[Federal Register Volume 69, Number 28 (Wednesday, February 11, 2004)]
[Notices]
[Pages 6705-6707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2907]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49187; File No. SR-CTA/CQ-2003-02]


Consolidated Tape Association; Order Approving the Sixth 
Substantive Amendment to the Second Restatement of the Consolidated 
Tape Association Plan and the Fourth Substantive Amendment to the 
Restated Consolidated Quotation Plan and Amendment No. 1 Thereto

February 4, 2004.

I. Introduction

    On November 28, 2003, the Consolidated Tape Association (``CTA'') 
Plan and Consolidated Quotation (``CQ'') Plan Participants 
(``Participants'') \1\ submitted to the Securities and Exchange 
Commission (``Commission'') a proposal to amend the CTA and CQ Plans 
(collectively, the ``Plans''), pursuant to Rule 11Aa3-2 \2\ under the 
Securities Exchange Act of 1934 (``Act''). On December 23, 2003, the 
Participants submitted Amendment No. 1 to the proposed amendments.\3\ 
The proposal represents the 6th substantive amendment made to the 
Second Restatement of the CTA Plan (``6th Amendment'') and the 4th

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substantive amendment to the Restated CQ Plan (``4th Amendment''), and 
reflects several changes unanimously adopted by the Participants. The 
proposed amendments would separate the functions of administering the 
contracts into which vendors and others enter for the purpose of 
receiving and using market data. Notice of the proposed amendments was 
published in the Federal Register on December 31, 2003.\4\
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    \1\ Each Participant executed the proposed amendments. The 
Participants are the American Stock Exchange LLC (``Amex''); Boston 
Stock Exchange, Inc.; Chicago Board Options Exchange, Inc.; Chicago 
Stock Exchange, Inc.; Cincinnati Stock Exchange, Inc. (now known as 
the National Stock Exchange, Inc.); National Association of 
Securities Dealers, Inc.; New York Stock Exchange, Inc. (``NYSE''); 
Pacific Exchange, Inc.; and Philadelphia Stock Exchange, Inc.
    \2\ 17 CFR 240.11Aa3-2.
    \3\ See letter to Jonathan G. Katz, Secretary, Commission, from 
Thomas E. Haley, Chairman, CTA, dated December 22, 2003 (``Amendment 
No. 1''). Amendment No. 1 makes a technical correction to the 
proposed amendments.
    \4\ See Securities Exchange Act Release No. 48984 (December 23, 
2003), 68 FR 75662 (December 31, 2003).
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    The Commission received no comments on the proposed amendments. 
This order approves the 6th Amendment to the CTA Plan and the 4th 
Amendment to the CQ Plan.

