Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 24217-24221 [2023-08224]
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Federal Register / Vol. 88, No. 75 / Wednesday, April 19, 2023 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97307; File No. SR–
EMERALD–2023–09]
Self-Regulatory Organizations; MIAX
Emerald, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule
April 13, 2023.
Pursuant to the provisions of 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 April 3, 2023, MIAX Emerald, LLC
(‘‘MIAX Emerald’’ or ‘‘Exchange’’), filed
with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX Emerald Fee Schedule
(the ‘‘Fee Schedule’’) to amend fees for
historical Open-Close Report to: (i) add
a fee for ad hoc requests for end-of-day
data and no longer provide such data
free of charge; (ii) respond to requests
for ad hoc intra-day data and adopt a
new fee for such requests; and (iii)
adopt academic discounts for requests
for ad hoc historical end-of-day and
intra-day Open-Close data.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/emerald, at MIAX’s principal
office, and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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1. Purpose
The Exchange adopted a new data
product for options known as the OpenClose Report,3 which the Exchange
made available for purchase to
Exchange Members 4 and non-Members
on June 1, 2021.5 The Open-Close
Report is described under Exchange
Rule 531(d)(1). The Exchange now
proposes to amend fees for historical
Open-Close Report to: (i) add a fee for
ad hoc requests for end-of-day data and
no longer provide such data free of
charge; (ii) respond to requests for ad
hoc intra-day data and adopt a new fee
for such requests; and (iii) adopt
academic discounts for requests for ad
hoc historical end-of-day and intra-day
Open-Close data. The Exchange
previously filed this proposal on March
23, 2023 (SR–EMERALD–2023–07). On
April 3, 2023, the Exchange withdrew
SR–EMERALD–2023–07 and
resubmitted this proposal.
General
By way of background, the Exchange
offers two versions of the Open-Close
Report, an end-of-day summary and
intra-day report.6 The end-of-day
version is a volume summary of trading
activity on the Exchange at the option
level by origin (Priority Customer, NonPriority Customer, Firm, Broker-Dealer,
and Market Maker),7 side of the market
(buy or sell), contract volume, and
transaction type (opening or closing).
The Priority Customer, Non-Priority
Customer volume is further broken
down into trade size buckets (less than
100 contracts, 100–199 contracts, greater
than 199 contracts). The Open-Close
3 See Securities Exchange Act Release No. 91963
(May 21, 2021), 86 FR 28662 (May 27, 2021) (SR–
EMERALD–2021–18) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
to Adopt a New Historical Market Data Product To
Be Known as the Open-Close Report).
4 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
5 See Securities Exchange Act Release No. 92138
(June 9, 2021), 86 FR 31769 (June 15, 2021) (SR–
EMERALD–2021–20) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
To Amend Its Fee Schedule To Adopt Fees for the
Open-Close Report).
6 The intraday Open-Close Report provides
similar information to that of Open-Close Data but
will be produced and updated every 10 minutes
during the trading day. Data is captured in
‘‘snapshots’’ taken every 10 minutes throughout the
trading day and is available to subscribers within
five minutes of the conclusion of each 10-minute
period.
7 See Exchange Rule 100.
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Report data is proprietary Exchange
trade data and does not include trade
data from any other exchange. It is also
a historical data product and not a realtime data feed. The Exchange notes that
Open-Close Report data is not necessary
for trading and subscribing to the OpenClose Report is completely optional.
Members and non-Members may
purchase the Open-Close Report on a
monthly basis. The Exchange currently
assess a monthly fee of $600 per month
for subscribing to the end-of-day
summary Open-Close Report and $2,000
per month for subscribing to the intraday Open-Close Report. For mid-month
subscriptions, new subscribers are
currently charged for the full calendar
month for which they subscribe and
will be provided Open-Close Report
data for each trading day of the calendar
month from the day on which they
subscribed and receive data for each
trading day of the calendar month prior
to the day on which they subscribe.
End-of-Day Ad Hoc Request (Historical
Data)
The Exchange currently provides
Members and Non-Members who
request on an ad hoc basis historical
end-of-day Open-Close Report data free
of charge. The Exchange initially
proposed to provide such data for free
because it only recently launched the
Open-Close Report and had minimal
amount of historical end-of-day data.
The Exchange also wanted to support
the introduction of the new product
through such a pricing incentive to
attract additional subscribers.
An ad hoc request may be for any
number of months beginning with June
2021, the month in which the Exchange
first made the Open-Close Report
available. For example, a market
participant may request end-of-day
Open-Close Report data for the month of
June 2021 or July 2021, or may request
such data for both June and July 2021
and would not be currently charged a
fee for such request(s). The Exchange
notes that other exchanges that provide
similar data products allow for ad hoc
requests of their end-of-day data for a
fee.8 Similar to other exchanges, the
8 See Price List—U.S. Derivatives Data for Nasdaq
PHLX, LLC (‘‘PHLX’’), The Nasdaq Stock Market,
LLC (‘‘Nasdaq’’), Nasdaq ISE, LLC (‘‘ISE’’), and
Nasdaq GEMX, LLC (‘‘GEMX’’), available at https://
www.nasdaqtrader.com/Trader.aspx?id=
DPPriceListOptions#web. Particularly, PHLX offers
‘‘Nasdaq PHLX Options Trade Outline (PHOTO)’’
and assesses $400 for historical end-of-day data;
Nasdaq offers the ‘‘Nasdaq Options Trade Outline
(NOTO)’’ and assesses $250 for historical end-ofday data; ISE offers the ‘‘Nasdaq ISE Open/Close
Trade Profile’’ and assesses $600 per month for
historical end-of-day data and $27,500 for complete
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Federal Register / Vol. 88, No. 75 / Wednesday, April 19, 2023 / Notices
Exchange now proposes to charge a fee
of $500 per request per month for adhoc requests for end-of-day historical
data.9
The Exchange currently makes the
historical end-of-day Open-Close data
available fifteen (15) days after the end
of the month for which it is requested.
The Exchange implemented this delay
because historical end-of-day OpenClose Report data was free of charge and
the Exchange sought to not encourage
subscribers to request historical end-ofday Open-Close Report data over a paid
subscription. Now that the Exchange
proposes to charge a fee for historical
end-of-day Open-Close Report data, it
believes the fifteen (15) day delay in
making the data available is no longer
necessary and proposes to remove this
language from its Fee Schedule.
