[Federal Register Volume 69, Number 130 (Thursday, July 8, 2004)]
[Notices]
[Pages 41312-41315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-15486]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49958; File No. SR-OPRA-2004-02]


Options Price Reporting Authority; Notice of Filing of Proposed 
Amendment to the Plan for Reporting of Consolidated Options Last Sale 
Reports and Quotation Information and Amendment No. 1 Thereto To 
Eliminate From the Plan References to the Fee Exemption Pilot Currently 
Provided for in the Plan

July 1, 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 May 7, 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''). On 
June 23, 2004, OPRA submitted Amendment No. 1 to

[[Page 41313]]

the proposal.\4\ The proposed amendment would eliminate from the OPRA 
Plan references to the fee exemption pilot that expired on May 31, 
2004. The Commission is publishing this notice to solicit comments from 
interested persons on the proposed OPRA Plan amendment, as amended by 
Amendment No. 1.
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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. 
(``ISE''), the Pacific Exchange, Inc., and the Philadelphia Stock 
Exchange, Inc.
    \4\ See letter from Michael L. Meyer, Counsel to OPRA, Schiff 
Hardin LLP, to Deborah Flynn, Assistant Director, Division of Market 
Regulation, Commission, dated June 22, 2004, replacing in its 
entirety the initial proposal filed on May 7, 2004. Amendment No. 1 
made technical corrections to the proposed rule text and purpose 
section.
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I. Description and Purpose of the Amendment

    The purpose of the proposed OPRA Plan amendment is to eliminate 
from the OPRA Plan references to the fee exemption pilot currently 
provided for in the OPRA Plan. The fee exemption pilot was added to 
section VII(d)(vi) of the OPRA Plan in August 2000. It provides a 
temporary exemption from OPRA fees for members of exchanges that are 
parties to the OPRA Plan and that act as brokers or dealers on 
traditional exchange trading floors or as specialists or market makers 
on electronic exchanges or electronic facilities of exchanges. For the 
duration of the pilot, section V(e) of the OPRA Plan also provides that 
parties to the OPRA Plan may access OPRA information on their trading 
floors or at their other business locations without being obligated to 
pay fees to OPRA. The temporary exemption for members of parties and 
for the parties themselves was originally scheduled to expire on May 
31, 2002, but was extended by OPRA until May 31, 2004.\5\
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    \5\ See Securities Exchange Act Release Nos. 43109 (August 2, 
2000), 65 FR 48769 (August 9, 2000) (SR-OPRA-00-06), and 46032 (June 
5, 2002), 67 FR 40356 (June 12, 2002) (SR-OPRA-2002-02).
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    OPRA states that the temporary fee exemption was added to the OPRA 
Plan shortly before the commencement of trading on the all-electronic 
ISE in order to eliminate what could otherwise have been viewed as 
discrimination between devices on the trading floors of traditional 
exchanges, which had never been subject to information fees, and 
devices used by market makers on electronic exchanges, which, absent 
the exemption, would have been subject to OPRA fees. OPRA states that, 
at the time the temporary fee exemption was adopted, it recognized that 
an alternative way to avoid discriminating among different types of 
exchanges would be to subject all devices used to access OPRA 
information, whether on-floor or off-floor, to OPRA's information fees. 
OPRA believes that this would be the effect of the proposed amendment, 
which, upon its effectiveness, would make all devices that are used to 
access options market information furnished by OPRA subject to OPRA's 
information fees.
    OPRA also proposes to amend the OPRA Plan to confirm that the 
receipt of options market data by an exchange over devices maintained 
by such exchange at its business locations would not involve 
redistribution of the data by such exchange, notwithstanding that 
members of such exchange could be able to access the information over 
those devices. OPRA proposes to amend the definitions of ``vendor'' and 
``subscriber'' set forth in paragraphs (k) and (l) of section II of the 
OPRA Plan to acknowledge that an exchange making options market 
information available to its members over devices maintained by an 
exchange at the exchange's business locations would not be engaged in 
``redistributing'' the information. Accordingly, neither the exchange 
nor its members who access options market data in this way would need 
to enter into vendor or subscriber agreements with OPRA. However, upon 
the expiration of the fee exemption pilot, all devices maintained by 
exchanges for the receipt of OPRA information would be subject to 
OPRA's information fees.
    Finally, as a matter of ``housekeeping,'' OPRA proposes to delete 
from section V(c)(i) of the OPRA Plan language concerning the 
introduction of OPRA's BBO Service in 2003 since the BBO Service is now 
already in place.
    The text of the proposed OPRA Plan amendment, as amended, is set 
forth below. Proposed new language is in italics; deletions are in 
brackets.
* * * * *

