Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 53140-53142 [2024-13829]
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53140
Federal Register / Vol. 89, No. 122 / Tuesday, June 25, 2024 / Notices
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–C2–2024–010 and should be
submitted on or before July 16, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.46
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–13826 Filed 6–24–24; 8:45 am]
BILLING CODE 8011–01–P
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX Options’’)
proposes to amend its Fee Schedule.
The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
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
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100371; File No. SR–
CboeBZX–2024–047]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule
khammond on DSKJM1Z7X2PROD with NOTICES
June 18, 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 June 3,
2024, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
46 17
CFR 200.30–3(a)(12).
15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1
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The Exchange proposes to update its
Fee Schedule to provide a 20% discount
on fees assessed to Exchange Members
and non-Members that purchase
$20,000 or more of historical OpenClose Data, effective June 3, 2024
through June 30, 2024.
By way of background, the Exchange
currently offers End-of-Day (‘‘EOD’’) and
Intraday Open-Close Data (collectively,
‘‘Open-Close Data’’). EOD Open-Close
Data is an end-of-day volume summary
of trading activity on the Exchange at
the option level by origin (customer,
professional customer, broker-dealer,
and market maker), side of the market
(buy or sell), price, and transaction type
(opening or closing). The customer and
professional customer volume is further
broken down into trade size buckets
(less than 100 contracts, 100–199
contracts, greater than 199 contracts).
The EOD Open-Close Data is proprietary
PO 00000
Frm 00103
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Sfmt 4703
Exchange trade data and does not
include trade data from any other
exchange. It is also a historical data
product and not a real-time data feed.
The Exchange also offers Intraday OpenClose Data, which provides similar
information to that of EOD Open-Close
Data but is produced and updated every
10 minutes during the trading day. Data
is captured in ‘‘snapshots’’ taken every
10 minutes throughout the trading day
and is available to subscribers within
five minutes of the conclusion of each
10-minute period.3 The Intraday OpenClose Data provides a volume summary
of trading activity on the Exchange at
the option level by origin (customer,
professional customer, broker-dealer,
and market maker), side of the market
(buy or sell), and transaction type
(opening or closing). The customer and
professional customer volume are
further broken down into trade size
buckets (less than 100 contracts, 100–
199 contracts, greater than 199
contracts). The Intraday Open-Close
Data is proprietary Exchange trade data
and does not include trade data from
any other exchange. All Open-Close
Data products are completely voluntary
products, in that the Exchange is not
required by any rule or regulation to
make this data available and that
potential customers may purchase it on
an ad-hoc basis only if they voluntarily
choose to do so.
Cboe LiveVol, LLC (‘‘LiveVol’’), a
wholly owned subsidiary of the
Exchange’s parent company, Cboe
Global Markets, Inc., makes the OpenClose Data available for purchase to
Members and non-Members on the
LiveVol DataShop website
(datashop.cboe.com). Customers may
currently purchase Open-Close Data on
a subscription basis (monthly or
annually) or by ad hoc request for a
specified month (historical file, e.g.,
request for Intraday Open-Close Data for
month of December 2023 or End-of-Day
Open-Close Data for month of December
2023). An ad-hoc request can be for any
number of months for which the data is
available.
Open-Close Data is subject to direct
competition from similar end-of-day
and intraday options trading summaries
offered by several other options
3 For example, subscribers to the intraday
product will receive the first calculation of intraday
data by approximately 9:42 a.m. ET, which
represents data captured from 9:30 a.m. to 9:40 a.m.
Subscribers will receive the next update at 9:52
a.m., representing the data previously provided
together with data captured from 9:40 a.m. through
9:50 a.m., and so forth. Each update will represent
the aggregate data captured from the current
‘‘snapshot’’ and all previous ‘‘snapshots.’’
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Federal Register / Vol. 89, No. 122 / Tuesday, June 25, 2024 / Notices
exchanges.4 All of these exchanges offer
essentially the same end-of-day and
intraday options trading summary
information.
