Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Its Fees Schedule, 16676-16681 [2023-05541]
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Federal Register / Vol. 88, No. 53 / Monday, March 20, 2023 / Notices
Public Service Company of New Mexico
(PNM); Southern California Public
Power Authority; and Los Angeles
Department of Water and Power, hold
possession-only rights for the licenses
(i.e., they are not licensed to operate the
facility).
II
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By application dated December 2,
2020 (Agencywide Documents Access
and Management System (ADAMS)
Accession No. ML20337A344), as
supplemented by letters dated February
26, 2021, and May 14, 2021
(ML21061A156 and ML21134A244,
respectively), APS, on behalf of PNM,
Avangrid, Inc. (Avangrid), and their
corporate affiliates (together, the
applicants), requested, pursuant to
Section 184 of the Atomic Energy Act of
1954, as amended, and Title 10 of the
Code of Federal Regulations (10 CFR)
Sections 50.80, ‘‘Transfer of licenses,’’
and 72.50, ‘‘Transfer of license,’’ that
the U.S. Nuclear Regulatory
Commission (NRC, the Commission)
consent to the indirect transfer of PNM’s
10.2 percent tenant-in-common interest
and possession-only rights in the
licenses to Avangrid. By indirect
transfer order dated May 25, 2021, the
Commission consented to this indirect
transfer. By its terms, the indirect
transfer order becomes null and void if
the transfer is not completed within 1
year (i.e., by May 25, 2022), provided,
however, that upon written application
and for good cause shown, such date
may be extended by order. On May 10,
2022, the NRC issued an order
extending the effectiveness of the
indirect transfer order from May 25,
2022, to May 25, 2023 (ML22101A266)
in response to a request dated February
8, 2022 (ML22040A068).
III
By letter dated February 10, 2023
(ADAMS Accession No. ML23041A441),
the applicants submitted a written
application to further extend the
effectiveness of the indirect transfer
order by 1 year, until May 25, 2024. As
stated in the application, by order dated
December 8, 2021, the New Mexico
Public Regulation Commission
(NMPRC) declined to issue the
regulatory approvals necessary for the
applicants to consummate the proposed
indirect transfer. The applicants have
obtained all other required regulatory
approvals, but they cannot proceed with
the transfer without the approval of the
NMPRC. On January 3, 2022, the
applicants filed a Notice of Appeal of
the NMPRC order to the Supreme Court
of New Mexico. It is not expected,
however, that these further legal
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proceedings will be resolved within the
1-year effectiveness of the extended
indirect transfer order (i.e., by May 25,
2023). The extension would allow
adequate time for the applicants to
obtain the required regulatory approval
and consummate the transfer.
Based on the above, the NRC staff has
determined that the applicants have
shown good cause for extending the
effectiveness of the indirect transfer
order by 1 year, as requested.
SECURITIES AND EXCHANGE
COMMISSION
IV
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 C2 Exchange, Inc.
(‘‘Exchange’’ or ‘‘C2’’) 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.
Accordingly, pursuant to Sections
161b, 161i, and 184 of the Atomic
Energy Act of 1954, as amended, 42
U.S.C. 2201(b), 2201(i), and 2234; and
10 CFR 50.80 and 10 CFR 72.50, it is
hereby ordered that the effectiveness of
the indirect transfer order dated May 25,
2021, is extended until May 25, 2024.
Should the subject indirect license
transfer from PNM to Avangrid not be
completed by May 25, 2024, the indirect
transfer order shall become null and
void, provided, however, that upon
written application and for good cause
shown, such date may be extended by
order.
This Order is effective upon issuance.
For further details with respect to this
Order, see the written application for
extension dated February 10, 2023,
which is available electronically
through ADAMS in the NRC Library at
https://www.nrc.gov/reading-rm/
adams.html under Accession No.
ML23041A441. Persons who encounter
problems with ADAMS should contact
the NRC’s Public Document Room
reference staff by telephone at 1–800–
397–4209 or 301–415–4737 or by email
to PDR.Resource@nrc.gov.
Dated: March 14, 2023.
For the Nuclear Regulatory Commission.
/RA/
Gregory F. Suber,
Deputy Director, Division of Operating
Reactor Licensing, Office of Nuclear Reactor
Regulation.
[FR Doc. 2023–05592 Filed 3–17–23; 8:45 am]
BILLING CODE 7590–01–P
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[Release No. 34–97134; File No. SR–C2–
2023–007]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend Its
Fees Schedule
March 14, 2023.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) proposes to update
its Fees 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/ctwo/),
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.