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Intra-Day Ad Hoc Request (Historical
Data)
The Exchange now proposes to
provide Members and Non-Members
who request on an ad hoc basis
historical intra-day Open-Close Report
data for a fee of $1,000 per request per
month. When the Exchange proposed to
provide for ad-hoc requests for end-of
day data, it did not also propose to
allow for ad hoc requests for intra-day
Open-Close Report data.10 Based on
interest from Members and nonMembers, the Exchange now proposes
to do so for the above proposed fee.
As it currently specifies for historical
end-of-day Open-Close data, an ad hoc
request may be for any number of
months beginning with June 2021, the
month in which the Exchange first made
the Open-Close Report available.
Similarly, the Exchange will provide
historical intra-day Open-Close data for
the same time period. The Exchange
notes that other exchanges that provide
similar data products allow for ad hoc
requests of their intra-day data for a
fee.11
history; and GEMX offers the ‘‘Nasdaq GEMX Open/
Close Trade Profile’’ and assesses $400 for historical
end-of-day data. Cboe EDGX Exchange, Inc.
(‘‘EDGX’’) and Cboe BZX Exchange, Inc. (‘‘BZX’’)
both assess $400 for historical end-of-day data per
request per month. See the EDGX fee schedule
available at https://markets.cboe.com/us/options/
membership/fee_schedule/edgx/ and the BZX fee
schedule available at https://markets.cboe.com/us/
options/membership/fee_schedule/bzx/.
9 Id.
10 See Securities Exchange Act Release No. 93023
(September 16, 2021), 86 FR 52731 (September 22,
2021) (SR–EMERALD–2021–28).
11 See Price List—U.S. Derivatives Data for PHLX,
ISE, and GEMX, available at https://
www.nasdaqtrader.com/Trader.aspx?id=
DPPriceListOptions#web. Particularly, PHLX offers
‘‘Nasdaq PHLX Options Trade Outline (PHOTO)’’
and assesses $1,000 for historical intra-day data; ISE
offers the ‘‘Nasdaq ISE Open/Close Trade Profile’’
and assesses $1,000 per month for historical intra-
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Academic Discounts for Ad Hoc
Historical End-of-Day and Intra-Day
Open-Close Report Data
The Exchange also proposes to adopt
an academic discount for ad-hoc
requests of historical months of these
data sets. Specifically, the Exchange
proposes to charge qualifying academic
purchasers per request $1,500 per year
for the first year (instead of $6,000 per
year) and $125 per month thereafter for
historical end-of-day Open-Close Report
data covering all of the Exchange’s
securities. Further, the Exchange
proposes to charge qualifying academic
purchasers per request $3,000 per year
for the first year (instead of $12,000 per
year) and $250 per month thereafter for
historical intra-day Open-Close Report
data covering all of the Exchange’s
securities.
Particularly, the Exchange believes
that academic institutions and
researchers provide a valuable service
for the Exchange in studying and
promoting the options market. Though
academic institutions and researchers
have need for granular options data sets,
they do not trade upon the data for
which they subscribe. The Exchange
believes the proposed reduced fee for
qualifying academic purchasers of
historical end-of-day Open-Close Report
data and intra-day Open-Close Report
data will encourage and promote
academic studies of its market data by
academic institutions. In order to
qualify for the academic pricing, an
academic purchaser must: (1) be an
accredited academic institution or
member of the faculty or staff of such an
institution, and (2) use the data in
independent academic research,
academic journals and other
publications, teaching and classroom
use, or for other bona fide educational
purposes (i.e. academic use).
Furthermore, use of the data must be
limited to faculty and students of an
accredited academic institution, and
any commercial or profit-seeking usage
is excluded. Academic pricing will not
be provided to any purchaser whose
research is funded by a securities
industry participant. Academic users
interested in qualifying will be required
to submit a brief application.12
day; and GEMX offers the ‘‘Nasdaq GEMX Open/
Close Trade Profile’’ and assesses $750 for historical
end-of-day data. EDGX and BZX both assess $750
for historical intra-day data per request per month.
See the EDGX fee schedule available at https://
markets.cboe.com/us/options/membership/fee_
schedule/edgx/ and the BZX fee schedule available
at https://markets.cboe.com/us/options/
membership/fee_schedule/bzx/.
12 The Exchange notes that it will have an
academic user application available on the
Exchange’s website soon but it has not received any
PO 00000
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Exchange Business Development
personnel will have the discretion to
review and approve such applications
and request additional information
when it deems necessary.
The Exchange notes that competing
exchanges currently offer academic
discounts for similar data sets on those
exchanges.13 The Exchange recognizes
the high value of academic research and
educational instruction and
publications, and believes that the
proposed academic discounts for
historical end-of-day Open-Close Report
data and intra-day Open-Close Report
data will encourage the promotion of
academic research of the options
industry, which will serve to benefit all
market participants while also opening
up a new potential user base among
students. Finally, the Exchange notes
that academic purchasers’ ad hoc
requests of historical end-of-day OpenClose and intra-day Open-Close data
would be educational in use and
purpose, and not vocational.
Implementation Date
The Exchange intends to implement
the proposed fee changes immediately.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,14 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,15 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and to protect investors and the
public interest, and that it is not
designed to permit unfair
discrimination among customers,
brokers, or dealers. The Exchange also
believes that its proposed changes to its
Fee Schedule concerning fees for the
Open-Close Report is consistent with
Section 6(b) of the Act 16 in general, and
furthers the objectives of Section 6(b)(4)
of the Act 17 in particular, in that it is
an equitable allocation of dues, fees and
other charges among its members and
other recipients of Exchange data.
In adopting Regulation NMS, the
Commission granted self-regulatory
such requests from potential academic users at the
time of this filing (or the previous filing).
13 See supra note 8, BZX, EDGX, and ISE fee
schedules; see also Cboe Exchange, Inc. (‘‘Cboe’’)
Options Fee Schedule, Livevol Fees, Open Close
Data available at https://cdn.cboe.com/resources/
membership/Cboe_FeeSchedule.pdf.
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(5).
16 15 U.S.C. 78f(b).
17 15 U.S.C. 78f(b)(4).
