[Federal Register Volume 66, Number 151 (Monday, August 6, 2001)]
[Notices]
[Pages 41057-41058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19525]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44614; File No. SR-CTA-2001-02]


Consolidated Tape Association; Notice of Filing and Immediate 
Effectiveness of Seventh Charges Amendment to the Second Restatement of 
the CTA Plan

July 30, 2001.
    Pursuant to Rule 11Aa3-2 \1\ of the Securities Exchange Act of 1934 
(``Act''), notice is hereby given that on July 3, 2001, the 
Consolidated Tape Association Plan (``CTA Plan'') participants 
(``Participants'') \2\ filed with the Securities and Exchange 
Commission (``Commission'' or ``SEC'') an amendment to the Second 
Restatement of the CTA Plan. In the amendment, the Participants propose 
to establish a new fee that applies to a vendor's dissemination of a 
real-time Network A last sale price information ticker over broadcast, 
cable or satellite television.
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    \1\ 17 CFR 240.11Aa3-2.
    \2\ Each Participant of the Plan executed the amendments. The 
Participants are the American Stock Exchange LLC, Boston Stock 
Exchange, Inc., Chicago Board Options Exchange, Inc., Chicago Stock 
Exchange, Inc., Cincinnati Stock Exchange, Inc., National 
Association of Securities Dealers, Inc., New York Stock Exchange, 
Inc., and Philadelphia Stock Exchange, Inc.
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    The Participants submitted this notice of proposed amendment to the 
CTA Plan, which is an effective national market system plan,\3\ 
pursuant to Rule 11Aa3-2(c)(1).\4\ The Commission is publishing this 
notice to solicit comments from interested persons on the amendment.
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    \3\ The CTA Plan has been designated as an effective transaction 
reporting plan pursuant to Rule 11Aa3-1(b). 17 CFR 240.11Aa3-1(b).
    \4\ 17 CFR 240.11Aa3-2(c)(1).
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I. Description and Purpose of the Amendments

A. Rule 11Aa3-2 \5\
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    \5\ 17 CFR 240.11Aa3-2.
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    The amendment seeks to establish as a permanent part of the Network 
A rate schedule a fee applicable to vendors that disseminate a real-
time Network A ticker over broadcast, cable or satellite television. 
The proposed fee is $2.00 per 1,000 households reached. Each vendor 
must pay a minimum fee of $2,000 per month.
    The fee may be prorated where a vendor broadcasts the Network A 
ticker for only a portion of the trading day. The proration is 
determined by dividing the number of minutes that the vendor broadcasts 
the Network A ticket during the primary market's trading day into the 
total number of minutes in the primary market's trading day (excluding 
after-hours sessions). Currently, the primary market trades from 9:30 
a.m. to 4 p.m. Eastern Standard Time (or for 390 minutes) on each 
trading day. So, if a vendor only broadcasts the Network A ticker for 
two hours during the trading day, it would calculate the Network A fee 
by (A) multiplying the number of households reached by ($2.00 divided 
by 1,000 households reached) and (B) multiplying that product by (120 
minutes divided by 390 minutes).
    Where a vendor owns more than one network and broadcasts the 
Network A ticker simultaneously over more than one of its networks to a 
household, the vendor only needs to count that household once in the 
calculation of the number of households reached.
    The Network A Participants propose to quantify the number of 
households reached for billing purposes through the use of the monthly 
Nielsen Cable National Audience Demographic Report (the ``Nielsen 
Report''). For January through June of each year, the Network A 
Participants will base the bills upon the number of households reached 
as of the end of the preceding September, as published in the Nielsen 
Report. For July through December of each year, the Network A 
Participants will base the bills upon the number of households reached 
as at the end of the preceding March, as published in the Nielsen 
Report.
    Where the Nielsen Report does not provide the number of households 
reached for a vendor as at the end of March or September, the Network A 
Participants will use the most recent figure that the Nielsen Report 
has published as at the end of any of the six months preceding that 
March or September. If the Nielsen Report does not provide the number 
of households reached during that period, then the Network A 
Participants will ask the vendor to report the number of households 
that its broadcasts reach as at the end of each September and March. 
The Network A Participants reserve the right to verify the accuracy of 
the vendor's report.
    The new Network A ticker fee applies to any television broadcasts 
of the Network A ticker, whether through broadcast, cable or satellite 
television. The vendor's television ticker service may not enable the 
vendor's subscribers to customize or interrogate the ticker stream or 
to electronically capture and store the last sale price information 
included in the stream. The vendor must provide the same ticker to each 
of its subscribers.
    The Network A Participants believe that the establishment of the 
proposed fee will contribute to the widespread distribution of real-
time market data around the world because it will make it possible for 
individuals to view real-time Network A prices throughout the trading 
day through television.
    As an administrative matter, the Network A Participants have also 
changed Schedule A-1's broker-dealer enterprise maximum monthly fee, 
and the description of that fee in Footnote 5 of Schedule A-1, to 
reflect the CTA plan's annual adjustment of the fee.