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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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
Cboe Data Services, LLC (‘‘CDS’’)
section of its Fees Schedule.3
Particularly, the Exchange proposes to
(i) reformat the section of its Fees
Schedule pertaining to market data fees,
(ii) harmonize various market data
related 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
Reformatting
The Exchange first proposes to
eliminate references to CDS and rename
the section ‘‘Market Data Fees’’ to align
with the heading of its affiliates, BZX
Options and EDGX Options. The
Definitions
In order to provide consistent rules
and terminology amongst the Exchange
and its affiliated options exchanges,
Cboe Options Exchange, Inc. (‘‘Cboe
Options’’), Cboe BZX Exchange, Inc.
(‘‘BZX Options’’) and Cboe EDGX
Exchange, Inc. (‘‘EDGX Options’’)
(collectively, ‘‘Affiliates’’) the Exchange
is proposing to amend various
definitions and product names to
harmonize with such terms used by its
affiliates BZX Options and EDGX
Options, specifically.5 As such, the
proposed rule change deletes a defined
term, adds certain defined terms, and
makes certain non-substantive changes
to existing definitions, as further
described in the table below. The
proposed rule change makes these
changes throughout the market data fee
language to conform to the proposed
defined terms and the Exchange uses
the proposed updated terms herein.
Defined term
Provision
Customer .....
A ‘‘Customer’’ is any person, company or other entity that,
pursuant to a market data agreement with CDS, is entitled
to receive data, either directly from CDS or through an authorized redistributor (i.e., a Customer or an extranet service provider), whether that data is distributed externally or
used internally. A third-party vendor of an Approved ThirdParty Device, as defined in the CDS Fee Schedule, is not a
Customer unless it has a market data agreement in place
with CDS. A Floor Broker User, as defined in the CDS Fee
Schedule, is not a Customer unless it has a market data
agreement in place with CDS.
A Distributor of an Exchange Market Data product is any entity that receives the Exchange Market Data product directly
from the Exchange or indirectly through another entity and
then distributes it internally or externally to a third party.
Section I of the Cboe
Data Services, LLC
(‘‘CDS’’) Section of
the Fees Schedule.
Deletes defined term to align terms
with BZX Options and EDGX Options. The concept of ‘‘Customer’’
is also better captured through the
proposed new term ‘‘Distributor’’.
N/A .................................
Internal Distributor.
An Internal Distributor of an Exchange Market Data product is
a Distributor that receives the Exchange Market Data product and then distributes that data to one or more Users
within the Distributor’s own entity.
N/A .................................
External Distributor.
An External Distributor of an Exchange Market Data product
is a Distributor that receives the Exchange Market Data
product and then distributes that data to a third party or
one or more Users outside the Distributor’s own entity.
N/A .................................
Codifies definition of ‘‘Distributor’’
under new ‘‘Definitions’’ section of
the C2 Options Fees Schedule.
Definition is identical to the definition used by BZX Options and
EDGX Options and substantially
similar to the language in the first
sentence of the definition of ‘‘Customer’’ in the Fees Schedule.
Codifies definition of ‘‘ Internal Distributor under new ‘‘Definitions’’
section of the C2 Options Fees
Schedule. Definition is identical to
the definition used by BZX Options
and EDGX Options.
Codifies definition of ‘‘External Distributor’’ under new ‘‘Definitions’’
section of the C2 Options Fees
Schedule. Definition is identical to
the definition used by BZX Options
and EDGX Options.
Distributor .....
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Exchange notes that no substantive
changes are being made with the
elimination of the references to CDS
fees. Rather, the proposed change more
accurately reflects the Exchange’s role
as it relates to its market data products
as CDS is merely an affiliate that is the
Cboe contracting entity for all U.S.
equities and options market data
products, but the data products
themselves are made available by the
Exchange. The Exchange also proposes
to reformat the layout of the fees under
the Cboe Data Services, LLC (‘‘CDS’’)
section of the Fees Schedule to align
with formatting of the corresponding
section in the fees schedules of the
Exchange’s options exchanges, Cboe
BZX Exchange, Inc. (‘‘BZX Options’’)
and Cboe EDGX Exchange, Inc. (‘‘EDGX
Options’’), including adding a new
‘‘Definitions’’ section under the CDS
Fees (or as proposed, the Market Data
Fees) section.
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3 The Exchange initially filed the proposed fee
changes on January 3, 2023 (SR–C2–2023–001). 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
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Current location
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
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Description of change
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.
5 Cboe Options will be submitting a similar filing
to harmonize its definitions and products names to
align with those of BZX Options and EDGX Options
as well.
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Defined term
Provision
Current location
Description of change
User .............
A User of an Exchange Market Data product is a natural person, a proprietorship, corporation, partnership, or entity, or
device (computer or other automated service), that is entitled to receive Exchange data.
N/A .................................
