Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for the NYSE Arca Aggregated Lite Data Feed, 78378-78387 [2024-21881]

Download as PDF ddrumheller on DSK120RN23PROD with NOTICES1 78378 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices 19(b)(3)(A) 44 of the Act and subparagraph (f)(2) of Rule 19b–4 45 thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 46 of the Act to determine whether the proposed rule change should be approved or disapproved. available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–NYSEAMER–2024–55 and should be submitted on or before October 16, 2024. www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 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.47 Sherry R. Haywood, Assistant Secretary. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– NYSEAMER–2024–55 on the subject line. SECURITIES AND EXCHANGE COMMISSION Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to file number SR–NYSEAMER–2024–55. 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 [FR Doc. 2024–21879 Filed 9–24–24; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–101110; File No. SR– NYSEARCA–2024–75] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for the NYSE Arca Aggregated Lite Data Feed September 19, 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 September 6, 2024, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to establish fees for the NYSE Arca Aggregated Lite data feed. The proposed rule change is available on the Exchange’s website at 47 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. 44 15 U.S.C. 78s(b)(3)(A). 45 17 CFR 240.19b–4(f)(2). 46 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 17:28 Sep 24, 2024 1 15 Jkt 262001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1. Purpose The Exchange proposes to amend the NYSE Arca Equities Proprietary Market Data Fees Schedule (‘‘Fee Schedule’’) and establish fees for the NYSE Arca Aggregated Lite (‘‘NYSE Arca Agg Lite’’) data feed,4 effective September 6, 2024.5 In summary, the NYSE Arca Agg Lite is a NYSE Arca-only frequency-based depth of book market data feed of the NYSE Arca’s limit order book for up to ten (10) price levels on both the bid and offer sides of the order book for securities traded on the Exchange and for which the Exchange reports quotes and trades under the Consolidated Tape Association (‘‘CTA’’) Plan or the Nasdaq/UTP Plan. The NYSE Arca Agg Lite is a compilation of limit order data that the Exchange provides to vendors and subscribers. The NYSE Arca Agg Lite includes partial depth of book order data as well as security status messages. The security status message informs subscribers of changes in the status of a specific security, such as trading halts, short sale restriction, etc. In addition, the NYSE Arca Agg Lite includes order imbalance information prior to the opening and closing of trading. 4 The proposed rule change establishing the NYSE Arca Agg Lite data feed was immediately effective on February 27, 2024. See Securities Exchange Act Release No. 99713 (March 12, 2024), 89 FR 19381 (March 18, 2024) (SR–NYSEARCA– 2024–22) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish the NYSE Arca Aggregated Lite Market Data Feed). 5 The Exchange originally filed to amend the Fee Schedule on May 13, 2024 (SR–NYSEARCA–2024– 39). On July 11, 2024, the Exchange withdrew SR– NYSEARCA–2024–39 and replaced it with SR– NYSEARCA–2024–60. On September 6, the Exchange withdrew SR–NYSEARCA–2024–60 and replaced it with this filing. E:\FR\FM\25SEN1.SGM 25SEN1 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices Background The Exchange operates in a highly competitive market. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. 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.’’ 6 While Regulation NMS has enhanced competition, it has also fostered a ‘‘fragmented’’ market structure where trading in a single stock can occur across multiple trading centers. When multiple trading centers compete for order flow in the same stock, the Commission has recognized that ‘‘such competition can lead to the fragmentation of order flow in that stock.’’ 7 Indeed, cash equity trading is currently dispersed across 16 exchanges,8 numerous alternative trading systems,9 and broker-dealer internalizers and wholesalers, all competing for order flow. Based on publicly-available information, no single exchange currently has more than 20% market share (whether including or excluding auction volume).10 ddrumheller on DSK120RN23PROD with NOTICES1 Proposed NYSE Arca Agg Lite Data Feed Fees The Exchange proposes to establish the fees listed below for the NYSE Arca Agg Lite data feed. The Exchange proposes to charge fees for the same categories of market data use as its affiliated exchanges (namely, NYSE, NYSE American and NYSE National) currently charge. The Exchange believes that adopting the same fee structure as its affiliated exchanges would reduce administrative burdens on market data 6 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (File No. S7–10–04) (Final Rule) (‘‘Regulation NMS’’). 7 See Securities Exchange Act Release No. 61358, 75 FR 3594, 3597 (January 21, 2010) (File No. S7– 02–10) (Concept Release on Equity Market Structure). 8 See Cboe U.S Equities Market Volume Summary, available at https://markets.cboe.com/us/ equities/market_share. See generally https:// www.sec.gov/fastanswers/divisionsmarketregmr exchangesshtml.html. 9 See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/ AtsIssueData. A list of alternative trading systems registered with the Commission is available at https://www.sec.gov/foia/docs/atslist.htm. 10 See Cboe Global Markets, U.S. Equities Market Volume Summary, available at https:// markets.cboe.com/us/equities/market_share/. VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 subscribers that also currently subscribe to market data feeds from the Exchange’s affiliates. 