Options Price Reporting Authority; Notice of Filing and Immediate Effectiveness of Amendment to OPRA Plan Revising Certain of Its Facilities and Access Fees

[Federal Register Volume 63, Number 245 (Tuesday, December 22, 1998)]
[Notices]
[Pages 70815-70816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33813]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40791; File No. SR-OPRA-98-03]


Options Price Reporting Authority; Notice of Filing and Immediate 
Effectiveness of Amendment to OPRA Plan Revising Certain of Its 
Facilities and Access Fees

December 15, 1998.
    Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934 
(``Exchange Act''), notice is hereby given that on December 7, 1998, 
the Options Price Reporting Authority (``OPRA''),\1\ submitted to the 
Securities and Exchange Commission (``SEC'' or ``Commission'') and 
amendment to the Plan for Reporting of Consolidated Options Last Sale 
Reports and Quotation Information (``Plan''). The amendment revises 
certain of the fees payable to OPRA by professional and nonprofessional 
subscribers and vendors for access to OPRA's Basic Service. 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 Exchange Act.\2\ The Commission is 
publishing this notice to solicit comments from interested persons on 
the proposed 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. 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'').
    \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 modest increases in the 
professional and nonprofessional subscriber fees and certain port-based 
vendor fees, and decreases in the redistribution fee and in various 
usage-based vendor fees that are alternatives to port-based fees.
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    \3\ Proposed revisions to fees charged to subscribers for access 
to information pertaining to foreign currency options provided 
through OPRA's FCO Service are being proposed in a separate filing. 
See File No. SR-OPRA-98-4.
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    Specifically, OPRA is proposing to increase the nonprofessional 
subscriber fee from a flat monthly rate of $2.00 to $2.50. OPRA is also 
proposing to increase device-based professional subscriber fees by 
varying amounts, and to increase the enterprise rate professional 
subscriber fee payable by the largest subscribers (those with more than 
20,000 registered representatives) from $7.50 to $10.00 per registered 
representative. Professional subscribers are those persons who 
subscribe to OPRA Data and do not qualify for the reduced fees charged 
to nonprofessional subscribers. The enterprise rate is available to 
professional subscribers as an alternative to device-based fees. The 
change in the enterprise rate for the largest subscribers will bring 
that fee for those subscribers to the same level that currently applies 
to subscribers with 20,000 or fewer registered representatives. 
Concurrently with this revision, the coverage of the enterprise rate 
will be extended to all of a subscriber's locations worldwide at no 
added cost for subscribers with at least 7,000 U.S. registered 
representatives. (Previously, the enterprise rate covered U.S. 
locations only.)
    In proposing an increase of the professional subscriber fee, this 
amendment represents the fourth stage of a four-year fee revision 
program that was first described in 1995. Like the first three stages, 
this amendment is intended to increase OPRA revenues derived from 
device-based subscriber fees 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. 
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 these 
fee revisions will increase revenues derived from device-based 
professional subscriber fees by approximately 7.6%.

[[Page 70816]]

    In addition, reflecting the increased utilization of the Internet 
as a distribution channel, OPRA is proposing to reduce the monthly 
$1,500 Redistribution Fee payable by redistributors of OPRA data to a 
monthly fee of $600 payable by those redistributors who utilize the 
Internet as their exclusive means of redistribution. By lowering this 
fee, OPRA hopes to encourage new entrants into the business of offering 
an Internet-based options market data service, thereby increasing the 
availability of such data at lower cost.
    OPRA is proposing to increase the monthly port charge payable by 
providers of a dialup market data service from $50 to $75 per port. 
OPRA is also proposing to replace the monthly fee of $5.00 per port 
payable by providers of a synthetic voice service with the regular 
device-based professional subscriber fee, treating each port as a 
separate device for purposes of the fee. At the same time, OPRA is 
proposing to reduce the usage-based fees that may be elected as 
alternatives to both of these port-based fees as well as to the device-
based radio paging service fee. This will result in all three usage-
based fees declining from a flat rate of $.02 per ``quote packet'' 
(consisting of any one or more of the last sale price, the bid/ask and 
related information for a single series of options) to a tiered rate, 
under which the fee will remain at $.02 per quote packet for the first 
two million quote packets in a single month, will decline to $.015 for 
each of the next two million quote packets in the same month, and will 
decline further to $.01 for each quote packet in excess of four million 
in the same month. The increase in port-based fees reflects recent 
developments in computer technology that now permit a single port to 
serve a greater number of simultaneous inquiries than when these port-
based fees were first established. The reduction in usage-based fees 
reflects OPRA's effort to encourage greater utilization of this type of 
fee, which in the long run, as improved technology continues to erode 
the traditional ``port'' concept, will provide the most reasonable way 
to allocate OPRA's charges to persons who make use of the services to 
which these fees apply. In addition to reducing the level of the three 
usage-based fees as described above, OPRA is also proposing to enlarge 
the category of ``historical'' information inquiries, which are not 
taken into account in calculating usage-based fees. Currently, 
information derived from a given trading day becomes ``historical,'' 
and thus no longer fee-liable, upon the opening of trading on the next 
succeeding trading day. As proposed to be revised, information would 
become ``historical'' for purposes of usage-based fees after the close 
of trading on the same day in which the information was derived.
    To the extent the proposed fee revisions are anticipated to result 
in increased net revenues from information fees, OPRA is proposing them 
in response to actual and anticipated increases in the costs of 
collecting, processing, consolidating, and disseminating options last 
sale and bid/ask information. This, in turn, reflects the continued 
enhancement and enlargement of systems and equipment necessary to 
provide the greater capacity and enhanced reliability and security of 
the OPRA system occasioned by the continuing expansion of the listed 
options business.

II. Solicitation of Comments

    Pursuant to Rule 11Aa3-2(c)(3),\4\ because the amendment is 
concerned solely with changing fees charged on behalf of OPRA, 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),\5\ 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.
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    \4\ 17 CFR 240.11Aa3-2.
    \5\ 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. 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-98-03 and should be 
submitted by January 12, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(29).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-33813 Filed 12-21-98; 8:45 am]
BILLING CODE 8010-01-M