Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 31535-31539 [2023-10466]
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Federal Register / Vol. 88, No. 95 / Wednesday, May 17, 2023 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to section
19(b)(3)(A)(iii) of the Act 13 and Rule
19b–4(f)(6) thereunder.14
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.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
LTSE–2023–03 on the subject line.
Paper Comments
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• 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–LTSE–2023–03. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
13 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires the Exchange to give the
Commission written notice of its intent to file the
proposed rule change, along with a brief description
and text of the proposed rule change, at least five
business days prior to the date of filing of the
proposed rule change, or such shorter time as
designated by the Commission. The Exchange has
satisfied this requirement.
14 17
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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.
Do not include personal identifiable
information in submissions; you should
submit only information that you wish
to make available publicly. We may
redact in part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection. All submissions should refer
to File Number SR–LTSE–2023–03 and
should be submitted on or before June
7, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–10474 Filed 5–16–23; 8:45 am]
BILLING CODE 8011–01–P
31535
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX Options’’)
proposes to amend its Fee Schedule.
The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/edgx/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97481; File No. SR–
CboeEDGX–2023–033]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule
May 11, 2023.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 28,
2023, Cboe EDGX Exchange, Inc.
(‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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The Exchange proposes to amend its
Fee Schedule to modify its market data
fees for EDGX Options Top.3
Particularly, the Exchange proposes to
modify the Professional and NonProfessional User Fees, adopt a new
Enterprise Fee for EDGX Options Top,
and make other clarifying, nonsubstantive changes.4
3 EDGX Options Top is an uncompressed data
feed that offers top of book quotations and
execution information based on options orders
entered into the System. Uncompressed data is
disseminated ‘‘as is’’ in the native format by the
Exchange, with no compression.
4 The Exchange initially filed the proposed fee
changes on January 3, 2023 (SR–CboeEDGX–2023–
001). On March 1, 2023, the Exchange withdrew
that filing and submitted SR–CboeEDGX–2023–015
in place of SR–CboeEDGX–2023–001, which the
Exchange withdrew on March 1, 2023. On March
10, 2023 the Exchange withdrew CboeEDGX–2023–
015 and submitted SR–CboeEDGX–2023–020. On
April 28, 2023, the Exchange withdrew that filing
and submitted this filing.
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Federal Register / Vol. 88, No. 95 / Wednesday, May 17, 2023 / Notices
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The Exchange first proposes to reduce
the rates for Professional and NonProfessional User fees for EDGX Options
Top. The Exchange currently charges
Internal Distributors and External
Distributors that redistribute any of the
EDGX Options Data Feeds different fees
for their Professional Users 5 and NonProfessional Users.6 The Exchange
currently assesses a monthly fee for
Professional Users of $10.00 per User
and a monthly fee of $1.00 per NonProfessional User.7 Further, the Fee
Schedule provides that Distributors and
Users of any one of EDGX Options
market data products (i.e., EDGX
Options Top, EDGX Options Depth,
EDGX Options Auction Feed, EDGX
Options Complex Depth, EDGX Options
Complex Top, and EDGX Options
Complex Auction Fees) may receive, at
no additional charge, access to any or all
of the other market data products listed.
The Exchange proposes to reduce the
rates for the User fees for EDGX Options
Top. Particularly, the Exchange
proposes to reduce the monthly (i)
Professional User fee from $10 per user
to $5 per user and (ii) Non-Professional
User fee from $1.00 per user to $0.10 per
user. The Exchange also proposes to
start charging separate User fees for
EDGX Options Top. User Fees for the
Exchange’s remaining market data
products will continue to receive, at no
additional charge, access to any or all of
the other market data products listed
(with the exception of EDGX Options
Top). The Exchange has reformatted the
Market Data Fees tables to make this
clear.8
5 A Professional User of an Exchange Market Data
product is any User other than a Non-Professional
User.
6 A ‘‘Non-Professional User’’ of an Exchange
Market Data product is a natural person or
qualifying trust that uses Data only for personal
purposes and not for any commercial purpose and,
for a natural person who works in the United States,
is not: (i) registered or qualified in any capacity
with the Securities and Exchange Commission, the
Commodities Futures Trading Commission, any
state securities agency, any securities exchange or
association, or any commodities or futures contract
market or association; (ii) engaged as an
‘‘investment adviser’’ as that term is defined in
section 202(a)(11) of the Investment Advisors Act
of 1940 (whether or not registered or qualified
under that Act); or (iii) employed by a bank or other
organization exempt from registration under federal
or state securities laws to perform functions that
would require registration or qualification if such
functions were performed for an organization not so
exempt; or, for a natural person who works outside
of the United States, does not perform the same
functions as would disqualify such person as a
Non-Professional User if he or she worked in the
United States.
7 Distributors that receive EDGX Options Data
Feeds are required to count every Professional User
and Non-Professional User to which they provide
the market data product(s).