1. Access Fee. For the receipt of access to the NYSE Arca Agg Lite data feed, the Exchange proposes to charge $1,500 per month. This proposed Access Fee would be charged to any data recipient that receives the NYSE Arca Agg Lite data feed. Data recipients that only use display devices to view NYSE Arca Agg Lite market data and do not separately receive a data feed would not be charged an Access Fee. The proposed Access Fee would be charged only once per firm. 2. User Fees. The Exchange proposes to charge a Professional User Fee (Per User) of $30 per month and a NonProfessional User Fee (Per User) of $4 per month. These user fees would apply to each display device that has access to the NYSE Arca Agg Lite data feed. 3. Redistribution Fee. For redistribution of the NYSE Arca Agg Lite data feed, the Exchange proposes to establish a fee of $250 per month. The proposed Redistribution Fee would be charged to any Redistributor of the NYSE Arca Agg Lite data feed, which is defined to mean a vendor or any person that provides a real-time NYSE Arca market data product externally to a data recipient that is not its affiliate or wholly-owned subsidiary, or to any system that an external data recipient uses, irrespective of the means of transmission or access. The proposed Redistribution Fee would be charged only once per Redistributor account. As an incentive to potential Redistributors to subscribe to the NYSE Arca Agg Lite data feed, the Exchange proposes to waive the Access Fee and Redistribution Fee for a Redistributor if the Redistributor provides NYSE Arca Agg Lite externally to at least one data feed recipient and reports such data feed recipient or recipients to the Exchange. For example, a Redistributor that subscribes to the NYSE Arca Agg Lite data feed will have the Access Fee and Redistribution Fee waived if such Redistributor provides NYSE Arca Agg Lite externally to at least one data feed recipient and reports such data feed recipient to the Exchange. By targeting this proposed fee waiver to Redistributors that provide external distribution of NYSE Arca Agg Lite, the Exchange believes that this would provide an incentive for Redistributors to make the NYSE Arca Agg Lite market data product available to its customers. Specifically, if a data recipient is interested in subscribing to NYSE Arca Agg Lite and relies on a Redistributor to obtain market data products from the Exchange, that data recipient would PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 78379 need its Redistributor to subscribe to and redistribute NYSE Arca Agg Lite. The Exchange believes that this proposed fee waiver for Redistributors of NYSE Arca Agg Lite would provide an incentive for Redistributors to make NYSE Arca Agg Lite available to their customers, which will increase the availability of the Exchange’s market data products to a larger potential population of data recipients. Further, the Exchange proposes to adopt a credit that would be applicable to Redistributors that provide external distribution of NYSE Arca Agg Lite to Professional and Non-Professional Users. As proposed, such Redistributors would receive a credit equal to the amount of the monthly Professional User and Non-Professional User Fees for such external distribution, up to a maximum of the combination of the Access Fee and Redistribution Fee for NYSE Arca Agg Lite that the Redistributor would otherwise be required to pay to the Exchange. For example, a Redistributor that reports external Professional Users and NonProfessional Users in a month totaling $1,750 or more would receive a maximum credit of $1,750 for that month, which could effectively reduce its monthly fee for access and redistribution to zero. If that same Redistributor were to report external User quantities in a month totaling $600 of monthly usage, that Redistributor would receive a credit of $600. The Exchange believes the proposed credit would provide Redistributors with an incentive to increase their redistribution of NYSE Arca Agg Lite because the credit they would be eligible to receive would increase if they report additional external User quantities. 4. Enterprise Fees. The Exchange proposes to establish an enterprise license that will reduce Exchange fees and administrative costs for subscribers that disseminate NYSE Arca Agg Lite. Subscribers that are broker-dealers will be able to distribute the NYSE Arca Agg Lite data feed for display usage to an unlimited number of non-professional users for a monthly fee of $35,000, with an opportunity to lower that fee to $31,500 per month if they contract for twelve months of service in advance. Alternatively, subscribers that are broker-dealers will be able to distribute the NYSE Arca Agg Lite data feed for display usage to an unlimited number of recipients (professional users and nonprofessional users) for a monthly fee of $110,000, with an opportunity to lower that fee to $99,000 per month if they contract for twelve months of service in advance. E:\FR\FM\25SEN1.SGM 25SEN1 ddrumheller on DSK120RN23PROD with NOTICES1 78380 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices As proposed, the NYSE Arca Agg Lite data feed may be distributed pursuant to the proposed market data enterprise license only for display usage and in the context of a brokerage relationship with a broker-dealer through such brokerdealer’s own devices. Purchase of an enterprise license would eliminate per User subscriber fees for NYSE Arca Agg Lite. Further, the Exchange proposes to waive the Access Fee and the Redistribution Fee for NYSE Arca Agg lite for Redistributors that pay either the Non-Professional Enterprise Fee or the Professional and Non-Professional Enterprise Fee. The Exchange believes the proposed fee waiver would provide an incentive for Redistributors to subscribe to the NYSE Arca Agg Lite market data product at the enterprise level to reduce the fees it would pay to the Exchange and without having to report the number of users that receive the data feed from the Redistributor. Subscribers that intend to purchase a market data enterprise license for at least twelve months may elect to purchase this product in advance for a monthly fee of $31,500 for distribution of NYSE Arca Agg Lite to an unlimited number of non-professional users, or $99,000 per month for distribution to an unlimited number of professional users and non-professional users. This feature is intended to simplify cost projections and budgeting for both subscribers and the Exchange. Subscribers that elect not to purchase this particular feature will nevertheless be able to obtain all of the market data information offered by NYSE Arca Agg Lite by paying the standard fee of $35,000 per month for distribution of NYSE Arca Agg Lite to an unlimited number of nonprofessional users, or $110,000 per month for distribution to an unlimited number of professional users and nonprofessional users. Subscribers that elect to pay the monthly fee will be able to switch to the annual fee at any time, and those that elect to purchase the annual contract would be able to change to the monthly contract, with notice, at the end of the twelve-month period. The Exchange believes that the proposed market data enterprise license will reduce exchange fees, lower administrative costs for subscribers, and help expand the availability of market information to investors, and thereby increase participation in financial markets. 