Document ID: SEC-2011-0985-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Options Price Reporting Authority
Posted Date: 2011-07-12T04:00Z

[Federal Register Volume 76, Number 133 (Tuesday, July 12, 2011)]
[Notices]
[Pages 40967-40969]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17380]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64819; File No. SR-OPRA-2011-02]

Options Price Reporting Authority; Notice of Filing and Immediate 
Effectiveness of Proposed Amendment to the Plan for Reporting of 
Consolidated Options Last Sale Reports and Quotation Information To 
Adopt a New Hosted Solution Fee and Other Changes to the Fee Schedule

July 6, 2011.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on June 24, 2011, the Options Price Reporting Authority (``OPRA'') 
submitted to the Securities and Exchange Commission (``Commission'') an 
amendment to the Plan for Reporting of Consolidated Options Last Sale 
Reports and Quotation Information (``OPRA Plan'').\3\ The proposed 
amendment would make several change to the fees payable by OPRA Vendors 
and to the terms that describe when those fees are payable. The 
Commission is publishing this notice to solicit comments from 
interested persons on the proposed OPRA Plan amendment.
---------------------------------------------------------------------------

    \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 the 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.
---------------------------------------------------------------------------

I. Description and Purpose of the Plan Amendment

    The purpose of this amendment is to make several changes in the 
fees payable by OPRA Vendors and in the terms that describe when those 
fees are payable.
    The first change is to adopt a new fee (referred to in this filing 
as the ``Hosted Solution Fee'') that will be payable by any OPRA Vendor 
that supplies OPRA Data to a ``Hosted Solution'' sponsored by a 
``Client Organization.'' The terms ``Hosted Solution'' and ``Client 
Organization'' are defined in a revised Policy entitled ``Policy with 
respect to Hosted Solutions.'' The revised Policy replaces a Policy 
entitled ``OPRA Policy on Persons Providing Internet Access to Real-
Time OPRA Data.'' The definitions of the terms ``Hosted Solution'' and 
``Client Organization'' are described below.
    The second change is to permit a Client Organization that sponsors 
a Hosted Solution that displays delayed OPRA Data not to pay a 
Redistribution Fee as a result of its sponsorship of the Hosted 
Solution.
    The third change is to add a new footnote to OPRA's Fee Schedule to 
clarify the circumstances in which an OPRA Vendor may pay OPRA's 
``Internet Service Only'' Redistribution Fee ($650/month) instead of 
the standard Redistribution Fee ($1500/month).

(a) New Hosted Solution Fee; Revised Policy

    OPRA is proposing to adopt a new fee, referred to in this filing as 
the ``Hosted Solution Fee.'' The fee will be payable by OPRA Vendors 
that supply OPRA Data to ``Hosted Solutions.'' A ``Hosted Solution'' is 
a market data delivery vehicle, such as a Web site or a page on a 
website, that satisfies certain requirements: (i) The delivery vehicle 
displays ``current'' or ``delayed'' OPRA Data,\4\ and the OPRA Data is 
displayed only on a ``per inquiry'' basis; \5\ (ii) the

[[Page 40968]]

delivery vehicle is offered (``sponsored'') by a second company (a 
``Client Organization''); (iii) the delivery vehicle is administered by 
the OPRA Vendor; \6\ and (iv) the delivery vehicle clearly and 
prominently identifies the OPRA Vendor that administers the delivery 
vehicle.
---------------------------------------------------------------------------

    \4\ OPRA defines the term ``current'' to refer to OPRA Data that 
has been transmitted to the Vendor within the immediately preceding 
15 minutes, and the term ``delayed'' to refer to OPRA Data that is 
no longer current. See paragraph 1(e) of the OPRA form of Vendor 
Agreement, available on OPRA's website (http://www.opradata.com).
    \5\ The requirement that the OPRA Data is displayed only on a 
``per inquiry'' basis means that an offering of OPRA Data on a bulk 
data feed basis does not qualify as a Hosted Solution. (A recipient 
of OPRA Data on a bulk data feed basis has the ability to select 
data for display on a continuous basis and to format the display.)
    \6\ The delivery vehicle is ``administered'' by the OPRA Vendor 
if the Vendor controls the OPRA Data that is displayed or 
distributed via the delivery vehicle. For current OPRA Data, this 
means that the OPRA Vendor is responsible for assuring that each 
person having access to the OPRA Data either has a Subscriber 
Agreement in place with the Vendor or has a Professional Subscriber 
Agreement in place with OPRA. (This is stated in paragraph 3 of the 
revised Policy.)
---------------------------------------------------------------------------

