Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Options Proprietary Market Data Fee Schedule, 12743-12748 [2022-04560]
Download as PDF
<![CDATA[
Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices
II. Docketed Proceeding(s)
Erica A. Barker,
Secretary.
[FR Doc. 2022–04748 Filed 3–4–22; 8:45 am]
BILLING CODE 7710–FW–P
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice: March 7,
2022.
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on March 1, 2022,
it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Express & Priority Mail
Contract 130 to Competitive Product
List. Documents are available at
www.prc.gov, Docket Nos. MC2022–43,
CP2022–49.
SUMMARY:
BILLING CODE 7710–12–P
Postal ServiceTM.
ACTION: Notice.
POSTAL SERVICE
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice: March 7,
2022.
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on March 1, 2022,
it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Contract 736 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2022–44, CP2022–50.
Sean Robinson,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2022–04774 Filed 3–4–22; 8:45 am]
BILLING CODE 7710–12–P
17:50 Mar 04, 2022
BILLING CODE 7710–12–P
[FR Doc. 2022–04771 Filed 3–4–22; 8:45 am]
SUMMARY:
Jkt 256001
Sean Robinson,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2022–04773 Filed 3–4–22; 8:45 am]
Postal ServiceTM.
ACTION: Notice.
AGENCY:
Product Change—Priority Mail
Negotiated Service Agreement
AGENCY:
khammond on DSKJM1Z7X2PROD with NOTICES
Product Change—Priority Mail Express
and Priority Mail Negotiated Service
Agreement
Sean Robinson,
Attorney, Corporate and Postal Business Law.
POSTAL SERVICE
VerDate Sep<11>2014
www.prc.gov, Docket Nos. MC2022–42,
CP2022–48.
POSTAL SERVICE
1. Docket No(s).: MC2022–43 and
CP2022–49; Filing Title: USPS Request
to Add Priority Mail Express & Priority
Mail Contract 130 to Competitive
Product List and Notice of Filing
Materials Under Seal; Filing Acceptance
Date: March 1, 2022; Filing Authority:
39 U.S.C. 3642, 39 CFR 3040.130
through 3040.135, and 39 CFR 3035.105;
Public Representative: Jennaca
Upperman; Comments Due: March 9,
2022.
2. Docket No(s).: MC2022–44 and
CP2022–50; Filing Title: USPS Request
to Add Priority Mail Contract 736 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: March 1, 2022; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
Kenneth R. Moeller; Comments Due:
March 9, 2022.
This Notice will be published in the
Federal Register.
12743
Product Change—Priority Mail and
First-Class Package Service
Negotiated Service Agreement
Postal ServiceTM.
ACTION: Notice.
AGENCY:
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, that the Securities and
Exchange Commission will hold an
Open Meeting on Wednesday, March 9,
2022 at 10 a.m.
PLACE: The meeting will be webcast on
the Commission’s website at
www.sec.gov.
STATUS: The meeting will begin at 10
a.m. (ET) and will be open to the public
via webcast on the Commission’s
website at www.sec.gov.
MATTERS TO BE CONSIDERED: 1. The
Commission will consider whether to
propose amendments regarding
cybersecurity risk management, strategy,
governance, and incident disclosure.
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed, please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
TIME AND DATE:
Dated: March 9, 2022.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2022–04830 Filed 3–3–22; 11:15 am]
BILLING CODE 8011–01–P
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice: March 7,
2022.
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on February 28,
2022, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail & First-Class Package
Service Contract 215 to Competitive
Product List. Documents are available at
SUMMARY:
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94319; File No. SR–
NYSEArca–2022–10]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE Arca
Options Proprietary Market Data Fee
Schedule
February 28, 2022.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
E:\FR\FM\07MRN1.SGM
07MRN1
12744
Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices
notice is hereby given that, on February
24, 2022, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. 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 Arca 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 nonmembers, 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
khammond on DSKJM1Z7X2PROD with NOTICES
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
4 Members of the Exchange are OTP Firms, OTP
Holders and ETP 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. 93132 (September 27, 2021), 86 FR
54499 (October 1, 2021) (SR–NYSEArca–2021–82).
VerDate Sep<11>2014
17:50 Mar 04, 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
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.
6 The terms Customer, Professional Customer,
Firm and Market Maker are defined in Rule 1.1.
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
PO 00000
Frm 00089
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
(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.
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\07MRN1.SGM
07MRN1
Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
pricing. As described above, the
Exchange’s data product competes headto-head with numerous products
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
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
17:50 Mar 04, 2022
Jkt 256001
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
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 13% 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
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
10.35% for the month of November 2020 and
12.99% for the month of November 2021.
17 The
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
12745
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
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 ‘‘marketbased’’ 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
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\07MRN1.SGM
07MRN1
khammond on DSKJM1Z7X2PROD with NOTICES
12746
Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices
more or less attractive than the
competition they can and do switch
between similar products. The proposed
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
23 See,
24 See,
note 11, supra.
note 8, supra.
VerDate Sep<11>2014
17:50 Mar 04, 2022
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.
