Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE American Options Proprietary Market Data Fee Schedule, 12503-12508 [2022-04561]
Download as PDF
<![CDATA[
Federal Register / Vol. 87, No. 43 / Friday, March 4, 2022 / Notices
records related to requests for
Reasonable Accommodation.
5. COVID–19 Related Medical
Records: Records related to the COVID–
19 public health crisis, including copies
of COVID–19 Vaccination Record Cards,
and Records of COVID–19
immunization from a health care
provider or pharmacy, copies of
COVID–19 immunization records from
public health, state, or tribal
immunization information system.
RECORD SOURCE CATEGORIES:
Employees, applicants for
employment; applicant or employee
health care provider(s), USPS and
Department of Veterans Affairs medical
staff, USPS designee testing facilities,
substance abuse professionals, and
designated contractors.
ROUTINE USES OF RECORDS MAINTAINED IN THE
SYSTEM, INCLUDING CATEGORIES OF USERS AND
THE PURPOSES OF SUCH USES:
Standard routine uses 1 through 9
apply. In addition:
a. Medical records may be disclosed
to an employee’s private treating
physician and to medical personnel
retained by USPS to provide medical
examinations or treatment for an
employee’s health or physical condition
related to employment.
POLICIES AND PRACTICES FOR STORAGE OF
RECORDS:
Automated database, computer
storage media, digital files, and paper
files.
POLICIES AND PRACTICES FOR RETRIEVAL OF
RECORDS:
lotter on DSK11XQN23PROD with NOTICES1
1. The Employee Medical Folder is
retained by USPS until the employee is
separated from USPS. On an annual
basis, records of all employees separated
during the prior year are transferred to
the National Personnel Records Center
and retained for 30 years.
2. Candidate medical information for
applicants determined to be medically
unsuitable for the position offered is
retained 2 years in hard copy. Computer
data is retained 3 years in a history
database.
3. Documentation supporting
applicant requests for reasonable
accommodation for participation in the
hiring or assessment process are
maintained for 2 years in hard copy.
Computer records of such requests are
retained 3 years.
Jkt 256001
CONTESTING RECORD PROCEDURES:
See Notification Procedure below and
Record Access Procedures above.
NOTIFICATION PROCEDURES:
Individuals wanting to know if
information about them is maintained in
this system must address inquiries to
the facility head where currently or last
employed. Headquarters employees
must submit inquiries to the National
Medical Director, Health and Resource
Management, 475 L’Enfant Plaza SW,
Washington, DC 20260. Individuals who
requested accommodation for an
entrance examination or assessment
must submit inquiries to the Manager of
Selection, Evaluation, and Recognition,
475 L’Enfant Plaza SW, Washington, DC
20260. Inquiries must include full
name, Social Security Number or
Employee Identification Number, name
and address of facility where last
employed, and dates of USPS
employment or date of application.
EXEMPTIONS PROMULGATED FOR THE SYSTEM:
None.
HISTORY:
June 17, 2011, 76 FR 35483; April 29,
2005, 70 FR 22516
*
*
*
*
*
Sarah E. Sullivan,
Attorney, Ethics and Legal Compliance.
[FR Doc. 2022–03242 Filed 3–3–22; 8:45 am]
BILLING CODE 7710–12–P
POLICIES AND PRACTICES FOR RETENTION AND
DISPOSAL OF RECORDS:
17:05 Mar 03, 2022
regulations regarding access to records
and verification of identity under 39
CFR 266.5.
ADMINISTRATIVE, TECHNICAL, AND PHYSICAL
SAFEGUARDS:
By employee or applicant name,
Social Security Number, Employee
Identification Number, Candidate
Identification Number, or duty or pay
location.
VerDate Sep<11>2014
4. Reasonable Accommodation
Committee and District Reasonable
Accommodation Committee records are
maintained for the duration of the
employee’s tenure with the USPS or
until any appeals are adjudicated,
whichever is longer. After the official
use for these records has been satisfied,
the records are to be placed in a sealed
envelope, labeled as ‘‘Reasonable
Accommodation Committee Records,’’
and placed in the employee medical
folder (EMF) and retained in accordance
with the official retention period for the
EMFs.
5. Alcohol test results indicating a
breath alcohol concentration of 0.02 or
greater, verified positive controlled
substance test results, refusals, medical
review officer’s evaluations, employee
statements, and substance abuse
professionals’ evaluations and referrals
are retained 5 years. Alcohol test results
indicating a breath alcohol
concentration of less than 0.02, and
negative and canceled controlled
substance test results, are retained 1
year.
6. COVID–19 Test results are retained
for one year after the expiration of
Postal Service COVID–19 Policies.
7. COVID–19 Vaccination Status is
retained for one year after the expiration
of Postal Service COVID–19 Policies.
Records existing on paper are
destroyed by burning, pulping, or
shredding. Records existing on
computer storage media are destroyed
according to the applicable USPS media
sanitization practice.
12503
Paper records, computers, and
computer storage media are located in
controlled-access areas under
supervision of program personnel.
Access to these areas is limited to
authorized personnel, who must be
identified with a badge. Access to
records is limited to individuals whose
official duties require such access.
Contractors and licensees are subject to
contract controls and unannounced onsite audits and inspections. Computers
are protected by mechanical locks, card
key systems, or other physical access
control methods. The use of computer
systems is regulated with installed
security software, computer logon
identifications, and operating system
controls including access controls,
terminal and transaction logging, and
file management software.
RECORD ACCESS PROCEDURES:
Requests for access must be made in
accordance with the Notification
Procedure above and USPS Privacy Act
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94324; File No. SR–
NYSEAMER–2022–12]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE
American Options Proprietary Market
Data Fee Schedule
February 28, 2022.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on February
24, 2022, NYSE American LLC (‘‘NYSE
American’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
15 U.S.C. 78s(b)(1).
15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1
2
E:\FR\FM\04MRN1.SGM
04MRN1
12504
Federal Register / Vol. 87, No. 43 / Friday, March 4, 2022 / Notices
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
NYSE American Options Proprietary
Market Data Fee Schedule (‘‘Fee
Schedule’’) to introduce a data product
to be known as the NYSE Options OpenClose End of Day Volume Summary
(‘‘End of Day Volume Summary’’) that
would be available for purchase by any
market participant, i.e., members 4 and
non-members, on an ad-hoc basis and to
adopt fees for such product. The
proposed rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
lotter on DSK11XQN23PROD with NOTICES1
The Exchange proposes to introduce a
data product to be known as the End of
Day Volume Summary that would be
available for purchase by market
participants on an ad-hoc basis and to
adopt fees for such product.5
4 Members of the Exchange are member
organizations, members, ETP Holders and ATP
Holders.
