Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE American Options Proprietary Market Data Fee Schedule, 73060-73064 [2023-23400]

Download as PDF 73060 Federal Register / Vol. 88, No. 204 / Tuesday, October 24, 2023 / Notices subparagraph (f)(6) of Rule 19b–4 thereunder.21 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: Electronic Comments ddrumheller on DSK120RN23PROD with NOTICES1 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–NASDAQ–2023–041. 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 21 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. 17:08 Oct 23, 2023 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–23404 Filed 10–23–23; 8:45 am] BILLING CODE 8011–01–P • 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– NASDAQ–2023–041 on the subject line. VerDate Sep<11>2014 Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 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–NASDAQ–2023–041 and should be submitted on or before November 14, 2023. Jkt 262001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–98771; File No. SR– NYSEAMER–2023–50] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE American Options Proprietary Market Data Fee Schedule March 18, 2023. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 16, 2023, NYSE American LLC (‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 proposes to amend the NYSE American Options Proprietary Market Data Fee Schedule (‘‘Fee Schedule’’) to introduce a data product to be known as the NYSE Options OpenClose Intra-Day Volume Summary 22 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 (‘‘Intra-Day Volume Summary’’) that would be available for purchase by any market participant, i.e., members 4 and non-members, on an ad-hoc basis and to adopt fees for such product. The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, 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 self-regulatory organization 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 those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to introduce a data product to be known as the IntraDay Volume Summary that would be available for purchase by market participants on an ad-hoc basis and to adopt fees for such product.5 More specifically, the Exchange proposes to offer an ad-hoc historic monthly Intra-Day Volume Summary market data product that provides a volume summary of trading activity on the Exchange at the option level by origin (Customer, Professional Customer, Firm, Broker-Dealer, and Market Maker 6), side of the market (buy or sell), contract volume, and 4 References to ‘‘member organization’’ as used in Exchange rules include American Trading Permit (‘‘ATP’’) Holders, which are registered brokers or dealers approved to effect transactions on the Exchange’s options marketplace. Under the Exchange’s rules, an ATP Holder has the status as a ‘‘member’’ of the Exchange as that term is defined in Section 3 of the Act. See Rule 900.2NY. 5 The Exchange previously adopted a subscription-based market data product known as the NYSE Options Open-Close Volume Summary that market participants can purchase on a subscription basis. See Securities Exchange Act Release No. 93803 (December 16, 2021), 86 FR 72647 (December 22, 2021) (SR–NYSEAMER–2021– 46). The purpose of this filing is to introduce a historic monthly report of the NYSE Options OpenClose Volume Summary that would be available for purchase by any market participant on an ad-hoc basis. 6 The terms Customer, Professional Customer, Firm and Market Maker are defined in Rule 900.2NY. E:\FR\FM\24OCN1.SGM 24OCN1 Federal Register / Vol. 88, No. 204 / Tuesday, October 24, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES1 transaction type (opening or closing). The Customer, Professional Customer, Firm, Broker-Dealer, and Market Maker volume is further broken down into trade size buckets (less than 100 contracts, 100–199 contracts, greater than 199 contracts). The ad-hoc historic monthly Intra-Day Volume Summary 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 proposes to offer data beginning November 2023 and would contain all series in an underlying security if it has volume.7 The Exchange anticipates a wide variety of market participants to purchase the ad-hoc historic monthly Intra-Day Volume Summary, including, but not limited to, individual customers, buy-side investors, investment banks and academic institutions. For example, academic institutions may utilize the proposed product to promote research and studies of the options industry to the benefit of all market participants. The Exchange believes the proposed product may also provide helpful trading information regarding investor sentiment and may be used to create and test trading models and analytical strategies. The ad-hoc historic monthly Intra-Day Volume Summary is a completely voluntary product, in that the Exchange is not required by any rule or regulation to make this data available and that potential customers may purchase it on an ad-hoc basis only if they voluntarily choose to do so. The Exchange notes that other exchanges offer a similar product,8 including the Exchange’s affiliate, NYSE Arca, Inc. (‘‘NYSE Arca’’).9 As such, the ad-hoc historic monthly Intra-Day Volume Summary is subject to direct competition from similar intra-day 7 The specifications for the ad-hoc historic monthly Intra-Day Volume Summary can be found at https://www.nyse.com/market-data/historical/ open-close-volume-summary. 8 See e.g., Securities Exchange Act Release Nos. 89496 (August 6, 2020), 85 FR 48743 (August 12, 2020) (SR–C2–2020–010) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Introduce a New Data Product To Be Known as Intraday Open-Close Data); and 97723 (June 14, 2023), 88 FR 40358 (June 21, 2023) (SR– BOX–2023–16) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule for Trading on the BOX Options Market LLC Facility To Offer Ad-Hoc Historical Requests for the Intraday Open-Close Data Report and Adopt Fees for This Data). The ad-hoc historic monthly Intra-Day Volume Summary report contains the same information that is provided in the monthly subscription-based market data product known as the NYSE Options Open-Close Volume Summary. See, note 5, supra. 