[Federal Register Volume 62, Number 191 (Thursday, October 2, 1997)]
[Notices]
[Pages 51708-51709]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26148]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39131; File No. SR-OPRA-97-3]
Options Price Reporting Authority; Notice of Filing and Immediate
Effectiveness of Amendment to OPRA Plan Revising Professional
Subscriber Fees and Eliminating the Requirement That Enterprise Rate-
Based Fees Must Be Paid by Electronic Funds Transfer
September 25, 1997.
Pursuant to Rule 11Aa3-2 under the Securities and Exchange Act of
1934 (``Exchange Act''), notice is hereby given that on September 9,
1997, 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 the
device-based fees paid by professional subscribers for OPRA's Basic
Service, effective January 1, 1998. In addition, the amendment
eliminates a requirement that persons electing to pay the enterprise
rate-based subscriber fee must arrange for payment by electronic funds
transfer. OPRA has designated this proposal 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,
permitting the proposal to become effective upon
[[Page 51709]]
filing pursuant to Rule 11Aa3-2(3)(i) under the Exchange Act. The
Commission is publishing this notice to solicit comments from
interested persons on the amendment.
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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. See 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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I. Description and Purpose of the Amendment
The purpose of the amendment is to revise the fees payable to OPRA
by professional subscribers for access to OPRA's Basic Service, which
consists of market data and related information pertaining to equity
and index options (``OPRA Data'').\2\ Professional subscribers are
those persons who subscribe to OPRA Data and do not qualify for the
reduced fees charged to nonprofessional subscribers. The Basic Service
professional subscriber fee was last amended in April 1997,\3\ which,
in turn, followed an earlier Plan amendment that initially proposed a
program of fee revisions to be implemented in stages over a four-year
period.\4\ Subsequently, OPRA amended that filing to propose only the
first stage of the fee revision program, with the understanding that
the implementation of the remaining stages would be the subject of
separate filings.\5\ This amendment proposes the third stage of the fee
revision program. Like the first two stages, this amendment is intended
to increase OPRA revenues derived from device-based subscriber fees by
less than 5% in order to permit a greater share of the costs of
collecting, consolidating, processing and transmitting options market
information to be covered by professional subscriber fees. This
amendment also continues the process of simplifying the structure of
the professional subscriber fee by reducing the number of member rate
pricing tiers from four to three for purposes of the volume discount in
the per-device fee.
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\2\ Information pertaining to foreign currency options (FCOs) is
provided through OPRA's FCO Service, which fees are not affected by
this filing.
\3\ See Securities Exchange Act Release No. 38467 (April 2,
1997), 62 FR 17652 (April 10, 1997).
\4\ See Securities Exchange Act Release No. 36364 (October 12,
1995), 60 FR 54093 (October 19, 1995).
\5\ See Securities Exchange Act Release No. 36817 (February 7,
1996), 61 FR 5827 (February 14, 1996).
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Similar to the past two years' fee revisions, the proposed changes
in the level of OPRA's device-based professional subscriber fee will
reduce or leave the fees paid by the smallest subscribers and increase
the fees paid by larger subscribers.\6\ 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 these
fee revisions will be to increase revenues derived from device-based
professional subscriber fees by slightly less than 5%.
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\6\ The proposed tiers are as follows: (1) for 1-9 devices,
members pay $15.00 per device and non-members pay $24.00 per device;
(2) for 10-29 devices, members pay $15.00 per device and non-members
pay $20.00 per device; (3) for 30-99 devices, members pay $12.00 per
device and non-members pay $20 per device; (4) for 100-749 devices,
members pay $12.00 per device and non-members pay $14.50 per device;
and (5) for 750+ devices, members pay $9.40 per device and non-
members pay $14.50 per device.
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OPRA proposes the fee revisions as a result of the continued
implementation of systems and equipment upgrades and additions to
increase the capacity and enhance the reliability and security of the
OPRA system. The costs of collection, processing, consolidating and
disseminating options last sale and bid/ask information have continued
to increase, and further increases are anticipated. The modest
increases in device-based fees provided for in the proposed amendment
are intended to permit some increase in device-based revenues to cover
these greater expenses.
OPRA also proposes to amend Section 2 of the Enterprise Rate
Amendment to its Professional Subscriber Agreement to eliminate the
requirement that the enterprise rate-based fee must be paid by
electronic funds transfer. Although this requirement was originally
included to simplify the billing and collection of OPRA's enterprise
rate subscriber fee and thereby lower OPRA's costs of administration,
OPRA's experience over the past year has suggested that a number of
firms are not yet organized in a manner that facilitates electronic
funds transfers. Accordingly, OPRA believes that this requirement
prevented certain firms from taking advantage of the enterprise rate
agreement when they might otherwise have elected to do so. To eliminate
this impediment to a broader acceptance of the enterprise rate
arrangement, OPRA has decided to eliminate the electronic fund transfer
requirement. Instead, to encourage timely payment of the enterprise
rate fees, OPRA proposes to impose interest charges on amounts not paid
by the end of the month following the month in which the fees are
invoiced. Interest charges will be calculated as the lesser of the
prime rate plus three percent or the maximum lawful rate of interest.
Although this amendment was filed for immediate effectiveness
pursuant to Rule 11Aa3-2(c)(3)(i), the revised subscriber fees will be
put into effect as of January 1, 1998 to provide subscribers advance
notice of the changed fees. The elimination of the electronic funds
transfer requirement for payment of the enterprise rate subscriber fee
will be effective immediately.
II. Solicitation of Comments
Pursuant to Rule 11Aa3-2(c)(3), the amendment is effective upon
filing with the Commission. 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), 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 Exchange Act.
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. 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.
Copies of the submission, all subsequent amendments, and all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change 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 also will be available at
the principal offices of OPRA. All submissions should refer to file
number SR-OPRA-97-3 and should be submitted by October 21, 1997.
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. 97-26148 Filed 10-1-97; 8:45 am]
BILLING CODE 8010-01-P
