Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule To Adopt Fees for the Short Interest Report, 2989-2993 [2024-00710]
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Federal Register / Vol. 89, No. 11 / Wednesday, January 17, 2024 / Notices
annual performance plan and annual
performance report. 39 U.S.C. 3653(d).
The Commission may also ‘‘provide
recommendations to the Postal Service
related to the protection or promotion of
public policy objectives set out in’’ Title
39. Id.
Since Docket No. ACR2013, the
Commission has evaluated whether the
Postal Service met its performance goals
in reports separate from the Annual
Compliance Determination.4 The
Commission continues this current
practice to provide a more in-depth
analysis of the Postal Service’s progress
toward meeting its performance goals
and plans to improve performance in
future years. To facilitate this review,
the Commission invites public comment
on the following issues:
• Did the Postal Service meet its
performance goals in FY 2023?
• Do the FY 2023 Report and the FY
2024 Plan meet applicable statutory
requirements, including 39 U.S.C. 2803
and 2804?
• What recommendations should the
Commission provide to the Postal
Service that relate to protecting or
promoting public policy objectives in
Title 39?
• For the Excellent Customer
Experience performance goal, are there
any customer experience (CX) metrics
the Postal Service should add to
measure CX? 5
• What recommendations or
observations should the Commission
make concerning the Postal Service’s
strategic initiatives? 6
• What other matters are relevant to
the Commission’s analysis of the FY
2023 Report and the FY 2024 Plan
under 39 U.S.C. 3653(d)?
II. Request for Comments
Comments by interested persons are
due no later than March 15, 2024. Reply
comments are due no later than March
29, 2024. Pursuant to 39 U.S.C. 505,
Kenneth R. Moeller is appointed to
serve as Public Representative to
represent the interests of the general
public in this proceeding with respect to
issues related to the Commission’s
analysis of the FY 2023 Report and the
FY 2024 Plan.
III. Ordering Paragraphs
It is ordered:
1. The Commission invites public
comment on the Postal Service’s FY
2023 Report and FY 2024 Plan.
2. Pursuant to 39 U.S.C. 505, the
Commission appoints Kenneth R.
Moeller to serve as Public
Representative to represent the interests
of the general public in this proceeding
with respect to issues related to the
Commission’s analysis of the FY 2023
Report and the FY 2024 Plan.
3. Comments are due no later than
March 15, 2024.
4. Reply comments are due no later
than March 29, 2024.
5. The Secretary shall arrange for
publication of this Order in the Federal
Register.
By the Commission.
Jennie L. Jbara,
Alternate Certifying Officer.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January 2,
2024, Cboe BZX Exchange, Inc. (the
‘‘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’’) proposes to
amend its Fee Schedule. The text of the
proposed rule change is provided
below.
(additions are italicized; deletions are
[bracketed])
*
*
*
*
*
Cboe U.S. Equities Fee Schedules
BZX Equities
[FR Doc. 2024–00700 Filed 1–16–24; 8:45 am]
BILLING CODE 7710–FW–P
Effective [December 12, 2023] January 2,
2024
*
*
*
*
*
Market Data Fees:
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99307; File No. SR–
CboeBZX–2024–003]
*
*
*
*
*
Cboe Premium Exchange Tools
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule To Adopt Fees for the
Short Interest Report
January 10, 2024.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
Description
Fee
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Monthly Fee per User Login ................................................................................................................................................................
4 See Docket No. ACR2013, Postal Regulatory
Commission, Review of Postal Service FY 2013
Performance Report and FY 2014 Performance Plan,
July 7, 2014; Docket No. ACR2014, Postal
Regulatory Commission, Analysis of the Postal
Service’s FY 2014 Program Performance Report and
FY 2015 Performance Plan, July 7, 2015; Docket No.
ACR2015, Postal Regulatory Commission, Analysis
of the Postal Service’s FY 2015 Annual Performance
Report and FY 2016 Performance Plan, May 4, 2016;
Docket No. ACR2016, Postal Regulatory
Commission, Analysis of the Postal Service’s FY
2016 Annual Performance Report and FY 2017
Performance Plan, April 27, 2017; Docket No.
ACR2017, Postal Regulatory Commission, Analysis
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of the Postal Service’s FY 2017 Annual Performance
Report and FY 2018 Performance Plan, April 26,
2018; Docket No. ACR2018, Postal Regulatory
Commission, Analysis of the Postal Service’s FY
2018 Annual Performance Report and FY 2019
Performance Plan, May 13, 2019; Docket No.
ACR2019, Postal Regulatory Commission, Analysis
of the Postal Service’s FY 2019 Annual Performance
Report and FY 2023 Performance Plan, June 1,
2023; Docket No. ACR2020, Postal Regulatory
Commission, Analysis of the Postal Service’s FY
2020 Annual Performance Report and FY 2021
Performance Plan, June 2, 2021; Docket No.