9 See Securities Exchange Act Release No. 97841 (July 5, 2023), 88 FR 44176 (July 11, 2023) (SR– NYSEArca–2023–46). VerDate Sep<11>2014 17:08 Oct 23, 2023 Jkt 262001 options trading summaries offered by other exchanges. All of these exchanges offer essentially the same intra-day options trading summary information for purchase on an ad-hoc basis, and generally differ solely in the amount of history available for purchase.10 The Exchange proposes to provide in its Fee Schedule that market participants may purchase the ad-hoc historic monthly Intra-Day Volume Summary for a specified month (historical data). The Exchange proposes to assess a fee of $1,000 per request per month for an ad-hoc request of historical Intra-Day Volume Summary covering all Exchange-listed securities. An ad-hoc request can be for any number of months beginning with November 2023 for which the data is available.11 The proposed fee for ad-hoc requests for the historic monthly IntraDay Volume Summary will apply to all market participants. The Exchange notes that other exchanges provide a similar data product 12 that may be purchased on an ad-hoc basis. The proposed fee is comparably priced to at least one other exchange that sells a market data product similar to Intra-Day Volume Summary that may be purchased on an ad-hoc basis.13 The Exchange intends to offer the historic monthly Intra-Day Volume Summary on an ad-hoc basis and charge the proposed fees effective November 1, 2023. 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) 10 For example, Nasdaq PHLX LLC offers history for its intra-day data starting in January 2009 for purchase on an ad-hoc basis while Intra-Day Volume Summary history is only offered starting in August 2022. See https://www.nasdaqtrader.com/ micro.aspx?id=photo. 11 For example, a customer that requests historical Intra-Day Volume Summary for the months of November 2023 and December 2023, would be assessed a total of $2,000. 12 See e.g., Cboe LiveVol, LLC Market Data Fees available at https://www.cboe.com/us/options/ membership/fee_schedule/ctwo/. Cboe C2 Options (‘‘C2’’) offers Open-Close Data: Intraday Ad-hoc Request (historical data) and assesses a fee of $500 per request per month. Cboe EDGX Exchange, Inc. (‘‘EDGX’’) similarly offers Open-Close Data: Intraday Ad-hoc Request (historical data) and assesses a fee of $500 per request per month. See https://www.cboe.com/us/options/membership/fee_ schedule/edgx/. Nasdaq ISE, LLC (‘‘ISE’’) offers Nasdaq ISE Open/Close Trade Profile Intraday AdHoc Request (historical data) and assesses a fee of $1,000 per request per month, $2,000 per request per quarter and $8,000 per request per year. See Sec. 10, Market Data, at https://listingcenter. nasdaq.com/rulebook/ise/rules/ise-options-7. 13 See ISE fees, note 12, supra. 14 15 U.S.C. 78f(b). PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 73061 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 proposal to adopt fees for ad-hoc historic monthly Intra-Day Volume Summary 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 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 users and consumers of such data and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed ad-hoc historic monthly IntraDay Volume Summary market data product would further broaden the availability of U.S. options market data to investors consistent with the principles of Regulation NMS. The proposed rule change would benefit investors by providing access to historic data, which as noted above, may promote better informed trading, as well as research and studies of the options industry. Particularly, information regarding opening and closing activity across different options series may indicate investor sentiment, which can be helpful research and/or trading information. Customers of the historic data product may be able to enhance their ability to analyze options trade and volume data, and create and test trading models and analytical strategies. The Exchange believes ad-hoc historic monthly Intra-Day Volume Summary would provide a valuable tool that customers can use to gain comprehensive insight into the trading activity in a particular series, but also emphasizes such data is not necessary for trading. Moreover, other exchanges offer a similar data product.18 15 15 U.S.C. 78f(b)(5). U.S.C. 78f(b). 17 15 U.S.C. 78f(b)(4). 18 See, notes 8 and 9, supra. 16 15 E:\FR\FM\24OCN1.SGM 24OCN1 73062 Federal Register / Vol. 88, No. 204 / Tuesday, October 24, 2023 / Notices The Exchange operates in a highly competitive market. Indeed, there are currently 17 registered options exchanges competing for order flow. Based on publicly-available information, and excluding index-based options, no single exchange has more than 16% of the market share of executed volume of multiply-listed equity and ETF options trades.19 Therefore, no exchange possesses significant pricing power in the execution of multiply-listed equity and ETF options order flow. More specifically, in July 2023, the Exchange had less than 12% market share of executed volume of multiply-listed equity and ETF options trades.20 The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, 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 With respect to market data, the decision of the United States Court of Appeals for the District of Columbia Circuit in NetCoalition v. SEC upheld the Commission’s reliance on the existence of competitive market mechanisms to evaluate the reasonableness and fairness of fees for proprietary market data: In fact, the legislative history indicates that the Congress intended that the market system ‘‘evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed’’ and that the SEC wield its regulatory power ‘‘in those situations where competition may not be sufficient,’’ such as in the creation of a ‘‘consolidated transactional reporting system.’’ 22 ddrumheller on DSK120RN23PROD with NOTICES1 The court agreed with the Commission’s conclusion that ‘‘Congress intended that ‘competitive 19 The Options Clearing Corporation (‘‘OCC’’) publishes options and futures volume in a variety of formats, including daily and monthly volume by exchange, available here: https://www.theocc.com/ Market-Data/Market-Data-Reports/Volume-andOpen-Interest/Monthly-Weekly-Volume-Statistics. 20 Based on a compilation of OCC data for monthly volume of equity-based options and monthly volume of equity-based ETF options, see id., the Exchange’s market share in equity-based options increased slightly from 11.30% for the month of July 2022 to 11.50% for the month of July 2023. 21 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 22 NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. Cir. 2010) (quoting H.R. Rep. No. 94–229 at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 323). VerDate Sep<11>2014 17:08 Oct 23, 2023 Jkt 262001 forces should dictate the services and practices that constitute the U.S. national market system for trading equity securities.’ ’’ 23 More recently, the Commission confirmed that it applies a ‘‘market-based’’ test in its assessment of market data fees, and that under that test: the Commission considers whether the exchange was subject to significant competitive forces in setting the terms of its proposal for [market data], including the level of any fees. If an exchange meets this burden, the Commission will find that its fee rule is consistent with the Act unless there is a substantial countervailing basis to find that the terms of the rule violate the Act or the rules thereunder.24 Making similar historic 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 historic data product as more or less attractive than the competition they can and do switch between similar products. The proposed fees are a result of the competitive environment, as the Exchange seeks to adopt fees to attract purchasers of the ad-hoc historic monthly Intra-Day Volume Summary data product. The Exchange believes its proposal to provide the ad-hoc historic monthly Intra-Day Volume Summary is reasonable as the proposed fee is comparable to the fee charged by at least one other exchange that provides a similar historic data product.25 Indeed, proposing fees that are excessively higher than established fees for similar historic data products would simply serve to reduce demand for the Exchange’s historic data product, which as noted, is entirely optional. Like the ad-hoc historic monthly Intra-Day Volume Summary, other exchanges offer similar historic data products that each provide insight into trading on those markets and may likewise aid in assessing investor sentiment. Although each of these similar historic 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 options series based on open and closing interest on any one exchange. Similarly, market 23 Id. at 535. Securities Exchange Act Release No. 34– 90217 (October 16, 2020), 85 FR 67392 (October 22, 2020) (SR–NYSENAT–2020–05) (internal quotation marks omitted), quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74781 (December 9, 2008) (ArcaBook Approval Order). 25 See, note 12, supra. 24 See PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 participants may be able to analyze options trade and volume data, and create and test trading models and analytical strategies using only the adhoc historic monthly Intra-Day Volume Summary data relating to trading activity on one or more of the other markets that provide similar historic data products. As such, if a market participant views another exchange’s data as more attractive than the Exchange’s offering, then such market participant can merely choose not to purchase the Exchange’s historic data product and instead purchase another exchange’s historic product, which offer similar data points, albeit based on that other market’s trading activity. The Exchange also believes the proposed fees are reasonable as they would support the introduction of a historic market data product that is designed to aid investors by providing insight into trading on the Exchange. In turn, this data would assist market participants in gauging investor sentiment and trading activity, resulting in potentially better-informed trading decisions. As noted above, customers may also use such data to create and test trading models and analytical strategies. Selling historic market data, such as the ad-hoc historic monthly Intra-Day Volume Summary, is also a means by which exchanges compete to attract business. To the extent that the Exchange is successful in attracting customers to the Exchange’s historic data product, it may earn trading revenues and further enhance the value of its data products. If the market deems the proposed fees to be unfair or inequitable, customers can diminish or discontinue their use of the historic data and/or avail themselves of similar products offered by other exchanges.26 The Exchange therefore believes that the proposed fees reflect the competitive environment and would be properly and equally assessed to all customers. The Exchange also believes the proposed fees are equitable and not unfairly discriminatory as the fees would apply equally to all customers who choose to purchase such data. The proposed fees would not differentiate between customers that purchase the ad-hoc historic monthly Intra-Day Volume Summary, and are set at a modest level that would allow any interested market participant to purchase such data based on their business needs. Nothing in this proposal treats any category of market participant any differently from any other category of market participant. The ad-hoc historic monthly Intra-Day Volume Summary is available to all 26 See, E:\FR\FM\24OCN1.SGM notes 8 and 9, supra. 24OCN1 ddrumheller on DSK120RN23PROD with NOTICES1 Federal Register / Vol. 88, No. 204 / Tuesday, October 24, 2023 / Notices market participants, i.e., members and non-members, and all market participants would receive the same information in the data feed. As noted above, the Exchange anticipates a wide variety of market participants to purchase the ad-hoc historic monthly Intra-Day Volume Summary data product, including but not limited to individual customers, buy-side investors, investment banks and academic institutions. As such, the Exchange anticipates that the historic data product may be used not just for commercial or monetizing purposes, but also for educational use and research. The Exchange reiterates that the decision as to whether or not to purchase the ad-hoc historic monthly Intra-Day Volume Summary is entirely optional for all potential customers. Indeed, no market participant is required to purchase the historic data product, and the Exchange is not required to make the historic data product available to market participants. Rather, the Exchange is voluntarily making the historic data product available, as requested by customers, and market participants may choose to receive (and pay for) this data based on their own business needs. Potential customers may request the data at any time if they believe it to be valuable or may decline to purchase such data. In sum, the fierce competition for order flow constrains any exchange from pricing its historic market data at a supra-competitive price, and constrains the Exchange here in setting its fees for the ad-hoc historic monthly Intra-Day Volume Summary data product. The proposed fees are therefore reasonable because in setting them, the Exchange is constrained by the availability of numerous substitute venues offering historic market data products and trading.27 Such substitutes need not be identical, but only substantially similar to the product at hand. More specifically, in setting fees for the ad-hoc historic monthly IntraDay Volume Summary data product, the Exchange is constrained by the fact that, if its pricing is unattractive to customers, customers have their pick of an increasing number of alternative venues to use instead of the Exchange.28 Because of the availability of substitutes, an exchange that overprices its historic market data products stands a high risk that customers may substitute another source of market data information for its own. Those competitive pressures imposed by 27 See, 28 See, notes 8 and 9, supra. note 12, supra. VerDate Sep<11>2014 17:08 Oct 23, 2023 available alternatives are evident in the Exchange’s proposed pricing. The existence of numerous alternatives to the Exchange ensures that the Exchange cannot set unreasonable fees for historic market data without suffering the negative effects of that decision in the fiercely competitive market in which it operates. 