8 The Exchange is not proposing any changes to
the current User Fee rates for its other market data
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The Exchange lastly proposes to
establish a $20,000 per month
Enterprise Fee that will permit a
Distributor to purchase a monthly (and
optional) Enterprise license to receive
the EDGX Options Top Data for
distribution to an unlimited number of
Professional and Non-Professional
Users. The Enterprise Fee is an
alternative to Professional and NonProfessional User fees and it is assessed
in addition to the Distribution Fee,
which the Exchange proposes to make
clear in the Fee Schedule. The
Enterprise Fee may provide an
opportunity to reduce fees. For example,
if a Distributor distributes EDGX
Options Top to 15,000 Professional
Users who each receive EDGX Options
Top at $5.00 per month (as proposed),
then that Distributor will pay $75,000
per month in Professional Users fees. If
the Distributor instead were to purchase
the proposed Enterprise license, then it
would alternatively pay a flat fee of
$20,000 for an unlimited number of
Professional and Non-Professional
Users. A Distributor must pay a separate
Enterprise Fee for each entity that
controls the display of EDGX Options
Top if it wishes for such Users to be
covered by the Enterprise Fee rather
than by per User fees.9 A Distributor
that pays the Enterprise Fee will not
have to report its number of such Users
on a monthly basis. Rather, every six
months, it must provide the Exchange
with a count of the total number of
Professional and Non-Professional users
of EDGX Options Top.10 The Exchange
notes that the purchase of an Enterprise
license is voluntary and a firm may elect
to instead use the per User structure and
benefit from the proposed per User Fees
described above. For example, a firm
that does not have a sufficient number
of Users to benefit from purchase of the
license need not do so.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
products at this time and Users of any one of the
remaining market data products may continue to
receive, at no additional charge, access to any or all
of the other market data products listed (i.e., except
for EDGX Options Top).
9 For example, if a Distributor (e.g., Refinitiv) that
distributes EDGX Options Top to Retail Brokerage
Firm A and Retail Brokerage Firm B (which
‘‘entities’’ redistribute BZX Options Top to its
respective Users) and wishes to have the Users
under each firm covered by an Enterprise license,
the Distributor would be subject to two Enterprise
Fees.
10 See Cboe Global Markets north American Data
Policies.
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and, in particular, the requirements of
section 6(b) of the Act.11 Specifically,
the Exchange believes the proposed rule
change is consistent with the section
6(b)(5) 12 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the section 6(b)(5) requirement that the
rules of an exchange not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange also believes this
proposal is consistent with section
6(b)(8) of the Act, which requires that
the rules of an exchange not impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.13 In addition,
the Exchange believes that the proposed
rule change is consistent with section
11(A) of the Act as it supports (i) fair
competition among brokers and dealers,
among exchange markets, and between
exchange markets and markets other
than exchange markets, and (ii) the
availability to brokers, dealers, and
investors of information with respect to
quotations for and transactions in
securities.14 The Exchange also believes
the proposed rule change is consistent
with section 6(b)(4) of the Act,15 which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
Members and other persons using its
facilities. The Exchange first notes that
it operates in a highly competitive
environment. Indeed, there are currently
16 registered options exchanges that
trade options. Based on publicly
available information, no single options
exchange has more than 18% of the
market share.16 The Exchange believes
top-of-book quotation and transaction
data is highly competitive as national
securities exchanges compete vigorously
with each other to provide efficient,
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
13 15 U.S.C. 78f(b)(8).
14 15 U.S.C. 78k–1.
15 15 U.S.C. 78f(b)(4).
16 See Cboe Global Markets U.S. Options Market
Month-to-Date Volume Summary (April 24, 2023),
available at https://markets.cboe.com/us/options/
market_statistics/.
12 15
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reliable, and low-cost data to a wide
range of investors and market
participants. Indeed, there are several
competing products offered by other
national securities exchanges today, not
counting products offered by the
Exchange’s affiliates, and each of the
Exchange’s affiliated U.S. options
exchanges also offers similar top-ofbook data.17 Each of those exchanges
offer top-of-book quotation and last sale
information based on their own
quotation and trading activity that is
substantially similar to the information
provided by the Exchange through the
EDGX Options Top Feed. Further, the
quote and last sale data contained in the
EDGX Options Top Feed is identical to
the data sent to OPRA for redistribution
to the public.18 Accordingly, Exchange
top-of-book data is widely available
today from a number of different
sources.
Moreover, the EDGX Options Top is
distributed and purchased on a
voluntary basis, in that neither the
Exchange nor market data distributors
are required by any rule or regulation to
make this data available. Accordingly,
Distributors and Users can discontinue
use at any time and for any reason,
including due to an assessment of the
reasonableness of fees charged. As
described above, market participants
have a wide variety of alternative
market data products from which to
choose, such as similar proprietary data
products offered by other exchanges and
consolidated data. Further, the
Exchange is not required to make any
proprietary data products available or to
offer any specific pricing alternatives to
any customers. Moreover, persons
(including broker-dealers) who
subscribe to any exchange proprietary
data feed must also have equivalent
access to consolidated Options
Information 19 from OPRA for the same
17 See e.g., NYSE Arca Options Proprietary
Market Data Fees Schedule, MIAX Options
Exchange, Fee Schedule, Section 6 (Market Data
Fees), Nasdaq PHLX Options 7 Pricing Schedule,
Section 10 (Proprietary Data Feed Fees) and Cboe
Data Services, LLC Fees Schedule.
18 The Exchange notes that it makes available the
top-of-book and last sale data that is included in the
EDGX Options Top Data Feed no earlier than the
time at which the Exchange sends that data to
OPRA.
19 ‘‘Consolidated Options Information’’ means
consolidated Last Sale Reports combined with
either consolidated Quotation Information or the
BBO furnished by OPRA. Access to consolidated
Options Information is deemed ‘‘equivalent’’ if both
kinds of information are equally accessible on the
same terminal or work station. See Limited Liability
Company Agreement of Options Price Reporting
Authority, LLC (‘‘OPRA Plan’’), Section 5.2(c)(iii).
