[Federal Register Volume 59, Number 174 (Friday, September 9, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22244]


[[Page Unknown]]

[Federal Register: September 9, 1994]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34625; International Series No. 709, File No. S7-8-90]

 

Notice of Proposed Amendment to the Options Price Reporting 
Authority's National Market System Plan for the Purpose of Establishing 
a Fee to be Paid by Persons other than Vendors who Provide a Data 
Control Service to OPRA Subscribers

September 1, 1994.
    Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934 
(``Act''), notice is hereby given that on June 27, 1994, the Options 
Price Reporting Authority (``OPRA'')\1\ submitted to the Securities and 
Exchange Commission (``SEC'' or ``Commission'') an amendment to its 
National Market System Plan for the purpose of establishing a Data 
Control Service Agreement and a Control Service Fee for persons other 
than vendors who provide a data control service to OPRA subscribers and 
exempting subscribers who receive the feed from OPRA's Subscriber 
Indirect Access Fee. On August 30, 1994, OPRA filed with the Commission 
a letter amendment revising the amendment to clarify that OPRA vendors 
who provide data control services to their data feed customers are not 
considered to be Control Service Providers required to enter into a 
Data Control Service Agreement or pay a Control Service Fee.\2\ The 
Commission is publishing this notice to solicit comments from 
interested persons on the amendment.
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    \1\OPRA is a National Market System Plan approved by the 
Commission pursuant to Section 11A of the Act and Rule 11Aa3-2. 
Securities Exchange Act Release No. 17638 (Mar. 18, 1981).
    The plan provides for the collection and dissemination of last 
sale and quotation information on options that are traded on the 
five member exchanges. The five exchanges which agreed to the OPRA 
Plan are the Philadelphia Stock Exchange (``PHLX''), the Chicago 
Board Options Exchange (``CBOE''), the American Stock Exchange 
(``AMEX''), the Pacific Stock Exchange (``PSE''), and the New York 
Stock Exchange (``NYSE'').
    The OPRA plan was agreed to in response to directives of the SEC 
that provision be made for the consolidated reporting of 
transactions in eligible options contracts listed and traded on 
national securities exchanges.
    \2\See letter from Michael L. Meyer, Schiff Hardin & Waite, 
Attorney for OPRA, to Scott C. Kursman, Attorney, Division of Market 
Regulation, Commission (August 30, 1994).
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I. Description and Purpose of the Amendment

    The proposed amendment will establish a Control Service Fee to be 
paid by persons other than vendors who provide a data control service 
to OPRA subscribers. A Data Control Service Provider is a provider that 
controls the access and entitlement of subscribers' devices with 
respect to market information received in the form of a data feed 
transmission from a vendor. The Control Service Fee is intended to 
cover OPRA's additional administrative costs and to allocate a portion 
of OPRA's overall costs to those persons who utilize options market 
information for commercial purposes.
    Persons wishing to offer a data control service will be required to 
enter into a Data Control Service Agreement. This agreement imposes 
requirements on Control Service Providers intended to assure the 
reliability and integrity of the services they provide. It will require 
Control Service Providers to provide OPRA with a complete description 
of the systems and procedures to be utilized by them in controlling 
subscribers' access to options information, as well as a current list 
of subscribers and their entitlements.
    The amendment also provides that OPRA's Subscriber Indirect Access 
Fee, which is payable by subscribers who receive uncontrolled data feed 
transmissions of options information from vendors, will not apply to 
subscribers whose receipt of a data feed is under the control of a 
Control Service Provider.
    Finally, the Indirect (Vendor Pass-Through) Circuit Connection 
Rider to OPRA's Subscriber Agreement is proposed to be amended to 
relieve controlled data feed subscribers of the obligation to report 
device counts to OPRA. Since vendors and Control Service Providers are 
or will be required to provide this information to OPRA, there is no 
need to obtain it from the subscribers.
    These changes are intended to respond to new advances in computer 
and communications technology that have led an increasing number of 
OPRA subscribers to receive options market information by means of 
high-speed, data feed transmissions from vendors. Historically, OPRA 
vendors have provided a controlled and formatted transmission of 
options information to most subscribers, but have also provided an 
uncontrolled, bulk, data feed transmission to an increasing number of 
subscribers. Because subscribers now also have the option to receive 
data transmissions from a controlled service provider, OPRA has had to 
restructure its fees and contracts in the manner described above.

II. Implementation of the Plan

    The Data Control Service Agreement and the related Control Service 
Fee, will be implemented upon their approval by the Commission pursuant 
to Rule 11Aa3-2(c)(2) by requiring every person other than a vendor who 
wishes to offer an authorized data control service to execute a Data 
Control Service Agreement and to pay the fee provided for therein. 
Concurrently with the effectiveness of the Agreement, the Subscriber 
Indirect Access Fee and the Indirect (Vendor Pass-Through) Circuit 
Connection Rider to the Subscriber Agreement will be amended as 
described above.

III. Solicitation of Comments

    Interested Persons are invited to submit written data, views and 
arguments concerning the foregoing. Commentators are asked to address 
whether they believe the proposed amendment is necessary or appropriate 
in the public interest, for the protection of investors and the 
maintenance of fair and orderly markets, to remove impediments to, and 
perfect the mechanisms of a national market system, or otherwise in 
furtherance of the purposes of the Act.
    Persons making written submissions should file six copies thereof 
with the Secretary, Securities and Exchange Commission, 450 Fifth 
Street, NW, Washington D.C. 20549. Copies of the submission, all 
subsequent amendments, all written statements with respect to the 
proposed rule change that are filed with the Commission and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for inspection and copying in the Commission's Public 
Reference Room. Copies of the filing also will be available at the 
offices of OPRA. All submissions should refer to File No. S7-8-90 and 
should be submitted by September 30, 1994.

    For the Commission by the Division of Market Regulation, by 
delegated authority, 17 CFR 200.30-3(a)(29).
Jonathan G. Katz,
Secretary.
[FR Doc. 94-22244 Filed 9-8-94; 8:45 am]
BILLING CODE 8010-01-M