5. Non-Display Use Fees. The Exchange proposes to establish nondisplay fees for the NYSE Arca Agg Lite data feed that are based on the nondisplay use categories charged by NYSE, NYSE American, NYSE National, the CTA, and the UTP Plan for non-display VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 use.11 Non-display use would mean accessing, processing, or consuming the NYSE Arca Agg Lite data feed delivered directly or through a Redistributor, for a purpose other than in support of a data recipient’s display or further internal or external redistribution (‘‘Non-Display Use’’). Non-Display Use would include trading uses such as high frequency or algorithmic trading as well as any trading in any asset class, automated order or quote generation and/or order pegging, price referencing for algorithmic trading or smart order routing, operations control programs, investment analysis, order verification, surveillance programs, risk management, compliance, and portfolio management. Under the proposal, for Non-Display Use of NYSE Arca Agg Lite, there would be three categories of, and fees applicable, to data recipients. One, two, or three categories of Non-Display Use may apply to a data recipient. • As proposed, the Category 1 Fee would be $4,500 per month and would apply when a data recipient’s NonDisplay Use of the NYSE Arca Agg Lite data feed is on its own behalf, not on behalf of its clients. • As proposed, Category 2 Fees would be $4,500 per month and would apply to a data recipient’s Non-Display Use of the NYSE Arca Agg Lite data feed on behalf of its clients. • As proposed, Category 3 Fees would be $4,500 per month and would apply to a data recipient’s Non-Display Use of the NYSE Arca Agg Lite data feed for the purpose of internally matching buy and sell orders within an organization, including matching customer orders for a data recipient’s own behalf and/or on behalf of its clients. This category would apply to Non-Display Use in trading platforms, such as, but not restricted to, alternative 11 See Endnote 1 to the NYSE Proprietary Market Data Fees, available here: https://www.nyse.com/ publicdocs/nyse/data/NYSE_Market_Data_Fee_ Schedule.pdf; Endnote 1 to the NYSE American LLC Equities Proprietary Market Data Fees, available here: https://www.nyse.com/publicdocs/ nyse/data/NYSE_American_Equities_Market_Data_ Fee_Schedule.pdf; Endnote 1 to the NYSE National Equities Proprietary Market Data Fees, available here: https://www.nyse.com/publicdocs/nyse/data/ NYSE_National_Market_Data_Fee_Schedule.pdf; Endnote 8 to the Schedule of Market Data Charges for the CTA, available here: https:// www.ctaplan.com/publicdocs/ctaplan/ notifications/trader-update/Schedule%20Of% 20Market%20Data%20Charges%20%20January%201,%202015.pdf; and Non-Display Usage Fees as set forth in the UTP Plan Fee Schedule and Non-Display Policy, available here: https://utpplan.com/DOC/Datapolicies.pdf. See, e.g., Securities Exchange Act Release Nos. 69315 (April 5, 2013), 78 FR 21668 (April 11, 2013) (SR– NYSEArca–2013–37) and 73011 (September 5, 2014), 79 FR 54315 (September 11, 2014) (SR– NYSEARCA–2014–93). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 trading systems (‘‘ATSs’’), broker crossing networks, broker crossing systems not filed as ATSs, dark pools, multilateral trading facilities, exchanges and systematic internalization systems. A data recipient will be charged $4,500 per month for each platform on which it uses the Non-Display data internally to match buy and sell orders, up to a cap of $13,500 per month; even if the data recipient uses the NYSE Arca Agg Lite data feed for more than three platforms, it will not pay more than $13,500 for such Category 3 use per month. The description of the three nondisplay use categories is set forth in the Fee Schedule in endnote 1 and that endnote would be referenced in the NYSE Arca Agg Lite data feed fees on the Fee Schedule. The text in the endnote would remain unchanged. Data recipients that receive the NYSE Arca Agg Lite data feed for Non-Display Use would be required to complete and submit a Non-Display Use Declaration before they would be authorized to receive the feed. A firm subject to Category 3 Fees would be required to identify each platform that uses the NYSE Arca Agg Lite data feed for a Category 3 Non-Display Use basis, such as ATSs and broker crossing systems not registered as ATSs, as part of the NonDisplay Use Declaration. 6. Non-Display Use Declaration Late Fee. Data recipients that receive the NYSE Arca Agg Lite data feed for NonDisplay Use would be required to complete and submit a Non-Display Use Declaration before they would be authorized to receive the feed. Beginning in 2025, NYSE Arca Agg Lite data feed recipients would be required to submit, by January 31 of each year, the Non-Display Use Declaration. The requirement to submit a Non-Display Use Declaration applies to all real-time NYSE Arca data feed product recipients. The Exchange proposes to charge a NonDisplay Use Declaration Late Fee of $1,000 per month to any data recipient that pays an Access Fee for the NYSE Arca Agg Lite data feed that has failed to timely complete and submit a NonDisplay Use Declaration. Specifically, with respect to the Non-Display Use Declaration due by January 31 of each year, the Non-Display Use Declaration Late Fee would apply to data recipients that fail to complete and submit the Non-Display Use Declaration by the January 31 due date, and would apply beginning February 1 and for each month thereafter until the data recipient has completed and submitted the annual Non-Display Use Declaration. The proposed Non-Display Use Declaration Late Fee applicable to NYSE Arca Agg Lite data feed would be set E:\FR\FM\25SEN1.SGM 25SEN1 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices ddrumheller on DSK120RN23PROD with NOTICES1 forth in endnote 2 on the Fee Schedule. As proposed, endnote 2 would be amended with the proposed addition of the following new text: ‘‘The NonDisplay Declaration Late Fee will apply, beginning in 2025, to NYSE Arca Aggregated Lite data recipients that fail to complete and submit the annual NonDisplay Use Declaration by the January 31st due date, and applies beginning February 1st and for each month thereafter until the data recipient has completed and submitted the annual Non-Display use Declaration.’’ In addition, if a data recipient’s use of the NYSE Arca Agg Lite data feed changes at any time after the data recipient submits a Non-Display Use Declaration, the data recipient must inform the Exchange of the change by completing and submitting at the time of the change an updated declaration reflecting the change of use. 7. Multiple Data Feed Fee. The Exchange proposes to establish a monthly fee, the ‘‘Multiple Data Feed Fee,’’ that would apply to data recipients that take a data feed for a market data product in more than two locations. Data recipients taking the NYSE Arca Agg Lite data feed in more than two locations would be charged $200 per additional location per month. No new reporting would be required.12 8. Three-Month Fee Waiver. The Exchange currently provides a onemonth free trial to any firm that subscribes to a particular NYSE Arca market data product for the first time. Under the current one-month trial, a first-time subscriber is not charged the Access Fee, Non-Display Fee, any applicable Professional and NonProfessional User Fee and Redistribution Fee for one calendar month.13 The Exchange now proposes an additional three-month fee waiver for any Redistributor that subscribes to a particular NYSE Arca market data product for the first time for external redistribution. As proposed, a first-time Redistributor would be any firm that has not previously subscribed to and externally redistributed a particular NYSE Arca market data product listed on the Fee Schedule. As proposed, a first-time Redistributor that subscribes to a particular NYSE Arca market data product would not be charged the 12 Data vendors currently report a unique Vendor Account Number for each location at which they provide a data feed to a data recipient. The Exchange considers each Vendor Account Number a location. For example, if a data recipient has five Vendor Account Numbers, representing five locations, for the receipt of the NYSE Arca Agg Lite data feed, that data recipient will pay the Multiple Data Feed fee with respect to three of the five locations. 13 See Fee Schedule. VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 Access Fee and the Redistribution Fee for that product for three calendar months. Any other fees, including but not limited to, Non-Display Fee, any applicable Professional and NonProfessional User Fee, and Enterprise Fee would be billable after the first calendar month after a first-time Redistributor subscribes to a particular NYSE Arca market data product. For example, a first-time Redistributor that chooses to subscribe to NYSE Arca Agg Lite on September 24, 2024 would not be charged the Access Fee and the Redistribution Fee for the months of October, November, and December 2024. The proposed fee waiver would be for the three calendar months following the date a Redistributor is approved to receive access to the particular NYSE Arca market data product. The Exchange would provide the threemonth fee waiver for each particular product to each Redistributor once. The Exchange believes that providing a three-month fee waiver to NYSE Arca market data products listed on the Fee Schedule would enable potential Redistributors to determine whether a particular NYSE Arca market data product is useful to their business models before fully committing to expend development and implementation costs related to the receipt of that product, and is intended to encourage increased use of the Exchange’s market data products by defraying some of the development and implementation costs Redistributors would ordinarily have to expend before using a product. The proposed threemonth fee waiver would also provide Redistributors with time to begin onboarding new clients prior to being liable to the Access Fee and the Redistribution Fee, allowing time to choose how to allocate costs and increase revenues to defray costs associated with providing a new feed to its customers. Application of Proposed Fees The Exchange is not required to make the NYSE Arca Agg Lite data feed available or to offer any specific pricing alternatives to any customers, nor is any firm required to purchase the NYSE Arca Agg Lite data feed. Firms that choose to purchase the NYSE Arca Agg Lite data feed do so for the primary goals of using it to increase their revenues, reduce their expenses, and in some instances to compete directly with the Exchange (including for order flow). Those firms are able to determine for themselves whether or not the NYSE Arca Agg Lite data feed or any other similar products are attractively priced. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 78381 The Exchange believes the proposed rule change would provide an incentive both for data subscribers to subscribe to NYSE Arca Agg Lite and for Redistributors to subscribe to the product for purposes of providing external distribution of NYSE Arca Agg Lite. The Exchange believes that this proposed rule change also has the potential to attract new Redistributors for NYSE Arca Agg Lite. The proposed fee structure is not novel as it is based on the fee structure currently in place for the NYSE ArcaBook feed. The Exchange is proposing fees for the NYSE Arca Agg Lite data feed that are based on the existing fee structure and rates that data recipients already pay for the NYSE ArcaBook feed. Specifically, the fees for the NYSE ArcaBook feed—which like the NYSE Arca Agg Lite data feed, includes depth of book, auction imbalances, and security status messages—consist of an Access Fee of $2,000 per month, a Professional User Fee (Per User) of $60 per month, a NonProfessional User Fee (Per User) that ranges between $3 per month to $10 per month, Non-Display Fees 14 of $6,000 per month for each of Categories 1, 2 and 3, and a Redistribution Fee of $2,000 per month. The Exchange also charges a Non-Display Use Declaration Late Fee of $1,000 per month and a Multiple Data Feed Fee of $200 per month for NYSE ArcaBook.15 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,16 in general, and Sections 6(b)(4) and 6(b)(5) of the Act,17 in particular, in that it provides an equitable allocation of reasonable fees among users and recipients of the data and is not designed to permit unfair discrimination among customers, issuers, and brokers. The Proposed Rule Change Is Reasonable In adopting Regulation NMS, the Commission granted SROs and brokerdealers increased authority and flexibility to offer new and unique 14 The Exchange does not anticipate that data recipients would use NYSE Arca Agg Lite for nondisplay purpose. However, the Exchange is adopting Non-Display use fees so that the proposed fees for NYSE Arca Agg Lite are consistent with the Exchange’s fee structure for its other proprietary market data products. 