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Federal Register / Vol. 88, No. 75 / Wednesday, April 19, 2023 / Notices
organizations (‘‘SROs’’) and brokerdealers increased authority and
flexibility to offer new and unique
market data to the public. It was
believed that this authority would
expand the amount of data available to
consumers, and also spur innovation
and competition for the provision of
market data. Particularly, the OpenClose Report further broadens the
availability of U.S. option market data to
investors consistent with the principles
of Regulation NMS. The data product
also promotes increased transparency
through the dissemination of the OpenClose Report. Particularly, information
regarding opening and closing activity
across different option series during the
trading day may indicate investor
sentiment, which may allow market
participants to make better informed
trading decisions throughout the day.
Subscribers to the data may also be able
to enhance their ability to analyze
option trade and volume data and create
and test trading models and analytical
strategies. The Exchange believes the
Open-Close Report provides a valuable
tool that subscribers can use to gain
comprehensive insight into the trading
activity in a particular series, but also
emphasizes such data is not necessary
for trading and completely optional.
Moreover, other exchanges offer a
similar data product.18 This proposal
seeks to provide historical Open-Close
Report data to market participants by
amending the fees for the Open-Close
Report to: (i) add a fee of $500 per
request per month for ad hoc requests
for end-of-day historical data; (ii)
respond to requests for ad hoc intra-day
data and adopt a fee of $1,000 per
request per month for such requests;
and (iii) adopt academic discounts for
requests for ad hoc historical end-of-day
and intra-day Open-Close data.
The Exchange operates in a highly
competitive environment. Indeed, there
are currently 16 registered options
exchanges that trade options. Based on
publicly available information, for the
month of March 2023, no single options
exchange had more than approximately
13% of the equity options market share
and the Exchange represented only
approximately 3.27% of the equity
options market share for the month of
March 2023.19 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
18 See
supra notes 8 and 11.
the Exchange’s ‘‘The market at a glance,’’
available at https://www.miaxoptions.com/ (last
visited April 3, 2023).
19 See
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NMS, the Commission highlighted the
importance of market forces in
determining prices and SRO revenues
and, also, recognized that current
regulation of the market system ‘‘has
been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 20
Making similar data products available
to market participants fosters
competition in the marketplace, and
constrains the ability of exchanges to
charge supra-competitive 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 Exchange believes its proposal to
respond to requests and add fees for ad
hoc requests for historical end-of-day
and intra-day data and adopt academic
discounts for such requests is
reasonable as the proposed rates are
similar to fees assessed by other
exchanges that provide data in response
to ad hoc request for their similar data
products.21 The Exchange believes its
proposal is reasonable and not unfairly
discriminatory because the Exchange
now has almost two years of historical
Open-Close Report data to provide to
market participants that request
historical intra-day or end-of-day OpenClose Report data since the Exchange
began offering the Open-Close Report in
June 2021. Further, the Exchange notes
that no competing exchange provides
their own historical Open-Close report
data free of charge.22 Indeed, proposing
fees that are excessively higher than
established fees for similar data
products would simply serve to reduce
demand for the Exchange’s data
product, which as noted, is entirely
optional. Like the Exchange’s OpenClose Report, other exchanges offer
similar data products that each provide
insight into trading on those markets
and may likewise aid in assessing
investor sentiment. Although each of
these similar Open-Close data products
provide only proprietary trade data and
not trade data from other exchanges, it
is possible investors are still able to
gauge overall investor sentiment across
different option series based on open
and closing interest on any one
exchange.23 Similarly, market
participants may be able to analyze
20 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
21 See supra notes 8 and 11.
22 See id.
23 The Exchange notes that its Open-Close Report
data product does not include data on any
exclusive, singly-listed option series.
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24219
option trade and volume data, and
create and test trading models and
analytical strategies using only OpenClose data relating to trading activity on
one or more of the other markets that
provide similar data products. As such,
if a market participant views another
exchange’s historical end-of-day or
intra-day Open-Close data as more
attractive than the Exchange’s historical
end-of-day or intra-day Open-Close
Report data, then such market
participant can merely choose not to
request such data from the Exchange
and instead purchase another
exchange’s historical end-of-day or
intra-day Open-Close data, which offer
similar data points, albeit based on that
other market’s trading activity.
The Exchange also believes its
proposal is reasonable as it would
further support its offer of the OpenClose Report, which is designed to aid
investors by providing insight into
trading on the Exchange. Providing
market data, such as the Open-Close
Report, is also a means by which
exchanges compete to attract business.
Subscribers that receive end-of-day
Open-Close data, and now intra-day
Open-Close data as a result of this
proposal, in response to an ad hoc
request may use such data to evaluate
the usefulness of the Exchange’s OpenClose Report and decide, based on that
data, whether to subscribe to the OpenClose Report on a monthly basis. To the
extent that the Exchange is successful in
attracting subscribers for the Open-Close
Report through this proposal, it may
earn trading revenues and further
enhance the value of its data products.
If the market deems the proposal to be
unfair or inequitable, firms can
diminish or discontinue their use of the
data and/or avail themselves of similar
products offered by other exchanges.24
The Exchange therefore believes that its
proposal reflects the competitive
environment and would be properly
assessed on Member or non-Member
subscribers. The Exchange also believes
the proposal is equitable and not
unfairly discriminatory as it would
apply equally to all users who choose to
purchase or receive such data.
The Exchange believes its proposal is
equitably allocated because a wide
variety of market participants may
choose to request historical Open-Close
Report intra-day or end-of-day data,
including but not limited to individual
customers, buy-side investors and
investment banks, all of which will be
charged the same rates for the monthly
data requests depending on the type of
request (i.e., intra-day or end-of-day ad
24 See
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supra notes 8 and 11.
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hoc historical requests). The Exchange
reiterates that the decision as to whether
or not to make an ad hoc request for
historical end-of-day or intra-day data
Open-Close Report data is entirely
optional and available for all market
participants. Indeed, no market
participant is required to make such ad
hoc request for historical end-of-day or
intra-day Open-Close Report data, and
the Exchange is not required to make
historical end-of-day or intra-day OpenClose Report data available to all
investors. The Exchange is voluntarily
making a subset of existing Open-Close
Report data available via ad hoc
requests for intra-day and end-of-day
data under this proposal at the request
of customers, and market participants
may choose to receive this data based on
their own business needs and for the
proposed fees specified herein. Potential
purchasers of ad hoc data may request
the data at any time if they believe it to
be valuable or may decline to subscribe
such data.
