Options Price Reporting Authority; Order Granting Permanent Approval to an 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 Foreign Currency Options, 6750-6752 [E8-1998]
Download as PDF
<![CDATA[
6750
Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices
out requirements that are intended to
elicit only the information that OPRA
would need in order to verify the fees
paid by a television company for
television dissemination.
In addition, to accommodate the
possibility that some owners of the
indexes that OPRA disseminates may
not wish to grant television companies
the right to disseminate their indexes
separately from the dissemination of
related options market data, the new
Rider would include language providing
OPRA with the ability to grant
permission to Vendor television
companies to display index values
separately from the dissemination of
related options market data, and to
revoke that permission. OPRA would
treat all television companies that sign
Riders identically with respect to
permission to display index values.
However, if OPRA revokes permission
to display particular index values
separately from the dissemination of
related options market data, and, as a
consequence, the television company
Vendor no longer wishes to display
OPRA Data values and to pay fees for
doing so, language in the Rider would
allow the television company Vendor to
terminate the Rider and its Vendor
Agreement, or only the Rider, effective
as of the date that the index values cease
to be available to the television
company Vendor.5
Furthermore, Section 2 of the Rider
would require a television company
Vendor to display a legend on its
television display at least three times a
day. OPRA represents that the form of
the legend would be the same as the
legend required by the Consolidated
Tape Association (‘‘CTA’’) for its
counterpart Network A service, and the
requirement with respect to the display
of the legend would be the same as the
CTA requirement.6
Finally, OPRA proposes to charge a
fee for the dissemination via television
of current OPRA Data on the basis of the
number of ‘‘thousands of households
reached’’ by the Vendor television
company’s programming.7 OPRA
represents that this metric is widely
used in the television industry and is
used by CTA for its counterpart service.
III. Discussion
After careful review, the Commission
finds that the proposed OPRA Plan
amendment is consistent with the
requirements of the Act and the rules
and regulations thereunder.8
Specifically, the Commission finds that
the proposed OPRA Plan amendment is
consistent with Section 11A of the Act 9
and Rule 608 thereunder 10 in that it is
appropriate in the public interest, for
the protection of investors and the
maintenance of fair and orderly markets,
and to remove impediments to, and
perfect the mechanism of, a national
market system.
The Commission believes the new
Rider to allow television companies to
disseminate current OPRA data via a
passive scrolling or ticker television
display is consistent with, and would
further one of the principal objectives
for the national market system set forth
in Section 11A(a)(1)(C)(iii) of the Act 11
because it would help to assure the
availability of information with respect
to options information to brokers,
dealers, and investors. Furthermore, the
Commission believes that the proposed
OPRA Plan amendment provides for an
equitable allocation of reasonable fees
for the dissemination via television of
current OPRA Data.
IV. 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–2007–05)
be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–1997 Filed 2–4–08; 8:45 am]
BILLING CODE 8011–01–P
rmajette on PROD1PC64 with NOTICES
5 Any
Vendor has the right under paragraph 1(c)
of the Rider to terminate the Rider, and under
paragraph 19(d) of the OPRA form of Vendor
Agreement to terminate the Vendor Agreement, in
each case without cause upon thirty days written
notice. The termination right essentially provides
comfort to a television company Vendor that, if an
index ceases to be available to the Vendor on less
than thirty days notice, the Vendor may terminate
either the Rider alone or the Rider and Vendor
Agreement on the date the index ceases to be
available.
6 See the CTA form of Exhibit C to its form
Agreement for Receipt and Use of Consolidated
Network A Data and NYSE Market Data for ‘‘Cable
Broadcasts.’’
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15:34 Feb 04, 2008
Jkt 214001
7 Specifically, OPRA plans to charge a fee of $.50
per 1,000 households reached. See proposed
‘‘Television Display Fee’’ on the OPRA Fee
Schedule.
8 In approving this proposed OPRA Plan
Amendment, the Commission has considered its
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
9 15 U.S.C. 78k–1.
10 17 CFR 242.608.
