Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Its Fees Schedule, 18591-18598 [2023-06428]

Download as PDF Federal Register / Vol. 88, No. 60 / Wednesday, March 29, 2023 / Notices ACTION: Notice. SECURITIES AND EXCHANGE COMMISSION The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. SUMMARY: Date of required notice: March 29, 2023. DATES: FOR FURTHER INFORMATION CONTACT: Sean Robinson, 202–268–8405. The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on March 21, 2023, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Contract 776 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2023–123, CP2023–126. SUPPLEMENTARY INFORMATION: Sarah Sullivan, Attorney, Ethics & Legal Compliance. [FR Doc. 2023–06523 Filed 3–28–23; 8:45 am] BILLING CODE 7710–12–P POSTAL SERVICE Product Change—Priority Mail Negotiated Service Agreement AGENCY: ACTION: Postal ServiceTM. Notice. The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. SUMMARY: Date of required notice: March 29, 2023. DATES: FOR FURTHER INFORMATION CONTACT: Sean Robinson, 202–268–8405. The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on March 24, 2023, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Contract 777 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2023–124, CP2023–127. ddrumheller on DSK120RN23PROD with NOTICES1 SUPPLEMENTARY INFORMATION: Sarah Sullivan, Attorney, Ethics & Legal Compliance. [FR Doc. 2023–06528 Filed 3–28–23; 8:45 am] BILLING CODE 7710–12–P VerDate Sep<11>2014 19:20 Mar 28, 2023 Jkt 259001 [Investment Company Act Release No. 34870; File No. 812–15303] Bain Capital Private Credit and BCSF Advisors, LP March 23, 2023. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. AGENCY: Notice of an application under section 6(c) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from sections 18(a)(2), 18(c), 18(i) and section 61(a) of the Act. SUMMARY OF APPLICATION: Applicants request an order to permit certain registered closed-end investment companies that intend to elect to be regulated as business development companies to issue multiple classes of shares of beneficial interest with varying sales loads and asset-based distribution and/or service fees. APPLICANTS: Bain Capital Private Credit and BCSF Advisors, LP. FILING DATES: The application was filed on January 26, 2022, and amended on March 28, 2022 and February 14, 2023. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing on any application by emailing the SEC’s Secretary at Secretarys-Office@sec.gov and serving the relevant applicant with a copy of the request by email, if an email address is listed for the relevant applicant below, or personally or by mail, if a physical address is listed for the relevant applicant below. Hearing requests should be received by the Commission by 5:30 p.m. on April 17, 2023, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by emailing the Commission’s Secretary. ADDRESSES: The Commission: Secretarys-Office@sec.gov. The Applicants: Michael Treisman, Esq., Bain Capital Credit, LP, 200 Clarendon Street, 37th Floor, Boston, MA 02116; Richard Horowitz, Esq., Dechert LLP, richard.horowitz@dechert.com. FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, or Terri PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 18591 G. Jordan, Branch Chief, at (202) 551– 6825 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: For Applicants’ representations, legal analysis, and condition, please refer to Applicants’ second amended and restated application, dated February 14, 2023, which may be obtained via the Commission’s website by searching for the file number at the top of the document, or for an Applicant using the Company name search field, on the SEC’s EDGAR system. The SEC’s EDGAR system may be searched at https://www.sec.gov/edgar/searchedgar/ legacy/companysearch.html. You may also call the SEC’s Public Reference Room at (202) 551–8090. For the Commission, by the Division of Investment Management, under delegated authority. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2023–06433 Filed 3–28–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97191; File No. SR– CboeEDGX–2023–022] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Its Fees Schedule March 23, 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 16, 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) 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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\29MRN1.SGM 29MRN1 18592 Federal Register / Vol. 88, No. 60 / Wednesday, March 29, 2023 / Notices 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 the Market Data section of its Fees Schedule.3 Particularly, the Exchange proposes to (i) adopt a New External Credit applicable to EDGX Options Top, (ii) adopt a credit towards the monthly Distribution fees for EDGX Options Top, (iii) modify the EDGX Options Top Enterprise Fee; and (iv) establish fees for Cboe One Options Feed. ddrumheller on DSK120RN23PROD with NOTICES1 EDGX Top Data By way of background, the Exchange offers the EDGX Options Top Data feed, which is an uncompressed data feed that offers top-of-book quotations and last sale information based on options orders entered into the Exchange’s System. The EDGX Options Top Data feed benefits investors by facilitating their prompt access to real-time top-ofbook information contained in EDGX Options Top Data. The Exchange’s affiliated options exchanges (i.e., Cboe Exchange, Inc. (‘‘Cboe Options’’), Cboe BZX Exchange, Inc. (‘‘BZX Options’’), and Cboe C2 Exchange, Inc. (‘‘C2 Options’’) (collectively, ‘‘Affiliates’’) also offer similar top-of-book data feeds.4 Particularly, each of the Exchange’s Affiliates offer top-of-book 3 The Exchange initially filed the proposed fee changes on March 1, 2023 (SR–CboeEDGX–2023– 017). On March 3, 2023, the Exchange withdrew that filing and submitted SR–CboeEDGX–2023–018. On March 10, 2023, the Exchange withdrew that filing and submitted SR–CboeEdgx–2023–021. On March 16, 2023 the Exchange withdrew that filing and submitted this proposal. 4 See Cboe Options Fees Schedule, C2 Options Fees Schedule, and BZX Rule 21.15. VerDate Sep<11>2014 19:20 Mar 28, 2023 Jkt 259001 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. The Exchange proposes to make the following fee changes relating to EDGX Options Top. New External Distributor Credit The Exchange first proposes to adopt a New External Distributor Credit which will provide that new External Distributors of the EDGX Options Top feed will not be charged an External Distributor Fee for their first three (3) months in order to incentivize External Distributors to enlist new users to receive EDGX Options Top feed. The Exchange notes that other exchanges, including the Exchange’s affiliated equities exchanges, offer similar credits for similar market data products. For example, Cboe’s equities exchanges currently offer a three (3) month New External Distributor Credit applicable to External Distributors of their top-ofbook data feeds.5 Distributor Fee Credit The Exchange also proposes to provide that each External Distributor will receive a credit against its monthly Distributor Fee for the EDGX Options Top equal to the amount of its monthly Usage Fees up to a maximum of the Distributor Fee for the EDGX Options Top feed. For example, an External Distributor will be subject to a $500 monthly Distributor Fee where they elect to receive the EDGX Options Top. If that External Distributor reports User quantities totaling $500 or more of monthly usage of the EDGX Options Top, it will pay no net Distributor Fee, whereas if that same External Distributor were to report User quantities totaling $400 of monthly usage, it will pay a net of $100 for the Distributor Fee. External Distributors will remain subject to the per User fees applicable to EDGX Options Top. In every case the Exchange will receive at least $500 in connection with the distribution of the EDGX Options Top (through a combination of the External Distribution Fee and per User Fees). The Exchange notes that its affiliated equities exchanges offer a similar credit for a similar market data product.6 Enterprise Fee Tiers The Exchange currently offers Distributors the ability to purchase a monthly (and optional) Enterprise 5 See e.g., EDGX Equities Exchange Fees Schedule, Market Data Fees. 6 See e.g., EDGX Equities Exchange Fees Schedule, Id. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 license to receive the EDGX Options Top Feed 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 permits a Distributor to pay a flat fee for an unlimited number of Professional and Non-Professional Users and is in addition to the Distribution fees. The Exchange currently assesses an Enterprise fee of $20,000 per month. The Exchange proposes to modify the current Enterprise Fee and adopt a tiered structure based on the number of Users a Distributor has. The Exchange proposes to adopt the following monthly Enterprise Fees: $20,000 for up to 1,500,000 Users (Tier 1), $40,000 for 1,500,001 to 2,500,000 Users (Tier 2) and $60,000 for 2,500,001 or greater Users (Tier 3). The proposed fees are non-progressive (e.g., if a Distributor has 2,000,000 Users, it will be subject to $40,000 for Tier 2). The Enterprise Fee may provide an opportunity to reduce fees. For example, if a Distributor has 1 million Non-Professional Users who each receive Cboe One Options Feed at $0.10 per month (as proposed), then that Distributor will pay $100,000 per month in Professional Users fees. If the Distributor instead were to purchase the proposed Enterprise license (tier 1), it would alternatively pay a flat fee of $20,000 for up to 1.5 million Professional and Non-Professional Users. A Distributor that pays the Tier 1 or Tier 2 Enterprise Fee will have to report its number of such Users on a monthly basis. A Distributor that pays the Tier 3 Enterprise Fee will only have to report the number of its Users every six months.7 The Exchange notes that if the reported number of Users exceed the Enterprise Tier a Distributor has purchased, the higher Tier will apply (e.g., if a Distributor purchases Tier 1, but reports 1,600,000 Users for a month, the Distributor will be assessed the Tier 2 fee). The Exchange also proposes to allow Distributors to purchase the Enterprise Fee on a monthly or annual basis. Annual licenses will receive a 5% discount off the applicable Enterprise Tier fee. 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 a license need not do so. 7 See Cboe Global Markets north American Data Policies. E:\FR\FM\29MRN1.SGM 29MRN1 Federal Register / Vol. 88, No. 60 / Wednesday, March 29, 2023 / Notices Cboe One Options Feed By way of background, the Exchange recently adopted a new market data product called Cboe One Options Feed, which is launching March 1, 2023.8 Cboe One Options Feed will provide top-of-book quotation and last sale information based on the quotation and trading activity on the Exchange and each of its Affiliates, which the Exchange believes offers a comprehensive and highly representative view of US options pricing to market participants. More specifically, Cboe One Options Feed will contain the aggregate best bid and offer (‘‘BBO’’) of all displayed orders for options traded on the Exchange and its Affiliates, as well as individual last sale information and volume, which includes the price, time of execution and individual Cboe options exchange on which the trade was executed. The Cboe One Options Feed will also consist of Symbol Summary,9 Market Status,10 Trading Status,11 and Trade Break 12 messages for the Exchange and each of its Affiliates. The Exchange will use the following data feeds to create the Cboe One Options Feed, each of which is available to other vendors and/or distributors: Cboe Options Top Data, C2 Options Top Data, EDGX Options Top and BZX Options Top. A vendor and/or distributor that wishes to create a product like the Cboe One Options Feed could instead subscribe to each of the aforementioned data feeds. Any entity that receives, or elects to receive, the individual data feeds or the feeds that may be used to create a product like the 8 See SR–CboeEDGX–2023–013. Symbol Summary message will include the total executed volume across all Cboe Options Exchanges. 