The Exchange believes it is reasonable
to remove the mandatory fifteen (15)
day waiting period in order to receive
historical ad hoc end-of-day Open-Close
data because the Exchange initially
implemented this delay because it made
historical end-of-day Open-Close Report
data free and sought to not encourage
subscribers to request historical end-ofday Open-Close Report data over a paid
subscription. Now that the Exchange
proposes to charge a fee for historical
end-of-day Open-Close Report data and
because no other options exchange
imposes similar delay requirements for
the same data, the Exchange believes the
fifteen (15) day waiting period is no
longer necessary and is reasonable to
remove this language from the Fee
Schedule.
The Exchange believes that the
discount for qualifying academic
purchasers of the ad hoc historical endof-day Open-Close and intra-day OpenClose Report data is reasonable because
academic users are not able to monetize
access to the data as they do not trade
on the data set. The Exchange believes
the proposed discount will allow for
more academic institutions and faculty
members to purchase historical end-ofday Open-Close and intra-day OpenClose Report data, and, as a result,
promote research and studies of the
options industry to the benefit of all
market participants. The Exchange
believes that the proposed discount is
equitable and not unfairly
discriminatory because it will apply
equally to all academic users that
submit applications and meet the
accredited academic institution or
faculty member and academic use
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criteria. As stated above, qualified
academic users will subscribe to the
data set for educational use and
purposes and are not permitted to use
the data for commercial or monetizing
purposes, nor can qualify if they are
funded by an industry participant. As a
result, the Exchange believes the
proposed discount is equitable and not
unfairly discriminatory because it
maintains equal treatment for all
industry participants or other
subscribers that use the data for
vocational, commercial or other forprofit purposes.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Rather, the
Exchange believes that the proposal will
promote competition by permitting the
Exchange to enhance the value of a data
product that is similar to those offered
by other competitor options
exchanges.25 The Exchange made
historical end-of-day and intra-day
Open-Close Report data available in
order to keep pace with changes in the
industry and evolving customer needs,
and believes that providing such data to
market participants that make requests
for it will continue to contribute to
robust competition among national
securities exchanges. At least eight other
U.S. options exchanges offer historical
end-of-day and intra-day Open-Close
report data on an ad hoc basis with fees
that are substantially similar to the
Exchange’s proposed fees herein. As a
result, the Exchange believes this
proposed rule change permits fair
competition among national securities
exchanges. While the proposed
academic discount is a fee reduction
that applies only to qualifying academic
purchasers, the Exchange believes that
academic purchasers’ research and
publications as a result of access to
historical market data benefits all
market participants.
Furthermore, the Exchange operates
in a highly competitive environment,
and its ability to price ad hoc requests
for end-of-day and intra-day Open-Close
Report data is constrained by
competition among exchanges that offer
similar fees for similar ad hoc requests
for end-of-day and intra-day Open-Close
report data to their customers. The
Exchange notes that there are currently
a number of similar products available
to market participants and investors. At
least eight other U.S. options exchanges
25 See
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offer similar fees for ad hoc requests for
end-of-day and intra-day Open-Close
report data that is substantially similar
to the fees for ad hoc requests for endof-day and intra-day Open-Close Report
data proposed in this filing, which the
Exchange must consider in its pricing
discipline in order to compete for the
market data.26 For example, proposing
fees that are excessively higher than
established fees for similar ad hoc
requests for historical end-of-day and
intra-day Open-Close Report data on the
Exchange would simply serve to reduce
demand for the Exchange’s data
product, which as discussed, market
participants are under no obligation to
utilize. In this competitive environment,
potential purchasers are free to choose
which, if any, similar product to
purchase to satisfy their need for market
information. As a result, the Exchange
believes this proposed rule change
permits fair competition among national
securities exchanges.
The Exchange also does not believe
the proposal would cause any
unnecessary or inappropriate burden on
intermarket competition as other
exchanges are free to introduce their
own comparable data product and lower
their prices for ad hoc historical
requests to better compete with the
Exchange’s offering. The Exchange does
not believe the proposed rule change
would cause any unnecessary or
inappropriate burden on intramarket
competition. Particularly, the proposal
would apply uniformly to any market
participant, in that it does not
differentiate between requests for ad hoc
historical Open-Close Report data, other
than for qualifying academic users. The
proposal allows any interested Member
or non-Member to request on an ad hoc
basis historical end-of-day or intra-day
Open-Close Report databased on their
business needs.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
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)(ii) of the Act,27 and Rule
26 See, e.g. Cboe Options Fee Schedule, Livevol
Fees, Open-Close Data, available at https://
cdn.cboe.com/resources/membership/Cboe_
FeeSchedule.pdf. See also supra note 8, ISE fee
schedule.
27 15 U.S.C. 78s(b)(3)(A)(ii).
E:\FR\FM\19APN1.SGM
19APN1
Federal Register / Vol. 88, No. 75 / Wednesday, April 19, 2023 / Notices
19b-4(f)(2) 28 thereunder. At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
lotter on DSK11XQN23PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
EMERALD–2023–09 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–EMERALD–2023–09. 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–EMERALD–2023–09, and
should be submitted on or before May
10, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–08224 Filed 4–18–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97302; File No. SR–MIAX–
2023–15]
Self-Regulatory Organizations; Miami
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule
April 13, 2023.
Pursuant to the provisions of 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 April 3, 2023, Miami International
Securities Exchange, LLC (‘‘MIAX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I, II, and III below,
which Items have been prepared by the
Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX Fee Schedule (‘‘Fee
Schedule’’) to amend fees for historical
Open-Close Report to: (i) add a fee for
ad hoc requests for end-of-day data and
no longer provide such data free of
charge; (ii) respond to requests for ad
hoc intra-day data and adopt a new fee
for such requests; and (iii) adopt
academic discounts for requests for ad
hoc historical end-of-day and intra-day
Open-Close data.
The text of the proposed rule change
is available on the Exchange’s website at
29 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
28 17
CFR 240.19b–4(f)(2).
