Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 16687-16691 [2023-05535]

Download as PDF Federal Register / Vol. 88, No. 53 / Monday, March 20, 2023 / Notices and the VaR margin calculator available on NSCC’s Risk Client Portal, to monitor their positions and anticipate any potential intraday charges. For these reasons, the Commission believes the Proposed Rule Change would provide members with sufficient information regarding when and how NSCC may collect additional amounts to address the risks of portfolios that experience significant volatility on an intraday basis. The Commission also believes that the specificity regarding how and when NSCC would calculate the intraday volatility charge provides additional transparency over the ‘‘special charge’’ in NSCC’s Rules that allows NSCC to collect a special charge in times of market volatility or price fluctuations. As NSCC states, ‘‘[w]hen the intraday volatility charge is triggered, a special charge would not also be required from a Member to address the same volatility risks.’’ 78 Finally, one commenter asserted that the proposal failed to provide any information regarding what would happen if a member fails to meet an intraday volatility charge.79 However, NSCC’s Rules address a member’s requirement to meet its obligations with respect to required margin, as determined by NSCC, and set forth NSCC’s authority if a member does not meet its obligations.80 Therefore, the Commission disagrees that this proposal should have provided more information on what happens if a member does not meet this type of margin call. Accordingly, the Commission finds that the Proposed Rule Change would enable NSCC to establish, implement, maintain, and enforce written policies and procedures reasonably designed to provide sufficient information to enable members to identify and evaluate the risks, fees, and other material costs they incur as NSCC members, consistent with Rule 17Ad–22(e)(23)(ii). IV. Conclusion On the basis of the foregoing, the Commission finds that the Proposed Rule Change is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 81 and the rules lotter on DSK11XQN23PROD with NOTICES1 78 See Notice of Filing, supra note 3, at 43359– 60. 79 Robinhood Letter at 2–3, supra note 69. Rule 4, Section 1 and Procedure XV, Section II(B) of the Rules, supra note 10. See also Letter from Timothy Hulse, Managing Director, DTCC, at 1–2 (Sept. 27, 2022), available at https:// www.sec.gov/comments/sr-nscc-2022-009/ srnscc2022009-20144273-309218.pdf. 81 15 U.S.C. 78q–1. 80 See VerDate Sep<11>2014 17:19 Mar 17, 2023 Jkt 259001 and regulations promulgated thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act 82 that proposed rule change SR–NSCC–2022– 009, be, and hereby is, approved.83 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.84 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–05447 Filed 3–17–23; 8:45 am] BILLING CODE 8011–01–P 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 22, 2023 at 10:00 a.m. PLACE: The meeting will be webcast on the Commission’s website at www.sec.gov. STATUS: The meeting will begin at 10:00 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 adopt amendments to Form PF, the confidential reporting form for certain registered investment advisers to private funds, to require current reporting for certain private fund advisers and revise certain reporting requirements. 2. The Commission will consider whether to: a. Propose to require the electronic filing or submission on the Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system, using structured data where appropriate, of several forms, notices, and reports required under the Exchange Act; b. Propose to rescind Form 19b–4(e) and require the information currently contained in Form 19b–4(e) instead to be publicly posted on the listing selfregulatory organization’s website; and remove the requirement in Form 19b–4 for a manual signature and the related manual signature retention requirement; c. Propose to amend the Commission’s Informal and Other TIME AND DATE: 82 15 U.S.C. 78s(b)(2). approving the Proposed Rule Change, the Commission considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 84 17 CFR 200.30–3(a)(12). 83 In PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 16687 Procedures to reflect that Form 1 and Form 1–N would be submitted electronically and to make certain technical revisions; d. Propose to amend the requirement for supplemental materials for registered clearing agencies to require that a clearing agency post to its website the required supplemental information, rather than submit such material in paper copy to the Commission; e. Propose to allow electronic signatures in certain broker-dealer filings and proposing amendments regarding the Financial and Operational Combined Uniform Single Report (Form X–17A–5) to harmonize with other rules, make technical corrections, and provide clarifications; and f. Propose to require that notices made pursuant to Rule 3a71–3(d)(1)(vi) be withdrawn in specified circumstances. 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. Dated: March 15, 2023. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2023–05694 Filed 3–16–23; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97136; File No. SR– CboeEDGX–2023–020] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule March 14, 2023. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 10, 2023, Cboe EDGX Exchange, Inc. (‘‘Exchange’’ or ‘‘EDGX’’) 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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\20MRN1.SGM 20MRN1 16688 Federal Register / Vol. 88, No. 53 / Monday, March 20, 2023 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX Options’’) proposes to amend its Fee Schedule. 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://markets.cboe.com/us/ options/regulation/rule_filings/edgx/), 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 lotter on DSK11XQN23PROD with NOTICES1 The Exchange proposes to amend its Fee Schedule to modify its market data fees for EDGX Options Top.3 Particularly, the Exchange proposes to modify the Professional and NonProfessional User Fees, adopt a new Enterprise Fee for EDGX Options Top, and make other clarifying, nonsubstantive changes.4 The Exchange first proposes to reduce the rates for Professional and NonProfessional User fees for EDGX Options Top. The Exchange currently charges Internal Distributors and External Distributors that redistribute any of the EDGX Options Data Feeds different fees 3 EDGX Options Top is an uncompressed data feed that offers top of book quotations and execution information based on options orders entered into the System. Uncompressed data is disseminated ‘‘as is’’ in the native format by the Exchange, with no compression. 