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Notice

Options Price Reporting Authority; Notice of Filing and Immediate Effectiveness of Amendment to OPRA Plan To Extend a Pilot To Permit Fee-Exempt Access to Market Data

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Start Preamble June 5, 2002.

Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on May 31, 2002, the Options Price Reporting Authority (“OPRA”) [2] 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 (“OPRA Plan”). The proposed OPRA Plan amendment would extend the pilot period during which off-floor market maker members of participant exchanges will be permitted to access options market data on a fee-exempt basis for an additional two years, until May 31, 2004, or such later date as OPRA may subsequently determine. The Commission is publishing this notice to solicit comments from interested persons on the proposed OPRA Plan amendment.

I. Description and Purpose of the Amendment

Section VII(d)(vi) of the OPRA Plan provides that during a pilot period, the members of a floor-based exchange that is a party to the OPRA Plan who act in the capacity of brokers or dealers on the party's trading floor, and their counterparts on an electronic exchange that is a party to the OPRA Plan, are permitted to access options market information over the OPRA system without thereby becoming liable to pay OPRA's subscriber fees. In addition, Section VII(d)(vi) of the OPRA Plan provides that the pilot period will end “on May 31, 2002, or on such later date as OPRA may determine.” The purpose of the proposed amendment is to reflect the determination by OPRA to extend the expiration of the pilot period provided for in Section VII(d)(vi) of the OPRA Plan for an additional two years, until May 31, 2004, or such later date as OPRA may subsequently determine.

This temporary exemption from subscriber fees was added to the OPRA Plan two years ago, when ISE was about to begin trading options in an entirely electronic market.[3] The purpose of the exemption was to provide equal treatment for that exchange and its specialists and market-makers (and the off-floor specialists and market makers of any other electronic exchange or facility that may in the future be operated by an OPRA participant) so long as the floor-based counterparts of such members of electronic exchanges or facilities are not subject to subscriber fees. At the time the temporary fee exemption was adopted, OPRA had not decided on a permanent basis whether it would continue to exempt floor-based and off-floor specialists and market makers from OPRA fees, or whether it Start Printed Page 40357would make all such persons subject to OPRA fees.

OPRA still has not made a final decision concerning the permanent application of subscriber fees to floor-based members of participants or to their counterparts on electronic exchanges or facilities. Accordingly, in order to continue to provide equal treatment to floor-based and electronic options markets and their members, OPRA has determined to continue this temporary exemption from OPRA fees for an additional two years, expiring on May 31, 2004, or on such later date as OPRA may subsequently determine. The effect of this is also to extend for an additional two years the fee exemption applicable to parties to the OPRA Plan that is provided for in Section V(f) of the OPRA Plan, because that exemption applies by its terms for the duration of the pilot period described in Section VII(d)(vi) of the OPRA Plan. The determination by OPRA reflected in this filing makes no change to any of the terms of these fee exemptions; it only extends the pilot period during which they apply.

II. Implementation of the OPRA Plan Amendment

Pursuant to paragraph (c)(3)(i) of Rule 11Aa3-2,[4] OPRA designates this amendment 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, thereby qualifying for effectiveness upon filing. The Commission may summarily abrogate the amendment within sixty 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 Act.

III. Solicitation of Comments

Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed OPRA 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, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, and all written statements with respect to the proposed OPRA Plan amendment that are filed with the Commission, and all written communications relating to the proposed OPRA 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 also will be available at the principal offices of OPRA. All submissions should refer to File No. SR-OPRA-2002-02 and should be submitted by July 3, 2002.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[6]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

2.  OPRA is a national market system plan approved by the Commission pursuant to Section 11A of the Act and Rule 11Aa3-2 thereunder. See Securities Exchange Act Release No. 17638 (Mar. 18, 1981). The OPRA Plan provides for the collection and dissemination of last sale and quotation information on options that are traded on the member exchanges. The five participants to the OPRA Plan that operate an options market are the American Stock Exchange LLC, the Chicago Board Options Exchange, Inc. (“CBOE”), the International Securities Exchange LLC (“ISE”), the Pacific Exchange, Inc., and the Philadelphia Stock Exchange, Inc. The New York Stock Exchange, Inc. is a signatory to the OPRA Plan, but sold its options business to the CBOE in 1997. See Securities Exchange Act Release No. 38542 (April 23, 1997), 62 FR 23521 (April 30, 1997).

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3.  See Securities Exchange Act Release No. 43109 (August 2, 2000), 65 FR 48769 (August 9, 2000).

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4.  17 CFR 240.11Aa3-2(c)(3)(i).

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[FR Doc. 02-14776 Filed 6-11-02; 8:45 am]

BILLING CODE 8010-01-P