ACR2021, Postal Regulatory Commission, Analysis
of the Postal Service’s FY 2021 Annual Performance
PO 00000
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$65
Report and FY 2022 Performance Plan, June 30,
2022; Docket No. ACR2022, Postal Regulatory
Commission, Analysis of the Postal Service’s FY
2022 Annual Performance Report and FY 2023
Performance Plan, June 28, 2023.
5 In FY 2023, the Postal Service measured CX
based on customer surveys. See Docket No.
ACR2023, Library Reference USPS–FY23–38,
December 29, 2023, ZIP folder ‘‘FY23.38.Files.zip’’
PDF file ‘‘CX_Surveys_FY23.pdf.
6 See FY 2023 Annual Report at 59–60.
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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Short Interest Report *
Delivery
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Fee
Fee—Access ..........................................................................................................................................................................
Fee—Access (Historical Data) ...............................................................................................................................................
Fee per Internal Distributor ....................................................................................................................................................
Fee Internal Distributor (Historical Data) ...............................................................................................................................
Fee per External Distributor ** ...............................................................................................................................................
Fee External Distributor (Historical Data) ** ..........................................................................................................................
$250
250
500
500
750
750
* The Short Interest Report is available for purchase on a monthly basis or on an annual basis.
** The Short Interest Report provided for External Distribution is only for display use redistribution.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s
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.
lotter on DSK11XQN23PROD with NOTICES1
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 adopt fees to be
assessed to individuals that elect to
subscribe to the Short Interest Reports,
effective January 2, 2024.
On December 11, 2023 the Exchange
proposed to adopt a new data product
known as the Short Interest Report.3
The Short Interest Report contains a
summary of consolidated market short
interest positions in all BZX-listed
securities 4 only as reported by the
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’); it is designed
to facilitate the distribution of short sale
data to, among other things, provide
analytical and investment data that the
brokerage industry, academic
institutions, and investors may use in
3 See
SR–CboeBZX–2023–102.
BZX-listed security is a security listed on the
Exchange pursuant to Chapter 14 of the Exchange’s
Rules and includes both corporate listed securities
and Exchange Traded Products (‘‘ETPs’’).
4A
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developing risk-assessment tool and
trading models for BZX-listed issues.
The report data fields include Cycle
Settlement Date,5 BATS-Symbol,6
Security Name, Number of Shares Net
Short Current Cycle,7 Number of Shares
Net Short Previous Cycle,8 Cycle
Average Daily Trade Volume,9
Minimum Number of Trade Days to
Cover Shorts,10 Split Indicator,11
Manual Revision Indicator,12 Percent
Change in Short Position,13 and Change
in Short Position from Previous.14
The Short Interest Report is available
for purchase by both Members 15 and
non-Members on a monthly or annual
subscription basis, and subscribers will
receive a daily end-of-day file (with
values updated twice per month). The
Short Interest Report is also available for
purchase on a historical monthly basis.
The historical reports provide the endof-day report for each day during a
given calendar month, are available for
purchase dating back to March 31, 2015,
and include the same data fields as the
5 ‘‘Cycle Settlement Date’’ is the reporting period
date.
6 ‘‘BATS-Symbol’’ is the Exchange-assigned
symbol for the given security.
7 ‘‘Number Shares Net Short Current Cycle’’ is the
total of uncovered open short interest positions in
a particular security in shares, for the current
reporting period.
8 ‘‘Number of Shares Net Short Previous Cycle’’
is the total number of uncovered open short interest
positions in a particular security in shares, for the
previous reporting period.
9 ‘‘Cycle Average Daily Trade Volume’’ is the
number of shares traded on average per day in a
particular security in shares.
10 ‘‘Minimum Number of Trade Days to Cover
Shorts’’ is the ratio of the current short interest
position over the average daily volume for the
current settlement date.
11 ‘‘Split Indicator’’ indicates whether the security
has undergone a stock split during the current
reporting period.
12 ‘‘Manual Revision Indicator’’ indicates whether
the security’s short interest for the previous
reporting period has been revised.
13 ‘‘Percent Change in Short Position’’ is the
percent change from the current reporting period’s
short interest compared to the previous reporting
period’s short interest.
14 ‘‘Change in Short Position from Previous’’ is
the difference between the current and previous
reporting period of uncovered short interest
positions in a particular security in shares.
15 See Exchange Rule 1.5(n).
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daily end-of-day files. Members and
non-Members have the ability to redistribute (internally and/or externally)
the Short Interest Report.
The Exchange now proposes to adopt
fees applicable to individuals that
subscribe to the Short Interest Reports.
As proposed, the Exchange would
assess a monthly 16 fee of $250 per
month for individuals that subscribe to
the report, $500 per month for an
Internal Distributor 17 of the report, and
a fee of $750 per month to an External
Distributor 18 of the report. These fees
may be paid on a monthly basis or on
an annual basis.19 Data provided to an
External Distributor via the Short
Interest Report is only for display use
redistribution (e.g., the data may be
provided on the distributor’s platform).