The Exchange notes that this requirement under the
OPRA Plan is also reiterated under the Cboe Global
Markets Global Data Agreement and Cboe Global
Markets North American Data Policies, which
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classes or series of options that are
included in the proprietary data feed,
and proprietary data feeds cannot be
used to meet that particular
requirement.20 As such, all proprietary
data feeds are purely optional and only
those that deem the product to be of
sufficient overall value and usefulness
would purchase it.
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.’’ 21
Making similar data products available
to market participants fosters
competition in the marketplace, and
constrains the ability of exchanges to
charge supracompetitive fees. In the
event that a market participant views
one exchange’s data product as more or
less attractive than a competitor they
can and do switch between similar
products. The proposed fees are a result
of the competitive environment, as the
Exchange seeks to adopt fees to attract
purchasers who may be interested in
purchasing only the EDGX Options Top
Data Feed.
The Exchange believes the proposed
changes to reduce the rates of the
current Professional and NonProfessional User fees for EDGX Options
Top Feed are reasonable as Distributors
will be subject to lower User fees for
EDGX Options Top Feed. Distributors
who only wish to distribute EDGX
Options Top Feed will therefore be
subject to lower User fees. Additionally,
the User fees continue to be in line with
and/or lower than User fees assessed by
other exchanges for similar data.22
subscribers to any exchange proprietary product
must sign and are subject to, respectively.
Additionally, the Exchange’s Data Order Form
(used for requesting the Exchange’s market data
products) requires confirmation that the requesting
market participant receives data from OPRA.
20 Id.
21 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
22 See e.g., Nasdaq PHLX Options 7 Pricing
Schedule, Section 10 (Proprietary Data Feed Fees),
which provides for a fee of $40 per month to
professional users and $1.00 per month to nonprofessional users to cover the usage of PHLX
Options (TOPO) Data, TOPO Plus Orders, PHLX
Orders and PHLX Depth Data feeds. See also NYSE
American Options Proprietary Market Data Fees
schedule, which provides for a fee of $50 per month
to professional users and $1.00 per month to non-
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31537
The Exchange believes that the
proposed fees are equitable and not
unfairly discriminatory because they
will be charged uniformly to
Distributors who distribute EDGX
Options Top. The Exchange also
believes continuing to offer EDGX
Options Top Data to Non-Professional
Users at a lower cost than Professional
Users results in greater equity among
data recipients, as Professional Users are
categorized as such based on their
employment and participation in
financial markets, and thus, are
compensated to participate in the
markets. Although Non-Professional
Users too can receive significant
financial benefits through their
participation in the markets, the
Exchange believes it is reasonable to
charge more for those Users who are
more directly engaged in the markets.
The Exchange believes assessing lower
User fees for EDGX Options Top as
compared to the remaining EDGX
Options market data feeds is also
equitably and not unfairly
discriminatory. Particularly, the EDGX
Options Top Feed contains less
information than other market data
products, including EDGX Options
Depth (indeed, the information
contained in EDGX Options Top is a
subset of the information that is
included in EDGX Options Depth). The
Exchange believes it is equitable to have
pricing based, in part, upon the amount
of information contained in each data
feed and the value of that information
to market participants. Thus, the
Exchange believes it’s reasonable for
EDGX Options Top to have lower User
fees than the other EDGX Options
market data products because it offers
less data than other products.
Additionally, the Exchange believes the
proposed reduced User fee for EDGX
Options Top as compared to the User
fees for the remaining EDGX Options
market data products is reasonable,
equitable and not unfairly
discriminatory as the Exchange
continues to provide that Users of any
one of EDGX Options Depth, EDGX
professional users of American Options Top Data,
American Options Deep and American Options
Complex products. By comparison, the total
combined Professional User fee for the Exchange’s
market data products is significantly lower at $11
per Professional User (i.e., $1 per Professional Users
of EDGX Options Top, as proposed, and $10 per
Professional User of any of the remaining EDGX
Options market data products). The Exchange’s
combined Non-Professional User Fee at $1.10 per
Non-Professional User (i.e., $0.10 per NonProfessional User of EDGX Options Top, as
proposed, and $1 per Non-Professional User of any
of the remaining EDGX Options market data
products) is still in line with, and not a significant
departure from, PHLX’s and NYSE American’s
aforementioned Non-Professional User fees.
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Options Auction Feed, EDGX Options
Complex Top, EDGX Options Complex
Depth, and/or EDGX Options Complex
Auction Feed may receive, at no
additional charge, access to any or all
of the other aforementioned market data
products.
The Exchange next notes it is not
required to charge a single User fee to
cover all its available data products, but
none-the-less has opted to not charge for
separate User Fees for EDGX Options
data feeds since EDGX Options Top was
adopted in January 2018.23 However,
the Exchange now wishes to have
separate User fees for EDGX Options
Top. The Exchange believes the
proposed change is reasonable,
equitable and not unfairly
discriminatory as all of EDGX Options
data products are purely optional. As
stated above, the Exchange also believes
charging separate User fees is equitable
as it allows the Exchange to assess
prices based on the amount of
information contained in each feed,
which can provide an opportunity to
assess lower fees for products that
contain less information. Particularly,
the proposed rule change enables
market participants who only want topof-book and execution data and do not
need other types of market data,
including depth-of-book, complex order
and auction feed data, to purchase such
top-of-book and execution data at a
lower price. Those who wish to receive
more comprehensive data, including the
foregoing, may still continue to do so at
the current (and higher) price.
