CHICAGO (March 2, 2010) - The Options Clearing Corporation (OCC) announced today that its Board of Directors recently approved a refund of $ 57,928,503 to Clearing Members for the year ended Dec. 31, 2009.
Since 2003, OCC has refunded all revenues in excess of operational expenses. For the years ended Dec. 31, 2008, 2007 and 2006 those refund amounts were $64.7 million, $58.7 million, and $45.2 million, respectively. Since 1974 OCC’s cumulative refunds and discounts have exceeded $1.2 billion.
The net clearing fee for 2009 was 1.6 cents per contract. This is a fraction of a penny higher than the 2008 net clearing fee, reflecting the smaller increase in contract volume relative to annual increases in operating costs.
“As options trading volume continues to rise—including last year’s record of more than 3.6 billion contracts—OCC has been able to consistently offer the lowest net cost of clearing in the world,” said Michael E. Cahill, OCC President and Chief Operating Officer. “We are pleased that while maintaining the lowest fees, we are also able to continue providing our members with the best clearing, settlement and risk management services, ensuring a solid foundation for the markets we serve.”
OCC is the world's largest derivatives clearing organization by contract volume and open interest. Founded in 1973, OCC operates under the jurisdiction of both the Securities and Exchange Commission (SEC) as a Registered Clearing Agency and the Commodity Futures Trading Commission (CFTC) as a Derivatives Clearing Organization. OCC now provides central counterparty (CCP) clearing and settlement services to 14 exchanges and platforms for options, financial and commodity futures, security futures and securities lending transactions.
As the CCP clearinghouse for the markets it serves, OCC assumes the counterparty risk of members involved in a trade—becoming the buyer to every seller and the seller to every buyer. OCC manages its risk of member default by collecting margin (collateral). Clearing member margin requirements are calculated using OCC’s proprietary System for Theoretical Analysis and Numerical Simulations (STANS) that uses large-scale Monte Carlo simulations to forecast price moves and correlations to make those margin determinations. In 1993, OCC became the first clearinghouse to receive a 'AAA' credit rating from Standard & Poor's Corporation, and has continued to receive that high rating every year as a result of its risk management standards.
OCC operates as a utility clearinghouse, owned by several of its participant exchanges but with a Board of Directors majority drawn from its clearing members, allowing it to provide highly efficient but low-cost solutions to the markets it serves. More information about OCC is available through its Web site at www.optionsclearing.com.