[Federal Register Volume 76, Number 228 (Monday, November 28, 2011)]
[Notices]
[Pages 72989-72991]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30425]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65794; File No. SR-OPRA-2011-03]
Options Price Reporting Authority; Notice of Filing and Immediate
Effectiveness of Proposed Amendment to the Plan To Implement New
Policies Regarding Reporting and Usage-Based Vendor Fees
November 21, 2011.
Pursuant to Section 11A of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that
on November 7, 2011, the Options Price Reporting Authority (``OPRA'')
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'').\3\ The proposed
amendment would implement a new set of policies entitled ``Policies
with respect to Reporting and Usage-based Vendor Fees.'' 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 242.608.
\3\ The OPRA Plan is a national market system plan approved by
the Commission pursuant to Section 11A of the Act and Rule 608
thereunder (formerly Rule 11Aa3-2). See Securities Exchange Act
Release No. 17638 (March 18, 1981), 22 S.E.C. Docket 484 (March 31,
1981). The full text of the OPRA Plan is available at http://www.opradata.com.
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 nine participants to the OPRA Plan
are BATS Exchange, Inc., Chicago Board Options Exchange,
Incorporated, C2 Options Exchange, Incorporated, International
Securities Exchange, LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX,
Inc., NASDAQ Stock Market LLC, NYSE Amex, Inc., and NYSE Arca, Inc.
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I. Description and Purpose of the Plan Amendment
OPRA's proposed ``Policies with respect to Reporting and Usage-
based Vendor Fees'' (the ``Policies'') are comprised of three sections.
The first section describes OPRA policies relating to the reports that
OPRA requires in order to determine the fees that are payable to OPRA
by Vendors' and Professional Subscribers. The second and third sections
describe OPRA policies pertaining to ``Usage-based Vendor Fees.'' \4\
Usage-based Vendor Fees are one of the types of fees that are payable
to OPRA by Vendors. OPRA is not proposing to change the amount of any
of its fees, but rather to clarify its reporting requirements and the
circumstances in which certain fees are payable.
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\4\ ``Usage-based Vendor Fees'' or ``usage-based fees'' are fees
that are payable by each Vendor with respect to access to OPRA Data
by the Vendor's Subscribers on a ``Per Query'' or ``meter-based''
basis. Usage-based fees are applicable, at the election of the
Vendor, to queries for ``quote packets'' or ``options chains.'' The
rates for usage-based fees are stated, and the terms ``quote
packet'' and ``options chain'' are defined, in OPRA's Fee Schedule.
OPRA's Fee Schedule is available on OPRA's Web site,
www.opradata.com.
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(1) Policies with Respect to Reporting. Section 1 of the new
Policies summarizes OPRA's reporting requirements for Vendors and for
Professional Subscribers that have an obligation to report their usage
of OPRA data directly to OPRA. (These Professional Subscribers are
sometimes referred to as ``internal distributors.'' \5\) OPRA has not
previously summarized its requirements in a single document. As
described in Section 1, OPRA requires that a Vendor report to OPRA with
respect to:
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\5\ Professional Subscribers that are obliged to report their
usage of OPRA data directly to OPRA are sometimes referred to as
``internal distributors'' because they have the independent ability
to entitle access to OPRA data by their employees. These
Professional Subscribers must have entered into Professional
Subscriber Agreements directly with OPRA, and must also have entered
into either a Direct Circuit Connection Rider or an Indirect (Vendor
Pass-Through) Circuit Connection Rider with OPRA. OPRA sometimes
refers to the data service to a Professional Subscriber that enables
the Professional Subscriber to act as an internal distributor as a
``bulk data feed,'' and that term is defined in the Policies for
that purpose.
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The Professional Subscribers to which the Vendor is
providing bulk data feeds of OPRA Data (enabling these Professional
Subscribers to act as internal distributors).