Non-ProfesA ‘‘Non-Professional User’’ is a natural person or qualifying
sional User.
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 201(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 NonProfessional User if he or she worked in the United States.
Professional
A Professional User of an Exchange Market Data product is
User.
any natural person recipient of an Exchange Market Data
product who is not a Non-Professional User.
Display Only
A ‘‘Display Only Service’’ allows a natural person end-user to
Service.
view and manipulate data using the Distributor’s computerized service, but not to save, copy, export or transfer the
data or any results of the manipulation to any other computer hardware, software or media, except for printing it to
paper or other non-magnetic media.
Device .......... A ‘‘Device’’ means any computer, workstation or other item of
equipment, fixed or portable, that receives, accesses and/or
displays data in visual, audible or other form.
Sections I and III ...........
Codifies definition of ‘‘User’’ under
new ‘‘Definitions’’ section of the C2
Options Fees Schedule. Definition
is identical to one used by BZX
Options and EDGX Options.
Relocates definition under new
‘‘Definitions’’ section of the C2 Options Fees Schedule and updates
the rule reference to ‘‘Section
201(11)’’ of the Investment Advisors Act of 1940 to ‘‘Section
202(a)(11)’’.
The Exchange also proposes to
rename the following market data
products and fees and use the proposed
names herein, in order to align with the
naming convention used by the
Exchange’s affiliates, BZX Options,
EDGX Options and Cboe Options, as
applicable for similar data products and
fees.6
Current name
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BBO Data Feed ........
Book Depth Data
Feed.
Complex Order Book
(COB) Data Feed.
Port Fee ....................
Proposed name
C2 Options Top.
C2 Options Depth.
C2 Complex Order
Book (COB).
Data Access Fee.
6 See BZX Options Exchange Fees Schedule,
Market Data Fees and EDGX Options Exchange Fees
Schedule, Market Data Fees. See also Cboe Data
Services, LLC Fees Schedule, Section V. System
Fees.
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Section I ........................
N/A .................................
the rule and more harmonized rule
language across the Fees Schedules of
the Cboe affiliated options exchanges.
Further, the Exchange notes that the
changes are non-substantive changes or
provide additional detail in the rule
regarding current market participants
that purchase or use the Exchange’s
market data products. None of these
differences impact the manner in which
any of the terms and corresponding fees
apply, including how the Exchange
would have otherwise characterized a
Distributor or User (Professional or NonProfessional).
C2 Options Top Fee Changes
The Exchange believes the proposed
changes to eliminate, modify and adopt
the terms discussed above will add
additionally transparency to the Fees
Schedule and will protect investors, as
the changes provide more clarity within
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Sections I and III ...........
The Exchange first proposes to modify
its current User Fees. The Exchange
currently charges a ‘‘User Fee’’ of $50
per month per Device or user ID for use
of the data in the C2 Options Top Data
Feed by ‘‘Display Only Service’’ users.
The current User fee is payable only for
‘‘external’’ Display Only Service users
who receive C2 Options Top.7 Internal
7 Pursuant to the Cboe Global Markets North
American Data Policies, Distributors must report
the number of authorized external devices that
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Relocates definition under new
‘‘Definitions’’ section of the C2 Options Fees Schedule
Relocates definition under new
‘‘Definitions’’ section of the C2 Options Fees Schedule
Adds new definition under new
‘‘Definitions’’ section of the C2 Options Fees Schedule. Definition is
identical to one used by Cboe Options.
Distributors may currently distribute C2
Options Top Data to an unlimited
number of internal users and Devices
within the Distributor at no further cost.
The Exchange proposes to eliminate the
current C2 Options Top User fee and in
its place adopt Professional and NonProfessional User fees for C2 Options
Top that would apply to both Internal
and External Distributors for all
Professional and Non-Professional
Users. Particularly, the Exchange
proposes to charge C2 Options Top
Distributors a monthly fee of $5.00 per
Professional Users User and a monthly
fee of $0.10 per Non-Professional User.8
The Exchange lastly proposes to
establish a $10,000 per month
Enterprise Fee that will permit a
Distributor to purchase a monthly (and
optional) Enterprise license to receive
the C2 Options Top Data for distribution
receive C2 Options Top data during a calendar
month within 15 days after such month in the
manner and format specified by the Exchange from
time to time to determine applicable fees.
8 Distributors that receive C2 Options Top Data
will be required to count every Professional User
and Non-Professional User to which they provide
the data feed.
