The Options Clearing Corporation’s (OCC) Board of Directors recently approved a refund of $49,648,466 to clearing members for the year ended Dec. 31, 2005, their largest clearing fee refund.
OCC, a derivatives clearing organization, annually refunds all revenues in excess of operational expenses. For the years ended Dec. 31, 2004, 2003, 2002 and 2001, this refund amounted to $47.4 million, $33.1 million, $14.1 million and $26.7 million, respectively. OCC’s cumulative refunds and discounts since 1974 total more than $435.4 million.
“The dramatic rise in trading volume — including last year’s record options volume exceeding 1.5 billion contracts — has allowed us to continue to cut fees while providing service enhancements for our business partners,” said Michael Cahill, OCC president and CEO. “We are very proud to be able to provide our customers world-class risk management, clearance and settlement services at a reasonable cost.”
In addition to the refund, OCC also provided its members $58,122,275 in fee discounts in 2005. Clearing fees have been lowered three times over the past year and a half, the most recent being June 2005 which dropped the fee 29% for most trades. The discount was most notable for trades between one and 500 contracts, which account for approximately 75% of OCC’s cleared contracts.