[Federal Register Volume 69, Number 51 (Tuesday, March 16, 2004)]
[Notices]
[Pages 12377-12379]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5841]



[[Page 12377]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49382; File No. SR-OPRA-2004-01]


Options Price Reporting Authority; Notice of Filing and Immediate 
Effectiveness of Amendment to OPRA Plan Regarding Device-Based and 
Enterprise Rate Professional Subscriber Fees Charged by OPRA in Respect 
of Its Basic Service and Its FCO Service

March 9, 2004.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 11Aa3-2 thereunder,\2\ notice is hereby given 
that on February 25, 2004, the Options Price Reporting Authority 
(``OPRA'') \3\ submitted to the Securities and Exchange Commission 
(``Commission'') an amendment to the Plan for Reporting of Consolidated 
Options Last Sale Reports and Quotation Information (``OPRA Plan''). 
The proposed OPRA Plan amendment would revise device-based and 
Enterprise Rate professional subscriber fees charged by OPRA in respect 
of its Basic Service and FCO Service. The Commission is publishing this 
notice to solicit comments from interested persons on the proposed OPRA 
Plan amendment.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 240.11Aa3-2.
    \3\ OPRA is a national market system plan approved by the 
Commission pursuant to Section 11A of the Act and Rule 11Aa3-2 
thereunder. See Securities Exchange Act Release No. 17638 (March 18, 
1981), 22 S.E.C. Docket 484 (March 31, 1981).
    The OPRA Plan provides for the collection and dissemination of 
last sale and quotation information on options that are traded on 
the participant exchanges. The six participants to the OPRA Plan are 
the American Stock Exchange LLC, the Boston Stock Exchange, Inc., 
the Chicago Board Options Exchange, Inc., the International 
Securities Exchange, Inc., the Pacific Exchange, Inc., and the 
Philadelphia Stock Exchange, Inc.
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I. Description and Purpose of the Amendment

    The purpose of the proposed amendment to OPRA's national market 
system plan is to make incremental changes to the device-based and 
Enterprise Rate professional subscriber fees charged by OPRA in respect 
of its Basic Service and FCO Service over a four-year period commencing 
in 2004. By January 1, 2007, every professional subscriber would be 
subject to the same Basic Service device-based fee and the same FCO 
Service device-based fee, or elect to pay the Basic Service Enterprise 
Rate fee as an alternative to the Basic Service device-based fee at a 
rate per registered representative that is more closely aligned to the 
uniform device-based rate. OPRA's Basic Service consists of market data 
and related information pertaining to equity and index options. OPRA's 
FCO Service consists of this same information pertaining to foreign 
currency options. As a result of these changes, by the beginning of 
2007, OPRA would have eliminated all distinctions in the device fees 
paid by professional subscribers based on the subscriber's status as a 
member or nonmember of an exchange that is a party to the OPRA Plan, as 
well as distinctions in the per-device fee based on the total number of 
OPRA-enabled devices of each professional subscriber.
    The annual incremental changes to OPRA's professional subscriber 
fees proposed to be made over a four year period, including the changes 
to be made at the beginning of the fourth year when all device-based 
fees would be the same for all professional subscribers, are estimated 
by OPRA to increase total OPRA revenues derived from these fees by 
approximately 5% each year. This would be at or below the rate at which 
OPRA has increased professional subscriber fees in the past. Since 
Professional Subscribers currently pay device-based fees at different 
rates depending on their status as members or nonmembers of exchanges 
and on the number of devices through which they access OPRA 
information, in one or more of the four years during which these 
distinctions are being phased out, some Professional Subscribers would 
see their fees increase by more than the 5% average, although a greater 
number of Professional Subscribers would actually see their OPRA fees 
decrease. Professional subscribers are persons who subscribe to OPRA 
Information and do not qualify for the reduced fees charged to 
nonprofessional subscribers.
    The elimination from OPRA's device-based professional subscriber 
fees of both the member and nonmember distinction and the volume 
discount is intended to make OPRA's rate structure simpler and fairer 
in light of continuing changes in communications and computer 
technology as well as in the structure of exchanges and in the nature 
of exchange membership. All of these combine to make these distinctions 
no longer useful. OPRA proposes to phase in the elimination of these 
fee distinctions over a four-year period in order to avoid making too 
great a change to the fees paid by any one professional subscriber in a 
single year.
    The 5% annual increase in OPRA revenues estimated to result from 
these proposed fee changes is needed to defray the ever-increasing 
costs incurred by OPRA in collecting, processing, and disseminating 
options market data. These costs have increased over the past several 
years on account of the expansion of options trading and the 
introduction of new services, such as OPRA's BBO service that was 
introduced in 2003. OPRA's costs are expected to continue to increase 
over the next four years in light of anticipated continued growth in 
the number of messages that OPRA would be required to handle as a 
result of the entry of new options exchanges and the expansion of 
trading on existing exchanges, and changes in the trading and quoting 
methodologies used by OPRA's exchanges that are expected to increase 
significantly the number of individual quotes generated by each 
exchange.
    The text of the proposed Professional Subscriber Fee Schedule is 
set forth below.
* * * * *

OPTIONS PRICE REPORTING AUTHORITY

Professional Subscriber Fee Schedule

(Effective April 1, 2004)

