Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule Relating to the Sale of Open-Close Volume Data, 57005-57008 [2022-20034]
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Federal Register / Vol. 87, No. 179 / Friday, September 16, 2022 / Notices
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:
khammond on DSKJM1Z7X2PROD with NOTICES
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–
C2–2022–016 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–C2–2022–016. 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
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submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–C2–2022–016 and should
be submitted on or before October 7,
2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–20035 Filed 9–15–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95736; File No. SR–CBOE–
2022–044]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fees
Schedule Relating to the Sale of OpenClose Volume Data
September 12, 2022.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 1, 2022, Cboe Exchange, Inc.
(the ‘‘Exchange’’ or ‘‘Cboe Options’’)
filed with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III 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
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to amend
its Fees Schedule relating to the sale of
Open-Close volume data. The text of the
proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/CBOELegalRegulatory
Home.aspx), at the Exchange’s Office of
the Secretary, and at the Commission’s
Public Reference Room.
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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57005
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
Exchange 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 these
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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
Fees Schedule to offer a free trial during
the months of September, October,
November and December 2022 for an
ad-hoc request of three (3) historical
months of Intraday Open-Close
historical data to all Cboe Options
Trading Permit Holders (‘‘TPHs’’) and
non-TPHs who have never before
subscribed to the Intraday Open-Close
historical files, effective September 1,
2022.
By way of background, the Exchange
currently offers End-of-Day (‘‘EOD’’) and
Intraday Open-Close Data (collectively,
‘‘Open-Close Data’’). EOD Open-Close
Data is an end-of-day volume summary
of trading activity on the Exchange at
the option level by origin (customer,
professional customer, broker-dealer,
and market maker), side of the market
(buy or sell), price, and transaction type
(opening or closing). The customer and
professional customer volume is further
broken down into trade size buckets
(less than 100 contracts, 100–199
contracts, greater than 199 contracts).
The Open-Close Data is proprietary
Cboe Options 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 also offers Intraday OpenClose Data, which provides similar
information to that of Open-Close Data
but is produced and updated every 10
minutes during the trading day. Data is
captured in ‘‘snapshots’’ taken every 10
minutes throughout the trading day and
is available to subscribers within five
minutes of the conclusion of each 10minute period.3 The Intraday Open3 For example, subscribers to the intraday product
will receive the first calculation of intraday data by
Continued
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Federal Register / Vol. 87, No. 179 / Friday, September 16, 2022 / Notices
Close Data provides a volume summary
of trading activity on the Exchange at
the option level by origin (customer,
professional customer, broker-dealer,
and market maker), side of the market
(buy or sell), and transaction type
(opening or closing). The customer and
professional customer volume are
further broken down into trade size
buckets (less than 100 contracts, 100–
199 contracts, greater than 199
contracts). The Intraday Open-Close
Data is also proprietary Cboe Options
trade data and does not include trade
data from any other exchange.
Cboe LiveVol, LLC (‘‘LiveVol’’), a
wholly owned subsidiary of the
Exchange’s parent company, Cboe
Global Markets, Inc., makes the OpenClose Data available for purchase to
TPHs and non-TPHs on the LiveVol
DataShop website (datashop.cboe.com).
Customers may currently purchase
Open-Close Data on a subscription basis
(monthly or annually) or by ad hoc
request for a specified month (e.g.,
request for Intraday Open-Close Data for
month of January 2022).
Open-Close Data is subject to direct
competition from similar end-of-day
and intraday options trading summaries
offered by several other options
exchanges.4 All of these exchanges offer
essentially the same end-of-day and
intraday options trading summary
information.
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Free Trial
The Exchange seeks to re-establish a
free trial for historical ad hoc requests
for Intraday Open-Close Data for new
purchasers. Currently, ad hoc requests
for historical Intraday Open-Close Data
are available to all customers at the
same price and in the same manner. The
current charge for this historical
Intraday Open-Close Data covering all of
the Exchange’s securities (Equities,
Indexes & ETF’s) is $1,000 per month.
The Exchange now proposes to adopt a
free trial available during the months of
September, October, November and
December 2022 (i.e., September through
December 2022) to provide a total up to
three (3) historical months of Intraday
Open-Close Data to any TPH or nonapproximately 9:42 a.m. ET, which represents data
captured from 9:30 a.m. to 9:40 a.m. Subscribers
will receive the next update at 9:52 a.m.,
representing the data previously provided together
with data captured from 9:40 a.m. through 9:50
a.m., and so forth. Each update will represent the
aggregate data captured from the current
‘‘snapshot’’ and all previous ‘‘snapshots.’’
