Options Corp. Refines Rules for Contract Adjustments
Published Date: 12/17/2025
Notice
Summary
The Options Clearing Corporation (OCC) is updating its rules on how options contracts get adjusted, making things clearer and more organized. This change affects traders and firms using OCC’s services, aiming to keep contract adjustments smooth and fair. The SEC gave a thumbs-up quickly, so these updates will roll out soon without any extra costs for users.
Analyzed Economic Effects
5 provisions identified: 2 benefits, 2 costs, 1 mixed.
Adjustments Include Foreign Withholding Tax
OCC will generally make contract adjustments net of any relevant foreign withholding taxes under proposed Rule 2803(l), except where local tax authorities issue rulings that exempt groups and OCC reasonably believes U.S. investors can be included. OCC also says it will investigate withholding information on foreign securities and take that into account when available.
Small Cash Dividends Below $0.125 Not Adjusted
OCC continues its practice (codified in Rule 2803(c)(2)) of generally not making adjustments for cash dividends or distributions that are less than $0.125 per share for stock option contracts. OCC also states that this general rule does not apply to cash paid in lieu of fractional share entitlements.
Cash-in-Lieu Aligns With DTC Practice
Under proposed Rule 2803(k), when an adjusted deliverable includes cash in lieu of fractional shares, OCC will generally align its cash-in-lieu amounts with determinations made by the central securities depository clearing agency (e.g., the Depository Trust Company), though OCC may in rare cases independently determine a cash-in-lieu price.
OCC May Set Cash Value When Delays Likely
Proposed Rule 2803(j) explicitly permits OCC to determine the cash value of distributed property in adjustments, including in circumstances where the final amount or distribution may not be determinable for a long period, so that timely settlement can occur.
Deliverable for Election Mergers Clarified
Proposed Rule 2803(i) states that in election mergers or similar shareholder-election events, the adjusted deliverable will generally be based on the consideration accruing to a non‑electing shareholder if OCC determines it can readily facilitate delivery of that consideration, making explicit prior practice.
Your PRIA Score
Personalized for You
How does this regulation affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this federal register document and every other regulation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Key Dates
Department and Agencies
Related Federal Register Documents
2026-07651 — Concept Release on Consolidated Audit Trail and Other Audit Trails and Data Sources
The SEC wants your thoughts on how it tracks stock market trades using the Consolidated Audit Trail and other data tools. They’re thinking about updating rules to keep up with new tech, privacy, and security needs, and to make sure the system is fair and cost-effective. If you’re involved in the stock market or data tracking, speak up by June 22, 2026!
2026-10241 — Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the DTC Operational Arrangements (Necessary for Securities to Become and Remain Eligible for DTC Services)
The Depository Trust Company (DTC) is updating its rules to make it easier and clearer for agents handling corporate offers like tenders and subscriptions through its automated systems. This change affects companies and agents using DTC services to process these offers and starts right away with no extra costs. It’s all about smoother, faster, and more reliable processing for everyone involved!
2026-10244 — Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Fee Schedule Applicable to Members Concerning Equities Transaction Pricing
Investors Exchange (IEX) is updating its fee schedule starting June 1, 2026. Members who trade stocks will see changes in how they qualify for rebates and fee discounts based on their trading volume. These tweaks aim to make fees fairer and encourage more trading activity on the exchange.
2026-10245 — Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 3120 To Increase the Position and Exercise Limits for Options on the iShares Bitcoin Trust ETF
BOX Exchange is raising the limits on how many options traders can hold and exercise for the iShares Bitcoin Trust ETF. This change lets bigger players trade more freely and takes effect immediately, matching similar moves by other exchanges. If you trade these options, get ready for bigger opportunities starting now!
2026-10129 — The Goldman Sachs Group, Inc.
Goldman Sachs is asking the SEC for special permission to create investment funds just for its employees, letting them skip some usual rules. This change mainly affects Goldman Sachs workers and could speed up how these funds work without changing important protections. If no one objects by June 12, 2026, the SEC will approve this request.
2026-10168 — Agency Information Collection Activities; Submission for OMB Review; Comment Request; Extension: Rule 17a-2
The SEC is asking to keep the rules that require underwriters to keep records about certain stock market activities for three years. About 647 companies spend around 3,235 hours and $530,000 yearly to follow these rules. This extension keeps things running smoothly without adding new costs or changes.
Previous / Next Documents
Previous: 2025-23076 — Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Fees for the Trades and Spread Feeds
Starting January 1, 2026, Nasdaq PHLX LLC will charge fees for two new data feeds called the Trades Feed and the Spread Feed. These fees affect traders and firms who use this market data to make decisions. The change is already approved and aims to help the exchange cover costs while keeping the data flowing smoothly.
Next: 2025-23078 — Submission for Office of Management and Budget Review; Sexual Risk Avoidance Education Program Performance Analysis Study
The government is asking to keep collecting and updating data on the Sexual Risk Avoidance Education program, which helps teach kids to avoid risky behaviors. Starting July 2026, they’ll simplify surveys based on feedback to make things clearer for program participants and providers. This affects grant recipients who report on their progress, with public comments open until January 16, 2026, and no new costs expected.