[Federal Register Volume 64, Number 226 (Wednesday, November 24, 1999)]
[Notices]
[Pages 66221-66222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30653]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42152; File No. SR-OPRA-99-02]


Options Price Reporting Authority; Notice of Filing and Immediate 
Effectiveness of Amendment to OPRA Plan Revising Certain of its 
Subscriber Fees

November 17, 1999.
    Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934 
(``Act''), notice is hereby given that on October 27, 1999, the Options 
Price Reporting Authority (``OPRA''),\1\ submitted to the Securities 
and Exchange Commission (``SEC'' or ``Commission'') an amendment to the 
Plan for Reporting of Consolidated Options Last Sale Reports and 
Quotation Information (``Plan''). The amendment revises or eliminates 
certain of the facilities and access fees charged by OPRA in respect of 
its Basic Service. Fee revisions consist of proposed reductions in 
usage-based fees for access to OPRA's dial-up market data service, 
voice-synthesized market data service and radio paging service, a 
proposed reduction in the nonprofessional subscriber fee, and a 
proposed increase in OPRA's device-based information fee payable by 
professional subscribers. In addition, OPRA proposes to eliminate its 
port-based dial-up market data service utilization fee.
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    \1\ OPRA is a National Market System Plan approved by the 
Commission pursuant to Section 11A of the Exchange Act and Rule 
11Aa3-2 thereunder. 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 
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 Exchange (``PCX''); and the Philadelphia Stock Exchange 
(``PHLX'').
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    OPRA has designated this proposal as concerned solely with 
establishing or changing a fee or other charge collected on behalf of 
all of the OPRA participants in connection with access to or use of 
OPRA facilities, permitting the proposal to become effective upon 
filing pursuant to Rule 11Aa3-2(c)(3)(i) under the Act.\2\ The 
Commission is publishing this notice to solicit comments from 
interested persons on the proposed amendment.
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    \2\ 17 CFR 240.11Aa3-2(c)(3)(i).
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I. Description and Purpose of the Amendment

    The purpose of the amendment is to revise certain of the fees 
payable to OPRA by professional and nonprofessional subscribers and 
vendors for access to OPRA's Basic Service, which consists of market 
data and related information pertaining to equity and index options 
(``OPRA Data'').\3\ The revisions reflect significant decreases in 
various usage-based vendor fees and in the nonprofessional subscriber 
fee, and a modest increase in the professional subscriber fee. In 
addition, OPRA proposes to eliminate its port-based dial-up market data 
service utilization fee.
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    \3\ No changes are proposed at this time for fees charged to 
vendors and subscribers for access to information pertaining to 
foreign currency options provided through OPRA's FCO Service.
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    Specifically, OPRA proposes to decrease the three usage-based fees 
which apply to vendors who provide a dial-up market data service (which 
may include an Internet service) or a radio paging service, and to 
vendors or subscribers who provide a voice-synthesized market data 
service. Currently, usage-based fees for these three services range 
from two cents to one cent ($.02-$.01) per quote packet, depending on 
total usage. OPRA proposes to reduce all three usage-based fees to a 
flat rate fee of one-half cent ($.005) per quote packet, and to 
institute new usage-based fees for access to these services of two 
cents ($.02) per ``options chain,'' which may be elected as an 
alternative to the per quote packet fee.

[[Page 66222]]