5 The Exchange previously adopted a
subscription-based market data product known as
the NYSE Options Open-Close Volume Summary
that market participants can purchase on a
subscription basis. See Securities Exchange Act
Release No. 93803 (December 16, 2021), 86 FR
72647 (December 22, 2021) (SR–NYSEAMER–2021–
46). The purpose of this filing is to introduce a
historic monthly report of the NYSE Options OpenClose Volume Summary that would be available for
purchase by any market participant on an ad-hoc
basis.
VerDate Sep<11>2014
17:05 Mar 03, 2022
Jkt 256001
More specifically, the Exchange
proposes to offer an ad-hoc historic
monthly End of Day Volume Summary
market data product that will provide a
volume summary of trading activity on
the Exchange at the option level by
origin (Customer, Professional
Customer, Firm, Broker-Dealer, and
Market Maker 6), side of the market (buy
or sell), contract volume, and
transaction type (opening or closing).
The Customer, Professional Customer,
Firm, Broker-Dealer, and Market Maker
volume will be further broken down
into trade size buckets (less than 100
contracts, 100–199 contracts, greater
than 199 contracts). The ad-hoc historic
monthly End of Day Volume Summary
is proprietary Exchange trade data and
does not include trade data from any
other exchange. It is also a historical
data product and not a real-time data
feed. The Exchange proposes to offer
data that would go back to December
2018 and would contain all series in an
underlying security if it has volume.7
The Exchange anticipates a wide
variety of market participants to
purchase the ad-hoc historic monthly
End of Day Volume Summary,
including, but not limited to, individual
customers, buy-side investors,
investment banks and academic
institutions. For example, academic
institutions may utilize the proposed
product to promote research and studies
of the options industry to the benefit of
all market participants. The Exchange
believes the proposed product may also
provide helpful trading information
regarding investor sentiment and may
be used to create and test trading
models and analytical strategies. The
ad-hoc historic monthly End of Day
Volume Summary is a completely
voluntary product, in that the Exchange
is not required by any rule or regulation
to make this data available and that
potential customers may purchase it on
an ad-hoc basis only if they voluntarily
choose to do so. The Exchange notes
that other exchanges offer a similar
product.8 As such, the ad-hoc historic
6 The terms Customer, Professional Customer,
Firm and Market Maker are defined in Rule
900.2NY.
7 The specifications for the ad-hoc historic
monthly End of Day Volume Summary can be
found at https://www.nyse.com/market-data/
historical/open-close-volume-summary.
8 See Securities Exchange Act Release Nos. 87463
(November 5, 2019), 84 FR 61129 (November 12,
2019) (SR–C2–2019–023) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
To Introduce a New Data Product To Be Known as
Open-Close Data and To Adopt Fees for Such
Product); 55062 (January 8, 2007), 72 FR 2048
(January 17, 2007) (SR–CBOE–2006–88) (Order
Granting Approval to Proposed Rule Change To
Codify a Fee Schedule for the Sale of Open and
Close Volume Data on CBOE Listed Options by
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
monthly End of Day Volume Summary
is subject to direct competition from
similar end of day options trading
summaries offered by other exchanges.
All of these exchanges offer essentially
the same end of day options trading
summary information, and generally
differ solely in the amount of history
available for purchase.9
The Exchange proposes to provide in
its Fee Schedule that market
participants may purchase the ad-hoc
historic monthly End of Day Volume
Summary for a specified month
(historical file). The Exchange proposes
to assess a fee of $600 per request per
month for an ad-hoc request of
historical End of Day Volume Summary
covering all Exchange-listed securities.
An ad-hoc request can be for any
number of months beginning with
December 2018 for which the data is
available.10 The proposed fee for ad-hoc
requests for the historic monthly End of
Day Volume Summary will apply to all
market participants. The Exchange notes
that other exchanges provide a similar
data product that may be purchased on
an ad-hoc basis and is comparably
priced.11
NYSE Options Open-Close Volume
Summary is subject to significant
competitive forces that constrain its
pricing. As described above, the
Exchange’s data product competes headto-head with numerous products
Market Data Express, LLC); and 56957 (December
13, 2007), 72 FR 71988 (December 19, 2007) (SR–
ISE–2007–115) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change Relating to
Historical ISE Open/Close Trade Profile Fees). The
ad-hoc historic monthly End of Day Volume
Summary report contains the same information that
is provided in the monthly subscription-based
market data product known as the NYSE Options
Open-Close Volume Summary. See note 5, supra.
9 For example, Nasdaq PHLX LLC offers history
for their end of day data starting in January 2009
while NYSE Options Open-Close Volume Summary
history is only offered starting in December 2018.
See https://www.nasdaqtrader.com/micro.
aspx?id=photo.
10 For example, a customer that requests historical
End of Day Volume Summary for the months of
June 2021 and July 2021, would be assessed a total
of $1,200. The Exchange notes that it may make
historical data prior to December 2018 available in
the future and that such historical data would be
available to all members and non-members.
11 See e.g., Cboe LiveVol, LLC Market Data Fees
available at https://www.cboe.com/us/options/
membership/fee_schedule/ctwo/. Cboe C2 Options
(‘‘C2’’) offers Open-Close Data: End-of-Day Ad-hoc
Request (historical data) and assesses a fee of $400
per request per month. Cboe EDGX Exchange, Inc.
(‘‘EDGX’’) similarly offers Open-Close Data: End-ofDay Ad-hoc Request (historical data) and assesses
a fee of $400 per request per month. See https://
www.cboe.com/us/options/membership/fee_
schedule/edgx/. Nasdaq ISE, LLC (‘‘ISE’’) offers
Nasdaq ISE Open/Close Trade Profile End of Day
Ad-Hoc Request (historical data) and assesses a fee
of $600 per request per month. See Sec. 10, Market
Data, at https://listingcenter.nasdaq.com/rulebook/
ise/rules/ise-options-7.
E:\FR\FM\04MRN1.SGM
04MRN1
Federal Register / Vol. 87, No. 43 / Friday, March 4, 2022 / Notices
lotter on DSK11XQN23PROD with NOTICES1
currently available in the marketplace.
These products each serve as reasonable
substitutes for one another as they are
each designed to provide data on
options market activity which can be
used to infer longer-term trends. The
information provided by one exchange
is generally similar to that provided by
other exchanges because order flow can
move from one exchange to another, and
market sentiment trends that appear on
one exchange are likely to be similar to
the sentiment trends on other
exchanges. The key differentiator in the
quality of the data depends on the
volume of transactions on a given
exchange. The greater the volume of
transactions, the greater the value of the
data. The proposed fee for ad-hoc
purchases of historic monthly End of
Day Volume Summary is therefore
constrained by the competition among
exchanges for similar options trading
summary products.
