Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule To Provide a Discount on the Purchase of Historic Short Volume and Trade Reports, 52115-52117 [2024-13536]
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Federal Register / Vol. 89, No. 120 / Friday, June 21, 2024 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeEDGX–2024–035 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.
ddrumheller on DSK120RN23PROD with NOTICES1
All submissions should refer to file
number SR–CboeEDGX–2024–035. 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–CboeEDGX–2024–035 and should be
submitted on or before July 12, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.45
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–13545 Filed 6–20–24; 8:45 am]
[Release No. 34–100333; File No. SR–
CboeEDGX–2024–034]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule To Provide a Discount
on the Purchase of Historic Short
Volume and Trade Reports
June 14, 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 June 4,
2024, Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) proposes to
amend its Fee Schedule. The text of the
proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/edgx/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
BILLING CODE 8011–01–P
1 15
45 17
CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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52115
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to update its
Fee Schedule to provide a discount on
fees assessed to EDGX Members
(‘‘Members’’) 3 and non-Members that
purchase $20,000 or more of U.S. Equity
Short Volume and Trades Reports
(‘‘Short Volume Reports’’), effective
June 4, 2024 through June 30, 2024.
By way of background, the Short
Volume Report is an end-of-day report
that summarizes certain equity trading
activity on the Exchange, including
trade date,4 total volume,5 short
volume,6 and sell short exempt
volume,7 by symbol.8 The Short Volume
Report also includes an end-of-month
report that provides a record of all short
sale transactions for the month,
including trade date and time (in
microseconds),9 trade size,10 trade
price,11 and type of short sale
execution,12 by symbol and exchange.13
The Short Volume Report 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
3 See Rule 1.5(n) (‘‘Member’’). The term
‘‘Member’’ shall mean any registered broker or
dealer that has been admitted to membership in the
Exchange. A Member will have the status of a
‘‘member’’ of the Exchange as that term is defined
in Section 3(a)(3) of the Act. Membership may be
granted to a sole proprietor, partnership,
corporation, limited liability company or other
organization which is a registered broker or dealer
pursuant to Section 15 of the Act, and which has
been approved by the Exchange.
4 ‘‘Trade date’’ is the date of trading activity in
yyyy-mm-dd format.
5 ‘‘Total volume’’ is the total number of shares
transacted.
6 ‘‘Short volume’’ is the total number of shares
sold short.
7 ‘‘Short exempt volume’’ is the total number of
shares sold short classified as exempt.
8 ‘‘Symbol’’ refers to the Cboe formatted symbol
in which the trading activity occurred. See https://
cdn.cboe.com/resources/membership/US_
Symbology_Reference.pdf.
9 ‘‘Trade date and time’’ is the date and time of
trading activity in yyyy-mm-dd hh:mm:ss.000000
ET format.
10 ‘‘Trade size’’ is the number of shares
transacted.
11 ‘‘Trade price’’ is the price at which shares were
transacted.
12 ‘‘Short type’’ is a data field that will indicate
whether the transaction was a short sale or short
sale exempt transaction. A short sale transaction is
a transaction in which a seller sells a security
which the seller does not own, or the seller has
borrowed for its own account (see 17 CFR 242.200).
A short sale exempt transaction is a short sale
transaction that is exempt from the short sale price
test restrictions of Regulation SHO Rule 201 (see 17
CFR 242.201(c)).
13 ‘‘Exchange’’ is the market identifier (Z = BZX,
Y = BYX, X = EDGX, A = EDGA).
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52116
Federal Register / Vol. 89, No. 120 / Friday, June 21, 2024 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
purchase it on an ad-hoc basis only if
they voluntarily choose to do so.
Cboe LiveVol, LLC (‘‘LiveVol’’), a
wholly owned subsidiary of the
Exchange’s parent company, Cboe
Global Markets, Inc., makes the Short
Volume Report available for purchase to
Users on the LiveVol DataShop website
(datashop.cboe.com). Both the end-ofday report and end-of-month report are
included in the cost of the Short
Volume Report and are available for
purchase by both Members as well as
non-Members on an annual or
monthly 14 basis. The monthly fee is
$750 per Internal Distributor 15 and
$1,250 per External Distributor.16
Additionally, the Exchange offers
historical reports containing both the
end-of-day volume and end-of-month
trading activity. The fee per month of
historical data is $500. The Short
Volume Report provided on a historical
basis is only for display use
redistribution (e.g., the data may be
provided on the User’s platform).