Therefore, distributors of the data may
not charge separately for data included
in the Report or incorporate such data
into their product. External Distributors,
unlike Internal Distributors, are
typically compensated for the
distribution of short sale data through
subscription fees or other mechanisms.
The higher price for External
Distributors reflects the additional value
these distributors may gain from the
product.
Additionally, the Exchange proposes
to adopt fees for the Short Interest
Report provided on a historical basis. As
16 The monthly fees for the Short Interest Reports
are assessed based on a 30-day period. For example,
if an individual subscribes to the Short Interest
Report on December 15, 2023, the monthly fee will
cover the period of December 15, 2023 through
January 15, 2023. If the individual cancels his/her
subscription prior to January 15, 2023, the
individual will not be charged for (or have access
to) Short Interest Reports for the remainder of
January.
17 An ‘‘Internal Distributor’’ of an Exchange
Market Data product is a Distributor that receives
the Exchange Market Data product and then
distributes that data to one or more users within the
Distributor’s own entity.
18 An ‘‘External Distributor’’ of an Exchange
Market Data product is a Distributor that receives
the Exchange Market Data product and then
distributes that data to a third party or one or more
users outside the Distributor’s own entity.
19 Those who subscribe to the Short Interest
Report during the middle of a month will receive
the end-of-day report for each day beginning on the
date of subscription.
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noted above, the Short Interest Report
will be available for each calendar
month dating back to March 31, 2015.
As proposed, the fees for Short Interest
Reports provided on a historical basis
are the same as the fees proposed for the
standard Short Interest Report: the
Exchange would assess a fee of $250 per
historical month for individuals that
subscribe, $500 per historical month
assessed to Internal Distributors of the
report, and a fee of $750 per historical
month assessed to External Distributors
of the report. Data provided via the
historical Short Volume Report is also
for display use redistribution only (e.g.,
the data may be provided on the
distributor’s platform). Therefore,
distributors of the historical data may
not charge separately for data included
in the Short Interest Report or
incorporate such data into their product.
Nonetheless, the Exchange believes it is
reasonable, equitable and not unfairly
discriminatory to charge a fee for
display use redistribution that reflects
the value these distributors may gain
from the historical product.
The Exchange anticipates that a wide
variety of market participants will
purchase the Short Interest Report,
including, but not limited to, active
equity trading firms and academic
institutions. For example, the Exchange
notes that academic institutions may
utilize the Short Interest Report data
and as a result promote research and
studies of the equities industry to the
benefit of all market participants. The
Exchange further believes the Short
Interest Report may provide helpful
trading information regarding investor
sentiment that may allow market
participants to make more informed
trading decisions and may be used to
create and test trading models and
analytical strategies and provide
comprehensive insight into trading on
the Exchange.
The Exchange notes that the Short
Interest Report is a completely
voluntary product, in that the Exchange
is not required by any rule or regulation
to make the reports or services available
and that potential subscribers may
purchase it only if they voluntarily
choose to do so. Further, the Exchange
notes that other exchanges offer similar
products for a fee.20
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
20 See,
e.g., Specifications for Short Interest file,
available at: https://www.nasdaq.com/solutions/
short-interest-report; and NYSE Group Short
Interest Client Specification, available at: NYSE_
Group_Short_Interest_Client_Specification_
v1.5.pdf.
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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.21 Specifically,
the Exchange believes the proposed rule
change is consistent with the section
6(b)(5) 22 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) 23 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange also believes the
proposed rule change is consistent with
section 6(b)(4) of the Act,24 which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
Trading Permit Holders and other
persons using its facilities.
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
consumers, and also spur innovation
and competition for the provision of
market data. The Exchange believes that
the Short Interest Report further
broadens the availability of U.S. equity
market data to investors consistent with
the principles of Regulation NMS. The
Short Interest Report also promotes
increased transparency through the
dissemination of short interest data. The
Short Interest Report benefits investors
by providing access to the Short Interest
Report data, which may promote better
informed trading, as well as research
and studies of the equities industry.
The Exchange operates in a highly
competitive environment. Indeed, there
are currently 16 registered equities
exchanges that trade equities. Based on
publicly available information, no single
equities exchange has more than 13% of
21 15
22 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
23 Id.
24 15
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U.S.C. 78f(b)(4).
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2991
the equity market share.25 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.’’ 26
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
attractive than the competition, that
market participant can, and often does,
switch between similar products. The
proposed fees are a result of the
competitive environment of the U.S.
equities industry as the Exchange seeks
to adopt fees to attract purchasers of the
recently introduced Short Interest
Report.
