[Federal Register Volume 67, Number 248 (Thursday, December 26, 2002)]
[Notices]
[Pages 78832-78833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32472]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47030; File No. SR-CTA/CQ-2002-01]


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

December 18, 2002.
    Pursuant to Rule 11Aa3-2 \1\ under the Securities Exchange Act of 
1934 (``Act''), notice is hereby given that on December 16, 2002, the 
Consolidated Tape Association (``CTA'') Plan and Consolidated Quotation 
(``CQ'') Plan Participants (``Participants'') \2\ filed with the 
Securities and Exchange Commission (``SEC'' or ``Commission'') a 
proposal to amend the CTA and CQ Plans (collectively, the ``Plans''). 
The proposal represents the 4th substantive amendment made to the 
Second Restatement of the CTA Plan (``4th Amendment'') and the 2nd 
substantive amendment to the Restated CQ Plan (``2nd Amendment''), and 
reflects several changes unanimously adopted by the Participants. The 
proposed amendments would introduce a capacity planning process into 
the Plans and would allocate among the Participants the costs 
associated with their capacity needs under the Plans.
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    \1\ 17 CFR 240.11Aa3-2.
    \2\ Each Participant executed the proposed amendments. The 
Participants are the American Stock Exchange LLC (``AMEX''); Boston 
Stock Exchange, Inc. (``BSE''); Chicago Board Options Exchange, Inc. 
(``CBOE''); Chicago Stock Exchange, Inc. (``CHX''); Cincinnati Stock 
Exchange, Inc. (``CSE''); National Association of Securities 
Dealers, Inc. (``NASD''); New York Stock Exchange, Inc. (``NYSE''); 
Pacific Exchange, Inc. (``PCX''); and Philadelphia Stock Exchange, 
Inc. (``PHLX'').
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    The Commission is putting into effect summarily the 4th Amendment 
to the CTA Plan and the 2nd Amendment to the CQ Plan, and publishing 
this notice to solicit comments from interested persons on the proposed 
amendments to the Plans generally.

I. Description and Purpose of the Amendment

A. Rule 11Aa3-2

    The Participants propose to introduce a capacity planning process 
into the Plans. The Participants will engage in the capacity planning 
process on a semi-annual basis. The proposed capacity planning process 
requires each Participant to submit its projected capacity needs 
directly to the Securities Industry Automation Corporation (``SIAC'' or 
``Processor''), the processor under both Plans. The process avoids any 
need for Participants to share their individual capacity needs with one 
another. SIAC will provide each Participant with aggregate capacity 
projections for all Participants, but will not provide any individual 
Participant's capacity projections with any other Participant.
    Under the proposed plan:
1. Semi-Annual Planning Cycles
    a. At the start of each semi-annual capacity planning cycle, each 
Participant will develop and submit to SIAC an initial set of projected 
capacity needs.
    b. Once it receives all of the initial sets of projected capacity 
needs, SIAC will aggregate the initial projected capacity requirements 
for all of the Participants and will notify each Participant as to:
    i. the initial aggregate capacity projections for all Participants;
    ii. the percentage of capacity requirements attributable to that 
Participant; and
    iii. the amount of any projected excess capacity or any projected 
deficit capacity.

(SIAC determines the excess or deficit by comparing the capacity that 
the then existing systems under the Plans can provide and the aggregate 
projected capacity needs of the Participants.)
    c. Each Participant will then notify the Processor of its final 
projected capacity needs.
    d. Based on the information that SIAC provides, CTA and the CQ 
Operating Committee will determine and advise SIAC of any increase or 
decrease that they propose to make to the capacity of their respective 
systems. However, in directing SIAC to make any proposed change, the 
Participants must cause the system to have no less capacity than the 
capacity necessary to meet the aggregate projected capacity 
requirements for the system for all Participants.
    e. SIAC will then submit to each Participant a proposal for 
increasing or decreasing total system capacity and each Participant's 
proportionate share of the estimated costs for implementing any change. 
Each Participant's proportionate share of the costs will reflect that 
Participant's percentage of the final projected capacity requirements 
for all Participants.
    f. SIAC will bill each Participant directly and each Participant 
will pay SIAC for the services that SIAC renders to it. The cost of the 
services for each Participant will be its proportionate share of the 
total cost to all of the Participants.
    g. Each Participant will be entitled to use its proportionate share 
of the final capacity requirements of all Participants and, at no extra 
cost, of any excess capacity. If the Processor determines that a 
Participant is using more than its proportionate share of the aggregate 
capacity and the excess capacity, that Participant may be subject to a 
fine. The proceeds from any such fine will be distributed to each of 
the other Participants in accordance with their proportionate shares.
2. Intra-Cycle Capacity Transfers
    a. In between the semi-annual capacity planning cycles, a 
Participant may seek to increase or decrease the amount of capacity 
available to it by notifying SIAC of its desire for more or less 
capacity. Under those circumstances, a Participant may purchase 
additional capacity only if another Participant has submitted to SIAC 
an unfilled request to sell a portion of its capacity or if excess 
capacity exists in the system at that time. A Participant may sell some 
of its capacity only if another Participant has submitted to SIAC an 
unfilled request to purchase additional capacity.
    b. If SIAC is able to match Participants' requests to buy and sell 
capacity within a planning cycle, SIAC will effect the sale for the 
Participants without revealing either Participant's identity.
    c. If a Participant determines to acquire available excess 
capacity, SIAC shall adjust each Participant's proportionate share of 
system costs based on the new amount of capacity available to the 
Participant acquiring the available excess capacity.
    d. On a periodic basis, SIAC will determine and inform each 
Participant of the total amount of the system capacity currently 
available, whether it is available from available excess capacity or 
from a Participant that seeks to sell capacity.
    Under this plan, SIAC will not disclose to any Participant:
    1. The initial or final projected capacity requirements of any 
other Participant;
    2. The percentage of the aggregate amount of capacity attributable 
to any other Participant; or
    3. Any other Participant's between-planning-cycles request to 
increase or decrease capacity.
    The Participants believe that the filing of the proposed amendments 
is in fulfillment of the national market system objectives regarding 
the dissemination of market information as

