[Federal Register: December 26, 2002 (Volume 67, Number 248)]
[Notices]
[Page 78832-78833]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26de02-116]
[[Page 78832]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47030; File No. SR-CTA/CQ-2002-01]
Consolidated Tape Association; Notice of Filing and Summary
Effectiveness of the Fourth Substantive Amendment to the Second
Restatement of the Consolidated Tape Association Plan and the Second
Substantive Amendment to the Restated Consolidated Quotation Plan
December 18, 2002.
Pursuant to Rule 11Aa3-2 \1\ under the Securities Exchange Act of
1934 (``Act''), notice is hereby given that on December 16, 2002, the
Consolidated Tape Association (``CTA'') Plan and Consolidated Quotation
(``CQ'') Plan Participants (``Participants'') \2\ 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 4th substantive amendment made to the
Second Restatement of the CTA Plan (``4th Amendment'') and the 2nd
substantive amendment to the Restated CQ Plan (``2nd Amendment''), and
reflects several changes unanimously adopted by the Participants. The
proposed amendments would introduce a capacity planning process into
the Plans and would allocate among the Participants the costs
associated with their capacity needs under the Plans.
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\1\ 17 CFR 240.11Aa3-2.
\2\ Each Participant executed the proposed amendments. The
Participants are the American Stock Exchange LLC (``AMEX''); Boston
Stock Exchange, Inc. (``BSE''); Chicago Board Options Exchange, Inc.
(``CBOE''); Chicago Stock Exchange, Inc. (``CHX''); Cincinnati Stock
Exchange, Inc. (``CSE''); National Association of Securities
Dealers, Inc. (``NASD''); New York Stock Exchange, Inc. (``NYSE'');
Pacific Exchange, Inc. (``PCX''); and Philadelphia Stock Exchange,
Inc. (``PHLX'').
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The Commission is putting into effect summarily the 4th Amendment
to the CTA Plan and the 2nd Amendment to the CQ Plan, and publishing
this notice to solicit comments from interested persons on the proposed
amendments to the Plans generally.
I. Description and Purpose of the Amendment
A. Rule 11Aa3-2
The Participants propose to introduce a capacity planning process
into the Plans. The Participants will engage in the capacity planning
process on a semi-annual basis. The proposed capacity planning process
requires each Participant to submit its projected capacity needs
directly to the Securities Industry Automation Corporation (``SIAC'' or
``Processor''), the processor under both Plans. The process avoids any
need for Participants to share their individual capacity needs with one
another. SIAC will provide each Participant with aggregate capacity
projections for all Participants, but will not provide any individual
Participant's capacity projections with any other Participant.
Under the proposed plan:
1. Semi-Annual Planning Cycles
a. At the start of each semi-annual capacity planning cycle, each
Participant will develop and submit to SIAC an initial set of projected
capacity needs.
b. Once it receives all of the initial sets of projected capacity
needs, SIAC will aggregate the initial projected capacity requirements
for all of the Participants and will notify each Participant as to:
i. the initial aggregate capacity projections for all Participants;
ii. the percentage of capacity requirements attributable to that
Participant; and
iii. the amount of any projected excess capacity or any projected
deficit capacity.
(SIAC determines the excess or deficit by comparing the capacity that
the then existing systems under the Plans can provide and the aggregate
projected capacity needs of the Participants.)
c. Each Participant will then notify the Processor of its final
projected capacity needs.
d. Based on the information that SIAC provides, CTA and the CQ
Operating Committee will determine and advise SIAC of any increase or
decrease that they propose to make to the capacity of their respective
systems. However, in directing SIAC to make any proposed change, the
Participants must cause the system to have no less capacity than the
capacity necessary to meet the aggregate projected capacity
requirements for the system for all Participants.
e. SIAC will then submit to each Participant a proposal for
increasing or decreasing total system capacity and each Participant's
proportionate share of the estimated costs for implementing any change.
Each Participant's proportionate share of the costs will reflect that
Participant's percentage of the final projected capacity requirements
for all Participants.
f. SIAC will bill each Participant directly and each Participant
will pay SIAC for the services that SIAC renders to it. The cost of the
services for each Participant will be its proportionate share of the
total cost to all of the Participants.
g. Each Participant will be entitled to use its proportionate share
of the final capacity requirements of all Participants and, at no extra
cost, of any excess capacity. If the Processor determines that a
Participant is using more than its proportionate share of the aggregate
capacity and the excess capacity, that Participant may be subject to a
fine. The proceeds from any such fine will be distributed to each of
the other Participants in accordance with their proportionate shares.