The Exchange believes that the
proposed fees for the Short Interest
Report are consistent with the Act in
that they are reasonable, equitable, and
not unfairly discriminatory. In
particular, the Exchange believes that
the proposed fees are reasonable
because they are reasonably aligned
with the value and benefits provided to
users that choose to subscribe to the
Short Interest Report on the Exchange.
As discussed above, the Short Interest
Report may be beneficial to Members
and non-Members as it may provide
helpful trading information regarding
investor sentiment that may allow
market participants to make more
informed trading decisions and may be
used to create and test trading models
and analytical strategies and provide
comprehensive insight into trading on
the Exchange. Therefore, the Exchange
believes that it is reasonable to assess a
modest fee to users that subscribe to the
Short Interest Report.
The Exchange further believes the
proposed fee is reasonable because the
amount assessed is less than the
analogous fees charged by competitor
exchanges. For example, for its Short
Interest Reports, Nasdaq charges $500
25 See Cboe Global Markets, U.S. Equities Market
Volume Summary, Month-to-Date (December 18,
2023), available at https://www.cboe.com/us/
equities/market_statistics/.
26 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
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for access, $1,000 for Internal
Distributors and from $2,500 to $7,500
for External Distributors (depending on
the number of subscribers).27
Additionally, NYSE and its affiliated
equity markets (the ‘‘NYSE Group’’)
have a similar Short Interest Report
offering, seemingly for a charge.28 The
Exchange therefore believes that the
proposed fees are reasonable and set at
a level to compete with other equity
exchanges that offer similar reports.
Indeed, proposing fees that are
excessively higher than established fees
for similar data products would simply
serve to reduce demand for the
Exchange’s data product, which as
noted, is entirely optional. Although
each of these similar 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 equities based on the included
data points on any one exchange. As
such, if a market participant views
another exchange’s potential report as
more attractive, then such market
participant can merely choose not to
purchase the Exchange’s Short Interest
Report and instead purchase another
exchange’s similar data product, which
offers similar data points, albeit based
on that other market’s trading activity.
In addition, the Exchange believes
that the proposed fees are equitable and
not unfairly discriminatory because they
will apply to all similarly situated
Members and non-Members that choose
to subscribe to the Short Interest Report
equally. As stated, the Short Interest
Report is completely optional and not
necessary for trading. Rather, the
Exchange voluntarily makes the Short
Interest Report available, and users may
choose to subscribe (and pay for) the
report based on their own individual
business needs. Potential subscribers
may subscribe to the Short Interest
Report at any time if they believe it to
be valuable or may decline to purchase
it.
The Exchange also believes it is
reasonable, equitable and not unfairly
discriminatory to charge an External
Distributor of the Short Interest Report
a higher fee than an Internal Distributor
as an External Distributor may provide
the data on their platform. External
Distributors, unlike Internal
Distributors, are typically compensated
for the distribution of short sale data
through subscription fees or other
27 See
Nasdaq Rule 7, Section 122.
https://www.nyse.com/market-data/
reference/nyse-group-short-interest, which includes
a ‘‘Purchase Now’’ option. The Exchange is
unaware of a related filing for the offering.
28 See
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mechanisms. Therefore, the Exchange
believes it is reasonable, equitable and
not unfairly discriminatory to charge a
higher fee for display use redistribution,
as it reflects the additional value these
distributors may gain from the Short
Interest product. Additionally, the
Exchange believes it is reasonable,
equitable and not unfairly
discriminatory to charge an Internal
Distributor of the Short Interest Report
a higher fee than an individual, as an
Internal Distributor may distribute the
data to one or more users within the
Distributor’s own entity; thus, the
higher fee reflects the additional value
such Internal Distributors may gain from
the Short Interest product. Further, the
proposed fee will apply equally to
similarly situated individuals, Internal
Distributors and External Distributors,
respectively. Moreover, as described
above, another Exchange similarly
charges Internal and External
Distributors higher fees as compared to
individuals for a similar data product.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposed rule change will impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because the Short Interest Report will be
available equally to all Members and
non-Members that choose to subscribe
to the report. Market participants are not
required to purchase the Short Interest
Report, and the Exchange is not
required to make the Short Interest
Report available to investors. Rather, the
Exchange is voluntarily making the
Short Interest Report available, and
market participants may choose to
receive (and pay for) this data based on
their own business needs. Potential
purchasers may request the data at any
time if they believe it to be valuable or
may decline to purchase such data.
Given the above, the Exchange does not
believe 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.
Additionally, as discussed above, the
Exchange believes it is appropriate to
charge Internal and External
Distributors higher fees as compared to
individuals, as the higher fees reflect the
additional value such Internal
Distributors and External Distributors
may gain from the Short Interest
product.
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Next, the Exchange believes the
proposed rule change does not impose
any burden on intermarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
As previously discussed, similar
products offered by Nasdaq are priced
higher than the Short Volume Report.
Moreover, 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.’’ The
fact that this market is competitive has
also long been recognized by the courts.