10 The Market Status message is disseminated to reflect a change in the status of one of the Cboe Options Exchanges. For example, the Market Status message will indicate whether one of the Cboe Options Exchanges is experiencing a systems issue or disruption and quotation or trade information from that market is not currently being disseminated via the Cboe One Options Feed as part of the aggregated BBO. The Market Status message will also indicate when a Cboe Options Exchange is no longer experiencing a systems issue or disruption to properly reflect the status of the aggregated BBO. 11 The Trade Break message will indicate when an execution on a Cboe Options Exchange is broken in accordance with the individual Cboe Options Exchange’s rules (e.g., Cboe Options Rule 6.5, C2 Option Rule 6.5, BZX Options Rule 20.6, EDGX Options Rule 20.6). 12 The Trading Status message will indicate the current trading status of an option contract on each individual Cboe Options Exchange. A Trading Status message will also be sent whenever a security’s trading status changes. For example, a Trading Status message will be sent when a symbol is open for trading or when a symbol is subject to a trading halt or when it resumes trading. ddrumheller on DSK120RN23PROD with NOTICES1 9 The VerDate Sep<11>2014 19:20 Mar 28, 2023 Jkt 259001 Cboe One Options Feed would be able to, if it so chooses, to create a data feed with the same information included in the Cboe One Options Feed and sell and distribute it to its clients so that it could be received by those clients as quickly as the Cboe One Options Feed would be received by those same clients. The Exchange proposes to amend its fee schedule to incorporate fees related to the Cboe One Options Feed. The Exchange has taken into consideration its affiliated relationship with its Affiliates in its design of the Cboe One Options Feed to assure that vendors 13 would be able to offer a similar product on the same terms as the Exchange from a cost perspective. Although Cboe Options Exchanges are the exclusive distributors of the individual data feeds from which certain data elements would be taken to create the Cboe One Options Feed, the Exchange would not be the exclusive distributor of the aggregated and consolidated information that compose the proposed Cboe One Options Feed. Distributors and/or vendors would be able, if they chose, to create a data feed with the same information as the Cboe One Options Feed and distribute it to their clients on a level-playing field with respect to latency and cost as compared to the Exchange’s proposed Cboe One Options Feed. The pricing the Exchange proposes to charge for the Cboe One Options Feed, as described more fully below, is not lower than the cost to a distributor or vendor to obtain the underlying data feeds. In fact, the Distribution and User (Professional and Non-Professional) fees, as well as the optional Enterprise Fees, that the Exchange proposes to adopt for the Cboe One Options Feed are equal to the respective combined fees for subscribing to each individual data feed. The Exchange also proposes to adopt a ‘‘Data Consolidation Fee,’’ which would reflect the value of the aggregation and consolidation function the Exchange performs in creating the Cboe One 13 For purposes of this filing, a ‘‘vendor’’, which is a type of distributor, will refer to any entity that receives an exchange market data product directly from the exchange or indirectly from another entity (for example, from an extranet) and then resell that data to a third-party customer (e.g., a data provider that resells exchange market data to a retail brokerage firm). The term ‘‘distributor’’ herein, will refer to any entity that receives an exchange market data product, directly from the exchange or indirectly from another entity (e.g., from a data vendor) and then distributes to individual internal or external end-users (e.g., a retail brokerage firm who distributes exchange data to its individual employees and/or customers). An example of a vendor’s ‘‘third-party customer’’ or ‘‘customer’’ is an institutional broker dealer or a retail broker dealer, who then may in turn distribute the data to their customers who are individual internal or external end-users. PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 18593 Options Feed. Therefore, vendors would be enabled to create a competing product based on the individual data feeds and charge their clients a fee that they believe reflects the value of the aggregation and consolidation function that is competitive with Cboe One Options Feed pricing. For these reasons, the Exchange believes that vendors could readily offer a product similar to the Cboe One Options Feed on a competitive basis at a similar cost. The proposed Cboe One Options Feed fees include the following, each of which are described in further detail below: (i) Distributor Fees; (ii) User Fees for both Professional and NonProfessional Users; (iii) Enterprise Fees; and (iv) a Data Consolidation Fee. The Exchange also proposes to adopt a New External Distributor credit and a credit against the monthly External Distribution Fee equal to the amount of monthly User Fees up to a maximum of the External Distributor Fee. To ensure consistency across the Cboe Options Exchanges, Cboe Options, C2 Options, and BZX Options will be filing companion proposals to reflect this proposal in their respective fee schedules. Distributor Fees As proposed, each Internal Distributor that receives the Cboe One Options Feed shall pay a fee of $15,000 per month. The proposed Internal Distribution Fee equals the combined monthly Internal Distribution fees for the underlying individual data feeds of the Cboe Options Exchanges (i.e., the monthly Internal Distribution fees are $3,000 for BZX Options Top, $500 for EDGX Options Top, $2,500 for C2 Options Top and $9,000 for Cboe Options Top). The Exchange also proposes to assess External Distributors a monthly fee of $10,000. The proposed External Distribution fee equals the combined monthly External Distribution fees for the underlying individual data feeds of the Cboe Options Exchanges (i.e., the monthly External Distribution fees are $5,000 per month for the Cboe Options Top, $2,500 per month for C2 Options Top, $2,000 per month for BZX Options Top, and $500 for EDGX Options Top). As noted above, the Exchange is proposing to charge External Distributors an External Distribution Fee that equals the combined External Distribution fees of each individual Top feed to ensure that vendors could compete with the Exchange by creating the same product as the Cboe One Options Feed to sell to their clients. E:\FR\FM\29MRN1.SGM 29MRN1 18594 Federal Register / Vol. 88, No. 60 / Wednesday, March 29, 2023 / Notices New External Distributor Credit The Exchange proposes to adopt a New External Distributor Credit which would provide that new External Distributors of the Cboe One Options Feed will not be charged an External Distributor Fee for their first three (3) months in order to incentive them to enlist new Users to receive the Cboe One Options Feed. The Exchange notes that other exchanges, including the Exchange’s affiliated equities exchanges offer similar credits for similar market data products. For example, Cboe’s equities exchanges currently offer a three (3) month New External Distributor Credit applicable to Cboe One Summary Feed.14 To alleviate any competitive issues that may arise with a vendor seeking to offer a product similar to the Cboe One Options Feed based on the underlying data feeds, the Exchange is proposing, as discussed above, to also adopt a three month New External Distributor Credit for the underlying top-of-book data feeds for the Cboe Options Exchanges. The respective proposals to adopt a threemonth credit ensures the proposed New External Distributor Credit for Cboe One Options will not cause the combined cost of subscribing to Cboe Options, C2 Options, BZX Options and EDGX Options Top feeds for new External Distributors to be greater than those that would be charged to subscribe to the Cboe One Options feed. ddrumheller on DSK120RN23PROD with NOTICES1 User Fees In addition to Internal and External Distributor Fees, the Exchange proposes to assess Professional 15 User and NonProfessional 16 User Fees. The proposed 14 See e.g., EDGX Equities Exchange Fees Schedule, Market Data Fees. 15 A Professional User of an Exchange Market Data product is any natural person recipient of an Exchange Market Data product who is not a NonProfessional User. 16 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. VerDate Sep<11>2014 19:20 Mar 28, 2023 Jkt 259001 monthly Professional User fee for the Cboe Options Exchanges is $30.50 per Professional User, which equals the combined monthly Professional User fees of the underlying individual Cboe Options Exchanges Top feeds (i.e., $15.50 per Professional User for the Cboe Options Top, $5 per Professional User for C2 Options Top, $5 per Professional User for BZX Options Top, and $5 per Professional User for EDGX Options Top). The Exchange also proposes to adopt a monthly NonProfessional User fee of $0.60 per NonProfessional User, which similarly represents the combined total NonProfessional User fee for the individual data feeds of the Cboe Options (i.e., $0.30 per Non-Professional User for Cboe Options Top, $0.10 per NonProfessional User for C2 Options Top, $0.10 per Non-Professional User for BZX Options Top, and $0.10 per NonProfessional User for EDGX Options Top). Similar to the individual underlying feeds, Distributors that receive Cboe One Options Feed will be required to count Professional and NonProfessional Users to which they provide the data feed. The Exchange also proposes to provide that each External Distributor will receive a credit against its monthly Distributor Fee for the Cboe One Feed equal to the amount of its monthly User Fees up to a maximum of the Distributor Fee for the Cboe One Options Feed. For example, an External Distributor will be subject to a $10,000 monthly Distributor Fee where they elect to receive the Cboe One Options Feed. If that External Distributor reports User quantities totaling $10,000 or more of monthly User fees of the Cboe Options One Feed, it will pay no net Distributor Fee, whereas if that same External Distributor were to report User quantities totaling $9,000 of monthly usage, it will pay a net of $1,000 for the Distributor Fee. External Distributors will remain subject to the per User fees discussed above. In every case the