    The Hosted Solution Fee would be payable by the OPRA Vendors that 
administer Hosted Solutions, not the Client Organizations that sponsor 
Hosted Solutions. For current OPRA Data the Hosted Solution Fee would 
be $100 per month per Hosted Solution. For delayed OPRA Data the Hosted 
Solution Fee would be $50 per month per Hosted Solution. The Hosted 
Solution Fee would also include two ``Enterprise Fee'' alternatives: an 
OPRA Vendor would be authorized to provide delayed OPRA Data to an 
unlimited number of Hosted Solutions for an Enterprise Fee of $5,000 
per month, or would be authorized to provide current and/or delayed 
OPRA Data to an unlimited number of Hosted Solutions for an Enterprise 
Fee of $10,000 per month.\7\ The Hosted Solution fee would be in 
addition to any other applicable fees payable by the Vendor, including 
the Redistribution Fee, Usage-based Vendor Fees, Nonprofessional 
Subscriber Fees and Direct Access Fee.\8\
---------------------------------------------------------------------------

    \7\ For example, if an OPRA Vendor were to administer four 
Hosted Solutions, three of which display current OPRA Data with two 
of those being sponsored by one Client Organization and the third 
being sponsored by another Client Organization, and one of which 
displays delayed OPRA Data, the Hosted Solution Fee payable by the 
OPRA Vendor would be $350/month.
    \8\ These fees are all described in OPRA's Fee Schedule.
---------------------------------------------------------------------------

    The current Policy applies only to ``an Internet site on which 
there is a link or a framed page through which OPRA data provided by a 
person that is an OPRA Vendor may be accessed.'' OPRA believes that 
``links'' and ``framed pages'' are now used relatively rarely, and that 
the more common arrangement is for the upstream Vendor to supply data 
to the Web site of the downstream client of the Vendor in response to 
queries to the Web site.\9\ Accordingly, OPRA believes that there is 
uncertainty under its current Policy as to the circumstances in which 
the downstream entity that sponsors a website must itself become a 
Vendor and pay a Redistribution Fee. The revised Policy addresses this 
uncertainty by replacing the references to ``links'' and ``framed 
pages'' with the more general ``Hosted Solution'' definition.
---------------------------------------------------------------------------

    \9\ The terms ``upstream'' and ``downstream'' are used in this 
filing with reference to the ``flow'' of OPRA Data; an entity is 
``upstream'' from a second entity if the first entity is supplying 
OPRA Data to the second entity.
---------------------------------------------------------------------------

    The revised Policy also differs from the existing Policy in that it 
eliminates an alternative arrangement that OPRA believes has never been 
used. The existing Policy contemplates, as an alternative to the 
ordinary arrangement in which the upstream Vendor controls the 
entitlement process for persons who have access to current OPRA Data 
via a downstream client's website, that the downstream client may 
become a ``Correspondent Subscriber'' and control the entitlement 
process. To become a Correspondent Subscriber for a Vendor, a person 
must enter into a ``Correspondent Subscriber Agreement'' with the 
Vendor and the Correspondent Subscriber Agreement must be approved by 
OPRA.\10\ No OPRA Vendor has ever submitted a form of Correspondent 
Subscriber Agreement to OPRA for approval, and accordingly OPRA 
believes that the Correspondent Subscriber alternative has never been 
used to comply with the existing Policy. The revised Policy eliminates 
the Correspondent Subscriber alternative.
---------------------------------------------------------------------------

    \10\ OPRA's requirements with respect to Correspondent 
Subscriber Agreements are set out in Section 7 of the OPRA Vendor 
Agreement.
---------------------------------------------------------------------------

(b) No Redistribution Fee for a Client Organization That Sponsors a 
Hosted Solution Displaying Delayed OPRA Data

    In general, if a legal person redistributes current or delayed OPRA 
Data ``externally'' (i.e., outside its own organization), OPRA 
classifies the person as a ``Vendor,'' requires the person to execute a 
Vendor Agreement with OPRA and requires the person to pay an OPRA 
Redistribution Fee. The existing Policy entitled ``OPRA Policy on 
Persons Providing Internet Access to Real-Time OPRA Data'' states that 
OPRA does not regard a person as a Vendor if the person does no more 
than sponsor a Web site on which real time (i.e., current) OPRA Data is 
displayed, and accordingly allows such a person not to pay a 
Redistribution Fee.
    The revised Policy extends these concepts so that they apply to 
delayed OPRA Data as well as current OPRA Data. Accordingly, the 
revised Policy provides that OPRA will not regard a person as a Vendor 
if the person does no more than sponsor a Hosted Solution on which 
either current or delayed OPRA Data is displayed, and accordingly 
allows such a person not to pay a Redistribution Fee.

