Notice2023-21349
Joint Industry Plan; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Amendment To Modify the Options Price Reporting Authority's Fee Schedule Regarding Caps on the Amounts of Certain Port Fees
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 29, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 188 (Friday, September 29, 2023)</title>
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[Federal Register Volume 88, Number 188 (Friday, September 29, 2023)]
[Notices]
[Pages 67398-67400]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-21349]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98514; File No. SR-OPRA-2023-01]
Joint Industry Plan; Order Instituting Proceedings To Determine
Whether To Approve or Disapprove a Proposed Amendment To Modify the
Options Price Reporting Authority's Fee Schedule Regarding Caps on the
Amounts of Certain Port Fees
September 25, 2023.
I. Introduction
On July 14, 2023, the Options Price Reporting Authority (``OPRA''),
pursuant to Section 11A of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 608 of Regulation National Market System
(``Regulation NMS'') thereunder,\2\ filed with the Securities and
Exchange Commission (``Commission'') a proposed amendment to the Plan
for Reporting of Consolidated Options Last Sale Reports and Quotation
Information (``OPRA Plan'').\3\ The proposed OPRA Plan amendment
(``Proposed Amendment'') would amend the OPRA Fee Schedule to reflect
the applicable monthly fee caps on certain connectivity ports that are
used to access OPRA data. The Proposed Amendment was published for
comment in the Federal Register on August 2, 2023.\4\ The Commission
has not received any comments on the Proposed 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. See Securities Exchange Act Release No. 17638 (Mar. 18,
1981), 22 SEC. Docket 484 (Mar. 31, 1981). The full text of the OPRA
Plan and a list of its participants are available at <a href="https://www.opraplan.com/">https://www.opraplan.com/</a>. The OPRA Plan provides for the collection and
dissemination of last sale and quotation information on options that
are traded on the participant exchanges.
\4\ See Securities Exchange Act Release No. 98012 (July 27,
2023), 88 FR 50939 (``Notice'').
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This order institutes proceedings, under Rule 608(b)(2)(i) of
Regulation NMS,\5\ to determine whether to approve or disapprove the
Proposed Amendment or to approve the Proposed Amendment with any
changes or subject to any conditions the Commission deems necessary or
appropriate after considering public comment.
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\5\ 17 CFR 242.608(b)(2)(i).
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II. Summary of the Proposed Amendment \6\
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\6\ The full text of the Proposed Amendment appears as
Attachment A to the Notice. See Notice, supra note 4, 88 FR at
50941-42.
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OPRA states that the Proposed Amendment is designed to amend the
OPRA Fee Schedule to provide public notice that OPRA negotiated terms
in the 2021 Processor Services Agreement (the ``2021 Processor
Agreement'') between OPRA and the Securities Industry Automation
Corporation (``SIAC'') that impose caps on certain port fees that can
be charged per month when SIAC, either directly or through a third
party, provides direct access to OPRA data to any person authorized by
OPRA to receive direct access to OPRA data.\7\ OPRA further states
that, under the 2021 Processor Agreement, SIAC is OPRA's ``processor,''
meaning that SIAC gathers the last sale and quote information from each
of the OPRA members, consolidates that information, and disseminates
the consolidated OPRA data.\8\ According to OPRA, as the processor,
SIAC works directly with OPRA members and data vendors to provide
connectivity to SIAC, and connectivity to SIAC is currently provided by
an affiliate of SIAC, the ICE Global Network (``IGN''), which both sets
and charges the port fees associated with that connectivity.\9\
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\7\ See id. at 50939.
\8\ See id.
\9\ See id.
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OPRA states that recipients of OPRA data can access that data using
a 10 gigabit (``Gb''), 40 Gb, or 100 Gb network connection. OPRA
further states that it has contractually capped the connectivity or
``port'' fees that SIAC, or any third party utilized by SIAC, may
charge to provide direct connectivity to OPRA data using a 10 Gb or 40
Gb connection and that it has ``the right to approve a cap on port fees
that could be charged for . . . higher capacity ports'' in the event
that such higher capacity ports become available in the future.\10\
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\10\ See id.