Exchange will receive at least $10,000 in connection with the distribution of the Cboe One Options Feed (through a combination of the External Distribution Fee and per User Fees). The Exchange notes that its affiliated equities exchanges offer a similar credit for a similar market data product.17 Enterprise Fees The Exchange also proposes to establish Enterprise Fees that will permit a Distributor to purchase a monthly (and optional) Enterprise 17 See e.g., EDGX Equities Exchange Fees Schedule, Market Data Fees. PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 license to receive the Cboe One Options Feed for distribution to a specified number of Professional and NonProfessional Users. The Enterprise Fee will be an alternative to Professional and Non-Professional User fees and will permit a Distributor to pay a flat fee to receive the data for a specified 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 Exchange proposes to adopt the following monthly Enterprise Fees: $350,000 for up to 1,500,000 Users (Tier 1), $550,000 for 1,500,001 to 2,500,000 Users (Tier 2) and $750,000 for 2,500,001 or greater Users (Tier 3). The proposed fees are non-progressive (e.g., if a Distributor has 2,000,000 Users, it will be subject to $550,000 for Tier 2). The Enterprise Fee may provide an opportunity to reduce fees. For example, if a Distributor has 1 million NonProfessional Users who each receive Cboe One Options Feed at $0.60 per month (as proposed), then that Distributor will pay $600,000 per month in Professional Users fees. If the Distributor instead were to purchase the proposed Enterprise license (tier 1), it would alternatively pay a flat fee of $350,000 for up to 1.5 million Professional and Non-Professional Users. A Distributor must pay a separate Enterprise Fee for each entity that controls the display of Cboe One Options Feed if it wishes for such Users to be covered by an Enterprise Fee rather than by per User fees.18 A Distributor that pays the Tier 1 or Tier 2 Enterprise Fee will have to report its number of such Users on a monthly basis. A Distributor that pays the Tier 3 Enterprise Fee will only have to report the number of its Users every six months.19 The Exchange notes that if the reported number of Users exceed the Enterprise Tier a Distributor has purchased, the higher Tier will apply (e.g., if a Distributor purchases Tier 1, but reports 1,600,000 Users for a month, the Distributor will be assessed the Tier 2 fee). The Exchange also proposes to allow Distributors to purchase the Enterprise Fee on a monthly or annual basis. Annual licenses will receive a 5% discount off the applicable Enterprise Fee tier. The Exchange notes that the 18 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. 19 See Cboe Global Markets north American Data Policies. E:\FR\FM\29MRN1.SGM 29MRN1 Federal Register / Vol. 88, No. 60 / Wednesday, March 29, 2023 / Notices 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 a license need not do so. Data Consolidation Fee The Exchange also proposes to charge External Distributors of the Cboe One Options Feed a separate Data Consolidation Fee, which reflects the value of the aggregation and consolidation function the Exchange performs in creating the Cboe One Options Feed. As stated above, the Exchange creates the Cboe One Options Feed from data derived from the Cboe Options Top, C2 Options Top, BZX Options Top, and EDGX Options Top Feeds. External Distributors could similarly create a competing product to the Cboe One Options Feed based on these individual data feeds, or, alternatively, the applicable Top and Last Sale products offered by the Exchanges, and could charge its clients a fee that it believes reflects the value of the aggregation and consolidation function. Accordingly, the Exchange believes that vendors could readily offer a product similar to the Cboe One Options Feed on a competitive basis at a similar cost. ddrumheller on DSK120RN23PROD with NOTICES1 3. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,20 in general, and furthers the objectives of Section 6(b)(4),21 in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its members and other recipients of Exchange data. In addition, the Exchange believes that the proposed rule change is consistent with Section 11(A) of the Act as it supports (i) fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets, and (ii) the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities.22 Finally, the proposed rule change is also consistent with Rule 603 of Regulation NMS,23 which provides that any national securities exchange that distributes information with respect to quotations for or transactions in an 20 15 U.S.C. 78f. U.S.C. 78f(b)(4) 22 15 U.S.C. 78k–1. 23 See 17 CFR 242.603. 21 15 VerDate Sep<11>2014 19:20 Mar 28, 2023 Jkt 259001 NMS stock do so on terms that are not unreasonably discriminatory. 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.24 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.25 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 Data Feed. Further, the quote and last sale data contained in the EDGX Data Feed is identical to the data sent to OPRA for redistribution to the public.26 Accordingly, Exchange top-of-book data is widely available today from a number of different sources. Moreover, the EDGX Options Top Data Feed and Cboe One Options Feeds are 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 these data products available. Accordingly, Distributors (including vendors) and Users can discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. 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 24 See Cboe Global Markets U.S. Options Market Month-to-Date Volume Summary (February 23, 2024), available at https://markets.cboe.com/us/ options/market_statistics/. 25 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. 26 The Exchange makes available the top-of-book data 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. PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 18595 access to consolidated Options Information 27 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.28 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 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.’’ 29 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 and Cboe One Options Feed. The Exchange has also taken into consideration its affiliated relationship with its Affiliates in its design of the Cboe One Options Feed to ensure that vendors would be able to offer a similar product on the same terms as the Exchange from a cost perspective. While the Cboe Options Exchanges are the exclusive distributors of the individual data feeds from which certain data elements may be taken to create the Cboe One Options Feed, they are not the exclusive distributors of the aggregated 27 ‘‘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. 28 Id. 29 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (‘‘Regulation NMS Adopting Release’’). E:\FR\FM\29MRN1.SGM 29MRN1 ddrumheller on DSK120RN23PROD with NOTICES1 18596 Federal Register / Vol. 88, No. 60 / Wednesday, March 29, 2023 / Notices and consolidated information that comprises the Cboe One Options Feed. Any entity that receives, or elects to receive, the individual data feeds would be able to, if it so chooses, to create a data feed with the same information included in the Cboe One Options Feed and sell and distribute it to its clients so that it could be received by those clients as quickly as the Cboe One Options Feed would be received by those same clients with no greater cost than the Exchange. In addition, vendors and Distributors that do not wish to purchase the Cboe One Options Feed may separately purchase the individual underlying products, and if they so choose, perform a similar aggregation and consolidation function that the Exchange performs in creating the Cboe One Options Feed. To enable such competition, the Exchange is offering the Cboe One Options Feed on terms that a vendor of those underlying feeds could offer a competing product if it so chooses. In addition, the fees that are the subject of this rule filing are constrained by competition. Particularly, the Exchange competes with other exchanges (and their affiliates) that may choose to offer similar market data products. If another exchange (or its affiliate) were to charge less to consolidate and distribute a similar product than the Exchange charges to consolidate and distribute the Cboe One Options Feed, prospective Users likely could choose to not subscribe to, or would cease subscribing to, the Cboe One Options Feed. In addition, the Exchange would compete with unaffiliated market data vendors who would be in a position to consolidate and distribute the same data that comprises the Cboe One Options Feed into the vendor’s own comparable market data product. If the third-party vendor is able to provide the exact same data for a lower cost, prospective Users would avail themselves of that lower cost and elect not to take the Cboe One Options Feed. For these reasons, the Exchange believes that the proposed fees are reasonable, equitable, and not unfairly discriminatory. User Fees. The Exchange believes that the proposed Professional and NonProfessional User fees for the Cboe One Options Feed are reasonable because they represent the combined monthly fees for Professional and NonProfessional User fees, respectively for the underlying individual data feeds, which have previously been filed with the Commission. The Exchange believes that the proposed fees are equitable and not unfairly discriminatory because they VerDate Sep<11>2014 19:20 Mar 28, 2023 Jkt 259001 will be charged uniformly to Distributors. 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.30 The Exchange also believes offering Cboe One Options Feed 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. Enterprise Fee. The Exchange believes the proposed Enterprise Fees for the Cboe One Options Feed and proposed changes to the Enterprise Fee for the EDGX Options Top feed are reasonable as the fees proposed could result in a fee reduction for Distributors of the respective products with a large number of Professional and Non-Professional Users. If a Distributor has a smaller number of Professional Users of the Cboe One Options Feed, then it may continue using the per User structure and benefit from the per User Fee reductions. By reducing prices for Distributors with a large number of Professional and Non-Professional Users, the Exchange believes that more firms may choose to receive and to distribute the Cboe One Options Feed, thereby expanding the distribution of this market data for the benefit of investors. Also as described above, the Enterprise Fees are entirely optional. A firm that does not have a sufficient number of Users to benefit from purchase of a license need not do so. Distributor Fees. The Exchange believes that the proposed Distributor fees for the Cboe One Options Feed are 30 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 00085 Fmt 4703 Sfmt 4703 reasonable because they represent the combined monthly fees for Internal and External Distributor fees, respectively for the underlying individual data feeds, which have previously been filed with the Commission. The Exchange believes that the proposed fees are equitable and not unfairly discriminatory because they will be charged uniformly to Internal and