62910 Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Notices

18 Id. See also 17 CFR 240.11Aa3–1(d) (relating to

retransmission of transaction reports or last sale

data); 17 CFR 240.11Aa3–1(e) (permitting the

imposition of reasonable, uniform charges for the

distribution of transaction reports or last sale data).

19Securities Exchange Act release No. 20874

(April 17, 1984) (‘‘Instinet case’’).

20 Id. at 40–41.

21 Id. Although the fee restructuring proposal is

not cost-based in the sense described in the Instinet

case, the purpose of the restructured fee schedule

is fundamentally different. OPRA’s proposal is

designed to reallocate costs fairly and equitably

among all persons that derive a commercial benefit

from the information obtained from exchange

markets. Because ORPA is not in direct competition

with the vendors that will be subject to the

redistribution fee, the analysis applied in the

Instinet case is not strictly applicable. Although

OPRA’s posture with respect to the vendors that

will be affected by the redistribution fee is different

than the relationship between the NASD and

Instinet, the Commission continues to have the duty

to ensure that OPRA’s fees satisfy applicable

standards.

22 15 U.S.C. 78k–1(a)(3)(B).

23 17 CFR 240.30–3(a)(29).

1 15 U.S.C. 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1994).

3See Securities Exchange Act Release No. 36239

(September 15, 1995), 60 FR 49032.

4Option quote parameters govern the width of

market quotations, establishing the maximum

widths between the bid and the offer for an option

contract.

found a proposed Consolidated Tape

Association retransmission fee

consistent with the Exchange Act.18

In addition, the appropriate scope of

fees was addressed in a denial of access

petition filed by Instinet against the

National Association of Securities

Dealers, Inc. (‘‘NASD’’).19 The NASD

attempted to impose certain vendor and

subscriber fees on the quotation

information (referred to as the National

Quotation Data Service) sought by

Instinet. In its review of the denial of

access petition, the Commission noted

that in a situation where a monopolistic

supplier of market information is in

direct competition with vendors in

providing such information, there is the

potential for the supplier to erect

barriers to entry by charging higher fees

to vendors of competing information

services.20 The Commission

determined, therefore, that because

Instinet sought to distribute certain

quotation information in competition

with the NASD, an exclusive processor

of that information, the NASD’s

proposed fees were required to be costbased to ensure neutrality and

reasonableness of the vendor and

subscriber fees.21

OPRA’s proposal will encourage the

use of real-time data by reducing the

OPRA fees charged to vendors of realtime data. The Commission believes that

investment decisions should be based

on the most accurate, up-to-date

information available. Thus, this

proposal marks a step toward making

real-time data more accessible to a

greater number of market information

users. Recent technological innovations

have further enhanced the feasibility of

providing easy access to real-time

market data to a larger segment of the

investor community. The Commission

encourages OPRA to utilize these new

technologies to encourage additional

steps to promote the use of real-time

information on a fair, reasonable and

non-discriminatory basis.

The Commission recognizes that not

all subscribers can afford regular realtime service and, as noted by some

commenters, not all subscribers believe

their use of market data justifies the cost

of such service (even assuming that realtime vendors pass on their savings to

their subscribers). As to these

subscribers, there is a continued need

for access to affordable delayed data.

One adverse consequence of the fee

restructuring will be to increase the

costs to vendors of delayed data which,

in turn, may result in a modest increase

in the cost of delayed data to

subscribers. The Commission has long

been committed to protecting the

public’s right of access to market

information and believes that any

modest increase in costs to subscribers

of delayed data under OPRA’s proposed

fee restructuring will not act as a barrier

to fair and reasonable access to

information for those subscribers.

Competition among technology and

information providers continues to

thrive. Over the past few years,

individual inventors have enjoyed

unprecedented access to market data

through varied media, including CNN,

CNBC, satellite services, on-line

computer services, the World Wide

Web, and the Internet. The Commission

believes that those innovations will

continue to facilitate the fair and

reasonable distribution of delayed data

even though redistributors of delayed

options data will be required to pay a

redistribution fee.

It is therefore ordered, pursuant to

Section 11A(a)(3)(B) of the Act,22 that

the amendment (S7–8–90) to the OPRA

Plan be, and hereby is, approved.

For the Commission by the Division

of Market Regulation, pursuant to

delegated authority.23

Jonathan G. Katz,

Secretary.

[FR Doc. 95–29775 Filed 12–6–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36539; International Series

Release No. 895; File No. SR–Phlx–95–47]

Self-Regulatory Organizations;

Philadelphia Stock Exchange, Inc.;

Order Approving Proposed Rule

Change Relating to Japanese Yen

Quote Spread Parameters

November 30, 1995.

I. Introduction

On August 22, 1995, the Philadelphia

Stock Exchange, Inc. (‘‘Phlx’’ or

‘‘Exchange’’) submitted to the Securities

and Exchange Commission

(‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposal to widen the

quote spread parameters applicable to

Japanese yen options. The proposed rule

change was published for comment in

the Federal Register on September 21,

1995.3 No comments were received on

the proposed rule change. This order

approves the proposal.

II. Description of the Proposal

The Phlx seeks to widen the quotation

spread parameters (bid/ask differentials)

applicable to Japanese yen options in

light of the increased volatility and

value of the underlying currency, the

Japanese yen.4 The Exchange proposes

to change the parameters in Rule

1014(c)(ii) and Floor Procedure Advice

(‘‘Advice’’) F–6, Option Quote

Parameters, from $.000004, $.000006,

and $.000008 to $.000006, $.000009,

and $.000012. Under the proposal, the

new quote spread parameters will be

reflected in Rule 1014 as follows: no

more than $.000006 between the bid

and the offer for each option contract for

which the bid is $.000040 or less; no

more than $.000009 where the bid is

more than $.000040 but does not exceed

$.000160; and no more than $.000012

where the bid is more than $.000160.