Additionally, as noted above, the data
contained in the EDGX Options Top
Feed is a subset of the data included in
the EDGX Options Depth Feed. As such,
a User that receives EDGX Options
Depth Feed would not need to also
receive the EDGX Options Top Feed
since the EDGX Options Depth Feed is
already inclusive of the data contained
in the EDGX Options Top Feed. Only
those Distributors that deem one or
more of the products to be of sufficient
overall value and usefulness would
purchase them for distribution to Users.
Further, Distributors are not required to
distribute, and Users are not required to
receive, any one particular data product
and may choose to receive none, one, or
several of the Exchange’s market data
products. Additionally, the Exchange is
not required to provide any fee waiver
to Distributors of EDGX Options Top,
including for User fees. In fact, another
exchange similarly adopted separate
fees for different data products that
historically had otherwise been
provided under a single fee.24 The
Exchange believes the proposed change
is equitable and not unfairly
discriminatory as it will apply
uniformly to Distributors.
The proposed Enterprise Fee for
EDGX Options Top Feed is equitable
and reasonable as the proposed fee
could result in a fee reduction for
Distributors with a large number of
Professional and Non-Professional
Users. If a Distributors has a smaller
number of Professional Users of EDGX
Options Top Data, then it may continue
using the per User structure and benefit
from the proposed per EDGX Options
Top User Fee reductions. By reducing
prices for Distributors with a large
number of Professional and NonProfessional Users, the Exchange
believes that more firms may choose to
receive and to distribute EDGX Options
Top Data, thereby expanding the
distribution of this market data for the
benefit of investors.
The Exchange further believes that the
proposed Enterprise Fee is reasonable
because it will simplify reporting for
certain Distributors that have large
numbers of Professional and NonProfessional Users. Firms that pay the
proposed Enterprise Fee will not have to
report the number of Users on a
monthly basis as they currently do, but
rather will only have to count
Professional and Non-Professional Users
every six months, which is a significant
reduction in administrative burden.
Finally, as described above the
Enterprise Fee is entirely optional. A
firm that does not have a sufficient
number of Users to benefit from
purchase of the license need not do so.
23 See Securities Exchange Act Release No. 82462
(January 8, 2018), 83 FR 1647 (January 12, 2018)
(SR–CboeEDGX–2017–010).
24 See Securities Exchange Act Release No. 79556
(December 14, 2016), 81 FR 92935 (December 20,
2016) (SR–NASDAQ–2016–167).
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would result
in any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange operates in a highly
competitive environment, and its ability
to price top-of-book data is constrained
by competition among exchanges that
offer similar data products to their
customers. For example, Top-of-book
data is broadly disseminated by
competing U.S. options exchanges. In
this competitive environment potential
Distributors are free to choose which
competing product to purchase to
satisfy their need for market
information. Often, the choice comes
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down to price, as market data customers
look to purchase cheaper data products,
and quality, as market participants seek
to purchase data that represents
significant market liquidity.
The Exchange believes that the
proposed fees do not put any market
participants at a relative disadvantage
compared to other market participants.
As discussed, the proposed fees would
apply to all similarly situated
Distributors of EDGX Options Top on an
equal and non-discriminatory basis. The
Exchange believes the differentiated fees
for Professional and Non-Professional
Users of EDGX Options Top is
appropriate given Professional Users are
categorized as such based on their
employment and participation in
financial markets, and thus, are
compensated to participate in the
markets. Non-Professional Users too can
receive significant financial benefits
through their participation in the
markets, however the Exchange believes
it is reasonable to charge more to those
Users who are more directly engaged in
the markets. The Exchange therefore
believes that the proposed fee neither
favors nor penalizes one or more
categories of market participants in a
manner that would impose an undue
burden on competition.
The Exchange believes that the
proposed fees do not impose a burden
on competition or on other SROs that is
not necessary or appropriate in
furtherance of the purposes of the Act.
In particular, market participants are not
forced to subscribe to EDGX Options
Top Data, or any of the Exchange’s data
feeds, as described above. As noted, the
quote and last sale data contained in the
Exchange’s EDGX Options Top feed is
identical to the data sent to OPRA for
redistribution to the public.
Accordingly, Exchange top-of-book data
is therefore widely available today from
a number of different sources.
Because market data customers can
find suitable substitute feeds, an
exchange that overprices its market data
products stands a high risk that users
may substitute another product. These
competitive pressures ensure that no
one exchange’s market data fees can
impose an undue burden on
competition, and the Exchange’s
proposed fees do not do so here.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
E:\FR\FM\17MYN1.SGM
17MYN1
Federal Register / Vol. 88, No. 95 / Wednesday, May 17, 2023 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act 25 and paragraph (f) of Rule
19b–4 26 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
ddrumheller on DSK120RN23PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeEDGX–2023–033 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CboeEDGX–2023–033. 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. Do not include
personal identifiable information in
submissions; you should submit only
information that you wish to make
available publicly. We may redact in
part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection. All submissions should refer
to File Number SR–CboeEDGX–2023–
033 and should be submitted on or
before June 7, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–10466 Filed 5–16–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97480; File No. SR–
CboeBZX–2023–030]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule
May 11, 2023.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 28,
2023, Cboe BZX Exchange, Inc.
(‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX Options’’)
proposes to amend its Fee Schedule.
The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
27 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
25 15
U.S.C. 78s(b)(3)(A).
26 17 CFR 240.19b–4(f).