VerDate Sep<11>2014
16:37 Apr 18, 2023
Jkt 259001
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
24221
https://www.miaxoptions.com/rulefilings, at MIAX’s principal office, 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 adopted a new data
product for options known as the OpenClose Report,3 which the Exchange
made available for purchase to
Exchange Members 4 and non-Members
on June 1, 2021.5 The Open-Close
Report is described under Exchange
Rule 531(d)(1). The Exchange now
proposes to amend fees for historical
Open-Close Report to: (i) add a fee for
ad hoc requests for end-of-day data and
no longer provide such data free of
charge; (ii) respond to requests for ad
hoc intra-day data and adopt a new fee
for such requests; and (iii) adopt
academic discounts for requests for ad
hoc historical end-of-day and intra-day
Open-Close data. The Exchange
previously filed this proposal on March
23, 2023 (SR–MIAX–2023–14). On April
3, 2023, the Exchange withdrew SR–
MIAX–2023–14 and resubmitted this
proposal.
General
By way of background, the Exchange
offers two versions of the Open-Close
3 See Securities Exchange Act Release No. 91965
(May 21, 2021), 86 FR 28665 (May 27, 2021) (SR–
MIAX–2021–18) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Adopt
a New Historical Market Data Product To Be Known
as the Open-Close Report).
4 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
5 See Securities Exchange Act Release No. 92135
(June 9, 2021), 86 FR 31751 (June 15, 2021) (SR–
MIAX–2021–23) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule To Adopt Fees for the Open-Close
Report).
E:\FR\FM\19APN1.SGM
19APN1
]]>Agencies
[Federal Register Volume 88, Number 75 (Wednesday, April 19, 2023)]
[Notices]
[Pages 24217-24221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08224]
[[Page 24217]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97307; File No. SR-EMERALD-2023-09]
Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
April 13, 2023.
Pursuant to the provisions of 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 April 3, 2023, MIAX Emerald, LLC (``MIAX
Emerald'' or ``Exchange''), filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing a proposal to amend the MIAX Emerald Fee
Schedule (the ``Fee Schedule'') to amend fees for historical Open-Close
Report to: (i) add a fee for ad hoc requests for end-of-day data and no
longer provide such data free of charge; (ii) respond to requests for
ad hoc intra-day data and adopt a new fee for such requests; and (iii)
adopt academic discounts for requests for ad hoc historical end-of-day
and intra-day Open-Close data.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/emerald, at MIAX's
principal office, 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 adopted a new data product for options known as the
Open-Close Report,\3\ which the Exchange made available for purchase to
Exchange Members \4\ and non-Members on June 1, 2021.\5\ The Open-Close
Report is described under Exchange Rule 531(d)(1). The Exchange now
proposes to amend fees for historical Open-Close Report to: (i) add a
fee for ad hoc requests for end-of-day data and no longer provide such
data free of charge; (ii) respond to requests for ad hoc intra-day data
and adopt a new fee for such requests; and (iii) adopt academic
discounts for requests for ad hoc historical end-of-day and intra-day
Open-Close data. The Exchange previously filed this proposal on March
23, 2023 (SR-EMERALD-2023-07). On April 3, 2023, the Exchange withdrew
SR-EMERALD-2023-07 and resubmitted this proposal.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 91963 (May 21,
2021), 86 FR 28662 (May 27, 2021) (SR-EMERALD-2021-18) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to
Adopt a New Historical Market Data Product To Be Known as the Open-
Close Report).
\4\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100.
\5\ See Securities Exchange Act Release No. 92138 (June 9,
2021), 86 FR 31769 (June 15, 2021) (SR-EMERALD-2021-20) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule To Adopt Fees for the Open-Close Report).
---------------------------------------------------------------------------
General
By way of background, the Exchange offers two versions of the Open-
Close Report, an end-of-day summary and intra-day report.\6\ The end-
of-day version is a volume summary of trading activity on the Exchange
at the option level by origin (Priority Customer, Non-Priority
Customer, Firm, Broker-Dealer, and Market Maker),\7\ side of the market
(buy or sell), contract volume, and transaction type (opening or
closing). The Priority Customer, Non-Priority Customer volume is
further broken down into trade size buckets (less than 100 contracts,
100-199 contracts, greater than 199 contracts). The Open-Close Report
data is proprietary Exchange trade data and does not include trade data
from any other exchange. It is also a historical data product and not a
real-time data feed. The Exchange notes that Open-Close Report data is
not necessary for trading and subscribing to the Open-Close Report is
completely optional.
---------------------------------------------------------------------------
\6\ The intraday Open-Close Report provides similar information
to that of Open-Close Data but will be produced and updated every 10
minutes during the trading day. Data is captured in ``snapshots''
taken every 10 minutes throughout the trading day and is available
to subscribers within five minutes of the conclusion of each 10-
minute period.
\7\ See Exchange Rule 100.
---------------------------------------------------------------------------
Members and non-Members may purchase the Open-Close Report on a
monthly basis. The Exchange currently assess a monthly fee of $600 per
month for subscribing to the end-of-day summary Open-Close Report and
$2,000 per month for subscribing to the intra-day Open-Close Report.
For mid-month subscriptions, new subscribers are currently charged for
the full calendar month for which they subscribe and will be provided
Open-Close Report data for each trading day of the calendar month from
the day on which they subscribed and receive data for each trading day
of the calendar month prior to the day on which they subscribe.
End-of-Day Ad Hoc Request (Historical Data)
The Exchange currently provides Members and Non-Members who request
on an ad hoc basis historical end-of-day Open-Close Report data free of
charge. The Exchange initially proposed to provide such data for free
because it only recently launched the Open-Close Report and had minimal
amount of historical end-of-day data. The Exchange also wanted to
support the introduction of the new product through such a pricing
incentive to attract additional subscribers.
