[Federal Register Volume 65, Number 41 (Wednesday, March 1, 2000)]
[Notices]
[Pages 11102-11104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4851]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42444; File No. SR-CTA/CQ-00-01]


Consolidated Tape Association; Notice of Filing and Immediate 
Effectiveness of Second Substantive Amendment to the Second Restatement 
of the Consolidated Tape Association Plan and the First Substantive 
Amendment to the Restated Consolidated Quotation Plan

February 18, 2000.
    Pursuant to Rule 11A3-2 \1\ of the Securities Exchange Act of 1934 
(``Act''),\2\ notice is hereby given that on January 19, 2000, the 
Consolidated Tape Association (``CTA'') and the Consolidated Quotation 
(``CQ'') Plan Participants (``Participants'') \3\ filed with the 
Securities and Exchange Commission (``Commission'' or ``SEC'') 
amendments to the Restated CTA Plan and CQ Plan. The amendments propose 
to adopt, as an additional form under Exhibit D of the Plans, a 
Consolidated Subscriber Form for use in connection with the 
implementation of new procedures under which vendors (rather than 
Network B) will now: (1) Execute directly with professional subscribers 
a Consolidated Subscriber Form for receipt and use of Network B market 
data that runs to the benefit of the Network B Participants and (2) 
assume responsibility for the billing, collecting and forwarding of all 
Network B subscriber charges to Network B.
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    \1\ 17 CFR 240.11Aa3-2.
    \2\ 15 U.S.C. 78k-1.
    \3\ The amendments were executed by each Participant in each of 
the Plans. The Participants include American Stock Exchange LLC, 
Boston Stock Exchange, Inc., Chicagao Board Options Exchange, Inc., 
Chicago Stock Exchange, Inc., Cincinnati Stock Exchange, Inc., 
National Association of Securities Dealers, Inc., New York Stock 
Exchange, Inc., Pacific Exchange, Inc., and Philadelphia Stock 
Exchange, Inc.
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    Pursuant to Rule 11Aa3-2(c)(3)(ii), the CTA and CQ Participants 
have designated the amendments as a matter concerned solely with the 
administration of the Plans on behalf of all of the sponsors and the 
participants, which renders the amendments effective upon receipt of 
this filing by the Commission. At any time within 60 days of the filing 
of the amendments, the Commission may summarily abrogate the amendment 
and require that the amendment be refiled in accordance with the 
paragraph (b)(1) of this section and reviewed in accordance with 
paragraph (c)(2) of this section, if it appears to the Commission that 
such action is necessary or appropriate in the public interest, for the 
protection of investors, or the maintenance of fair and orderly 
markets, to remove impediments to, and perfect mechanisms of, a 
national market system or otherwise in furtherance of the purposes of 
the Act. The Commission is publishing this notice to solicit comments 
from interested persons on the amendments.

I. Description and Purpose of the Amendments

A. Rule 11Aa3-2

Purpose of the Amendments
    Currently, Network B uses a Consolidated Subscriber Form that it 
executes directly with professional subscribers. While the subscriber 
also executes an agreement with its vendor to receive Network B market 
data from the vendor (the ``Vendor-Subscriber Agreement''), Network B 
generally bills all subscriber charges directly to the subscriber and 
collects the fees itself.\4\
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    \4\ Exhibit D to each Plan sets forth the forms of market data 
subscriber agreements currently in use.
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    Network B is now proposing to shift the billing and collecting 
functions to the vendors. As part of that effort, Network B is 
proposing to amend the CTA and CQ Plans by adding a new Consolidated 
Subscriber Form to Exhibit D of each Plan. The new form implements new 
procedures pursuant to which vendors will replace Amex as the party 
that will now (1) execute directly with professional subscribers a 
Consolidated Subscriber Form for receipt and use of Network B market 
data that runs to the benefit of Network B Participants and (2) bill 
and collect all Network B subscriber charges for Network B. The new 
Consolidated Subscriber Form that will be used for Network B vendor 
billing will be virtually identical to the existing Consolidated 
Subscriber Form, except for (1) the vendor signature block (replacing 
the Network B signature block), (2) language indicating that the 
agreement runs to the benefit of the Network B Participants as third-
party beneficiaries; and (3) minor changes reflecting the shift of the 
billing and collection functions to the vendors (including such things 
as allowing vendors to examine records and request equipment 
descriptions).
    The Network B Participants believe that the shift to vendor billing 
will

