Bloomberg News

OCC to Clear Over-The-Counter S&P Index Options This Quarter

January 06, 2012

Jan. 6 (Bloomberg) -- OCC, which clears and settles all equity options trades on U.S. exchanges, plans to begin processing over-the-counter transactions in three Standard & Poor’s indexes this quarter.

The Chicago-based organization will clear trades in the S&P 500 Index, S&P Midcap 400 Index and S&P Smallcap 600 Index, according to a regulatory filing dated Jan. 3. The company may clear transactions that occur away from exchanges based on other indexes and individual securities in the future, OCC said.

The SEC must approve the request before OCC can clear the products. The agency requested comments on the proposal.

OCC will determine the margin required from clearing firms by using its STANS system, which it employs for exchange-traded options, the proposal said. Over-the-counter options will not be interchangeable with exchange-traded products, although they will be among themselves if they have identical terms, OCC said.

--Editor: Chris Nagi

To contact the reporter on this story: Nina Mehta in New York at nmehta24@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.


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