The Options Clearing Corporation (OCC) filed a proposed rule change to amend the definition of “Fund Share” in its by-laws. This change aligns with the Commodity Futures Trading Commission's (CFTC) advisory indicating that options on spot commodity exchange traded funds (ETFs) are likely to be considered securities, thus falling under SEC oversight. The proposed changes will remove the need for product-by-product exemptions previously sought from the CFTC, providing clearer guidelines for market participants, and ensuring OCC's by-laws remain current and clear. The rule change aims to facilitate the efficient clearance of these options without significantly impacting competition or investor protection.
Simple Explanation
The Options Clearing Corporation wants to change their rules to make it clearer that certain types of stock options (linked to commodities) are looked after by one group of rule makers, the SEC, instead of needing special exceptions each time. This helps everyone understand the rules better and keeps the system running smoothly without making it harder for others to join or for people to stay safe.