[Federal Register Volume 64, Number 226 (Wednesday, November 24, 1999)]
[Notices]
[Pages 66221-66222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30653]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42152; File No. SR-OPRA-99-02]
Options Price Reporting Authority; Notice of Filing and Immediate
Effectiveness of Amendment to OPRA Plan Revising Certain of its
Subscriber Fees
November 17, 1999.
Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934
(``Act''), notice is hereby given that on October 27, 1999, the Options
Price Reporting Authority (``OPRA''),\1\ submitted to the Securities
and Exchange Commission (``SEC'' or ``Commission'') an amendment to the
Plan for Reporting of Consolidated Options Last Sale Reports and
Quotation Information (``Plan''). The amendment revises or eliminates
certain of the facilities and access fees charged by OPRA in respect of
its Basic Service. Fee revisions consist of proposed reductions in
usage-based fees for access to OPRA's dial-up market data service,
voice-synthesized market data service and radio paging service, a
proposed reduction in the nonprofessional subscriber fee, and a
proposed increase in OPRA's device-based information fee payable by
professional subscribers. In addition, OPRA proposes to eliminate its
port-based dial-up market data service utilization fee.
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\1\ OPRA is a National Market System Plan approved by the
Commission pursuant to Section 11A of the Exchange Act and Rule
11Aa3-2 thereunder. Securities Exchange Act Release No. 17638 (Mar.
18 1981).
The Plan provides for the collection and dissemination of last
sale and quotation information on options that are traded on the
member exchanges. The five exchanges which agreed to the OPRA Plan
are the American Stock Exchange (``AMEX''); the Chicago Board
Options Exchange (``CBOE''); the New York Stock Exchange (``NYSE'');
the Pacific Exchange (``PCX''); and the Philadelphia Stock Exchange
(``PHLX'').
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OPRA has designated this proposal as concerned solely with
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, permitting the proposal to become effective upon
filing pursuant to Rule 11Aa3-2(c)(3)(i) under the Act.\2\ The
Commission is publishing this notice to solicit comments from
interested persons on the proposed amendment.
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\2\ 17 CFR 240.11Aa3-2(c)(3)(i).
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I. Description and Purpose of the Amendment
The purpose of the amendment is to revise certain of the fees
payable to OPRA by professional and nonprofessional subscribers and
vendors for access to OPRA's Basic Service, which consists of market
data and related information pertaining to equity and index options
(``OPRA Data'').\3\ The revisions reflect significant decreases in
various usage-based vendor fees and in the nonprofessional subscriber
fee, and a modest increase in the professional subscriber fee. In
addition, OPRA proposes to eliminate its port-based dial-up market data
service utilization fee.
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\3\ No changes are proposed at this time for fees charged to
vendors and subscribers for access to information pertaining to
foreign currency options provided through OPRA's FCO Service.
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Specifically, OPRA proposes to decrease the three usage-based fees
which apply to vendors who provide a dial-up market data service (which
may include an Internet service) or a radio paging service, and to
vendors or subscribers who provide a voice-synthesized market data
service. Currently, usage-based fees for these three services range
from two cents to one cent ($.02-$.01) per quote packet, depending on
total usage. OPRA proposes to reduce all three usage-based fees to a
flat rate fee of one-half cent ($.005) per quote packet, and to
institute new usage-based fees for access to these services of two
cents ($.02) per ``options chain,'' which may be elected as an
alternative to the per quote packet fee.
[[Page 66222]]
An ``options chain'' may include quotes on all series of options on the
same underlying interest. Since a single options chain may include many
separate quote packets covering different series of put and call
options on a single underlying interest, this alternative usage-based
fee will generally result in lower fees as compared with straight
quote-based pricing.
In addition, OPRA is proposing to cap total usage-based fees
payable by a vendor in any month for the use of its dial-up service by
any individual nonprofessional subscriber so that such fees will not
exceed an amount equal to the monthly nonprofessional subscriber fee,
which is proposed to be reduced to $1.00 per month. Under the proposed
change to usage-based fees, a vendor who provides a dial-up service to
its customers will still be able to choose whether to pay information
fees on account of this service on the basis of the number of requests
for quotes actually made by its customers, or by paying a flat-rate
nonprofessional subscriber fee of $1.00 per month for each of its
customers who qualify as nonprofessional subscribers. However, if a
vendor elects to pay usage-based fees, the monthly fee for each
nonprofessional subscriber will not exceed the flat-rate
nonprofessional subscriber fee.