The Exchange intends to offer the
historic monthly End of Day Volume
Summary on an ad-hoc basis and charge
the proposed fees on March 1, 2022.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,12 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,13 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and to protect investors and the
public interest, and that it is not
designed to permit unfair
discrimination among customers,
brokers, or dealers. The Exchange also
believes that its proposal to adopt fees
for End of Day Volume Summary is
consistent with Section 6(b) of the Act 14
in general, and furthers the objectives of
Section 6(b)(4) of the Act 15 in
particular, in that it is an equitable
allocation of dues, fees and other
charges among its members and other
recipients of Exchange data.
In adopting Regulation NMS, the
Commission granted self-regulatory
organizations (‘‘SROs’’) and brokerdealers increased authority and
flexibility to offer new and unique
market data to the public. It was
believed that this authority would
expand the amount of data available to
users and consumers of such data and
12 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(4).
13 15
VerDate Sep<11>2014
17:05 Mar 03, 2022
Jkt 256001
also spur innovation and competition
for the provision of market data.
The Exchange believes that the
proposed ad-hoc historic monthly End
of Day Volume Summary market data
product would further broaden the
availability of U.S. option market data to
investors consistent with the principles
of Regulation NMS. The proposed rule
change would benefit investors by
providing access to historic data, which
as noted above, may promote better
informed trading, as well as research
and studies of the options industry.
Particularly, information regarding
opening and closing activity across
different option series may indicate
investor sentiment, which can be
helpful research and/or trading
information. Customers of the historic
data product may be able to enhance
their ability to analyze options trade and
volume data, and create and test trading
models and analytical strategies. The
Exchange believes ad-hoc historic
monthly End of Day Volume Summary
would provide a valuable tool that
customers can use to gain
comprehensive insight into the trading
activity in a particular series, but also
emphasizes such data is not necessary
for trading. Moreover, other exchanges
offer a similar data product.16
The Exchange operates in a highly
competitive market. Indeed, there are
currently 16 registered options
exchanges competing for order flow.
Based on publicly-available
information, and excluding index-based
options, no single exchange has more
than 16% of the market share of
executed volume of multiply-listed
equity and ETF options trades.17
Therefore, currently no exchange
possesses significant pricing power in
the execution of multiply-listed equity
and ETF options order flow. More
specifically, in November 2021, the
Exchange had less than 8% market
share of executed volume of multiplylisted equity and ETF options trades.18
The Commission has repeatedly
expressed its preference for competition
over regulatory intervention in
determining prices, products, and
services in the securities markets.
Specifically, in Regulation NMS, the
16 See
note 8, supra.
Options Clearing Corporation (‘‘OCC’’)
publishes options and futures volume in a variety
of formats, including daily and monthly volume by
exchange, available here: https://www.theocc.com/
Market-Data/Market-Data-Reports/Volume-andOpen-Interest/Monthly-Weekly-Volume-Statistics.
18 Based on OCC data for monthly volume of
equity-based options and monthly volume of ETFbased options, see id., the Exchange’s market share
in multiply-listed equity and ETF options was
9.09% for the month of November 2020 and 7.06%
for the month of November 2021.
17 The
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
12505
Commission highlighted the importance
of market forces in determining prices
and SRO revenues, and also recognized
that current regulation of the market
system ‘‘has been remarkably successful
in promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 19
With respect to market data, the
decision of the United States Court of
Appeals for the District of Columbia
Circuit in NetCoalition v. SEC upheld
the Commission’s reliance on the
existence of competitive market
mechanisms to evaluate the
reasonableness and fairness of fees for
proprietary market data:
In fact, the legislative history indicates that
the Congress intended that the market system
‘‘evolve through the interplay of competitive
forces as unnecessary regulatory restrictions
are removed’’ and that the SEC wield its
regulatory power ‘‘in those situations where
competition may not be sufficient,’’ such as
in the creation of a ‘‘consolidated
transactional reporting system.’’ 20
The court agreed with the
Commission’s conclusion that
‘‘Congress intended that ‘competitive
forces should dictate the services and
practices that constitute the U.S.
national market system for trading
equity securities.’’’ 21 More recently, the
Commission confirmed that it applies a
‘‘market-based’’ test in its assessment of
market data fees, and that under that
test:
the Commission considers whether the
exchange was subject to significant
competitive forces in setting the terms of its
proposal for [market data], including the
level of any fees. If an exchange meets this
burden, the Commission will find that its fee
rule is consistent with the Act unless there
is a substantial countervailing basis to find
that the terms of the rule violate the Act or
the rules thereunder.22
Making similar historic data products
available to market participants fosters
competition in the marketplace, and
constrains the ability of exchanges to
charge supra-competitive fees. In the
event that a market participant views
one exchange’s historic data product as
more or less attractive than the
competition they can and do switch
between similar products. The proposed
19 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
20 NetCoalition v. SEC, 615 F.3d 525, 535 (D.C.
Cir. 2010) (quoting H.R. Rep. No. 94–229 at 92
(1975), as reprinted in 1975 U.S.C.C.A.N. 323).
21 Id. at 535.
22 See Securities Exchange Act Release No. 34–
90217 (October 16, 2020), 85 FR 67392 (October 22,
2020) (SR–NYSENAT–2020–05) (internal quotation
marks omitted), quoting Securities Exchange Act
Release No. 59039 (December 2, 2008), 73 FR
74770, 74781 (December 9, 2008) (ArcaBook
Approval Order).
E:\FR\FM\04MRN1.SGM
04MRN1
lotter on DSK11XQN23PROD with NOTICES1
12506
Federal Register / Vol. 87, No. 43 / Friday, March 4, 2022 / Notices
fees are a result of the competitive
environment, as the Exchange seeks to
adopt fees to attract purchasers of the
ad-hoc historic monthly End of Day
Volume Summary data product.