VerDate Sep<11>2014
18:34 May 16, 2023
1 15
Jkt 259001
PO 00000
Frm 00062
Fmt 4703
Sfmt 4703
31539
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
fees Fee Schedule to modify its market
data fees for BZX Options Top.3
Particularly, the Exchange proposes to
modify the Professional and NonProfessional User Fees, modify the
Enterprise Fee for BXZ Options Top and
make other clarifying, non-substantive
changes.4
The Exchange first proposes to reduce
the rates for Professional and NonProfessional User fees for BZX Options
Top. The Exchange currently charges
Internal Distributors and External
Distributors that redistribute any of the
BZX Options Data Feeds different fees
for their Professional Users 5 and NonProfessional Users.6 The Exchange
3 BZX Options Top is an uncompressed data feed
that offers top of book quotations and execution
information based on options orders entered into
the System. Uncompressed data is disseminated ‘‘as
is’’ in the native format by the Exchange, with no
compression.
4 The Exchange initially filed the proposed fee
changes on January 3, 2023 (SR–CboeBZX–2023–
001). On March 1, 2023, the Exchange withdrew
that filing and submitted SR–CboeBZX–2023–016,
which was filed on February 28, 2023. On April 28,
2023, the Exchange withdrew that filing and
submitted this filing.
5 A Professional User of an Exchange Market Data
product is any User other than a Non-Professional
User.
6 A ‘‘Non-Professional User’’ of an Exchange
Market Data product is a natural person or
qualifying trust that uses Data only for personal
purposes and not for any commercial purpose and,
for a natural person who works in the United States,
is not: (i) registered or qualified in any capacity
with the Securities and Exchange Commission, the
Commodities Futures Trading Commission, any
state securities agency, any securities exchange or
Continued
E:\FR\FM\17MYN1.SGM
17MYN1
]]>Agencies
[Federal Register Volume 88, Number 95 (Wednesday, May 17, 2023)]
[Notices]
[Pages 31535-31539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-10466]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97481; File No. SR-CboeEDGX-2023-033]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule
May 11, 2023.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 28, 2023, Cboe EDGX Exchange, Inc. (``Exchange'' or ``EDGX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX Options'')
proposes to amend its Fee Schedule. The text of the proposed rule
change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Fee Schedule to modify its
market data fees for EDGX Options Top.\3\ Particularly, the Exchange
proposes to modify the Professional and Non-Professional User Fees,
adopt a new Enterprise Fee for EDGX Options Top, and make other
clarifying, non-substantive changes.\4\
---------------------------------------------------------------------------
\3\ EDGX Options Top is an uncompressed data feed that offers
top of book quotations and execution information based on options
orders entered into the System. Uncompressed data is disseminated
``as is'' in the native format by the Exchange, with no compression.
\4\ The Exchange initially filed the proposed fee changes on
January 3, 2023 (SR-CboeEDGX-2023-001). On March 1, 2023, the
Exchange withdrew that filing and submitted SR-CboeEDGX-2023-015 in
place of SR-CboeEDGX-2023-001, which the Exchange withdrew on March
1, 2023. On March 10, 2023 the Exchange withdrew CboeEDGX-2023-015
and submitted SR-CboeEDGX-2023-020. On April 28, 2023, the Exchange
withdrew that filing and submitted this filing.
---------------------------------------------------------------------------
[[Page 31536]]
The Exchange first proposes to reduce the rates for Professional
and Non-Professional User fees for EDGX Options Top. The Exchange
currently charges Internal Distributors and External Distributors that
redistribute any of the EDGX Options Data Feeds different fees for
their Professional Users \5\ and Non-Professional Users.\6\ The
Exchange currently assesses a monthly fee for Professional Users of
$10.00 per User and a monthly fee of $1.00 per Non-Professional
User.\7\ Further, the Fee Schedule provides that Distributors and Users
of any one of EDGX Options market data products (i.e., EDGX Options
Top, EDGX Options Depth, EDGX Options Auction Feed, EDGX Options
Complex Depth, EDGX Options Complex Top, and EDGX Options Complex
Auction Fees) may receive, at no additional charge, access to any or
all of the other market data products listed. The Exchange proposes to
reduce the rates for the User fees for EDGX Options Top. Particularly,
the Exchange proposes to reduce the monthly (i) Professional User fee
from $10 per user to $5 per user and (ii) Non-Professional User fee
from $1.00 per user to $0.10 per user. The Exchange also proposes to
start charging separate User fees for EDGX Options Top. User Fees for
the Exchange's remaining market data products will continue to receive,
at no additional charge, access to any or all of the other market data
products listed (with the exception of EDGX Options Top). The Exchange
has reformatted the Market Data Fees tables to make this clear.\8\
---------------------------------------------------------------------------
\5\ A Professional User of an Exchange Market Data product is
any User other than a Non-Professional User.
\6\ A ``Non-Professional User'' of an Exchange Market Data
product is a natural person or qualifying trust that uses Data only
for personal purposes and not for any commercial purpose and, for a
natural person who works in the United States, is not: (i)
registered or qualified in any capacity with the Securities and
Exchange Commission, the Commodities Futures Trading Commission, any
state securities agency, any securities exchange or association, or
any commodities or futures contract market or association; (ii)
engaged as an ``investment adviser'' as that term is defined in
section 202(a)(11) of the Investment Advisors Act of 1940 (whether
or not registered or qualified under that Act); or (iii) employed by
a bank or other organization exempt from registration under federal
or state securities laws to perform functions that would require
registration or qualification if such functions were performed for
an organization not so exempt; or, for a natural person who works
outside of the United States, does not perform the same functions as
would disqualify such person as a Non-Professional User if he or she
worked in the United States.
