[Federal Register Volume 61, Number 96 (Thursday, May 16, 1996)]
[Notices]
[Pages 24842-24843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12237]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37191; File No. SR-CTA/CQ-96-1]


Consolidated Tape Association; Order Granting Approval of 
Proposed Restatements and Amendments to the Restated Consolidated Tape 
Association Plan and the Consolidated Quotation Plan

May 9, 1996.

I. Introduction

    On December 26, 1995, the Consolidated Tape Association (``CTA'') 
and Consolidated Quotation (``CQ'') Plan Participants filed with the 
Securities and Exchange Commission (``Commission'' or ``SEC'') 
amendments to the Restated CTA Plan and CQ Plan pursuant to Rule 11Aa3-
2 of the Securities Exchange Act of 1934 (``Act''). Notice of the 
filing appeared in the Federal Register on January 25, 1996.\1\ No 
comment letters were received in response to the Notice. For the 
reasons stated below, the Commission has determined to approve the 
filing.
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    \1\ Securities Exchange Act Release No. 36725 (January 17, 
1996), 61 FR 2321.
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II. Description

A. Overview of the Changes

    The changes to the CQ and CTA Plans broaden ``concurrent uses'' of 
the CTA and CQ facilities, incorporate a number of housekeeping 
changes, and consolidate and reorganize the ``Financial Matters'' 
provisions of both plans. In an attempt to make the plans less 
legalistic, and therefore easier to read, the filing expands the use of 
definitions used throughout the plans, and deletes certain language 
that is almost two decades old and outdated. Furthermore, the 
amendments provide the Participants with greater flexibility in 
prescribing contract and other requirements for vendor and subscriber 
services, including the use of the Subscriber Addendum or such 
alternate requirements as the Participants may prescribe.

B. Second Restatement of the CTA Plan

    The filing restates and amends the Restated CTA Plan.\2\ The 
restatement (the ``Second Restatement of the CTA Plan'') incorporates 
into the Restated CTA Plan the 17 substantive amendments, and 16 
charges amendments, to the Restated CTA Plan that the Commission has 
previously approved and incorporates the additional amendments 
submitted to the Commission.\3\
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    \2\ The Commission declared the CTA Plan effective as of May 17, 
1974. See Securities Exchange Act Release No. 10787 (May 10, 1974), 
39 FR 17799. The Participants filed a restatement and amendment of 
that Plan (the ``Restated CTA Plan'') with the Commission on May 12, 
1980. The Commission approved the Restated CTA Plan on July 16, 
1980. See Securities Exchange Act Release No. 16983 (July 16, 1980) 
45 FR 49414.
    \3\ A description of the amendments and a listing of the 
attachments were included in the Notice of Filing of Amendment (see, 
note 1 supra), and are incorporated by reference herein.
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    The amendments (1) revise the form of agreement \4\ into which the 
Participants require vendors and certain end users to enter (the 
``Consolidated Vendor Form'') and (2) introduce a form of addendum (the 
``Subscriber Addendum'') that the Participants, under appropriate 
circumstances, will allow vendors to attach to, or to incorporate into, 
agreements with certain subscribers as a surrogate for the form of 
agreement that the participants currently require subscribers to 
execute.
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    \4\ The Participants submitted the version of the Consolidated 
Vendor Form currently in use to the Commission on October 12, 1989. 
The Commission published a notice of the effectiveness of the 
Consolidated Vendor Form on September 6, 1990. See Securities 
Exchange Act Release No. 28407 (September 6, 1990) 55 FR 37276.
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C. Restated CQ Plan

    The filing restates and amends the CQ Plan.\5\ The restatement (the 
``Restated CQ Plan'') incorporates into the CQ Plan the 21 substantive 
amendments, and 6 changes amendments, to the CQ Plan that the 
Commission has previously approved and incorporates the additional 
amendments submitted to the Commission.\6\
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    \5\ AMEX and NYSE submitted the version of the CQ Plan currently 
in effect to the Commission on July 25, 1978. The Commission granted 
permanent approval of that plan effective as of January 22, 1980. 
See Securities Exchange Act Release No. 16518 (January 22, 1980), 45 
FR 6521.
    \6\ A description of the amendments and a listing of the 
attachments were included in the Notice of Filing of Amendment (see, 
note 1, supra), and are incorporated by reference herein.
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    The Participants are also proposing to use the revised Consolidated 
Vendor Form and the Subscriber Addendum in connection with the Restated 
CQ Plan, in the same manner as in the proposed Second Restatement of 
the CTA Plan.

III. Discussion

    The Commission has determined that the Second Restatement of the 
CTA Plan and the Restated CQ Plan are consistent with the Act. Rule 
11Aa3-2(c)(2) under

[[Page 24843]]

the Act provides, inter alia, that the Commission approve an amendment 
to an effective National Market System plan if it finds that the 
amendment is necessary or appropriate in the public interest, for the 
protection of investors and 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. In 
making such a determination, the Commission must examine Section 11A of 
the Act and rules promulgated thereunder. Rule 11Aa3-2(b) lists the 
requirements for filing or amending a national market system plan. The 
Commission has determined that the detailed description of the 
amendments, the rationale for the amendments, and plans for operation 
meet the requirements of Rule 11Aa3-2(b).
    Furthermore, the amendments will remove impediments to and perfect 
the mechanisms of a National Market System by affording greater 
flexibility that changing technology is likely to require. Participants 
will retain greater flexibility in determining which vendors and 
subscribers need to enter into contracts to receive and use information 
and which terms and conditions apply.\7\ The Commission expects that 
vendors and users of information will benefit from a more flexible 
agreement with the Participants, and in some instances will be relieved 
of additional contractual documents that today's practice requires.
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    \7\ The Commission notes that Section 11A of the Act establishes 
special fairness conditions for the dissemination of market 
information by exclusive securities information processors 
(``SIPs'') such as CTA and CQ. Limitations on access to services of 
exclusive SIPs must be consistent with the Act, must not 
discriminate unfairly, and must not place an inappropriate burden on 
competition. Section 11A requires any SIP that directly or 
indirectly prohibits or limits access to services offered by the SIP 
to immediately file notice thereof with the Commission. Such 
prohibition or limitation on access is subject to review by the 
Commission.
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    The public's interest in availability of information will be met by 
the broadening of the scope of concurrent use information to include 
virtually all Participant securities (including bonds) and index 
information. Amending the language and format of the two plans to make 
them more closely comport with each other will result in drafting 
economies, and a more easily readable document.

IV. Conclusion

    For the reasons discussed above, the Commission finds that the 
proposed amendments to the CTA and CQ Plans are consistent with the 
Act, and the Rules thereunder.
    It is therefore ordered, pursuant to Section 11A of the Act, that 
the amendments to the CTA and CQ Plans be, and hereby are, approved.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(27).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-12237 Filed 5-15-96; 8:45 am]
BILLING CODE 8010-01-M