The Exchange believes its proposal to
provide the ad-hoc historic monthly
End of Day Volume Summary is
reasonable as the proposed fees are
comparable to the fees assessed by other
exchanges 23 that provide similar
historic data products.24 Indeed,
proposing fees that are excessively
higher than established fees for similar
historic data products would simply
serve to reduce demand for the
Exchange’s historic data product, which
as noted, is entirely optional. Like the
ad-hoc historic monthly End of Day
Volume Summary, other exchanges offer
similar historic data products that each
provide insight into trading on those
markets and may likewise aid in
assessing investor sentiment. Although
each of these similar historic data
products provide only proprietary trade
data and not trade data from other
exchanges, it is possible investors are
still able to gauge overall investor
sentiment across different option series
based on open and closing interest on
any one exchange. Similarly, market
participants may be able to analyze
option trade and volume data, and
create and test trading models and
analytical strategies using only the adhoc historic monthly End of Day
Volume Summary data relating to
trading activity on one or more of the
other markets that provide similar
historic data products. As such, if a
market participant views another
exchange’s data as more attractive than
the Exchange’s offering, then such
market participant can merely choose
not to purchase the Exchange’s historic
data product and instead purchase
another exchange’s historic product,
which offer similar data points, albeit
based on that other market’s trading
activity.
The Exchange also believes the
proposed fees are reasonable as they
would support the introduction of a
historic market data product that is
designed to aid investors by providing
insight into trading on the Exchange. In
turn, this data would assist market
participants in gauging investor
sentiment and trading activity, resulting
in potentially better-informed trading
decisions. As noted above, customers
may also use such data to create and test
trading models and analytical strategies.
Selling historic market data, such as
the ad-hoc historic monthly End of Day
note 11, supra.
24 See, note 8, supra.
Volume Summary, is also a means by
which exchanges compete to attract
business. To the extent that the
Exchange is successful in attracting
customers to the Exchange’s historic
data product, it may earn trading
revenues and further enhance the value
of its data products. If the market deems
the proposed fees to be unfair or
inequitable, customers can diminish or
discontinue their use of the historic data
and/or avail themselves of similar
products offered by other exchanges.25
The Exchange therefore believes that the
proposed fees reflect the competitive
environment and would be properly and
equally assessed to all customers. The
Exchange also believes the proposed
fees are equitable and not unfairly
discriminatory as the fees would apply
equally to all customers who choose to
purchase such data. The proposed fees
would not differentiate between
customers that purchase the ad-hoc
historic monthly End of Day Volume
Summary, and are set at a modest level
that would allow any interested market
participant to purchase such data based
on their business needs. Nothing in this
proposal treats any category of market
participant any differently from any
other category of market participant.
The ad-hoc historic monthly End of Day
Volume Summary is available to all
market participants, i.e., members and
non-members, and all market
participants would receive the same
information in the data feed.
As noted above, the Exchange
anticipates a wide variety of market
participants to purchase the ad-hoc
historic monthly End of Day Volume
Summary data product, including but
not limited to individual customers,
buy-side investors, investment banks
and academic institutions. As such, the
Exchange anticipates that the historic
data product may be used not just for
commercial or monetizing purposes, but
also for educational use and research.
The Exchange reiterates that the
decision as to whether or not to
purchase the ad-hoc historic monthly
End of Day Volume Summary is entirely
optional for all potential customers.
Indeed, no market participant is
required to purchase the historic data
product, and the Exchange is not
required to make the historic data
product available to market participants.
Rather, the Exchange is voluntarily
making the historic data product
available, as requested by customers,
and market participants may choose to
receive (and pay for) this data based on
their own business needs. Potential
customers may request the data at any
23 See,
VerDate Sep<11>2014
17:05 Mar 03, 2022
time if they believe it to be valuable or
may decline to purchase such data.
In sum, the fierce competition for
order flow constrains any exchange
from pricing its historic market data at
a supra-competitive price, and
constrains the Exchange here in setting
its fees for the ad-hoc historic monthly
End of Day Volume Summary data
product.
The proposed fees are therefore
reasonable because in setting them, the
Exchange is constrained by the
availability of numerous substitute
venues offering historic market data
products and trading.26 Such substitutes
need not be identical, but only
substantially similar to the product at
hand. More specifically, in setting fees
for the ad-hoc historic monthly End of
Day Volume Summary data product, the
Exchange is constrained by the fact that,
if its pricing is unattractive to
customers, customers have their pick of
an increasing number of alternative
venues to use instead of the Exchange.27
Because of the availability of
substitutes, an exchange that overprices
its historic market data products stands
a high risk that customers may
substitute another source of market data
information for its own. Those
competitive pressures imposed by
available alternatives are evident in the
Exchange’s proposed pricing. The
existence of numerous alternatives to
the Exchange ensures that the Exchange
cannot set unreasonable fees for historic
market data without suffering the
negative effects of that decision in the
fiercely competitive market in which it
operates.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange also does not believe the
proposed fees would cause any
unnecessary or inappropriate burden on
intermarket competition as other
exchanges are free to introduce their
own comparable historic data product
and adopt fees to better compete with
the Exchange’s offering. Rather, the
Exchange believes that the proposal will
promote competition by permitting the
Exchange to sell a historic data product
similar to those offered by other
competitor options exchanges.28 The
Exchange is offering the ad-hoc historic
monthly End of Day Volume Summary
26 See,
note 8, supra.
note 11, supra.
28 See, note 8, supra.
27 See,
25 See,
Jkt 256001
PO 00000
note 11, supra.
Frm 00084
Fmt 4703
Sfmt 4703
E:\FR\FM\04MRN1.SGM
04MRN1
Federal Register / Vol. 87, No. 43 / Friday, March 4, 2022 / Notices
in order to keep pace with changes in
the industry and evolving customer
needs, and believes the data product
will contribute to robust competition
among national securities exchanges.
Furthermore, the Exchange operates
in a highly competitive environment,
and its ability to price the ad-hoc
historic monthly End of Day Volume
Summary is constrained by competition
among exchanges that offer similar
historic data products to their
customers. As discussed above, there
are currently a number of similar
products available to market
participants and investors. A number of
U.S. options exchanges offer a historic
market data product that is substantially
similar to the Exchange’s offering,
which the Exchange must consider in its
pricing discipline in order to compete
effectively. For example, proposing fees
that are excessively higher than
established fees for similar historic data
products would simply serve to reduce
demand for the Exchange’s historic data
product, which as discussed, market
participants are under no obligation to
utilize or purchase. In this competitive
environment, potential purchasers are
free to choose which, if any, similar
historic product to purchase to satisfy
their need for market information. As a
result, the Exchange believes this
proposed rule change permits fair
competition among national securities
exchanges.