An ad hoc request may be for any number of months beginning with
June 2021, the month in which the Exchange first made the Open-Close
Report available. For example, a market participant may request end-of-
day Open-Close Report data for the month of June 2021 or July 2021, or
may request such data for both June and July 2021 and would not be
currently charged a fee for such request(s). The Exchange notes that
other exchanges that provide similar data products allow for ad hoc
requests of their end-of-day data for a fee.\8\ Similar to other
exchanges, the
[[Page 24218]]
Exchange now proposes to charge a fee of $500 per request per month for
ad-hoc requests for end-of-day historical data.\9\
---------------------------------------------------------------------------
\8\ See Price List--U.S. Derivatives Data for Nasdaq PHLX, LLC
(``PHLX''), The Nasdaq Stock Market, LLC (``Nasdaq''), Nasdaq ISE,
LLC (``ISE''), and Nasdaq GEMX, LLC (``GEMX''), available at https://www.nasdaqtrader.com/Trader.aspx?id=DPPriceListOptions#web.
Particularly, PHLX offers ``Nasdaq PHLX Options Trade Outline
(PHOTO)'' and assesses $400 for historical end-of-day data; Nasdaq
offers the ``Nasdaq Options Trade Outline (NOTO)'' and assesses $250
for historical end-of-day data; ISE offers the ``Nasdaq ISE Open/
Close Trade Profile'' and assesses $600 per month for historical
end-of-day data and $27,500 for complete history; and GEMX offers
the ``Nasdaq GEMX Open/Close Trade Profile'' and assesses $400 for
historical end-of-day data. Cboe EDGX Exchange, Inc. (``EDGX'') and
Cboe BZX Exchange, Inc. (``BZX'') both assess $400 for historical
end-of-day data per request per month. See the EDGX fee schedule
available at https://markets.cboe.com/us/options/membership/fee_schedule/edgx/ and the BZX fee schedule available at https://markets.cboe.com/us/options/membership/fee_schedule/bzx/.
\9\ Id.
---------------------------------------------------------------------------
The Exchange currently makes the historical end-of-day Open-Close
data available fifteen (15) days after the end of the month for which
it is requested. The Exchange implemented this delay because historical
end-of-day Open-Close Report data was free of charge and the Exchange
sought to not encourage subscribers to request historical end-of-day
Open-Close Report data over a paid subscription. Now that the Exchange
proposes to charge a fee for historical end-of-day Open-Close Report
data, it believes the fifteen (15) day delay in making the data
available is no longer necessary and proposes to remove this language
from its Fee Schedule.
Intra-Day Ad Hoc Request (Historical Data)
The Exchange now proposes to provide Members and Non-Members who
request on an ad hoc basis historical intra-day Open-Close Report data
for a fee of $1,000 per request per month. When the Exchange proposed
to provide for ad-hoc requests for end-of day data, it did not also
propose to allow for ad hoc requests for intra-day Open-Close Report
data.\10\ Based on interest from Members and non-Members, the Exchange
now proposes to do so for the above proposed fee.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 93023 (September
16, 2021), 86 FR 52731 (September 22, 2021) (SR-EMERALD-2021-28).
---------------------------------------------------------------------------
As it currently specifies for historical end-of-day Open-Close
data, an ad hoc request may be for any number of months beginning with
June 2021, the month in which the Exchange first made the Open-Close
Report available. Similarly, the Exchange will provide historical
intra-day Open-Close data for the same time period. The Exchange notes
that other exchanges that provide similar data products allow for ad
hoc requests of their intra-day data for a fee.\11\
---------------------------------------------------------------------------
\11\ See Price List--U.S. Derivatives Data for PHLX, ISE, and
GEMX, available at https://www.nasdaqtrader.com/Trader.aspx?id=DPPriceListOptions#web. Particularly, PHLX offers
``Nasdaq PHLX Options Trade Outline (PHOTO)'' and assesses $1,000
for historical intra-day data; ISE offers the ``Nasdaq ISE Open/
Close Trade Profile'' and assesses $1,000 per month for historical
intra-day; and GEMX offers the ``Nasdaq GEMX Open/Close Trade
Profile'' and assesses $750 for historical end-of-day data. EDGX and
BZX both assess $750 for historical intra-day data per request per
month. See the EDGX fee schedule available at https://markets.cboe.com/us/options/membership/fee_schedule/edgx/ and the
BZX fee schedule available at https://markets.cboe.com/us/options/membership/fee_schedule/bzx/.
---------------------------------------------------------------------------
Academic Discounts for Ad Hoc Historical End-of-Day and Intra-Day Open-
Close Report Data
The Exchange also proposes to adopt an academic discount for ad-hoc
requests of historical months of these data sets. Specifically, the
Exchange proposes to charge qualifying academic purchasers per request
$1,500 per year for the first year (instead of $6,000 per year) and
$125 per month thereafter for historical end-of-day Open-Close Report
data covering all of the Exchange's securities. Further, the Exchange
proposes to charge qualifying academic purchasers per request $3,000
per year for the first year (instead of $12,000 per year) and $250 per
month thereafter for historical intra-day Open-Close Report data
covering all of the Exchange's securities.
Particularly, the Exchange believes that academic institutions and
researchers provide a valuable service for the Exchange in studying and
promoting the options market. Though academic institutions and
researchers have need for granular options data sets, they do not trade
upon the data for which they subscribe. The Exchange believes the
proposed reduced fee for qualifying academic purchasers of historical
end-of-day Open-Close Report data and intra-day Open-Close Report data
will encourage and promote academic studies of its market data by
academic institutions. In order to qualify for the academic pricing, an
academic purchaser must: (1) be an accredited academic institution or
member of the faculty or staff of such an institution, and (2) use the
data in independent academic research, academic journals and other
publications, teaching and classroom use, or for other bona fide
educational purposes (i.e. academic use). Furthermore, use of the data
must be limited to faculty and students of an accredited academic
institution, and any commercial or profit-seeking usage is excluded.
Academic pricing will not be provided to any purchaser whose research
is funded by a securities industry participant. Academic users
interested in qualifying will be required to submit a brief
application.\12\ Exchange Business Development personnel will have the
discretion to review and approve such applications and request
additional information when it deems necessary.
---------------------------------------------------------------------------
\12\ The Exchange notes that it will have an academic user
application available on the Exchange's website soon but it has not
received any such requests from potential academic users at the time
of this filing (or the previous filing).