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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. Like User fees, the
Enterprise Fee would be assessed in
addition to the Distribution Fees. The
Enterprise Fee may provide an
opportunity to reduce fees. For example,
if a Distributor has 10,000 Professional
Users who each receive C2 Options Top
at $5.00 per month (as proposed), then
that Distributor will pay $50,000 per
month in Professional Users fees. If the
Distributor instead were to purchase the
proposed Enterprise license, it would
alternatively pay a flat fee of $10,000 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 C2 Options Top
if it wishes for such Users to be covered
by an 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, the
recipient firm must provide the
Exchange with a count of the total
number of Professional and NonProfessional Users users of C2 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.
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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.11 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 12 requirements that the rules of
an exchange be designed to prevent
9 For example, if a Distributor that distributes C2
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.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
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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,13 which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
Trading Permit Holders 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.14 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.15 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
C2 Options Top Feed. Further, the quote
and last sale data contained in the C2
Options Data Feed is identical to the
data sent to OPRA for redistribution to
the public.16 Accordingly, Exchange
top-of-book data is widely available
13 15
U.S.C. 78f(b)(4).
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/.
15 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.
16 The Exchange notes that it makes available the
BBO data and last sale data that is included in the
C2 Options Top Data Feed no earlier than the time
at which the Exchange sends that data to OPRA.
14 See
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16679
today from a number of different
sources.
Moreover, the C2 Options Top Data
Feed 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.
Additionally, only those Distributors
that deem a product 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 C2 Options Top. 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 17 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.18 As such, all proprietary
data feeds are optional.
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
17 ‘‘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.
18 Id.
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of market forces in determining prices
and SRO revenues and, also, recognized
that current regulation of the market
system ‘‘has been remarkably successful
in promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 19
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 C2 Options Top Data.
The Exchange believes the proposed
changes to adopt new Professional and
Non-Professional User fees are
reasonable as the User fees continue to
be to be in line with User fees assessed
by other exchanges for similar data.20
Moreover, External users will now be
subject to lower fees as the Exchange
proposes to significantly reduce the
monthly User fees from $50 per External
User to $5.00 per Professional User or
$0.10 per Non-Professional User.
Although External Distributors are
currently only subject to fees for
external users, the fee for external users
(which are likely to be Non-Professional
Users) are significantly lower (i.e., $0.10
per Non-Professional User) than the
current $50 fee for external users.
Moreover, the proposed fee structure of
differentiated Professional and NonProfessional fees that are paid by both
19 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
20 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
Professional User fee for C2 Options Top and C2
Options COB is in line, and in fact lower than the
above Professional User fee at $30 per Professional
User (i.e., $5 per Professional Users of C2 Options
Top, as proposed, and $25 per Professional User of
C2 Options COB). The Exchange’s combined NonProfessional User Fee at $0.10 per Non-Professional
User (i.e., $0.30 per Non-Professional User of C2
Options Top, as proposed, and $0 per NonProfessional User of C2 Options COB) is lower than
PHLX’s and NYSE American’s aforementioned NonProfessional User fees. C2 Options Depth does not
charge users based on Professional or NonProfessional classification and market participants
have always been subject to separate User fees
across C2 Options market data products.
VerDate Sep<11>2014
17:19 Mar 17, 2023
Jkt 259001
Internal and External Distributors has
long been used by other exchanges,
including the Exchange, for their
proprietary data products, and by the
OPRA plan in order to reduce the price
of data to retail investors and make it
more broadly available.21 The Exchange
also believes offering C2 Options Top to
Non-Professional 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 to those Users who are
more directly engaged in the markets.
The Exchange believes that the
proposed fees are equitable and not
unfairly discriminatory because they
will be charged uniformly to
Distributors for their Professional and
Non-professional Users.
The proposed Enterprise Fee for C2
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 Distributor
has a smaller number of Professional
Users of C2 Options Top Data, then it
may continue using the per User
structure and benefit from the proposed
per C2 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 C2 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 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
21 See, e.g., Securities Exchange Act Release No.
59544 (March 9, 2009), 74 FR 11162 (March 16,
2009) (SR–NYSE–2008–131) (establishing the $15
Non-Professional User Fee (Per User) for NYSE
OpenBook); See, e.g., Securities Exchange Act
Release No. 67589 (August 2, 2012), 77 FR 47459
(August 8, 2012) (revising OPRA’s definition of the
term ‘‘Nonprofessional’’); and See Securities
Exchange Act Release No. 70683 (October 15, 2013),
78 FR 62798 (October 22, 2013) (SR–CBOE–2013–
087) (establishing Professional and NonProfessional User fees for Cboe Options COB Data
Feed).
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
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 changes relating to the defined
terms and terminology will provide
additional specificity and clarity, while
also harmonizing the various definition
with that of its affiliates. Doing so
would ensure consistent terms amongst
the Exchange and its affiliates, thereby
reducing the potential for confusion
amongst market data subscribers of the
Exchange’s and its affiliates’ market data
products. Additionally, the proposed
new terms are identical to the terms
already used by the Exchange’s affiliates
BZX Options and EDGX Options.
