OCC Declares Clearing Member Refund and Dividend for 2015 and Reduction of Fees under Approved Capital Plan

Special Refund for 2015 Also Declared

CHICAGO--()--OCC, the world’s largest equity derivatives clearing organization, today announced the declaration of a refund, dividend, and fee reduction under its approved capital plan.1 The refund of approximately $39 million2 to clearing members and the dividend of approximately $17 million3 to Stockholder Exchanges will be paid in Q1 2016 following issuance of OCC’s financial statements. The new fee schedule, included below, will commence on March 1, 2016, and will result in a reduction in the average clearing fee of approximately 19% from current levels.

OCC also announced a special refund of 2015 clearing fees of approximately $72 million. The special refund represents the excess of 2015 pre-tax net income over OCC’s target revenue based on achievement of a 25% business risk buffer. Payment of the 2015 special refund, and the previously declared 2014 refund of $33.3 million, will be made as soon as practicable in 2016 upon further determination that the 2015 special refund and 2014 refund amounts will not cause OCC’s capital to fall below its total equity capital resource requirement of $247 million.

The SEC has approved OCC’s capital plan and more recently issued an order discontinuing the automatic stay that resulted from the filings of various petitions for review of the approval order. In doing so, the SEC noted that strengthening the capitalization of OCC is a compelling public interest and that the concerns raised by the petitioners did not justify continuation of the stay. “Our actions taken under the approved capital plan are consistent with the operative fee, refund, and dividend policies approved by the SEC and align with regulatory expectations under the approval order,” said Craig Donohue, OCC Executive Chairman. He added, “It will also ensure OCC has the amount of capital needed to comply with existing and proposed capital requirements.”

The following schedule of revised fees will be effective as of March 1, 2016.

SCHEDULE OF REVISED FEES

Tier       Current Fee       New Fee
1-500 $0.050/per contract $0.041/per contract
501-1000 $0.040/per contract $0.032/per contract
1001-2000 $0.030/per contract $0.024/per contract
>2000 $55.00/per trade $46.00/per trade

Market maker/specialist scratch and linkage fees per side will remain unchanged at $0.020.

Additionally, the board has approved a flat fee schedule that will be separately implemented following OCC’s regulatory filing with the SEC. The flat fee schedule will provide greater simplicity and preserve the approximately 19% fee reduction described above.

About OCC

OCC is the world’s largest equity derivatives clearing organization and the foundation for secure markets. Founded in 1973, OCC operates under the jurisdiction of both the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC). OCC now provides central counterparty (CCP) clearing and settlement services to 18 exchanges and trading platforms for options, financial futures, security futures and securities lending transactions. More information about OCC is available at www.theocc.com.

1 For information about the approved capital plan, see http://www.theocc.com/about/newsroom/releases/2015/09_11.jsp.
2 Amounts for the 2015 refund, dividend, and special refund are based on 2015 projections and subject to change based on the completion of OCC’s annual financial statements.
3 Pro-ration based on Stockholder Exchange funding commencing on March 3, 2015.

Contacts

OCC
David Prosperi, 312-322-4484
dprosperi@theocc.com

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Contacts

OCC
David Prosperi, 312-322-4484
dprosperi@theocc.com