In its proposal, the Phlx notes that as

the yen spot value has risen, the spreads

between the bid and the offer in the spot

price also have risen. For example, a

spot market of 101.50 (bid)–.60 (ask) yen

in January 1995 represented $.009852–

.009842 in American terms, which is ten

‘‘ticks’’ wide. Comparatively, a spot

market of 85.10–.20 yen in May 1995

represented $.011751–.011737, which is

14 ticks wide. Similarly, the Exchange

states that the spreads in Japanese yen
Federal Register / Vol. 60, No. 235 / Thursday, December 7, 1995 / Notices 62911

5 15 U.S.C. 78f(b)(5) (1988).

6 15 U.S.C. 78s(b)(2) (1988).

7 17 CFR 200.30–3(a)(12) (1993).

1See Letter from William Floyd-Jones, Assistant

General Counsel, Amex, to Stephen M. Youhn, SEC,

dated Sept. 26, 1995. The amendment renumbers

two rule provisions that were misstated in the

original filing.

2See Securities Exchange Act Release No. 30768

(June 2, 1992). A Registered Trader under Rule 958

is also referred to as a Registered Options Trader

(‘‘ROT’’).

3Moreover, due to the derivative pricing of

currency warrants, the Exchange believes it is

Continued

futures and forward contracts also have

widened.

III. Discussion

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and, in particular, the

requirements of Section 6(b)(5) 5 that the

rules of an exchange be designed to

promote just and equitable principles of

trade, prevent fraudulent and

manipulative acts, and, in general,

protect investors and the public interest

by providing a more efficient and

competitive market for foreign currency

options.

The Commission believes that the

recent significant rise in the value of the

yen in relation to the U.S. dollar

justifies amending the present

applicable quote spread parameters. As

the Japanese yen spot value (in relation

to the U.S. dollar) has increased, the

U.S. dollar value of each yen option

contract likewise has increased.

However, the quote spread parameters

have not previously been adjusted to

account for this movement. Setting

Japanese yen option quote spread

parameters as proposed by the Phlx

should continue to facilitate tightly

quoted markets without impairing Phlx

market makers’ ability to provide market

depth and liquidity. In addition, the

new quote spread parameters should

allow the Phlx and Phlx Japanese yen

option market makers to compete more

effectively with similar over-thecounter-based products.

Finally, the Commission notes that

under Phlx Rule 1014, ‘‘Obligations and

Restrictions Applicable to Specialists

and Registered Options Traders,’’

Japanese yen market makers are

required to maintain a fair and orderly

market and are not permitted to enter

into transactions or make bids or offers

that are inconsistent with such

obligations. Accordingly, the

Commission expects the Phlx to monitor

trading in Japanese yen options affected

by the proposal to ensure that there is

adequate market activity in those series

and to ensure that market makers are

meeting their obligations to maintain

fair and orderly markets.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,6 that the

proposed rule change (SR–Phlx–95–47)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–29776 Filed 12–6–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36535; File No. SR–AMEX–

95–38]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change and

Amendment No. 1 to Proposed Rule

Change by the American Stock

Exchange, Inc. Relating to

Transactions in Currency Warrants by

Registered Options Traders

November 30, 1995.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on September 22,

1995, the American Stock Exchange,

Inc. (‘‘Amex’’ or ‘‘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 prepared by the selfregulatory organization. On September

26, 1995, the Amex filed Amendment

No. 1 (‘‘Amendment No. 1’’) to the

proposal.1 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

The Amex proposes to amend

Commentary .12 to Amex Rule 111

(Restrictions on Registered Traders).

Commentary .14 to Rule 114 (Registered

Equity Market Makers) and Commentary

.10 to Rule 958 (Options Transactions of

Registered Traders) to provide that

proprietary transactions on the Floor in

currency warrants shall be governed by,

and affected in accordance with, Rule

958. The text of the proposed rule

change is available at the Office of the

Secretary, Amex and at the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

Amex 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. The Amex has

prepared summaries, set forth in

Sections A, B, and C below, of the most

significant aspects of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The Amex proposes to amend

Commentary .12 to Rule 111

(Restrictions on Registered Traders),

Commentary .14 to Rule 114 (Registered

Equity Market Makers) and Commentary

.10 to Rule 958 (Options Transactions of

Registered Traders) to provide that

proprietary transactions on the Amex

Floor in currency warrants, shall be

governed by, and effected in accordance

with, Rule 958.

In 1992, the Exchange amended its

rules to permit regular members to

register as a Registered Trader under

Rule 958 to engage in supplemental

market making activity in stock index

warrants and certain other non-options

derivative products.2 The Exchange

enacted these changes to conform its

rules to those of other markets, and to

provide additional liquidity to the

market for the Exchange’s Portfolio

Depositary Receipts and LOR

SuperUnits. Due to the limited purpose

of the 1992 rule changes, the Exchange

did not seek at that time to extend this

treatment to the trading of listed

currency warrants by ROTs.

At present, currency warrants are

traded on the Floor by Registered Equity

Market Makers (‘‘REMMs’’) under the

Exchange’s equity trading rules,

pursuant to the provisions of Rule 114

(which includes applicable provisions

of Rule 111). Under the proposed rule

changes, regular members wishing to

engage in supplemental market making

activity in currency warrants may

register as Registered Traders under

Rule 958, and would trade for their own

account in such securities pursuant to

the provisions of that Rule.

In contrast to REMMs trading

pursuant to Rules 111 and 114, Rule 958

imposes continuous affirmative market

making obligations upon Registered

Traders.3 In recognition of this, such