Options Clearing Corporation
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[edit] The Options Clearing Corporation (OCC)
The Options Clearing Corporation (OCC), founded in 1973, is the world's largest equity derivatives clearing organization. We are dedicated to promoting stability and financial integrity in the marketplaces that we serve by focusing on sound risk management principles. By acting as guarantor, we ensure that the obligations of the contracts we clear are fulfilled.
Without this guarantor of these types of contracts, it is argued that the market for options and futures would be quite complex, speculative, and far below investment grade. Financial professionals are interested in true securities, which options are considered to be. Like all securities, their investment merit is largely comprised of their ability to be guaranteed (i.e. their legitimacy). Without the OCC, it is argued that an option or future contract would be too intangible to have any investment merit.
As the marketplace evolves, so do our clearing capabilities. Although we began as a clearinghouse for listed equity options, we have grown into a globally recognized entity that clears a multitude of diverse and sophisticated products. OCC operates under the jurisdiction of both the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). Under its SEC jurisdiction, OCC clears transactions for put and call options on common stock and other equity issues, stock indexes, foreign currencies, interest rate composites and single-stock futures. As a registered Derivatives Clearing Organization (DCO) under CFTC jurisdiction, we offer clearing and settlement services for transactions in futures and options on futures contracts.
Overseeing OCC is a clearing member dominated board of directors. OCC operates as an industry utility and receives most of its revenue from clearing fees charged to its members. We offer volume discounts on fees and, as applicable, refund excess fees to our clearing members.
Participant Exchanges and Clearing Members
OCC's participant exchanges include: American Stock Exchange, Chicago Board Options Exchange, International Securities Exchange, NYSE Arca, Philadelphia Stock Exchange, and the Boston Stock Exchange. Our clearing members serve both professional traders and public customers and comprise approximately 130 of the largest U.S. broker-dealers, futures commission merchants and non-U.S. securities firms. OCC's goal is to service clearing members and the exchanges through an operating plan that emphasizes timely, reliable and cost-efficient clearing operations.
OCC also serves other markets, including those trading commodity futures, commodity options, and security futures. We clear commodity contracts traded on CBOE Futures Exchange and Philadelphia Board of Trade, respectively, as well as security futures contracts traded on OneChicago.