External Distributors. The Exchange believes that it is also fair and equitable, and not unfairly discriminatory to charge different fees for internal and external distribution of the Cboe One Options Feed. Although the proposed distribution fee charged to External Distributors will be lower than the existing distribution fee charged to Internal Distributors, External Distributors are subject to NonProfessional user fees to which Internal Distributors are not subject, in addition to Professional User fees (or alternatively the proposed Enterprise Fee). Furthermore, the proposal is designed to incentivize External Distributors to subscribe to Cboe One Options Feed. The proposed Distributor Fees for the Cboe One Options Feed are also designed to ensure that vendors could compete with the Exchange by creating a similar product as the Cboe One Options Feed. The Exchange believes that the proposed Distributor Fees are equitable and reasonable as they equal the combined fee of subscribing to each individual data feed of the Cboe Options Exchanges, which have been previously published by the Commission. In addition, the Exchange believes it is reasonable to not charge External Distributors of EDGX Options Top and Cboe One Options Feed a Distribution Fee during their first three (3) months and does not believe this would inhibit a vendor from creating a competing product and offer a similar free period as the Exchange. Specifically, a vendor seeking to create the Cboe One Options Feed could do so by subscribing to the underlying individual data feeds, all of which will also include a New External Distributor Credit identical to that proposed for the Cboe One Options Feed. As a result, a competing vendor would incur similar costs as the Exchange in offering such free period for a competing product and may do so on the same terms as the Exchange. Data Consolidation Fee. The Exchange believes that the proposed $500 per month Data Consolidation Fee charged to Distributors who receive the Cboe One Options Feed is reasonable because it represents the value of the data aggregation and consolidation function that the Exchange performs. The Exchange further believes the E:\FR\FM\29MRN1.SGM 29MRN1 Federal Register / Vol. 88, No. 60 / Wednesday, March 29, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES1 proposed Data Consolidation Fee is not designed to permit unfair discrimination because all Distributor who obtain the Cboe One Options Feed will be charged the same fee. The increased cost of the Cboe One Options Feed is designed to include the value of the aggregation and consolidation function the Exchange performs in creating the Cboe One Options Feed. Therefore, the Exchange believes the proposed application of the Data Consolidation Fee is reasonable would not permit unfair discrimination. In addition, a vendor could create a competing product based on the individual data feeds and charge its clients a fee that it believes reflects the value of the aggregation and consolidation function that is competitive with the Cboe One Options Feed pricing. Therefore, the Exchange believes the proposed pricing would enable a vendor to create a competing product based on the individual data feeds and charge its clients a fee that it believes reflects the value of the aggregation and consolidation function that is competitive with Cboe One Options Feed pricing. 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. In this competitive environment potential Distributors are free to choose which competing product to purchase to satisfy their respective needs for market information. Often, the choice comes down to price, as market data participants 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 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, Cboe One Options Feed 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 VerDate Sep<11>2014 19:20 Mar 28, 2023 Jkt 259001 public. Accordingly, Exchange top-ofbook data is widely available today from a number of different sources. 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 waiver, credits and Enterprise Fees would apply to all similarly situated Distributors of EDGX Options Top on an equal and non-discriminatory basis. 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. Additionally, the Cboe One Options Feed will enhance competition because it provides investors with an alternative option for receiving market data. Although the Cboe Options Exchanges are the exclusive distributors of the individual data feeds from which certain data elements would be taken to create the Cboe One Options Feed, the Exchange would not be the exclusive distributor of the aggregated and consolidated information that would compose the proposed Cboe One Options Feed. Any entity that receives, or elects to received, the underlying data feeds would be able to, if it so chooses, to create a data feed with the same information included in the Cboe One Options Feed and sell and distribute it to its clients so that it could be received by those clients as quickly as the Cboe One Options Feed would be received by those same clients and at a similar cost. The proposed pricing the Exchange would charge for the Cboe One Options Feed compared to the cost of the individual data feeds from the Cboe Options Exchanges would enable a vendor to receive the underlying individual data feeds and offer a similar product on a competitive basis and with no greater cost than the Exchange. The pricing the Exchange proposes to charge for the Cboe One Options Feed is not lower than the cost to a vendor of receiving the underlying data feeds. Indeed, the proposed pricing equals the combined costs of the respective fees, and the proposed waivers are also being proposed for the underlying individual feeds as well, thereby enabling a vendor to receive the underlying data feeds and offer a similar product on a competitive basis and with no greater cost than the Exchange. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 18597 The Exchange further believes that its proposed monthly Data Consolidation Fee would be pro-competitive because a vendor could create a competing product, perform a similar aggregating and consolidating function, and similarly charge for such service. The Exchange notes that a competing vendor might engage in a different analysis of assessing the cost of a competing product. For these reasons, the Exchange believes the proposed pricing, fee waiver and credit, would enable a vendor to create a competing product based on the individual data feeds and charge its clients a fee that it believes reflects the value of the aggregation and consolidation function that is competitive with Cboe One Options Feed pricing. In establishing the proposed fees, the Exchange considered the competitiveness of the market for proprietary data and all of the implications of that competition. The Exchange believes that it has considered all relevant factors and has not considered irrelevant factors in order to establish fair, reasonable, and not unreasonably discriminatory fees and an equitable allocation of fees among all users. The existence of alternatives to the Cboe One Options Feed, including the existing underlying feeds and data from other sources, such as OPRA, constrains the Exchange from setting unreasonable fees, or fees that are unreasonably discriminatory, when vendors and Distributors can elect these alternatives or choose not to purchase a specific proprietary data product if its cost to purchase is not justified by the returns any particular vendor or Distributor would achieve through the purchase. 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 31 and paragraph (f) of Rule 19b–4 32 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may 31 15 32 17 E:\FR\FM\29MRN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 29MRN1 18598 Federal Register / Vol. 88, No. 60 / Wednesday, March 29, 2023 / Notices temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: ddrumheller on DSK120RN23PROD 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–2023–022 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–2023–022. 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 VerDate Sep<11>2014 19:20 Mar 28, 2023 Jkt 259001 comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CboeEDGX–2023–022 and should be submitted on or before April 19, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2023–06428 Filed 3–28–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 34871; 812–15438] Nomura Alternative Income Fund and Nomura Private Capital LLC March 23, 2023. Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’). ACTION: Notice. AGENCY: Notice of an application under section 6(c) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from sections 18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and 23(c) of the Act for an exemption from rule 23c–3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d– 1 under the Act. SUMMARY OF APPLICATION: Applicants request an order to permit certain registered closed-end investment companies to issue multiple classes of shares and to impose asset-based distribution and/or service fees and early withdrawal charges. APPLICANTS: Nomura Alternative Income Fund and Nomura Private Capital LLC. FILING DATES: The application was filed on February 16, 2023. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing on any application by emailing the SEC’s Secretary at Secretarys-Office@sec.gov and serving the Applicants with a copy of the request by email, if an email address is listed for the relevant Applicant below, or personally or by mail, if a physical address is listed for the relevant Applicant below. Hearing requests should be received by the Commission by 5:30 p.m. on April 17, 2023, and should be accompanied by proof of service on the Applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to rule 0– 5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by emailing the Commission’s Secretary. ADDRESSES: The Commission: Secretarys-Office@sec.gov. Applicants: Joshua B. Deringer, Esq., Faegre Drinker Biddle & Reath LLP, joshua.deringer@ faegredrinker.com. FOR FURTHER INFORMATION CONTACT: Trace W. Rakestraw, Senior Special Counsel, at (202) 551–6825 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: For Applicants’ representations, legal analysis, and conditions, please refer to Applicants’ application, dated February 16, 2023, which may be obtained via the Commission’s website by searching for the file number at the top of this document, or for an Applicant using the Company name search field on the SEC’s EDGAR system. The SEC’s EDGAR system may be searched at https://www.sec.gov/edgar/searchedgar/ legacy/companysearch.html. You may also call the SEC’s Public Reference Room at (202) 551–8090. For the Commission, by the Division of Investment Management, under delegated authority. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2023–06432 Filed 3–28–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97190; File No. SR– CboeBZX–2023–021] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Its Fees Schedule March 23, 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 16, 2023, Cboe BZX Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and 1 15 33 17 PO 00000 CFR 200.30–3(a)(12). Frm 00087 Fmt 4703 Sfmt 4703 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\29MRN1.SGM 29MRN1

