Daily Rules, Proposed Rules, and Notices of the Federal Government
Rule 19b-4 thereunder
Clearing Corporation ("OCC") filed with the Securities and Exchange Commission("Commission") the proposed rule change as described in Items I, II and III below, which Itemshave been prepared primarily by OCC. OCC filed the proposed rule change pursuant to Section 19(b)(3)(A)
OCC proposes to clarify the applicability of OCC's rules governing delivery of Treasury securities underlying Treasury futures contracts to futures on Treasury securities with maturities of greater than 25 years.
In its filing with the Commission, OCC included statements concerning
The purpose of this proposed rule change is to clarify the applicability of OCC's Rules governing delivery of Treasury securities underlying Treasury futures contracts to futures on Treasury securities with maturities of greater than 25 years, which are currently traded on ELX Futures, L.P. ("ELX").
Clearing members that are, or that represent, the seller of a physically-settled Treasury future must make delivery of the underlying Treasury security in accordance with the procedures set forth in Rule 1302B. A clearing member need not deliver Treasury securities of a particular issue to satisfy a delivery obligation.
ELX trades futures on Treasury securities of various maturities, including futures on treasury bonds with a maturity of greater than 25 years ("Ultra-Long Treasury Futures"). Under the rules of ELX, delivery obligations on Ultra-Long Treasury Futures may be satisfied by delivering Treasury bonds that, if not callable, have a remaining term of at least 25 years, or if callable, are not callable for at least 25 years. Interpretation and Policy .02 does not specifically address the delivery of Treasury bonds with maturities of 25 years or greater against Ultra-Long Treasury Futures. Accordingly, OCC is proposing to amend Interpretation and Policy .02 to Rule 1302B to provide that the characteristics of Treasury securities that may be delivered in settlement of futures on Treasury securities will be as set forth in the relevant exchange rules and reflected in OCC's procedures. This amendment will clarify the applicability of Rule 1302B to Ultra-Long Treasury Futures, as well as accommodate futures on other Treasury securities that may be introduced by an exchange at a later date that allow for delivery of Treasury securities with different maturity dates than those currently listed in Interpretation and Policy .02.
OCC believes that the proposed rule change is consistent with the purposes and requirements of Section 17A of the Securities Exchange Act of 1934, because they are designed to permit OCC to perform clearing services for products that are subject to the jurisdiction of the Commodity Futures Trading Commission ("CFTC") without adversely affecting OCC's obligations with respect to the prompt and accurate clearance and settlement of securities transactions or the protection of investors and the public interest. The proposed rule change is not inconsistent with any rules of OCC, including any that are proposed to be amended.
OCC does not believe the proposed rule change would impose any burden oncompetition.
Written comments on the proposed rule change were not and are not intended to besolicited with respect to the proposed rule change and none have been received.
The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A)(iii)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
* Use the Commission's Internet comment form (
* Send an email to
* Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All comments received will be posted without change; the Commission does