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OPRA states that the negotiated port fee caps of $16,000 per month
per 10 Gb port and $20,500 per month per 40 Gb port were established as
part of the 2015 Processor Agreement between OPRA and SIAC.\11\ OPRA
further states that these caps were retained in the 2021 Processor
Agreement,\12\ and that OPRA's Management Committee
[[Page 67399]]
subsequently approved the $30,000 per month port fee cap with respect
to the 100 Gb port in September 2021 in accordance with the terms of
the 2021 Processor Agreement.\13\
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\11\ See id.
\12\ See id. at 50939-40 (stating OPRA ``used the negotiation
process as an opportunity to ensure that SIAC's ability to increase
the amount of port fees would be capped during the term of the 2015
Processor Agreement for all OPRA data recipients, including OPRA
members, who were authorized to receive direct access to OPRA
data.'').
\13\ See id.
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OPRA states that it does not provide access ports, does not itself
charge any port fees, does not collect any fees on behalf of OPRA
members in connection with access to SIAC, and does not receive any
portion of port fees charged by other entities.\14\ OPRA further states
that it does not believe the caps that it negotiated with SIAC
concerning ``the amount of port fees that can be charged either (1)
establishes or changes a fee or charge collected on behalf of the
members of the OPRA Plan in connection with access to, or use of, any
OPRA facilities or (2) represents a fee or charge imposed by OPRA as
contemplated by Rule 608(a)(5)(ii) of Regulation NMS.'' \15\ OPRA
states that it submitted the Proposed Amendment to ``provide notice of
the contractual fee caps it negotiated with SIAC'' and because
Commission staff requested that it do so.\16\
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\14\ See id. at 50939.
\15\ Id.
\16\ Id.
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III. Proceedings To Determine Whether To Approve Or Disapprove the
Proposed Amendment
The Commission is instituting proceedings pursuant to Rule
608(b)(2)(i) of Regulation NMS,\17\ and Rule 700 of the Commission's
Rules of Practice,\18\ to determine whether to approve or disapprove
the Proposed Amendment or to approve the Proposed Amendment with any
changes or subject to any conditions the Commission deems necessary or
appropriate after considering public comment. Institution of
proceedings does not indicate that the Commission has reached any
conclusions with respect to any of the issues involved. Rather, the
Commission seeks and encourages interested persons to provide
additional comment on the Proposed Amendment to inform the Commission's
analysis.
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\17\ 17 CFR 242.608(b)(2)(i).
\18\ 17 CFR 201.700.
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Rule 608(b)(2) of Regulation NMS provides that the Commission
``shall approve a . . . proposed amendment to an effective national
market system plan, with such changes or subject to such conditions as
the Commission may deem necessary or appropriate, if it finds that such
. . . amendment is necessary or appropriate in the public interest, for
the protection of investors and 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.'' \19\ Rule 608(b)(2) further provides that the Commission
shall disapprove a proposed amendment if it does not make such a
finding.\20\ Pursuant to Rule 608(b)(2)(i) of Regulation NMS,\21\ the
Commission is providing notice of the grounds for possible disapproval
under consideration:
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\19\ 17 CFR 242.608(b)(2).
\20\ See id.
\21\ 17 CFR 242.608(b)(2)(i). See also Commission Rule of
Practice 700(b)(2), 17 CFR 201.700(b)(2).
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<bullet> Whether the Proposed Amendment is consistent with Rule 608
of Regulation NMS. Specifically, whether the Proposed Amendment is
necessary or appropriate in the public interest, for the protection of
investors and 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.\22\
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\22\ See 17 CFR 242.608(b)(2).
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<bullet> Whether, consistent with Rule 603(a) and 614(d)(3) of
Regulation NMS, the Proposed Amendment provides for the distribution of
information with respect to quotations for and transactions in NMS
stocks on terms that are fair and reasonable and not unreasonably
discriminatory.\23\
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\23\ See 17 CFR 242.603(a), 614(d)(3).
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<bullet> Whether the Proposed Amendment is consistent with Rule
608(a)(4)(C) of Regulation NMS requiring every amendment to a national
market system plan be accompanied by, among other things, an analysis
of the impact on competition of implementation of the amendment.\24\
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\24\ See 17 CFR 242.608(a)(4)(C).