The Exchange proposes to provide a
temporary pricing incentive program in
which Members or Non-Members that
purchase historical Open-Close Data
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 OpenClose Data of $20,000 or more.5 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,
including the academic discount
provided for Qualifying Academic
Purchasers of historical Open-Close
Data. The Exchange intends to introduce
the discount program beginning June 3,
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.6
khammond on DSKJM1Z7X2PROD with NOTICES
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.7 Specifically, the
Exchange believes the proposed rule
change is consistent with the section
6(b)(5) 8 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
4 These substitute products are: Nasdaq PHLX
Options Trade Outline, Nasdaq Options Trade
Outline, ISE Profile, GEMX Trade Profile data;
open-close data from C2, Cboe Options, and EDGX;
Open Close Reports from MIAX Options, Pearl, and
Emerald; and NYSE Options Open-Close Volume
Summary.
5 The discount will apply on an order-by-order
basis. To qualify for the discount, an order must
contain End-of-Day Ad-hoc Requests (historical
data) and/or Intraday Ad-hoc Requests (historical
data) and must total $20,000 or more; the Exchange
will not aggregate purchases made throughout a
billing cycle for purposes of the incentive program.
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).
6 See Securities Exchange Act Release No. 99027
(November 28, 2023), 88 FR 84028 (December 1,
2023) (SR–CboeBZX–2023–094).
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
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53141
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) 9 requirement that the
rules of an exchange not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
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 the
proposed fee changes will further
broaden the availability of U.S. option
market data to investors consistent with
the principles of Regulation NMS.
Open-Close Data is designed to help
investors understand underlying market
trends to improve the quality of
investment decisions. Indeed,
purchasers of the data may be able to
enhance their ability to analyze option
trade and volume data and create and
test trading models and analytical
strategies. The Exchange believes OpenClose Data provides a valuable tool that
purchasers can use to gain
comprehensive insight into the trading
activity in a particular series, but also
emphasizes such data is not necessary
for trading and as noted above, is
entirely optional. Moreover, several
other exchanges offer a similar data
product which offer same type of data
content through end-of-day or intraday
reports.10
The Exchange also operates in a
highly competitive environment.
Indeed, there are currently 17 registered
options exchanges that trade options.
Based on publicly available information,
no single options exchange has more
than 17% of the market share.11 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.’’ 12
Making similar data products available
to market participants fosters
competition in the marketplace, and
constrains the ability of exchanges to
charge supracompetitive fees. In the
event that a market participant views
one exchange’s data product as more or
less attractive than the competition they
can and do switch between similar
products. The proposed fees are a result
of the competitive environment, as the
Exchange seeks to adopt fees to attract
purchasers of historical Open-Close
Data.
The Exchange believes that the
proposed incentive program for any
Member or non-Member who purchases
historical Open-Close Data is reasonable
because such purchasers would receive
a 20% discount for purchasing $20,000
or more worth of historical Open-Close
Data. The Exchange believes the
proposed discount is reasonable as it
will give purchasers the ability to use
and test the historical Open-Close Data
at a discounted rate, prior to purchasing
additional months or a monthly
subscription, and will therefore
encourage and promote users to
purchase the historical Open-Close
Data. Further, the proposed discount is
intended to promote increased use of
the Exchange’s historical Open-Close
Data 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 OpenClose Data. Lastly, the purchase of this
data product is discretionary and not
compulsory. Indeed, no market
participant is required to purchase the
historical Open-Close Data, and the
Exchange is not required to make the
historical Open-Close Data 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.13
Id.
See supra note 4.
11 See Cboe Global Markets U.S. Options Market
Month-to-Date Volume Summary (June 3, 2024),
available at https://markets.cboe.com/us/options/
market_statistics/.
12 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
13 See Securities Exchange Act Release No. 99027
(November 28, 2023), 88 FR 84028 (December 1,
2023) (SR-CboeBZX–2023–094).
9
10
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53142
Federal Register / Vol. 89, No. 122 / Tuesday, June 25, 2024 / Notices
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, Open-Close Data is
subject to direct competition from
several other options exchanges that
offer substitutes to Open-Close Data.
Moreover, purchase of Open-Close Data
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 Open-Close Data.
khammond on DSKJM1Z7X2PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act 14 and paragraph (f) of Rule
19b–4 15 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
14
15
15 U.S.C. 78s(b)(3)(A).
17 CFR 240.19b–4(f).
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17:03 Jun 24, 2024
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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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–13829 Filed 6–24–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100378; File No. SR–NYSE–
2024–34]
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–2024–047 on the subject line.