Therefore, Users of the historical data
may not charge separately for data
included in the Short Volume Report or
incorporate such data into their product.
The Exchange notes that the Short
Volume Report is subject to direct
competition from other exchanges, as
other exchanges offer similar products
for a fee.17
The Exchange proposes to provide a
temporary pricing incentive program in
which Members or Non-Members that
purchase historical Short Volume
Reports will receive a percentage fee
discount where specific purchase
thresholds are met. Specifically, the
Exchange proposes to provide a 20%
discount for ad-hoc purchases of
14 The monthly fees for the Report are assessed on
a rolling period based on the original subscription
date. For example, if a User subscribes to the Report
on October 24, 2023, the monthly fee will cover the
period of October 24, 2023, through November 23,
2023. If the User cancels its subscription prior to
November 23, 2023, and no refund is issued, the
User will continue to receive both the end-of-day
and end-of-month components of the Report for the
subscription period.
15 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. See Cboe EDGX U.S.
Equities Exchange Fee Schedule.
16 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. See Cboe
EDGX U.S. Equities Exchange Fee Schedule.
17 See the Nasdaq Fee Schedule, Equity 7, Section
152. See also, the TAQ Group Short Sales (Monthly
File) and Short Volume product, offered by the New
York Stock Exchange LLC (‘‘NYSE’’) and affiliated
equity markets (the ‘‘NYSE Group’’) at NYSE
Exchange Proprietary Market Data √ TAQ NYSE
Group Short Sales.
VerDate Sep<11>2014
17:46 Jun 20, 2024
Jkt 262001
historical Short Volume Reports of
$20,000 or more.18 The proposed
program will apply to all market
participants irrespective of whether the
market participant is a new or current
purchaser; however, the discount
cannot be combined with any other
discounts offered by the Exchange. The
Exchange intends to introduce the
discount program beginning June 4,
2024, with the program remaining in
effect through June 30, 2024. The
Exchange also notes that it previously
adopted the same discount program last
year and proposes to update the Fees
Schedule with the new program dates
accordingly.19
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.20 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 21 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) 22 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,23 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.
18 The discount will apply on an order-by-order
basis. The discount will apply to the total purchase
price, once the $20,000 minimum purchase is
satisfied (for example, a qualifying order of $25,000
would be discounted to $20,000, i.e. receive a 20%
discount of $5,000).
19 See Securities Exchange Act Release No. 99185
(December 14, 2023), 88 FR 88182 (December 20,
2023) (SR–CboeEDGX–2023–072).
20 15 U.S.C. 78f(b).
21 15 U.S.C. 78f(b)(5).
22 Id.
23 15 U.S.C. 78f(b)(4).
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Frm 00107
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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 proposed fee changes will further
broaden the availability of U.S. equity
market data to investors consistent with
the principles of Regulation NMS. The
Exchange believes the dissemination of
historical short volume data via
historical Short Volume Reports benefits
investors through increased
transparency and may promote better
informed trading, as well as research
and studies of the equities industry.
Nevertheless, the Exchange notes that
such data is not necessary for trading
and as noted above, is entirely optional.
Moreover, several other exchanges offer
a similar data product which offer the
same type of data content through
similar reports.24
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 16% 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 supercompetitive 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
24 See
supra note 17.
Cboe Global Markets, U.S. Equities Market
Volume Summary, Month-to-Date (June 3, 2024),
available at https://www.cboe.com/us/equities/
market_/.
26 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
25 See
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Federal Register / Vol. 89, No. 120 / Friday, June 21, 2024 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
competitive environment of the U.S.
equities industry as the Exchange seeks
to adopt fees to attract purchasers of
historical Short Volume Reports.