4 These substitute products are: Nasdaq PHLX
Options Trade Outline, Nasdaq Options Trade
Outline, ISE Trade Profile, GEMX Trade Profile
data; open-close data from C2 Options, BZX, and
EDGX; and Open Close Reports from MIAX
Options, Pearl, and Emerald.
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TPH that has not previously subscribed
to this offering.5 The Exchange notes
that it previously offered this free trial
period recently for the months of May,
June and July 2022. The Exchange
believes bringing back the proposed trial
will again serve as an incentive for new
users who have never purchased
Intraday Open-Close historical data to
start purchasing Intraday Open-Close
historical data. Particularly, the
Exchange believes it will give potential
subscribers the ability to use and test
the data offering before signing up for
additional months. The Exchange also
notes another exchange offers a free trial
for new subscribers of a similar data
product.6 Lastly, the purchase of
Intraday Open-Close historical data is
discretionary and not compulsory.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.7 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 8 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 9 requirement that
the rules of an exchange not be designed
5 For example, if a TPH or non-TPH that has never
made an ad-hoc request for a specified month of
Intraday Open-Close historical data wishes to
purchase Intraday Open-Close Data for the months
of January, February and March 2022 during the
month of September 2022, the historical files for
those months would be provided free of charge. If
a new user wishes to purchase Intraday Open-Close
historical data for the months of January, February,
March and April 2022 during the month of
September 2022, then the data for January, February
and March 2022 would be provided free of charge,
and the new user would be charged $1,000 for the
April 2022 historical file.
6 See Nasdaq ISE, Options 7 Pricing Schedule,
Section 10A., Nasdaq ISE Open/Close Trade Profile
End of Day.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
9 Id.
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to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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
consumers, and also spur innovation
and competition for the provision of
market data. The Exchange believes the
proposed fee change will further
broaden the availability of U.S. option
market data to investors consistent with
the principles of Regulation NMS.
Open-Close Data is designed to help
investors understand underlying market
trends to improve the quality of
investment decisions. Indeed,
subscribers to the data may be able to
enhance their ability to analyze option
trade and volume data and create and
test trading models and analytical
strategies. The Exchange believes OpenClose Data provides a valuable tool that
subscribers can use to gain
comprehensive insight into the trading
activity in a particular series, but also
emphasizes such data is not necessary
for trading and as noted above, is
entirely optional. Moreover, several
other exchanges offer a similar data
product which offer same type of data
content through end-of-day or intraday
reports.10
The Exchange also operates in a
highly competitive environment.
Indeed, there are currently 16 registered
options exchanges that trade options.
Based on publicly available information,
no single options exchange has more
than 16% of the market share.11 The
Commission has repeatedly expressed
its preference for competition over
regulatory intervention in determining
prices, products, and services in the
securities markets. Particularly, 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.’’ 12
Making similar data products available
to market participants fosters
competition in the marketplace, and
10 See
supra note 4.
Cboe Global Markets U.S. Options Market
Month-to-Date Volume Summary (August 31, 2022),
available at https://markets.cboe.com/us/options/
market_statistics/.
12 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
11 See
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Federal Register / Vol. 87, No. 179 / Friday, September 16, 2022 / Notices
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constrains the ability of exchanges to
charge supracompetitive fees. In the
event that a market participant views
one exchange’s data product as 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 a fee waiver to
attract future purchasers of historical
Intraday Open-Close Data.
The Exchange believes that the
proposed free trial for any TPH or nonTPH who has not previously purchased
Intraday Open-Close historical data is
reasonable because such users would
not be subject to fees for up to 3 months’
worth of Intraday Open-Close historical
data. The Exchange believes the
proposed free trial is also reasonable as
it will give potential subscribers the
ability to use and test the Intraday
Open-Close historical data prior to
purchasing additional months and will
therefore encourage and promote new
users to purchase the Intraday OpenClose historical data. The Exchange
believes that the proposed discount is
equitable and not unfairly
discriminatory because it will apply
equally to all TPHs and non-TPHs who
have not previously purchased Intraday
Open-Close historical data. Also as
noted above, another exchange offers a
free trial to new users for a similar data
product 13 and the Exchange itself
recently offered a similar free trial.14
Lastly, the purchase of this data product
is discretionary and not compulsory.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange operates in a highly
competitive environment in which the
Exchange must continually adjust its
fees to remain competitive. Because
competitors are free to modify their own
fees in response, the Exchange believes
that the degree to which fee changes in
this market may impose any burden on
competition is extremely limited.
