Rules with respect to default accounts and reflect OCCs current practice.
2 Statutory Basis OCC believes the proposed rule changes are consistent with Section 17A
of the Securities Exchange Act of 1934
Exchange Act and the rules and regulations thereunder. Section 17Ab3F 18 of the Exchange Act requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities and derivatives transactions and protect investors and the public interest. By correcting typographical errors, omissions and erroneous crossreferences in OCCs By-Laws and Rules, as well as removing inoperative provisions, the proposed rule changes facilitate the administration of existing rules intended to promote the prompt and accurate clearance and settlement of securities and derivatives transactions and protect investors and the public interest.
In addition, Rule 17Ad22e1
requires OCC to, among other things, maintain written policies and procedures reasonably designed to, among other things, ensure a wellfounded, clear, transparent, and enforceable legal basis for each aspect of OCCs activities.19 By correcting errors and omissions in the text as filed with the SEC and removing inoperative provisions, the changes discussed above are intended to support the maintenance of OCCs By-Laws and Rules and improve their clarity and transparency.
The proposed rule change is not inconsistent with any existing rules of OCC, including any other rules proposed to be amended.
B Clearing Agencys Statement on Burden on Competition Section 17Ab3I of the Exchange Act requires that the rules of a clearing agency not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act.20 As discussed above, the proposed changes would correct typographical errors, omissions and erroneous crossreferences and remove certain 18 15

U.S.C. 78q1b3F.
CFR 240.17Ad22e1.
20 15 U.S.C. 78q1b3I.
19 17

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