SOURCE: Options Clearing Corporation

Options Clearing Corporation

February 17, 2010 11:07 ET

The Options Clearing Corporation Announces Successful Symbology Conversion

CHICAGO, IL--(Marketwire - February 17, 2010) - The Options Clearing Corporation (OCC) is pleased to announce the February 12 conversion for the Options Symbology Initiative (OSI) has successfully been accomplished with firms, clearing members, exchanges and the OCC all now using the new OSI key.

Five months of industry-wide testing paved the way for an exceedingly smooth transition on Feb. 12, and follow-up reports through Feb. 16 have not revealed any problems with the first major milestone moving toward the new symbology. Prior to the conversion, all OCC Clearing Members certified they had completed the scripted industry testing that took place from September 2009 through January 2010. Many market participants had moved to the new symbology before the conversion date. The next step in the process is consolidation. Completion of the OSI transition is scheduled for mid-May.

OSI was launched in 2005 with the goal of overhauling the existing method of identifying exchange-listed options contracts. A committee of industry professionals from the broker-dealer, exchange, vendor and clearing communities have been working together on this multi-year effort to update the current nomenclature from a five character alpha code to an OSI key which clearly identifies the underlying product.

About OCC

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 13 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

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