[[Page 78833]]

anticipated by Sections 11A(a)(1)(C),\3\ 11A(a)(1)(D) \4\ and 
11A(a)(3)(B) \5\ of the Act.
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    \3\ 15 U.S.C. 78k-1(a)(1)(C).
    \4\ 15 U.S.C. 78k-1(a)(1)(D).
    \5\ 15 U.S.C. 78k-1(a)(3)(B).
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B. Governing or Constituent Documents

    Not applicable.

C. Implementation of Amendment

    The Participants have requested that the proposed amendments to the 
Plans become effective summarily upon publication of notice of the 
amendments, on a temporary basis not to exceed 120 days, so that the 
proposed new capacity planning process can be implemented on January 1, 
2003, the date of the next capacity planning cycle.\6\
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    \6\ Telephone conversation between Thomas F. Haley, Chairman, 
CTA, and Kathy A. England, Assistant Director, Sapna C. Patel, 
Attorney, Ian K. Patel, Attorney, Division of Market Regulation 
(``Division''), Commission, on December 17, 2002. See also letter 
from Thomas E. Haley, Chairman, CTA, to Kathy A. England, Assistant 
Director, Division, Commission, dated December 16, 2002. The 
Commission's notes that the original filing of the proposed 
amendments to the Plans incorrectly stated that the proposed 
amendments would take effect upon filing with the Commission because 
they are concerned solely with the administration of the Plans.
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D. Development and Implementation Phases

    The Participants propose to commence to plan for their capacity 
needs pursuant to the new process with the next capacity planning 
cycle, which begins on January 1, 2003.

E. Analysis of Impact on Competition

    The Participants believe that the proposed amendments do not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Participants do not believe 
that the proposed plan amendments introduce terms that are unreasonably 
discriminatory for the purposes of Section 11A(c)(1)(D) \7\ of the Act.
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    \7\ 15 U.S.C. 78k-1(c)(1)(D).
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F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    The forms of agreement between the Participants and SIAC have been 
revised to reflect the new obligations of the Participants and the 
Processor in respect of the new capacity planning process.

G. Approval by Sponsors in Accordance with Plan

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

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

    Not applicable.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 11Aa3-1

A. Reporting Requirements

    Not applicable.

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

    The proposed amendments provide a new process pursuant to which the 
Participants under the Plans can plan for the capacity needs of the 
systems that they use to gather market data from their respective 
marketplaces for consolidation and distribution to the public.

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 Transaction Reports

    Not applicable.

G. Identification of Marketplace of Execution

    Not Applicable.

III. Date of Effectiveness of the Proposed Amendment

    The Commission has determined, pursuant to Rule 11Aa3-2(c)(4) \8\ 
under the Act, that the proposed amendments, which generally implement 
a new capacity planning process, will become effective summarily upon 
publication of this notice of amendments in the Federal Register on a 
temporary basis not to exceed 120 days. The Commission believes that it 
is appropriate to put the proposed amendments into effect summarily 
because they should provide for the maintenance of fair and orderly 
markets, and should remove impediments to, and perfect the mechanism 
of, a national market system. By granting temporary summary 
effectiveness, the Participants can begin to plan their capacity needs 
pursuant to the proposed capacity planning process for the January 1, 
2003 capacity planning cycle.
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    \8\ 17 CFR 240.11Aa3-2(c)(4).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed 
amendments to the 4th Amendment to the CTA Plan and the 2nd Amendment 
to the CQ Plan 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 amendments 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 filing will also be 
available for inspection and copying at the principal office of CTA. 
All submissions should refer to File No. SR-CTA/CQ-2002-01 and be 
submitted by January 16, 2003.

    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. 02-32472 Filed 12-24-02; 8:45 am]
BILLING CODE 8010-01-P