Similarly, the Exchange believes the
proposal to reformate the fees will
provide for a more streamlined fees
schedule, thereby reducing potential
confusion. Accordingly, the Exchange
believes the proposed changes remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, protect 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.
E:\FR\FM\20MRN1.SGM
20MRN1
Federal Register / Vol. 88, No. 53 / Monday, March 20, 2023 / Notices
As discussed, the proposed fees would
apply to all similarly situated recipient
firms of C2 Options Top on an equal
and non-discriminatory basis. The
Exchange believes the differentiated fees
for Professional and Non-Professional
Users of C2 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 C2 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 C2 Option Top feed is
identical to the data sent to OPRA for
redistribution to the public.
Accordingly, Exchange top-of-book data
is 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.
lotter on DSK11XQN23PROD with NOTICES1
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any written
comments from members or other
interested parties.
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 22 and paragraph (f) of Rule
22 15
U.S.C. 78s(b)(3)(A).
VerDate Sep<11>2014
17:19 Mar 17, 2023
19b–4 23 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.
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–
C2–2023–007 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–C2–2023–007. 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
23 17
Jkt 259001
PO 00000
CFR 240.19b–4(f).
Frm 00103
Fmt 4703
Sfmt 4703
16681
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–C2–2023–007 and should
be submitted on or before April 10,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–05541 Filed 3–17–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97129; File No. SR–NSCC–
2022–009]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Order Approving
Proposed Rule Change To Adopt
Intraday Volatility Charge and
Eliminate Intraday Backtesting Charge
March 13, 2023.
I. Introduction
On July 7, 2022, National Securities
Clearing Corporation (‘‘NSCC’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) proposed
rule change SR–NSCC–2022–009 (the
‘‘Proposed Rule Change’’) pursuant to
Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder.2 The Proposed Rule
Change was published for comment in
the Federal Register on July 20, 2022,3
and the Commission has received
comments on the Proposed Rule
Change.4
On September 1, 2022, pursuant to
Section 19(b)(2) of the Act,5 the
Commission designated a longer period
within which to approve, disapprove, or
institute proceedings to determine
whether to approve or disapprove the
Proposed Rule Change.6 On October 14,
24 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 95286
(July 14, 2022), 87 FR 43355 (July 20, 2022) (File
No. SR–NSCC–2022–009) (‘‘Notice of Filing’’).
4 Comments are available at https://www.sec.gov/
comments/sr-nscc-2022-009/srnscc2022009.htm.
5 15 U.S.C. 78s(b)(2).
6 Securities Exchange Act Release No. 95650
(Sept. 1, 2022), 87 FR 55054 (Sept. 8, 2022) (File
No. SR–NSCC–2022–009).
1 15
E:\FR\FM\20MRN1.SGM
20MRN1
]]>Agencies
[Federal Register Volume 88, Number 53 (Monday, March 20, 2023)]
[Notices]
[Pages 16676-16681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05541]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97134; File No. SR-C2-2023-007]
Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Amend Its Fees 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 C2 Exchange, Inc. (``Exchange'' or ``C2'')
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 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe C2 Exchange, Inc. (the ``Exchange'' or ``C2'') proposes to
update its Fees 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/ctwo/), 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.
[[Page 16677]]
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 Cboe Data Services, LLC
(``CDS'') section of its Fees Schedule.\3\ Particularly, the Exchange
proposes to (i) reformat the section of its Fees Schedule pertaining to
market data fees, (ii) harmonize various market data related
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\
---------------------------------------------------------------------------
\3\ The Exchange initially filed the proposed fee changes on
January 3, 2023 (SR-C2-2023-001). 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)
end-of-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.
---------------------------------------------------------------------------
Reformatting
The Exchange first proposes to eliminate references to CDS and
rename the section ``Market Data Fees'' to align with the heading of
its affiliates, BZX Options and EDGX Options. The Exchange notes that
no substantive changes are being made with the elimination of the
references to CDS fees. Rather, the proposed change more accurately
reflects the Exchange's role as it relates to its market data products
as CDS is merely an affiliate that is the Cboe contracting entity for
all U.S. equities and options market data products, but the data
products themselves are made available by the Exchange. The Exchange
also proposes to reformat the layout of the fees under the Cboe Data
Services, LLC (``CDS'') section of the Fees Schedule to align with
formatting of the corresponding section in the fees schedules of the
Exchange's options exchanges, Cboe BZX Exchange, Inc. (``BZX Options'')
and Cboe EDGX Exchange, Inc. (``EDGX Options''), including adding a new
``Definitions'' section under the CDS Fees (or as proposed, the Market
Data Fees) section.
