

[Federal Register: December 14, 2005 (Volume 70, Number 239)]
[Notices]               
[Page 74061-74062]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14de05-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52901; File No. SR-OPRA-2005-03]

 
Options Price Reporting Authority; Order Approving an Amendment 
to the Plan for Reporting of Consolidated Options Last Sale Reports and 
Quotation Information To Provide That Classes of Foreign Currency 
Options Newly Introduced for Trading on the Philadelphia Stock Exchange 
Be Treated as Equity/Index Options During a Temporary Period Ending on 
December 31, 2007

December 6, 2005.
    On October 21, 2005, 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 provide that classes of Foreign Currency Options (``FCO 
Securities'' or ``FCO''), newly introduced for trading on the Phlx 
during a temporary period ending no later than December 31, 2007, will 
be treated by OPRA as Equity/Index Options (``EIO Securities'' or 
``EIO'') to the extent described in the proposed amendment. Notice of 
the proposal was published in the Federal Register on November 7, 
2005.\4\ The Commission received no comment letters on the proposed 
OPRA Plan amendment. This order approves the proposal.
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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, Inc., the Pacific Exchange, Inc., and the 
Philadelphia Stock Exchange, Inc (``Phlx'').
    \4\ See Securities Exchange Act Release No. 52710 (November 1, 
2005), 70 FR 67503.
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    FCO Securities under the OPRA Plan are currently traded only on the 
Phlx, which processes these options on a separate computer platform 
from its EIO Securities. The FCO platform is a legacy system, which is 
in the process of being converted to a newer technology. The Phlx has 
advised OPRA that it expects to have this effort completed no later 
than December 31, 2007, and that, in the meanwhile, the Phlx does not 
intend to devote resources to expanding the soon to be replaced legacy 
platform. Because the legacy FCO platform does not have the capacity to 
handle additional classes of FCO Securities that may be introduced for 
trading by the Phlx while the new platform is being developed, the Phlx 
has proposed to temporarily process any such new classes of FCO 
Securities on its EIO platform, which does have the capacity to handle 
them, until the new FCO platform is available. According to OPRA, this 
would mean that, while these new FCO Securities are on the EIO 
platform, their quotes and trade reports would be disseminated to OPRA 
over EIO data lines and not over the FCO data line. In turn, this would 
require OPRA to treat these quotes and trade reports as if they were 
EIO Securities. Thus, quotes and trade reports covering these new FCO 
Securities would be included in OPRA's basic service and not in its FCO 
service, and revenues and expenses pertaining to market data regarding 
these new FCO Securities would be allocated to OPRA's basic accounting 
center and further allocated among the parties to the OPRA Plan as if 
these products were EIO Securities and not FCO Securities.
    OPRA represents that all currently traded FCO products would 
continue to be disseminated on the current FCO data line, and would 
continue to be treated by OPRA as FCO Securities. Only newly traded FCO 
Securities would be treated as EIO Securities and only for a temporary 
period while the Phlx's upgraded FCO platform is being developed. The 
purpose of the proposed OPRA Plan amendment is to codify in the 
language of the OPRA Plan the above-described temporary treatment of 
the Phlx's newly traded FCO Securities.
    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.\5\ The Commission finds that the 
proposed OPRA Plan amendment is consistent with Section 11A of the Act 
\6\ and Rule 608 thereunder \7\ in that it is 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. Specifically, the Commission 
finds that it is appropriate to clarify in the language of the OPRA 
Plan the temporary treatment of the Phlx's newly traded FCO Securities 
as EIO Securities and believes that the proposed language is a 
reasonable accommodation by OPRA during the time the Phlx is upgrading 
its FCO platform.
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    \5\ 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).
    \6\ 15 U.S.C. 78k-1.
    \7\ 17 CFR 242.608.
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    It is therefore ordered, pursuant to Section 11A of the Act,\8\ and 
Rule 608 thereunder,\9\ that the proposed OPRA Plan amendment (SR-OPRA-
2005-03) be, and it hereby is, approved on a temporary basis, until 
December 31, 2007.
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    \8\ 15 U.S.C. 78k-1.
    \9\ 17 CFR 242.608.


[[Page 74062]]


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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(29).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-7301 Filed 12-13-05; 8:45 am]

BILLING CODE 8010-01-P