Agencies

[Federal Register Volume 88, Number 60 (Wednesday, March 29, 2023)]
[Notices]
[Pages 18591-18598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06428]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97191; File No. SR-CboeEDGX-2023-022]


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

March 23, 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 16, 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 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') 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

[[Page 18592]]

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 the Market Data section of its Fees 
Schedule.\3\ Particularly, the Exchange proposes to (i) adopt a New 
External Credit applicable to EDGX Options Top, (ii) adopt a credit 
towards the monthly Distribution fees for EDGX Options Top, (iii) 
modify the EDGX Options Top Enterprise Fee; and (iv) establish fees for 
Cboe One Options Feed.
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    \3\ The Exchange initially filed the proposed fee changes on 
March 1, 2023 (SR-CboeEDGX-2023-017). On March 3, 2023, the Exchange 
withdrew that filing and submitted SR-CboeEDGX-2023-018. On March 
10, 2023, the Exchange withdrew that filing and submitted SR-
CboeEdgx-2023-021. On March 16, 2023 the Exchange withdrew that 
filing and submitted this proposal.
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EDGX Top Data
    By way of background, the Exchange offers the EDGX Options Top Data 
feed, which is an uncompressed data feed that offers top-of-book 
quotations and last sale information based on options orders entered 
into the Exchange's System. The EDGX Options Top Data feed benefits 
investors by facilitating their prompt access to real-time top-of-book 
information contained in EDGX Options Top Data. The Exchange's 
affiliated options exchanges (i.e., Cboe Exchange, Inc. (``Cboe 
Options''), Cboe BZX Exchange, Inc. (``BZX Options''), and Cboe C2 
Exchange, Inc. (``C2 Options'') (collectively, ``Affiliates'') also 
offer similar top-of-book data feeds.\4\ Particularly, each of the 
Exchange's Affiliates 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. The Exchange proposes to make the 
following fee changes relating to EDGX Options Top.
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    \4\ See Cboe Options Fees Schedule, C2 Options Fees Schedule, 
and BZX Rule 21.15.
---------------------------------------------------------------------------

New External Distributor Credit
    The Exchange first proposes to adopt a New External Distributor 
Credit which will provide that new External Distributors of the EDGX 
Options Top feed will not be charged an External Distributor Fee for 
their first three (3) months in order to incentivize External 
Distributors to enlist new users to receive EDGX Options Top feed. The 
Exchange notes that other exchanges, including the Exchange's 
affiliated equities exchanges, offer similar credits for similar market 
data products. For example, Cboe's equities exchanges currently offer a 
three (3) month New External Distributor Credit applicable to External 
Distributors of their top-of-book data feeds.\5\
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    \5\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data 
Fees.
---------------------------------------------------------------------------

Distributor Fee Credit
    The Exchange also proposes to provide that each External 
Distributor will receive a credit against its monthly Distributor Fee 
for the EDGX Options Top equal to the amount of its monthly Usage Fees 
up to a maximum of the Distributor Fee for the EDGX Options Top feed. 
For example, an External Distributor will be subject to a $500 monthly 
Distributor Fee where they elect to receive the EDGX Options Top. If 
that External Distributor reports User quantities totaling $500 or more 
of monthly usage of the EDGX Options Top, it will pay no net 
Distributor Fee, whereas if that same External Distributor were to 
report User quantities totaling $400 of monthly usage, it will pay a 
net of $100 for the Distributor Fee. External Distributors will remain 
subject to the per User fees applicable to EDGX Options Top. In every 
case the Exchange will receive at least $500 in connection with the 
distribution of the EDGX Options Top (through a combination of the 
External Distribution Fee and per User Fees). The Exchange notes that 
its affiliated equities exchanges offer a similar credit for a similar 
market data product.\6\
---------------------------------------------------------------------------

    \6\ See e.g., EDGX Equities Exchange Fees Schedule, Id.
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Enterprise Fee Tiers
    The Exchange currently offers Distributors the ability to purchase 
a monthly (and optional) Enterprise license to receive the EDGX Options 
Top Feed 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 permits a Distributor 
to pay a flat fee for an unlimited number of Professional and Non-
Professional Users and is in addition to the Distribution fees. The 
Exchange currently assesses an Enterprise fee of $20,000 per month. The 
Exchange proposes to modify the current Enterprise Fee and adopt a 
tiered structure based on the number of Users a Distributor has. The 
Exchange proposes to adopt the following monthly Enterprise Fees: 
$20,000 for up to 1,500,000 Users (Tier 1), $40,000 for 1,500,001 to 
2,500,000 Users (Tier 2) and $60,000 for 2,500,001 or greater Users 
(Tier 3). The proposed fees are non-progressive (e.g., if a Distributor 
has 2,000,000 Users, it will be subject to $40,000 for Tier 2). The 
Enterprise Fee may provide an opportunity to reduce fees. For example, 
if a Distributor has 1 million Non-Professional Users who each receive 
Cboe One Options Feed at $0.10 per month (as proposed), then that 
Distributor will pay $100,000 per month in Professional Users fees. If 
the Distributor instead were to purchase the proposed Enterprise 
license (tier 1), it would alternatively pay a flat fee of $20,000 for 
up to 1.5 million Professional and Non-Professional Users. A 
Distributor that pays the Tier 1 or Tier 2 Enterprise Fee will have to 
report its number of such Users on a monthly basis. A Distributor that 
pays the Tier 3 Enterprise Fee will only have to report the number of 
its Users every six months.\7\ The Exchange notes that if the reported 
number of Users exceed the Enterprise Tier a Distributor has purchased, 
the higher Tier will apply (e.g., if a Distributor purchases Tier 1, 
but reports 1,600,000 Users for a month, the Distributor will be 
assessed the Tier 2 fee).
---------------------------------------------------------------------------

    \7\ See Cboe Global Markets north American Data Policies.
---------------------------------------------------------------------------

    The Exchange also proposes to allow Distributors to purchase the 
Enterprise Fee on a monthly or annual basis. Annual licenses will 
receive a 5% discount off the applicable Enterprise Tier fee. 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 a license need not do so.