OPRA also proposes to reduce the monthly nonprofessional subscriber
fee from the current rate of $2.50 per nonprofessional subscriber to a
rate of $1.00 per nonprofessional subscriber. This will substantially
lower the cost of access to real time options market information for
those nonprofessional investors who subscribe to this information by
paying a flat monthly fee. Also, because as described above, the
monthly nonprofessional subscriber fee is proposed to serve as a cap on
usage-based fees for dial-up services provided to nonprofessional
subscribers, reducing this fee will result in lower costs for vendors
who provide dial-up (or Internet) services to this category of
investors.
OPRA proposes to increase device-based professional subscriber \4\
fees by amounts ranging from 5.00% to 6.25% of the existing fees.
Professional subscriber fees charged to members will continue to be
discounted by 2% for members who preauthorize payment by electronic
funds transfer through an automated clearinghouse system. OPRA
estimates that the overall effect of the proposed increase in
professional subscriber fees will be to increase revenues derived from
device-based professional subscriber fees by approximately 5.15%. As an
alternative to device-based fees, professional subscribers may pay an
enterprise rate fee based on the number of their U.S. registered
representatives. No changes are proposed to be made to the enterprise
rate fee.
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\4\ Professional subscribers are those persons who subscribe to
OPRA Data and do not qualify for the reduced fees charged to
nonprofessional subscribers.
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The proposed increase in the amount of the professional subscriber
fee is intended to increase OPRA revenues derived from device-based
subscriber fees in order to offset revenues lost as a result of the
reductions in usage-based fees and nonprofessional subscriber fees
described above. It is also intended to generate additional revenue to
cover actual and anticipated increases in the costs of collecting,
consolidating, processing, and transmitting options market information
necessitated by the continued expansion of the listed options business,
including major improvements and upgrades in the OPRA system to enable
it to handle that expansion.
Finally, OPRA is proposing to eliminate its port-based fee
currently imposed on vendors who offer a dial-up market data
utilization service. The port-based fee has been an alternative to the
usage-based fee, which is proposed to be reduced as described above,
for vendors who provide a dial-up service to customers who may not all
be professional or nonprofessional subscribers. The elimination of this
port-based fee reflects that in recent years, as communications
technology has continued to improve, a single high-capacity port may
now be used by a vendor to provide a dial-up service to the same number
of customers that once required tens or even hundreds of ports. As a
result, the number of ports used by a vendor no longer serves as a
meaningful measure of the extent of the vendor's total service. Thus a
port-based fee no longer provides a fair and equitable way to allocate
among vendors the fees imposed by OPRA on providers of a dail-up
service, which is why OPRA proposes to eliminate it.
II. Solicitation of Comments
Pursuant to Rule 11Aa3-2(c)(3),\5\ because the amendment is
concerned solely with changing fees charged on behalf of OPRA, the
amendment is effective upon filing with the Commission. To give persons
subject to these fees advance notice of the changes, OPRA proposes to
put the revised fees into effect commencing January 1, 2000. The
Commission may summarily abrogate the amendment within 60 days of its
filing and require refiling and approval of the amendment by Commission
order pursuant to Rule 11Aa3-2(c)(2),\6\ 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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\5\ 17 CFR 240.11Aa3-2(c)(3).
\6\ 17 CFR 240.11Aa3-2(c)(2).
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Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed 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, N.W., Washington,
D.C., 20549-0609. Copies of the submission, all subsequent amendments,
and all written statements with respect to the proposed plan amendment
that are filed with the Commission, 450 Fifth Street, N.W., Washington,
D.C., 20549-0609. Copies of the submission, all subsequent amendments,
and 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 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 at the principal offices of OPRA. All
submissions should refer to File No. SR-OPRA-99-02 and should be
submitted by December 15, 1999.
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. 99-30653 Filed 11-23-99; 8:45 am]
BILLING CODE 8010-01-M