The Exchange believes that the
proposed incentive program for any
Member or non-Member who purchases
historical Short Volume Reports is
reasonable because such purchasers
would receive a 20% discount for
purchasing $20,000 or more worth of
historical Short Volume Reports. The
Exchange believes the proposed
discount is reasonable as it will give
purchasers the ability to use and test the
historical Short Volume Reports at a
discounted rate, prior to purchasing
additional months or a monthly
subscription, and will therefore
encourage users to purchase historical
Short Volume Reports. Further, the
proposed discount is intended to
promote increased use of the Exchange’s
historical Short Volume Reports by
defraying some of the costs a purchaser
would ordinarily have to expend before
using the data product. The Exchange
believes that the proposed discount is
equitable and not unfairly
discriminatory because it will apply
equally to all Members and nonMembers who purchase historical Short
Volume Reports. Lastly, the purchase of
this data product is discretionary and
not compulsory. Indeed, no market
participant is required to purchase the
historical Short Volume Reports, and
the Exchange is not required to make
historical Short Volume Reports
available to all investors. Potential
purchasers may request the data at any
time if they believe it to be valuable or
may decline to purchase such data. As
noted above, the Exchange previously
adopted a similar discount program last
year.27
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 operates in a highly
competitive environment in which the
Exchange must continually adjust its
fees to remain competitive. Because
competitors are free to modify their own
fees in response, the Exchange believes
that the degree to which fee changes in
this market may impose any burden on
competition is extremely limited. As
discussed above, the Exchange’s
historical Short Volume Reports offering
Securities Exchange Act Release No. 88195
(December 14, 2023), 88 FR 88193 (December 20,
2023) (SR–CboeEDGX–2023–021).
is subject to direct competition from
several other options exchanges that
offer similar data products. Moreover,
purchase of historical Short Volume
Reports is optional. It is designed to
help investors understand underlying
market trends to improve the quality of
investment decisions, but is not
necessary to execute a trade.
The proposed rule changes are
grounded in the Exchange’s efforts to
compete more effectively. In this
competitive environment, potential
purchasers are free to choose which, if
any, similar product to purchase to
satisfy their need for market
information. As a result, the Exchange
believes this proposed rule change
permits fair competition among national
securities exchanges. Further, the
Exchange believes that these changes
will not cause any unnecessary or
inappropriate burden on intermarket
competition, as the proposed incentive
program applies uniformly to any
purchaser of historical Short Volume
Reports.
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 28 and paragraph (f) of Rule
19b–4 29 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:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeEDGX–2024–034 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–CboeEDGX–2024–034. 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–CboeEDGX–2024–034 and should be
submitted on or before July 12, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.30
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–13536 Filed 6–20–24; 8:45 am]
BILLING CODE 8011–01–P
27 See
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28 15
29 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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30 17
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CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 89, Number 120 (Friday, June 21, 2024)]
[Notices]
[Pages 52115-52117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13536]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100333; File No. SR-CboeEDGX-2024-034]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule To Provide a Discount on the Purchase of
Historic Short Volume and Trade Reports
June 14, 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 June 4, 2024, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to
amend its Fee Schedule. The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to update its Fee Schedule to provide a
discount on fees assessed to EDGX Members (``Members'') \3\ and non-
Members that purchase $20,000 or more of U.S. Equity Short Volume and
Trades Reports (``Short Volume Reports''), effective June 4, 2024
through June 30, 2024.
---------------------------------------------------------------------------
\3\ See Rule 1.5(n) (``Member''). The term ``Member'' shall mean
any registered broker or dealer that has been admitted to membership
in the Exchange. A Member will have the status of a ``member'' of
the Exchange as that term is defined in Section 3(a)(3) of the Act.
Membership may be granted to a sole proprietor, partnership,
corporation, limited liability company or other organization which
is a registered broker or dealer pursuant to Section 15 of the Act,
and which has been approved by the Exchange.
---------------------------------------------------------------------------
By way of background, the Short Volume Report is an end-of-day
report that summarizes certain equity trading activity on the Exchange,
including trade date,\4\ total volume,\5\ short volume,\6\ and sell
short exempt volume,\7\ by symbol.\8\ The Short Volume Report also
includes an end-of-month report that provides a record of all short
sale transactions for the month, including trade date and time (in
microseconds),\9\ trade size,\10\ trade price,\11\ and type of short
sale execution,\12\ by symbol and exchange.\13\ The Short Volume Report
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
[[Page 52116]]
purchase it on an ad-hoc basis only if they voluntarily choose to do
so.