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. The Exchange also does not believe the proposed fees would cause any unnecessary or inappropriate burden on intermarket competition as other exchanges are free to introduce their own comparable historic data product and adopt fees to better compete with the Exchange’s offering. Rather, the Exchange believes that the proposal will promote competition by permitting the Exchange to sell a historic data product similar to those offered by other options exchanges.29 The Exchange is offering the ad-hoc historic monthly Intra-Day Volume Summary in order to keep pace with changes in the industry and evolving customer needs, and believes the data product will contribute to robust competition among national securities exchanges. Furthermore, the Exchange operates in a highly competitive environment, and its ability to price the ad-hoc historic monthly Intra-Day Volume Summary is constrained by competition among exchanges that offer similar historic data products to their customers. As discussed above, there are currently a number of similar products available to market participants and investors. A number of U.S. options exchanges offer a historic market data product that is substantially similar to the Exchange’s offering, which the Exchange must consider in its pricing discipline in order to compete effectively. For example, proposing fees that are excessively higher than established fees for similar historic data products would simply serve to reduce demand for the Exchange’s historic data product, which as discussed, market participants are under no obligation to utilize or purchase. In this competitive environment, potential purchasers are free to choose which, if any, similar historic data product to purchase to satisfy their need for market information. As a result, the Exchange believes this proposed rule change 29 See, Jkt 262001 PO 00000 notes 8 and 9, supra. Frm 00077 Fmt 4703 Sfmt 4703 73063 permits fair competition among national securities exchanges. The Exchange does not believe the proposed rule change would cause any unnecessary or inappropriate burden on intramarket competition. Particularly, the proposed fees would apply uniformly to any customer, in that the Exchange would not differentiate between customers that purchase the ad-hoc historic monthly Intra-Day Volume Summary and all customers would receive the same information in the data feed. The Exchange believes the proposed fees are set at a modest level that would allow interested customers to purchase such data based on their business needs. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to 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 30 and Rule 19b–4(f)(6) thereunder.31 A proposed rule change filed under Rule 19b–4(f)(6) 32 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),33 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because the proposal does not raise any 30 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. 32 17 CFR 240.19b–4(f)(6). 33 17 CFR 240.19b–4(f)(6)(iii). 31 17 E:\FR\FM\24OCN1.SGM 24OCN1 73064 Federal Register / Vol. 88, No. 204 / Tuesday, October 24, 2023 / Notices new or novel issues.34 Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.35 At any time within 60 days of the filing of such 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: 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– NYSEAMER–2023–50 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–NYSEAMER–2023–50. 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 a.m. and 3 p.m. Copies of the filing also 34 See supra, notes 8–10 and 12. purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 35 For VerDate Sep<11>2014 17:08 Oct 23, 2023 Jkt 262001 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–NYSEAMER–2023–50 and should be submitted on or before November 14, 2023 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.36 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–23400 Filed 10–23–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–420, OMB Control No. 3235–0479] Proposed Collection; Comment Request; Extension Rule: 15c2–7 Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the existing collection of information provided for in Rule 15c2–7 (17 CFR 240.15c2–7) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission plans to submit this existing collection of information to the Office of Management and Budget (‘‘OMB’’) for extension and approval. Rule 15c2–7 places disclosure requirements on broker-dealers who have correspondent relationships, or agreements identified in the Rule, with other broker-dealers. Whenever any such broker-dealer enters a quotation for a security through an inter-dealer quotation system, Rule 15c2–7 requires the broker-dealer to disclose these relationships and agreements in the manner required by the Rule. The interdealer quotation system must also be able to make these disclosures public in association with the quotation the broker-dealer is making. When Rule 15c2–7 was adopted in 1964, the information it requires was 36 17 PO 00000 CFR 200.30–3(a)(12), (59). Frm 00078 Fmt 4703 Sfmt 4703 necessary for execution of the Commission’s mandate under the Securities Exchange Act of 1934 to prevent fraudulent, manipulative, and deceptive acts by broker-dealers. In the absence of the information collection required under Rule 15c2–7, investors and broker-dealers would have been unable to accurately determine the market depth of, and demand for, securities in an inter-dealer quotation system. There are approximately 3,493 brokerdealers registered with the Commission. Any of these broker-dealers could be potential respondents for Rule 15c2–7, so the Commission is using that figure to represent the number of respondents. Rule 15c2–7 applies only to quotations entered into an inter-dealer quotation system, such as OTC Link, operated by OTC Markets Group Inc. (‘‘OTC Link’’). According to a representative of OTC Link, it has not received any Rule 15c2– 7 notices since the previous PRA extension for Rule 15c2–7 in 2020; nor does OTC Link anticipate receiving any Rule 15c2–7 notices. However, because such notices could be made, the Commission estimates that one filing is made annually pursuant to Rule 15c2– 7. Based on prior industry reports, the Commission estimates that the average time required to enter a disclosure pursuant to the Rule is .75 minutes, or 45 seconds. The Commission sees no reason to change this estimate. We estimate that impacted respondents spend a total of .0125 hours per year to comply with the requirements of Rule 15c2–7 (1 notice (x) 45 seconds/notice). Written comments are invited on: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’s estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted by December 26, 2023. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. Please direct your written comments to: David Bottom, Director/Chief Information Officer, Securities and E:\FR\FM\24OCN1.SGM 24OCN1