4 The Exchange initially filed the proposed fee changes on January 3, 2023 (SR–CboeEDGX–2023– 001). On February 28, 2023, the Exchange submitted SR–CboeEDGX–2023–015 in place of SR– CboeEDGX–2023–001, which the Exchange withdrew on March 1, 2023. On March 10, 2023 the Exchange withdrew CboeEDGX–2023–015 and submitted this proposal. VerDate Sep<11>2014 17:19 Mar 17, 2023 Jkt 259001 for their Professional Users 5 and NonProfessional Users.6 The Exchange currently assesses a monthly fee for Professional Users of $10.00 per User and a monthly fee of $1.00 per NonProfessional User.7 Further, the Fee Schedule provides that Distributors and Users of any one of EDGX Options market data products (i.e., EDGX Options Top, EDGX Options Depth, EDGX Options Auction Feed, EDGX Options Complex Depth, EDGX Options Complex Top, and EDGX Options Complex Auction Fees) may receive, at no additional charge, access to any or all of the other market data products listed. The Exchange proposes to reduce the rates for the User fees for EDGX Options Top. Particularly, the Exchange proposes to reduce the monthly (i) Professional User fee from $10 per user to $5 per user and (ii) Non-Professional User fee from $1.00 per user to $0.10 per user. The Exchange also proposes to start charging separate User fees for EDGX Options Top. User Fees for the Exchange’s remaining market data products will continue to receive, at no additional charge, access to any or all of the other market data products listed (with the exception of EDGX Options Top). The Exchange has reformatted the Market Data Fees tables to make this clear.8 5 A Professional User of an Exchange Market Data product is any User other than a Non-Professional User. The Exchange proposes to amend the definition of ‘‘Professional User’’ in the Fee Schedule to further clarify that a Professional User is a natural person recipient of an Exchange Data product who is not a Non-Professional User. 6 A ‘‘Non-Professional User’’ of an Exchange Market Data product is a natural person or qualifying trust that uses Data only for personal purposes and not for any commercial purpose and, for a natural person who works in the United States, is not: (i) registered or qualified in any capacity with the Securities and Exchange Commission, the Commodities Futures Trading Commission, any state securities agency, any securities exchange or association, or any commodities or futures contract market or association; (ii) engaged as an ‘‘investment adviser’’ as that term is defined in Section 202(a)(11) of the Investment Advisors Act of 1940 (whether or not registered or qualified under that Act); or (iii) employed by a bank or other organization exempt from registration under federal or state securities laws to perform functions that would require registration or qualification if such functions were performed for an organization not so exempt; or, for a natural person who works outside of the United States, does not perform the same functions as would disqualify such person as a Non-Professional User if he or she worked in the United States. 7 Distributors that receive EDGX Options Data Feeds are required to count every Professional User and Non-Professional User to which they provide the market data product(s). 8 The Exchange is not proposing any changes to the current User Fee rates for its other market data products at this time and Users of any one of the remaining market data products may continue to receive, at no additional charge, access to any or all of the other market data products listed (i.e., except for EDGX Options Top). PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 The Exchange lastly proposes to establish a $20,000 per month Enterprise Fee that will permit a Distributor to purchase a monthly (and optional) Enterprise license to receive the EDGX Options Top Data for distribution to an unlimited number of Professional and Non-Professional Users. The Enterprise Fee is an alternative to Professional and NonProfessional User fees and will permit a Distributor to pay a flat fee to receive the data for an unlimited number of Professional and Non-Professional Users, which the Exchange proposes to make clear in the Fee Schedule. The Enterprise Fee may provide an opportunity to reduce fees. For example, if a Distributor distributes EDGX Options Top to 15,000 Professional Users who each receive EDGX Options Top at $5.00 per month (as proposed), then that Distributor will pay $75,000 per month in Professional Users fees. If the Distributor instead were to purchase the proposed Enterprise license, then it would alternatively pay a flat fee of $20,000 for an unlimited number of Professional and Non-Professional Users. A Distributor must pay a separate Enterprise Fee for each entity that controls the display of EDGX Options Top if it wishes for such Users to be covered by the Enterprise Fee rather than by per User fees.9 A Distributor that pays the Enterprise Fee will not have to report its number of such Users on a monthly basis. Rather, every six months, it must provide the Exchange with a count of the total number of Professional and Non-Professional users of EDGX Options Top.10 The Exchange notes that the purchase of an Enterprise license is voluntary and a firm may elect to instead use the per User structure and benefit from the proposed per User Fees described above. For example, a firm that does not have a sufficient number of Users to benefit from purchase of the license need not do so. The Exchange lastly proposes to modify the definition of Professional User under the definitions section of the Market Data Fees section to clarify that a Professional ‘‘User’’ is any natural person recipient of an Exchange Market Data product who is not a NonProfessional User. The proposed modification also aligns the definition with that of the definition used by the 9 For example, if a Distributor that distributes EDGX Options Top to Retail Brokerage Firm A and Retail Brokerage Firm B and wishes to have the Users under each firm covered by an Enterprise license, the Distributor would be subject to two Enterprise Fees. 10 See Cboe Global Markets North American Data Policies. E:\FR\FM\20MRN1.SGM 20MRN1 Federal Register / Vol. 88, No. 53 / Monday, March 20, 2023 / Notices Exchange’s affiliates Cboe Exchange, Inc. and Cboe C2 Exchange, Inc.11 lotter on DSK11XQN23PROD with NOTICES1 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.12 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 13 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 Section 6(b)(4) of the Act,14 which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Members and other persons using its facilities. The Exchange first notes that it 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 17% of the market share.15 The Exchange believes top-of-book quotation and transaction data is highly competitive as national securities exchanges compete vigorously with each other to provide efficient, reliable, and low-cost data to a wide range of investors and market participants. Indeed, there are several competing products offered by other national securities exchanges today, not counting products offered by the Exchange’s affiliates, and each of the Exchange’s affiliated U.S. options exchanges also offers similar top-ofbook data.16 Each of those exchanges 11 See Cboe Data Services, LLC Fees Schedule and Cboe C2 Options Fees Schedule. 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(5). 14 15 U.S.C. 78f(b)(4). 15 See Cboe Global Markets U.S. Options Market Month-to-Date Volume Summary (February 24, 2023), available at https://markets.cboe.com/us/ options/market_statistics/. 