The Exchange does not believe the
proposed rule change would cause any
unnecessary or inappropriate burden on
intramarket competition. Particularly,
the proposed fees would apply
uniformly to any customer, in that the
Exchange would not differentiate
between customers that purchase the
ad-hoc historic monthly End of Day
Volume Summary and all customers
would receive the same information in
the data feed. The Exchange believes the
proposed fees are set at a modest level
that would allow interested customers
to purchase such data based on their
business needs.
lotter on DSK11XQN23PROD with NOTICES1
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
VerDate Sep<11>2014
17:05 Mar 03, 2022
Jkt 256001
19(b)(3)(A) of the Act 29 and Rule 19b–
4(f)(6) 30 thereunder. Because the
foregoing proposed rule change does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 31 and Rule 19b–
4(f)(6) 32 thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 33 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),34 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay to allow the Exchange to
implement the proposed rule change
and corresponding fee on March 1,
2022, and thereby allow the Exchange to
compete with exchanges that currently
offer similar historic market data
products. The Commission believes
that, as described above, the Exchange’s
proposal does not raise any new or
novel issues. Therefore, the Commission
believes that waving the 30-day
operative delay is consistent with the
protection of investors and the public
interest. Accordingly, the Commission
designates the proposed rule change to
be operative upon filing.35
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
29 15
U.S.C. 78(b)(3)(A).
CFR 240.19b–4(f)(6).
31 15 U.S.C. 78s(b)(3)(A).
32 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
33 17 CFR 240.19b–4(f)(6).
34 17 CFR 240.19b–4(f)(6).
35 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
30 17
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
12507
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEAMER–2022–12 on the subject
line.
Paper Comments
• 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–NYSEAMER–2022–12. 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 (https://www.sec.gov/
rules/sro.shtml). 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
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEAMER–2022–12, and
E:\FR\FM\04MRN1.SGM
04MRN1
12508
Federal Register / Vol. 87, No. 43 / Friday, March 4, 2022 / Notices
should be submitted on or before March
25, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.36
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–04561 Filed 3–3–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94330; File No. SR–ICC–
2022–001]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to ICC’s Fee
Schedules
February 28, 2022.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934,1 and
Rule 19b–4 thereunder,2 notice is
hereby given that on February 17, 2022,
ICE Clear Credit LLC (‘‘ICC’’) filed with
the Securities and Exchange
Commission the proposed rule change,
as described in Items I, II and III below,
which Items have been prepared
primarily by ICC. ICC filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 3 and Rule 19b–
4(f)(2) thereunder,4 such that the
proposed rule change was immediately
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The principal purpose of the
proposed rule change is to modify ICC’s
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
lotter on DSK11XQN23PROD with NOTICES1
36 17
VerDate Sep<11>2014
17:05 Mar 03, 2022
Jkt 256001
fee schedules to implement reduced fees
for credit default index swaptions
(‘‘Index Options’’) through calendar year
2022. These revisions do not require any
changes to the ICC Clearing Rules.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, ICC
included statements concerning the
purpose of and basis for the proposed
rule change, security-based swap
submission, or advance notice and
discussed any comments it received on
the proposed rule change, securitybased swap submission, or advance
notice. The text of these statements may
be examined at the places specified in
Item IV below. ICC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
(a) Purpose
The proposed changes are intended to
modify ICC’s fee schedules to
implement reduced fees for Index
Options through calendar year 2022.5
ICC maintains a Clearing Participant
(‘‘CP’’) fee schedule 6 and client fee
schedule 7 (collectively, the ‘‘fee
schedules’’) that are publicly available
5 Pursuant to an Index Option, one party (the
‘‘Swaption Buyer’’) has the right (but
not the obligation) to cause the other party (the
‘‘Swaption Seller’’) to enter into an index credit
default swap transaction at a pre-determined strike
price on a specified expiration date on specified
terms. In the case of Index Options that may be
cleared by ICC, the underlying index credit default
swap is limited to certain CDX and iTraxx index
credit default swaps that are accepted for clearing
by ICC, and which would be automatically cleared
by ICC upon exercise of the Index Option by the
Swaption Buyer in accordance with its terms.
6 CP fee details available at: https://
www.theice.com/publicdocs/clear_credit/ICE_
Clear_Credit_Fees_Clearing_Participant.pdf.
7 Client fee details available at: https://
www.theice.com/publicdocs/clear_credit/ICE_
Clear_Credit_Fees.pdf. As specified, all fees are
charged directly to a client’s CP.
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
on its website, which ICC proposes to
update. Clearing fees are due by CPs and
clients in accordance with the product,
amount and currency set out in the fee
schedules and subject to any incentive
program described in the fee schedules.
The proposed changes to the fee
schedules are set forth in Exhibit 5A
and Exhibit 5B and described in detail
as follows. ICC proposes to make such
changes effective March 1, 2022 (the
‘‘Effective Date’’), subject to the
completion of any applicable regulatory
review process.
The amended CP fee schedule would
reduce Index Option fees to $1/million
or Ö1/million through calendar year
2022. Under the current CP fee
schedule, Index Option fees are $3/
million or Ö3/million, subject to an
incentive program that provides a tiered
discount schedule based on U.S. Dollar
equivalent, non-discounted Index
Option fees billed since the start of the
year. ICC also offered certain other
incentive programs that discounted
Index Option fees as part of the CP fee
schedule, which expired at the end of
calendar year 2021 and are removed
from Exhibit 5A.8 Under the proposed
changes, in addition to updating the fee
table, ICC would include a footnote to
indicate that the listed fees of $1/
million or Ö1/million are applicable
from the Effective Date through calendar
year 2022 and reflect a discount from
ICC’s regular Index Option fees of $3/
million or Ö3/million. On the first
business day of 2023, ICC would remove
this discount and the listed fees would
revert to ICC’s regular Index Option fees
on this schedule dated January 2023.
8 A description of these incentive programs is
included in prior filings. SEC Release No. 34–90524
(November 27, 2020) (notice), 85 FR 78157
(December 3, 2020) (SR–ICC–2020–013); SEC
Release No. 34–91922 (May 18, 2021) (notice), 86
FR 27938 (May 24, 2021) (SR–ICC–2021–014).
E:\FR\FM\04MRN1.SGM
04MRN1
]]>Agencies
[Federal Register Volume 87, Number 43 (Friday, March 4, 2022)]
[Notices]
[Pages 12503-12508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04561]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94324; File No. SR-NYSEAMER-2022-12]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
NYSE American Options Proprietary Market Data Fee Schedule
February 28, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on February 24, 2022, NYSE American LLC (``NYSE American''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in
[[Page 12504]]
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE American Options
Proprietary Market Data Fee Schedule (``Fee Schedule'') to introduce a
data product to be known as the NYSE Options Open-Close End of Day
Volume Summary (``End of Day Volume Summary'') that would be available
for purchase by any market participant, i.e., members \4\ and non-
members, on an ad-hoc basis and to adopt fees for such product. The
proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
---------------------------------------------------------------------------
\4\ Members of the Exchange are member organizations, members,
ETP Holders and ATP Holders.