As discussed above, Open-Close Data
is subject to direct competition from
several other options exchanges that
offer substitutes to Open-Close.
Moreover, purchase of Open-Close is
optional. It is designed to help investors
understand underlying market trends to
13 See Nasdaq ISE, Options 7 Pricing Schedule,
Section 10A., Nasdaq ISE Open/Close Trade Profile
End of Day.
14 See Securities Exchange Act Release No. 34–
94913 (May 13, 2022), 87 FR 30534 (May 19, 2022)
(SR–CBOE–2022–023).
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improve the quality of investment
decisions, but is not necessary to
execute a trade.
The proposed rule change is grounded
in the Exchange’s efforts to compete
more effectively. The Exchange is
proposing to provide a free trial for
market participants to test investment
strategies and trading models, and
develop market sentiment indicators.
This change will not cause any
unnecessary or inappropriate burden on
intermarket competition, but rather will
promote competition by encouraging
new market participants to investigate
the product. Other exchanges are, of
course, free to match this change or
undertake other competitive responses,
enhancing overall competition. Indeed,
as discussed, another exchange
currently offers a similar free-trial
period for similar data.15
The proposed rule change will not
cause any unnecessary or inappropriate
burden on intramarket competition.
Particularly, the proposed rule change
will apply to all TPHs and non-TPHs
who have never made an ad-hoc request
to purchase Intraday Open-Close
historical data. Moreover, purchase of
Intraday Open-Close historical files is
discretionary and not compulsory.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 16 and paragraph (f) of Rule
19b–4 17 thereunder. 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.
15 See Nasdaq ISE, Options 7 Pricing Schedule,
Section 10A., Nasdaq ISE Open/Close Trade Profile
End of Day.
16 15 U.S.C. 78s(b)(3)(A).
17 17 CFR 240.19b–4(f).
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57007
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–
CBOE–2022–044 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–CBOE–2022–044. 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–CBOE–2022–044 and
should be submitted on or before
October 7, 2022.
E:\FR\FM\16SEN1.SGM
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57008
Federal Register / Vol. 87, No. 179 / Friday, September 16, 2022 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–20034 Filed 9–15–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
National, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE
National Schedule of Fees and Rebates
September 12, 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 August
29, 2022, NYSE National, Inc. (‘‘NYSE
National’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III 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 National Schedule of Fees and
Rebates (‘‘Fee Schedule’’) to reflect the
fee for Directed Orders routed directly
by the Exchange to an alternative
trading system (‘‘ATS’’). 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.
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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.
CFR 200.30–3(a)(12).
15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
[Release No. 34–95742; File No. SR–
NYSENAT–2022–17]
18 17
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
The Exchange proposes to amend the
Fee Schedule to reflect the fee for
Directed Orders routed directly by the
Exchange to an ATS. The Exchange
proposes to implement the fee change
effective August 31, 2022.
Background
The Exchange operates in a highly
competitive market. The Securities and
Exchange Commission (‘‘Commission’’)
has repeatedly expressed its preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. 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.’’ 4
While Regulation NMS has enhanced
competition, it has also fostered a
‘‘fragmented’’ market structure where
trading in a single stock can occur
across multiple trading centers. When
multiple trading centers compete for
order flow in the same stock, the
Commission has recognized that ‘‘such
competition can lead to the
fragmentation of order flow in that
stock.’’ 5 Indeed, equity trading is
currently dispersed across 16
exchanges,6 numerous alternative
trading systems,7 and broker-dealer
internalizers and wholesalers, all
competing for order flow. Based on
publicly available information, no single
exchange currently has more than 18%
4 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(File No. S7–10–04) (Final Rule) (‘‘Regulation
NMS’’).
5 See Securities Exchange Act Release No. 61358,
75 FR 3594, 3597 (January 21, 2010) (File No. S7–
02–10) (Concept Release on Equity Market
Structure).