---------------------------------------------------------------------------
The Exchange notes that competing exchanges currently offer
academic discounts for similar data sets on those exchanges.\13\ The
Exchange recognizes the high value of academic research and educational
instruction and publications, and believes that the proposed academic
discounts for historical end-of-day Open-Close Report data and intra-
day Open-Close Report data will encourage the promotion of academic
research of the options industry, which will serve to benefit all
market participants while also opening up a new potential user base
among students. Finally, the Exchange notes that academic purchasers'
ad hoc requests of historical end-of-day Open-Close and intra-day Open-
Close data would be educational in use and purpose, and not vocational.
---------------------------------------------------------------------------
\13\ See supra note 8, BZX, EDGX, and ISE fee schedules; see
also Cboe Exchange, Inc. (``Cboe'') Options Fee Schedule, Livevol
Fees, Open Close Data available at https://cdn.cboe.com/resources/membership/Cboe_FeeSchedule.pdf.
---------------------------------------------------------------------------
Implementation Date
The Exchange intends to implement the proposed fee changes
immediately.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\14\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\15\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and to protect investors and the public
interest, and that it is not designed to permit unfair discrimination
among customers, brokers, or dealers. The Exchange also believes that
its proposed changes to its Fee Schedule concerning fees for the Open-
Close Report is consistent with Section 6(b) of the Act \16\ in
general, and furthers the objectives of Section 6(b)(4) of the Act \17\
in particular, in that it is an equitable allocation of dues, fees and
other charges among its members and other recipients of Exchange data.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
In adopting Regulation NMS, the Commission granted self-regulatory
[[Page 24219]]
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. Particularly, the Open-Close Report further
broadens the availability of U.S. option market data to investors
consistent with the principles of Regulation NMS. The data product also
promotes increased transparency through the dissemination of the Open-
Close Report. Particularly, information regarding opening and closing
activity across different option series during the trading day may
indicate investor sentiment, which may allow market participants to
make better informed trading decisions throughout the day. Subscribers
to the data may also be able to enhance their ability to analyze option
trade and volume data and create and test trading models and analytical
strategies. The Exchange believes the Open-Close Report provides a
valuable tool that subscribers can use to gain comprehensive insight
into the trading activity in a particular series, but also emphasizes
such data is not necessary for trading and completely optional.
Moreover, other exchanges offer a similar data product.\18\ This
proposal seeks to provide historical Open-Close Report data to market
participants by amending the fees for the Open-Close Report to: (i) add
a fee of $500 per request per month for ad hoc requests for end-of-day
historical data; (ii) respond to requests for ad hoc intra-day data and
adopt a fee of $1,000 per request per month for such requests; and
(iii) adopt academic discounts for requests for ad hoc historical end-
of-day and intra-day Open-Close data.
---------------------------------------------------------------------------
\18\ See supra notes 8 and 11.
---------------------------------------------------------------------------
The Exchange operates in a highly competitive environment. Indeed,
there are currently 16 registered options exchanges that trade options.
Based on publicly available information, for the month of March 2023,
no single options exchange had more than approximately 13% of the
equity options market share and the Exchange represented only
approximately 3.27% of the equity options market share for the month of
March 2023.\19\ The Commission has repeatedly expressed its preference
for competition over regulatory intervention in determining prices,
products, and services in the securities markets. Particularly, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \20\ Making
similar data products available to market participants fosters
competition in the marketplace, and constrains the ability of exchanges
to charge supra-competitive 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.
---------------------------------------------------------------------------
\19\ See the Exchange's ``The market at a glance,'' available at
https://www.miaxoptions.com/ (last visited April 3, 2023).
\20\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
The Exchange believes its proposal to respond to requests and add
fees for ad hoc requests for historical end-of-day and intra-day data
and adopt academic discounts for such requests is reasonable as the
proposed rates are similar to fees assessed by other exchanges that
provide data in response to ad hoc request for their similar data
products.\21\ The Exchange believes its proposal is reasonable and not
unfairly discriminatory because the Exchange now has almost two years
of historical Open-Close Report data to provide to market participants
that request historical intra-day or end-of-day Open-Close Report data
since the Exchange began offering the Open-Close Report in June 2021.
Further, the Exchange notes that no competing exchange provides their
own historical Open-Close report data free of charge.\22\ Indeed,
proposing fees that are excessively higher than established fees for
similar data products would simply serve to reduce demand for the
Exchange's data product, which as noted, is entirely optional. Like the
Exchange's Open-Close Report, other exchanges offer similar data
products that each provide insight into trading on those markets and
may likewise aid in assessing investor sentiment. Although each of
these similar Open-Close data products provide only proprietary trade
data and not trade data from other exchanges, it is possible investors
are still able to gauge overall investor sentiment across different
option series based on open and closing interest on any one
exchange.\23\ Similarly, market participants may be able to analyze
option trade and volume data, and create and test trading models and
analytical strategies using only Open-Close data relating to trading
activity on one or more of the other markets that provide similar data
products. As such, if a market participant views another exchange's
historical end-of-day or intra-day Open-Close data as more attractive
than the Exchange's historical end-of-day or intra-day Open-Close
Report data, then such market participant can merely choose not to
request such data from the Exchange and instead purchase another
exchange's historical end-of-day or intra-day Open-Close data, which
offer similar data points, albeit based on that other market's trading
activity.
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\21\ See supra notes 8 and 11.
\22\ See id.
\23\ The Exchange notes that its Open-Close Report data product
does not include data on any exclusive, singly-listed option series.
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The Exchange also believes its proposal is reasonable as it would
further support its offer of the Open-Close Report, which is designed
to aid investors by providing insight into trading on the Exchange.
Providing market data, such as the Open-Close Report, is also a means
by which exchanges compete to attract business. Subscribers that
receive end-of-day Open-Close data, and now intra-day Open-Close data
as a result of this proposal, in response to an ad hoc request may use
such data to evaluate the usefulness of the Exchange's Open-Close
Report and decide, based on that data, whether to subscribe to the
Open-Close Report on a monthly basis. To the extent that the Exchange
is successful in attracting subscribers for the Open-Close Report
through this proposal, it may earn trading revenues and further enhance
the value of its data products. If the market deems the proposal to be
unfair or inequitable, firms can diminish or discontinue their use of
the data and/or avail themselves of similar products offered by other
exchanges.\24\ The Exchange therefore believes that its proposal
reflects the competitive environment and would be properly assessed on
Member or non-Member subscribers. The Exchange also believes the
proposal is equitable and not unfairly discriminatory as it would apply
equally to all users who choose to purchase or receive such data.