[[Page 11103]]

significantly improve customer service for all subscribers to Network B 
market data services. Professional subscribers will now receive one 
bill from the vendor, instead of two bills (one from the vendor and one 
from Network B). As CTA currently relies on vendor data for subscriber 
billing and vendors are often late in furnishing such data, many 
discrepancies occur in billing subscribers. Vendor billing, with single 
bill and single point of contact, should streamline the billing process 
and reduce confusion among Network B subscribers. In this regard, the 
Network B subscriber community has been very supportive of this 
proposal to shift to vendor billing for Network B market data.
    Vendor billing will also enable Network B to reduce its 
administrative function and thereby realize significant cost savings. 
Vendors will be able to utilize their current billing infrastructures 
to bill for Network B subscriber charges, taking advance of existing 
efficiencies. This should also allow for a tighter receivable cycle.
    These amendments further the objectives of the national market 
system regarding the dissemination of last sale information delineated 
in Sections 11A(a)(1)(C), 11A(a)(1)(D) and 11A(a)(3)(B) of the Act.

B. Governing or Constituent Documents

    See Exhibit 1 to CTA and CQ Plan Amendments.

C. Implementation of Amendment

    The Participants have manifested their approval of the proposed 
amendments to the CTA and CQ Network B by means of their execution of 
the amendments. The Participants will begin the conversion process to 
vendor billing as soon as practicable after the Plan amendments are 
filed with the Commission.
    To accomplish this conversion, the Network B administrator intends 
to provide written notice to all Network B vendors and subscribers of 
the planned shift to vendor billing for Network B subscribers. It then 
plans to visit all Network B vendors, explaining the new procedures to 
them as well as reconciling their subscriber inventory. Vendors will be 
required to use the new Consolidated Subscriber Form for all new 
professional subscribers to Network B market data, executing it 
directly with those subscribers. All current Network B professional 
subscribers will be allowed to continue receiving Network B market data 
under their existing Consolidated Subscriber Form (which they entered 
into with Amex) without being required to sign the new form.
    The administrator plans to have the new vendor billing program 
implemented by the end of the third quarter of 2000.

D. Development and Implementation Phases

    See Item I(C).

E. Analysis of Impact on Competition

    The proposed amendments do not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act.

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    Not applicable.

G. Approval by Sponsors in Accordance With Plans

    In accordance with Section IV(b) of the CTA Plan and Section IV(c) 
of the CQ Plan, each of the Participants has approved the Plan 
amendments.

H. Description of Operation of Facility Contemplated by the Proposed 
Amendment

    Not applicable.

I. Terms and Conditions of Access

    See Item I(A) above.

J. Method of Determination and Imposition, and Amount of Fees and 
Charges

    Vendors will perform the billing and collection functions with 
respect to all Network B subscriber charges.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 11Aa3-1 (Solely in Its Application to the Amendment to the 
CTA Plan)

A. Reporting Requirements

    Not applicable.

B. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    Not applicable.

C. Manner of Consolidation

    Not applicable.

D. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable.

E. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

F. Terms of Access to Transactions Reports

    See Item I(A).

G. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    The CTA has designated these amendments as a matter concerned 
solely with the administration of the Plans on behalf of all of the 
sponsors and participants which, under Section 11Aa3-2(c)(3)(ii) of the 
Act, renders the proposal effective upon receipt of this filing by the 
Commission.
    The Commission may summarily abrogate the amendment within sixty 
days of its filing and require refiling and approval of the amendments 
by Commission order pursuant to Section 11Aa3-2(c)(3)(iii), if it 
appears to the Commission that such action 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.
    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the amendments 
are consistent with the Act. Persons making written submissions should 
file six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of 
the submission, all subsequent amendments, all written statements with 
respect to the proposed plan amendments that are filed with the 
Commission, and all written communications relating to the proposed 
plan amendments between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
CTA. All submissions should refer to the file number in the caption 
above and should be submitted by March 22, 2000.


[[Page 11104]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(27).
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Margaret H. McFarland.
Deputy Secretary.
[FR Doc. 00-4851 Filed 2-29-00; 8:45 am]
BILLING CODE 8010-01-M