OCC issuing $39m refund to clearing members
21 December 2015 Chicago
Image: Shutterstock
OCC will implement its approved capital plan in 2016, issuing a $39 million refund to clearing members and a dividend of $17 million to stockholder exchanges, and a new fee schedule marking a 19 percent drop in cost.
Both the refund and dividend will be paid in Q1 2016, following OCC’s financial statements, and the new fee schedule will begin on 1 March 2016.
Shareholders’ equity will increase from $25 million to $247 million.
The announcement comes after the SEC approved the capital plan. In September the SEC issued an order to stop a delay to the plan, which was put in place automatically because of various petitions filed against it by options competitors.
The plan allows OCC to refund about $72 million in 2015 clearing fees, on top of $33.3 million in 2014 clearing fees. These figures are based on pre-tax net incomes that exceeded OCC’s target revenues, including a 25 percent risk buffer.
Payment for this refunds will be made in 2016 “as soon as practicable”, according to OCC. The exact date will depend on determination that the refunds will not lead to OCC’s capital falling below its resource requirements, which currently stands at $247 million.
When the SEC ordered the end of the stay on the plan, it stated that the capitalisation of OCC is of public interest, and that the concerns raised by competitors did not warrant putting a stop to the plan.
Craig Donohue, executive chairman of OCC, said: "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."
He added, "It will also ensure OCC has the amount of capital needed to comply with existing and proposed capital requirements."
Both the refund and dividend will be paid in Q1 2016, following OCC’s financial statements, and the new fee schedule will begin on 1 March 2016.
Shareholders’ equity will increase from $25 million to $247 million.
The announcement comes after the SEC approved the capital plan. In September the SEC issued an order to stop a delay to the plan, which was put in place automatically because of various petitions filed against it by options competitors.
The plan allows OCC to refund about $72 million in 2015 clearing fees, on top of $33.3 million in 2014 clearing fees. These figures are based on pre-tax net incomes that exceeded OCC’s target revenues, including a 25 percent risk buffer.
Payment for this refunds will be made in 2016 “as soon as practicable”, according to OCC. The exact date will depend on determination that the refunds will not lead to OCC’s capital falling below its resource requirements, which currently stands at $247 million.
When the SEC ordered the end of the stay on the plan, it stated that the capitalisation of OCC is of public interest, and that the concerns raised by competitors did not warrant putting a stop to the plan.
Craig Donohue, executive chairman of OCC, said: "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."
He added, "It will also ensure OCC has the amount of capital needed to comply with existing and proposed capital requirements."
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