16 See e.g., NYSE Arca Options Proprietary Market Data Fees Schedule, MIAX Options Exchange, Fee Schedule, Section 6 (Market Data Fees), Nasdaq PHLX Options 7 Pricing Schedule, VerDate Sep<11>2014 17:19 Mar 17, 2023 Jkt 259001 offer top-of-book quotation and last sale information based on their own quotation and trading activity that is substantially similar to the information provided by the Exchange through the EDGX Options Top Feed. Further, the quote and last sale data contained in the EDGX Options Top Feed is identical to the data sent to OPRA for redistribution to the public.17 Accordingly, Exchange top-of-book data is widely available today from a number of different sources. Moreover, the EDGX Options Top is distributed and purchased on a voluntary basis, in that neither the Exchange nor market data distributors are required by any rule or regulation to make this data available. Accordingly, Distributors and Users can discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. As described above, market participants have a wide variety of alternative market data products from which to choose, such as similar proprietary data products offered by other exchanges and consolidated data. Further, the Exchange is not required to make any proprietary data products available or to offer any specific pricing alternatives to any customers. Moreover, persons (including broker-dealers) who subscribe to any exchange proprietary data feed must also have equivalent access to consolidated Options Information 18 from OPRA for the same classes or series of options that are included in the proprietary data feed, and proprietary data feeds cannot be used to meet that particular requirement.19 As such, all proprietary data feeds are optional. The Commission has repeatedly expressed its preference for competition Section 10 (Proprietary Data Feed Fees) and Cboe Data Services, LLC Fees Schedule. 17 The Exchange notes that it makes available the top-of-book and last sale data that is included in the EDGX Options Top Data Feed no earlier than the time at which the Exchange sends that data to OPRA. 18 ‘‘Consolidated Options Information’’ means consolidated Last Sale Reports combined with either consolidated Quotation Information or the BBO furnished by OPRA. Access to consolidated Options Information is deemed ‘‘equivalent’’ if both kinds of information are equally accessible on the same terminal or work station. See Limited Liability Company Agreement of Options Price Reporting Authority, LLC (‘‘OPRA Plan’’), Section 5.2(c)(iii). The Exchange notes that this requirement under the OPRA Plan is also reiterated under the Cboe Global Markets Global Data Agreement and Cboe Global Markets North American Data Policies, which subscribers to any exchange proprietary product must sign and are subject to, respectively. Additionally, the Exchange’s Data Order Form (used for requesting the Exchange’s market data products) requires confirmation that the requesting market participant receives data from OPRA. 19 Id. PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 16689 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.’’ 20 Making similar data products available to market participants fosters competition in the marketplace, and 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 fees to attract purchasers of EDGX Options Top Data. The Exchange believes the proposed changes to reduce the rates of the current Professional and NonProfessional User fees are reasonable as Distributors will be subject to lower rates for EDGX Options Top User fees. Additionally, the User fees continue to be in line with and/or lower than User fees assessed by other exchanges for similar data.21 The Exchange believes that the proposed fees are equitable and not unfairly discriminatory because they will be charged uniformly to Distributors who distribute EDGX Options Top. The Exchange also believes continuing to offer EDGX Options Top Data to Non-Professional 20 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (‘‘Regulation NMS Adopting Release’’). 21 See e.g., Nasdaq PHLX Options 7 Pricing Schedule, Section 10 (Proprietary Data Feed Fees), which provides for a fee of $40 per month to professional users and $1.00 per month to nonprofessional users to cover the usage of PHLX Options (TOPO) Data, TOPO Plus Orders, PHLX Orders and PHLX Depth Data feeds. See also NYSE American Options Proprietary Market Data Fees schedule, which provides for a fee of $50 per month to professional users and $1.00 per month to nonprofessional users of American Options Top Data, American Options Deep and American Options Complex products. By comparison, the total combined Professional User fee for the Exchange’s market data products is significantly lower at $11 per Professional User (i.e., $1 per Professional Users of EDGX Options Top, as proposed, and $10 per Professional User of any of the remaining EDGX Options market data products). The Exchange’s combined Non-Professional User Fee at $1.10 per Non-Professional User (i.e., $0.10 per NonProfessional User of EDGX Options Top, as proposed, and $1 per Non-Professional User of any of the remaining EDGX Options market data products) is still in line with, and not a significant departure from, PHLX’s and NYSE American’s aforementioned Non-Professional User fees. E:\FR\FM\20MRN1.SGM 20MRN1 lotter on DSK11XQN23PROD with NOTICES1 16690 Federal Register / Vol. 88, No. 53 / Monday, March 20, 2023 / Notices Users at a lower cost than Professional Users results in greater equity among data recipients, as Professional Users are categorized as such based on their employment and participation in financial markets, and thus, are compensated to participate in the markets. Although Non-Professional Users too can receive significant financial benefits through their participation in the markets, the Exchange believes it is reasonable to charge more for those Users who are more directly engaged in the markets. The Exchange next notes it is not required to charge a single User fee to cover all its available data products, but none-the-less has opted to not charge for separate User Fees for both feeds since EDGX Options Top was adopted in January 2018.22 However, the Exchange now wishes to have separate User fees for EDGX Options Top. The Exchange believes the proposed change is reasonable, equitable and not unfairly discriminatory as all of EDGX Options data products are purely optional. Only those Distributors that deem the products to be of sufficient overall value and usefulness would purchase them for distribution to Users. Further, Distributors are not required to distribute, and Users are not required to receive, any one particular data product and may choose to receive none, one, or several of the Exchange’s market data products. Indeed, less than 25% of the Exchange’s market data subscriptions is for EDGX Options Top. Additionally, the Exchange is not required to provide any fee waiver to Distributors of EDGX Options Top. The Exchange believes the proposed change is equitable and not unfairly discriminatory as it will apply uniformly to Distributors. The proposed Enterprise Fee for EDGX Options Top Feed is equitable and reasonable as the proposed fee could result in a fee reduction for Distributors with a large number of Professional and Non-Professional Users. If a Distributors has a smaller number of Professional Users of EDGX Options Top Data, then it may continue using the per User structure and benefit from the proposed per EDGX Options Top User Fee reductions. By reducing prices for recipient firms with a large number of Professional and NonProfessional Users, the Exchange believes that more firms may choose to receive and to distribute EDGX Options Top Data, thereby expanding the distribution of this market data for the benefit of investors. 