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of Amendment

    The Network A Participants have conducted a pilot program that 
permits vendors to disseminate a Network A last sale price information 
ticker by means of broadcast, cable and/or satellite television. Given 
the success of that pilot program, the CTA Plan limitation on the 
duration of pilot programs and the approach of the pilot program 
termination dates set forth in the earliest contracts that pilot 
participants enter into, the Network A Participants believe that it is 
now appropriate to convert the real-time Network A ticker initiative 
from a pilot program to a permanent part of the Network A rate 
schedule. The proposed new fee is identical to that which applied 
during the pilot program. (The Network A Participants note that with 
the termination of the real-time Network A ticker pilot program, 
Network A will have no remaining pilot programs in effect.)
    Because the amendment establishes a fee collected on the Network A 
Participants' behalf in connection with access to, or use of, the 
facilities contemplated by the Plans, the amendment becomes effective 
upon filing with the Commission.
    As a result, the amendment will ``be implemented'' immediately, as 
the new Network A fee will supersede and replace the pilot program. As 
additional vendors undertake to transmit the Network A ticker over 
television, they will be subject to the new fee in

[[Page 41058]]

accordance with the guidelines set forth in this letter.

D. Development and Implementation Phases

    See Item I(C).

E. Analysis of Impact on Competition

    The amendment will impose no burden on competition.

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

    The Participants have no written understandings or agreements 
relating to interpretation of the CTA Plan as a result of the 
amendment.

G. Approval by Sponsors in Accordance with Plan

    Under Section IV(b) of the CTA Plan, each CTA Plan Participant must 
execute a written amendment to the CTA Plan before the amendment can 
become effective. The amendment is so executed.

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

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

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

    In determining the amount of the fee, the Network A Participants 
have carried over the same fee that has applied during the real-time 
Network A television ticker pilot program.
    The pilot program fee was established through a process of 
discussion and negotiation with the first participants in the pilot 
program. In the view of the Network A Participants, using the number of 
households reached as the billing metric for the dissemination of last 
sale price information through television is a reasonable counterpart 
to metrics used in other contexts, such as counting devices or quote 
packets. The billing metric is the same as television advertisers use, 
a fact that serves to discipline accuracy of the households-reached 
count (since the television networks have incentives to maximize the 
number of households reached while the advertisers have incentives to 
minimize the number).
    The Network A Participants believe that the level of the fee is 
fair and reasonable and allows the television vendors to contribute an 
appropriate amount for the market data services that they provide. It 
constitutes a reasonable allocation of the costs of running the Network 
A securities markets to the purveyors of television ticker services.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 11Aa3-1 \6\
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    \6\ 17 CFR 240.11Aa3-1.
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A. Reporting Requirements

    Not applicable.

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

    The new fee will permit vendors to disseminate a ticker stream of 
Network A last sale price information to viewers of broadcast, cable or 
satellite television.

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 of Manipulative 
Dissemination

    Not applicable.

F. Terms of Access to Transaction Report

    The Network A Participants will require vendors of Network A 
television ticker services to enter into the standard form of vendor 
agreement. It is the same form that the CTA Plan Participants require 
all vendors to enter into.

G. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    The CTA has designated this proposal as establishing or changing 
fees and other charges collected on behalf of all of the sponsors and 
participants, which under Rule 11Aa3-2(c)(3)(i) \7\ of the Act renders 
the proposal effective upon receipt of this filing by the Commission.
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    \7\ 17 CFR 240.11Aa3-2(c)(3)(i).
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    The Commission may summarily abrogate the amendment within sixty 
days of its filing and require refilling and approval of the amendments 
by Commission order pursuant to Rule 11Aa3-2(c)(3)(iii) \8\ of the Act, 
if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors or 
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 proposal is 
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, D.C. 20549-0609. Copies 
of the submission, all subsequent amendments, all written statements 
with respect to the proposed amendment that are filed with the 
Commission, and all written communications relating to the proposal 
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 amendment will also be available 
for inspection and copying at the principal office of the CTA. All 
submissions should refer to File No. SR-CTA-2001-02 and should be 
submitted by August 27, 2001.
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    \8\ 17 CFR 11Aa(c)(3)(iii).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(27).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-19525 Filed 8-3-01; 8:45 am]
BILLING CODE 8010-01-M