Definitions
In order to provide consistent rules and terminology amongst the
Exchange and its affiliated options exchanges, Cboe Options Exchange,
Inc. (``Cboe Options''), Cboe BZX Exchange, Inc. (``BZX Options'') and
Cboe EDGX Exchange, Inc. (``EDGX Options'') (collectively,
``Affiliates'') the Exchange is proposing to amend various definitions
and product names to harmonize with such terms used by its affiliates
BZX Options and EDGX Options, specifically.\5\ As such, the proposed
rule change deletes a defined term, adds certain defined terms, and
makes certain non-substantive changes to existing definitions, as
further described in the table below. The proposed rule change makes
these changes throughout the market data fee language to conform to the
proposed defined terms and the Exchange uses the proposed updated terms
herein.
---------------------------------------------------------------------------
\5\ Cboe Options will be submitting a similar filing to
harmonize its definitions and products names to align with those of
BZX Options and EDGX Options as well.
----------------------------------------------------------------------------------------------------------------
Description of
Defined term Provision Current location change
----------------------------------------------------------------------------------------------------------------
Customer.......................... A ``Customer'' is any person, Section I of the Cboe Deletes defined term
company or other entity that, Data Services, LLC to align terms with
pursuant to a market data (``CDS'') Section of BZX Options and
agreement with CDS, is the Fees Schedule. EDGX Options. The
entitled to receive data, concept of
either directly from CDS or ``Customer'' is
through an authorized also better
redistributor (i.e., a captured through
Customer or an extranet the proposed new
service provider), whether term
that data is distributed ``Distributor''.
externally or used internally.
A third-party vendor of an
Approved Third-Party Device,
as defined in the CDS Fee
Schedule, is not a Customer
unless it has a market data
agreement in place with CDS. A
Floor Broker User, as defined
in the CDS Fee Schedule, is
not a Customer unless it has a
market data agreement in place
with CDS.
Distributor....................... A Distributor of an Exchange N/A.................. Codifies definition
Market Data product is any of ``Distributor''
entity that receives the under new
Exchange Market Data product ``Definitions''
directly from the Exchange or section of the C2
indirectly through another Options Fees
entity and then distributes it Schedule.
internally or externally to a Definition is
third party. identical to the
definition used by
BZX Options and
EDGX Options and
substantially
similar to the
language in the
first sentence of
the definition of
``Customer'' in the
Fees Schedule.
Internal Distributor.............. An Internal Distributor of an N/A.................. Codifies definition
Exchange Market Data product of `` Internal
is a Distributor that receives Distributor under
the Exchange Market Data new ``Definitions''
product and then distributes section of the C2
that data to one or more Users Options Fees
within the Distributor's own Schedule.
entity. Definition is
identical to the
definition used by
BZX Options and
EDGX Options.
External Distributor.............. An External Distributor of an N/A.................. Codifies definition
Exchange Market Data product of ``External
is a Distributor that receives Distributor'' under
the Exchange Market Data new ``Definitions''
product and then distributes section of the C2
that data to a third party or Options Fees
one or more Users outside the Schedule.
Distributor's own entity. Definition is
identical to the
definition used by
BZX Options and
EDGX Options.
[[Page 16678]]
User.............................. A User of an Exchange Market N/A.................. Codifies definition
Data product is a natural of ``User'' under
person, a proprietorship, new ``Definitions''
corporation, partnership, or section of the C2
entity, or device (computer or Options Fees
other automated service), that Schedule.
is entitled to receive Definition is
Exchange data. identical to one
used by BZX Options
and EDGX Options.
Non-Professional User............. A ``Non-Professional User'' is Sections I and III... Relocates definition
a natural person or qualifying under new
trust that uses Data only for ``Definitions''
personal purposes and not for section of the C2
any commercial purpose and, Options Fees
for a natural person who works Schedule and
in the United States, is not: updates the rule
(i) registered or qualified in reference to
any capacity with the ``Section 201(11)''
Securities and Exchange of the Investment
Commission, the Commodities Advisors Act of
Futures Trading Commission, 1940 to ``Section
any state securities agency, 202(a)(11)''.
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 201(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.
Professional User................. A Professional User of an Sections I and III... Relocates definition
Exchange Market Data product under new
is any natural person ``Definitions''
recipient of an Exchange section of the C2
Market Data product who is not Options Fees
a Non-Professional User. Schedule
Display Only Service.............. A ``Display Only Service'' Section I............ Relocates definition
allows a natural person end- under new
user to view and manipulate ``Definitions''
data using the Distributor's section of the C2
computerized service, but not Options Fees
to save, copy, export or Schedule
transfer the data or any
results of the manipulation to
any other computer hardware,
software or media, except for
printing it to paper or other
non-magnetic media.