22 See Securities Exchange Act Release No. 82462 (January 8, 2018), 83 FR 1647 (January 12, 2018) (SR–CboeEDGX–2017–010). VerDate Sep<11>2014 17:19 Mar 17, 2023 Jkt 259001 The Exchange further believes that the proposed Enterprise Fee is reasonable because it will simplify reporting for certain recipients that have large numbers of Professional and NonProfessional Users. Firms that pay the proposed Enterprise Fee will not have to report the number of Users on a monthly basis as they currently do, but rather will only have to count Professional and Non-Professional Users every six months, which is a significant reduction in administrative burden. Finally, as described above the Enterprise Fee is entirely optional. A firm that does not have a sufficient number of Users to benefit from purchase of the license need not do so. The Exchange lastly believes the proposed non-substantive clarifying changes will alleviate potential confusion, thereby removing impediments to and perfecting the mechanism of a free and open market and a national market system, and, in general, protecting investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change would result in 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, and its ability to price top-of-book data is constrained by competition among exchanges that offer similar data products to their customers. Top-of-book data is broadly disseminated by competing U.S. options exchanges and through OPRA. There are therefore a number of alternative products available to market participants and investors, including products offered by certain competing exchanges, as well as OPRA. In this competitive environment potential Distributors are free to choose which competing product to purchase to satisfy their need for market information. Often, the choice comes down to price, as market data customers look to purchase cheaper data products, and quality, as market participants seek to purchase data that represents significant market liquidity. The Exchange believes that the proposed fees do not put any market participants at a relative disadvantage compared to other market participants. As discussed, the proposed fees would apply to all similarly situated recipient firms of EDGX Options Top on an equal and non-discriminatory basis. The Exchange believes the differentiated fees for Professional and Non-Professional Users of EDGX Options Top is PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 appropriate given Professional Users are categorized as such based on their employment and participation in financial markets, and thus, are compensated to participate in the markets. Non-Professional Users too can receive significant financial benefits through their participation in the markets, however the Exchange believes it is reasonable to charge more to those Users who are more directly engaged in the markets. The Exchange therefore believes that the proposed fee neither favors nor penalizes one or more categories of market participants in a manner that would impose an undue burden on competition. The Exchange believes that the proposed fees do not impose a burden on competition or on other SROs that is not necessary or appropriate in furtherance of the purposes of the Act. In particular, market participants are not forced to subscribe to EDGX Options Top Data, or any of the Exchange’s data feeds, as described above. As noted, the quote and last sale data contained in the Exchange’s EDGX Options Top feed is identical to the data sent to OPRA for redistribution to the public. Accordingly, Exchange top-of-book data is therefore widely available today from a number of different sources. Because market data customers can find suitable substitute feeds, an exchange that overprices its market data products stands a high risk that users may substitute another product. These competitive pressures ensure that no one exchange’s market data fees can impose an undue burden on competition, and the Exchange’s proposed fees do not do so here. 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 23 and paragraph (f) of Rule 19b–4 24 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 23 15 24 17 E:\FR\FM\20MRN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 20MRN1 Federal Register / Vol. 88, No. 53 / Monday, March 20, 2023 / Notices 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: lotter on DSK11XQN23PROD with NOTICES1 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– CboeEDGX–2023–020 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–CboeEDGX–2023–020. 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–CboeEDGX–2023–020 and VerDate Sep<11>2014 17:19 Mar 17, 2023 Jkt 259001 should be submitted on or before April 10, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–05535 Filed 3–17–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97137; File No. SR–CBOE– 2023–013] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update the Cboe Data Services, LLC Fee Schedule March 14, 2023. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 28, 2023, Cboe Exchange, Inc. (‘‘Exchange’’ or ‘‘Cboe Options’’) 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 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 update the Cboe Data Services, LLC Fee Schedule. 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 25 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 16691 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 the fees set forth in the Cboe Data Services, LLC (‘‘CDS’’) Fee Schedule.3 The Exchange proposes to (i) relocate the fees in the CDS Fees Schedule to the Exchange’s Fees Schedule (ii) harmonize various definitions to align with the definitions used by the Exchange’s affiliates, and (iii) modify its fees relating to the distribution of the BBO data feed.4 Relocation of CDS Fees The Exchange first proposes to consolidate the Cboe Data Services, LLC (CDS) Fee Schedule and the Cboe Options Fees Schedule. Historically, the CDS Fee Schedule set forth fees relating to real-time Cboe Options market data products and has been maintained separately from the Cboe Options Fees Schedule. The Exchange proposes to eliminate the CDS Fee Schedule in its entirety and relocate the fees under the CDS Fees Schedule to the Cboe Options Fees Schedule. The Exchange believes this provides a more streamlined fee schedule for Cboe Options fees and allows TPHs to more readily and easily find all fees applicable to Cboe Options. The Exchange notes that no substantive changes are being made with the relocation of the CDS fees other than those discussed further below. The Exchange lastly notes that each of its affiliated options exchanges also reflect 3 The Exchange initially filed the proposed fee changes on January 3, 2023 (SR–CBOE–2023–001). On February 28, 2023, the Exchange withdrew that filing and submitted this proposal. 4 The BBO Data Feed is a real-time data feed that includes the following information: (i) outstanding quotes and standing orders at the best available price level on each side of the market; (ii) executed trades time, size, and price; (iii) totals of customer versus non-customer contracts at the best bid and offer (‘‘BBO’’); (iv) all-or-none contingency orders priced better than or equal to the BBO; (v) expected opening price and expected opening size; (vi) endof-day summaries by product, including open, high, low, and closing price during the trading session; (vi) recap messages any time there is a change in the open, high, low or last sale price of a listed option; (vii) COB information; and (viii) product IDs and codes for all listed options contracts. The quote and last sale data contained in the BBO data feed is identical to the data sent to the Options Price Reporting Authority (‘‘OPRA’’) for redistribution to the public. E:\FR\FM\20MRN1.SGM 20MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 88, Number 53 (Monday, March 20, 2023)]
[Notices]
[Pages 16687-16691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05535]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97136; File No. SR-CboeEDGX-2023-020]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Its Fee Schedule