[[Page 18593]]

Cboe One Options Feed
    By way of background, the Exchange recently adopted a new market 
data product called Cboe One Options Feed, which is launching March 1, 
2023.\8\ Cboe One Options Feed will provide top-of-book quotation and 
last sale information based on the quotation and trading activity on 
the Exchange and each of its Affiliates, which the Exchange believes 
offers a comprehensive and highly representative view of US options 
pricing to market participants. More specifically, Cboe One Options 
Feed will contain the aggregate best bid and offer (``BBO'') of all 
displayed orders for options traded on the Exchange and its Affiliates, 
as well as individual last sale information and volume, which includes 
the price, time of execution and individual Cboe options exchange on 
which the trade was executed.
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    \8\ See SR-CboeEDGX-2023-013.
---------------------------------------------------------------------------

    The Cboe One Options Feed will also consist of Symbol Summary,\9\ 
Market Status,\10\ Trading Status,\11\ and Trade Break \12\ messages 
for the Exchange and each of its Affiliates.
---------------------------------------------------------------------------

    \9\ The Symbol Summary message will include the total executed 
volume across all Cboe Options Exchanges.
    \10\ The Market Status message is disseminated to reflect a 
change in the status of one of the Cboe Options Exchanges. For 
example, the Market Status message will indicate whether one of the 
Cboe Options Exchanges is experiencing a systems issue or disruption 
and quotation or trade information from that market is not currently 
being disseminated via the Cboe One Options Feed as part of the 
aggregated BBO. The Market Status message will also indicate when a 
Cboe Options Exchange is no longer experiencing a systems issue or 
disruption to properly reflect the status of the aggregated BBO.
    \11\ The Trade Break message will indicate when an execution on 
a Cboe Options Exchange is broken in accordance with the individual 
Cboe Options Exchange's rules (e.g., Cboe Options Rule 6.5, C2 
Option Rule 6.5, BZX Options Rule 20.6, EDGX Options Rule 20.6).
    \12\ The Trading Status message will indicate the current 
trading status of an option contract on each individual Cboe Options 
Exchange. A Trading Status message will also be sent whenever a 
security's trading status changes. For example, a Trading Status 
message will be sent when a symbol is open for trading or when a 
symbol is subject to a trading halt or when it resumes trading.
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    The Exchange will use the following data feeds to create the Cboe 
One Options Feed, each of which is available to other vendors and/or 
distributors: Cboe Options Top Data, C2 Options Top Data, EDGX Options 
Top and BZX Options Top. A vendor and/or distributor that wishes to 
create a product like the Cboe One Options Feed could instead subscribe 
to each of the aforementioned data feeds. Any entity that receives, or 
elects to receive, the individual data feeds or the feeds that may be 
used to create a product like the Cboe One Options Feed would be able 
to, if it so chooses, to create a data feed with the same information 
included in the Cboe One Options Feed and sell and distribute it to its 
clients so that it could be received by those clients as quickly as the 
Cboe One Options Feed would be received by those same clients.
    The Exchange proposes to amend its fee schedule to incorporate fees 
related to the Cboe One Options Feed. The Exchange has taken into 
consideration its affiliated relationship with its Affiliates in its 
design of the Cboe One Options Feed to assure that vendors \13\ would 
be able to offer a similar product on the same terms as the Exchange 
from a cost perspective. Although Cboe Options Exchanges are the 
exclusive distributors of the individual data feeds from which certain 
data elements would be taken to create the Cboe One Options Feed, the 
Exchange would not be the exclusive distributor of the aggregated and 
consolidated information that compose the proposed Cboe One Options 
Feed. Distributors and/or vendors would be able, if they chose, to 
create a data feed with the same information as the Cboe One Options 
Feed and distribute it to their clients on a level-playing field with 
respect to latency and cost as compared to the Exchange's proposed Cboe 
One Options Feed. The pricing the Exchange proposes to charge for the 
Cboe One Options Feed, as described more fully below, is not lower than 
the cost to a distributor or vendor to obtain the underlying data 
feeds. In fact, the Distribution and User (Professional and Non-
Professional) fees, as well as the optional Enterprise Fees, that the 
Exchange proposes to adopt for the Cboe One Options Feed are equal to 
the respective combined fees for subscribing to each individual data 
feed. The Exchange also proposes to adopt a ``Data Consolidation Fee,'' 
which would reflect the value of the aggregation and consolidation 
function the Exchange performs in creating the Cboe One Options Feed. 
Therefore, vendors would be enabled to create a competing product based 
on the individual data feeds and charge their clients a fee that they 
believe reflects the value of the aggregation and consolidation 
function that is competitive with Cboe One Options Feed pricing. For 
these reasons, the Exchange believes that vendors could readily offer a 
product similar to the Cboe One Options Feed on a competitive basis at 
a similar cost.
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    \13\ For purposes of this filing, a ``vendor'', which is a type 
of distributor, will refer to any entity that receives an exchange 
market data product directly from the exchange or indirectly from 
another entity (for example, from an extranet) and then resell that 
data to a third-party customer (e.g., a data provider that resells 
exchange market data to a retail brokerage firm). The term 
``distributor'' herein, will refer to any entity that receives an 
exchange market data product, directly from the exchange or 
indirectly from another entity (e.g., from a data vendor) and then 
distributes to individual internal or external end-users (e.g., a 
retail brokerage firm who distributes exchange data to its 
individual employees and/or customers). An example of a vendor's 
``third-party customer'' or ``customer'' is an institutional broker 
dealer or a retail broker dealer, who then may in turn distribute 
the data to their customers who are individual internal or external 
end-users.
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    The proposed Cboe One Options Feed fees include the following, each 
of which are described in further detail below: (i) Distributor Fees; 
(ii) User Fees for both Professional and Non-Professional Users; (iii) 
Enterprise Fees; and (iv) a Data Consolidation Fee. The Exchange also 
proposes to adopt a New External Distributor credit and a credit 
against the monthly External Distribution Fee equal to the amount of 
monthly User Fees up to a maximum of the External Distributor Fee. To 
ensure consistency across the Cboe Options Exchanges, Cboe Options, C2 
Options, and BZX Options will be filing companion proposals to reflect 
this proposal in their respective fee schedules.
Distributor Fees
    As proposed, each Internal Distributor that receives the Cboe One 
Options Feed shall pay a fee of $15,000 per month. The proposed 
Internal Distribution Fee equals the combined monthly Internal 
Distribution fees for the underlying individual data feeds of the Cboe 
Options Exchanges (i.e., the monthly Internal Distribution fees are 
$3,000 for BZX Options Top, $500 for EDGX Options Top, $2,500 for C2 
Options Top and $9,000 for Cboe Options Top). The Exchange also 
proposes to assess External Distributors a monthly fee of $10,000. The 
proposed External Distribution fee equals the combined monthly External 
Distribution fees for the underlying individual data feeds of the Cboe 
Options Exchanges (i.e., the monthly External Distribution fees are 
$5,000 per month for the Cboe Options Top, $2,500 per month for C2 
Options Top, $2,000 per month for BZX Options Top, and $500 for EDGX 
Options Top). As noted above, the Exchange is proposing to charge 
External Distributors an External Distribution Fee that equals the 
combined External Distribution fees of each individual Top feed to 
ensure that vendors could compete with the Exchange by creating the 
same product as the Cboe One Options Feed to sell to their clients.

[[Page 18594]]

New External Distributor Credit
    The Exchange proposes to adopt a New External Distributor Credit 
which would provide that new External Distributors of the Cboe One 
Options Feed will not be charged an External Distributor Fee for their 
first three (3) months in order to incentive them to enlist new Users 
to receive the Cboe One Options Feed. The Exchange notes that other 
exchanges, including the Exchange's affiliated equities exchanges offer 
similar credits for similar market data products. For example, Cboe's 
equities exchanges currently offer a three (3) month New External 
Distributor Credit applicable to Cboe One Summary Feed.\14\ To 
alleviate any competitive issues that may arise with a vendor seeking 
to offer a product similar to the Cboe One Options Feed based on the 
underlying data feeds, the Exchange is proposing, as discussed above, 
to also adopt a three month New External Distributor Credit for the 
underlying top-of-book data feeds for the Cboe Options Exchanges. The 
respective proposals to adopt a three-month credit ensures the proposed 
New External Distributor Credit for Cboe One Options will not cause the 
combined cost of subscribing to Cboe Options, C2 Options, BZX Options 
and EDGX Options Top feeds for new External Distributors to be greater 
than those that would be charged to subscribe to the Cboe One Options 
feed.
---------------------------------------------------------------------------

    \14\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data 
Fees.
---------------------------------------------------------------------------