Device............................ A ``Device'' means any N/A.................. Adds new definition
computer, workstation or other under new
item of equipment, fixed or ``Definitions''
portable, that receives, section of the C2
accesses and/or displays data Options Fees
in visual, audible or other Schedule.
form. Definition is
identical to one
used by Cboe
Options.
----------------------------------------------------------------------------------------------------------------
The Exchange also proposes to rename the following market data
products and fees and use the proposed names herein, in order to align
with the naming convention used by the Exchange's affiliates, BZX
Options, EDGX Options and Cboe Options, as applicable for similar data
products and fees.\6\
---------------------------------------------------------------------------
\6\ See BZX Options Exchange Fees Schedule, Market Data Fees and
EDGX Options Exchange Fees Schedule, Market Data Fees. See also Cboe
Data Services, LLC Fees Schedule, Section V. System Fees.
------------------------------------------------------------------------
Current name Proposed name
------------------------------------------------------------------------
BBO Data Feed............................. C2 Options Top.
Book Depth Data Feed...................... C2 Options Depth.
Complex Order Book (COB) Data Feed........ C2 Complex Order Book (COB).
Port Fee.................................. Data Access Fee.
------------------------------------------------------------------------
The Exchange believes the proposed changes to eliminate, modify and
adopt the terms discussed above will add additionally transparency to
the Fees Schedule and will protect investors, as the changes provide
more clarity within the rule and more harmonized rule language across
the Fees Schedules of the Cboe affiliated options exchanges. Further,
the Exchange notes that the changes are non-substantive changes or
provide additional detail in the rule regarding current market
participants that purchase or use the Exchange's market data products.
None of these differences impact the manner in which any of the terms
and corresponding fees apply, including how the Exchange would have
otherwise characterized a Distributor or User (Professional or Non-
Professional).
C2 Options Top Fee Changes
The Exchange first proposes to modify its current User Fees. The
Exchange currently charges a ``User Fee'' of $50 per month per Device
or user ID for use of the data in the C2 Options Top Data Feed by
``Display Only Service'' users. The current User fee is payable only
for ``external'' Display Only Service users who receive C2 Options
Top.\7\ Internal Distributors may currently distribute C2 Options Top
Data to an unlimited number of internal users and Devices within the
Distributor at no further cost. The Exchange proposes to eliminate the
current C2 Options Top User fee and in its place adopt Professional and
Non-Professional User fees for C2 Options Top that would apply to both
Internal and External Distributors for all Professional and Non-
Professional Users. Particularly, the Exchange proposes to charge C2
Options Top Distributors a monthly fee of $5.00 per Professional Users
User and a monthly fee of $0.10 per Non-Professional User.\8\
---------------------------------------------------------------------------
\7\ Pursuant to the Cboe Global Markets North American Data
Policies, Distributors must report the number of authorized external
devices that receive C2 Options Top data during a calendar month
within 15 days after such month in the manner and format specified
by the Exchange from time to time to determine applicable fees.
\8\ Distributors that receive C2 Options Top Data will be
required to count every Professional User and Non-Professional User
to which they provide the data feed.
---------------------------------------------------------------------------
The Exchange lastly proposes to establish a $10,000 per month
Enterprise Fee that will permit a Distributor to purchase a monthly
(and optional) Enterprise license to receive the C2 Options Top Data
for distribution
[[Page 16679]]
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.
Like User fees, the Enterprise Fee would be assessed in addition to the
Distribution Fees. The Enterprise Fee may provide an opportunity to
reduce fees. For example, if a Distributor has 10,000 Professional
Users who each receive C2 Options Top at $5.00 per month (as proposed),
then that Distributor will pay $50,000 per month in Professional Users
fees. If the Distributor instead were to purchase the proposed
Enterprise license, it would alternatively pay a flat fee of $10,000
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 C2 Options Top if it wishes for such Users to
be covered by an 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, the
recipient firm must provide the Exchange with a count of the total
number of Professional and Non-Professional Users users of C2 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 C2 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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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.\11\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \12\ 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,\13\ which requires that Exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among its Trading Permit Holders and other persons using
its facilities.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ 15 U.S.C. 78f(b)(4).
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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.\14\
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.\15\ 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 C2
Options Top Feed. Further, the quote and last sale data contained in
the C2 Options Data Feed is identical to the data sent to OPRA for
redistribution to the public.\16\ Accordingly, Exchange top-of-book
data is widely available today from a number of different sources.
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\14\ 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/.
\15\ 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.