---------------------------------------------------------------------------
\4\ ``Trade date'' is the date of trading activity in yyyy-mm-dd
format.
\5\ ``Total volume'' is the total number of shares transacted.
\6\ ``Short volume'' is the total number of shares sold short.
\7\ ``Short exempt volume'' is the total number of shares sold
short classified as exempt.
\8\ ``Symbol'' refers to the Cboe formatted symbol in which the
trading activity occurred. See https://cdn.cboe.com/resources/membership/US_Symbology_Reference.pdf.
\9\ ``Trade date and time'' is the date and time of trading
activity in yyyy-mm-dd hh:mm:ss.000000 ET format.
\10\ ``Trade size'' is the number of shares transacted.
\11\ ``Trade price'' is the price at which shares were
transacted.
\12\ ``Short type'' is a data field that will indicate whether
the transaction was a short sale or short sale exempt transaction. A
short sale transaction is a transaction in which a seller sells a
security which the seller does not own, or the seller has borrowed
for its own account (see 17 CFR 242.200). A short sale exempt
transaction is a short sale transaction that is exempt from the
short sale price test restrictions of Regulation SHO Rule 201 (see
17 CFR 242.201(c)).
\13\ ``Exchange'' is the market identifier (Z = BZX, Y = BYX, X
= EDGX, A = EDGA).
---------------------------------------------------------------------------
Cboe LiveVol, LLC (``LiveVol''), a wholly owned subsidiary of the
Exchange's parent company, Cboe Global Markets, Inc., makes the Short
Volume Report available for purchase to Users on the LiveVol DataShop
website (datashop.cboe.com). Both the end-of-day report and end-of-
month report are included in the cost of the Short Volume Report and
are available for purchase by both Members as well as non-Members on an
annual or monthly \14\ basis. The monthly fee is $750 per Internal
Distributor \15\ and $1,250 per External Distributor.\16\ Additionally,
the Exchange offers historical reports containing both the end-of-day
volume and end-of-month trading activity. The fee per month of
historical data is $500. The Short Volume Report provided on a
historical basis is only for display use redistribution (e.g., the data
may be provided on the User's platform). Therefore, Users of the
historical data may not charge separately for data included in the
Short Volume Report or incorporate such data into their product. The
Exchange notes that the Short Volume Report is subject to direct
competition from other exchanges, as other exchanges offer similar
products for a fee.\17\
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\14\ The monthly fees for the Report are assessed on a rolling
period based on the original subscription date. For example, if a
User subscribes to the Report on October 24, 2023, the monthly fee
will cover the period of October 24, 2023, through November 23,
2023. If the User cancels its subscription prior to November 23,
2023, and no refund is issued, the User will continue to receive
both the end-of-day and end-of-month components of the Report for
the subscription period.
\15\ 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. See Cboe EDGX U.S. Equities Exchange Fee
Schedule.
\16\ 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. See Cboe EDGX U.S. Equities
Exchange Fee Schedule.
\17\ See the Nasdaq Fee Schedule, Equity 7, Section 152. See
also, the TAQ Group Short Sales (Monthly File) and Short Volume
product, offered by the New York Stock Exchange LLC (``NYSE'') and
affiliated equity markets (the ``NYSE Group'') at NYSE Exchange
Proprietary Market Data TAQ NYSE Group Short Sales.
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The Exchange proposes to provide a temporary pricing incentive
program in which Members or Non-Members that purchase historical Short
Volume Reports will receive a percentage fee discount where specific
purchase thresholds are met. Specifically, the Exchange proposes to
provide a 20% discount for ad-hoc purchases of historical Short Volume
Reports of $20,000 or more.\18\ The proposed program will apply to all
market participants irrespective of whether the market participant is a
new or current purchaser; however, the discount cannot be combined with
any other discounts offered by the Exchange. The Exchange intends to
introduce the discount program beginning June 4, 2024, with the program
remaining in effect through June 30, 2024. The Exchange also notes that
it previously adopted the same discount program last year and proposes
to update the Fees Schedule with the new program dates accordingly.\19\
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\18\ The discount will apply on an order-by-order basis. The
discount will apply to the total purchase price, once the $20,000
minimum purchase is satisfied (for example, a qualifying order of
$25,000 would be discounted to $20,000, i.e. receive a 20% discount
of $5,000).
