

[Federal Register: February 5, 2008 (Volume 73, Number 24)]
[Notices]               
[Page 6750-6752]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05fe08-93]                         

-----------------------------------------------------------------------

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 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. (``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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(29).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-1998 Filed 2-4-08; 8:45 am]

BILLING CODE 8011-01-P