March 14, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 10, 2023, Cboe EDGX Exchange, Inc. (``Exchange'' or ``EDGX'') 
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 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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[[Page 16688]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX Options'') 
proposes to amend its Fee Schedule. 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://markets.cboe.com/us/options/regulation/rule_filings/edgx/), 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 Fee Schedule to modify its 
market data fees for EDGX Options Top.\3\ Particularly, the Exchange 
proposes to modify the Professional and Non-Professional User Fees, 
adopt a new Enterprise Fee for EDGX Options Top, and make other 
clarifying, non-substantive changes.\4\
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    \3\ EDGX Options Top is an uncompressed data feed that offers 
top of book quotations and execution information based on options 
orders entered into the System. Uncompressed data is disseminated 
``as is'' in the native format by the Exchange, with no compression.
    \4\ The Exchange initially filed the proposed fee changes on 
January 3, 2023 (SR-CboeEDGX-2023-001). On February 28, 2023, the 
Exchange submitted SR-CboeEDGX-2023-015 in place of SR-CboeEDGX-
2023-001, which the Exchange withdrew on March 1, 2023. On March 10, 
2023 the Exchange withdrew CboeEDGX-2023-015 and submitted this 
proposal.
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    The Exchange first proposes to reduce the rates for Professional 
and Non-Professional User fees for EDGX Options Top. The Exchange 
currently charges Internal Distributors and External Distributors that 
redistribute any of the EDGX Options Data Feeds different fees for 
their Professional Users \5\ and Non-Professional Users.\6\ The 
Exchange currently assesses a monthly fee for Professional Users of 
$10.00 per User and a monthly fee of $1.00 per Non-Professional 
User.\7\ Further, the Fee Schedule provides that Distributors and Users 
of any one of EDGX Options market data products (i.e., EDGX Options 
Top, EDGX Options Depth, EDGX Options Auction Feed, EDGX Options 
Complex Depth, EDGX Options Complex Top, and EDGX Options Complex 
Auction Fees) may receive, at no additional charge, access to any or 
all of the other market data products listed. The Exchange proposes to 
reduce the rates for the User fees for EDGX Options Top. Particularly, 
the Exchange proposes to reduce the monthly (i) Professional User fee 
from $10 per user to $5 per user and (ii) Non-Professional User fee 
from $1.00 per user to $0.10 per user. The Exchange also proposes to 
start charging separate User fees for EDGX Options Top. User Fees for 
the Exchange's remaining market data products will continue to receive, 
at no additional charge, access to any or all of the other market data 
products listed (with the exception of EDGX Options Top). The Exchange 
has reformatted the Market Data Fees tables to make this clear.\8\
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    \5\ A Professional User of an Exchange Market Data product is 
any User other than a Non-Professional User. The Exchange proposes 
to amend the definition of ``Professional User'' in the Fee Schedule 
to further clarify that a Professional User is a natural person 
recipient of an Exchange Data product who is not a Non-Professional 
User.
    \6\ A ``Non-Professional User'' of an Exchange Market Data 
product is a natural person or qualifying trust that uses Data only 
for personal purposes and not for any commercial purpose and, for a 
natural person who works in the United States, is not: (i) 
registered or qualified in any capacity with the Securities and 
Exchange Commission, the Commodities Futures Trading Commission, any 
state securities agency, any securities exchange or association, or 
any commodities or futures contract market or association; (ii) 
engaged as an ``investment adviser'' as that term is defined in 
Section 202(a)(11) of the Investment Advisors Act of 1940 (whether 
or not registered or qualified under that Act); or (iii) employed by 
a bank or other organization exempt from registration under federal 
or state securities laws to perform functions that would require 
registration or qualification if such functions were performed for 
an organization not so exempt; or, for a natural person who works 
outside of the United States, does not perform the same functions as 
would disqualify such person as a Non-Professional User if he or she 
worked in the United States.
    \7\ Distributors that receive EDGX Options Data Feeds are 
required to count every Professional User and Non-Professional User 
to which they provide the market data product(s).
    \8\ The Exchange is not proposing any changes to the current 
User Fee rates for its other market data products at this time and 
Users of any one of the remaining market data products may continue 
to receive, at no additional charge, access to any or all of the 
other market data products listed (i.e., except for EDGX Options 
Top).
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    The Exchange lastly proposes to establish a $20,000 per month 
Enterprise Fee that will permit a Distributor to purchase a monthly 
(and optional) Enterprise license to receive the EDGX Options Top Data 
for distribution to an unlimited number of Professional and Non-
Professional Users. The Enterprise Fee is an alternative to 
Professional and Non-Professional User fees and will permit a 
Distributor to pay a flat fee to receive the data for an unlimited 
number of Professional and Non-Professional Users, which the Exchange 
proposes to make clear in the Fee Schedule. The Enterprise Fee may 
provide an opportunity to reduce fees. For example, if a Distributor 
distributes EDGX Options Top to 15,000 Professional Users who each 
receive EDGX Options Top at $5.00 per month (as proposed), then that 
Distributor will pay $75,000 per month in Professional Users fees. If 
the Distributor instead were to purchase the proposed Enterprise 
license, then it would alternatively pay a flat fee of $20,000 for an 
unlimited number of Professional and Non-Professional Users. A 
Distributor must pay a separate Enterprise Fee for each entity that 
controls the display of EDGX Options Top if it wishes for such Users to 
be covered by the Enterprise Fee rather than by per User fees.\9\ A 
Distributor that pays the Enterprise Fee will not have to report its 
number of such Users on a monthly basis. Rather, every six months, it 
must provide the Exchange with a count of the total number of 
Professional and Non-Professional users of EDGX Options Top.\10\ The 
Exchange notes that the purchase of an Enterprise license is voluntary 
and a firm may elect to instead use the per User structure and benefit 
from the proposed per User Fees described above. For example, a firm 
that does not have a sufficient number of Users to benefit from 
purchase of the license need not do so.
---------------------------------------------------------------------------