\19\ See Securities Exchange Act Release No. 99185 (December 14,
2023), 88 FR 88182 (December 20, 2023) (SR-CboeEDGX-2023-072).
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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.\20\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \21\ 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) \22\ 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,\23\ 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.
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\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(5).
\22\ Id.
\23\ 15 U.S.C. 78f(b)(4).
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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 proposed fee
changes will further broaden the availability of U.S. equity market
data to investors consistent with the principles of Regulation NMS. The
Exchange believes the dissemination of historical short volume data via
historical Short Volume Reports benefits investors through increased
transparency and may promote better informed trading, as well as
research and studies of the equities industry. Nevertheless, the
Exchange notes that such data is not necessary for trading and as noted
above, is entirely optional. Moreover, several other exchanges offer a
similar data product which offer the same type of data content through
similar reports.\24\
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\24\ See supra note 17.
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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 16% 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
supercompetitive 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
[[Page 52117]]
competitive environment of the U.S. equities industry as the Exchange
seeks to adopt fees to attract purchasers of historical Short Volume
Reports.
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\25\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (June 3, 2024), available at https://www.cboe.com/us/equities/market_/.
\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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The Exchange believes that the proposed incentive program for any
Member or non-Member who purchases historical Short Volume Reports is
reasonable because such purchasers would receive a 20% discount for
purchasing $20,000 or more worth of historical Short Volume Reports.
The Exchange believes the proposed discount is reasonable as it will
give purchasers the ability to use and test the historical Short Volume
Reports at a discounted rate, prior to purchasing additional months or
a monthly subscription, and will therefore encourage users to purchase
historical Short Volume Reports. Further, the proposed discount is
intended to promote increased use of the Exchange's historical Short
Volume Reports by defraying some of the costs a purchaser would
ordinarily have to expend before using the data product. The Exchange
believes that the proposed discount is equitable and not unfairly
discriminatory because it will apply equally to all Members and non-
Members who purchase historical Short Volume Reports. Lastly, the
purchase of this data product is discretionary and not compulsory.
Indeed, no market participant is required to purchase the historical
Short Volume Reports, and the Exchange is not required to make
historical Short Volume Reports available to all investors. Potential
purchasers may request the data at any time if they believe it to be
valuable or may decline to purchase such data. As noted above, the
Exchange previously adopted a similar discount program last year.\27\
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\27\ See Securities Exchange Act Release No. 88195 (December 14,
2023), 88 FR 88193 (December 20, 2023) (SR-CboeEDGX-2023-021).
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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 operates in a
highly competitive environment in which the Exchange must continually
adjust its fees to remain competitive. Because competitors are free to
modify their own fees in response, the Exchange believes that the
degree to which fee changes in this market may impose any burden on
competition is extremely limited. As discussed above, the Exchange's
historical Short Volume Reports offering is subject to direct
competition from several other options exchanges that offer similar
data products. Moreover, purchase of historical Short Volume Reports is
optional. It is designed to help investors understand underlying market
trends to improve the quality of investment decisions, but is not
necessary to execute a trade.
The proposed rule changes are grounded in the Exchange's efforts to
compete more effectively. In this competitive environment, potential
purchasers are free to choose which, if any, similar product to
purchase to satisfy their need for market information. As a result, the
Exchange believes this proposed rule change permits fair competition
among national securities exchanges. Further, the Exchange believes
that these changes will not cause any unnecessary or inappropriate
burden on intermarket competition, as the proposed incentive program
applies uniformly to any purchaser of historical Short Volume Reports.
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 \28\ and paragraph (f) of Rule 19b-4 \29\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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\28\ 15 U.S.C. 78s(b)(3)(A).
\29\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-CboeEDGX-2024-034 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CboeEDGX-2024-034. 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-CboeEDGX-2024-034 and should
be submitted on or before July 12, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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\30\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-13536 Filed 6-20-24; 8:45 am]
BILLING CODE 8011-01-P