The Professional Subscribers that have entered into
Professional Subscriber Agreements directly with OPRA and that have
devices and/or User IDs entitled by the Vendors.\6\
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\6\ OPRA uses these reports to generate invoices for
``Professional Subscriber Device-based Fees'' that it sends directly
to these Professional Subscribers.
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The Professional Subscribers to which the Vendor
distributes OPRA data and for whose access it pays OPRA usage-based
fees (i.e., Professional Subscribers to which it distributes OPRA data
on a ``Per Query'' or ``meter-based'' basis).
The Non-Professional Subscribers to whom the Vendor
distributes OPRA data on a ``Per Query'' or ``meter-based'' basis and
for whose access it pays OPRA usage-based fees.
The Non-Professional Subscribers to whom the Vendor
distributes OPRA data and for whose access it pays OPRA Nonprofessional
Subscriber Fees.\7\
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\7\ OPRA's Fee Schedule permits a Vendor to pay fees with
respect to the receipt of OPRA data by a Nonprofessional Subscriber
in one of two ways: Either by counting quote packets or options
chains and paying usage-based fees or by paying the
``Nonprofessional Subscriber Fee''. The usage-based fees for
Nonprofessional Subscribers are subject to a monthly cap, currently
$1.00/month/Nonprofessional, and the Nonprofessional Subscriber Fee
is a flat fee, also currently $1.00/month/Nonprofessional.
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Any voice-synthesized market data service provided by the
Vendor.
Also as described in Section 1, OPRA requires that a Professional
Subscriber that is an internal distributor report to OPRA with respect
to the devices and User IDs that have .been entitled by the
Professional Subscriber to have access to OPRA data.
(2) Policies Relating to Usage-Based Fees. Section 2 of the
Policies describes OPRA's longstanding policies with respect to three
questions that Vendors occasionally ask relating to OPRA's usage-based
fees.
Paragraph 2(a) states OPRA's policy with respect to a Vendor that
wishes to have access to OPRA data other than in connection with its
activities as a Vendor--that is, to have access to OPRA
[[Page 72990]]
data in a ``Subscriber'' capacity as well as in its ``Vendor''
capacity. Such a Vendor has two choices. First, the Vendor may enter
into a Professional Subscriber Agreement with OPRA and pay ``device-
based fees'' directly to OPRA with respect to its access to OPRA data.
Alternatively, the Vendor may enter into a Subscriber Agreement with a
second, unaffiliated, Vendor to permit employees of the first Vendor to
have access to OPRA data on a metered usage basis. In that case, the
second Vendor will be responsible for tracking and reporting the access
to OPRA data by employees of the first Vendor. OPRA is occasionally
asked whether a Vendor can track and report the internal usage on a
metered basis of the Vendor itself or its affiliates and pay usage-
based fees with respect to this internal usage. Paragraph 2(a) states
OPRA's longstanding policy that this alternative is not permitted.
Paragraph 2(b) states OPRA's policy that a Vendor must report with
respect to its dissemination of OPRA data to a Professional Subscriber
entirely on either a ``meter-based'' basis (in which case, the Vendor
is responsible for paying Usage-based Vendor Fees for its dissemination
of OPRA data to the Professional Subscriber) or on a ``device-based''
basis (in which case, the Professional Subscriber is responsible for
paying device-based fees with respect to the Vendor's dissemination of
OPRA data to the Professional Subscriber).
The policy described in paragraph 2(c) states that, if a device or
User ID is capable of receiving OPRA information from one Vendor for
which a Professional Subscriber pays device-based fees and from a
second Vendor for which the second Vendor pays usage-based fees, both
types of fees must be paid by the respective payors. OPRA has had a
longstanding policy--stated in OPRA's ``Policies with respect to
Device-Based Fees,'' \8\--that a Professional Subscriber is not
required to pay more than one device-based fee with respect to any
device or User ID that is capable of receiving OPRA information, even
if the device or User ID is capable of receiving OPRA information from
more than one source or ``service.'' Paragraph 2(c) affirms that, if a
device or User ID is capable of receiving OPRA information from one
Vendor for which the Professional Subscriber pays device-based fees and
from a second Vendor for which the second Vendor pays usage-based fees,
OPRA requires that both types of fees be paid by the respective payors.