\7\ Distributors that receive EDGX Options Data Feeds are
required to count every Professional User and Non-Professional User
to which they provide the market data product(s).
\8\ The Exchange is not proposing any changes to the current
User Fee rates for its other market data products at this time and
Users of any one of the remaining market data products may continue
to receive, at no additional charge, access to any or all of the
other market data products listed (i.e., except for EDGX Options
Top).
---------------------------------------------------------------------------
The Exchange lastly proposes to establish a $20,000 per month
Enterprise Fee that will permit a Distributor to purchase a monthly
(and optional) Enterprise license to receive the EDGX Options Top Data
for distribution to an unlimited number of Professional and Non-
Professional Users. The Enterprise Fee is an alternative to
Professional and Non-Professional User fees and it is assessed in
addition to the Distribution Fee, which the Exchange proposes to make
clear in the Fee Schedule. The Enterprise Fee may provide an
opportunity to reduce fees. For example, if a Distributor distributes
EDGX Options Top to 15,000 Professional Users who each receive EDGX
Options Top at $5.00 per month (as proposed), then that Distributor
will pay $75,000 per month in Professional Users fees. If the
Distributor instead were to purchase the proposed Enterprise license,
then it would alternatively pay a flat fee of $20,000 for an unlimited
number of Professional and Non-Professional Users. A Distributor must
pay a separate Enterprise Fee for each entity that controls the display
of EDGX Options Top if it wishes for such Users to be covered by the
Enterprise Fee rather than by per User fees.\9\ A Distributor that pays
the Enterprise Fee will not have to report its number of such Users on
a monthly basis. Rather, every six months, it must provide the Exchange
with a count of the total number of Professional and Non-Professional
users of EDGX Options Top.\10\ The Exchange notes that the purchase of
an Enterprise license is voluntary and a firm may elect to instead use
the per User structure and benefit from the proposed per User Fees
described above. For example, a firm that does not have a sufficient
number of Users to benefit from purchase of the license need not do so.
---------------------------------------------------------------------------
\9\ For example, if a Distributor (e.g., Refinitiv) that
distributes EDGX Options Top to Retail Brokerage Firm A and Retail
Brokerage Firm B (which ``entities'' redistribute BZX Options Top to
its respective Users) and wishes to have the Users under each firm
covered by an Enterprise license, the Distributor would be subject
to two Enterprise Fees.
\10\ See Cboe Global Markets north American Data Policies.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of section 6(b) of the Act.\11\ Specifically, the
Exchange believes the proposed rule change is consistent with the
section 6(b)(5) \12\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
section 6(b)(5) requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The Exchange also believes this proposal is
consistent with section 6(b)(8) of the Act, which requires that the
rules of an exchange not impose any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.\13\
In addition, the Exchange believes that the proposed rule change is
consistent with section 11(A) of the Act as it supports (i) fair
competition among brokers and dealers, among exchange markets, and
between exchange markets and markets other than exchange markets, and
(ii) the availability to brokers, dealers, and investors of information
with respect to quotations for and transactions in securities.\14\ The
Exchange also believes the proposed rule change is consistent with
section 6(b)(4) of the Act,\15\ which requires that Exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among its Members and other persons using its facilities.
The Exchange first notes that it operates in a highly competitive
environment. Indeed, there are currently 16 registered options
exchanges that trade options. Based on publicly available information,
no single options exchange has more than 18% of the market share.\16\
The Exchange believes top-of-book quotation and transaction data is
highly competitive as national securities exchanges compete vigorously
with each other to provide efficient,
[[Page 31537]]
reliable, and low-cost data to a wide range of investors and market
participants. Indeed, there are several competing products offered by
other national securities exchanges today, not counting products
offered by the Exchange's affiliates, and each of the Exchange's
affiliated U.S. options exchanges also offers similar top-of-book
data.\17\ Each of those exchanges offer top-of-book quotation and last
sale information based on their own quotation and trading activity that
is substantially similar to the information provided by the Exchange
through the EDGX Options Top Feed. Further, the quote and last sale
data contained in the EDGX Options Top Feed is identical to the data
sent to OPRA for redistribution to the public.\18\ Accordingly,
Exchange top-of-book data is widely available today from a number of
different sources.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ 15 U.S.C. 78f(b)(8).
\14\ 15 U.S.C. 78k-1.
\15\ 15 U.S.C. 78f(b)(4).
\16\ See Cboe Global Markets U.S. Options Market Month-to-Date
Volume Summary (April 24, 2023), available at https://markets.cboe.com/us/options/market_statistics/.
\17\ See e.g., NYSE Arca Options Proprietary Market Data Fees
Schedule, MIAX Options Exchange, Fee Schedule, Section 6 (Market
Data Fees), Nasdaq PHLX Options 7 Pricing Schedule, Section 10
(Proprietary Data Feed Fees) and Cboe Data Services, LLC Fees
Schedule.
\18\ The Exchange notes that it makes available the top-of-book
and last sale data that is included in the EDGX Options Top Data
Feed no earlier than the time at which the Exchange sends that data
to OPRA.