Basic Service

    Subscriber shall pay a monthly fee based upon the number of 
electronic display or interrogation devices maintained by Subscriber 
that are capable of displaying or reporting OPRA Information. OPRA's 
device-based professional subscriber fees are subject to written 
policies. These policies are available at www.opradata.com. Copies of 
these policies have been furnished to all professional subscribers, and 
additional copies will be mailed to subscribers upon request. The 
monthly fee per device shall be as follows:

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                                                                                               Basic Service
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                Number of Devices                           2004                      2005                      2006                      2007
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                                                     Member     Non-Member     Member     Non-Member     Member     Non-Member     Member     Non-Member
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1-9.............................................       $20.50       $32.25       $20.50       $32.25       $20.50       $32.25       $20.00       $20.00
10-29...........................................        20.50        27.50        20.50        27.50        20.50        27.50        20.00        20.00
30-99...........................................        18.00        27.50        19.00        27.50        20.00        27.50        20.00        20.00
100-749.........................................        18.00        20.00        19.00        20.00        20.00        20.00        20.00        20.00
750+............................................        14.00        20.00        15.75        20.00        17.75        20.00        20.00        20.00
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Enterprise Rate Professional Subscriber Fee

    As an alternative to the Device-based Professional Subscriber Fee, 
OPRA's Enterprise Rate Professional Subscriber Fee is available to 
those Subscribers that are members or associate members in good 
standing of one or more of the exchanges that are parties to the OPRA 
Plan, and that elect to pay Subscriber Fees at the Enterprise Rate by 
signing the Enterprise Rate Amendment to the Subscriber Agreement. The 
Enterprise Rate Subscriber Fee in effect commencing April 1, 2004 is a 
monthly fee of $12.00 times the number of a Subscriber's registered 
representatives based in the United States, its territories and 
possessions as reported by the NASD, subject to a minimum monthly fee 
of $2,400 per subscriber and subject to adjustment in accordance with 
the Enterprise Rate Amendment to the Subscriber Agreement. Effective 
January 1, 2005, the Enterprise Rate Subscriber Fee will be $14.00 per 
registered representative subject to a minimum monthly fee of $2,800, 
effective January 1, 2006, the Enterprise Rate Subscriber Fee will be 
$16 per registered representative subject to a minimum monthly fee of 
$3,200, and effective January 1, 2007, the Enterprise Rate Subscriber 
Fee will be $20 per registered representative subject to a minimum 
monthly fee of $4,000. Payment of the Enterprise Rate Professional 
Subscriber Fee entitles Subscriber to access OPRA's Basic Service at 
any of its locations in the United States, its territories and 
possessions, except that Subscribers who pay the Enterprise Rate 
Professional Subscriber Fee on the basis of more than 7,000 registered 
representatives (i.e., a monthly fee in excess of $84,000 in 2004, 
$98,000 in 2005, $112,000 in 2006, and $140,000 in 2007) are entitled 
to access OPRA's Basic Service at any of their locations worldwide. In 
addition, payment of the Enterprise Rate Professional Subscriber Fee by 
a Subscriber allows OPRA's Basic Service to be made available to 
independent investment advisers who are under contract with the 
Subscriber to provide investment advisory services to the Subscriber's 
customers. All such investment advisers will be deemed to be registered 
representatives of the Subscriber for purposes of calculating the 
Subscriber's Enterprise Rate Professional Subscriber Fee.
* * * * *

FCO Service

    Subscriber shall pay a monthly fee based upon the number of 
electronic display or interrogation devices maintained by Subscriber 
that are capable of displaying or reporting OPRA's FCO Service. The 
monthly fee per device shall be as follows:

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      Number of devices          2004       2005       2006       2007
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1...........................      $3.75      $4.25      $4.75      $5.00
2-9.........................       3.25       3.75       4.25       5.00
10-749......................       3.00       3.50       4.25       5.00
750+........................       2.25       3.00       4.00       5.00
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* * * * *

II. Implementation of the OPRA Plan Amendment

    Pursuant to paragraph (c)(3)(i) of Rule 11Aa3-2 under the Act,\4\ 
OPRA designates this amendment as 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, thereby qualifying 
for effectiveness upon filing. In order to provide persons subject to 
these fees advance notice of the changes, OPRA proposes that the 
revised fees go into effect on April 1, 2004. The Commission may 
summarily abrogate the amendment within sixty days of its filing and 
require refiling and approval of the amendment by Commission order 
pursuant to Rule 11Aa3-2(c)(2) under the Act,\5\ 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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    \4\ 17 CFR 240.11Aa3-2(c)(3)(i).
    \5\ 17 CFR 240.11Aa3-2(c)(2).
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III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed OPRA 
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 NW., Washington, 
DC 20549-0609. Comments may also be submitted electronically at the 
following e-mail address: [email protected]. All comment letters 
should refer to File No. SR-OPRA-2004-01. This file number should be 
included on the subject line if e-mail is used. To help the Commission 
process and review your comments more efficiently, comments should be 
sent in hardcopy or by e-mail but not by both methods. Copies of the 
submission, all subsequent amendments, and all written statements with 
respect to the proposed OPRA Plan amendment that are filed with the 
Commission, and all written communications relating to the proposed 
OPRA Plan amendment between the Commission and any

[[Page 12379]]

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 
also will be available at the principal offices of OPRA. All 
submissions should refer to File No. SR-OPRA-2004-01 and should be 
submitted by April 6, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(29).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-5841 Filed 3-15-04; 8:45 am]
BILLING CODE 8010-01-P