Agencies

[Federal Register Volume 88, Number 204 (Tuesday, October 24, 2023)]
[Notices]
[Pages 73060-73064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23400]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98771; File No. SR-NYSEAMER-2023-50]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
NYSE American Options Proprietary Market Data Fee Schedule

March 18, 2023.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on October 16, 2023, NYSE American LLC (``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II below, which Items have been 
prepared by the self-regulatory organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE American Options 
Proprietary Market Data Fee Schedule (``Fee Schedule'') to introduce a 
data product to be known as the NYSE Options Open-Close Intra-Day 
Volume Summary (``Intra-Day Volume Summary'') that would be available 
for purchase by any market participant, i.e., members \4\ and non-
members, on an ad-hoc basis and to adopt fees for such product. The 
proposed rule change is available on the Exchange's website at 
www.nyse.com, at the principal office of the Exchange, and at the 
Commission's Public Reference Room.
---------------------------------------------------------------------------

    \4\ References to ``member organization'' as used in Exchange 
rules include American Trading Permit (``ATP'') Holders, which are 
registered brokers or dealers approved to effect transactions on the 
Exchange's options marketplace. Under the Exchange's rules, an ATP 
Holder has the status as a ``member'' of the Exchange as that term 
is defined in Section 3 of the Act. See Rule 900.2NY.
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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 self-regulatory organization 
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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to introduce a data product to be known as 
the Intra-Day Volume Summary that would be available for purchase by 
market participants on an ad-hoc basis and to adopt fees for such 
product.\5\
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    \5\ The Exchange previously adopted a subscription-based market 
data product known as the NYSE Options Open-Close Volume Summary 
that market participants can purchase on a subscription basis. See 
Securities Exchange Act Release No. 93803 (December 16, 2021), 86 FR 
72647 (December 22, 2021) (SR-NYSEAMER-2021-46). The purpose of this 
filing is to introduce a historic monthly report of the NYSE Options 
Open-Close Volume Summary that would be available for purchase by 
any market participant on an ad-hoc basis.
---------------------------------------------------------------------------

    More specifically, the Exchange proposes to offer an ad-hoc 
historic monthly Intra-Day Volume Summary market data product that 
provides a volume summary of trading activity on the Exchange at the 
option level by origin (Customer, Professional Customer, Firm, Broker-
Dealer, and Market Maker \6\), side of the market (buy or sell), 
contract volume, and

[[Page 73061]]

transaction type (opening or closing). The Customer, Professional 
Customer, Firm, Broker-Dealer, and Market Maker volume is further 
broken down into trade size buckets (less than 100 contracts, 100-199 
contracts, greater than 199 contracts). The ad-hoc historic monthly 
Intra-Day Volume Summary 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 proposes to 
offer data beginning November 2023 and would contain all series in an 
underlying security if it has volume.\7\
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    \6\ The terms Customer, Professional Customer, Firm and Market 
Maker are defined in Rule 900.2NY.
    \7\ The specifications for the ad-hoc historic monthly Intra-Day 
Volume Summary can be found at https://www.nyse.com/market-data/historical/open-close-volume-summary.
---------------------------------------------------------------------------

    The Exchange anticipates a wide variety of market participants to 
purchase the ad-hoc historic monthly Intra-Day Volume Summary, 
including, but not limited to, individual customers, buy-side 
investors, investment banks and academic institutions. For example, 
academic institutions may utilize the proposed product to promote 
research and studies of the options industry to the benefit of all 
market participants. The Exchange believes the proposed product may 
also provide helpful trading information regarding investor sentiment 
and may be used to create and test trading models and analytical 
strategies. The ad-hoc historic monthly Intra-Day Volume Summary is a 
completely voluntary product, in that the Exchange is not required by 
any rule or regulation to make this data available and that potential 
customers may purchase it on an ad-hoc basis only if they voluntarily 
choose to do so. The Exchange notes that other exchanges offer a 
similar product,\8\ including the Exchange's affiliate, NYSE Arca, Inc. 
(``NYSE Arca'').\9\ As such, the ad-hoc historic monthly Intra-Day 
Volume Summary is subject to direct competition from similar intra-day 
options trading summaries offered by other exchanges. All of these 
exchanges offer essentially the same intra-day options trading summary 
information for purchase on an ad-hoc basis, and generally differ 
solely in the amount of history available for purchase.\10\
---------------------------------------------------------------------------