2. Intra-Cycle Capacity Transfers
a. In between the semi-annual capacity planning cycles, a
Participant may seek to increase or decrease the amount of capacity
available to it by notifying SIAC of its desire for more or less
capacity. Under those circumstances, a Participant may purchase
additional capacity only if another Participant has submitted to SIAC
an unfilled request to sell a portion of its capacity or if excess
capacity exists in the system at that time. A Participant may sell some
of its capacity only if another Participant has submitted to SIAC an
unfilled request to purchase additional capacity.
b. If SIAC is able to match Participants' requests to buy and sell
capacity within a planning cycle, SIAC will effect the sale for the
Participants without revealing either Participant's identity.
c. If a Participant determines to acquire available excess
capacity, SIAC shall adjust each Participant's proportionate share of
system costs based on the new amount of capacity available to the
Participant acquiring the available excess capacity.
d. On a periodic basis, SIAC will determine and inform each
Participant of the total amount of the system capacity currently
available, whether it is available from available excess capacity or
from a Participant that seeks to sell capacity.
Under this plan, SIAC will not disclose to any Participant:
1. The initial or final projected capacity requirements of any
other Participant;
2. The percentage of the aggregate amount of capacity attributable
to any other Participant; or
3. Any other Participant's between-planning-cycles request to
increase or decrease capacity.
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
[[Page 78833]]
anticipated by Sections 11A(a)(1)(C),\3\ 11A(a)(1)(D) \4\ and
11A(a)(3)(B) \5\ of the Act.
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\3\ 15 U.S.C. 78k-1(a)(1)(C).
\4\ 15 U.S.C. 78k-1(a)(1)(D).
\5\ 15 U.S.C. 78k-1(a)(3)(B).
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B. Governing or Constituent Documents
Not applicable.
C. Implementation of Amendment
The Participants have requested that the proposed amendments to the
Plans become effective summarily upon publication of notice of the
amendments, on a temporary basis not to exceed 120 days, so that the
proposed new capacity planning process can be implemented on January 1,
2003, the date of the next capacity planning cycle.\6\
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\6\ Telephone conversation between Thomas F. Haley, Chairman,
CTA, and Kathy A. England, Assistant Director, Sapna C. Patel,
Attorney, Ian K. Patel, Attorney, Division of Market Regulation
(``Division''), Commission, on December 17, 2002. See also letter
from Thomas E. Haley, Chairman, CTA, to Kathy A. England, Assistant
Director, Division, Commission, dated December 16, 2002. The
Commission's notes that the original filing of the proposed
amendments to the Plans incorrectly stated that the proposed
amendments would take effect upon filing with the Commission because
they are concerned solely with the administration of the Plans.
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D. Development and Implementation Phases
The Participants propose to commence to plan for their capacity
needs pursuant to the new process with the next capacity planning
cycle, which begins on January 1, 2003.
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) \7\ of the Act.
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\7\ 15 U.S.C. 78k-1(c)(1)(D).
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F. Written Understanding or Agreements Relating to Interpretation of,
or Participation in, Plan
The forms of agreement between the Participants and SIAC have been
revised to reflect the new obligations of the Participants and the
Processor in respect of the new capacity planning process.
G. Approval by Sponsors in Accordance with Plan
In accordance with Section IV(b) of the CTA Plan and Section IV(c)
of the Restated CQ Plan, each of the Participants has approved the
amendments.
H. Description of Operation of Facility Contemplated by the Proposed
Amendment
Not applicable.
I. Terms and Conditions of Access
Not applicable.
J. Method of Determination and Imposition, and Amount of, Fees and
Charges
Not applicable.
K. Method and Frequency of Processor Evaluation
Not applicable.
L. Dispute Resolution
Not applicable.
II. Rule 11Aa3-1
A. Reporting Requirements
Not applicable.
B. Manner of Collecting, Processing, Sequencing, Making Available and
Disseminating Last Sale Information
The proposed amendments provide a new process pursuant to which the
Participants under the Plans can plan for the capacity needs of the
systems that they use to gather market data from their respective
marketplaces for consolidation and distribution to the public.
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
Not applicable.
G. Identification of Marketplace of Execution
Not Applicable.
III. Date of Effectiveness of the Proposed Amendment
The Commission has determined, pursuant to Rule 11Aa3-2(c)(4) \8\
under the Act, that the proposed amendments, which generally implement
a new capacity planning process, will become effective summarily upon
publication of this notice of amendments in the Federal Register on a
temporary basis not to exceed 120 days. The Commission believes that it
is appropriate to put the proposed amendments into effect summarily
because they should provide for the maintenance of fair and orderly
markets, and should remove impediments to, and perfect the mechanism
of, a national market system. By granting temporary summary
effectiveness, the Participants can begin to plan their capacity needs
pursuant to the proposed capacity planning process for the January 1,
2003 capacity planning cycle.
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\8\ 17 CFR 240.11Aa3-2(c)(4).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed
amendments to the 4th Amendment to the CTA Plan and the 2nd Amendment
to the CQ Plan 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. 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-2002-01 and be
submitted by January 16, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(27).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-32472 Filed 12-24-02; 8:45 am]
BILLING CODE 8010-01-P