User Fees
    In addition to Internal and External Distributor Fees, the Exchange 
proposes to assess Professional \15\ User and Non-Professional \16\ 
User Fees. The proposed monthly Professional User fee for the Cboe 
Options Exchanges is $30.50 per Professional User, which equals the 
combined monthly Professional User fees of the underlying individual 
Cboe Options Exchanges Top feeds (i.e., $15.50 per Professional User 
for the Cboe Options Top, $5 per Professional User for C2 Options Top, 
$5 per Professional User for BZX Options Top, and $5 per Professional 
User for EDGX Options Top). The Exchange also proposes to adopt a 
monthly Non-Professional User fee of $0.60 per Non-Professional User, 
which similarly represents the combined total Non-Professional User fee 
for the individual data feeds of the Cboe Options (i.e., $0.30 per Non-
Professional User for Cboe Options Top, $0.10 per Non-Professional User 
for C2 Options Top, $0.10 per Non-Professional User for BZX Options 
Top, and $0.10 per Non-Professional User for EDGX Options Top). Similar 
to the individual underlying feeds, Distributors that receive Cboe One 
Options Feed will be required to count Professional and Non-
Professional Users to which they provide the data feed.
---------------------------------------------------------------------------

    \15\ A Professional User of an Exchange Market Data product is 
any natural person recipient of an Exchange Market Data product who 
is not a Non-Professional User.
    \16\ 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.
---------------------------------------------------------------------------

    The Exchange also proposes to provide that each External 
Distributor will receive a credit against its monthly Distributor Fee 
for the Cboe One Feed equal to the amount of its monthly User Fees up 
to a maximum of the Distributor Fee for the Cboe One Options Feed. For 
example, an External Distributor will be subject to a $10,000 monthly 
Distributor Fee where they elect to receive the Cboe One Options Feed. 
If that External Distributor reports User quantities totaling $10,000 
or more of monthly User fees of the Cboe Options One Feed, it will pay 
no net Distributor Fee, whereas if that same External Distributor were 
to report User quantities totaling $9,000 of monthly usage, it will pay 
a net of $1,000 for the Distributor Fee. External Distributors will 
remain subject to the per User fees discussed above. In every case the 
Exchange will receive at least $10,000 in connection with the 
distribution of the Cboe One Options Feed (through a combination of the 
External Distribution Fee and per User Fees). The Exchange notes that 
its affiliated equities exchanges offer a similar credit for a similar 
market data product.\17\
---------------------------------------------------------------------------

    \17\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data 
Fees.
---------------------------------------------------------------------------

Enterprise Fees
    The Exchange also proposes to establish Enterprise Fees that will 
permit a Distributor to purchase a monthly (and optional) Enterprise 
license to receive the Cboe One Options Feed for distribution to a 
specified number of Professional and Non-Professional Users. The 
Enterprise Fee will be an alternative to Professional and Non-
Professional User fees and will permit a Distributor to pay a flat fee 
to receive the data for a specified 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 Exchange proposes to adopt the 
following monthly Enterprise Fees: $350,000 for up to 1,500,000 Users 
(Tier 1), $550,000 for 1,500,001 to 2,500,000 Users (Tier 2) and 
$750,000 for 2,500,001 or greater Users (Tier 3). The proposed fees are 
non-progressive (e.g., if a Distributor has 2,000,000 Users, it will be 
subject to $550,000 for Tier 2). The Enterprise Fee may provide an 
opportunity to reduce fees. For example, if a Distributor has 1 million 
Non-Professional Users who each receive Cboe One Options Feed at $0.60 
per month (as proposed), then that Distributor will pay $600,000 per 
month in Professional Users fees. If the Distributor instead were to 
purchase the proposed Enterprise license (tier 1), it would 
alternatively pay a flat fee of $350,000 for up to 1.5 million 
Professional and Non-Professional Users. A Distributor must pay a 
separate Enterprise Fee for each entity that controls the display of 
Cboe One Options Feed if it wishes for such Users to be covered by an 
Enterprise Fee rather than by per User fees.\18\ A Distributor that 
pays the Tier 1 or Tier 2 Enterprise Fee will have to report its number 
of such Users on a monthly basis. A Distributor that pays the Tier 3 
Enterprise Fee will only have to report the number of its Users every 
six months.\19\ The Exchange notes that if the reported number of Users 
exceed the Enterprise Tier a Distributor has purchased, the higher Tier 
will apply (e.g., if a Distributor purchases Tier 1, but reports 
1,600,000 Users for a month, the Distributor will be assessed the Tier 
2 fee).
---------------------------------------------------------------------------

    \18\ 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.
    \19\ See Cboe Global Markets north American Data Policies.
---------------------------------------------------------------------------

    The Exchange also proposes to allow Distributors to purchase the 
Enterprise Fee on a monthly or annual basis. Annual licenses will 
receive a 5% discount off the applicable Enterprise Fee tier. The 
Exchange notes that the

[[Page 18595]]

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 a license need 
not do so.
Data Consolidation Fee
    The Exchange also proposes to charge External Distributors of the 
Cboe One Options Feed a separate Data Consolidation Fee, which reflects 
the value of the aggregation and consolidation function the Exchange 
performs in creating the Cboe One Options Feed. As stated above, the 
Exchange creates the Cboe One Options Feed from data derived from the 
Cboe Options Top, C2 Options Top, BZX Options Top, and EDGX Options Top 
Feeds. External Distributors could similarly create a competing product 
to the Cboe One Options Feed based on these individual data feeds, or, 
alternatively, the applicable Top and Last Sale products offered by the 
Exchanges, and could charge its clients a fee that it believes reflects 
the value of the aggregation and consolidation function. Accordingly, 
the Exchange believes that vendors could readily offer a product 
similar to the Cboe One Options Feed on a competitive basis at a 
similar cost.
3. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\20\ in general, and 
furthers the objectives of Section 6(b)(4),\21\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its members and other recipients of 
Exchange data. In addition, the Exchange believes that the proposed 
rule change is consistent with Section 11(A) of the Act as it supports 
(i) fair competition among brokers and dealers, among exchange markets, 
and between exchange markets and markets other than exchange markets, 
and (ii) the availability to brokers, dealers, and investors of 
information with respect to quotations for and transactions in 
securities.\22\ Finally, the proposed rule change is also consistent 
with Rule 603 of Regulation NMS,\23\ which provides that any national 
securities exchange that distributes information with respect to 
quotations for or transactions in an NMS stock do so on terms that are 
not unreasonably discriminatory.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f.
    \21\ 15 U.S.C. 78f(b)(4)
    \22\ 15 U.S.C. 78k-1.
    \23\ See 17 CFR 242.603.
---------------------------------------------------------------------------

    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.\24\ 
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.\25\ 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 Data Feed. Further, the quote and last sale data contained 
in the EDGX Data Feed is identical to the data sent to OPRA for 
redistribution to the public.\26\ Accordingly, Exchange top-of-book 
data is widely available today from a number of different sources.
---------------------------------------------------------------------------

    \24\ See Cboe Global Markets U.S. Options Market Month-to-Date 
Volume Summary (February 23, 2024), available at https://markets.cboe.com/us/options/market_statistics/.
    \25\ 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.
    \26\ The Exchange makes available the top-of-book data 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 Data Feed and Cboe One Options Feeds 
are 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 these data products available. Accordingly, 
Distributors (including vendors) and Users can discontinue use at any 
time and for any reason, including due to an assessment of the 
reasonableness of fees charged. 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 \27\ 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.\28\ As such, 
all proprietary data feeds are optional.
---------------------------------------------------------------------------

    \27\ ``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.
    \28\ 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.'' \29\ 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 and Cboe One Options Feed.
---------------------------------------------------------------------------

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

    The Exchange has also taken into consideration its affiliated 
relationship with its Affiliates in its design of the Cboe One Options 
Feed to ensure that vendors would be able to offer a similar product on 
the same terms as the Exchange from a cost perspective. While the Cboe 
Options Exchanges are the exclusive distributors of the individual data 
feeds from which certain data elements may be taken to create the Cboe 
One Options Feed, they are not the exclusive distributors of the 
aggregated