6 See Cboe U.S. Equities Market Volume
Summary, available at https://markets.cboe.com/us/
equities/market_share. See generally https://
www.sec.gov/fast-answers/divisionsmarketregm
rexchangesshtml.html.
7 See FINRA ATS Transparency Data, available at
https://otctransparency.finra.org/otctransparency/
AtsIssueData. A list of alternative trading systems
registered with the Commission is available at
https://www.sec.gov/foia/docs/atslist.htm.
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market share.8 Therefore, no exchange
possesses significant pricing power in
the execution of equity order flow. More
specifically, the Exchange’s share of
executed volume of equity trades in
Tapes A, B and C securities is less than
2%.9
The Exchange believes that the evershifting market share among the
exchanges from month to month
demonstrates that market participants
can move order flow, or discontinue or
reduce use of certain categories of
products. While it is not possible to
know a firm’s reason for shifting order
flow, the Exchange believes that one
such reason is because of fee changes at
any of the registered exchanges or nonexchange venues to which a firm routes
order flow. Accordingly, competitive
forces constrain exchange transaction
fees, and market participants can readily
trade on competing venues if they deem
pricing levels at those other venues to
be more favorable.
Proposed Rule Change
Pursuant to Commission approval, the
Exchange adopted a new order type
known as Directed Orders.10 A Directed
Order is a Limit Order 11 with
instructions to route on arrival at its
limit price to a specified ATS with
which the Exchange maintains an
electronic linkage. Under Exchange
rules, the ATS to which a Directed
Order is routed would be responsible for
validating whether the order is eligible
to be accepted, and if such ATS
determines to reject the order, the order
would be cancelled. Directed Orders
must be designated with a Time in
Force modifier of Day 12 or IOC 13 or and
are eligible to be designated for the Core
Trading Session 14 only. Directed Orders
that are the subject of this proposed rule
8 See Cboe Global Markets U.S. Equities Market
Volume Summary, available at https://
markets.cboe.com/us/equities/market_share/.
9 See id.
10 See Rule 7.31(f)(4). See also Securities
Exchange Act Release No. 95426 (August 4, 2022),
87 FR 48718 (August 10, 2022) (SR–NYSENAT–
2022–06).
11 A Limit Order is defined in Rule 7.31(a)(2) as
an order to buy or sell a stated amount of a security
at a specified price or better.
12 Pursuant to Rule 7.31(b)(1), any order to buy or
sell designated Day, if not traded, will expire at the
end of the designated session on the day on which
it was entered.
13 Pursuant to Rule 7.31(b)(2), a Limit Order may
be designated with an Immediate-or-Cancel (‘‘IOC’’)
modifier.
14 The Core Trading Session for each security
begins at 9:30 a.m. Eastern Time and ends at the
conclusion of Core Trading Hours. See Rule
7.34(a)(2). The term ‘‘Core Trading Hours’’ means
the hours of 9:30 a.m. Eastern Time through 4:00
p.m. Eastern Time or such other hours as may be
determined by the Exchange from time to time. See
Rule 1.1.
E:\FR\FM\16SEN1.SGM
16SEN1
]]>Agencies
[Federal Register Volume 87, Number 179 (Friday, September 16, 2022)]
[Notices]
[Pages 57005-57008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20034]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95736; File No. SR-CBOE-2022-044]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fees Schedule Relating to the Sale of Open-Close Volume Data
September 12, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 1, 2022, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend its Fees Schedule relating to the sale of Open-Close volume
data. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, 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 Exchange 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 these 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 aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Fees Schedule to offer a free
trial during the months of September, October, November and December
2022 for an ad-hoc request of three (3) historical months of Intraday
Open-Close historical data to all Cboe Options Trading Permit Holders
(``TPHs'') and non-TPHs who have never before subscribed to the
Intraday Open-Close historical files, effective September 1, 2022.
By way of background, the Exchange currently offers End-of-Day
(``EOD'') and Intraday Open-Close Data (collectively, ``Open-Close
Data''). EOD Open-Close Data is an end-of-day volume summary of trading
activity on the Exchange at the option level by origin (customer,
professional customer, broker-dealer, and market maker), side of the
market (buy or sell), price, and transaction type (opening or closing).
