SEC approves OCC capital plan
On Feb. 11, the Securities and Exchange Commission issued an order approving the OCC’s plan to raise capital. The commission’s approval came after the agency conducted an in-depth review of the plan in response to objections raised by several exchanges and broker-dealers.
“We are pleased that the SEC has granted final approval of OCC’s capital plan,” said Craig Donohue, OCC executive chairman, in a statement. “Through this action, the SEC has confirmed that strengthening OCC’s capitalization is a compelling public interest and has acknowledged OCC’s importance to the U.S. financial markets as a systemically important financial market utility.”
The OCC’s capital plan was initially approved by SEC staff in March, but on Sept. 10 the SEC issued an order lifting that stay of approval and a second order to initiate a review of the approval.
The plan is designed to help the OCC meet the higher standards now required for systemically important financial market infrastructures. The plan will allow the clearinghouse to boost shareholder equity to $247 million through a combination of additional funding from the four exchange groups that own the clearinghouse and the retention of its earnings. In return for the increased equity, the exchanges will receive an annual dividend.