    \8\ See e.g., Securities Exchange Act Release Nos. 89496 (August 
6, 2020), 85 FR 48743 (August 12, 2020) (SR-C2-2020-010) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating To Introduce a New Data Product To Be Known as Intraday 
Open-Close Data); and 97723 (June 14, 2023), 88 FR 40358 (June 21, 
2023) (SR-BOX-2023-16) (Notice of Filing and Immediate Effectiveness 
of a Proposed Rule Change To Amend the Fee Schedule for Trading on 
the BOX Options Market LLC Facility To Offer Ad-Hoc Historical 
Requests for the Intraday Open-Close Data Report and Adopt Fees for 
This Data). The ad-hoc historic monthly Intra-Day Volume Summary 
report contains the same information that is provided in the monthly 
subscription-based market data product known as the NYSE Options 
Open-Close Volume Summary. See, note 5, supra.
    \9\ See Securities Exchange Act Release No. 97841 (July 5, 
2023), 88 FR 44176 (July 11, 2023) (SR-NYSEArca-2023-46).
    \10\ For example, Nasdaq PHLX LLC offers history for its intra-
day data starting in January 2009 for purchase on an ad-hoc basis 
while Intra-Day Volume Summary history is only offered starting in 
August 2022. See https://www.nasdaqtrader.com/micro.aspx?id=photo.
---------------------------------------------------------------------------

    The Exchange proposes to provide in its Fee Schedule that market 
participants may purchase the ad-hoc historic monthly Intra-Day Volume 
Summary for a specified month (historical data). The Exchange proposes 
to assess a fee of $1,000 per request per month for an ad-hoc request 
of historical Intra-Day Volume Summary covering all Exchange-listed 
securities. An ad-hoc request can be for any number of months beginning 
with November 2023 for which the data is available.\11\ The proposed 
fee for ad-hoc requests for the historic monthly Intra-Day Volume 
Summary will apply to all market participants. The Exchange notes that 
other exchanges provide a similar data product \12\ that may be 
purchased on an ad-hoc basis. The proposed fee is comparably priced to 
at least one other exchange that sells a market data product similar to 
Intra-Day Volume Summary that may be purchased on an ad-hoc basis.\13\
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    \11\ For example, a customer that requests historical Intra-Day 
Volume Summary for the months of November 2023 and December 2023, 
would be assessed a total of $2,000.
    \12\ See e.g., Cboe LiveVol, LLC Market Data Fees available at 
https://www.cboe.com/us/options/membership/fee_schedule/ctwo/. Cboe 
C2 Options (``C2'') offers Open-Close Data: Intraday Ad-hoc Request 
(historical data) and assesses a fee of $500 per request per month. 
Cboe EDGX Exchange, Inc. (``EDGX'') similarly offers Open-Close 
Data: Intraday Ad-hoc Request (historical data) and assesses a fee 
of $500 per request per month. See https://www.cboe.com/us/options/membership/fee_schedule/edgx/. Nasdaq ISE, LLC (``ISE'') offers 
Nasdaq ISE Open/Close Trade Profile Intraday Ad-Hoc Request 
(historical data) and assesses a fee of $1,000 per request per 
month, $2,000 per request per quarter and $8,000 per request per 
year. See Sec. 10, Market Data, at https://listingcenter.nasdaq.com/rulebook/ise/rules/ise-options-7.
    \13\ See ISE fees, note 12, supra.
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    The Exchange intends to offer the historic monthly Intra-Day Volume 
Summary on an ad-hoc basis and charge the proposed fees effective 
November 1, 2023.
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 proposal to adopt fees for ad-hoc historic monthly Intra-Day Volume 
Summary 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 
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 users and consumers of such data and also spur innovation and 
competition for the provision of market data.
    The Exchange believes that the proposed ad-hoc historic monthly 
Intra-Day Volume Summary market data product would further broaden the 
availability of U.S. options market data to investors consistent with 
the principles of Regulation NMS. The proposed rule change would 
benefit investors by providing access to historic data, which as noted 
above, may promote better informed trading, as well as research and 
studies of the options industry. Particularly, information regarding 
opening and closing activity across different options series may 
indicate investor sentiment, which can be helpful research and/or 
trading information. Customers of the historic data product may be able 
to enhance their ability to analyze options trade and volume data, and 
create and test trading models and analytical strategies. The Exchange 
believes ad-hoc historic monthly Intra-Day Volume Summary would provide 
a valuable tool that customers can use to gain comprehensive insight 
into the trading activity in a particular series, but also emphasizes 
such data is not necessary for trading. Moreover, other exchanges offer 
a similar data product.\18\
---------------------------------------------------------------------------

    \18\ See, notes 8 and 9, supra.

