agreements with OCC, settlement is effected pursuant to the rules of those clearing corporations, and OCC has no further responsibility to either the exercising holder or the assigned writer. In a few cases—which usually occur because an underlying equity security is no longer eligible for clearance through a stock clearing corporation—set- tlements calling for the delivery of that security are made directly between Clearing Members. OCC's rules provide protect procedures for exercise settle- ments made directly between Clearing Members that involve the delivery of securities which either have been called for redemption, are due to expire or with respect to which a call or expiration date is impending, or are subject to an otter which will expire, if the expira- tion time (as defined in OCC's rules) is on or after the exercise settlement date for the option. Under these protect procedures. the Clearing Member entitled to receive the securities may give a lialttyli _police to the delivering Clearing Member by a specified cut-off time prior to the expiration time. It a liability notice is so given and the securities are not delivered sufficiently in advance of the expiration time to permit the receiving Clearing Member to obtain their benefit, the delivering Clearing Member will be liable for any resulting dam- ages. If the failure to deliver was the fault of the Clear- ing Member's customer, the Clearing Member may (depending on its own procedures) pass that liability on to the customer. Investors should be aware that correspondent clearing corporations may have protect procedures in respect of the settlements made through them. At the date of this booklet. the regular exercise set- tlement date for physical delivery stock options is the fifth business day after exercise, but the SEC has adopted a rule that requires the regular settlement date to be the third business day after an exercise that takes place on or after June 1. 1995. The