The OCC was charged with not having appropriate risk management procedures in place.
US regulator, the Securities and Exchange Commission (SEC), alongside the Commodity Futures Trading Commission (CFTC) revealed on Wednesday that it has reached a settlement with the Options Clearing Corporation (OCC), which will see the clearing organization undertake remedial efforts and pay $20 million in penalties.
The SEC and CFTC had charged the Chicago-based clearing organization with failing to have policies and procedures involving financial Risk Management, operational requirements, and information systems security. In addition, the SEC’s order also accused the OCC of changing its policies on core risk management issues without obtaining approval from the regulator.
OCC is the sole registered clearing agency for exchange-listed options contracts on equities in the United States. It is also the largest equity derivatives clearing organization in the world.
By settling, the clearing company has neither admitted nor denied the SEC’s and CFTC’s findings. Altogether, it will pay $20 million in penalties. $15 million of this is under the SEC’s order and $5 million under the CFTC’s order. The company will also hire an independent compliance auditor.
Commenting on the settlement, SEC Chairman Jay Clayton said: “As a clearing agency, OCC performs a range of services that are critical to the effective operation of the securities markets. Today’s resolution is intended to ensure that OCC will have appropriate policies and procedures in place to meet its obligations to our financial system.”
OCC response to settlement with SEC and CFTC
The OCC, has, in turn, released its own statement regarding the settlement. The company states that a settlement was able to be reached because of the clearing agency’s cooperation and remediation efforts it has already undertaken.
"We take our responsibility to promote the stability and integrity of markets seriously, and we are committed to operating as a resilient Clearing House and maintaining the highest standards of regulatory compliance throughout our organization,” added OCC Chief Executive Officer John Davidson.
“Our commitment is reflected in the progress we have made as most of the compliance remediation is now complete and any remaining actions are on a path to be completed expeditiously. We look forward to continuing to work constructively with our regulators as our transformation continues."
OCC overhauls leadership team, names new CEO
As part of this process, the OCC has replaced many of its senior executives at the direction of its Executive Chairman and Board of Directors. This saw the company hire a new CEO, Chief Operating Officer, Head of Financial Risk Management, Chief Information Officer, Chief Security Officer, and heads of control function. It has also increased its staff members in the area of risk management, compliance, legal, and information technology.
Speaking on the changes, Executive Chairman Craig Donohue continued: "On behalf of OCC's Board of Directors, I want to thank our regulators for their support and cooperation in resolving these matters.
“For the past five years, OCC has been engaged in a comprehensive transformation effort to strengthen our financial resiliency, our people, our compliance processes, and our technology to meet new and heightened regulatory obligations and to better serve market participants and the investing public.
“I, along with our Board of Directors, believe we have the right leaders in place in John Davidson, Scot Warren and our new management team to successfully move OCC forward in our role as a Systemically Important Financial Market Utility."
US regulator, the Securities and Exchange Commission (SEC), alongside the Commodity Futures Trading Commission (CFTC) revealed on Wednesday that it has reached a settlement with the Options Clearing Corporation (OCC), which will see the clearing organization undertake remedial efforts and pay $20 million in penalties.
The SEC and CFTC had charged the Chicago-based clearing organization with failing to have policies and procedures involving financial Risk Management, operational requirements, and information systems security. In addition, the SEC’s order also accused the OCC of changing its policies on core risk management issues without obtaining approval from the regulator.
OCC is the sole registered clearing agency for exchange-listed options contracts on equities in the United States. It is also the largest equity derivatives clearing organization in the world.
By settling, the clearing company has neither admitted nor denied the SEC’s and CFTC’s findings. Altogether, it will pay $20 million in penalties. $15 million of this is under the SEC’s order and $5 million under the CFTC’s order. The company will also hire an independent compliance auditor.
Commenting on the settlement, SEC Chairman Jay Clayton said: “As a clearing agency, OCC performs a range of services that are critical to the effective operation of the securities markets. Today’s resolution is intended to ensure that OCC will have appropriate policies and procedures in place to meet its obligations to our financial system.”
OCC response to settlement with SEC and CFTC
The OCC, has, in turn, released its own statement regarding the settlement. The company states that a settlement was able to be reached because of the clearing agency’s cooperation and remediation efforts it has already undertaken.
"We take our responsibility to promote the stability and integrity of markets seriously, and we are committed to operating as a resilient Clearing House and maintaining the highest standards of regulatory compliance throughout our organization,” added OCC Chief Executive Officer John Davidson.
“Our commitment is reflected in the progress we have made as most of the compliance remediation is now complete and any remaining actions are on a path to be completed expeditiously. We look forward to continuing to work constructively with our regulators as our transformation continues."
OCC overhauls leadership team, names new CEO
As part of this process, the OCC has replaced many of its senior executives at the direction of its Executive Chairman and Board of Directors. This saw the company hire a new CEO, Chief Operating Officer, Head of Financial Risk Management, Chief Information Officer, Chief Security Officer, and heads of control function. It has also increased its staff members in the area of risk management, compliance, legal, and information technology.
Speaking on the changes, Executive Chairman Craig Donohue continued: "On behalf of OCC's Board of Directors, I want to thank our regulators for their support and cooperation in resolving these matters.
“For the past five years, OCC has been engaged in a comprehensive transformation effort to strengthen our financial resiliency, our people, our compliance processes, and our technology to meet new and heightened regulatory obligations and to better serve market participants and the investing public.
“I, along with our Board of Directors, believe we have the right leaders in place in John Davidson, Scot Warren and our new management team to successfully move OCC forward in our role as a Systemically Important Financial Market Utility."
Institutional FX Demand Continues to Climb in April
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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