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to introduce a data product to be known as
the End of Day Volume Summary that would be available for purchase by
market participants on an ad-hoc basis and to adopt fees for such
product.\5\
---------------------------------------------------------------------------
\5\ The Exchange previously adopted a subscription-based market
data product known as the NYSE Options Open-Close Volume Summary
that market participants can purchase on a subscription basis. See
Securities Exchange Act Release No. 93803 (December 16, 2021), 86 FR
72647 (December 22, 2021) (SR-NYSEAMER-2021-46). The purpose of this
filing is to introduce a historic monthly report of the NYSE Options
Open-Close Volume Summary that would be available for purchase by
any market participant on an ad-hoc basis.
---------------------------------------------------------------------------
More specifically, the Exchange proposes to offer an ad-hoc
historic monthly End of Day Volume Summary market data product that
will provide a volume summary of trading activity on the Exchange at
the option level by origin (Customer, Professional Customer, Firm,
Broker-Dealer, and Market Maker \6\), side of the market (buy or sell),
contract volume, and transaction type (opening or closing). The
Customer, Professional Customer, Firm, Broker-Dealer, and Market Maker
volume will be further broken down into trade size buckets (less than
100 contracts, 100-199 contracts, greater than 199 contracts). The ad-
hoc historic monthly End of Day Volume Summary is proprietary Exchange
trade data and does not include trade data from any other exchange. It
is also a historical data product and not a real-time data feed. The
Exchange proposes to offer data that would go back to December 2018 and
would contain all series in an underlying security if it has volume.\7\
---------------------------------------------------------------------------
\6\ The terms Customer, Professional Customer, Firm and Market
Maker are defined in Rule 900.2NY.
\7\ The specifications for the ad-hoc historic monthly End of
Day Volume Summary can be found at https://www.nyse.com/market-data/historical/open-close-volume-summary.
---------------------------------------------------------------------------
The Exchange anticipates a wide variety of market participants to
purchase the ad-hoc historic monthly End of Day Volume Summary,
including, but not limited to, individual customers, buy-side
investors, investment banks and academic institutions. For example,
academic institutions may utilize the proposed product to promote
research and studies of the options industry to the benefit of all
market participants. The Exchange believes the proposed product may
also provide helpful trading information regarding investor sentiment
and may be used to create and test trading models and analytical
strategies. The ad-hoc historic monthly End of Day Volume Summary is a
completely voluntary product, in that the Exchange is not required by
any rule or regulation to make this data available and that potential
customers may purchase it on an ad-hoc basis only if they voluntarily
choose to do so. The Exchange notes that other exchanges offer a
similar product.\8\ As such, the ad-hoc historic monthly End of Day
Volume Summary is subject to direct competition from similar end of day
options trading summaries offered by other exchanges. All of these
exchanges offer essentially the same end of day options trading summary
information, and generally differ solely in the amount of history
available for purchase.\9\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release Nos. 87463 (November 5,
2019), 84 FR 61129 (November 12, 2019) (SR-C2-2019-023) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Introduce a New Data Product To Be Known as Open-Close Data and To
Adopt Fees for Such Product); 55062 (January 8, 2007), 72 FR 2048
(January 17, 2007) (SR-CBOE-2006-88) (Order Granting Approval to
Proposed Rule Change To Codify a Fee Schedule for the Sale of Open
and Close Volume Data on CBOE Listed Options by Market Data Express,
LLC); and 56957 (December 13, 2007), 72 FR 71988 (December 19, 2007)
(SR-ISE-2007-115) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change Relating to Historical ISE Open/Close Trade
Profile Fees). The ad-hoc historic monthly End of Day Volume Summary
report contains the same information that is provided in the monthly
subscription-based market data product known as the NYSE Options
Open-Close Volume Summary. See note 5, supra.
\9\ For example, Nasdaq PHLX LLC offers history for their end of
day data starting in January 2009 while NYSE Options Open-Close
Volume Summary history is only offered starting in December 2018.
See https://www.nasdaqtrader.com/micro.aspx?id=photo.
---------------------------------------------------------------------------
The Exchange proposes to provide in its Fee Schedule that market
participants may purchase the ad-hoc historic monthly End of Day Volume
Summary for a specified month (historical file). The Exchange proposes
to assess a fee of $600 per request per month for an ad-hoc request of
historical End of Day Volume Summary covering all Exchange-listed
securities. An ad-hoc request can be for any number of months beginning
with December 2018 for which the data is available.\10\ The proposed
fee for ad-hoc requests for the historic monthly End of Day Volume
Summary will apply to all market participants. The Exchange notes that
other exchanges provide a similar data product that may be purchased on
an ad-hoc basis and is comparably priced.\11\
---------------------------------------------------------------------------
\10\ For example, a customer that requests historical End of Day
Volume Summary for the months of June 2021 and July 2021, would be
assessed a total of $1,200. The Exchange notes that it may make
historical data prior to December 2018 available in the future and
that such historical data would be available to all members and non-
members.
\11\ See e.g., Cboe LiveVol, LLC Market Data Fees available at
https://www.cboe.com/us/options/membership/fee_schedule/ctwo/. Cboe
C2 Options (``C2'') offers Open-Close Data: End-of-Day Ad-hoc
Request (historical data) and assesses a fee of $400 per request per
month. Cboe EDGX Exchange, Inc. (``EDGX'') similarly offers Open-
Close Data: End-of-Day Ad-hoc Request (historical data) and assesses
a fee of $400 per request per month. See https://www.cboe.com/us/options/membership/fee_schedule/edgx/. Nasdaq ISE, LLC (``ISE'')
offers Nasdaq ISE Open/Close Trade Profile End of Day Ad-Hoc Request
(historical data) and assesses a fee of $600 per request per month.
See Sec. 10, Market Data, at https://listingcenter.nasdaq.com/rulebook/ise/rules/ise-options-7.
---------------------------------------------------------------------------
NYSE Options Open-Close Volume Summary is subject to significant
competitive forces that constrain its pricing. As described above, the
Exchange's data product competes head-to-head with numerous products
[[Page 12505]]
currently available in the marketplace. These products each serve as
reasonable substitutes for one another as they are each designed to
provide data on options market activity which can be used to infer
longer-term trends. The information provided by one exchange is
generally similar to that provided by other exchanges because order
flow can move from one exchange to another, and market sentiment trends
that appear on one exchange are likely to be similar to the sentiment
trends on other exchanges. The key differentiator in the quality of the
data depends on the volume of transactions on a given exchange. The
greater the volume of transactions, the greater the value of the data.
The proposed fee for ad-hoc purchases of historic monthly End of Day
Volume Summary is therefore constrained by the competition among
exchanges for similar options trading summary products.
