Íø±¬³Ô¹Ï

Home   News   Features   Interviews   Magazine Archive   Symposium   Industry Awards  
Subscribe
Íø±¬³Ô¹Ï
Leading the Way

Global Íø±¬³Ô¹Ï Finance News and Commentary
≔ Menu
Íø±¬³Ô¹Ï
Leading the Way

Global Íø±¬³Ô¹Ï Finance News and Commentary
News by section
Subscribe
⨂ Close
  1. Home
  2. Industry news
  3. US SEC approves OCC capital management policy
Industry news

US SEC approves OCC capital management policy


31 January 2020 Chicago
Reporter: Natalie Turner

Generic business image for news article
Image: Shutterstock
The Options Clearing Corporation (OCC) has been given the green light for its capital management policy from the US Íø±¬³Ô¹Ï and Exchange Commission (US SEC).

The core elements of the Chicago-based equity derivatives clearinghouse’s policy provide OCC’s approach to determining clearing fees inclusive of an operating margin based on the variance in daily volume.

It also identifies the considerations made in determining OCC’s level of target capital on an annual basis and to monitor its capital levels to identify whether capital has fallen or is in danger of falling.

If this were to be the case, the policy also includes a contingency plan of replenishing additional capital if it falls below defined thresholds.

According to Craig Donohue, OCC’s executive chairman, the capitalisation will help to “increase market transparency, and provide capital and operational efficiencies for the participants in the US exchange-listed options, futures and securities lending markets."

In the event of a clearing member default, OCC explains, the amount of equity capital above 110 percent of the target capital requirement will be available to offset the loss after utilising the margin and clearing fund contributions of the default clearing member.

Additionally, OCC will contribute the funds held under its executive deferred compensation plan (EDCP), to the extent such funds are deposited on or after 1 January and in excess of amounts necessary to pay for benefits vested under the EDCP at such time, on a pro-rata basis with clearing member fund contributions.

OCC’s chief operating officer Scot Warren says that the policy’s fair swift approval was due in part to the feedback received from OCC clearing member firms and other market participants.

“This policy will ensure OCC maintains appropriate financial resources to continue providing critical services to our participating exchanges, clearing member firms, and their customers in the unlikely event of a material operational loss," he says.
← Previous industry article

OCC sees back-to-back new loan activity fall
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Íø±¬³Ô¹Ï Finance Times
Advertisement
Subscribe today
Knowledge base

Companies in this article
→ OCC

Explore our extensive directory to find all the essential contacts you need

Visit our directory →
Glossary terms in this article
→ Default

Discover definitions, explanations and related news articles in our glossary

Visit our glossary →