(c) Clarification of Circumstances in Which an OPRA Vendor May Pay 
OPRA's ``Internet Service Only'' Redistribution Fee

    OPRA has always referred to the basic fee payable by each OPRA 
Vendor as the ``Redistribution Fee.'' The standard Redistribution Fee 
has been $1500 per month for many years. OPRA implemented an ``Internet 
service only'' Redistribution Fee effective January 1, 1999, applicable 
in lieu of the standard Redistribution Fee to any Vendor whose 
redistribution of OPRA Data is made solely by means of the 
Internet.\11\
---------------------------------------------------------------------------

    \11\ The ``Internet Service only'' fee implemented effective 
January 1, 1999 was $600 per month. The fee was changed to its 
current $650/month in 2002.
---------------------------------------------------------------------------

    When OPRA implemented the ``Internet service only'' Redistribution 
Fee, an ``Internet service only'' was a service that was generally for 
retail customers and not for high traffic volumes. More recently, 
Vendors have occasionally asked OPRA if they qualify for the ``Internet 
service only'' Redistribution Fee in circumstances in which the Fee is 
not applicable, such as where a Vendor is providing a data feed to a 
downstream Vendor. OPRA is proposing to add a footnote to its Fee 
Schedule to provide additional guidance as to the circumstances in 
which a Vendor is eligible to pay the ``Internet service only'' 
Redistribution Fee. The footnote would state that a Vendor does not 
qualify for the ``Internet service only'' rate if the Vendor 
redistributes OPRA Data via dedicated lines or if the Vendor 
redistributes OPRA Data to the systems of one or more downstream 
Vendors or to one or more Hosted Solutions.

(d) Rationale for the Changes to OPRA's Fees

    OPRA anticipates that these changes may result in a small 
incremental increase in its revenues, with the Hosted Solution Fees 
that it receives at least partially offset by revenues that it will not 
receive from firms that sponsor Hosted Solutions as Client 
Organizations rather than becoming Vendors. OPRA believes that its 
overall fee structure is appropriately adjusted by requiring certain 
Vendors to pay Hosted Solution Fees while providing relief from paying 
the OPRA Redistribution Fee to Client Organizations that sponsor Hosted 
Solutions. OPRA believes that the amounts that it is proposing for the 
new Hosted Solution Fees are reasonable in

[[Page 40969]]

terms of the value received by Vendors, and will represent an 
appropriate revenue contribution to covering the overall costs of OPRA 
and its member exchanges of collecting, consolidating, processing, 
disseminating and assuring the reliability and integrity of options 
market information.
    The text of the proposed amendment to the OPRA Plan is available at 
OPRA, the Commission's Public Reference Room, http://opradata.com, and 
on the Commission's Web site at http://www.sec.gov.

II. Implementation of the OPRA Plan Amendment

    OPRA designated this amendment as qualified to be put into effect 
upon filing with the Commission in accordance with clause (i) of 
paragraph (b)(3) of Rule 608 under the Act.\12\ OPRA intends to 
implement the amendment effective as of the first day of a calendar 
quarter after having given OPRA Vendors at least 30-days notice of the 
revised fees and the revised Policy.
---------------------------------------------------------------------------

    \12\ 17 CFR 242.608(b)(3)(i).
---------------------------------------------------------------------------

    The Commission may summarily abrogate the amendment within sixty 
days of its filing and require refiling and approval of the amendment 
by Commission order pursuant to Rule 608(b)(2) under the Act \13\ if it 
appears to the Commission that such action 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 the mechanisms of, a national market system, or otherwise in 
furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \13\ 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed OPRA 
Plan amendment is consistent with the Act. Comments may be submitted by 
any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-OPRA-2011-02 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-OPRA-2011-02. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed plan amendment that are 
filed with the Commission, and all written communications relating to 
the proposed plan amendment between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for Web site 
viewing and printing in the Commission's Public Reference Room, 100 F 
Street, NE., Washington, DC 20549, on official business days between 
the hours of 10 a.m. and 3 p.m. Copies of such filing also will be 
available for inspection and copying at the principal office of OPRA. 
All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-OPRA-2011-02 
and should be submitted on or before August 2, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(29).
---------------------------------------------------------------------------

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-17380 Filed 7-11-11; 8:45 am]
BILLING CODE 8011-01-P