[Federal Register Volume 72, Number 242 (Tuesday, December 18, 2007)]
[Notices]
[Pages 71720-71722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24484]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56949; File No. SR-OPRA-2007-03]
Options Price Reporting Authority; Notice of Filing and Order
Approving on a Temporary Basis Not To Exceed 120 Days a Proposed
Amendment to the Plan for Reporting of Consolidated Options Last Sale
Reports and Quotation Information, as Modified by Amendment No. 1
Thereto, To Modify Various Provisions of the OPRA Plan and the OPRA Fee
Schedule To Reflect the Elimination of Separate Fees for Access to
Market Data Concerning Certain Foreign Currency Options
December 12, 2007.
I. Introduction
Pursuant to section 11A of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that
on October 9, 2007, the Options Price Reporting Authority (``OPRA'')
submitted to the Securities and Exchange Commission (``Commission'') an
amendment to the Plan for Reporting of Consolidated Options Last Sale
Reports and Quotation Information (``OPRA Plan'').\3\ The proposed
amendment would amend various provisions of the OPRA Plan in order to
reflect the elimination of the separate fees for access to market data
concerning Foreign Currency Options (``FCOs'') that currently apply to
certain FCOs traded on the Phlx. The OPRA Fee Schedule would similarly
be revised to reflect the elimination of the separate FCO service
access fees. On November 14, 2007, OPRA submitted Amendment No. 1 to
the proposal.\4\ On December 11, 2007, OPRA submitted a revised version
of Exhibit II to Amendment No. 1 to the proposal, which it requested be
substituted for the original version of Exhibit II.\5\ This order
approves the proposal as modified by Amendment No. 1 for a temporary
period not to exceed 120 days, and solicits comment on the proposal
from interested persons.
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\1\ 15 U.S.C. 78k-1.
\2\ 17 CFR 242.608.
\3\ The OPRA Plan is a national market system plan approved by
the Commission pursuant to Section 11A of the Act and Rule 608
thereunder (formerly Rule 11Aa3-2). See Securities Exchange Act
Release No. 17638 (March 18, 1981), 22 S.E.C. Docket 484 (March 31,
1981). The full text of the OPRA Plan is available at http://www.opradata.com.
The OPRA Plan provides for the collection and dissemination of
last sale and quotation information on options that are traded on
the participant exchanges. The six participants to the OPRA Plan are
the American Stock Exchange LLC, the Boston Stock Exchange, Inc.,
the Chicago Board Options Exchange, Incorporated, the International
Securities Exchange, LLC (``ISE''), NYSE Arca, Inc., and the
Philadelphia Stock Exchange, Inc. (``Phlx'').
\4\ Amendment No. 1 did not make any substantive changes to the
text of the proposed OPRA Plan amendment, but instead provided a
revised Exhibit I to the original filing and offered a new Exhibit
II to the proposal. Amendment No. 1 replaced the original filing in
its entirety.
\5\ The revised Exhibit II made technical changes to the
original and corrected an outdated reference to the ``NASD,'' which
is now called ``FINRA.''
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II. Description and Purpose of the Amendment
Effective March 14, 1995, the OPRA Plan was amended to authorize
the imposition of separate, unbundled access charges for market
information pertaining to FCOs.\6\ Subsequently, effective January 1,
1996, separate access charges for market information were imposed by
OPRA, and subject to the exception described below, such separate
charges have remained in effect since that time.\7\ More recently, OPRA
adopted a temporary exception to the separate FCO access fees for
``new'' FCOs first listed on any exchange on or after December 6, 2005,
pursuant to which access to market information pertaining to such
securities has been included within OPRA's basic information service,
and has required payment only of OPRA's basic service access fees.\8\
This temporary exception, which is set forth in Section VIII(c)(iii) of
the OPRA Plan, is scheduled to expire by its terms on December 31,
2007, at which time, absent further action, all FCOs would become
subject to separate FCO service access fees.