In NetCoalition v. Securities and
Exchange Commission, the D.C. Circuit
stated as follows: ‘‘[n]o one disputes
that competition for order flow is
‘fierce.’ . . . As the SEC explained, ‘[i]n
the U.S. national market system, buyers
and sellers of securities, and the brokerdealers that act as their order-routing
agents, have a wide range of choices of
where to route orders for execution’;
[and] ‘no exchange can afford to take its
market share percentages for granted’
because ‘no exchange possesses a
monopoly, regulatory or otherwise, in
the execution of order flow from broker
dealers’. . . .’’. Accordingly, the
Exchange does not believe its proposal
imposes any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
Further, 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
attractive than the competition, that
market participant can, and often does,
switch between similar products. The
proposed fees are a result of the
competitive environment of the U.S.
equities industry as the Exchange seeks
to adopt fees to attract purchasers of the
Short Interest Report. As noted above,
the Exchange believes that the proposed
fees are reasonable and set at a level to
compete with other equity exchanges
that offer similar reports. Accordingly,
the Exchange does not believe its
proposal imposes any burden on
competition that is not necessary or
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appropriate in furtherance of the
purposes of the Act.
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
The foregoing rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act 29 and paragraph (f) of Rule
19b–4 30 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:
lotter on DSK11XQN23PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBZX–2024–003 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–CboeBZX–2024–003. 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–CboeBZX–2024–003 and should be
submitted on or before February 7, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–00710 Filed 1–16–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99311; File No. SR–
CboeBYX–2023–020]
Self-Regulatory Organizations; Cboe
BYX Exchange, Inc.; Notice of Filing of
a Proposed Rule Change To Modify
Rule 11.24 To Introduce an Enhanced
RPI Order and Expand Its Retail Price
Improvement Program To Include
Securities Priced Below $1.00
January 10, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
27, 2023, Cboe BYX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(the ‘‘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
31 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
29 15
U.S.C. 78s(b)(3)(A).
30 17 CFR 240.19b–4(f).
VerDate Sep<11>2014
18:14 Jan 16, 2024
1 15
Jkt 262001
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
2993
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 modify
Rule 11.24 to introduce an Enhanced
RPI Order and expand its Retail Price
Improvement program to include
securities priced below $1.00. The text
of the proposed rule change is provided
in Exhibit 5.
The text of the proposed rule change
is available on the Exchange’s website
(https://markets.cboe.com/us/equities/
regulation/rule_filings/byx/), 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
Rule 11.24 to enhance the Exchange’s
Retail Price Improvement Program (the
‘‘Program’’) for the benefit of retail
investors. Specifically, the Exchange
proposes to introduce a new Retail Price
Improvement Order type (‘‘RPI Order’’) 3
to be known as an ‘‘Enhanced RPI
Order.’’ The proposed Enhanced RPI
Order will allow retail liquidity
providers to post orders at their limit
price but have the opportunity to
provide a greater amount of price
improvement as compared to other
resting orders on the same side of the
BYX Book with higher priority in order
to execute with an incoming Retail
Order 4 by exercising at a price within
their established step-up range. The
proposed change is designed to provide
retail investors with additional
opportunities for meaningful price
3 See Rule 11.24(a)(3) (‘‘Retail Price Improvement
Order’’).
4 See Rule 11.24(a)(2) (‘‘Retail Order’’).
E:\FR\FM\17JAN1.SGM
17JAN1
]]>Agencies
[Federal Register Volume 89, Number 11 (Wednesday, January 17, 2024)]
[Notices]
[Pages 2989-2993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00710]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99307; File No. SR-CboeBZX-2024-003]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule To Adopt Fees for the Short Interest Report
January 10, 2024.
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 January 2, 2024, Cboe BZX Exchange, Inc. (the ``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.
---------------------------------------------------------------------------
\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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
amend its Fee Schedule. The text of the proposed rule change is
provided below.
(additions are italicized; deletions are [bracketed])
* * * * *
Cboe U.S. Equities Fee Schedules
BZX Equities
Effective [December 12, 2023] January 2, 2024
* * * * *
Market Data Fees:
* * * * *
Cboe Premium Exchange Tools
------------------------------------------------------------------------
Description Fee
------------------------------------------------------------------------
Monthly Fee per User Login.............................. $65
------------------------------------------------------------------------
[[Page 2990]]
Short Interest Report *
------------------------------------------------------------------------
Delivery Fee
------------------------------------------------------------------------
Monthly Fee--Access..................................... $250
Monthly Fee--Access (Historical Data)................... 250
Monthly Fee per Internal Distributor.................... 500
Monthly Fee Internal Distributor (Historical Data)...... 500
Monthly Fee per External Distributor **................. 750
Monthly Fee External Distributor (Historical Data) **... 750
------------------------------------------------------------------------
* The Short Interest Report is available for purchase on a monthly basis
or on an annual basis.