15 See NYSE Arca Equities Proprietary Market Data Fees at https://www.nyse.com/publicdocs/ nyse/data/NYSE_Arca_Equities_Proprietary_Data_ Fee_Schedule.pdf. 16 15 U.S.C. 78f(b). 17 15 U.S.C. 78f(b)(4), (5). E:\FR\FM\25SEN1.SGM 25SEN1 78382 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices market data to the public. 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.’’ 18 With respect to market data, the decision of the United States Court of Appeals for the District of Columbia Circuit in NetCoalition v. SEC upheld the Commission’s reliance on the existence of competitive market mechanisms to evaluate the reasonableness and fairness of fees for proprietary market data: In fact, the legislative history indicates that the Congress intended that the market system ‘‘evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed’’ and that the SEC wield its regulatory power ‘‘in those situations where competition may not be sufficient,’’ such as in the creation of a ‘‘consolidated transactional reporting system.’’ 19 The court agreed with the Commission’s conclusion that ‘‘Congress intended that ‘competitive forces should dictate the services and practices that constitute the U.S. national market system for trading equity securities.’ ’’ 20 More recently, the Commission confirmed that it applies a ‘‘marketbased’’ test in its assessment of market data fees, and that under that test: the Commission considers whether the exchange was subject to significant competitive forces in setting the terms of its proposal for [market data], including the level of any fees. If an exchange meets this burden, the Commission will find that its fee rule is consistent with the Act unless there is a substantial countervailing basis to find that the terms of the rule violate the Act or the rules thereunder.21 As discussed below, the Exchange believes that its proposed fees are constrained by competitive forces. ddrumheller on DSK120RN23PROD with NOTICES1 18 See Regulation NMS Adopting Release, 70 FR 37495, at 37499. 19 NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. Cir. 2010) (‘‘NetCoalition I’’) (quoting H.R. Rep. No. 94–229 at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 323). 20 Id. at 535. 21 See Securities Exchange Act Release No. 34– 90217 (October 16, 2020), 85 FR 67392 (October 22, 2020) (SR–NYSENAT–2020–05) (‘‘National IF Approval Order’’) (internal quotation marks omitted), quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74781 (December 9, 2008). VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 As the D.C. Circuit recognized in NetCoalition I, ‘‘[n]o one disputes that competition for order flow is fierce.’’ 22 The court further noted that ‘‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers,’’ and that an exchange ‘‘must compete vigorously for order flow to maintain its share of trading volume.’’ 23 As noted above, while Regulation NMS has enhanced competition, it has also fostered a ‘‘fragmented’’ market structure where trading in a single stock can occur across multiple trading centers. When multiple trading centers compete for order flow in the same stock, the Commission has recognized that ‘‘such competition can lead to the fragmentation of order flow in that stock.’’ 24 Indeed, today, equity trading is currently dispersed across 16 exchanges,25 numerous alternative trading systems,26 broker-dealer internalizers and wholesalers, all competing for order flow. Based on publicly-available information, no single exchange currently has more than 20% market share.27 Further, low barriers to entry mean that new exchanges may rapidly and inexpensively enter the market to compete with the Exchange. For example, since 2020, three new ones have entered the market: Long Term Stock Exchange (LTSE), which began operations as an exchange on August 28, 2020; 28 Members Exchange (MEMX), which began operations as an exchange on September 29, 2020; 29 and Miami International Holdings (MIAX), which 22 NetCoalition I, 615 F.3d at 544 (internal quotation omitted). 23 Id. 24 See Securities Exchange Act Release No. 61358, 75 3594, 3597 (January 21, 2010) (File No. S7–02– 10) (Concept Release on Equity Market Structure). 25 See Cboe Global Markets, U.S. Equities Market Volume Summary, available at https:// markets.cboe.com/us/equities/market_share/. 26 See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/ otctransparency/AtsIssueData. A list of alternative trading systems registered with the Commission is available at https://www.sec.gov/foia/docs/ atslist.htm. 27 See Cboe Global Markets, U.S. Equities Market Volume Summary, available at https:// markets.cboe.com/us/equities/market_share/. 28 See LTSE Market Announcement: MA–2020– 020, dated August 14, 2020, announcing LTSE production securities phase-in planned for August 28, available here: https://assets-global.websitefiles.com/6462417e8db99f8baa06952c/6462417e 8db99f8baa0698e7_MA-2020-020__Production_ Securities_Launching_August_28_-_Google_ Docs.pdf and LTSE Market Announcement: MA– 2020–025, available here: https://assetsglobal.website-files.com/6462417e8db99f8baa 06952c/6462417e8db99f8baa069873_MA-2020025.pdf. 29 As of October 29, 2020, MEMX is trading all NMS symbols. See https://info.memxtrading.com/ trader-alert-20-10-memx-trading-symbols-update/. PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 began operations of its first equities exchange on September 29, 2020.30 More specifically, in setting fees for the NYSE Arca Agg Lite data feed, the Exchange is constrained by the fact that, if its pricing is unattractive to customers, customers have their pick of alternatives to purchase similar data from instead of purchasing it from the Exchange. The existence of alternatives to the Exchange’s data product ensures that the Exchange cannot set unreasonable market data fees without suffering the negative effects of that decision in the fiercely competitive market for proprietary partial depth of book market data. The Exchange notes that the NYSE Arca Agg Lite is entirely optional. The Exchange is not required to make the NYSE Arca Agg Lite available to any customers, nor is any customer required to purchase the NYSE Arca Agg Lite market data feed. Unlike some other data products (e.g., the consolidated quotation and last-sale information feeds) that firms are required to purchase in order to fulfil regulatory obligations,31 a