    \9\ For example, if a Distributor that distributes EDGX Options 
Top to Retail Brokerage Firm A and Retail Brokerage Firm B and 
wishes to have the Users under each firm covered by an Enterprise 
license, the Distributor would be subject to two Enterprise Fees.
    \10\ See Cboe Global Markets North American Data Policies.
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    The Exchange lastly proposes to modify the definition of 
Professional User under the definitions section of the Market Data Fees 
section to clarify that a Professional ``User'' is any natural person 
recipient of an Exchange Market Data product who is not a Non-
Professional User. The proposed modification also aligns the definition 
with that of the definition used by the

[[Page 16689]]

Exchange's affiliates Cboe Exchange, Inc. and Cboe C2 Exchange, 
Inc.\11\
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    \11\ See Cboe Data Services, LLC Fees Schedule and Cboe C2 
Options Fees Schedule.
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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.\12\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \13\ 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 
Section 6(b)(4) of the Act,\14\ which requires that Exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its Members and other persons using its facilities.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange first notes that it 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 17% of the market share.\15\ 
The Exchange believes top-of-book quotation and transaction data is 
highly competitive as national securities exchanges compete vigorously 
with each other to provide efficient, reliable, and low-cost data to a 
wide range of investors and market participants. Indeed, there are 
several competing products offered by other national securities 
exchanges today, not counting products offered by the Exchange's 
affiliates, and each of the Exchange's affiliated U.S. options 
exchanges also offers similar top-of-book data.\16\ Each of those 
exchanges offer top-of-book quotation and last sale information based 
on their own quotation and trading activity that is substantially 
similar to the information provided by the Exchange through the EDGX 
Options Top Feed. Further, the quote and last sale data contained in 
the EDGX Options Top Feed is identical to the data sent to OPRA for 
redistribution to the public.\17\ Accordingly, Exchange top-of-book 
data is widely available today from a number of different sources.
---------------------------------------------------------------------------

