95-14254. Options Price Reporting Authority; Notice of Filing of Amendment to the National Market System Plan To Update the Current Fee Structure and Eliminate the Use of Separate News Service Agreements  

  • [Federal Register Volume 60, Number 112 (Monday, June 12, 1995)]
    [Notices]
    [Pages 30904-30906]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-14254]
    
    
    
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    [[Page 30905]]
    
    SECURITIES AND EXCHANGE COMMISSION
    
    [Release No. 34-35804; International Series No. 815; File No. S7-8-90]
    
    
    Options Price Reporting Authority; Notice of Filing of Amendment 
    to the National Market System Plan To Update the Current Fee Structure 
    and Eliminate the Use of Separate News Service Agreements
    
    June 5, 1995.
        Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934 
    (``Act''),\1\ notice is hereby given that on April 25, 1995, the 
    Options Price Reporting Authority (``OPRA'') \2\ submitted to the 
    Commission an amendment to its National Market System Plan for the 
    purpose of updating OPRA's fee structure and eliminating the use of 
    separate news service agreements.\3\
    
        \1\ 17 CFR 240.11Aa3-2.
        \2\ OPRA is a National Market System Plan approved by the 
    Securities and Exchange Commission (``Commission'' or ``SEC'') 
    pursuant to Section 11A of the Act and Rule 11Aa3-2, thereunder. 
    Securities Exchange Act Release No. 17638 (March 18, 1981).
        The Plan provides for the collection and dissemination of last 
    sale and quotation information on options that are traded on the 
    five 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 Stock Exchange (``PSE''), and the Philadelphia Stock 
    Exchange (``PHLX'').
        \3\ The proposed amendment was approved by OPRA in accordance 
    with the OPRA Plan at a meeting held on April 11, 1995.
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        The Commission is publishing this notice to solicit comments from 
    interested persons on the amendment.
    
    I. Description and Purpose of the Amendment
    
        OPRA proposes to amend its vendor agreement and the related fee 
    schedule to impose a new redistribution fee on all persons who 
    redistribute options market information, to reflect a reduction in the 
    level of the access charge currently payable by vendors and other 
    persons who receive direct or indirect access to OPRA's Processor, and 
    to eliminate indirect-assess or pass-through vendors and news services 
    as persons subject to the access charge. In addition, OPRA proposes to 
    eliminate the separate news service agreement. Instead, OPRA would 
    categorize news services as vendors and would seek to have such 
    services sign vendor agreements. Conforming changes would be made to 
    the OPRA Plan.
        OPRA has made this proposal in response to the growth in the listed 
    options market and the changes in the ways in which options market 
    information is disseminated and used. Among these changes are the 
    increased use of electronic forms of redistribution of market 
    information from vendors and news services directly to individual 
    investors, often on a fifteen minute delayed basis, and the expanded 
    number of value-added intermediaries in the chain of transmission from 
    OPRA's processor to the end users of the information.
        OPRA proposes to institute a new redistribution fee. This fee would 
    apply to persons who receive and retransmit delayed market information. 
    The redistribution fee would not apply to historical information.\4\ 
    OPRA's redistribution fee proposal is in response to its belief that 
    instead of encouraging vendors to distribute current options 
    information, the current fee structure encourages the redistribution of 
    delayed information.
    
        \4\ Under the proposal, information becomes ``historical'' upon 
    the opening of trading in the next succeeding trading session of 
    that same market. For example, reports of transactions completed in 
    a trading session on Wednesday become historical reports from and 
    after the opening of trading on the following Thursday.
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        With the introduction of the new redistribution fee, OPRA proposes 
    to eliminate the vendor and news service pass-through fee, currently 
    charged to vendors and news services that receive options information 
    from another vendor instead of from the OPRA Processor. In addition, in 
    light of the added revenue expected to be realized from redistribution 
    fees payable by vendors of delayed data, the direct access charge is 
    proposed to be reduced from its current level to the point where the 
    direct access charge will be less than the access charge or pass-
    through fee currently charged. OPRA believes that total revenue from 
    fees charged to vendors and news services will not increase as a result 
    of these proposed changes and, in fact, may slightly decrease during 
    the transition period.\5\ The proposed amendment to the vendor 
    agreement also includes some nonsubstantive, editorial changes.
    
        \5\ The transition period reflects the time in which vendors 
    distributing delayed information are identified and brought under 
    contract pursuant to the proposed redistribution fee.
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        In addition to the fee restructuring proposal, OPRA proposes to 
    eliminate separate news service agreements. Instead, news services 
    would be required to enter into vendor agreements with OPRA. OPRA 
    proposes to eliminate these separate agreements in light of 
    technological changes that it perceives have blurred the distinction 
    between news services and other redistributors of market data, making 
    it no longer useful to treat news services as a separate category of 
    vendor. According to OPRA, only two news services currently are parties 
    to news service agreements, with most redistributors of options 
    information to news media having already entered into vendor agreements 
    in order to be able to redistribute options market data electronically 
    to entities other than news media. OPRA believes that the current news 
    service agreement and the vendor agreement are substantially the same 
    and that the same fees apply to both news services and vendors. The 
    elimination of the separate news service agreement, therefore, will 
    allow news services and other vendors to be subject to the same 
    agreement and the same fees.
    
    II. Implementation of the Plan Amendment
    
        In accordance with OPRA's existing agreements with vendors and news 
    services, amendments to these agreements and to the fees charged 
    thereunder require not less than 30 days advance notice. In order to 
    assure that the required notice has been given to vendors and to 
    provide time during which vendors and news services will be asked to 
    sign new agreements reflecting the new fee structure, OPRA does not 
    intend to implement this amendment until September 1, 1995, subject to 
    Commission approval.
    
    III. Solicitation of Comments
    
        Interested persons are invited to submit written data, views and 
    arguments concerning the foregoing. Commenters are asked to address 
    whether they believe the proposed amendment 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 is in 
    furtherance of the purposes of 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. 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. 522, will 
    be available for inspection and copying in [[Page 30906]] the 
    Commission's Public Reference Room. Copies of the filing also will be 
    available at the offices of OPRA. All submissions should refer to File 
    No. S7-8-90 and should be submitted by July 3, 1995.
    
        For the Commission by the Division of Market Regulation, 
    pursuant to delegated authority.\6\
    
        \6\ 17 CFR 200.30-3(a)(29).
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    Margaret H. McFarland,
    Deputy Secretary.
    [FR Doc. 95-14254 Filed 6-9-95; 8:45 am]
    BILLING CODE 8010-01-M
    
    

Document Information

Published:
06/12/1995
Department:
Securities and Exchange Commission
Entry Type:
Notice
Document Number:
95-14254
Pages:
30904-30906 (3 pages)
Docket Numbers:
Release No. 34-35804, International Series No. 815, File No. S7-8-90
PDF File:
95-14254.Pdf