II. Definitions

* * * * *
    (k) ``Vendor'' means a person that receives consolidated Options 
Information provided by OPRA or provided by a Vendor in connection with 
such person's business of distributing, publishing, or otherwise 
furnishing such information to other persons; provided, however, that a 
party to the Plan who receives consolidated Options Information over 
interrogation, display or other communications devices maintained by or 
on behalf of the party at any of its business locations shall not be 
deemed to be a Vendor solely because members of the party have access 
to consolidated Options Information over such devices at such 
locations. If a party makes consolidated Options Information available 
to its members or to any other persons (other than the party's own 
employees or agents) over any other devices or at any other locations, 
the party shall be deemed to be a Vendor.
    (l) ``Subscriber'' means a person that receives consolidated 
Options Information provided by OPRA or provided by a Vendor for [its] 
such person's own use, other than in connection with [its] such 
person's activities as a Vendor, provided, however, that a member of a 
party to the Plan shall not be deemed to be a Subscriber solely because 
the member has access to consolidated Options Information over 
interrogation, display or other communications devices maintained by or 
on behalf of such party at one or more of such party's business 
locations.

III. Administration of the Plan

    (a) [No Change]
    (b) Authority of Policy Committee. Except as otherwise expressly 
provided in the Plan, the OPRA Policy Committee shall make all policy 
decisions on behalf of OPRA in furtherance of the functions and 
objectives of OPRA under the Exchange Act and under the Plan, including 
but not limited to the following:
    (1)-(3) [No change]
    (4) Determining the level of fees to be paid to [the parties by] 
OPRA by parties, Vendors, Subscribers[,] or [others for] other approved 
persons for access or other services related to consolidated options 
Last Sale Reports or consolidated Quotation Information;
    (5)-(7) [No change]
    (c)-(h) [No change]
* * * * *

V. Collection and Dissemination of Options Last Sale Reports and 
Quotation Information

    (a)-(b) [No change]
    (c) Dissemination of Last Sale Reports, Quotation Information and 
Other Information.
    (i) The OPRA System shall provide for the uniform, 
nondiscriminatory dissemination of consolidated Options Information, on 
fair and reasonable terms over a network or networks to the parties, 
Vendors, Subscribers and other approved persons. Such information shall 
include consolidated Last Sale Reports and consolidated Quotation 
Information for all series of options for which the parties are 
required to provide current market information to OPRA in accordance 
with paragraphs (a)-(b) of this section V, and [Not later than March 
31, 2003, or upon the earlier completion of modifications to the OPRA 
system necessary to enable the

[[Page 41314]]

System to carry the BBO, such information] shall also include the BBO 
for all such series of options. [Once the BBO is available through the 
OPRA System,] OPRA may offer a complete options market data service 
consisting of the BBO combined with consolidated Last Sale Reports and 
Quotation Information, or OPRA may offer a limited service consisting 
of the BBO combined with consolidated Last Sale Reports only while 
separately continuing to offer Last Sale Reports and complete Quotation 
Information. Only such consolidated market information and related 
information, together with other information that satisfies the 
conditions of paragraph (iv) of this section V(c) or is approved by 
OPRA, shall be disseminated through the System.
    (ii)-(iv) [No change]
    (d) [No change]
    [(e) For the duration of the pilot period described in subparagraph 
(d)(vi) of section VII of the Plan, each of the parties to the Plan is 
entitled to access Options Information without obligation to pay 
information fees or facilities charges to OPRA, provided that such 
access is provided only on the party's trading floor or at its other 
business locations, and provided further that the Options Information 
is used by the party only in connection with the operation, 
surveillance or regulation of its market in Eligible Securities. This 
entitlement extends to any other self-regulatory organization that 
performs regulatory or surveillance functions for a party.]
* * * * *

