Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934 (“Act”), notice is hereby given that on November 28, 2003, the Consolidated Tape Association (“CTA”) Plan and Consolidated Quotation (“CQ”) Plan Participants (“Participants”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) a proposal to amend the CTA and CQ Plans (collectively, the “Plans”). The proposal represents the 5th substantive amendment made to the Second Restatement of the CTA Plan and the 3rd substantive amendment to the Restated CQ Plan, and reflects changes unanimously adopted by the Participants. The proposed amendments would delete the provisions of the Plans that exempt any Participant in the Plans from paying market data fees for the receipt of data on its trading floor for regulation or surveillance or for other specifically approved purposes (“Participant Fee Exemptions”). On December 23, 2003, the Participants submitted Amendment No. 1 to the proposed amendments. The Commission is publishing this notice to solicit comments from interested persons on the proposed amendments to the Plans.
17 CFR 240.11Aa3-2.
Each Participant executed the proposed amendments. The Participants are the American Stock Exchange LLC; Boston Stock Exchange, Inc.; Chicago Board Options Exchange, Inc.; Chicago Stock Exchange, Inc.; Cincinnati Stock Exchange, Inc.; National Association of Securities Dealers, Inc. (“NASD”); New York Stock Exchange, Inc. (“NYSE”); Pacific Exchange, Inc.; and Philadelphia Stock Exchange, Inc.
See letter to Jonathan G. Katz, Secretary, Commission, from Thomas E. Haley, Chairman, CTA, dated December 22, 2003 (“Amendment No. 1”). Amendment No. 1 makes a technical correction to the proposed amendments.
I. Description and Purpose of the Amendments
A. Rule 11Aa3-2
17 CFR 240.11Aa3-2.
Currently, the Plans specify that each Participant is exempt from certain market data charges (other than access fees) if it is in compliance with the requisite market data contract. According to the Participant Fee Exemptions, the market data contract must require the Participant (1) to receive market data solely at premises that it occupies solely or on its “trading floor or trading floors” (as that term is generally understood), and (2) to use the data solely for regulatory, surveillance and other approved purposes.
The Participants propose to amend the Plans to require each Participant to pay the same fees for its receipt and use of market data as other market participants pay, regardless of whether the Participant receives the data on its trading floor or elsewhere or uses the data for surveillance or other purposes.
The Participants believe that eliminating the Participant Fee Exemptions will eliminate disputes that have arisen among the Participants regarding what constitutes a “trading floor” (as that term is generally understood) and will eliminate a perceived competitive advantage that the Participant Fee Exemptions give Participant markets over non-exchange markets (such as electronic communications networks and other alternative trading systems), over NASD market makers and, in the case of Participants that trade options, over non-Participant options markets.
The Participants believe that the filing of the proposed amendments is in fulfillment of the national market system objectives regarding the dissemination of market information as anticipated by sections 11A(a)(1)(C), 11A(a)(1)(D) and 11A(a)(3)(B) of the Act.
15 U.S.C. 78k-1(a)(1)(D).
B. Governing or Constituent Documents
Not applicable.
C. Implementation of Amendment
The Participants have manifested their approval of the proposed amendments to the CTA and CQ Plans by means of their execution of the proposed amendments. The proposed amendments would become effective upon Commission approval of the proposed amendments. The Participants will commence to pay the fees that are the subject of the exemption in the billing cycle that follows the Commission's approval of these proposed amendments.
D. Development and Implementation Phases
See Item I.C. above.
E. Analysis of Impact on Competition
The Participants believe that the proposed amendments do not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Participants do not believe that the proposed plan amendments introduce terms that are unreasonably discriminatory for the purposes of section 11A(c)(1)(D) of the Act.
F. Written Understanding or Agreements relating to Interpretation of, or Participation in, Plan
The Participants do not anticipate that they will enter into any new written understandings or agreements relating to the interpretation of the Plans or to conditions for becoming a sponsor or participant in the Plans.
G. Approval by Sponsors in Accordance With Plan
In accordance with Section IV(b) of the CTA Plan and Section IV(c) of the CQ Plan, each of the Participants has approved the proposed amendments.
H. Description of Operation of Facility Contemplated by the Proposed Amendment
Not applicable.
I. Terms and Conditions of Access
By removing the exemptions, the proposed amendments would subject the Participants to the same fee schedule as all other recipients and users of market data.
J. Method of Determination and Imposition, and Amount of, Fees and Charges
The proposed amendments do not change the method for determining, and the amount of, fees and charges. However, the proposed amendments do impose charges for regulation, surveillance and other previously exempted purposes on the Participants.
K. Method and Frequency of Processor Evaluation
Not applicable.
L. Dispute Resolution
Not applicable.
II. Rule 11Aa3-1
17 CFR 240.11Aa3-1.
A. Reporting Requirements
Not applicable.
B. Manner of Collecting, Processing, Sequencing, Making Available and Disseminating Last Sale Information
Not applicable.
C. Manner of Consolidation
Not applicable.
D. Standards and Methods Ensuring Promptness, Accuracy and Completeness of Transaction Reports
Not applicable.
E. Rules and Procedures Addressed to Fraudulent or Manipulative Dissemination
Not applicable.
F. Terms of Access to Transaction Reports
By removing the Participant Fee Exemptions, the proposed amendments would subject the Participants to the same fee schedule as all other persons seeking access to the Participants' transaction reports.
G. Identification of Marketplace of Execution
Not Applicable.
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed amendments are consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Comments may also be submitted electronically at the following e-mail address: rule-comments@sec.gov. All comment letters should refer to File No. SR-CTA/CQ-2003-02. This file number should be included on the subject line if e-mail is used. To help the Commission process and review comments more efficiently, comments should be sent in hardcopy or by e-mail but not by both methods. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed amendments that are filed with the Commission, and all written communications relating to the proposal 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 inspection and copying in the Commission's Public Reference Room. Copies of the filing will also be available for inspection and copying at the principal office of CTA.
All submissions should refer to File No. SR-CTA/CQ-2003-01 and be submitted by January 21, 2004.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 03-32181 Filed 12-30-03; 8:45 am]
BILLING CODE 8010-01-P