Pursuant to Rule 11A3-2  of the Securities Exchange Act of 1934 (“Act”), notice is hereby given that on January 19, 2000, the Consolidated Tape Association (“CTA”) and the Consolidated Quotation (“CQ”) Plan Participants (“Participants”)  filed with the Securities and Exchange Commission (“Commission” or “SEC”) amendments to the Restated CTA Plan and CQ Plan. The amendments propose to adopt, as an additional form under Exhibit D of the Plans, a Consolidated Subscriber Form for use in connection with the implementation of new procedures under which vendors (rather than Network B) will now: (1) Execute directly with professional subscribers a Consolidated Subscriber Form for receipt and use of Network B market data that runs to the benefit of the Network B Participants and (2) assume responsibility for the billing, collecting and forwarding of all Network B subscriber charges to Network B.
Pursuant to Rule 11Aa3-2(c)(3)(ii), the CTA and CQ Participants have designated the amendments as a matter concerned solely with the administration of the Plans on behalf of all of the sponsors and the participants, which renders the amendments effective upon receipt of this filing by the Commission. At any time within 60 days of the filing of the amendments, the Commission may summarily abrogate the amendment and require that the amendment be refiled in accordance with the paragraph (b)(1) of this section and reviewed in accordance with paragraph (c)(2) of this section, if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or the maintenance of fair and orderly markets, to remove impediments to, and perfect mechanisms of, a national market system or otherwise in furtherance of the purposes of the Act. The Commission is publishing this notice to solicit comments from interested persons on the amendments.
I. Description and Purpose of the Amendments
A. Rule 11Aa3-2
Purpose of the Amendments
Currently, Network B uses a Consolidated Subscriber Form that it executes directly with professional subscribers. While the subscriber also executes an agreement with its vendor to receive Network B market data from the vendor (the “Vendor-Subscriber Agreement”), Network B generally bills all subscriber charges directly to the subscriber and collects the fees itself.
Network B is now proposing to shift the billing and collecting functions to the vendors. As part of that effort, Network B is proposing to amend the CTA and CQ Plans by adding a new Consolidated Subscriber Form to Exhibit D of each Plan. The new form implements new procedures pursuant to which vendors will replace Amex as the party that will now (1) execute directly with professional subscribers a Consolidated Subscriber Form for receipt and use of Network B market data that runs to the benefit of Network B Participants and (2) bill and collect all Network B subscriber charges for Network B. The new Consolidated Subscriber Form that will be used for Network B vendor billing will be virtually identical to the existing Consolidated Subscriber Form, except for (1) the vendor signature block (replacing the Network B signature block), (2) language indicating that the agreement runs to the benefit of the Network B Participants as third-party beneficiaries; and (3) minor changes reflecting the shift of the billing and collection functions to the vendors (including such things as allowing vendors to examine records and request equipment descriptions).
The Network B Participants believe that the shift to vendor billing will Start Printed Page 11103significantly improve customer service for all subscribers to Network B market data services. Professional subscribers will now receive one bill from the vendor, instead of two bills (one from the vendor and one from Network B). As CTA currently relies on vendor data for subscriber billing and vendors are often late in furnishing such data, many discrepancies occur in billing subscribers. Vendor billing, with single bill and single point of contact, should streamline the billing process and reduce confusion among Network B subscribers. In this regard, the Network B subscriber community has been very supportive of this proposal to shift to vendor billing for Network B market data.
Vendor billing will also enable Network B to reduce its administrative function and thereby realize significant cost savings. Vendors will be able to utilize their current billing infrastructures to bill for Network B subscriber charges, taking advance of existing efficiencies. This should also allow for a tighter receivable cycle.
These amendments further the objectives of the national market system regarding the dissemination of last sale information delineated in Sections 11A(a)(1)(C), 11A(a)(1)(D) and 11A(a)(3)(B) of the Act.
B. Governing or Constituent Documents
See Exhibit 1 to CTA and CQ Plan Amendments.
C. Implementation of Amendment
The Participants have manifested their approval of the proposed amendments to the CTA and CQ Network B by means of their execution of the amendments. The Participants will begin the conversion process to vendor billing as soon as practicable after the Plan amendments are filed with the Commission.
To accomplish this conversion, the Network B administrator intends to provide written notice to all Network B vendors and subscribers of the planned shift to vendor billing for Network B subscribers. It then plans to visit all Network B vendors, explaining the new procedures to them as well as reconciling their subscriber inventory. Vendors will be required to use the new Consolidated Subscriber Form for all new professional subscribers to Network B market data, executing it directly with those subscribers. All current Network B professional subscribers will be allowed to continue receiving Network B market data under their existing Consolidated Subscriber Form (which they entered into with Amex) without being required to sign the new form.
The administrator plans to have the new vendor billing program implemented by the end of the third quarter of 2000.
D. Development and Implementation Phases
See Item I(C).
E. Analysis of Impact on Competition
The proposed amendments do not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
F. Written Understanding or Agreements Relating to Interpretation of, or Participation in, Plan
G. Approval by Sponsors in Accordance With Plans
In accordance with Section IV(b) of the CTA Plan and Section IV(c) of the CQ Plan, each of the Participants has approved the Plan amendments.
H. Description of Operation of Facility Contemplated by the Proposed Amendment
I. Terms and Conditions of Access
See Item I(A) above.
J. Method of Determination and Imposition, and Amount of Fees and Charges
Vendors will perform the billing and collection functions with respect to all Network B subscriber charges.
K. Method and Frequency of Processor Evaluation
L. Dispute Resolution
II. Rule 11Aa3-1 (Solely in Its Application to the Amendment to the CTA Plan)
A. Reporting Requirements
B. Manner of Collecting, Processing, Sequencing, Making Available and Disseminating Last Sale Information
C. Manner of Consolidation
D. Standards and Methods Ensuring Promptness, Accuracy and Completeness of Transaction Reports
E. Rules and Procedures Addressed to Fraudulent or Manipulative Dissemination
F. Terms of Access to Transactions Reports
See Item I(A).
G. Identification of Marketplace of Execution
III. Solicitation of Comments
The CTA has designated these amendments as a matter concerned solely with the administration of the Plans on behalf of all of the sponsors and participants which, under Section 11Aa3-2(c)(3)(ii) of the Act, renders the proposal effective upon receipt of this filing by the Commission.
The Commission may summarily abrogate the amendment within sixty days of its filing and require refiling and approval of the amendments by Commission order pursuant to Section 11Aa3-2(c)(3)(iii), if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors and 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.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the amendments are consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed plan amendments that are filed with the Commission, and all written communications relating to the proposed plan amendments between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the CTA. All submissions should refer to the file number in the caption above and should be submitted by March 22, 2000.Start Signature
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Margaret H. McFarland.
3. The amendments were executed by each Participant in each of the Plans. The Participants include American Stock Exchange LLC, Boston Stock Exchange, Inc., Chicagao Board Options Exchange, Inc., Chicago Stock Exchange, Inc., Cincinnati Stock Exchange, Inc., National Association of Securities Dealers, Inc., New York Stock Exchange, Inc., Pacific Exchange, Inc., and Philadelphia Stock Exchange, Inc.Back to Citation
4. Exhibit D to each Plan sets forth the forms of market data subscriber agreements currently in use.Back to Citation
[FR Doc. 00-4851 Filed 2-29-00; 8:45 am]
BILLING CODE 8010-01-M