The Exchange intends to offer the historic monthly End of Day
Volume Summary on an ad-hoc basis and charge the proposed fees on March
1, 2022.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\13\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and to protect investors and the public
interest, and that it is not designed to permit unfair discrimination
among customers, brokers, or dealers. The Exchange also believes that
its proposal to adopt fees for End of Day Volume Summary is consistent
with Section 6(b) of the Act \14\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \15\ in particular, in that it
is an equitable allocation of dues, fees and other charges among its
members and other recipients of Exchange data.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to users and consumers of such data and also spur innovation and
competition for the provision of market data.
The Exchange believes that the proposed ad-hoc historic monthly End
of Day Volume Summary market data product would further broaden the
availability of U.S. option market data to investors consistent with
the principles of Regulation NMS. The proposed rule change would
benefit investors by providing access to historic data, which as noted
above, may promote better informed trading, as well as research and
studies of the options industry. Particularly, information regarding
opening and closing activity across different option series may
indicate investor sentiment, which can be helpful research and/or
trading information. Customers of the historic data product may be able
to enhance their ability to analyze options trade and volume data, and
create and test trading models and analytical strategies. The Exchange
believes ad-hoc historic monthly End of Day Volume Summary would
provide a valuable tool that customers can use to gain comprehensive
insight into the trading activity in a particular series, but also
emphasizes such data is not necessary for trading. Moreover, other
exchanges offer a similar data product.\16\
---------------------------------------------------------------------------
\16\ See note 8, supra.
---------------------------------------------------------------------------
The Exchange operates in a highly competitive market. Indeed, there
are currently 16 registered options exchanges competing for order flow.
Based on publicly-available information, and excluding index-based
options, no single exchange has more than 16% of the market share of
executed volume of multiply-listed equity and ETF options trades.\17\
Therefore, currently no exchange possesses significant pricing power in
the execution of multiply-listed equity and ETF options order flow.
More specifically, in November 2021, the Exchange had less than 8%
market share of executed volume of multiply-listed equity and ETF
options trades.\18\
---------------------------------------------------------------------------
\17\ The Options Clearing Corporation (``OCC'') publishes
options and futures volume in a variety of formats, including daily
and monthly volume by exchange, available here: https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics.
\18\ Based on OCC data for monthly volume of equity-based
options and monthly volume of ETF-based options, see id., the
Exchange's market share in multiply-listed equity and ETF options
was 9.09% for the month of November 2020 and 7.06% for the month of
November 2021.
---------------------------------------------------------------------------
The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. Specifically, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues, and also recognized that
current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \19\
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------
With respect to market data, the decision of the United States
Court of Appeals for the District of Columbia Circuit in NetCoalition
v. SEC upheld the Commission's reliance on the existence of competitive
market mechanisms to evaluate the reasonableness and fairness of fees
for proprietary market data:
In fact, the legislative history indicates that the Congress
intended that the market system ``evolve through the interplay of
competitive forces as unnecessary regulatory restrictions are
removed'' and that the SEC wield its regulatory power ``in those
situations where competition may not be sufficient,'' such as in the
creation of a ``consolidated transactional reporting system.'' \20\
---------------------------------------------------------------------------
\20\ NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. Cir. 2010)
(quoting H.R. Rep. No. 94-229 at 92 (1975), as reprinted in 1975
U.S.C.C.A.N. 323).
The court agreed with the Commission's conclusion that ``Congress
intended that `competitive forces should dictate the services and
practices that constitute the U.S. national market system for trading
equity securities.''' \21\ More recently, the Commission confirmed that
it applies a ``market-based'' test in its assessment of market data
fees, and that under that test:
---------------------------------------------------------------------------
\21\ Id. at 535.
the Commission considers whether the exchange was subject to
significant competitive forces in setting the terms of its proposal
for [market data], including the level of any fees. If an exchange
meets this burden, the Commission will find that its fee rule is
consistent with the Act unless there is a substantial countervailing
basis to find that the terms of the rule violate the Act or the
rules thereunder.\22\
---------------------------------------------------------------------------
\22\ See Securities Exchange Act Release No. 34-90217 (October
16, 2020), 85 FR 67392 (October 22, 2020) (SR-NYSENAT-2020-05)
(internal quotation marks omitted), quoting Securities Exchange Act
Release No. 59039 (December 2, 2008), 73 FR 74770, 74781 (December
9, 2008) (ArcaBook Approval Order).
Making similar historic data products available to market
participants fosters competition in the marketplace, and constrains the
ability of exchanges to charge supra-competitive fees. In the event
that a market participant views one exchange's historic data product as
more or less attractive than the competition they can and do switch
between similar products. The proposed
[[Page 12506]]
fees are a result of the competitive environment, as the Exchange seeks
to adopt fees to attract purchasers of the ad-hoc historic monthly End
of Day Volume Summary data product.
The Exchange believes its proposal to provide the ad-hoc historic
monthly End of Day Volume Summary is reasonable as the proposed fees
are comparable to the fees assessed by other exchanges \23\ that
provide similar historic data products.\24\ Indeed, proposing fees that
are excessively higher than established fees for similar historic data
products would simply serve to reduce demand for the Exchange's
historic data product, which as noted, is entirely optional. Like the
ad-hoc historic monthly End of Day Volume Summary, other exchanges
offer similar historic data products that each provide insight into
trading on those markets and may likewise aid in assessing investor
sentiment. Although each of these similar historic data products
provide only proprietary trade data and not trade data from other
exchanges, it is possible investors are still able to gauge overall
investor sentiment across different option series based on open and
closing interest on any one exchange. Similarly, market participants
may be able to analyze option trade and volume data, and create and
test trading models and analytical strategies using only the ad-hoc
historic monthly End of Day Volume Summary data relating to trading
activity on one or more of the other markets that provide similar
historic data products. As such, if a market participant views another
exchange's data as more attractive than the Exchange's offering, then
such market participant can merely choose not to purchase the
Exchange's historic data product and instead purchase another
exchange's historic product, which offer similar data points, albeit
based on that other market's trading activity.
---------------------------------------------------------------------------
\23\ See, note 11, supra.
\24\ See, note 8, supra.
---------------------------------------------------------------------------
The Exchange also believes the proposed fees are reasonable as they
would support the introduction of a historic market data product that
is designed to aid investors by providing insight into trading on the
Exchange. In turn, this data would assist market participants in
gauging investor sentiment and trading activity, resulting in
potentially better-informed trading decisions. As noted above,
customers may also use such data to create and test trading models and
analytical strategies.