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Its
Price List
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–2024–047. 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–2024–047 and should be
submitted on or before July 16, 2024.
Pursuant to section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on June 3,
2024, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) 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 selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
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June 18, 2024.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Price List to (1) revise the requirements
for market at-the-close (‘‘MOC’’) and
limit at the close (‘‘LOC’’) orders on
MOC/LOC Tier 1 and Tier 2; (2) modify
the requirements and charges for D
Orders at the close based on time of
entry or last modification; and (3)
introduce incremental per share credits
for orders entered and executed by a
Floor broker that add liquidity to the
Exchange and for D Orders at the close.
The Exchange proposes to implement
the fee changes effective June 3, 2024.
The proposed rule change is available
on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
17 CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
16
1 15
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]]>Agencies
[Federal Register Volume 89, Number 122 (Tuesday, June 25, 2024)]
[Notices]
[Pages 53140-53142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13829]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100371; File No. SR-CboeBZX-2024-047]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
June 18, 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 June 3, 2024, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') 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 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 Options'')
proposes to amend its Fee Schedule. The text of the proposed rule
change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/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 update its Fee Schedule to provide a 20%
discount on fees assessed to Exchange Members and non-Members that
purchase $20,000 or more of historical Open-Close Data, effective June
3, 2024 through June 30, 2024.
By way of background, the Exchange currently offers End-of-Day
(``EOD'') and Intraday Open-Close Data (collectively, ``Open-Close
Data''). EOD Open-Close Data is an end-of-day volume summary of trading
activity on the Exchange at the option level by origin (customer,
professional customer, broker-dealer, and market maker), side of the
market (buy or sell), price, and transaction type (opening or closing).
The customer and professional customer volume is further broken down
into trade size buckets (less than 100 contracts, 100-199 contracts,
greater than 199 contracts). The EOD Open-Close Data is proprietary
Exchange trade data and does not include trade data from any other
exchange. It is also a historical data product and not a real-time data
feed. The Exchange also offers Intraday Open-Close Data, which provides
similar information to that of EOD Open-Close Data but is produced and
updated every 10 minutes during the trading day. Data is captured in
``snapshots'' taken every 10 minutes throughout the trading day and is
available to subscribers within five minutes of the conclusion of each
10-minute period.\3\ The Intraday Open-Close Data provides a volume
summary of trading activity on the Exchange at the option level by
origin (customer, professional customer, broker-dealer, and market
maker), side of the market (buy or sell), and transaction type (opening
or closing). The customer and professional customer volume are further
broken down into trade size buckets (less than 100 contracts, 100-199
contracts, greater than 199 contracts). The Intraday Open-Close Data is
proprietary Exchange trade data and does not include trade data from
any other exchange. All Open-Close Data products are completely
voluntary products, in that the Exchange is not required by any rule or
regulation to make this data available and that potential customers may
purchase it on an ad-hoc basis only if they voluntarily choose to do
so.
---------------------------------------------------------------------------
\3\ For example, subscribers to the intraday product will
receive the first calculation of intraday data by approximately 9:42
a.m. ET, which represents data captured from 9:30 a.m. to 9:40 a.m.
Subscribers will receive the next update at 9:52 a.m., representing
the data previously provided together with data captured from 9:40
a.m. through 9:50 a.m., and so forth. Each update will represent the
aggregate data captured from the current ``snapshot'' and all
previous ``snapshots.''
---------------------------------------------------------------------------
Cboe LiveVol, LLC (``LiveVol''), a wholly owned subsidiary of the
Exchange's parent company, Cboe Global Markets, Inc., makes the Open-
Close Data available for purchase to Members and non-Members on the
LiveVol DataShop website (datashop.cboe.com). Customers may currently
purchase Open-Close Data on a subscription basis (monthly or annually)
or by ad hoc request for a specified month (historical file, e.g.,
request for Intraday Open-Close Data for month of December 2023 or End-
of-Day Open-Close Data for month of December 2023). An ad-hoc request
can be for any number of months for which the data is available.
Open-Close Data is subject to direct competition from similar end-
of-day and intraday options trading summaries offered by several other
options
[[Page 53141]]
exchanges.\4\ All of these exchanges offer essentially the same end-of-
day and intraday options trading summary information.