customer’s decision whether to purchase the NYSE Arca Agg Lite is entirely discretionary. The Exchange believes NYSE Arca Agg Lite would provide high-quality, comprehensive partial depth of book data that an anticipated end user might use for purposes of identifying an indicative price of Tape A, B and C securities without having to purchase consolidated data and thus it would not be a latency-sensitive product. The Exchange does not anticipate that an end user would, or could, use NYSE Arca Agg Lite data for purposes of making order-routing or trading decisions. Firms that choose to subscribe to NYSE Arca Agg Lite are able to determine for themselves whether the NYSE Arca Agg Lite data feed is necessary for their business needs, and if so, whether or not it is attractively priced. If the NYSE Arca Agg Lite data feed does not provide sufficient benefit to firms based on the uses those firms may have for it, such firms may simply choose to conduct 30 See MIAX Pearl Press release, dated September 29, 2020, available here: https:// www.miaxoptions.com/sites/default/files/alert-files/ MIAX_Press_Release_09292020.pdf. 31 The Exchange notes that broker-dealers are not required to purchase proprietary market data to comply with their best execution obligations. See In the Matter of the Application of Securities Industry and Financial Markets Association for Review of Actions Taken by Self-Regulatory Organizations, Release Nos. 34–72182; AP–3–15350; AP–3–15351 (May 16, 2014). Similarly, there is no requirement in Regulation NMS or any other rule that proprietary data be utilized for order routing decisions, and some broker-dealers and ATSs have chosen not to do so. E:\FR\FM\25SEN1.SGM 25SEN1 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices ddrumheller on DSK120RN23PROD with NOTICES1 their business operations in ways that do not use the NYSE Arca Agg Lite data feed. In setting the proposed fees for the NYSE Arca Agg Lite data feed, the Exchange considered the competitiveness of the market for proprietary partial depth of book data and all of the implications of that competition. The Exchange believes that it has considered all relevant factors and has not considered irrelevant factors in order to establish reasonable fees. The proposed fees are therefore reasonable because in setting them, the Exchange is constrained by the availability of substitute partial depth of book market data products. The Commission has been clear that substitute products need not be identical, but only substantially similar to the product at hand.32 The NYSE Arca Aggregated Lite market data feed is subject to significant competitive forces that constrain its pricing. Specifically, the NYSE Arca Agg Lite data feed competes head-tohead with similar market data products currently offered by the four U.S. equities exchanges operated by Cboe Exchange, Inc.—Cboe BZX Exchange, Inc. (‘‘BZX’’), Cboe BYX Exchange, Inc. (‘‘BYX’’), Cboe EDGA Exchange, Inc. (‘‘EDGA’’), and Cboe EDGX Exchange, Inc. (‘‘EDGX’’), each of which offers a market data product called BZX Summary Depth, BYX Summary Depth, EDGA Summary Depth and EDGX Summary Depth, respectively (collectively, the ‘‘Cboe Summary Depth’’).33 Similar to Cboe Summary Depth, NYSE Arca Agg Lite can be utilized by vendors and subscribers to quickly access and distribute aggregated order book data. As noted above, NYSE Arca Agg Lite, similar to Cboe Summary Depth, would provide aggregated depth per security, including the bid, ask and share quantity for orders received by 32 For example, in the National IF Approval Order, the Commission recognized that for some customers, the best bid and offer information from consolidated data feeds may function as a substitute for the NYSE National Integrated Feed product, which contains order by order information. See National IF Approval Order, supra note 21, at 67397 [release p. 21] (‘‘[I]nformation provided by NYSE National demonstrates that a number of executing broker-dealers do not subscribe to the NYSE National Integrated Feed and executing brokerdealers can otherwise obtain NYSE National best bid and offer information from the consolidated data feeds.’’ (internal quotations omitted)). 33 See BZX Rule 11.22(m) BZX Summary Depth; BYX Rule 11.22(k) BYX Summary Depth; EDGA Rule 13.8(f) EDGA Summary Depth; and EDGX Rule 13.8(f) EDGX Summary Depth. The Cboe Summary Depth offered by BZX, BYX, EDGA and EDGX are each a data feed that offers aggregated two-sided quotations for all displayed orders for up to five (5) price levels and contains the individual last sale information, market status, trading status and trade break messages. VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 NYSE Arca, except unlike Cboe Summary Depth, which provides aggregated depth per security for up to five price levels, NYSE Arca Agg Lite would provide aggregated depth per security for up to ten price levels on both the bid and offer sides of the NYSE Arca limit order book as well as auction imbalance data. The specific fees that the Exchange proposes for the NYSE Arca Agg Lite data feed are reasonable for the following additional reasons. Overall. The Exchange believes that the proposed fees for the NYSE Arca Agg Lite data feed are reasonable because they would provide vendors and subscribers with the option to subscribe to a market data product that integrates a subset of data from existing products and where such aggregated data is published at a pre-defined interval, thus lowering bandwidth, infrastructure and operational requirements. The Exchange believes the proposed fees for the NYSE Arca Agg Lite data feed are also reasonable when compared to fees for comparable products, such as the Cboe Summary Depth.34 Additionally, the Exchange is proposing fees for the NYSE Arca Agg Lite data feed that are based on the existing fee structure that data recipients already pay for the NYSE Arca’s other market data products. The Exchange believes that adopting the same fee structure would reduce administrative burdens on NYSE Arca data subscribers that also currently subscribe to market data feeds from NYSE Arca. Access Fee. The Exchange believes that the proposed monthly Access Fee of $1,500 for the NYSE Arca Aggregated Lite data feed is reasonable because it is lower than the fees charged by BZX, BYX, EDGA, and EDGX, each of which charges between $2,500 per month to $5,000 per month for both Internal Distribution and External Distribution of the Cboe Summary Depth market data product.35 User Fees. The Exchange believes that having separate Professional and NonProfessional User fees for the NYSE Arca Agg Lite data feed is reasonable because it will make the product more affordable and result in greater availability to Professional and NonProfessional Users. Setting a modest Non-Professional User fee is reasonable because it provides an additional method for Non-Professional Users to access the NYSE Arca Agg Lite data feed 34 See https://cdn.cboe.com/resources/ membership/US_Market_Data_Product_Price_ List.pdf. 35 Id. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 78383 by providing the same data that is available to Professional Users. The proposed monthly Professional User Fee (Per User) of $30 and monthly NonProfessional User Fee (Per User) of $4 are reasonable because they are comparable to user fees generally charged by exchanges. For example, NYSE Arca charges a monthly Professional User Fee (Per User) of $60 and a monthly Non-Professional User Fee (Per User) of up to $10 for the NYSE ArcaBook feed.36 Although the proposed User Fees for Professional and Non-Professional Users are higher than those charged by BZX, BYX, EDGA and EDGX, the Exchange notes that User fees are only a subset of the total fees that vendors and subscribers pay and the lower fees proposed to access and redistribute NYSE Arca Agg Lite would provide such market data recipients with a more affordable alternative to existing substitutes offered by the Exchange and its competitors. Redistribution Fees. The Exchange believes that charging a Redistribution Fee is reasonable because the vendors that would be charged such a fee profit by re-transmitting the Exchange’s market data to their customers. This fee would be charged only once per month to each vendor account that redistributes the NYSE Arca Agg Lite data feed, regardless of the number of customers to which that vendor redistributes the data. The Exchange believes the proposed monthly Redistribution Fee of $250 for the NYSE Arca Agg Lite data feed is reasonable because it is nominal and lower than the fees charged by BZX, BYX, EDGA and EDGX, each of which charges considerably more for both Internal Distribution and External Distribution of the Cboe Summary Depth market data feed.37 Enterprise Fees. The Exchange believes the proposed enterprise license is reasonable because it would reduce exchange fees, lower administrative costs for subscribers that are brokerdealers and help expand the availability of market information to investors, and thereby increase participation in financial markets. Subscribers that are broker-dealers would be able to disseminate the NYSE Arca Agg Lite data feed for display usage to an unlimited number of non-professional users for a monthly fee of $35,000, or $31,500 if they contract for twelve months of service in advance. Alternatively, subscribers that are broker-dealers would be able to disseminate the NYSE Arca Agg Lite 36 See 37 See E:\FR\FM\25SEN1.SGM Fee Schedule. supra, note 34. 25SEN1 ddrumheller on DSK120RN23PROD with NOTICES1 78384 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices data feed for display usage to an unlimited number of professional users and non-professional users for a monthly fee of $110,000, or $99,000 if they contract for twelve months of service in advance. The proposed enterprise license would result in lower fees for subscribers able to reach the largest audience of investors, including retail investors. Discounts for broader dissemination of market data information have routinely been adopted by exchanges and permitted by the Commission as equitable allocations of reasonable dues, fees and charges.38 Non-Display Use Fees. Non-display data can be used by data recipients for a wide variety of uses, including proprietary and agency trading and smart order routing, as well as by data recipients that operate order matching and execution platforms. Non-display data also can be used for a variety of non-trading purposes that indirectly support trading, such as risk management and compliance. Although some of these non-trading uses do not directly generate revenues, they can nonetheless substantially reduce a recipient’s costs by automating such functions so that they can be carried out in a more efficient and accurate manner and reduce errors and labor costs, thereby benefiting recipients. The Exchange believes that charging for nontrading uses is reasonable because data recipients can derive substantial benefit from such uses, for example, by automating tasks so that they can be performed more quickly and accurately and less expensively than if they were performed manually. The Exchange believes that the proposed fees of $4,500 per month for each of Categories 1, 2, and 3 is reasonable. These fees are comparable to non-display use fees generally charged by exchanges. For example, the fees for Non-Display Use of NYSE ArcaBook for Categories 1, 2 and 3 is $6,000 per month.39 The Exchange believes that it is reasonable to cap non-display use fees for Category 3 at $13,500 per month per data recipient, because a higher monthly fee may potentially dissuade subscribers from buying the NYSE Arca Agg Lite data feed. The proposed Non-Display Use fees for the NYSE Arca Agg Lite data feed are also reasonable because they take into account the usefulness of receiving the 38 For example, the Commission has permitted pricing discounts for market data under Nasdaq Rules 7023(c) and 7047(b). See also Securities Exchange Act Release No. 82182 (November 30, 2017), 82 FR 57627 (December 6, 2017) (SR–NYSE– 2017–60) (changing an enterprise fee for NYSE BBO and NYSE Trades). 