    \15\ See Cboe Global Markets U.S. Options Market Month-to-Date 
Volume Summary (February 24, 2023), available at https://markets.cboe.com/us/options/market_statistics/.
    \16\ See e.g., NYSE Arca Options Proprietary Market Data Fees 
Schedule, MIAX Options Exchange, Fee Schedule, Section 6 (Market 
Data Fees), Nasdaq PHLX Options 7 Pricing Schedule, Section 10 
(Proprietary Data Feed Fees) and Cboe Data Services, LLC Fees 
Schedule.
    \17\ The Exchange notes that it makes available the top-of-book 
and last sale data that is included in the EDGX Options Top Data 
Feed no earlier than the time at which the Exchange sends that data 
to OPRA.
---------------------------------------------------------------------------

    Moreover, the EDGX Options Top is distributed and purchased on a 
voluntary basis, in that neither the Exchange nor market data 
distributors are required by any rule or regulation to make this data 
available. Accordingly, Distributors and Users can discontinue use at 
any time and for any reason, including due to an assessment of the 
reasonableness of fees charged. As described above, market participants 
have a wide variety of alternative market data products from which to 
choose, such as similar proprietary data products offered by other 
exchanges and consolidated data. Further, the Exchange is not required 
to make any proprietary data products available or to offer any 
specific pricing alternatives to any customers. Moreover, persons 
(including broker-dealers) who subscribe to any exchange proprietary 
data feed must also have equivalent access to consolidated Options 
Information \18\ from OPRA for the same classes or series of options 
that are included in the proprietary data feed, and proprietary data 
feeds cannot be used to meet that particular requirement.\19\ As such, 
all proprietary data feeds are optional.
---------------------------------------------------------------------------

    \18\ ``Consolidated Options Information'' means consolidated 
Last Sale Reports combined with either consolidated Quotation 
Information or the BBO furnished by OPRA. Access to consolidated 
Options Information is deemed ``equivalent'' if both kinds of 
information are equally accessible on the same terminal or work 
station. See Limited Liability Company Agreement of Options Price 
Reporting Authority, LLC (``OPRA Plan''), Section 5.2(c)(iii). The 
Exchange notes that this requirement under the OPRA Plan is also 
reiterated under the Cboe Global Markets Global Data Agreement and 
Cboe Global Markets North American Data Policies, which subscribers 
to any exchange proprietary product must sign and are subject to, 
respectively. Additionally, the Exchange's Data Order Form (used for 
requesting the Exchange's market data products) requires 
confirmation that the requesting market participant receives data 
from OPRA.
    \19\ Id.
---------------------------------------------------------------------------

    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.'' \20\ Making 
similar data products available to market participants fosters 
competition in the marketplace, and 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 fees to attract purchasers of EDGX Options Top 
Data.
---------------------------------------------------------------------------

    \20\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
---------------------------------------------------------------------------

    The Exchange believes the proposed changes to reduce the rates of 
the current Professional and Non-Professional User fees are reasonable 
as Distributors will be subject to lower rates for EDGX Options Top 
User fees. Additionally, the User fees continue to be in line with and/
or lower than User fees assessed by other exchanges for similar 
data.\21\
---------------------------------------------------------------------------

    \21\ See e.g., Nasdaq PHLX Options 7 Pricing Schedule, Section 
10 (Proprietary Data Feed Fees), which provides for a fee of $40 per 
month to professional users and $1.00 per month to non-professional 
users to cover the usage of PHLX Options (TOPO) Data, TOPO Plus 
Orders, PHLX Orders and PHLX Depth Data feeds. See also NYSE 
American Options Proprietary Market Data Fees schedule, which 
provides for a fee of $50 per month to professional users and $1.00 
per month to non-professional users of American Options Top Data, 
American Options Deep and American Options Complex products. By 
comparison, the total combined Professional User fee for the 
Exchange's market data products is significantly lower at $11 per 
Professional User (i.e., $1 per Professional Users of EDGX Options 
Top, as proposed, and $10 per Professional User of any of the 
remaining EDGX Options market data products). The Exchange's 
combined Non-Professional User Fee at $1.10 per Non-Professional 
User (i.e., $0.10 per Non-Professional User of EDGX Options Top, as 
proposed, and $1 per Non-Professional User of any of the remaining 
EDGX Options market data products) is still in line with, and not a 
significant departure from, PHLX's and NYSE American's 
aforementioned Non-Professional User fees.
---------------------------------------------------------------------------

    The Exchange believes that the proposed fees are equitable and not 
unfairly discriminatory because they will be charged uniformly to 
Distributors who distribute EDGX Options Top. The Exchange also 
believes continuing to offer EDGX Options Top Data to Non-Professional

[[Page 16690]]