---------------------------------------------------------------------------
\4\ These substitute products are: Nasdaq PHLX Options Trade
Outline, Nasdaq Options Trade Outline, ISE Profile, GEMX Trade
Profile data; open-close data from C2, Cboe Options, and EDGX; Open
Close Reports from MIAX Options, Pearl, and Emerald; and NYSE
Options Open-Close Volume Summary.
---------------------------------------------------------------------------
The Exchange proposes to provide a temporary pricing incentive
program in which Members or Non-Members that purchase historical Open-
Close Data 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 Open-Close
Data of $20,000 or more.\5\ 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, including the academic
discount provided for Qualifying Academic Purchasers of historical
Open-Close Data. The Exchange intends to introduce the discount program
beginning June 3, 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.\6\
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\5\ The discount will apply on an order-by-order basis. To
qualify for the discount, an order must contain End-of-Day Ad-hoc
Requests (historical data) and/or Intraday Ad-hoc Requests
(historical data) and must total $20,000 or more; the Exchange will
not aggregate purchases made throughout a billing cycle for purposes
of the incentive program. 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).
\6\ See Securities Exchange Act Release No. 99027 (November 28,
2023), 88 FR 84028 (December 1, 2023) (SR-CboeBZX-2023-094).
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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.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
section 6(b)(5) \8\ 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) \9\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
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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 the proposed fee
changes will further broaden the availability of U.S. option market
data to investors consistent with the principles of Regulation NMS.
Open-Close Data is designed to help investors understand underlying
market trends to improve the quality of investment decisions. Indeed,
purchasers of the data may be able to enhance their ability to analyze
option trade and volume data and create and test trading models and
analytical strategies. The Exchange believes Open-Close Data provides a
valuable tool that purchasers can use to gain comprehensive insight
into the trading activity in a particular series, but also emphasizes
such data is not necessary for trading and as noted above, is entirely
optional. Moreover, several other exchanges offer a similar data
product which offer same type of data content through end-of-day or
intraday reports.\10\
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\10\ See supra note 4.
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The Exchange also operates in a highly competitive environment.
Indeed, there are currently 17 registered options exchanges that trade
options. Based on publicly available information, no single options
exchange has more than 17% of the market share.\11\ 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.'' \12\ Making similar data products available to
market participants fosters competition in the marketplace, and
constrains the ability of exchanges to charge supracompetitive fees. In
the event that a market participant views one exchange's data product
as more or less attractive than the competition they can and do switch
between similar products. The proposed fees are a result of the
competitive environment, as the Exchange seeks to adopt fees to attract
purchasers of historical Open-Close Data.
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\11\ See Cboe Global Markets U.S. Options Market Month-to-Date
Volume Summary (June 3, 2024), available at https://markets.cboe.com/us/options/market_statistics/.
\12\ 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 Open-Close Data is
reasonable because such purchasers would receive a 20% discount for
purchasing $20,000 or more worth of historical Open-Close Data. The
Exchange believes the proposed discount is reasonable as it will give
purchasers the ability to use and test the historical Open-Close Data
at a discounted rate, prior to purchasing additional months or a
monthly subscription, and will therefore encourage and promote users to
purchase the historical Open-Close Data. Further, the proposed discount
is intended to promote increased use of the Exchange's historical Open-
Close Data 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 Open-Close Data. Lastly, the purchase of this data
product is discretionary and not compulsory. Indeed, no market
participant is required to purchase the historical Open-Close Data, and
the Exchange is not required to make the historical Open-Close Data
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.\13\
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\13\ See Securities Exchange Act Release No. 99027 (November 28,
2023), 88 FR 84028 (December 1, 2023) (SR-CboeBZX-2023-094).
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[[Page 53142]]
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, Open-Close Data
is subject to direct competition from several other options exchanges
that offer substitutes to Open-Close Data. Moreover, purchase of Open-
Close Data 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 Open-Close Data.
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 \14\ and paragraph (f) of Rule 19b-4 \15\
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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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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-CboeBZX-2024-047 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-2024-047. 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-2024-047 and should be submitted
on or before July 16, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-13829 Filed 6-24-24; 8:45 am]
BILLING CODE 8011-01-P