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.
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
26 See,
25 See,
Jkt 256001
PO 00000
note 11, supra.
Frm 00091
Fmt 4703
27 See,
Sfmt 4703
E:\FR\FM\07MRN1.SGM
note 8, supra.
note 11, supra.
07MRN1
Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
competitor options exchanges.28 The
Exchange is offering the ad-hoc historic
monthly End of Day Volume Summary
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.
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.
28 See,
note 8, supra.
VerDate Sep<11>2014
17:50 Mar 04, 2022
Jkt 256001
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.
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
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 00092
Fmt 4703
Sfmt 4703
12747
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 rule-comments@
sec.gov. Please include File Number SR–
NYSEArca–2022–10 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–NYSEArca–2022–10. 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–NYSEArca–2022–10 and
E:\FR\FM\07MRN1.SGM
07MRN1
12748
Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices
should be submitted on or before March
28, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.36
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–04560 Filed 3–4–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting; Cancellation
FEDERAL REGISTER CITATION OF PREVIOUS
ANNOUNCEMENT: 87 FR 11493, March 1,
2022.
PREVIOUSLY ANNOUNCED TIME AND DATE OF
THE MEETING: Thursday March 3, 2022 at
2 p.m.
The Closed
Meeting scheduled for Thursday, March
3, 2022 at 2 p.m., has been cancelled.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
CHANGES IN THE MEETING:
Dated: March 2, 2022.
Vanessa A. Countryman,
Secretary.
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matter of the closed
meeting will consist of the following
topics:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations
and enforcement proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: March 3, 2022.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2022–04923 Filed 3–3–22; 4:15 pm]
BILLING CODE 8011–01–P
[FR Doc. 2022–04823 Filed 3–3–22; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94334; File No. SR–
NYSEAMER–2022–11]
Sunshine Act Meetings
TIME AND DATE:
12 p.m. on Wednesday,
March 9, 2022.
The meeting will be held via
remote means and/or at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or his designee, has
khammond on DSKJM1Z7X2PROD with NOTICES
PLACE:
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change To Amend the NYSE American
Options Proprietary Market Data Fee
Schedule
March 1, 2022.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on February
23, 2022, NYSE American LLC (‘‘NYSE
American’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. 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).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
36 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:50 Mar 04, 2022
Jkt 256001
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
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 adopt fees for the NYSE
Options Open-Close Volume Summary
market data product, effective March 1,
2022. The proposed 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
The Exchange proposes to amend the
Fee Schedule to adopt fees for the NYSE
Options Open-Close Volume Summary,4
which will be available for purchase by
any market participant, i.e., members 5
and non-members. The Exchange
proposes to implement fees for the
NYSE Options Open-Close Volume
Summary market data product on March
1, 2022. The proposed fees would be
applied equally to all market
participants and all market participants
would receive the same information in
the data feed.
Background
By way of background, pursuant to
the Product Filing, the Exchange
adopted two versions of the NYSE
Options Open-Close Volume Summary:
An End of Day Volume Summary
market data product and an Intra-Day
4 See Securities Exchange Act Release No. 93803
(December 16, 2021), 86 FR 72647 (December 22,
2021) (SR–NYSEAmerican–2021–46) (Notice of
Filing and Immediate Effectiveness of Proposed
Rule Change To Adopt a New Historical Market
Data Product To Be Known as the NYSE Options
Open-Close Volume Summary) (‘‘Product Filing’’).
5 Members of the Exchange are member
organizations, members, ETP Holders and ATP
Holders.
E:\FR\FM\07MRN1.SGM
07MRN1
]]>Agencies
[Federal Register Volume 87, Number 44 (Monday, March 7, 2022)]
[Notices]
[Pages 12743-12748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-04560]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94319; File No. SR-NYSEArca-2022-10]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Options Proprietary Market Data Fee Schedule
February 28, 2022.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\
[[Page 12744]]
notice is hereby given that, on February 24, 2022, NYSE Arca, Inc.
(``NYSE Arca'' or the ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the self-regulatory organization. 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 Arca 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 OTP Firms, OTP Holders and ETP
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. 93132 (September 27, 2021), 86
FR 54499 (October 1, 2021) (SR-NYSEArca-2021-82). 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 1.1.
\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
[[Page 12745]]
pricing. As described above, the Exchange's data product competes head-
to-head with numerous products 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 13%
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 10.35% for the month of November 2020 and 12.99% 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\
---------------------------------------------------------------------------
\21\ Id. at 535.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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
[[Page 12746]]
more or less attractive than the competition they can and do switch
between similar products. The proposed 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
[[Page 12747]]
competitor options exchanges.\28\ The Exchange is offering the ad-hoc
historic monthly End of Day Volume Summary 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-NYSEArca-2022-10 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-NYSEArca-2022-10. 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-NYSEArca-2022-10 and
[[Page 12748]]
should be submitted on or before March 28, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
---------------------------------------------------------------------------
\36\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-04560 Filed 3-4-22; 8:45 am]
BILLING CODE 8011-01-P
