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]

Download as PDF 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. lotter on DSK11XQN23PROD with NOTICES1 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. VerDate Sep<11>2014 16:37 Apr 18, 2023 Jkt 259001 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. PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 24217 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 E:\FR\FM\19APN1.SGM Continued 19APN1 24218 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. lotter on DSK11XQN23PROD with NOTICES1 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- VerDate Sep<11>2014 16:37 Apr 18, 2023 Jkt 259001 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 Frm 00072 Fmt 4703 Sfmt 4703 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). E:\FR\FM\19APN1.SGM 19APN1 lotter on DSK11XQN23PROD with NOTICES1 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 VerDate Sep<11>2014 16:37 Apr 18, 2023 Jkt 259001 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. PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 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 E:\FR\FM\19APN1.SGM supra notes 8 and 11. 19APN1 lotter on DSK11XQN23PROD with NOTICES1 24220 Federal Register / Vol. 88, No. 75 / Wednesday, April 19, 2023 / Notices 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 VerDate Sep<11>2014 16:37 Apr 18, 2023 Jkt 259001 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 PO 00000 supra notes 8 and 11. Frm 00074 Fmt 4703 Sfmt 4703 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]]

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

    \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.
---------------------------------------------------------------------------

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

    \24\ See supra notes 8 and 11.
---------------------------------------------------------------------------

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

    \25\ See supra notes 8 and 11.
---------------------------------------------------------------------------

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

    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
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