\16\ The Exchange notes that it makes available the BBO data and
last sale data that is included in the C2 Options Top Data Feed no
earlier than the time at which the Exchange sends that data to OPRA.
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Moreover, the C2 Options Top Data Feed 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. Additionally, only those Distributors
that deem a product 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 C2 Options Top. 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 \17\ 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.\18\ As such, all proprietary data feeds are optional.
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\17\ ``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.
\18\ Id.
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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
[[Page 16680]]
of market forces in determining prices and SRO revenues and, also,
recognized that current regulation of the market system ``has been
remarkably successful in promoting market competition in its broader
forms that are most important to investors and listed companies.'' \19\
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 C2 Options Top
Data.
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\19\ 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 the proposed changes to adopt new
Professional and Non-Professional User fees are reasonable as the User
fees continue to be to be in line with User fees assessed by other
exchanges for similar data.\20\ Moreover, External users will now be
subject to lower fees as the Exchange proposes to significantly reduce
the monthly User fees from $50 per External User to $5.00 per
Professional User or $0.10 per Non-Professional User. Although External
Distributors are currently only subject to fees for external users, the
fee for external users (which are likely to be Non-Professional Users)
are significantly lower (i.e., $0.10 per Non-Professional User) than
the current $50 fee for external users. Moreover, the proposed fee
structure of differentiated Professional and Non-Professional fees that
are paid by both Internal and External Distributors has long been used
by other exchanges, including the Exchange, for their proprietary data
products, and by the OPRA plan in order to reduce the price of data to
retail investors and make it more broadly available.\21\ The Exchange
also believes offering C2 Options Top to Non-Professional 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 to those Users who are more directly engaged in the
markets. The Exchange believes that the proposed fees are equitable and
not unfairly discriminatory because they will be charged uniformly to
Distributors for their Professional and Non-professional Users.
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\20\ 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 Professional User fee for C2 Options Top and
C2 Options COB is in line, and in fact lower than the above
Professional User fee at $30 per Professional User (i.e., $5 per
Professional Users of C2 Options Top, as proposed, and $25 per
Professional User of C2 Options COB). The Exchange's combined Non-
Professional User Fee at $0.10 per Non-Professional User (i.e.,
$0.30 per Non-Professional User of C2 Options Top, as proposed, and
$0 per Non-Professional User of C2 Options COB) is lower than PHLX's
and NYSE American's aforementioned Non-Professional User fees. C2
Options Depth does not charge users based on Professional or Non-
Professional classification and market participants have always been
subject to separate User fees across C2 Options market data
products.
\21\ See, e.g., Securities Exchange Act Release No. 59544 (March
9, 2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-2008-131)
(establishing the $15 Non-Professional User Fee (Per User) for NYSE
OpenBook); See, e.g., Securities Exchange Act Release No. 67589
(August 2, 2012), 77 FR 47459 (August 8, 2012) (revising OPRA's
definition of the term ``Nonprofessional''); and See Securities
Exchange Act Release No. 70683 (October 15, 2013), 78 FR 62798
(October 22, 2013) (SR-CBOE-2013-087) (establishing Professional and
Non-Professional User fees for Cboe Options COB Data Feed).
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The proposed Enterprise Fee for C2 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 Distributor has a smaller number of Professional Users of
C2 Options Top Data, then it may continue using the per User structure
and benefit from the proposed per C2 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 C2 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 changes relating to the
defined terms and terminology will provide additional specificity and
clarity, while also harmonizing the various definition with that of its
affiliates. Doing so would ensure consistent terms amongst the Exchange
and its affiliates, thereby reducing the potential for confusion
amongst market data subscribers of the Exchange's and its affiliates'
market data products. Additionally, the proposed new terms are
identical to the terms already used by the Exchange's affiliates BZX
Options and EDGX Options. Similarly, the Exchange believes the proposal
to reformate the fees will provide for a more streamlined fees
schedule, thereby reducing potential confusion. Accordingly, the
Exchange believes the proposed changes remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, protect 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.
[[Page 16681]]
As discussed, the proposed fees would apply to all similarly situated
recipient firms of C2 Options Top on an equal and non-discriminatory
basis. The Exchange believes the differentiated fees for Professional
and Non-Professional Users of C2 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 C2 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 C2 Option Top feed is
identical to the data sent to OPRA for redistribution to the public.
Accordingly, Exchange top-of-book data is 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 has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.
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 \22\ and paragraph (f) of Rule 19b-4 \23\
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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\22\ 15 U.S.C. 78s(b)(3)(A).
\23\ 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-C2-2023-007 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-C2-2023-007. 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-C2-2023-007 and should be submitted on
or before April 10, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-05541 Filed 3-17-23; 8:45 am]
BILLING CODE 8011-01-P