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\24\ See supra notes 8 and 11.
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The Exchange believes its proposal is equitably allocated because a
wide variety of market participants may choose to request historical
Open-Close Report intra-day or end-of-day data, including but not
limited to individual customers, buy-side investors and investment
banks, all of which will be charged the same rates for the monthly data
requests depending on the type of request (i.e., intra-day or end-of-
day ad
[[Page 24220]]
hoc historical requests). The Exchange reiterates that the decision as
to whether or not to make an ad hoc request for historical end-of-day
or intra-day data Open-Close Report data is entirely optional and
available for all market participants. Indeed, no market participant is
required to make such ad hoc request for historical end-of-day or
intra-day Open-Close Report data, and the Exchange is not required to
make historical end-of-day or intra-day Open-Close Report data
available to all investors. The Exchange is voluntarily making a subset
of existing Open-Close Report data available via ad hoc requests for
intra-day and end-of-day data under this proposal at the request of
customers, and market participants may choose to receive this data
based on their own business needs and for the proposed fees specified
herein. Potential purchasers of ad hoc data may request the data at any
time if they believe it to be valuable or may decline to subscribe such
data.
The Exchange believes it is reasonable to remove the mandatory
fifteen (15) day waiting period in order to receive historical ad hoc
end-of-day Open-Close data because the Exchange initially implemented
this delay because it made historical end-of-day Open-Close Report data
free and sought to not encourage subscribers to request historical end-
of-day Open-Close Report data over a paid subscription. Now that the
Exchange proposes to charge a fee for historical end-of-day Open-Close
Report data and because no other options exchange imposes similar delay
requirements for the same data, the Exchange believes the fifteen (15)
day waiting period is no longer necessary and is reasonable to remove
this language from the Fee Schedule.
The Exchange believes that the discount for qualifying academic
purchasers of the ad hoc historical end-of-day Open-Close and intra-day
Open-Close Report data is reasonable because academic users are not
able to monetize access to the data as they do not trade on the data
set. The Exchange believes the proposed discount will allow for more
academic institutions and faculty members to purchase historical end-
of-day Open-Close and intra-day Open-Close Report data, and, as a
result, promote research and studies of the options industry to the
benefit of all market participants. The Exchange believes that the
proposed discount is equitable and not unfairly discriminatory because
it will apply equally to all academic users that submit applications
and meet the accredited academic institution or faculty member and
academic use criteria. As stated above, qualified academic users will
subscribe to the data set for educational use and purposes and are not
permitted to use the data for commercial or monetizing purposes, nor
can qualify if they are funded by an industry participant. As a result,
the Exchange believes the proposed discount is equitable and not
unfairly discriminatory because it maintains equal treatment for all
industry participants or other subscribers that use the data for
vocational, commercial or other for-profit purposes.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Rather, the
Exchange believes that the proposal will promote competition by
permitting the Exchange to enhance the value of a data product that is
similar to those offered by other competitor options exchanges.\25\ The
Exchange made historical end-of-day and intra-day Open-Close Report
data available in order to keep pace with changes in the industry and
evolving customer needs, and believes that providing such data to
market participants that make requests for it will continue to
contribute to robust competition among national securities exchanges.
At least eight other U.S. options exchanges offer historical end-of-day
and intra-day Open-Close report data on an ad hoc basis with fees that
are substantially similar to the Exchange's proposed fees herein. As a
result, the Exchange believes this proposed rule change permits fair
competition among national securities exchanges. While the proposed
academic discount is a fee reduction that applies only to qualifying
academic purchasers, the Exchange believes that academic purchasers'
research and publications as a result of access to historical market
data benefits all market participants.
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\25\ See supra notes 8 and 11.
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Furthermore, the Exchange operates in a highly competitive
environment, and its ability to price ad hoc requests for end-of-day
and intra-day Open-Close Report data is constrained by competition
among exchanges that offer similar fees for similar ad hoc requests for
end-of-day and intra-day Open-Close report data to their customers. The
Exchange notes that there are currently a number of similar products
available to market participants and investors. At least eight other
U.S. options exchanges offer similar fees for ad hoc requests for end-
of-day and intra-day Open-Close report data that is substantially
similar to the fees for ad hoc requests for end-of-day and intra-day
Open-Close Report data proposed in this filing, which the Exchange must
consider in its pricing discipline in order to compete for the market
data.\26\ For example, proposing fees that are excessively higher than
established fees for similar ad hoc requests for historical end-of-day
and intra-day Open-Close Report data on the Exchange would simply serve
to reduce demand for the Exchange's data product, which as discussed,
market participants are under no obligation to utilize. In this
competitive environment, potential purchasers are free to choose which,
if any, similar product to purchase to satisfy their need for market
information. As a result, the Exchange believes this proposed rule
change permits fair competition among national securities exchanges.
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\26\ See, e.g. Cboe Options Fee Schedule, Livevol Fees, Open-
Close Data, available at https://cdn.cboe.com/resources/membership/Cboe_FeeSchedule.pdf. See also supra note 8, ISE fee schedule.
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The Exchange also does not believe the proposal would cause any
unnecessary or inappropriate burden on intermarket competition as other
exchanges are free to introduce their own comparable data product and
lower their prices for ad hoc historical requests to better compete
with the Exchange's offering. The Exchange does not believe the
proposed rule change would cause any unnecessary or inappropriate
burden on intramarket competition. Particularly, the proposal would
apply uniformly to any market participant, in that it does not
differentiate between requests for ad hoc historical Open-Close Report
data, other than for qualifying academic users. The proposal allows any
interested Member or non-Member to request on an ad hoc basis
historical end-of-day or intra-day Open-Close Report databased on their
business needs.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
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)(ii) of the Act,\27\ and Rule
[[Page 24221]]
19b-4(f)(2) \28\ thereunder. At any time within 60 days of the filing
of the proposed rule change, the Commission summarily may temporarily
suspend such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
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\27\ 15 U.S.C. 78s(b)(3)(A)(ii).
\28\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-EMERALD-2023-09 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-EMERALD-2023-09. 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-EMERALD-2023-09, and should be submitted
on or before May 10, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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\29\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-08224 Filed 4-18-23; 8:45 am]
BILLING CODE 8011-01-P