[[Page 18596]]

and consolidated information that comprises the Cboe One Options Feed. 
Any entity that receives, or elects to receive, the individual data 
feeds would be able to, if it so chooses, to create a data feed with 
the same information included in the Cboe One Options Feed and sell and 
distribute it to its clients so that it could be received by those 
clients as quickly as the Cboe One Options Feed would be received by 
those same clients with no greater cost than the Exchange.
    In addition, vendors and Distributors that do not wish to purchase 
the Cboe One Options Feed may separately purchase the individual 
underlying products, and if they so choose, perform a similar 
aggregation and consolidation function that the Exchange performs in 
creating the Cboe One Options Feed. To enable such competition, the 
Exchange is offering the Cboe One Options Feed on terms that a vendor 
of those underlying feeds could offer a competing product if it so 
chooses.
    In addition, the fees that are the subject of this rule filing are 
constrained by competition. Particularly, the Exchange competes with 
other exchanges (and their affiliates) that may choose to offer similar 
market data products. If another exchange (or its affiliate) were to 
charge less to consolidate and distribute a similar product than the 
Exchange charges to consolidate and distribute the Cboe One Options 
Feed, prospective Users likely could choose to not subscribe to, or 
would cease subscribing to, the Cboe One Options Feed. In addition, the 
Exchange would compete with unaffiliated market data vendors who would 
be in a position to consolidate and distribute the same data that 
comprises the Cboe One Options Feed into the vendor's own comparable 
market data product. If the third-party vendor is able to provide the 
exact same data for a lower cost, prospective Users would avail 
themselves of that lower cost and elect not to take the Cboe One 
Options Feed.
    For these reasons, the Exchange believes that the proposed fees are 
reasonable, equitable, and not unfairly discriminatory.
    User Fees. The Exchange believes that the proposed Professional and 
Non-Professional User fees for the Cboe One Options Feed are reasonable 
because they represent the combined monthly fees for Professional and 
Non-Professional User fees, respectively for the underlying individual 
data feeds, which have previously been filed with the Commission. The 
Exchange believes that the proposed fees are equitable and not unfairly 
discriminatory because they will be charged uniformly to Distributors. 
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.\30\ The Exchange also believes offering Cboe One 
Options Feed 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.
---------------------------------------------------------------------------

    \30\ 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).
---------------------------------------------------------------------------

    Enterprise Fee. The Exchange believes the proposed Enterprise Fees 
for the Cboe One Options Feed and proposed changes to the Enterprise 
Fee for the EDGX Options Top feed are reasonable as the fees proposed 
could result in a fee reduction for Distributors of the respective 
products with a large number of Professional and Non-Professional 
Users. If a Distributor has a smaller number of Professional Users of 
the Cboe One Options Feed, then it may continue using the per User 
structure and benefit from the per User Fee reductions. By reducing 
prices for Distributors with a large number of Professional and Non-
Professional Users, the Exchange believes that more firms may choose to 
receive and to distribute the Cboe One Options Feed, thereby expanding 
the distribution of this market data for the benefit of investors. Also 
as described above, the Enterprise Fees are entirely optional. A firm 
that does not have a sufficient number of Users to benefit from 
purchase of a license need not do so.
    Distributor Fees. The Exchange believes that the proposed 
Distributor fees for the Cboe One Options Feed are reasonable because 
they represent the combined monthly fees for Internal and External 
Distributor fees, respectively for the underlying individual data 
feeds, which have previously been filed with the Commission. The 
Exchange believes that the proposed fees are equitable and not unfairly 
discriminatory because they will be charged uniformly to Internal and 
External Distributors. The Exchange believes that it is also fair and 
equitable, and not unfairly discriminatory to charge different fees for 
internal and external distribution of the Cboe One Options Feed. 
Although the proposed distribution fee charged to External Distributors 
will be lower than the existing distribution fee charged to Internal 
Distributors, External Distributors are subject to Non-Professional 
user fees to which Internal Distributors are not subject, in addition 
to Professional User fees (or alternatively the proposed Enterprise 
Fee). Furthermore, the proposal is designed to incentivize External 
Distributors to subscribe to Cboe One Options Feed.
    The proposed Distributor Fees for the Cboe One Options Feed are 
also designed to ensure that vendors could compete with the Exchange by 
creating a similar product as the Cboe One Options Feed. The Exchange 
believes that the proposed Distributor Fees are equitable and 
reasonable as they equal the combined fee of subscribing to each 
individual data feed of the Cboe Options Exchanges, which have been 
previously published by the Commission.
    In addition, the Exchange believes it is reasonable to not charge 
External Distributors of EDGX Options Top and Cboe One Options Feed a 
Distribution Fee during their first three (3) months and does not 
believe this would inhibit a vendor from creating a competing product 
and offer a similar free period as the Exchange. Specifically, a vendor 
seeking to create the Cboe One Options Feed could do so by subscribing 
to the underlying individual data feeds, all of which will also include 
a New External Distributor Credit identical to that proposed for the 
Cboe One Options Feed. As a result, a competing vendor would incur 
similar costs as the Exchange in offering such free period for a 
competing product and may do so on the same terms as the Exchange.
    Data Consolidation Fee. The Exchange believes that the proposed 
$500 per month Data Consolidation Fee charged to Distributors who 
receive the Cboe One Options Feed is reasonable because it represents 
the value of the data aggregation and consolidation function that the 
Exchange performs. The Exchange further believes the

[[Page 18597]]

proposed Data Consolidation Fee is not designed to permit unfair 
discrimination because all Distributor who obtain the Cboe One Options 
Feed will be charged the same fee. The increased cost of the Cboe One 
Options Feed is designed to include the value of the aggregation and 
consolidation function the Exchange performs in creating the Cboe One 
Options Feed. Therefore, the Exchange believes the proposed application 
of the Data Consolidation Fee is reasonable would not permit unfair 
discrimination.
    In addition, a vendor could create a competing product based on the 
individual data feeds and charge its clients a fee that it believes 
reflects the value of the aggregation and consolidation function that 
is competitive with the Cboe One Options Feed pricing. Therefore, the 
Exchange believes the proposed pricing would enable a vendor to create 
a competing product based on the individual data feeds and charge its 
clients a fee that it believes reflects the value of the aggregation 
and consolidation function that is competitive with Cboe One Options 
Feed pricing.

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. In this competitive environment potential Distributors are free 
to choose which competing product to purchase to satisfy their 
respective needs for market information. Often, the choice comes down 
to price, as market data participants 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 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, Cboe One 
Options Feed 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 
widely available today from a number of different sources.
    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 waiver, credits and Enterprise 
Fees would apply to all similarly situated Distributors of EDGX Options 
Top on an equal and non-discriminatory basis. 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.
    Additionally, the Cboe One Options Feed will enhance competition 
because it provides investors with an alternative option for receiving 
market data. Although the Cboe Options Exchanges are the exclusive 
distributors of the individual data feeds from which certain data 
elements would be taken to create the Cboe One Options Feed, the 
Exchange would not be the exclusive distributor of the aggregated and 
consolidated information that would compose the proposed Cboe One 
Options Feed. Any entity that receives, or elects to received, the 
underlying data feeds would be able to, if it so chooses, to create a 
data feed with the same information included in the Cboe One Options 
Feed and sell and distribute it to its clients so that it could be 
received by those clients as quickly as the Cboe One Options Feed would 
be received by those same clients and at a similar cost.
    The proposed pricing the Exchange would charge for the Cboe One 
Options Feed compared to the cost of the individual data feeds from the 
Cboe Options Exchanges would enable a vendor to receive the underlying 
individual data feeds and offer a similar product on a competitive 
basis and with no greater cost than the Exchange. The pricing the 
Exchange proposes to charge for the Cboe One Options Feed is not lower 
than the cost to a vendor of receiving the underlying data feeds. 
Indeed, the proposed pricing equals the combined costs of the 
respective fees, and the proposed waivers are also being proposed for 
the underlying individual feeds as well, thereby enabling a vendor to 
receive the underlying data feeds and offer a similar product on a 
competitive basis and with no greater cost than the Exchange.
    The Exchange further believes that its proposed monthly Data 
Consolidation Fee would be pro-competitive because a vendor could 
create a competing product, perform a similar aggregating and 
consolidating function, and similarly charge for such service. The 
Exchange notes that a competing vendor might engage in a different 
analysis of assessing the cost of a competing product. For these 
reasons, the Exchange believes the proposed pricing, fee waiver and 
credit, would enable a vendor to create a competing product based on 
the individual data feeds and charge its clients a fee that it believes 
reflects the value of the aggregation and consolidation function that 
is competitive with Cboe One Options Feed pricing.
    In establishing the proposed fees, the Exchange considered the 
competitiveness of the market for proprietary data and all of the 
implications of that competition. The Exchange believes that it has 
considered all relevant factors and has not considered irrelevant 
factors in order to establish fair, reasonable, and not unreasonably 
discriminatory fees and an equitable allocation of fees among all 
users. The existence of alternatives to the Cboe One Options Feed, 
including the existing underlying feeds and data from other sources, 
such as OPRA, constrains the Exchange from setting unreasonable fees, 
or fees that are unreasonably discriminatory, when vendors and 
Distributors can elect these alternatives or choose not to purchase a 
specific proprietary data product if its cost to purchase is not 
justified by the returns any particular vendor or Distributor would 
achieve through the purchase.

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 \31\ and paragraph (f) of Rule 19b-4 \32\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may

[[Page 18598]]

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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    \31\ 15 U.S.C. 78s(b)(3)(A).
    \32\ 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-2023-022 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-2023-022. 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-2023-022 and should be 
submitted on or before April 19, 2023.
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-06428 Filed 3-28-23; 8:45 am]
BILLING CODE 8011-01-P
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