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[[Page 73062]]

    The Exchange operates in a highly competitive market. Indeed, there 
are currently 17 registered options exchanges competing for order flow. 
Based on publicly-available information, and excluding index-based 
options, no single exchange has more than 16% of the market share of 
executed volume of multiply-listed equity and ETF options trades.\19\ 
Therefore, no exchange possesses significant pricing power in the 
execution of multiply-listed equity and ETF options order flow. More 
specifically, in July 2023, the Exchange had less than 12% market share 
of executed volume of multiply-listed equity and ETF options 
trades.\20\
---------------------------------------------------------------------------

    \19\ The Options Clearing Corporation (``OCC'') publishes 
options and futures volume in a variety of formats, including daily 
and monthly volume by exchange, available here: https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics.
    \20\ Based on a compilation of OCC data for monthly volume of 
equity-based options and monthly volume of equity-based ETF options, 
see id., the Exchange's market share in equity-based options 
increased slightly from 11.30% for the month of July 2022 to 11.50% 
for the month of July 2023.
---------------------------------------------------------------------------

    The Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. Specifically, 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\
---------------------------------------------------------------------------

    \21\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------

    With respect to market data, the decision of the United States 
Court of Appeals for the District of Columbia Circuit in NetCoalition 
v. SEC upheld the Commission's reliance on the existence of competitive 
market mechanisms to evaluate the reasonableness and fairness of fees 
for proprietary market data:

    In fact, the legislative history indicates that the Congress 
intended that the market system ``evolve through the interplay of 
competitive forces as unnecessary regulatory restrictions are 
removed'' and that the SEC wield its regulatory power ``in those 
situations where competition may not be sufficient,'' such as in the 
creation of a ``consolidated transactional reporting system.'' \22\
---------------------------------------------------------------------------

    \22\ NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. Cir. 2010) 
(quoting H.R. Rep. No. 94-229 at 92 (1975), as reprinted in 1975 
U.S.C.C.A.N. 323).

    The court agreed with the Commission's conclusion that ``Congress 
intended that `competitive forces should dictate the services and 
practices that constitute the U.S. national market system for trading 
equity securities.' '' \23\ More recently, the Commission confirmed 
that it applies a ``market-based'' test in its assessment of market 
data fees, and that under that test:
---------------------------------------------------------------------------

    \23\ Id. at 535.

    the Commission considers whether the exchange was subject to 
significant competitive forces in setting the terms of its proposal 
for [market data], including the level of any fees. If an exchange 
meets this burden, the Commission will find that its fee rule is 
consistent with the Act unless there is a substantial countervailing 
basis to find that the terms of the rule violate the Act or the 
rules thereunder.\24\
---------------------------------------------------------------------------

    \24\ See Securities Exchange Act Release No. 34-90217 (October 
16, 2020), 85 FR 67392 (October 22, 2020) (SR-NYSENAT-2020-05) 
(internal quotation marks omitted), quoting Securities Exchange Act 
Release No. 59039 (December 2, 2008), 73 FR 74770, 74781 (December 
9, 2008) (ArcaBook Approval Order).

    Making similar historic 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 historic data product as 
more or less attractive than the competition they can and do switch 
between similar products. The proposed fees are a result of the 
competitive environment, as the Exchange seeks to adopt fees to attract 
purchasers of the ad-hoc historic monthly Intra-Day Volume Summary data 
product.
    The Exchange believes its proposal to provide the ad-hoc historic 
monthly Intra-Day Volume Summary is reasonable as the proposed fee is 
comparable to the fee charged by at least one other exchange that 
provides a similar historic data product.\25\ Indeed, proposing fees 
that are excessively higher than established fees for similar historic 
data products would simply serve to reduce demand for the Exchange's 
historic data product, which as noted, is entirely optional. Like the 
ad-hoc historic monthly Intra-Day Volume Summary, other exchanges offer 
similar historic data products that each provide insight into trading 
on those markets and may likewise aid in assessing investor sentiment. 
Although each of these similar historic 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 options series based on open and closing interest on 
any one exchange. Similarly, market participants may be able to analyze 
options trade and volume data, and create and test trading models and 
analytical strategies using only the ad-hoc historic monthly Intra-Day 
Volume Summary data relating to trading activity on one or more of the 
other markets that provide similar historic data products. As such, if 
a market participant views another exchange's data as more attractive 
than the Exchange's offering, then such market participant can merely 
choose not to purchase the Exchange's historic data product and instead 
purchase another exchange's historic product, which offer similar data 
points, albeit based on that other market's trading activity.
---------------------------------------------------------------------------

    \25\ See, note 12, supra.
---------------------------------------------------------------------------

    The Exchange also believes the proposed fees are reasonable as they 
would support the introduction of a historic market data product that 
is designed to aid investors by providing insight into trading on the 
Exchange. In turn, this data would assist market participants in 
gauging investor sentiment and trading activity, resulting in 
potentially better-informed trading decisions. As noted above, 
customers may also use such data to create and test trading models and 
analytical strategies.
    Selling historic market data, such as the ad-hoc historic monthly 
Intra-Day Volume Summary, is also a means by which exchanges compete to 
attract business. To the extent that the Exchange is successful in 
attracting customers to the Exchange's historic data product, it may 
earn trading revenues and further enhance the value of its data 
products. If the market deems the proposed fees to be unfair or 
inequitable, customers can diminish or discontinue their use of the 
historic data and/or avail themselves of similar products offered by 
other exchanges.\26\ The Exchange therefore believes that the proposed 
fees reflect the competitive environment and would be properly and 
equally assessed to all customers. The Exchange also believes the 
proposed fees are equitable and not unfairly discriminatory as the fees 
would apply equally to all customers who choose to purchase such data. 
The proposed fees would not differentiate between customers that 
purchase the ad-hoc historic monthly Intra-Day Volume Summary, and are 
set at a modest level that would allow any interested market 
participant to purchase such data based on their business needs. 
Nothing in this proposal treats any category of market participant any 
differently from any other category of market participant. The ad-hoc 
historic monthly Intra-Day Volume Summary is available to all