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<bullet> Whether the Proposed Amendment is consistent with Rule
608(a)(5) of Regulation NMS requiring every amendment to a national
market system plan include a description of the manner in which any
facility contemplated by the plan or amendment will be operated and
further requiring that any such description include, to the extent
applicable, the method by which any fees or charges collected on behalf
of all of the sponsors and/or participants in connection with access
to, or use of, any facility contemplated by the plan or amendment will
be determined and imposed (including any provision for distribution of
any net proceeds from such fees or charges to the sponsors and/or
participants) and the amount of such fees or charge.\25\
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\25\ See 17 CFR 242.608(a)(5).
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<bullet> Whether modifications to the Proposed Amendment, or
conditions to its approval, would be required to make the Proposed
Amendment necessary or appropriate in the public interest, for the
protection of investors and 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.\26\
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\26\ See CFR 242.608(b)(2).
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<bullet> Whether the Proposed Amendment is consistent with
Congress's finding, in Section 11A(1)(C)(iii) of the Act, that it is in
the public interest and appropriate for the protection of investors and
the maintenance of fair and orderly markets to ensure ``the
availability to brokers, dealers, and investors or information with
respect to quotations for and transactions in securities.\27\
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\27\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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<bullet> Whether, consistent with the purposes of Section
11A(c)(1)(B) of the Act,\28\ the Proposed Amendment's provisions are
drafted to support the prompt, accurate, reliable, and fair collection,
processing, distribution, and publication of information with respect
to quotations for and transactions in NMS securities, and the fairness
and usefulness of the form and content of such information.
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\28\ 15 U.S.C. 78k-1(c)(1)(B).
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Under the Commission's Rules of Practice, the ``burden to
demonstrate that a NMS plan filing is consistent with the Exchange Act
and the rules and regulations issued thereunder . . . is on the plan
participants that filed the NMS plan filing.'' \29\ The description of
the NMS plan filing, its purpose and operation, its effect, and a legal
analysis of its consistency with applicable requirements must all be
sufficiently detailed and specific to support an affirmative Commission
finding, and ``[a] mere assertion that the NMS plan filing is
consistent with those requirements is not sufficient.'' \30\ Any
failure of the plan participants that filed the NMS plan filing to
provide such detail and specificity may result in the Commission not
having a sufficient basis to make an affirmative finding that the NMS
plan filing is consistent with the Act and the applicable rules and
regulations thereunder.\31\
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\29\ 17 CFR 201.700(b)(3)(ii).
\30\ Id.
\31\ See id.
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IV. Commission's Solicitation of Comments
The Commission requests that interested persons provide written
submissions of their views, data, and
[[Page 67400]]
arguments with respect to the issues identified above, as well as any
other comments or concerns they may have regarding the proposal. In
particular, the Commission invites the written views of interested
persons concerning whether the proposal is consistent with Section 11A
or any other provision of the Act, or the rules and regulations
thereunder, and the Commission asks that commenters address the
sufficiency and merit of OPRA's statements in support of the Proposed
Amendment.\32\
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\32\ See Notice, supra note 4, 88 FR at 30989.
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Although there do not appear to be any issues relevant to approval
or disapproval that would be facilitated by an oral presentation of
views, data, and arguments, the Commission will consider, pursuant to
Rule 608(b)(2)(i) of Regulation NMS,\33\ any request for an opportunity
to make an oral presentation.\34\
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\33\ 17 CFR 242.608(b)(2)(i).
\34\ Rule 700(c)(2) of the Commission's Rules of Practice
provides that ``[t]he Commission, in its sole discretion, may
determine whether any issues relevant to approval or disapproval
would be facilitated by the opportunity for an oral presentation of
views.'' 17 CFR 201.700(c)(2).
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Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#97e5e2fbf2baf4f8fafaf2f9e3e4d7e4f2f4b9f0f8e1"><span class="__cf_email__" data-cfemail="750700191058161a1818101b0106350610165b121a03">[email protected]</span></a>. Please include
file number SR-OPRA-2023-01 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to: Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to file number SR-OPRA-2023-01. This file
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 website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change 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 website 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 the filing also will be available for
inspection and copying at the Participants' principal offices. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright
protection. All submissions should refer to file number SR-OPRA-
2023-01 and should be submitted on or before October 20, 2023. Rebuttal
comments should be submitted by November 3, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
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\35\ 17 CFR 200.30-3(a)(85).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21349 Filed 9-28-23; 8:45 am]
BILLING CODE 8011-01-P
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