---------------------------------------------------------------------------
Moreover, the EDGX Options Top is distributed and purchased on a
voluntary basis, in that neither the Exchange nor market data
distributors are required by any rule or regulation to make this data
available. Accordingly, Distributors and Users can discontinue use at
any time and for any reason, including due to an assessment of the
reasonableness of fees charged. As described above, market participants
have a wide variety of alternative market data products from which to
choose, such as similar proprietary data products offered by other
exchanges and consolidated data. Further, the Exchange is not required
to make any proprietary data products available or to offer any
specific pricing alternatives to any customers. Moreover, persons
(including broker-dealers) who subscribe to any exchange proprietary
data feed must also have equivalent access to consolidated Options
Information \19\ from OPRA for the same classes or series of options
that are included in the proprietary data feed, and proprietary data
feeds cannot be used to meet that particular requirement.\20\ As such,
all proprietary data feeds are purely optional and only those that deem
the product to be of sufficient overall value and usefulness would
purchase it.
---------------------------------------------------------------------------
\19\ ``Consolidated Options Information'' means consolidated
Last Sale Reports combined with either consolidated Quotation
Information or the BBO furnished by OPRA. Access to consolidated
Options Information is deemed ``equivalent'' if both kinds of
information are equally accessible on the same terminal or work
station. See Limited Liability Company Agreement of Options Price
Reporting Authority, LLC (``OPRA Plan''), Section 5.2(c)(iii). The
Exchange notes that this requirement under the OPRA Plan is also
reiterated under the Cboe Global Markets Global Data Agreement and
Cboe Global Markets North American Data Policies, which subscribers
to any exchange proprietary product must sign and are subject to,
respectively. Additionally, the Exchange's Data Order Form (used for
requesting the Exchange's market data products) requires
confirmation that the requesting market participant receives data
from OPRA.
\20\ Id.
---------------------------------------------------------------------------
The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. Particularly, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \21\ Making
similar data products available to market participants fosters
competition in the marketplace, and constrains the ability of exchanges
to charge supracompetitive fees. In the event that a market participant
views one exchange's data product as more or less attractive than a
competitor they can and do switch between similar products. The
proposed fees are a result of the competitive environment, as the
Exchange seeks to adopt fees to attract purchasers who may be
interested in purchasing only the EDGX Options Top Data Feed.
---------------------------------------------------------------------------
\21\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
The Exchange believes the proposed changes to reduce the rates of
the current Professional and Non-Professional User fees for EDGX
Options Top Feed are reasonable as Distributors will be subject to
lower User fees for EDGX Options Top Feed. Distributors who only wish
to distribute EDGX Options Top Feed will therefore be subject to lower
User fees. Additionally, the User fees continue to be in line with and/
or lower than User fees assessed by other exchanges for similar
data.\22\
---------------------------------------------------------------------------
\22\ See e.g., Nasdaq PHLX Options 7 Pricing Schedule, Section
10 (Proprietary Data Feed Fees), which provides for a fee of $40 per
month to professional users and $1.00 per month to non-professional
users to cover the usage of PHLX Options (TOPO) Data, TOPO Plus
Orders, PHLX Orders and PHLX Depth Data feeds. See also NYSE
American Options Proprietary Market Data Fees schedule, which
provides for a fee of $50 per month to professional users and $1.00
per month to non-professional users of American Options Top Data,
American Options Deep and American Options Complex products. By
comparison, the total combined Professional User fee for the
Exchange's market data products is significantly lower at $11 per
Professional User (i.e., $1 per Professional Users of EDGX Options
Top, as proposed, and $10 per Professional User of any of the
remaining EDGX Options market data products). The Exchange's
combined Non-Professional User Fee at $1.10 per Non-Professional
User (i.e., $0.10 per Non-Professional User of EDGX Options Top, as
proposed, and $1 per Non-Professional User of any of the remaining
EDGX Options market data products) is still in line with, and not a
significant departure from, PHLX's and NYSE American's
aforementioned Non-Professional User fees.
---------------------------------------------------------------------------
The Exchange believes that the proposed fees are equitable and not
unfairly discriminatory because they will be charged uniformly to
Distributors who distribute EDGX Options Top. The Exchange also
believes continuing to offer EDGX Options Top Data to Non-Professional
Users at a lower cost than Professional Users results in greater equity
among data recipients, as Professional Users are categorized as such
based on their employment and participation in financial markets, and
thus, are compensated to participate in the markets. Although Non-
Professional Users too can receive significant financial benefits
through their participation in the markets, the Exchange believes it is
reasonable to charge more for those Users who are more directly engaged
in the markets. The Exchange believes assessing lower User fees for
EDGX Options Top as compared to the remaining EDGX Options market data
feeds is also equitably and not unfairly discriminatory. Particularly,
the EDGX Options Top Feed contains less information than other market
data products, including EDGX Options Depth (indeed, the information
contained in EDGX Options Top is a subset of the information that is
included in EDGX Options Depth). The Exchange believes it is equitable
to have pricing based, in part, upon the amount of information
contained in each data feed and the value of that information to market
participants. Thus, the Exchange believes it's reasonable for EDGX
Options Top to have lower User fees than the other EDGX Options market
data products because it offers less data than other products.
Additionally, the Exchange believes the proposed reduced User fee for
EDGX Options Top as compared to the User fees for the remaining EDGX
Options market data products is reasonable, equitable and not unfairly
discriminatory as the Exchange continues to provide that Users of any
one of EDGX Options Depth, EDGX
[[Page 31538]]
Options Auction Feed, EDGX Options Complex Top, EDGX Options Complex
Depth, and/or EDGX Options Complex Auction Feed may receive, at no
additional charge, access to any or all of the other aforementioned
market data products.
The Exchange next notes it is not required to charge a single User
fee to cover all its available data products, but none-the-less has
opted to not charge for separate User Fees for EDGX Options data feeds
since EDGX Options Top was adopted in January 2018.\23\ However, the
Exchange now wishes to have separate User fees for EDGX Options Top.
