When announcement is made of the suspension of a member or member organization, other than a clearing member, pursuant to the provisions of General 2, Section 2, all open short positions of the suspended member or member organization in option contracts
and all open positions resulting from exercise of option contracts, other than positions that are secured in full by a specific deposit in accordance with the rules of The Options Clearing Corporation ("OCC"), shall be closed without unnecessary delay by all
member organizations carrying such positions for the account of the suspended member or member organization; provided, however, that upon any such suspension the Board may, in its discretion, suspend the mandatory close-out provisions of this Rule and may,
in its discretion, reinstate such provisions at such time as it may determine. No temporary suspension of the mandatory close-out provisions of this Rule shall relieve the suspended member or member organization of his or its obligations or for any damages
incurred by member organizations carrying positions for the account of such suspended member or member organization. Should an open short position or an open position resulting from an exercise of an option contract not be closed when required to be closed
by this Rule, the price for the purpose of determining shall be fixed by the price current at the time when such position should have been closed under this Rule. When a clearing member is suspended, the positions of such clearing member shall be closed out
in accordance with the rules of OCC.
Adopted Feb. 3, 2020 (20-03).
(a) Whenever The Options Clearing Corporation ("OCC") shall reject an Exchange options transaction because of the failure of the clearing member acting on behalf of the purchaser to pay the premium due thereon as required by the Rules of OCC, the member
or member organization acting as or on behalf of the seller (writer) shall have the right either to cancel the transaction by giving notice thereof to the defaulting clearing member or to enter into either a new opening writing transaction or closing sale
transaction, as the case may be, in respect of the same option contract that was the subject of the rejected Exchange options transaction, charging any loss resulting therefrom (including any commissions paid or payable in connection with such new transaction)
to the defaulting clearing member. Such action shall be taken as soon as possible and in any event not later than the close of trading on the day the Exchange options transaction was rejected by OCC, unless the Exchange shall extend such time.
(b) In the event the rejected transaction involves an option contract of a series in which trading has been terminated or suspended before a new Exchange options transaction can be effected to establish the amount of any loss the member or member organization
acting as or on behalf of the seller shall have a claim against the defaulting clearing member for the amount of the premium due thereon.
Adopted Feb. 3, 2020 (20-03).