11 15 U.S.C. 78k–1(a)(1)(C)(iii).
12 15 U.S.C. 78k–1.
13 17 CFR 242.608.
14 17 CFR 200.30–3(a)(29).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57230; File No. SR–OPRA–
2007–03]
Options Price Reporting Authority;
Order Granting Permanent Approval to
an 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
Foreign Currency Options
January 29, 2008.
I. Introduction
On October 9, 2007, the Options Price
Reporting Authority (‘‘OPRA’’)
submitted to the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 11A of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 608 thereunder,2 an
amendment to the Plan for Reporting of
Consolidated Options Last Sale Reports
and Quotation Information (‘‘OPRA
Plan’’).3 The proposed OPRA Plan
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 to be
1 15
U.S.C. 78k–1.
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 https://
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, Inc. (‘‘ISE’’), the NYSE Arca, Inc., and the
Philadelphia Stock Exchange, Inc. (‘‘Phlx’’).
4 Amendment No. 1 replaced the original filing in
its entirety.
2 17
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Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices
substituted for the original version of
Exhibit II.5
On December 12, 2007, the
Commission issued notice of and
approved the proposal, as amended, on
a temporary basis not to exceed 120
days, and solicited comment on the
proposal.6 The Commission received no
comment letters in response to the
Temporary Approval Order. This order
approves the proposed OPRA Plan
amendment, as modified by
Amendment No. 1, on a permanent
basis.
rmajette on PROD1PC64 with NOTICES
II. Description of the Proposal
Effective March 14, 1995, the OPRA
Plan was amended to authorize the
imposition of separate, unbundled
access charges for market information
pertaining to FCOs.7 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.8 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.9 This temporary exception,
which is set forth in Section VIII(c)(iii)
of the OPRA Plan, was scheduled to
expire by its terms on December 31,
2007, at which time, absent extension,
all FCOs would become subject to
separate FCO service access fees.10
Presently, OPRA states that 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.
Further, the ISE is the only other
5 The revised Exhibit II made technical changes
to the original and corrected an outdated reference
to the ‘‘NASD,’’ which is now called ‘‘FINRA.’’
6 See Securities Exchange Act Release No. 56949
(December 12, 2007), 72 FR 71720 (December 18,
2007) (‘‘Temporary Approval Order’’).
7 See Securities Exchange Act Release No. 35487
(March 14, 1995), 60 FR 14984 (March 21, 1995)
(File No. S7–8–90).
8 See Securities Exchange Act Release No. 36613
(December 20, 1995), 60 FR 67144 (December 28,
1995) (SR–OPRA–95–5).
9 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).
10 Pursuant to the Temporary Approval Order,
this deadline was extended on a temporary basis
not to exceed 120 days.
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15:34 Feb 04, 2008
Jkt 214001
exchange currently trading FCOs, where
all of the FCOs were listed subsequent
to December 6, 2005, and thus are
subject only to OPRA’s basic service
access fees.
Recently, the Phlx informed OPRA
that 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 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 cashsettled index options, is subject to
OPRA’s basic service access fees.11
OPRA proposes this amendment in
order to maintain the same fee structure
after the temporary exception for FCOs
would otherwise have expired at the
end of 2007. Trading in existing classes
of physical delivery FCOs on the Phlx
would 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. Accordingly, by
that date, if not sooner, there would no
longer be any physical delivery FCOs
traded on the Phlx that would be subject
to the existing separate FCO service
access fees. At that time, access to
market data for all options, including
U.S. dollar-settled FCOs and all other
FCO securities, would require payment
only of OPRA’s basic service access fees.
With respect to the FCOs traded on
the ISE, OPRA notes that, unless the
OPRA Plan is amended to eliminate the
separate access fees for FCOs, upon the
expiration of the temporary exception,
FCOs traded on the ISE would have
become subject to the separate FCO
service access fees. In order to avoid
subjecting FCO subscribers to what for
them would be a new, additional, access
fee for continued access to FCO market
information, OPRA states that the ISE
joined with the Phlx in requesting
OPRA to amend the OPRA Plan to
reflect the elimination of these separate
fees.
