SEC to review OCC capitalization plan

8 November 2015


The Securities and Exchange Commission on Sept. 10 issued an order lifting a stay of approval on the OCC’s plan to raise additional capital and a second order initiating a review of the approval.

The OCC’s plan was approved by SEC staff in March, but it was put on hold after several exchanges and broker-dealers raised concerns about how the OCC plans to raise the capital and the implications for competition in the U.S. options markets.

“We are pleased that the SEC agreed with the OCC that the concerns raised by petitioners do not justify maintaining the stay during the pendency of the Commission’s review,” Craig Donoghue, OCC’s executive chairman, said in a statement after the SEC issued the Sept. 10 order.

The capital plan is designed to help the OCC meet the higher standards now required for systemically important financial market infrastructures. The plan would increase shareholder equity in the OCC to $247 million through a combination of additional equity from the four exchange groups that own the clearinghouse and the retention of its earnings. In return for the increased equity, the four owner exchanges would receive an annual dividend.

The group opposing the plan includes three options exchanges that are not part of the OCC’s ownership— Bats Global Markets, Miax Options and Box Options— and two broker-dealers, KCG Holdings and Susquehanna International Group.

  • MarketVoice