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Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of Proposed Rule Change by The Options Clearing Corporation To Establish a Commercial Paper Program
Plain English Summary
The Options Clearing Corporation (OCC) is making changes to its rules that will affect how it manages liquidity in case a member defaults. They are introducing a Commercial Paper Program and a non-bank liquidity facility. This means OCC can use government securities from a defaulting member or the Clearing Fund to engage in transactions with institutional investors like insurance companies and pension funds. This is designed to limit the risk of relying too heavily on any one counterparty. Agents should stay informed about these changes as they may impact how they handle transactions involving OCC.
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and (B) a non-bank liquidity facility program, through which OCC may use Government securities deposited by the defaulting Clearing Member or borrowed from the Clearing Fund to enter into repurchase transactions with institutional investment counterparties, such as <span class="match">insurance</span> companies and pension funds, that do not increase the concentration of OCC's counterparty exposure to its participants
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(together with the syndicated bank credit facility, the “committed facilities”).
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Together, the Clearing Fund Cash Requirement and committed