[Federal Register Volume 60, Number 112 (Monday, June 12, 1995)]
[Notices]
[Pages 30904-30906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14254]



=======================================================================
-----------------------------------------------------------------------
[[Page 30905]]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-35804; International Series No. 815; File No. S7-8-90]


Options Price Reporting Authority; Notice of Filing of Amendment 
to the National Market System Plan To Update the Current Fee Structure 
and Eliminate the Use of Separate News Service Agreements

June 5, 1995.
    Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 25, 1995, the 
Options Price Reporting Authority (``OPRA'') \2\ submitted to the 
Commission an amendment to its National Market System Plan for the 
purpose of updating OPRA's fee structure and eliminating the use of 
separate news service agreements.\3\

    \1\ 17 CFR 240.11Aa3-2.
    \2\ OPRA is a National Market System Plan approved by the 
Securities and Exchange Commission (``Commission'' or ``SEC'') 
pursuant to Section 11A of the Act and Rule 11Aa3-2, thereunder. 
Securities Exchange Act Release No. 17638 (March 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 American Stock Exchange (``AMEX''), the Chicago Board 
Options Exchange (``CBOE''), the New York Stock Exchange (``NYSE''), 
the Pacific Stock Exchange (``PSE''), and the Philadelphia Stock 
Exchange (``PHLX'').
    \3\ The proposed amendment was approved by OPRA in accordance 
with the OPRA Plan at a meeting held on April 11, 1995.
---------------------------------------------------------------------------

    The Commission is publishing this notice to solicit comments from 
interested persons on the amendment.

I. Description and Purpose of the Amendment

    OPRA proposes to amend its vendor agreement and the related fee 
schedule to impose a new redistribution fee on all persons who 
redistribute options market information, to reflect a reduction in the 
level of the access charge currently payable by vendors and other 
persons who receive direct or indirect access to OPRA's Processor, and 
to eliminate indirect-assess or pass-through vendors and news services 
as persons subject to the access charge. In addition, OPRA proposes to 
eliminate the separate news service agreement. Instead, OPRA would 
categorize news services as vendors and would seek to have such 
services sign vendor agreements. Conforming changes would be made to 
the OPRA Plan.
    OPRA has made this proposal in response to the growth in the listed 
options market and the changes in the ways in which options market 
information is disseminated and used. Among these changes are the 
increased use of electronic forms of redistribution of market 
information from vendors and news services directly to individual 
investors, often on a fifteen minute delayed basis, and the expanded 
number of value-added intermediaries in the chain of transmission from 
OPRA's processor to the end users of the information.
    OPRA proposes to institute a new redistribution fee. This fee would 
apply to persons who receive and retransmit delayed market information. 
The redistribution fee would not apply to historical information.\4\ 
OPRA's redistribution fee proposal is in response to its belief that 
instead of encouraging vendors to distribute current options 
information, the current fee structure encourages the redistribution of 
delayed information.

    \4\ Under the proposal, information becomes ``historical'' upon 
the opening of trading in the next succeeding trading session of 
that same market. For example, reports of transactions completed in 
a trading session on Wednesday become historical reports from and 
after the opening of trading on the following Thursday.
---------------------------------------------------------------------------

    With the introduction of the new redistribution fee, OPRA proposes 
to eliminate the vendor and news service pass-through fee, currently 
charged to vendors and news services that receive options information 
from another vendor instead of from the OPRA Processor. In addition, in 
light of the added revenue expected to be realized from redistribution 
fees payable by vendors of delayed data, the direct access charge is 
proposed to be reduced from its current level to the point where the 
direct access charge will be less than the access charge or pass-
through fee currently charged. OPRA believes that total revenue from 
fees charged to vendors and news services will not increase as a result 
of these proposed changes and, in fact, may slightly decrease during 
the transition period.\5\ The proposed amendment to the vendor 
agreement also includes some nonsubstantive, editorial changes.

    \5\ The transition period reflects the time in which vendors 
distributing delayed information are identified and brought under 
contract pursuant to the proposed redistribution fee.
---------------------------------------------------------------------------

    In addition to the fee restructuring proposal, OPRA proposes to 
eliminate separate news service agreements. Instead, news services 
would be required to enter into vendor agreements with OPRA. OPRA 
proposes to eliminate these separate agreements in light of 
technological changes that it perceives have blurred the distinction 
between news services and other redistributors of market data, making 
it no longer useful to treat news services as a separate category of 
vendor. According to OPRA, only two news services currently are parties 
to news service agreements, with most redistributors of options 
information to news media having already entered into vendor agreements 
in order to be able to redistribute options market data electronically 
to entities other than news media. OPRA believes that the current news 
service agreement and the vendor agreement are substantially the same 
and that the same fees apply to both news services and vendors. The 
elimination of the separate news service agreement, therefore, will 
allow news services and other vendors to be subject to the same 
agreement and the same fees.

II. Implementation of the Plan Amendment

    In accordance with OPRA's existing agreements with vendors and news 
services, amendments to these agreements and to the fees charged 
thereunder require not less than 30 days advance notice. In order to 
assure that the required notice has been given to vendors and to 
provide time during which vendors and news services will be asked to 
sign new agreements reflecting the new fee structure, OPRA does not 
intend to implement this amendment until September 1, 1995, subject to 
Commission approval.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Commenters 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 is 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, DC 20549. Copies of the submission, all 
subsequent amendments, all written statements with respect to the 
proposed Plan amendment that are filed with the Commission and all 
written communications relating to the proposed Plan amendment 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. 522, will 
be available for inspection and copying in [[Page 30906]] 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 July 3, 1995.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\

    \6\ 17 CFR 200.30-3(a)(29).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-14254 Filed 6-9-95; 8:45 am]
BILLING CODE 8010-01-M