S&P AND THE OPTIONS CLEARING CORPORATION
BRING CENTRAL COUNTERPARTY CLEARING TO OTC INDEX OPTIONS
Landmark Agreement Allows OCC to Clear OTC Options Based on S&P Indices
NEW YORK and CHICAGO (September 20, 2010) - Standard & Poor’s, the world’s leading index provider, and The Options Clearing Corporation (OCC), the world's largest equity derivatives clearing organization, announced today that S&P has licensed the OCC to clear Over-The-Counter (OTC) options based on the S&P 500.
This landmark agreement represents the first time that central counterparty clearing will be available for OTC options based on the S&P 500, and marks OCC’s first step into OTC equity derivatives clearing.
The licensing agreement between S&P and OCC, which also covers the S&P MidCap 400 and S&P SmallCap 600, will provide for greater risk management in the OTC equity derivatives marketplace served by these key indices. OCC will leverage its existing systems to provide clearing services. Pending regulatory approval, OCC expects to launch the service in summer 2011.
“OCC is pleased to work with S&P in taking this first step toward bringing the CCP clearing benefits of greater efficiency and risk reduction to the OTC equity derivatives arena,” said Wayne P. Luthringshausen, OCC Chairman and CEO. “We will continue to work with our clearing members and market participants to best serve the needs of this evolving marketplace.”
“This landmark licensing agreement is a prime example of Standard & Poor’s helping to bring greater transparency and precision to the U.S. marketplace,” says Alex Matturri, Executive Managing Director at S&P Indices. “It also marks the first time that any index provider has licensed its indices for central counterparty clearing.”
Widely considered the single best gauge of the U.S. equity market since its launch in 1957, the S&P 500 is the world’s most followed stock market index with $1.1 trillion directly indexed and $4.83 trillion benchmarked to it.
About S&P Indices
S&P Indices, the world’s leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. For more information, please visit www.standardandpoors.com/indices.
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.
OCC is 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.