Under the proposed amendment, the
OPRA Plan would treat FCOs in exactly
the same manner in which it now treats
index options. Specifically, similar to
index options, the OPRA Plan would
continue to provide for a separate FCO
11 In the case of U.S. dollar-settled FCOs, the fee
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.
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Fmt 4703
Sfmt 4703
6751
accounting center and a framework for
the possible future imposition of a
separate access fee 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. In accordance
with the proposed OPRA Plan
amendment, the Phlx will 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.
III. Discussion
After careful review, the Commission
finds that the proposed OPRA Plan
amendment, as modified by
Amendment No. 1, is consistent with
the requirements of the Act and the
rules and regulations thereunder.12
Specifically, the Commission finds that
the proposed OPRA Plan amendment is
consistent with Section 11A of the
Act 13 and Rule 608 thereunder 14 in that
it is in the public interest and
appropriate for the protection of
investors and the maintenance of fair
and orderly markets, and to remove
impediments to, and perfect the
mechanism of, a national market
system.
The Commission believes that it is
appropriate for the proposed OPRA Plan
amendment to preserve the status quo
and extend the deadline set forth in
Section VIII(c)(iii) of the OPRA Plan
12 In approving this proposed OPRA Plan
Amendment, the Commission has considered its
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
13 15 U.S.C. 78k–1.
14 17 CFR 242.608.
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05FEN1
6752
Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices
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 fee. In
addition, the Commission believes that
OPRA’s proposal to amend various
provisions of the OPRA Plan and the
OPRA Fee Schedule to eliminate 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 the Phlx’s
decision to cease listing new series of
physical delivery FCOs to replace
expiring series. Accordingly, the
Commission believes that it 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
mechanism of, a national market system
to approve the proposed amendment to
the OPRA Plan on a permanent basis.
IV. Conclusion
It is therefore ordered, pursuant to
Section 11A of the Act,15 and Rule 608
thereunder,16 that the proposed OPRA
Plan amendment (SR–OPRA–2007–03),
as modified by Amendment No. 1
thereto, be, and it hereby is, approved
on a permanent basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–1998 Filed 2–4–08; 8:45 am]
BILLING CODE 8011–01–P
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
substantially prepared by CBOE. On
January 16, 2008, CBOE filed
Amendment No. 1 to the proposed rule
change. On January 23, 2008, CBOE
filed Amendment No. 2 to the proposed
rule change, and on January 28, CBOE
filed Amendment No. 3 to the proposed
rule change.3 CBOE has designated this
proposal as one establishing or changing
a due, fee, or other charge applicable
only to a member under section
19(b)(3)(A)(ii) of the Act,4 and Rule
19b–4(f)(2) thereunder,5 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE proposes to: (i) Establish a HAL
step-up rebate, and (ii) pass through to
members certain costs related to
Intermarket Option Linkage (‘‘Linkage’’)
Principal orders. The text of the rule
proposal is available on the Exchange’s
Web site (https://www.cboe.org/legal), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57231; File No. SR–CBOE–
2007–152]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change as Modified by
Amendments No. 1, 2, and 3 Relating
to a Hybrid Agency Liaison (‘‘HAL’’)
Step-Up Rebate and Pass-Through of
Certain Linkage Related Costs
In its filing with the Commission,
CBOE included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. CBOE has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
rmajette on PROD1PC64 with NOTICES
January 30, 2008.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
21, 2007, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
15 15
U.S.C. 78k–1.
CFR 242.608.
17 17 CFR 200.30–3(a)(29).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
16 17
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15:34 Feb 04, 2008
Jkt 214001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
HAL Step-Up Rebate
HAL is a system for automated
handling of electronically received
orders that are not automatically
executed upon receipt by the Hybrid
Trading System (‘‘Hybrid’’). CBOE Rule
6.14 governs the operation of the HAL
system.
