Federal Register #SR-OCC-2026-003

OCC Proposed Rule Change to Enable Clearing of Binary Options

This notice announces a proposed rule change by the Options Clearing Corporation (OCC) to enhance its risk management framework for clearing binary options. - Government Buyer: - Securities and Exchange Commission (SEC) - Address: 100 F Street NE, Washington, DC 20549-1090 - OEMs and Vendors: - No OEMs or commercial vendors are mentioned; this is a regulatory notice, not a procurement. - Products/Services Requested: - No products or services are being procured. - The OCC proposes updates to its System for Theoretical Analysis and Numerical Simulation (STANS) Methodology Description. - Key technical change: Use of a Black-Scholes pricing framework with an adjustment term for binary options. - Unique or Notable Requirements: - The rule change enables clearing of European-style binary options on equity indexes. - Focus on improved risk management and margin calculation for OCC clearing members. - Public comments are solicited on the proposed rule change.

Description

The Options Clearing Corporation (OCC) has filed a proposed rule change to amend its System for Theoretical Analysis and Numerical Simulation (STANS) Methodology Description. The amendment aims to enable OCC to accept binary options for clearing and to appropriately manage the risks associated with these products. The proposal includes pricing binary options using a Black-Scholes framework with an adjustment term to align theoretical prices with market prices, and updates to risk management and margin calculation methodologies. This change facilitates the clearing of European-style binary options on equity indexes and ensures adequate financial safeguards for clearing members.

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