II. Description of the Proposed Amendments

    Since 1989, NYSE has performed certain administrative functions on 
behalf of the Amex, which is the Network B Administrator.\5\ These 
functions include procuring and maintaining the contracts by which 
vendors and others receive and use the market data that both Network A 
and Network B make available.\6\ NYSE executes the Consolidated Vendor 
Form on behalf of itself, the Network B administrator and the other 
Plan Participants.
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    \5\ In 1989, the Participants introduced the ``Consolidated 
Vendor Form'' and that form of vendor agreement is still in use. See 
Securities Exchange Act Release No. 27498 (December 4, 1989), 54 FR 
50828 (December 11, 1989). The Consolidated Vendor Form applies to 
the receipt and use of Network B market data, as well as Network A 
market data. Pursuant to delegated authority, NYSE has administered 
that Consolidated Vendor Form on behalf of the Network B 
Participants as well as on behalf of the Network A Participants. 
Before the introduction of that form of vendor agreement, NYSE 
administered the Network A vendor agreements on behalf of the 
Network A Participants and the Amex administered the Network B 
vendor agreements on behalf of the Network B Participants.
    \6\ The form of contract that is the subject of the proposal is 
the form of contract (the Consolidated Vendor Form) that the 
Participants require ``Customers'' to enter into for their receipt 
and use of the market data that the Participants make available 
under the Plans. ``Customers'' include (1) vendors, (2) internal and 
other data redistributors, and (3) those that internally use market 
data for the purposes that are subject to the Plans' program 
classification charges. The Consolidated Vendor Form constitutes 
Exhibit C to each Plan.
    End users that do not redistribute data and do not use it for 
the purposes that are the subject of the program classification 
charges receive the data pursuant to ``subscriber'' forms of the 
agreement. NYSE, as the Network A administrator, currently 
administers the Network A form of that agreement. The Amex, as the 
Network B administrator, currently administers a Network B form of 
that agreement. The proposed amendments do not propose any change to 
those subscriber forms.
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    The Participants propose to once again divide the contract-
administration function between the Network A administrator (NYSE) (for 
the receipt and use of Network A market data) and the Network B 
administrator (Amex) (for the receipt and use of Network B market 
data). To make the separation of contract functions possible, the 
amendments propose to replace the Consolidated Vendor Form with two new 
forms, a ``Network A Consolidated Vendor Form'' and a ``Network B 
Consolidated Vendor Form.''
    Under the proposal, the Amex would assume all contract-
administration functions for the Network B Consolidated Vendor Form and 
would execute those forms on behalf of itself and the other Network B 
Participants. The NYSE would continue to perform the contract-
administration functions for Network A and would execute the Network A 
Consolidated Vendor Form on behalf of itself and the other Network A 
Participants.
    In terms of substance, the Network A Consolidated Vendor Form and 
the Network B Consolidated Vendor Form would offer the same terms and 
conditions as does the Consolidated Vendor Form. The only difference 
would be that the Consolidated Vendor Form governs the receipt and use 
of both Network A and Network B market data, whereas the Network A 
Consolidated Vendor Form governs the receipt and use of Network A 
market data and the Network B Consolidated Vendor Form will govern the 
receipt and use of Network B market data.
    The Participants originally submitted the Consolidated Vendor Form 
to the Commission on October 16, 1989.\7\ They made certain revisions 
to the form in response to changes recommended by commenters and re-
filed the Consolidated Vendor Form for immediate effectiveness in 
August 1990.\8\ In conjunction with its submission of amended and 
restated CTA and CQ Plans in December 1995, the Participants submitted 
a revised version of the Consolidated Vendor Form to the Commission. 
That revised version made non-substantive changes to conform the form's 
language to the language in the Plans and to provide greater clarity 
and standardization in the definitions. The Commission approved the 
restated Plans, including the revised version of the Consolidated 
Vendor Form, in May 1996.\9\ The amendments propose the first changes 
to the Consolidated Vendor Form since then.
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    \7\ See Securities Exchange Act Release No. 27498 (December 4, 
1989), 54 FR 50828 (December 11, 1989).
    \8\ See Securities Exchange Act Release No. 28407 (September 6, 
1990), 55 FR 37276 (September 10, 1990).
    \9\ See Securities Exchange Act Release No. 37191 (May 9, 1996), 
61 FR 24842 (May 16, 1996).
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    Under the proposal, the Amex would assume Network B contract-
administration functions within 90 days from the Commission's approval 
of these proposed amendments. The network administrators would commence 
to use the Network A consolidated Vendor Form and the Network B 
Consolidated Vendor Form at that time. The Participants state that they 
intend to notify vendors and other interested parties, both in writing 
and through verbal contact, of the two new forms.

III. Discussion

    The Commission finds that the proposed amendments to the Plans are 
consistent with the requirements of the Act and the rules and 
regulations thereunder,\10\ and, in particular, section 11A(a)(1)\11\ 
of the Act and Rule 11Aa3-2 thereunder.\12\
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    \10\ In approving the proposed plan amendments, the Commission 
has considered the proposed amendments' impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78k-1(a)(1).
    \12\ 17 CFR 240.11Aa3-2.
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    The Commission believes that separating the Network A and Network B 
functions of administering the contracts into which vendors and others 
enter for the purpose of receiving and using market data should help to 
facilitate the proper administration of the Plans. More specifically, 
the Commission believes that the proposed amendments should ease the 
administrative burden on the NYSE, which currently administers the 
Consolidated Vendor Form on behalf of both Network A and Network B 
Participants, by transferring the Network B Contract functions to the 
Amex, the Network B administrator. The Commission notes that the new 
Network A Consolidated Vendor Form and the new Network B Consolidated 
Vendor Form are substantially similar to, and offer the same terms and 
conditions as, the current Consolidated Vendor Form. The Commission 
further notes that the separation of the Network A and Network B 
contract-administration functions and the use of the new forms will be 
implemented 90 days from the date of this approval order, and that the 
Participants will notify vendors and other interested parties of the 
new forms. The Commission therefore finds that the proposed amendments 
to divide the contract-administration function between the Network A 
administrator and the Network B administrator are

[[Page 6707]]

consistent with section 11A of the Act \13\ and the rules and 
regulations thereunder.
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    \13\ 15 U.S.C. 78k-1.
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IV. Conclusion

    It is therefore ordered, pursuant to section 11A of the Act \14\ 
and paragraph (c)(2) of Rule 11Aa3-2\15\ thereunder, that the proposed 
6th Amendment to the CTA Plan and the proposed 4th Amendment to the CQ 
Plan are approved, as amended.
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    \14\ 15 U.S.C. 78k-1.
    \15\ 17 CFR 240.11Aa3-2(c)(2).
    \16\ 17 CFR 200.30-3(a)(27).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-2907 Filed 2-10-04; 8:45 am]
BILLING CODE 8010-01-P