Orders received by the HAL system
are electronically exposed to all CBOE
market-makers appointed to the relevant
option class, as well as to all members
acting as agent for orders at the top of
the Exchange’s book in the relevant
option series. This exposure and a
subsequent allocation period (together,
the ‘‘HAL auction’’) afford crowd
members an opportunity to match the
away national best bid or offer
(‘‘NBBO’’) price. If any portion of an
exposed order remains unexecuted at
the end of a HAL auction, then the
remaining order would be booked if it
is a limit order that is not marketable,
or, if marketable, routed to the exchange
showing the NBBO via Linkage.
In order to provide an incentive to
market makers to execute orders at
CBOE, versus routing orders away via
Linkage, the Exchange proposes to
establish a program whereby the
Exchange would provide a rebate to
market-makers that ‘‘step-up’’ and trade
all or part of certain orders on the HAL
system. Specifically, the Exchange will
rebate to a market-maker $.20 per
contract against transaction fees
generated from a transaction on the HAL
system in a penny pilot class, provided
that at least 80% of the market-maker’s
quotes in that class (excluding quotes in
LEAPS series) in that same month were
on one side of the NBBO. Marketmakers not meeting this 80% criteria
would not be eligible to receive a rebate.
The Exchange believes the HAL rebate
will allow market-makers to compete
better for order flow in the penny pilot
classes.
Pass-Through of Linkage P Order Costs
3 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on January 28, 2008, the
date on which the Exchange filed Amendment No.
3. See 15 U.S.C. 78s(b)(3)(C).
4 15 U.S.C. 78s(b)(3)(A)(ii).
5 17 CFR 240.19b–4(f)(2).
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Frm 00063
Fmt 4703
Sfmt 4703
Pursuant to Section 21 of the CBOE
Fees Schedule, the Exchange provides
certain rebates and credits to Designated
Primary Market-Makers (‘‘DPMs’’) for
fees they incur related to the execution
of outbound Principal orders (‘‘P
orders’’) on behalf of orders that are for
the account of a broker-dealer (i.e., ‘‘B’’
and ‘‘F’’ origin codes).
The Exchange proposes to amend this
program in two respects. First, the
E:\FR\FM\05FEN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 24 (Tuesday, February 5, 2008)]
[Notices]
[Pages 6750-6752]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1998]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57230; File No. SR-OPRA-2007-03]
Options Price Reporting Authority; Order Granting Permanent
Approval to an 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 Foreign Currency Options
January 29, 2008.
I. Introduction
On October 9, 2007, the Options Price Reporting Authority
(``OPRA'') submitted to the Securities and Exchange Commission
(``Commission''), pursuant to Section 11A of the Securities Exchange
Act of 1934 (``Act'') \1\ and Rule 608 thereunder,\2\ an amendment to
the Plan for Reporting of Consolidated Options Last Sale Reports and
Quotation Information (``OPRA Plan'').\3\ The proposed OPRA Plan
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 to
be
[[Page 6751]]
substituted for the original version of Exhibit II.\5\
---------------------------------------------------------------------------
\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 https://
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, Inc. (``ISE''), the NYSE Arca, Inc., and the
Philadelphia Stock Exchange, Inc. (``Phlx'').
\4\ 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.''
---------------------------------------------------------------------------
On December 12, 2007, the Commission issued notice of and approved
the proposal, as amended, on a temporary basis not to exceed 120 days,
and solicited comment on the proposal.\6\ The Commission received no
comment letters in response to the Temporary Approval Order. This order
approves the proposed OPRA Plan amendment, as modified by Amendment No.
1, on a permanent basis.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 56949 (December 12,
2007), 72 FR 71720 (December 18, 2007) (``Temporary Approval
Order'').
---------------------------------------------------------------------------
II. Description of the Proposal
Effective March 14, 1995, the OPRA Plan was amended to authorize
the imposition of separate, unbundled access charges for market
information pertaining to FCOs.\7\ 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.\8\ 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.\9\
This temporary exception, which is set forth in Section VIII(c)(iii) of
the OPRA Plan, was scheduled to expire by its terms on December 31,
2007, at which time, absent extension, all FCOs would become subject to
separate FCO service access fees.\10\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 35487 (March 14,
1995), 60 FR 14984 (March 21, 1995) (File No. S7-8-90).