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\8\ OPRA's Policies with respect to Device-Based Fees are
available on OPRA's Web site, www.opradata.com.
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(3) Guidelines for Vendors' Quote Counting Systems. Section 3
describes OPRA's guidelines with respect to Vendors' quote counting
systems or ``quote meters.'' This section replaces a Policy currently
on the OPRA Web site that, although it is entitled ``Auditing,''
actually describes OPRA's requirements with respect to quote meters.
Section 3 states that a quote meter must comply with the following
requirements:
The quote meter must be able to recognize and count
``quote packets'' and/or ``options chains'' \9\ for all data service of
the Vendor that is provided to Subscribers on a usage basis, except
that:
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\9\ These terms are defined in OPRA's Fee Schedule.
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[cir] If the Vendor is ``capping'' the fee payable by the Vendor
for any Nonprofessional Subscriber at the monthly maximum amount stated
in OPRA's Fee Schedule, the quote meter needs to be able to count usage
only up to the maximum amount.
[cir] If the Vendor is ``capping'' the fee payable by the Vendor
for any Professional Subscriber at the monthly maximum amount stated in
OPRA's Fee Schedule, the quote meter needs to be able to count usage
only up to the maximum amount.
The quote meter must not count usage for any
Nonprofessional Subscriber for which the Vendor is paying the
Nonprofessional Subscriber Fee. (The service to these Nonprofessional
Subscribers is not on a usage basis.) \10\
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\10\ OPRA's systems and Fee Schedule treat Nonprofessional
Subscriber Fees and Usage-based Vendor Fees that are paid by Vendors
with respect to access to OPRA data by Nonprofessionals separately.
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The quote meter must count usage separately for each
option listed in a portfolio format or a market minder service. (For
example, quote packets for a portfolio with five options series would
constitute five quote packets.)
The quote meter must count all ``current'' OPRA market
data (i.e., all OPRA data that was sent to the Vendor within the
preceding 15 minutes). (Data that is no longer current--i.e., that is
delayed data--is not subject to reporting and payment of usage-based
fees to OPRA.)
A Vendor's quote counting system must be able to comply with these
requirements if the system is to be able to count quotes in a manner
that results in an accurate determination of the Usage-based Vendor
Fees that the Vendor owes to OPRA. Section 3 of the Policies provides a
more accurate description of these requirements than OPRA's current
policy entitled ``Auditing'' does.
The text of the proposed amendment to the OPRA Plan is available at
OPRA, the Commission's Public Reference Room, on OPRA's Web site at
http://opradata.com, and on the Commission's Web site at http://www.sec.gov.
II. Implementation of the OPRA Plan Amendment
OPRA designated this amendment as qualified to be put into effect
upon filing with the Commission in accordance with clause (i) of
paragraph (b)(3) of Rule 608 under the Act.\11\ The Policies describe
and refine longstanding OPRA technical policies with respect to the
applicability of its fees, particularly its Usage-based Vendor Fee and
Nonprofessional Subscriber Fee. Accordingly, OPRA will implement the
Policies upon filing with the Commission.
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\11\ 17 CFR 242.608(b)(3)(i).
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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 608(b)(2) under the Act \12\ if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or 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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\12\ 17 CFR 242.608(b)(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. 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 email to [email protected]. Please include
File No. SR-OPRA-2011-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-OPRA-2011-03. This file
[[Page 72991]]
number should be included on the subject line if email 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/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 Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street NE., Washington, DC 20549, on official business days between the
hours of 10 a.m. and 3 p.m. 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-2011-03
and should be submitted on or before December 19, 2011.
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\13\ 17 CFR 200.30-3(a)(29).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30425 Filed 11-25-11; 8:45 am]
BILLING CODE 8011-01-P