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\6\ See Securities Exchange Act Release No. 35487 (March 14,
1995), 60 FR 14984 (March 21, 1995) (File No. S7-8-90).
\7\ See Securities Exchange Act Release No. 36613 (December 20,
1995), 60 FR 67144 (December 28, 1995) (SR-OPRA-95-5).
\8\ See Securities Exchange Act Release Nos. 52901 (December 6,
2005), 70 FR 74061 (December 14, 2005) (SR-OPRA-2005-03) and 55049
(January 5, 2007), 72 FR 1568 (January 12, 2007) (SR-OPRA-2006-02).
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Currently, certain classes of FCOs traded on the Phlx are subject
to the separate FCO access fees, while other classes of FCOs traded on
that exchange (those first listed on or after December 6, 2005) are
subject to OPRA's basic service access fees. The only other exchange
currently trading FCOs is the ISE, where all of the FCOs were listed
subsequent to December 6, 2005, and thus are subject only to OPRA's
basic service access fees.
Phlx recently informed OPRA that for business reasons it has ceased
listing new series of physical delivery FCOs to replace expiring
series, and instead provides a market for foreign currency derivative
securities through the listing of new classes of U.S. dollar-settled
[[Page 71721]]
FCOs, sometimes referred to as World Currency Options. Under the
current OPRA Plan, access to market data concerning all options,
including the new U.S. dollar-settled FCOs as well as individual equity
options and cash-settled index options, is subject to OPRA's basic
service access fees. In the case of U.S. dollar-settled FCOs, this
reflects the temporary exception described above, whereas in the case
of equity and index options it is because OPRA has never adopted
separate access fees for its index option service, but instead has made
index options subject to the same basic service access fees that apply
to equity options.
The purpose of this proposed amendment is to maintain this same fee
structure after the temporary exception for FCOs expires at the end of
2007. Trading in existing classes of physical delivery FCOs on Phlx
will be restricted to closing transactions until the last outstanding
class expires on March 14, 2008, if the remaining positions in these
classes are not closed out sooner. Thus by that date, if not sooner,
there will no longer be any physical delivery FCOs traded on the Phlx
that are subject to the existing separate FCO service access fees. At
that time, assuming the effectiveness of this proposed amendment,
access to market data for all options, including U.S. dollar-settled
FCOs and all other FCO securities, will require payment only of OPRA's
basic service access fees.
As noted, pursuant to the temporary exception in the OPRA Plan for
``new'' FCOs, all of the FCOs currently traded on ISE are subject only
to OPRA's basic service access fees, and none are subject to the
separate FCO service access fees. However, unless the OPRA Plan is
amended to eliminate the separate access fees for FCOs, upon the
expiration of the temporary exception, FCOs traded on ISE would become
subject to the separate FCO service access fees. In order to avoid
making this change to the status quo on ISE, the effect of which would
be to subject FCO subscribers to what for them would be a new,
additional, access fee for continued access to FCO market information,
ISE joined with Phlx in authorizing the elimination of the separate FCO
access fees, and in requesting OPRA to amend the OPRA Plan to reflect
the elimination of these separate fees.
As proposed to be amended, the OPRA Plan will treat FCOs in exactly
the same manner in which it now treats index options. Specifically,
similar to index options, the OPRA Plan will continue to provide for a
separate FCO accounting center and provide a framework for the possible
future imposition of a separate access fees when and if authorized by
the parties that provide a market in those securities, subject to
satisfying the requirements of the Act.