\8\ See Securities Exchange Act Release No. 36613 (December 20,
1995), 60 FR 67144 (December 28, 1995) (SR-OPRA-95-5).
\9\ 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).
\10\ Pursuant to the Temporary Approval Order, this deadline was
extended on a temporary basis not to exceed 120 days.
---------------------------------------------------------------------------
Presently, OPRA states that 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.
Further, the ISE is the only other exchange currently trading FCOs,
where all of the FCOs were listed subsequent to December 6, 2005, and
thus are subject only to OPRA's basic service access fees.
Recently, the Phlx informed OPRA that 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 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.\11\
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\11\ In the case of U.S. dollar-settled FCOs, the fee 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.
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OPRA proposes this amendment in order to maintain the same fee
structure after the temporary exception for FCOs would otherwise have
expired at the end of 2007. Trading in existing classes of physical
delivery FCOs on the Phlx would 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.
Accordingly, by that date, if not sooner, there would no longer be any
physical delivery FCOs traded on the Phlx that would be subject to the
existing separate FCO service access fees. At that time, access to
market data for all options, including U.S. dollar-settled FCOs and all
other FCO securities, would require payment only of OPRA's basic
service access fees.
With respect to the FCOs traded on the ISE, OPRA notes that, unless
the OPRA Plan is amended to eliminate the separate access fees for
FCOs, upon the expiration of the temporary exception, FCOs traded on
the ISE would have become subject to the separate FCO service access
fees. In order to avoid subjecting FCO subscribers to what for them
would be a new, additional, access fee for continued access to FCO
market information, OPRA states that the ISE joined with the Phlx in
requesting OPRA to amend the OPRA Plan to reflect the elimination of
these separate fees.
Under the proposed amendment, the OPRA Plan would treat FCOs in
exactly the same manner in which it now treats index options.
Specifically, similar to index options, the OPRA Plan would continue to
provide for a separate FCO accounting center and a framework for the
possible future imposition of a separate access fee 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. In accordance with the proposed
OPRA Plan amendment, the Phlx will 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.
III. Discussion
After careful review, the Commission finds that the proposed OPRA
Plan amendment, as modified by Amendment No. 1, is consistent with the
requirements of the Act and the rules and regulations thereunder.\12\
Specifically, the Commission finds that the proposed OPRA Plan
amendment is consistent with Section 11A of the Act \13\ and Rule 608
thereunder \14\ in that it is in the public interest and appropriate
for the protection of investors and the maintenance of fair and orderly
markets, and to remove impediments to, and perfect the mechanism of, a
national market system.
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\12\ In approving this proposed OPRA Plan Amendment, the
Commission has considered its impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
\13\ 15 U.S.C. 78k-1.
\14\ 17 CFR 242.608.
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The Commission believes that it is appropriate for the proposed
OPRA Plan amendment to preserve the status quo and extend the deadline
set forth in Section VIII(c)(iii) of the OPRA Plan
[[Page 6752]]
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 fee. In addition, the Commission believes that OPRA's
proposal to amend various provisions of the OPRA Plan and the OPRA Fee
Schedule to eliminate 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 the Phlx's decision to cease listing new
series of physical delivery FCOs to replace expiring series.
Accordingly, the Commission believes that it 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 mechanism of, a national market system to approve the
proposed amendment to the OPRA Plan on a permanent basis.
IV. Conclusion
It is therefore ordered, pursuant to Section 11A of the Act,\15\
and Rule 608 thereunder,\16\ that the proposed OPRA Plan amendment (SR-
OPRA-2007-03), as modified by Amendment No. 1 thereto, be, and it
hereby is, approved on a permanent basis.
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\15\ 15 U.S.C. 78k-1.
\16\ 17 CFR 242.608.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(29).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-1998 Filed 2-4-08; 8:45 am]
BILLING CODE 8011-01-P