An ``options chain'' may include quotes on all series of options on the 
same underlying interest. Since a single options chain may include many 
separate quote packets covering different series of put and call 
options on a single underlying interest, this alternative usage-based 
fee will generally result in lower fees as compared with straight 
quote-based pricing.
    In addition, OPRA is proposing to cap total usage-based fees 
payable by a vendor in any month for the use of its dial-up service by 
any individual nonprofessional subscriber so that such fees will not 
exceed an amount equal to the monthly nonprofessional subscriber fee, 
which is proposed to be reduced to $1.00 per month. Under the proposed 
change to usage-based fees, a vendor who provides a dial-up service to 
its customers will still be able to choose whether to pay information 
fees on account of this service on the basis of the number of requests 
for quotes actually made by its customers, or by paying a flat-rate 
nonprofessional subscriber fee of $1.00 per month for each of its 
customers who qualify as nonprofessional subscribers. However, if a 
vendor elects to pay usage-based fees, the monthly fee for each 
nonprofessional subscriber will not exceed the flat-rate 
nonprofessional subscriber fee.
    OPRA also proposes to reduce the monthly nonprofessional subscriber 
fee from the current rate of $2.50 per nonprofessional subscriber to a 
rate of $1.00 per nonprofessional subscriber. This will substantially 
lower the cost of access to real time options market information for 
those nonprofessional investors who subscribe to this information by 
paying a flat monthly fee. Also, because as described above, the 
monthly nonprofessional subscriber fee is proposed to serve as a cap on 
usage-based fees for dial-up services provided to nonprofessional 
subscribers, reducing this fee will result in lower costs for vendors 
who provide dial-up (or Internet) services to this category of 
investors.
    OPRA proposes to increase device-based professional subscriber \4\ 
fees by amounts ranging from 5.00% to 6.25% of the existing fees. 
Professional subscriber fees charged to members will continue to be 
discounted by 2% for members who preauthorize payment by electronic 
funds transfer through an automated clearinghouse system. OPRA 
estimates that the overall effect of the proposed increase in 
professional subscriber fees will be to increase revenues derived from 
device-based professional subscriber fees by approximately 5.15%. As an 
alternative to device-based fees, professional subscribers may pay an 
enterprise rate fee based on the number of their U.S. registered 
representatives. No changes are proposed to be made to the enterprise 
rate fee.
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    \4\ Professional subscribers are those persons who subscribe to 
OPRA Data and do not qualify for the reduced fees charged to 
nonprofessional subscribers.
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    The proposed increase in the amount of the professional subscriber 
fee is intended to increase OPRA revenues derived from device-based 
subscriber fees in order to offset revenues lost as a result of the 
reductions in usage-based fees and nonprofessional subscriber fees 
described above. It is also intended to generate additional revenue to 
cover actual and anticipated increases in the costs of collecting, 
consolidating, processing, and transmitting options market information 
necessitated by the continued expansion of the listed options business, 
including major improvements and upgrades in the OPRA system to enable 
it to handle that expansion.
    Finally, OPRA is proposing to eliminate its port-based fee 
currently imposed on vendors who offer a dial-up market data 
utilization service. The port-based fee has been an alternative to the 
usage-based fee, which is proposed to be reduced as described above, 
for vendors who provide a dial-up service to customers who may not all 
be professional or nonprofessional subscribers. The elimination of this 
port-based fee reflects that in recent years, as communications 
technology has continued to improve, a single high-capacity port may 
now be used by a vendor to provide a dial-up service to the same number 
of customers that once required tens or even hundreds of ports. As a 
result, the number of ports used by a vendor no longer serves as a 
meaningful measure of the extent of the vendor's total service. Thus a 
port-based fee no longer provides a fair and equitable way to allocate 
among vendors the fees imposed by OPRA on providers of a dail-up 
service, which is why OPRA proposes to eliminate it.

II. Solicitation of Comments

    Pursuant to Rule 11Aa3-2(c)(3),\5\ because the amendment is 
concerned solely with changing fees charged on behalf of OPRA, the 
amendment is effective upon filing with the Commission. To give persons 
subject to these fees advance notice of the changes, OPRA proposes to 
put the revised fees into effect commencing January 1, 2000. The 
Commission may summarily abrogate the amendment within 60 days of its 
filing and require refiling and approval of the amendment by Commission 
order pursuant to Rule 11Aa3-2(c)(2),\6\ if it appears to the 
Commission that such action 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.
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    \5\ 17 CFR 240.11Aa3-2(c)(3).
    \6\ 17 CFR 240.11Aa3-2(c)(2).
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    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed plan 
amendment is consistent with the Act. Persons making written 
submissions should file six copies thereof with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, 
D.C., 20549-0609. Copies of the submission, all subsequent amendments, 
and all written statements with respect to the proposed plan amendment 
that are filed with the Commission, 450 Fifth Street, N.W., Washington, 
D.C., 20549-0609. Copies of the submission, all subsequent amendments, 
and 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 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 
will also be available at the principal offices of OPRA. All 
submissions should refer to File No. SR-OPRA-99-02 and should be 
submitted by December 15, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(29).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-30653 Filed 11-23-99; 8:45 am]
BILLING CODE 8010-01-M