Users at a lower cost than Professional Users results in greater equity 
among data recipients, as Professional Users are categorized as such 
based on their employment and participation in financial markets, and 
thus, are compensated to participate in the markets. Although Non-
Professional Users too can receive significant financial benefits 
through their participation in the markets, the Exchange believes it is 
reasonable to charge more for those Users who are more directly engaged 
in the markets.
    The Exchange next notes it is not required to charge a single User 
fee to cover all its available data products, but none-the-less has 
opted to not charge for separate User Fees for both feeds since EDGX 
Options Top was adopted in January 2018.\22\ However, the Exchange now 
wishes to have separate User fees for EDGX Options Top. The Exchange 
believes the proposed change is reasonable, equitable and not unfairly 
discriminatory as all of EDGX Options data products are purely 
optional. Only those Distributors that deem the products to be of 
sufficient overall value and usefulness would purchase them for 
distribution to Users. Further, Distributors are not required to 
distribute, and Users are not required to receive, any one particular 
data product and may choose to receive none, one, or several of the 
Exchange's market data products. Indeed, less than 25% of the 
Exchange's market data subscriptions is for EDGX Options Top. 
Additionally, the Exchange is not required to provide any fee waiver to 
Distributors of EDGX Options Top. The Exchange believes the proposed 
change is equitable and not unfairly discriminatory as it will apply 
uniformly to Distributors.
---------------------------------------------------------------------------

    \22\ See Securities Exchange Act Release No. 82462 (January 8, 
2018), 83 FR 1647 (January 12, 2018) (SR-CboeEDGX-2017-010).
---------------------------------------------------------------------------

    The proposed Enterprise Fee for EDGX Options Top Feed is equitable 
and reasonable as the proposed fee could result in a fee reduction for 
Distributors with a large number of Professional and Non-Professional 
Users. If a Distributors has a smaller number of Professional Users of 
EDGX Options Top Data, then it may continue using the per User 
structure and benefit from the proposed per EDGX Options Top User Fee 
reductions. By reducing prices for recipient firms with a large number 
of Professional and Non-Professional Users, the Exchange believes that 
more firms may choose to receive and to distribute EDGX Options Top 
Data, thereby expanding the distribution of this market data for the 
benefit of investors.
    The Exchange further believes that the proposed Enterprise Fee is 
reasonable because it will simplify reporting for certain recipients 
that have large numbers of Professional and Non-Professional Users. 
Firms that pay the proposed Enterprise Fee will not have to report the 
number of Users on a monthly basis as they currently do, but rather 
will only have to count Professional and Non-Professional Users every 
six months, which is a significant reduction in administrative burden. 
Finally, as described above the Enterprise Fee is entirely optional. A 
firm that does not have a sufficient number of Users to benefit from 
purchase of the license need not do so.
    The Exchange lastly believes the proposed non-substantive 
clarifying changes will alleviate potential confusion, thereby removing 
impediments to and perfecting the mechanism of a free and open market 
and a national market system, and, in general, protecting investors and 
the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
result in 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, and its ability to price 
top-of-book data is constrained by competition among exchanges that 
offer similar data products to their customers. Top-of-book data is 
broadly disseminated by competing U.S. options exchanges and through 
OPRA. There are therefore a number of alternative products available to 
market participants and investors, including products offered by 
certain competing exchanges, as well as OPRA. In this competitive 
environment potential Distributors are free to choose which competing 
product to purchase to satisfy their need for market information. 
Often, the choice comes down to price, as market data customers look to 
purchase cheaper data products, and quality, as market participants 
seek to purchase data that represents significant market liquidity.
    The Exchange believes that the proposed fees do not put any market 
participants at a relative disadvantage compared to other market 
participants. As discussed, the proposed fees would apply to all 
similarly situated recipient firms of EDGX Options Top on an equal and 
non-discriminatory basis. The Exchange believes the differentiated fees 
for Professional and Non-Professional Users of EDGX Options Top is 
appropriate given Professional Users are categorized as such based on 
their employment and participation in financial markets, and thus, are 
compensated to participate in the markets. Non-Professional Users too 
can receive significant financial benefits through their participation 
in the markets, however the Exchange believes it is reasonable to 
charge more to those Users who are more directly engaged in the 
markets. The Exchange therefore believes that the proposed fee neither 
favors nor penalizes one or more categories of market participants in a 
manner that would impose an undue burden on competition.
    The Exchange believes that the proposed fees do not impose a burden 
on competition or on other SROs that is not necessary or appropriate in 
furtherance of the purposes of the Act. In particular, market 
participants are not forced to subscribe to EDGX Options Top Data, or 
any of the Exchange's data feeds, as described above. As noted, the 
quote and last sale data contained in the Exchange's EDGX Options Top 
feed is identical to the data sent to OPRA for redistribution to the 
public. Accordingly, Exchange top-of-book data is therefore widely 
available today from a number of different sources.
    Because market data customers can find suitable substitute feeds, 
an exchange that overprices its market data products stands a high risk 
that users may substitute another product. These competitive pressures 
ensure that no one exchange's market data fees can impose an undue 
burden on competition, and the Exchange's proposed fees do not do so 
here.

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 \23\ and paragraph (f) of Rule 19b-4 \24\ 
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

[[Page 16691]]

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.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3)(A).
    \24\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-CboeEDGX-2023-020 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-CboeEDGX-2023-020. 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-CboeEDGX-2023-020 and should be 
submitted on or before April 10, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-05535 Filed 3-17-23; 8:45 am]
BILLING CODE 8011-01-P

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