VII. Vendors, Subscribers and Other Approved Persons

    (a) Approval Required. Consolidated Options Information shall be 
disseminated through the OPRA System only to the parties, Vendors, 
Subscribers and other categories of persons that have been approved by 
OPRA and have entered into agreements with or for the benefit of OPRA 
and are in full compliance therewith. OPRA may, in its discretion, 
require that Vendors, Subscribers or other approved persons be 
separately approved to receive consolidated Last Sale Reports and/or 
consolidated Quotation Information relating to each of FCO Securities, 
Index Option Securities or other categories of Eligible Securities. Any 
Vendor, Subscriber, or other approved person may be disapproved or its 
previous approval may be terminated upon a determination by OPRA that 
such action is necessary or appropriate in the public interest or for 
the protection of investors, or in the event such person violates any 
provision of any contract or agreement pursuant to which such person 
receives consolidated Last Sale Reports, consolidated Quotation 
Information or other Options Information. Any person adversely affected 
by final action of OPRA in disapproving or revoking prior approval of 
the privilege of receiving consolidated Last Sale Reports or 
consolidated Quotation Information shall be entitled to have such 
action reviewed in accordance with the applicable rules and regulations 
of the Securities and Exchange Commission.
    (b)-(c) [No change]
    (d) Fees and Charges.
    (i) General. OPRA may impose information fees and/or facilities 
charges upon all persons who have access to Options Information, 
including parties, Vendors, Subscribers or other approved [persons in 
accordance with the agreements between OPRA and such] persons. A 
schedule of OPRA's effective fees and charges is attached as Exhibit A 
hereto. Except as provided in paragraphs (ii) and (iii) below, changes 
in these fees and charges may be made by the affirmative vote of not 
less than two-thirds of all of the parties. Upon approval in accordance 
with this section VII(d) and, in the case of fees and charges subject 
to approval only by parties who provide a market in FCO Securities or 
Index Option Securities, upon not less than 30 days prior written 
notice to the other parties, changes in fees and charges may be put 
into effect upon OPRA's filing notice thereof with the Securities and 
Exchange Commission, subject to any required notice period in the 
agreements between OPRA and the persons subject to the fees or charges 
in question. Any change in a fee or charge that has taken effect as 
stated above may be summarily abrogated by the Securities and Exchange 
Commission within 60 days of the date of filing the same with the 
Commission if the Commission determines that it is appropriate in 
furtherance of the purposes of the Exchange Act that such change not be 
put into effect until it has been reviewed and approved by the 
Commission. The abrogation of a change in a fee or charge by the 
Commission shall not affect the validity of the revised fee or charge 
during the period it was in effect, except that if the Commission 
should ultimately disapprove the change, OPRA shall refund the excess 
of any fees or charges paid to it over the fees or charges as finally 
approved by the Commission.
    (ii)-(v) [No change]
    [(vi) Temporary Exemption From Subscriber Fees and Charges for 
Certain Members of Parties. During a pilot period that end on May 31, 
2002, or on such later date as OPRA may determine, except as OPRA's 
schedule of effective fees and charges may expressly provide to the 
contrary, a member of a party who acts in the capacity of a broker or 
dealer on a party's trading floor, or a member of a party who acts as a 
specialist or registered market maker on an electronic exchange or 
other electronic facility maintained by the party, shall not be subject 
to OPRA's information fees or facilities charges in respect of those 
terminals or other devices that are used by the member for the sole 
purpose of obtaining access to OPRA Information in connection with its 
performing the above activities. Such members who have access to OPRA 
Information at off-floor locations will be required to enter into 
Subscriber agreements with OPRA, except that the provisions of those 
agreements pertaining to payment of fees to OPRA will not apply.]
* * * * *

II. Implementation of Plan Amendment

    The proposed amendment will be effective upon its approval by the 
Commission pursuant to Rule 11Aa3-2 of the Act.\6\
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    \6\ 17 CFR 240.11Aa3-2.
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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, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-OPRA-2004-02 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-OPRA-2004-02. 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, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/

[[Page 41315]]

rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed plan amendment that 
are filed with the Commission, and all written communications relating 
to the proposed plan amendment 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 section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office of OPRA. 
All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-OPRA-2004-02 
and should be submitted on or before July 23, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(29).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-15486 Filed 7-7-04; 8:45 am]
BILLING CODE 8010-01-P