The Exchange believes the proposed change is reasonable, equitable and
not unfairly discriminatory as all of EDGX Options data products are
purely optional. As stated above, the Exchange also believes charging
separate User fees is equitable as it allows the Exchange to assess
prices based on the amount of information contained in each feed, which
can provide an opportunity to assess lower fees for products that
contain less information. Particularly, the proposed rule change
enables market participants who only want top-of-book and execution
data and do not need other types of market data, including depth-of-
book, complex order and auction feed data, to purchase such top-of-book
and execution data at a lower price. Those who wish to receive more
comprehensive data, including the foregoing, may still continue to do
so at the current (and higher) price. Additionally, as noted above, the
data contained in the EDGX Options Top Feed is a subset of the data
included in the EDGX Options Depth Feed. As such, a User that receives
EDGX Options Depth Feed would not need to also receive the EDGX Options
Top Feed since the EDGX Options Depth Feed is already inclusive of the
data contained in the EDGX Options Top Feed. Only those Distributors
that deem one or more of the products to be of sufficient overall value
and usefulness would purchase them for distribution to Users. Further,
Distributors are not required to distribute, and Users are not required
to receive, any one particular data product and may choose to receive
none, one, or several of the Exchange's market data products.
Additionally, the Exchange is not required to provide any fee waiver to
Distributors of EDGX Options Top, including for User fees. In fact,
another exchange similarly adopted separate fees for different data
products that historically had otherwise been provided under a single
fee.\24\ The Exchange believes the proposed change is equitable and not
unfairly discriminatory as it will apply uniformly to Distributors.
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\23\ See Securities Exchange Act Release No. 82462 (January 8,
2018), 83 FR 1647 (January 12, 2018) (SR-CboeEDGX-2017-010).
\24\ See Securities Exchange Act Release No. 79556 (December 14,
2016), 81 FR 92935 (December 20, 2016) (SR-NASDAQ-2016-167).
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The proposed Enterprise Fee for EDGX Options Top Feed is equitable
and reasonable as the proposed fee could result in a fee reduction for
Distributors with a large number of Professional and Non-Professional
Users. If a Distributors has a smaller number of Professional Users of
EDGX Options Top Data, then it may continue using the per User
structure and benefit from the proposed per EDGX Options Top User Fee
reductions. By reducing prices for Distributors with a large number of
Professional and Non-Professional Users, the Exchange believes that
more firms may choose to receive and to distribute EDGX Options Top
Data, thereby expanding the distribution of this market data for the
benefit of investors.
The Exchange further believes that the proposed Enterprise Fee is
reasonable because it will simplify reporting for certain Distributors
that have large numbers of Professional and Non-Professional Users.
Firms that pay the proposed Enterprise Fee will not have to report the
number of Users on a monthly basis as they currently do, but rather
will only have to count Professional and Non-Professional Users every
six months, which is a significant reduction in administrative burden.
Finally, as described above the Enterprise Fee is entirely optional. A
firm that does not have a sufficient number of Users to benefit from
purchase of the license need not do so.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
operates in a highly competitive environment, and its ability to price
top-of-book data is constrained by competition among exchanges that
offer similar data products to their customers. For example, Top-of-
book data is broadly disseminated by competing U.S. options exchanges.
In this competitive environment potential Distributors are free to
choose which competing product to purchase to satisfy their need for
market information. Often, the choice comes down to price, as market
data customers look to purchase cheaper data products, and quality, as
market participants seek to purchase data that represents significant
market liquidity.
The Exchange believes that the proposed fees do not put any market
participants at a relative disadvantage compared to other market
participants. As discussed, the proposed fees would apply to all
similarly situated Distributors of EDGX Options Top on an equal and
non-discriminatory basis. The Exchange believes the differentiated fees
for Professional and Non-Professional Users of EDGX Options Top is
appropriate given Professional Users are categorized as such based on
their employment and participation in financial markets, and thus, are
compensated to participate in the markets. Non-Professional Users too
can receive significant financial benefits through their participation
in the markets, however the Exchange believes it is reasonable to
charge more to those Users who are more directly engaged in the
markets. The Exchange therefore believes that the proposed fee neither
favors nor penalizes one or more categories of market participants in a
manner that would impose an undue burden on competition.
The Exchange believes that the proposed fees do not impose a burden
on competition or on other SROs that is not necessary or appropriate in
furtherance of the purposes of the Act. In particular, market
participants are not forced to subscribe to EDGX Options Top Data, or
any of the Exchange's data feeds, as described above. As noted, the
quote and last sale data contained in the Exchange's EDGX Options Top
feed is identical to the data sent to OPRA for redistribution to the
public. Accordingly, Exchange top-of-book data is therefore widely
available today from a number of different sources.
Because market data customers can find suitable substitute feeds,
an exchange that overprices its market data products stands a high risk
that users may substitute another product. These competitive pressures
ensure that no one exchange's market data fees can impose an undue
burden on competition, and the Exchange's proposed fees do not do so
here.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
[[Page 31539]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to section
19(b)(3)(A) of the Act \25\ and paragraph (f) of Rule 19b-4 \26\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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\25\ 15 U.S.C. 78s(b)(3)(A).
\26\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CboeEDGX-2023-033 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-CboeEDGX-2023-033. 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. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to File Number SR-CboeEDGX-2023-033 and should be
submitted on or before June 7, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-10466 Filed 5-16-23; 8:45 am]
BILLING CODE 8011-01-P