Selling historic market data, such as the ad-hoc historic monthly
End of Day Volume Summary, is also a means by which exchanges compete
to attract business. To the extent that the Exchange is successful in
attracting customers to the Exchange's historic data product, it may
earn trading revenues and further enhance the value of its data
products. If the market deems the proposed fees to be unfair or
inequitable, customers can diminish or discontinue their use of the
historic data and/or avail themselves of similar products offered by
other exchanges.\25\ The Exchange therefore believes that the proposed
fees reflect the competitive environment and would be properly and
equally assessed to all customers. The Exchange also believes the
proposed fees are equitable and not unfairly discriminatory as the fees
would apply equally to all customers who choose to purchase such data.
The proposed fees would not differentiate between customers that
purchase the ad-hoc historic monthly End of Day Volume Summary, and are
set at a modest level that would allow any interested market
participant to purchase such data based on their business needs.
Nothing in this proposal treats any category of market participant any
differently from any other category of market participant. The ad-hoc
historic monthly End of Day Volume Summary is available to all market
participants, i.e., members and non-members, and all market
participants would receive the same information in the data feed.
---------------------------------------------------------------------------
\25\ See, note 11, supra.
---------------------------------------------------------------------------
As noted above, the Exchange anticipates a wide variety of market
participants to purchase the ad-hoc historic monthly End of Day Volume
Summary data product, including but not limited to individual
customers, buy-side investors, investment banks and academic
institutions. As such, the Exchange anticipates that the historic data
product may be used not just for commercial or monetizing purposes, but
also for educational use and research. The Exchange reiterates that the
decision as to whether or not to purchase the ad-hoc historic monthly
End of Day Volume Summary is entirely optional for all potential
customers. Indeed, no market participant is required to purchase the
historic data product, and the Exchange is not required to make the
historic data product available to market participants. Rather, the
Exchange is voluntarily making the historic data product available, as
requested by customers, and market participants may choose to receive
(and pay for) this data based on their own business needs. Potential
customers may request the data at any time if they believe it to be
valuable or may decline to purchase such data.
In sum, the fierce competition for order flow constrains any
exchange from pricing its historic market data at a supra-competitive
price, and constrains the Exchange here in setting its fees for the ad-
hoc historic monthly End of Day Volume Summary data product.
The proposed fees are therefore reasonable because in setting them,
the Exchange is constrained by the availability of numerous substitute
venues offering historic market data products and trading.\26\ Such
substitutes need not be identical, but only substantially similar to
the product at hand. More specifically, in setting fees for the ad-hoc
historic monthly End of Day Volume Summary data product, the Exchange
is constrained by the fact that, if its pricing is unattractive to
customers, customers have their pick of an increasing number of
alternative venues to use instead of the Exchange.\27\ Because of the
availability of substitutes, an exchange that overprices its historic
market data products stands a high risk that customers may substitute
another source of market data information for its own. Those
competitive pressures imposed by available alternatives are evident in
the Exchange's proposed pricing. The existence of numerous alternatives
to the Exchange ensures that the Exchange cannot set unreasonable fees
for historic market data without suffering the negative effects of that
decision in the fiercely competitive market in which it operates.
---------------------------------------------------------------------------
\26\ See, note 8, supra.
\27\ See, note 11, supra.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
also does not believe the proposed fees would cause any unnecessary or
inappropriate burden on intermarket competition as other exchanges are
free to introduce their own comparable historic data product and adopt
fees to better compete with the Exchange's offering. Rather, the
Exchange believes that the proposal will promote competition by
permitting the Exchange to sell a historic data product similar to
those offered by other competitor options exchanges.\28\ The Exchange
is offering the ad-hoc historic monthly End of Day Volume Summary
[[Page 12507]]
in order to keep pace with changes in the industry and evolving
customer needs, and believes the data product will contribute to robust
competition among national securities exchanges.
---------------------------------------------------------------------------
\28\ See, note 8, supra.
---------------------------------------------------------------------------
Furthermore, the Exchange operates in a highly competitive
environment, and its ability to price the ad-hoc historic monthly End
of Day Volume Summary is constrained by competition among exchanges
that offer similar historic data products to their customers. As
discussed above, there are currently a number of similar products
available to market participants and investors. A number of U.S.
options exchanges offer a historic market data product that is
substantially similar to the Exchange's offering, which the Exchange
must consider in its pricing discipline in order to compete
effectively. For example, proposing fees that are excessively higher
than established fees for similar historic data products would simply
serve to reduce demand for the Exchange's historic data product, which
as discussed, market participants are under no obligation to utilize or
purchase. In this competitive environment, potential purchasers are
free to choose which, if any, similar historic product to purchase to
satisfy their need for market information. As a result, the Exchange
believes this proposed rule change permits fair competition among
national securities exchanges.
The Exchange does not believe the proposed rule change would cause
any unnecessary or inappropriate burden on intramarket competition.
Particularly, the proposed fees would apply uniformly to any customer,
in that the Exchange would not differentiate between customers that
purchase the ad-hoc historic monthly End of Day Volume Summary and all
customers would receive the same information in the data feed. The
Exchange believes the proposed fees are set at a modest level that
would allow interested customers to purchase such data based on their
business needs.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \29\ and Rule 19b-4(f)(6) \30\ thereunder.
Because the foregoing proposed rule change does not: (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A) of the Act \31\ and Rule 19b-4(f)(6) \32\
thereunder.
---------------------------------------------------------------------------
\29\ 15 U.S.C. 78(b)(3)(A).
\30\ 17 CFR 240.19b-4(f)(6).
\31\ 15 U.S.C. 78s(b)(3)(A).
\32\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \33\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\34\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay to allow the
Exchange to implement the proposed rule change and corresponding fee on
March 1, 2022, and thereby allow the Exchange to compete with exchanges
that currently offer similar historic market data products. The
Commission believes that, as described above, the Exchange's proposal
does not raise any new or novel issues. Therefore, the Commission
believes that waving the 30-day operative delay is consistent with the
protection of investors and the public interest. Accordingly, the
Commission designates the proposed rule change to be operative upon
filing.\35\
---------------------------------------------------------------------------
\33\ 17 CFR 240.19b-4(f)(6).
\34\ 17 CFR 240.19b-4(f)(6).
\35\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEAMER-2022-12 on the subject line.
Paper Comments
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-NYSEAMER-2022-12. 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 (https://www.sec.gov/rules/sro.shtml). 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
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEAMER-2022-12, and
[[Page 12508]]
should be submitted on or before March 25, 2022.
---------------------------------------------------------------------------
\36\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-04561 Filed 3-3-22; 8:45 am]
BILLING CODE 8011-01-P
