Document ID: SEC-2011-1827-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Options Price Reporting Authority
Posted Date: 2011-11-28T05:00Z

[Federal Register Volume 76, Number 228 (Monday, November 28, 2011)]
[Notices]
[Pages 72989-72991]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30425]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65794; File No. SR-OPRA-2011-03]

Options Price Reporting Authority; Notice of Filing and Immediate 
Effectiveness of Proposed Amendment to the Plan To Implement New 
Policies Regarding Reporting and Usage-Based Vendor Fees

November 21, 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 November 7, 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 implement a new set of policies entitled ``Policies 
with respect to Reporting and Usage-based Vendor Fees.'' The Commission 
is publishing this notice to solicit comments from interested persons 
on the proposed OPRA Plan amendment.
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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 nine participants to the OPRA Plan 
are BATS Exchange, Inc., Chicago Board Options Exchange, 
Incorporated, C2 Options Exchange, Incorporated, International 
Securities Exchange, LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, 
Inc., NASDAQ Stock Market LLC, NYSE Amex, Inc., and NYSE Arca, Inc.
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I. Description and Purpose of the Plan Amendment

    OPRA's proposed ``Policies with respect to Reporting and Usage-
based Vendor Fees'' (the ``Policies'') are comprised of three sections. 
The first section describes OPRA policies relating to the reports that 
OPRA requires in order to determine the fees that are payable to OPRA 
by Vendors' and Professional Subscribers. The second and third sections 
describe OPRA policies pertaining to ``Usage-based Vendor Fees.'' \4\ 
Usage-based Vendor Fees are one of the types of fees that are payable 
to OPRA by Vendors. OPRA is not proposing to change the amount of any 
of its fees, but rather to clarify its reporting requirements and the 
circumstances in which certain fees are payable.
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    \4\ ``Usage-based Vendor Fees'' or ``usage-based fees'' are fees 
that are payable by each Vendor with respect to access to OPRA Data 
by the Vendor's Subscribers on a ``Per Query'' or ``meter-based'' 
basis. Usage-based fees are applicable, at the election of the 
Vendor, to queries for ``quote packets'' or ``options chains.'' The 
rates for usage-based fees are stated, and the terms ``quote 
packet'' and ``options chain'' are defined, in OPRA's Fee Schedule. 
OPRA's Fee Schedule is available on OPRA's Web site, 
www.opradata.com.
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    (1) Policies with Respect to Reporting. Section 1 of the new 
Policies summarizes OPRA's reporting requirements for Vendors and for 
Professional Subscribers that have an obligation to report their usage 
of OPRA data directly to OPRA. (These Professional Subscribers are 
sometimes referred to as ``internal distributors.'' \5\) OPRA has not 
previously summarized its requirements in a single document. As 
described in Section 1, OPRA requires that a Vendor report to OPRA with 
respect to:
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    \5\ Professional Subscribers that are obliged to report their 
usage of OPRA data directly to OPRA are sometimes referred to as 
``internal distributors'' because they have the independent ability 
to entitle access to OPRA data by their employees. These 
Professional Subscribers must have entered into Professional 
Subscriber Agreements directly with OPRA, and must also have entered 
into either a Direct Circuit Connection Rider or an Indirect (Vendor 
Pass-Through) Circuit Connection Rider with OPRA. OPRA sometimes 
refers to the data service to a Professional Subscriber that enables 
the Professional Subscriber to act as an internal distributor as a 
``bulk data feed,'' and that term is defined in the Policies for 
that purpose.
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     The Professional Subscribers to which the Vendor is 
providing bulk data feeds of OPRA Data (enabling these Professional 
Subscribers to act as internal distributors).
     The Professional Subscribers that have entered into 
Professional Subscriber Agreements directly with OPRA and that have 
devices and/or User IDs entitled by the Vendors.\6\
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    \6\ OPRA uses these reports to generate invoices for 
``Professional Subscriber Device-based Fees'' that it sends directly 
to these Professional Subscribers.
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     The Professional Subscribers to which the Vendor 
distributes OPRA data and for whose access it pays OPRA usage-based 
fees (i.e., Professional Subscribers to which it distributes OPRA data 
on a ``Per Query'' or ``meter-based'' basis).
     The Non-Professional Subscribers to whom the Vendor 
distributes OPRA data on a ``Per Query'' or ``meter-based'' basis and 
for whose access it pays OPRA usage-based fees.
     The Non-Professional Subscribers to whom the Vendor 
distributes OPRA data and for whose access it pays OPRA Nonprofessional 
Subscriber Fees.\7\
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    \7\ OPRA's Fee Schedule permits a Vendor to pay fees with 
respect to the receipt of OPRA data by a Nonprofessional Subscriber 
in one of two ways: Either by counting quote packets or options 
chains and paying usage-based fees or by paying the 
``Nonprofessional Subscriber Fee''. The usage-based fees for 
Nonprofessional Subscribers are subject to a monthly cap, currently 
$1.00/month/Nonprofessional, and the Nonprofessional Subscriber Fee 
is a flat fee, also currently $1.00/month/Nonprofessional.
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     Any voice-synthesized market data service provided by the 
Vendor.
    Also as described in Section 1, OPRA requires that a Professional 
Subscriber that is an internal distributor report to OPRA with respect 
to the devices and User IDs that have .been entitled by the 
Professional Subscriber to have access to OPRA data.
    (2) Policies Relating to Usage-Based Fees. Section 2 of the 
Policies describes OPRA's longstanding policies with respect to three 
questions that Vendors occasionally ask relating to OPRA's usage-based 
fees.
    Paragraph 2(a) states OPRA's policy with respect to a Vendor that 
wishes to have access to OPRA data other than in connection with its 
activities as a Vendor--that is, to have access to OPRA