** The Short Interest Report provided for External Distribution is only
for display use redistribution.
* * * * *
The text of the proposed rule change is also available on the
Exchange's 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 Fee Schedule to adopt fees to be
assessed to individuals that elect to subscribe to the Short Interest
Reports, effective January 2, 2024.
On December 11, 2023 the Exchange proposed to adopt a new data
product known as the Short Interest Report.\3\ The Short Interest
Report contains a summary of consolidated market short interest
positions in all BZX-listed securities \4\ only as reported by the
Financial Industry Regulatory Authority, Inc. (``FINRA''); it is
designed to facilitate the distribution of short sale data to, among
other things, provide analytical and investment data that the brokerage
industry, academic institutions, and investors may use in developing
risk-assessment tool and trading models for BZX-listed issues. The
report data fields include Cycle Settlement Date,\5\ BATS-Symbol,\6\
Security Name, Number of Shares Net Short Current Cycle,\7\ Number of
Shares Net Short Previous Cycle,\8\ Cycle Average Daily Trade
Volume,\9\ Minimum Number of Trade Days to Cover Shorts,\10\ Split
Indicator,\11\ Manual Revision Indicator,\12\ Percent Change in Short
Position,\13\ and Change in Short Position from Previous.\14\
---------------------------------------------------------------------------
\3\ See SR-CboeBZX-2023-102.
\4\ A BZX-listed security is a security listed on the Exchange
pursuant to Chapter 14 of the Exchange's Rules and includes both
corporate listed securities and Exchange Traded Products (``ETPs'').
\5\ ``Cycle Settlement Date'' is the reporting period date.
\6\ ``BATS-Symbol'' is the Exchange-assigned symbol for the
given security.
\7\ ``Number Shares Net Short Current Cycle'' is the total of
uncovered open short interest positions in a particular security in
shares, for the current reporting period.
\8\ ``Number of Shares Net Short Previous Cycle'' is the total
number of uncovered open short interest positions in a particular
security in shares, for the previous reporting period.
\9\ ``Cycle Average Daily Trade Volume'' is the number of shares
traded on average per day in a particular security in shares.
\10\ ``Minimum Number of Trade Days to Cover Shorts'' is the
ratio of the current short interest position over the average daily
volume for the current settlement date.
\11\ ``Split Indicator'' indicates whether the security has
undergone a stock split during the current reporting period.
\12\ ``Manual Revision Indicator'' indicates whether the
security's short interest for the previous reporting period has been
revised.
\13\ ``Percent Change in Short Position'' is the percent change
from the current reporting period's short interest compared to the
previous reporting period's short interest.
\14\ ``Change in Short Position from Previous'' is the
difference between the current and previous reporting period of
uncovered short interest positions in a particular security in
shares.
---------------------------------------------------------------------------
The Short Interest Report is available for purchase by both Members
\15\ and non-Members on a monthly or annual subscription basis, and
subscribers will receive a daily end-of-day file (with values updated
twice per month). The Short Interest Report is also available for
purchase on a historical monthly basis. The historical reports provide
the end-of-day report for each day during a given calendar month, are
available for purchase dating back to March 31, 2015, and include the
same data fields as the daily end-of-day files. Members and non-Members
have the ability to re-distribute (internally and/or externally) the
Short Interest Report.
---------------------------------------------------------------------------
\15\ See Exchange Rule 1.5(n).
---------------------------------------------------------------------------
The Exchange now proposes to adopt fees applicable to individuals
that subscribe to the Short Interest Reports. As proposed, the Exchange
would assess a monthly \16\ fee of $250 per month for individuals that
subscribe to the report, $500 per month for an Internal Distributor
\17\ of the report, and a fee of $750 per month to an External
Distributor \18\ of the report. These fees may be paid on a monthly
basis or on an annual basis.\19\ Data provided to an External
Distributor via the Short Interest Report is only for display use
redistribution (e.g., the data may be provided on the distributor's
platform). Therefore, distributors of the data may not charge
separately for data included in the Report or incorporate such data
into their product. External Distributors, unlike Internal
Distributors, are typically compensated for the distribution of short
sale data through subscription fees or other mechanisms. The higher
price for External Distributors reflects the additional value these
distributors may gain from the product.
---------------------------------------------------------------------------
\16\ The monthly fees for the Short Interest Reports are
assessed based on a 30-day period. For example, if an individual
subscribes to the Short Interest Report on December 15, 2023, the
monthly fee will cover the period of December 15, 2023 through
January 15, 2023. If the individual cancels his/her subscription
prior to January 15, 2023, the individual will not be charged for
(or have access to) Short Interest Reports for the remainder of
January.
\17\ An ``Internal Distributor'' of an Exchange Market Data
product is a Distributor that receives the Exchange Market Data
product and then distributes that data to one or more users within
the Distributor's own entity.