Because the proposed amendment cannot become effective until the
elimination by expiration or by closing transaction of the last
remaining open position in physical delivery FCOs traded on Phlx that
are subject to the separate FCO service access fees, which could be as
late as March 14, 2008, and because it is necessary to retain the
temporary exception from the separate FCO service access charges until
these separate charges no longer apply, OPRA proposes to extend the
temporary exception, currently scheduled to expire on December 31,
2007, until as late as March 14, 2008. Accordingly, this proposed
amendment includes an extension of the temporary exception provided for
in section VIII(c)(iii) of the OPRA Plan until such time as there is no
longer any open interest in physical delivery FCOs traded on the Phlx
that are subject to the separate FCO service access fees. In no event
will this be later than March 14, 2008. The Phlx has undertaken to
advise OPRA when that last remaining open interest no longer exists, so
that the separate FCO service access fees and the temporary exception
can be removed from the OPRA Plan effective as of that time, in
accordance with this proposed OPRA Plan amendment.
The text of the proposed amendment to the OPRA Plan and the
proposed changes to the OPRA Fee Schedule are available at OPRA, the
Commission's Public Reference Room, and http://opradata.com/pdf/proposed_amendments.pdf.
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. Comments may be submitted by
any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File No. SR-OPRA-2007-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-OPRA-2007-03. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, 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 that may be 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, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of OPRA. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-OPRA-2007-03 and should be
submitted on or before January 8, 2008.
IV. Discussion
After careful review, the Commission finds that the proposed OPRA
Plan amendment, as modified by Amendment No. 1, is sufficient under the
Act and the rules and regulations thereunder for temporary approval of
not more than 120 days.\9\ Specifically, the Commission believes that
the proposed OPRA Plan amendment, is sufficient under section 11A of
the Act \10\ and Rule 608(b)(4) \11\ thereunder for temporary approval
not to exceed 120 days in that it is in the public interest and
appropriate for the protection of investors and the maintenance of fair
and orderly markets to preserve the status quo by extending the
deadline set forth in section VIII(c)(iii) of the OPRA Plan until such
[[Page 71722]]
time as there is no longer any open interest in physical delivery FCOs
traded on the Phlx that are subject to the separate FCO service access
fee. The Commission believes that OPRA's proposal, which would amend
various provisions of the OPRA Plan and the OPRA Fee Schedule in order
to reflect the elimination of the separate fees for access to market
data concerning FCOs that currently apply to certain FCOs traded on the
Phlx, is appropriate in light of Phlx's decision to cease listing new
series of physical delivery FCOs to replace expiring series. The
proposed amendment would maintain the same fee structure after the
temporary exception would otherwise expire on December 31, 2007.
Further, once the remaining positions in existing classes of physical
delivery FCOs listed on the Phlx are Phlx are closed-out, access to
market data for all options, including dollar-settled FCOs and all
other FCO securities will require payment of the same fee, OPRA's basic
service access fee.
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\9\ In approving the proposed OPR Plan Amendment, the Commission
has considered its impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\10\ 15 U.S.C. 78k-1.
\11\ 17 CFR 242.608(b)(4).
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Finally, the Commission finds that it is appropriate to put the
proposed OPRA Plan amendment, as modified by Amendment No.1, into
effect summarily upon publication of notice on a temporary basis not to
exceed 120 days to extend for a brief period the temporary exception
provided for in section VIII(c)(iii) of the OPRA Plan and thus preserve
the status quo. Absent such extension, the ISE would become subject to
the separate FCO service access fee. Accordingly, the Commission finds
that 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 the mechanism of, a national
market system to approve the proposed OPRA Plan amendment, as modified
by Amendment No. 1 thereto, on a temporary basis not to exceed 120
days.
V. Conclusion
It is therefore ordered, pursuant to Section 11A of the Act,\12\
and Rule 608 thereunder,\13\ that the proposed OPRA Plan amendment (SR-
OPRA-2007-03), as modified by Amendment No. 1, be, and it hereby is,
approved on a temporary basis not to exceed 120 days.
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\12\ 15 U.S.C. 78k-1.
\13\ 17 CFR 242.608.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(29).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-24484 Filed 12-17-07; 8:45 am]
BILLING CODE 8011-01-P