[[Page 72990]]

data in a ``Subscriber'' capacity as well as in its ``Vendor'' 
capacity. Such a Vendor has two choices. First, the Vendor may enter 
into a Professional Subscriber Agreement with OPRA and pay ``device-
based fees'' directly to OPRA with respect to its access to OPRA data. 
Alternatively, the Vendor may enter into a Subscriber Agreement with a 
second, unaffiliated, Vendor to permit employees of the first Vendor to 
have access to OPRA data on a metered usage basis. In that case, the 
second Vendor will be responsible for tracking and reporting the access 
to OPRA data by employees of the first Vendor. OPRA is occasionally 
asked whether a Vendor can track and report the internal usage on a 
metered basis of the Vendor itself or its affiliates and pay usage-
based fees with respect to this internal usage. Paragraph 2(a) states 
OPRA's longstanding policy that this alternative is not permitted.
    Paragraph 2(b) states OPRA's policy that a Vendor must report with 
respect to its dissemination of OPRA data to a Professional Subscriber 
entirely on either a ``meter-based'' basis (in which case, the Vendor 
is responsible for paying Usage-based Vendor Fees for its dissemination 
of OPRA data to the Professional Subscriber) or on a ``device-based'' 
basis (in which case, the Professional Subscriber is responsible for 
paying device-based fees with respect to the Vendor's dissemination of 
OPRA data to the Professional Subscriber).
    The policy described in paragraph 2(c) states that, if a device or 
User ID is capable of receiving OPRA information from one Vendor for 
which a Professional Subscriber pays device-based fees and from a 
second Vendor for which the second Vendor pays usage-based fees, both 
types of fees must be paid by the respective payors. OPRA has had a 
longstanding policy--stated in OPRA's ``Policies with respect to 
Device-Based Fees,'' \8\--that a Professional Subscriber is not 
required to pay more than one device-based fee with respect to any 
device or User ID that is capable of receiving OPRA information, even 
if the device or User ID is capable of receiving OPRA information from 
more than one source or ``service.'' Paragraph 2(c) affirms that, if a 
device or User ID is capable of receiving OPRA information from one 
Vendor for which the Professional Subscriber pays device-based fees and 
from a second Vendor for which the second Vendor pays usage-based fees, 
OPRA requires that both types of fees be paid by the respective payors.
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    \8\ OPRA's Policies with respect to Device-Based Fees are 
available on OPRA's Web site, www.opradata.com.
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    (3) Guidelines for Vendors' Quote Counting Systems. Section 3 
describes OPRA's guidelines with respect to Vendors' quote counting 
systems or ``quote meters.'' This section replaces a Policy currently 
on the OPRA Web site that, although it is entitled ``Auditing,'' 
actually describes OPRA's requirements with respect to quote meters. 
Section 3 states that a quote meter must comply with the following 
requirements:
     The quote meter must be able to recognize and count 
``quote packets'' and/or ``options chains'' \9\ for all data service of 
the Vendor that is provided to Subscribers on a usage basis, except 
that:
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    \9\ These terms are defined in OPRA's Fee Schedule.
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    [cir] If the Vendor is ``capping'' the fee payable by the Vendor 
for any Nonprofessional Subscriber at the monthly maximum amount stated 
in OPRA's Fee Schedule, the quote meter needs to be able to count usage 
only up to the maximum amount.
    [cir] If the Vendor is ``capping'' the fee payable by the Vendor 
for any Professional Subscriber at the monthly maximum amount stated in 
OPRA's Fee Schedule, the quote meter needs to be able to count usage 
only up to the maximum amount.
     The quote meter must not count usage for any 
Nonprofessional Subscriber for which the Vendor is paying the 
Nonprofessional Subscriber Fee. (The service to these Nonprofessional 
Subscribers is not on a usage basis.) \10\
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    \10\ OPRA's systems and Fee Schedule treat Nonprofessional 
Subscriber Fees and Usage-based Vendor Fees that are paid by Vendors 
with respect to access to OPRA data by Nonprofessionals separately.
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     The quote meter must count usage separately for each 
option listed in a portfolio format or a market minder service. (For 
example, quote packets for a portfolio with five options series would 
constitute five quote packets.)
     The quote meter must count all ``current'' OPRA market 
data (i.e., all OPRA data that was sent to the Vendor within the 
preceding 15 minutes). (Data that is no longer current--i.e., that is 
delayed data--is not subject to reporting and payment of usage-based 
fees to OPRA.)
    A Vendor's quote counting system must be able to comply with these 
requirements if the system is to be able to count quotes in a manner 
that results in an accurate determination of the Usage-based Vendor 
Fees that the Vendor owes to OPRA. Section 3 of the Policies provides a 
more accurate description of these requirements than OPRA's current 
policy entitled ``Auditing'' does.
    The text of the proposed amendment to the OPRA Plan is available at 
OPRA, the Commission's Public Reference Room, on OPRA's Web site at 
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.\11\ The Policies describe 
and refine longstanding OPRA technical policies with respect to the 
applicability of its fees, particularly its Usage-based Vendor Fee and 
Nonprofessional Subscriber Fee. Accordingly, OPRA will implement the 
Policies upon filing with the Commission.
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    \11\ 17 CFR 242.608(b)(3)(i).
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    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 \12\ 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.
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    \12\ 17 CFR 242.608(b)(2).
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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 email to rule-comments@sec.gov. Please include 
File No. SR-OPRA-2011-03 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-2011-03. This file

[[Page 72991]]

number should be included on the subject line if email 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-2011-03 
and should be submitted on or before December 19, 2011.
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    \13\ 17 CFR 200.30-3(a)(29).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30425 Filed 11-25-11; 8:45 am]
BILLING CODE 8011-01-P