OCC Gets Approval for Smoother Shutdown and Recovery Plans
Published Date: 8/4/2025
Notice
Summary
The Options Clearing Corporation (OCC) got the green light to update its plan for handling tough times, like if it needs to shut down smoothly or recover from big problems. These changes help protect everyone who trades options and futures by making sure the OCC can manage risks better and keep things running safely. The new rules kick in soon, with no extra costs for members, making the financial playground safer and more reliable.
Analyzed Economic Effects
4 provisions identified: 3 benefits, 1 costs, 0 mixed.
SEC Approves OCC RWD Plan Update
The Securities and Exchange Commission approved OCC's changes to its Recovery and Orderly Wind-Down (RWD) Plan on July 30, 2025. The amendments are meant to help OCC more clearly identify and continue its core payment, clearing, and settlement services for listed options and certain futures in the event of severe stress, supporting more reliable market functioning for people who trade these products.
Annual RWD Plan Testing Required
OCC will require testing of its ability to implement the RWD Plan at least every 12 months. The tests must report results to OCC's Board and require participation by participants and, in some instances, stakeholders.
Clearing Fund Use and Replenishment Clarified
The RWD Plan is revised to state that OCC pays deficiencies (rather than losses) from the Clearing Fund, removes language requiring an initial determination that unsecured borrowing is unavailable before using the Clearing Fund, and clarifies that Clearing Fund replenishment would not be required until a borrowing is deemed a charge against the Clearing Fund.
Escrow Deposit Program: Cash As Collateral
The revised RWD Plan describes OCC's Escrow Deposit Program, which allows a customer of an OCC Clearing Member to use cash deposited with an Escrow Bank as supporting collateral for Escrow Deposits. Each customer must enter a Tri-Party Agreement with the Bank and OCC to use cash in this way.
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