Option Symbology Initiative Background

The Options Clearing Corporation (OCC) has introduced an initiative to restructure processing of exchange traded options; an initiative known as the Options Symbology Initiative (OSI). The OSI is a plan to overhaul the existing method of identifying exchange-listed option contracts to decrease limitations in today's marketplace. This will be accomplished with the elimination of OPRA codes and fractional strike price values. The new Symbology Key will contain explicit expiration dates and decimal strike price values. The plan also provides for the conversion of option symbols into the base underlying symbol in order to create consistency. The OCC has mandated a deadline of February 10, 2010

Ascend’s OSI Expertise

Ascend’s focused expertise and involvement with OSI are critical to remediation required by the OCC. As an active participant on the OSI testing subcommittee, our dedicated OSI practice provides leadership and valuable input to the OCC by sharing industry best practices and lessons learned to benefit our clients and the industry. Ascend’s OSI Practice has identified the three critical remediation areas, including;

• the addition of required OCC option expiration day field,
• expansion of existing option related field sizes, and
• the modification of strike price field to accept decimal format.

Our position in the market provides us with unique advantage as we provide a comprehensive understanding the direction of the OCC, the OSI impact to our clients, and the remediation needed for;

• front-office option-related order management systems and option-related assignment and exercise systems,
• reporting and statement creation, including regulatory reporting,
• in-house data stores containing option related master data, including but not limited to SMF data, and ETL repositories,
• middle and back office trade, settlement & clearing, and matching operations,
• external partner feeds, both inbound and outbound including exchanges, market data feeds, and clearing houses, and
• in-house SOA services layers containing shared rules.

We are currently engaged with multiple OSI PMO and change initiatives for global financial services firms. Some of our engagement responsibilities include;

• building and executing enterprise OSI questionnaire for PMO planning, awareness/education level assessment, system/interface inventory, and resource planning,
• development and rollout of OSI program and project management office,
• standardization of system and interface inventories, and capture of cross system and feed dependencies,
• creation and execution of comprehensive system, integration and UAT test plans, and
• communication with OCC exchanges and data providers, to ensure compliance and certification.

Related Links;

http://theocc.com/initiatives/symbology/default.jsp