[[Page 73063]]

market participants, i.e., members and non-members, and all market 
participants would receive the same information in the data feed.
---------------------------------------------------------------------------

    \26\ See, notes 8 and 9, supra.
---------------------------------------------------------------------------

    As noted above, the Exchange anticipates a wide variety of market 
participants to purchase the ad-hoc historic monthly Intra-Day Volume 
Summary data product, including but not limited to individual 
customers, buy-side investors, investment banks and academic 
institutions. As such, the Exchange anticipates that the historic data 
product may be used not just for commercial or monetizing purposes, but 
also for educational use and research. The Exchange reiterates that the 
decision as to whether or not to purchase the ad-hoc historic monthly 
Intra-Day Volume Summary is entirely optional for all potential 
customers. Indeed, no market participant is required to purchase the 
historic data product, and the Exchange is not required to make the 
historic data product available to market participants. Rather, the 
Exchange is voluntarily making the historic data product available, as 
requested by customers, and market participants may choose to receive 
(and pay for) this data based on their own business needs. Potential 
customers may request the data at any time if they believe it to be 
valuable or may decline to purchase such data.
    In sum, the fierce competition for order flow constrains any 
exchange from pricing its historic market data at a supra-competitive 
price, and constrains the Exchange here in setting its fees for the ad-
hoc historic monthly Intra-Day Volume Summary data product.
    The proposed fees are therefore reasonable because in setting them, 
the Exchange is constrained by the availability of numerous substitute 
venues offering historic market data products and trading.\27\ Such 
substitutes need not be identical, but only substantially similar to 
the product at hand. More specifically, in setting fees for the ad-hoc 
historic monthly Intra-Day Volume Summary data product, the Exchange is 
constrained by the fact that, if its pricing is unattractive to 
customers, customers have their pick of an increasing number of 
alternative venues to use instead of the Exchange.\28\ Because of the 
availability of substitutes, an exchange that overprices its historic 
market data products stands a high risk that customers may substitute 
another source of market data information for its own. Those 
competitive pressures imposed by available alternatives are evident in 
the Exchange's proposed pricing. The existence of numerous alternatives 
to the Exchange ensures that the Exchange cannot set unreasonable fees 
for historic market data without suffering the negative effects of that 
decision in the fiercely competitive market in which it operates.
---------------------------------------------------------------------------

    \27\ See, notes 8 and 9, supra.
    \28\ See, note 12, supra.
---------------------------------------------------------------------------

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. The Exchange 
also does not believe the proposed fees would cause any unnecessary or 
inappropriate burden on intermarket competition as other exchanges are 
free to introduce their own comparable historic data product and adopt 
fees to better compete with the Exchange's offering. Rather, the 
Exchange believes that the proposal will promote competition by 
permitting the Exchange to sell a historic data product similar to 
those offered by other options exchanges.\29\ The Exchange is offering 
the ad-hoc historic monthly Intra-Day Volume Summary in order to keep 
pace with changes in the industry and evolving customer needs, and 
believes the data product will contribute to robust competition among 
national securities exchanges.
---------------------------------------------------------------------------

    \29\ See, notes 8 and 9, supra.
---------------------------------------------------------------------------

    Furthermore, the Exchange operates in a highly competitive 
environment, and its ability to price the ad-hoc historic monthly 
Intra-Day Volume Summary is constrained by competition among exchanges 
that offer similar historic data products to their customers. As 
discussed above, there are currently a number of similar products 
available to market participants and investors. A number of U.S. 
options exchanges offer a historic market data product that is 
substantially similar to the Exchange's offering, which the Exchange 
must consider in its pricing discipline in order to compete 
effectively. For example, proposing fees that are excessively higher 
than established fees for similar historic data products would simply 
serve to reduce demand for the Exchange's historic data product, which 
as discussed, market participants are under no obligation to utilize or 
purchase. In this competitive environment, potential purchasers are 
free to choose which, if any, similar historic data 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 does not believe the proposed rule change would cause 
any unnecessary or inappropriate burden on intramarket competition. 
Particularly, the proposed fees would apply uniformly to any customer, 
in that the Exchange would not differentiate between customers that 
purchase the ad-hoc historic monthly Intra-Day Volume Summary and all 
customers would receive the same information in the data feed. The 
Exchange believes the proposed fees are set at a modest level that 
would allow interested customers to purchase such data based on their 
business needs.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to 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 \30\ and Rule 
19b-4(f)(6) thereunder.\31\
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \31\ 17 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \32\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\33\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiver of the 30-day operative delay is consistent with the 
protection of investors and the public interest because the proposal 
does not raise any

[[Page 73064]]

new or novel issues.\34\ Accordingly, the Commission hereby waives the 
30-day operative delay and designates the proposal operative upon 
filing.\35\
---------------------------------------------------------------------------

    \32\ 17 CFR 240.19b-4(f)(6).
    \33\ 17 CFR 240.19b-4(f)(6)(iii).
    \34\ See supra, notes 8-10 and 12.
    \35\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 [email protected]. Please include 
file number SR-NYSEAMER-2023-50 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-NYSEAMER-2023-50. 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 
a.m. and 3 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-NYSEAMER-2023-50 and should 
be submitted on or before November 14, 2023

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\36\
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    \36\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-23400 Filed 10-23-23; 8:45 am]
BILLING CODE 8011-01-P
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