\18\ An ``External Distributor'' of an Exchange Market Data
product is a Distributor that receives the Exchange Market Data
product and then distributes that data to a third party or one or
more users outside the Distributor's own entity.
\19\ Those who subscribe to the Short Interest Report during the
middle of a month will receive the end-of-day report for each day
beginning on the date of subscription.
---------------------------------------------------------------------------
Additionally, the Exchange proposes to adopt fees for the Short
Interest Report provided on a historical basis. As
[[Page 2991]]
noted above, the Short Interest Report will be available for each
calendar month dating back to March 31, 2015. As proposed, the fees for
Short Interest Reports provided on a historical basis are the same as
the fees proposed for the standard Short Interest Report: the Exchange
would assess a fee of $250 per historical month for individuals that
subscribe, $500 per historical month assessed to Internal Distributors
of the report, and a fee of $750 per historical month assessed to
External Distributors of the report. Data provided via the historical
Short Volume Report is also for display use redistribution only (e.g.,
the data may be provided on the distributor's platform). Therefore,
distributors of the historical data may not charge separately for data
included in the Short Interest Report or incorporate such data into
their product. Nonetheless, the Exchange believes it is reasonable,
equitable and not unfairly discriminatory to charge a fee for display
use redistribution that reflects the value these distributors may gain
from the historical product.
The Exchange anticipates that a wide variety of market participants
will purchase the Short Interest Report, including, but not limited to,
active equity trading firms and academic institutions. For example, the
Exchange notes that academic institutions may utilize the Short
Interest Report data and as a result promote research and studies of
the equities industry to the benefit of all market participants. The
Exchange further believes the Short Interest Report may provide helpful
trading information regarding investor sentiment that may allow market
participants to make more informed trading decisions and may be used to
create and test trading models and analytical strategies and provide
comprehensive insight into trading on the Exchange.
The Exchange notes that the Short Interest Report is a completely
voluntary product, in that the Exchange is not required by any rule or
regulation to make the reports or services available and that potential
subscribers may purchase it only if they voluntarily choose to do so.
Further, the Exchange notes that other exchanges offer similar products
for a fee.\20\
---------------------------------------------------------------------------
\20\ See, e.g., Specifications for Short Interest file,
available at: https://www.nasdaq.com/solutions/short-interest-report; and NYSE Group Short Interest Client Specification,
available at:
NYSE_Group_Short_Interest_Client_Specification_v1.5.pdf.
---------------------------------------------------------------------------
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.\21\ Specifically, the
Exchange believes the proposed rule change is consistent with the
section 6(b)(5) \22\ 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) \23\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The Exchange also believes the proposed rule
change is consistent with section 6(b)(4) of the Act,\24\ which
requires that Exchange rules provide for the equitable allocation of
reasonable dues, fees, and other charges among its Trading Permit
Holders and other persons using its facilities.
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78f(b).
\22\ 15 U.S.C. 78f(b)(5).
\23\ Id.
\24\ 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 consumers, and also spur innovation and competition for the
provision of market data. The Exchange believes that the Short Interest
Report further broadens the availability of U.S. equity market data to
investors consistent with the principles of Regulation NMS. The Short
Interest Report also promotes increased transparency through the
dissemination of short interest data. The Short Interest Report
benefits investors by providing access to the Short Interest Report
data, which may promote better informed trading, as well as research
and studies of the equities industry.
The Exchange operates in a highly competitive environment. Indeed,
there are currently 16 registered equities exchanges that trade
equities. Based on publicly available information, no single equities
exchange has more than 13% of the equity market share.\25\ 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.'' \26\ 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 attractive than the competition, that
market participant can, and often does, switch between similar
products. The proposed fees are a result of the competitive environment
of the U.S. equities industry as the Exchange seeks to adopt fees to
attract purchasers of the recently introduced Short Interest Report.
---------------------------------------------------------------------------
\25\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (December 18, 2023), available at https://www.cboe.com/us/equities/market_statistics/.
\26\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
The Exchange believes that the proposed fees for the Short Interest
Report are consistent with the Act in that they are reasonable,
equitable, and not unfairly discriminatory. In particular, the Exchange
believes that the proposed fees are reasonable because they are
reasonably aligned with the value and benefits provided to users that
choose to subscribe to the Short Interest Report on the Exchange. As
discussed above, the Short Interest Report may be beneficial to Members
and non-Members as it may provide helpful trading information regarding
investor sentiment that may allow market participants to make more
informed trading decisions and may be used to create and test trading
models and analytical strategies and provide comprehensive insight into
trading on the Exchange. Therefore, the Exchange believes that it is
reasonable to assess a modest fee to users that subscribe to the Short
Interest Report.
