[Federal Register Volume 62, Number 219 (Thursday, November 13, 1997)]
[Notices]
[Pages 60933-60934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29882]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39302; File No. SR-OPRA-97-4]


Options Price Reporting Authority; Order Granting Approval of 
Amendment to OPRA Plan Revising OPRA's Dial-Up Market Data Service 
Rider to Its Vendor Agreement To Accommodate the Vendor's Provision of 
Dial-Up Service to Customers of OPRA Subscribers

November 5, 1997.

I. Introduction

    On September 11, 1997, the Options Price Reporting Authority 
(``OPRA'') \1\

[[Page 60934]]

submitted to the Securities and Exchange Commission (``SEC'' or 
``Commission''), pursuant to Rule 11Aa3-2 under the Securities Exchange 
Act of 1934 (``Exchange Act''), an amendment to the Plan for Reporting 
of Consolidated Options Last Sale Reports and Quotation Information 
(``Plan''). The proposed amendment revises the Dial-Up Market Data 
Service Rider (``Rider'') to OPRA's vendor agreement to accommodate a 
third party vendor's provisions of dial-up service to customers of an 
OPRA subscriber.
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    \1\ OPRA is a National Market System Plan approved by the 
Commission pursuant to Section 11A of the Exchange Act and Rule 
11Aa3-2 thereunder. See Exchange Act Release No. 17638 (March 18, 
1981).
    The Plan provides for the collection and dissemination of last 
sale and quotation information on options that are traded on the 
member exchanges. The five exchanges which agreed to the OPRA Plan 
are the American Stock Exchange (``AMEX''); the Chicago Board 
Options Exchange (``CBOE''); the New York Stock Exchange (``NYSE''); 
the Pacific Exchange (``PCX''); and the Philadelphia Stock Exchange 
(``Phlx'').
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    The proposed amendment was published for comment in the Federal 
Register on October 2, 1997.\2\ No comments were received on the 
proposal. This order approves the proposal.
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    \2\ See Exchange Act Release No. 39137 (September 26, 1997) 62 
FR 51707.
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II. Description and Purpose of the Amendment

    The purpose of the amendment is to add provisions to OPRA's Rider 
to the vendor agreement to accommodate the situation in which an OPRA 
vendor provides a dial-up service to the customers of an OPRA 
subscriber, rather than to its own customers. According to OPRA, 
several vendors and broker-dealer subscribers have recently expressed 
interest in such an arrangement. As this arrangement is not currently 
contemplated under the Rider, the proposal would amend the Rider to 
address the one significant difference between the traditional 
situation of a firm providing a dial-up service to its own customers 
and the recent proposals for firms to arrange for third-party vendors 
to provide a dial-up service for the firms' customers. In the former 
case, there is a direct contractual relationship between the vendor, a 
party to the Rider, and the vendor's customers. In the latter case, 
however, the vendor's subscriber, rather than the vendor, has a 
contractual relationship with the customer.
    In its current form, the Rider imposes certain obligations on 
vendors who provide a dial-up service. These obligations require that 
contracts between vendors and their customers contain specific 
provisions, for the benefit of OPRA, relating to proprietary rights to 
OPRA data, non-retransmission of data, the absence of any guarantee of 
the data and a disclaimer of liability. The proposed amendment to the 
Rider would mandate that vendors require comparable provisions to be 
included in contracts between subscribers and their customers who 
receive a dial-up service from a third-party vendor.\3\
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    \3\ The proposal would require vendors to obtain a written 
agreement from each OPRA subscriber whose customers will be provided 
the dial-up service from the vendor that the subscriber will: (1) 
obtain from each of its customers to whom the vendor furnishes the 
service an agreement that the customer will: (a) receive OPRA data 
only for such person's use, (b) not retransmit the data to anyone 
else, and (c) acknowledge that OPRA data is the property of the 
respective exchange or market in which a reported transaction 
occurred or a reported quotation was entered; (2) provide to the 
vendor a current list of customers entitled to receive the service 
from the vendor and to certify that each named customer has entered 
into the required agreement; (3) maintain the same customer records 
required to be maintained by the vendor with respect to customers; 
and (4) acknowledge the absence of any guarantee and the disclaimer 
of liability on the part of OPRA, OPRA's processor and each 
participating exchange.
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    Other than as described above, OPRA proposes no change in the way 
in which dial-up services may be offered to investors. OPRA represents 
that no new or additional OPRA fees will result from this proposed 
amendment and the amendment will not make any new parties subject to 
OPRA's existing fee. OPRA proposes to phase in the revised form of the 
Rider to take the place of the existing Rider.

III. Discussion

    After careful review, the Commission finds that the proposed 
amendment is consistent with the requirements of the Act and the rules 
and regulations thereunder.\4\ Specifically, the Commission believes 
that the proposed amendment, which accommodates the provision of OPRA 
data through third-party vendors, is consistent with Rule 11Aa3-2 in 
that it will contribute to the maintenance of fair and orderly markets 
and remove impediments to and perfect the mechanisms of a national 
market system.
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    \4\ In approving this rule, the Commission notes that it has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
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    The Commission notes that the proposed amendment will require third 
party vendors that provide a dial-up service to the customers of OPRA 
subscribers to obtain an agreement from the subscribers, in writing, 
that the subscribers will include provisions for the benefit of OPRA in 
the subscribers' written agreements with its customers. The Commission 
believes that it is reasonable for OPRA to extend its existing 
contractual protections to situations in which a third party vendor 
provides a dial-up service to the customers of an OPRA subscriber. The 
Commission notes that the proposed amendment also provides OPRA 
subscribers with alternatives for the provision of the dial-up service 
to their customers. Accordingly, the Commission believes that the 
proposed amendment will provide additional flexibility to OPRA 
subscribers while providing OPRA with the contractual protections that 
it requires.

IV. Conclusion

    It is therefore ordered, pursuant to Rule 11Aa3-2 of the Act, that 
the proposed amendment (SR-OPRA-97-4) is approved.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\17 CFR 200.30-3(a)(29).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-29882 Filed 11-12-97; 8:45 am]
BILLING CODE 8010-01-M