[Federal Register Volume 62, Number 219 (Thursday, November 13, 1997)]
[Notices]
[Pages 60933-60934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29882]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39302; File No. SR-OPRA-97-4]
Options Price Reporting Authority; Order Granting Approval of
Amendment to OPRA Plan Revising OPRA's Dial-Up Market Data Service
Rider to Its Vendor Agreement To Accommodate the Vendor's Provision of
Dial-Up Service to Customers of OPRA Subscribers
November 5, 1997.
I. Introduction
On September 11, 1997, the Options Price Reporting Authority
(``OPRA'') \1\
[[Page 60934]]
submitted to the Securities and Exchange Commission (``SEC'' or
``Commission''), pursuant to Rule 11Aa3-2 under the Securities Exchange
Act of 1934 (``Exchange Act''), an amendment to the Plan for Reporting
of Consolidated Options Last Sale Reports and Quotation Information
(``Plan''). The proposed amendment revises the Dial-Up Market Data
Service Rider (``Rider'') to OPRA's vendor agreement to accommodate a
third party vendor's provisions of dial-up service to customers of an
OPRA subscriber.
---------------------------------------------------------------------------
\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 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
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'').
---------------------------------------------------------------------------
The proposed amendment was published for comment in the Federal
Register on October 2, 1997.\2\ No comments were received on the
proposal. This order approves the proposal.
---------------------------------------------------------------------------
\2\ See Exchange Act Release No. 39137 (September 26, 1997) 62
FR 51707.
---------------------------------------------------------------------------
II. Description and Purpose of the Amendment
The purpose of the amendment is to add provisions to OPRA's Rider
to the vendor agreement to accommodate the situation in which an OPRA
vendor provides a dial-up service to the customers of an OPRA
subscriber, rather than to its own customers. According to OPRA,
several vendors and broker-dealer subscribers have recently expressed
interest in such an arrangement. As this arrangement is not currently
contemplated under the Rider, the proposal would amend the Rider to
address the one significant difference between the traditional
situation of a firm providing a dial-up service to its own customers
and the recent proposals for firms to arrange for third-party vendors
to provide a dial-up service for the firms' customers. In the former
case, there is a direct contractual relationship between the vendor, a
party to the Rider, and the vendor's customers. In the latter case,
however, the vendor's subscriber, rather than the vendor, has a
contractual relationship with the customer.
In its current form, the Rider imposes certain obligations on
vendors who provide a dial-up service. These obligations require that
contracts between vendors and their customers contain specific
provisions, for the benefit of OPRA, relating to proprietary rights to
OPRA data, non-retransmission of data, the absence of any guarantee of
the data and a disclaimer of liability. The proposed amendment to the
Rider would mandate that vendors require comparable provisions to be
included in contracts between subscribers and their customers who
receive a dial-up service from a third-party vendor.\3\
---------------------------------------------------------------------------
\3\ The proposal would require vendors to obtain a written
agreement from each OPRA subscriber whose customers will be provided
the dial-up service from the vendor that the subscriber will: (1)
obtain from each of its customers to whom the vendor furnishes the
service an agreement that the customer will: (a) receive OPRA data
only for such person's use, (b) not retransmit the data to anyone
else, and (c) acknowledge that OPRA data is the property of the
respective exchange or market in which a reported transaction
occurred or a reported quotation was entered; (2) provide to the
vendor a current list of customers entitled to receive the service
from the vendor and to certify that each named customer has entered
into the required agreement; (3) maintain the same customer records
required to be maintained by the vendor with respect to customers;
and (4) acknowledge the absence of any guarantee and the disclaimer
of liability on the part of OPRA, OPRA's processor and each
participating exchange.
---------------------------------------------------------------------------
Other than as described above, OPRA proposes no change in the way
in which dial-up services may be offered to investors. OPRA represents
that no new or additional OPRA fees will result from this proposed
amendment and the amendment will not make any new parties subject to
OPRA's existing fee. OPRA proposes to phase in the revised form of the
Rider to take the place of the existing Rider.
III. Discussion
After careful review, the Commission finds that the proposed
amendment is consistent with the requirements of the Act and the rules
and regulations thereunder.\4\ Specifically, the Commission believes
that the proposed amendment, which accommodates the provision of OPRA
data through third-party vendors, is consistent with Rule 11Aa3-2 in
that it will contribute to the maintenance of fair and orderly markets
and remove impediments to and perfect the mechanisms of a national
market system.
---------------------------------------------------------------------------
\4\ In approving this rule, the Commission notes that it has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
The Commission notes that the proposed amendment will require third
party vendors that provide a dial-up service to the customers of OPRA
subscribers to obtain an agreement from the subscribers, in writing,
that the subscribers will include provisions for the benefit of OPRA in
the subscribers' written agreements with its customers. The Commission
believes that it is reasonable for OPRA to extend its existing
contractual protections to situations in which a third party vendor
provides a dial-up service to the customers of an OPRA subscriber. The
Commission notes that the proposed amendment also provides OPRA
subscribers with alternatives for the provision of the dial-up service
to their customers. Accordingly, the Commission believes that the
proposed amendment will provide additional flexibility to OPRA
subscribers while providing OPRA with the contractual protections that
it requires.
IV. Conclusion
It is therefore ordered, pursuant to Rule 11Aa3-2 of the Act, that
the proposed amendment (SR-OPRA-97-4) is approved.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
---------------------------------------------------------------------------
\5\17 CFR 200.30-3(a)(29).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-29882 Filed 11-12-97; 8:45 am]
BILLING CODE 8010-01-M