The Exchange further believes the proposed fee is reasonable
because the amount assessed is less than the analogous fees charged by
competitor exchanges. For example, for its Short Interest Reports,
Nasdaq charges $500
[[Page 2992]]
for access, $1,000 for Internal Distributors and from $2,500 to $7,500
for External Distributors (depending on the number of subscribers).\27\
Additionally, NYSE and its affiliated equity markets (the ``NYSE
Group'') have a similar Short Interest Report offering, seemingly for a
charge.\28\ The Exchange therefore believes that the proposed fees are
reasonable and set at a level to compete with other equity exchanges
that offer similar reports. Indeed, proposing fees that are excessively
higher than established fees for similar data products would simply
serve to reduce demand for the Exchange's data product, which as noted,
is entirely optional. Although each of these similar 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 equities based on the included data
points on any one exchange. As such, if a market participant views
another exchange's potential report as more attractive, then such
market participant can merely choose not to purchase the Exchange's
Short Interest Report and instead purchase another exchange's similar
data product, which offers similar data points, albeit based on that
other market's trading activity.
---------------------------------------------------------------------------
\27\ See Nasdaq Rule 7, Section 122.
\28\ See https://www.nyse.com/market-data/reference/nyse-group-short-interest, which includes a ``Purchase Now'' option. The
Exchange is unaware of a related filing for the offering.
---------------------------------------------------------------------------
In addition, the Exchange believes that the proposed fees are
equitable and not unfairly discriminatory because they will apply to
all similarly situated Members and non-Members that choose to subscribe
to the Short Interest Report equally. As stated, the Short Interest
Report is completely optional and not necessary for trading. Rather,
the Exchange voluntarily makes the Short Interest Report available, and
users may choose to subscribe (and pay for) the report based on their
own individual business needs. Potential subscribers may subscribe to
the Short Interest Report at any time if they believe it to be valuable
or may decline to purchase it.
The Exchange also believes it is reasonable, equitable and not
unfairly discriminatory to charge an External Distributor of the Short
Interest Report a higher fee than an Internal Distributor as an
External Distributor may provide the data on their platform. External
Distributors, unlike Internal Distributors, are typically compensated
for the distribution of short sale data through subscription fees or
other mechanisms. Therefore, the Exchange believes it is reasonable,
equitable and not unfairly discriminatory to charge a higher fee for
display use redistribution, as it reflects the additional value these
distributors may gain from the Short Interest product. Additionally,
the Exchange believes it is reasonable, equitable and not unfairly
discriminatory to charge an Internal Distributor of the Short Interest
Report a higher fee than an individual, as an Internal Distributor may
distribute the data to one or more users within the Distributor's own
entity; thus, the higher fee reflects the additional value such
Internal Distributors may gain from the Short Interest product.
Further, the proposed fee will apply equally to similarly situated
individuals, Internal Distributors and External Distributors,
respectively. Moreover, as described above, another Exchange similarly
charges Internal and External Distributors higher fees as compared to
individuals for a similar data product.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the Short Interest
Report will be available equally to all Members and non-Members that
choose to subscribe to the report. Market participants are not required
to purchase the Short Interest Report, and the Exchange is not required
to make the Short Interest Report available to investors. Rather, the
Exchange is voluntarily making the Short Interest Report available, and
market participants may choose to receive (and pay for) this data based
on their own business needs. Potential purchasers may request the data
at any time if they believe it to be valuable or may decline to
purchase such data. Given the above, the Exchange does not believe 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.
Additionally, as discussed above, the Exchange believes it is
appropriate to charge Internal and External Distributors higher fees as
compared to individuals, as the higher fees reflect the additional
value such Internal Distributors and External Distributors may gain
from the Short Interest product.
Next, the Exchange believes the proposed rule change does not
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, similar products offered by Nasdaq are priced higher than
the Short Volume Report. Moreover, 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.'' The fact that this market is competitive has also long
been recognized by the courts. In NetCoalition v. Securities and
Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .''. Accordingly, the Exchange does not believe its
proposal imposes any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
Further, 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
attractive than the competition, that market participant can, and often
does, switch between similar products. The proposed fees are a result
of the competitive environment of the U.S. equities industry as the
Exchange seeks to adopt fees to attract purchasers of the Short
Interest Report. As noted above, the Exchange believes that the
proposed fees are reasonable and set at a level to compete with other
equity exchanges that offer similar reports. Accordingly, the Exchange
does not believe its proposal imposes any burden on competition that is
not necessary or
[[Page 2993]]
appropriate in furtherance of the purposes of the Act.
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
The foregoing rule change has become effective pursuant to section
19(b)(3)(A) of the Act \29\ and paragraph (f) of Rule 19b-4 \30\
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.
---------------------------------------------------------------------------
\29\ 15 U.S.C. 78s(b)(3)(A).
\30\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-CboeBZX-2024-003 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-CboeBZX-2024-003. 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-CboeBZX-2024-003 and should
be submitted on or before February 7, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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\31\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-00710 Filed 1-16-24; 8:45 am]
BILLING CODE 8011-01-P