The customer and professional customer volume is further broken down
into trade size buckets (less than 100 contracts, 100-199 contracts,
greater than 199 contracts). The Open-Close Data is proprietary Cboe
Options 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 also offers Intraday Open-Close Data, which provides
similar information to that of Open-Close Data but is produced and
updated every 10 minutes during the trading day. Data is captured in
``snapshots'' taken every 10 minutes throughout the trading day and is
available to subscribers within five minutes of the conclusion of each
10-minute period.\3\ The Intraday Open-
[[Page 57006]]
Close Data provides a volume summary of trading activity on the
Exchange at the option level by origin (customer, professional
customer, broker-dealer, and market maker), side of the market (buy or
sell), and transaction type (opening or closing). The customer and
professional customer volume are further broken down into trade size
buckets (less than 100 contracts, 100-199 contracts, greater than 199
contracts). The Intraday Open-Close Data is also proprietary Cboe
Options trade data and does not include trade data from any other
exchange.
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\3\ For example, subscribers to the intraday product will
receive the first calculation of intraday data by approximately 9:42
a.m. ET, which represents data captured from 9:30 a.m. to 9:40 a.m.
Subscribers will receive the next update at 9:52 a.m., representing
the data previously provided together with data captured from 9:40
a.m. through 9:50 a.m., and so forth. Each update will represent the
aggregate data captured from the current ``snapshot'' and all
previous ``snapshots.''
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Cboe LiveVol, LLC (``LiveVol''), a wholly owned subsidiary of the
Exchange's parent company, Cboe Global Markets, Inc., makes the Open-
Close Data available for purchase to TPHs and non-TPHs on the LiveVol
DataShop website (datashop.cboe.com). Customers may currently purchase
Open-Close Data on a subscription basis (monthly or annually) or by ad
hoc request for a specified month (e.g., request for Intraday Open-
Close Data for month of January 2022).
Open-Close Data is subject to direct competition from similar end-
of-day and intraday options trading summaries offered by several other
options exchanges.\4\ All of these exchanges offer essentially the same
end-of-day and intraday options trading summary information.
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\4\ These substitute products are: Nasdaq PHLX Options Trade
Outline, Nasdaq Options Trade Outline, ISE Trade Profile, GEMX Trade
Profile data; open-close data from C2 Options, BZX, and EDGX; and
Open Close Reports from MIAX Options, Pearl, and Emerald.
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Free Trial
The Exchange seeks to re-establish a free trial for historical ad
hoc requests for Intraday Open-Close Data for new purchasers.
Currently, ad hoc requests for historical Intraday Open-Close Data are
available to all customers at the same price and in the same manner.
The current charge for this historical Intraday Open-Close Data
covering all of the Exchange's securities (Equities, Indexes & ETF's)
is $1,000 per month. The Exchange now proposes to adopt a free trial
available during the months of September, October, November and
December 2022 (i.e., September through December 2022) to provide a
total up to three (3) historical months of Intraday Open-Close Data to
any TPH or non-TPH that has not previously subscribed to this
offering.\5\ The Exchange notes that it previously offered this free
trial period recently for the months of May, June and July 2022. The
Exchange believes bringing back the proposed trial will again serve as
an incentive for new users who have never purchased Intraday Open-Close
historical data to start purchasing Intraday Open-Close historical
data. Particularly, the Exchange believes it will give potential
subscribers the ability to use and test the data offering before
signing up for additional months. The Exchange also notes another
exchange offers a free trial for new subscribers of a similar data
product.\6\ Lastly, the purchase of Intraday Open-Close historical data
is discretionary and not compulsory.
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\5\ For example, if a TPH or non-TPH that has never made an ad-
hoc request for a specified month of Intraday Open-Close historical
data wishes to purchase Intraday Open-Close Data for the months of
January, February and March 2022 during the month of September 2022,
the historical files for those months would be provided free of
charge. If a new user wishes to purchase Intraday Open-Close
historical data for the months of January, February, March and April
2022 during the month of September 2022, then the data for January,
February and March 2022 would be provided free of charge, and the
new user would be charged $1,000 for the April 2022 historical file.
\6\ See Nasdaq ISE, Options 7 Pricing Schedule, Section 10A.,
Nasdaq ISE Open/Close Trade Profile End of Day.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \9\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
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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 consumers, and also spur innovation and competition for the
provision of market data. The Exchange believes the proposed fee change
will further broaden the availability of U.S. option market data to
investors consistent with the principles of Regulation NMS. Open-Close
Data is designed to help investors understand underlying market trends
to improve the quality of investment decisions. Indeed, subscribers to
the data may be able to enhance their ability to analyze option trade
and volume data and create and test trading models and analytical
strategies. The Exchange believes Open-Close Data provides a valuable
tool that subscribers can use to gain comprehensive insight into the
trading activity in a particular series, but also emphasizes such data
is not necessary for trading and as noted above, is entirely optional.
