SIFMA Submits Comment Letters to SEC on OCC-Proposed Rule Changes

SIFMA submitted two comment letters to the SEC regarding two proposed rule changes filed by the Options Clearing Corporation ("OCC") on (i) curtailing the use of the "dividend plays" trading strategy, and (ii) price reasonableness checks on confirmed trades.

Regarding dividend plays, the OCC proposed to add an interpretation and policy to Rules 801 and 805, respectively, stating that the "OCC will process all sales of options in a Market-Maker's account prior to the exercise of any long call options in the account to ensure that only net long positions in a particular series may be exercised."

The other proposed rule change would add an interpretation and policy to implement price reasonableness checks on confirmed trades in standardized options and futures options to increase the likelihood that erroneous trades will be identified and voided.

SIFMA stated it strongly agrees with both rule changes, and urged the SEC to approve the added interpretations and policies.

See: SIFMA Comment Letter to SEC on Dividend Plays Rule Change; SIFMA Comment Letter to SEC on Price Reasonableness Checks Rule Change; SIFMA Press Release.