Moreover, several other exchanges offer a similar data product which
offer same type of data content through end-of-day or intraday
reports.\10\
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\10\ See supra note 4.
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The Exchange also operates in a highly competitive environment.
Indeed, there are currently 16 registered options exchanges that trade
options. Based on publicly available information, no single options
exchange has more than 16% of the market share.\11\ The Commission has
repeatedly expressed its preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. Particularly, 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.'' \12\ Making similar data products available to
market participants fosters competition in the marketplace, and
[[Page 57007]]
constrains the ability of exchanges to charge supracompetitive fees. In
the event that a market participant views one exchange's data product
as 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 a fee waiver to
attract future purchasers of historical Intraday Open-Close Data.
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\11\ See Cboe Global Markets U.S. Options Market Month-to-Date
Volume Summary (August 31, 2022), available at https://markets.cboe.com/us/options/market_statistics/.
\12\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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The Exchange believes that the proposed free trial for any TPH or
non-TPH who has not previously purchased Intraday Open-Close historical
data is reasonable because such users would not be subject to fees for
up to 3 months' worth of Intraday Open-Close historical data. The
Exchange believes the proposed free trial is also reasonable as it will
give potential subscribers the ability to use and test the Intraday
Open-Close historical data prior to purchasing additional months and
will therefore encourage and promote new users to purchase the Intraday
Open-Close historical data. The Exchange believes that the proposed
discount is equitable and not unfairly discriminatory because it will
apply equally to all TPHs and non-TPHs who have not previously
purchased Intraday Open-Close historical data. Also as noted above,
another exchange offers a free trial to new users for a similar data
product \13\ and the Exchange itself recently offered a similar free
trial.\14\ Lastly, the purchase of this data product is discretionary
and not compulsory.
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\13\ See Nasdaq ISE, Options 7 Pricing Schedule, Section 10A.,
Nasdaq ISE Open/Close Trade Profile End of Day.
\14\ See Securities Exchange Act Release No. 34-94913 (May 13,
2022), 87 FR 30534 (May 19, 2022) (SR-CBOE-2022-023).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange operates in a
highly competitive environment in which the Exchange must continually
adjust its fees to remain competitive. Because competitors are free to
modify their own fees in response, the Exchange believes that the
degree to which fee changes in this market may impose any burden on
competition is extremely limited.
As discussed above, Open-Close Data is subject to direct
competition from several other options exchanges that offer substitutes
to Open-Close. Moreover, purchase of Open-Close is optional. It is
designed to help investors understand underlying market trends to
improve the quality of investment decisions, but is not necessary to
execute a trade.
The proposed rule change is grounded in the Exchange's efforts to
compete more effectively. The Exchange is proposing to provide a free
trial for market participants to test investment strategies and trading
models, and develop market sentiment indicators. This change will not
cause any unnecessary or inappropriate burden on intermarket
competition, but rather will promote competition by encouraging new
market participants to investigate the product. Other exchanges are, of
course, free to match this change or undertake other competitive
responses, enhancing overall competition. Indeed, as discussed, another
exchange currently offers a similar free-trial period for similar
data.\15\
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\15\ See Nasdaq ISE, Options 7 Pricing Schedule, Section 10A.,
Nasdaq ISE Open/Close Trade Profile End of Day.
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The proposed rule change will not cause any unnecessary or
inappropriate burden on intramarket competition. Particularly, the
proposed rule change will apply to all TPHs and non-TPHs who have never
made an ad-hoc request to purchase Intraday Open-Close historical data.
Moreover, purchase of Intraday Open-Close historical files is
discretionary and not compulsory.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \16\ and paragraph (f) of Rule 19b-4 \17\
thereunder. 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.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed 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-CBOE-2022-044 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-CBOE-2022-044. 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-CBOE-2022-044 and should be submitted on
or before October 7, 2022.
[[Page 57008]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-20034 Filed 9-15-22; 8:45 am]
BILLING CODE 8011-01-P