39 See Fee Schedule. VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 data for Non-Display Use on an integrated basis. Non-Display Use Declaration Late Fee. The Exchange believes that it is reasonable to require annual submissions of the Non-Display Use Declaration so that the Exchange will have current and accurate information about the use of the NYSE Arca Agg Lite data feed and can correctly assess fees for the uses of the NYSE Arca Agg Lite data feed. Requiring annual submissions of such declarations is reasonable because it also allows users to re-assess their own usage each year. The Exchange believes that it is reasonable to impose a late fee in connection with the submission of the Non-Display Use Declaration. In order to correctly assess fees for the nondisplay use of the NYSE Arca Agg Lite data feed, the Exchange needs to have current and accurate information about the use of the NYSE Arca Agg Lite data feed. The failure of data recipients to submit the Non-Display Use Declaration on time leads to potentially incorrect billing and administrative burdens, including tracking and obtaining late Non-Display Use Declarations and correcting and following up on payments owed in connection with late Non-Display Use Declarations. The purpose of the late fee is to incent data recipients to submit the Non-Display Use Declaration promptly to avoid the administrative burdens associated with the late submission of Non-Display Use Declarations. Multiple Data Feed Fee. The Exchange believes that it is reasonable to require data recipients to pay a modest fee for taking a data feed for a market data product in more than two locations. In addition, there are administrative burdens associated with tracking each location at which a data recipient receives the product. The Multiple Data Feed Fee is designed to encourage data recipients to better manage their requests for additional data feeds and to monitor their usage of data feeds. The proposed fee is designed to apply to data feeds received in more than two locations so that each data recipient can have one primary and one backup data location before having to pay a multiple data feed fee. Three-Month Fee Waiver. The Exchange believes the proposal to waive the Access Fee and the Redistribution Fee for the NYSE Arca Agg Lite data feed to new Redistributors for three calendar months is reasonable because it would enable potential Redistributors to determine whether a particular NYSE Arca market data product is useful to their business models before fully committing to expend development and PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 implementation costs related to the receipt of that product, and is intended to encourage increased use of the Exchange’s market data products by defraying some of the development and implementation costs Redistributors would ordinarily have to expend before using a product. The proposed fee waiver would also allow Redistributors to become familiar with the feed and determine whether it suits their needs without incurring fees. Making a new market data product available without charging a fee for three months is consistent with offerings of other exchanges. For example, BZX offers subscribers of BZX Summary Depth a three-month credit for external distribution, which is akin to the threemonth fee waiver proposed by the Exchange.40 For all of the foregoing reasons, the Exchange believes that the proposed fees for the NYSE Arca Agg Lite data feed are reasonable. The Proposed Fees Are Equitably Allocated The Exchange believes the proposed fees for the NYSE Arca Agg Lite data feed are allocated fairly and equitably among the various categories of users of the feed, and any differences among categories of users are justified. Overall. The Exchange believes that the proposed fees are equitably allocated because they will apply to all data recipients that choose to subscribe to the NYSE Arca Agg Lite data feed. Any subscriber or vendor that chooses to subscribe to the NYSE Arca Agg Lite data feed is subject to the same Fee Schedule, regardless of what type of business they operate or the use they plan to make of the data feed. Subscribers and vendors are not required to purchase the NYSE Arca Agg Lite data feed and may choose to receive the data on the NYSE Arca Agg Lite data feed regardless of what type of business they operate or the use they plan to make of the data feed. Access Fee. The Exchange believes the proposed monthly Access Fee of $1,500 for the NYSE Arca Agg Lite data feed is equitably allocated because it would be charged on an equal basis to all data recipients that receive a data feed of the NYSE Arca Agg Lite data feed, regardless of what type of business they operate or the use they plan to make of the data feed. 40 See e.g., Securities Exchange Act Release No. 94432 (March 16, 2022), 87 FR 16277 (March 22, 2022) (SR–CboeBZX–2022–015) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Applicable to Various Market Data Products). E:\FR\FM\25SEN1.SGM 25SEN1 ddrumheller on DSK120RN23PROD with NOTICES1 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices User Fees. The Exchange believes that the fee structure differentiating Professional User fees ($30 per month per user) from Non-Professional User fees ($4 per month per user) for display device access to the NYSE Arca Agg Lite data feed is equitable. This structure has long been used by the Exchange to reduce the price of data to NonProfessional Users and make it more broadly available.41 Offering the NYSE Arca Agg Lite data feed to NonProfessional Users with the same data as is available to Professional Users results in greater equity among data recipients. These user fees would be charged uniformly to all display devices that have access to the NYSE Arca Agg Lite data feed. Redistribution Fees. The Exchange believes the proposed monthly fee of $250 for redistributing the NYSE Arca Agg Lite data feed is equitably allocated because it would be charged on an equal basis to those Redistributors that choose to redistribute the feed. Enterprise Fees. The Exchange believes the proposed enterprise license is equitably allocated because it would be available on an equal basis to all subscribers that are broker-dealers, each of whom would benefit from reduced exchange fees and from lower administrative costs. Moreover, the specific feature of the proposed enterprise license that will allow subscribers to lower fees by subscribing to a twelve-month contract is also an equitable allocation because all subscribers will have the same option of choosing between the stability of a fixed, lower rate, and the more flexible option of maintaining the ability to change market data products after a month of service. Subscribers will be free to move from the monthly to the annual rate at any time, or from annual to a monthly fee, with notice, at the expiration of the twelve-month period. Non-Display Use Fees. The Exchange believes the proposed Non-Display Use fees are equitably allocated because they would require subscribers to pay fees only for the uses they actually make of the data. As noted above, non-display data can be used by data recipients for a wide variety of purposes (including trading, risk management, and compliance) as well as purposes that reduce the recipient’s costs by 41 See, e.g., Securities Exchange Act Release No. 72560 (July 8, 2014), 79 FR 40801 (July 14, 2014) (SR–NYSEARCA–2014–72) (establishing tiered Non-Professional User Fees (Per User) for NYSE ArcaBook); Securities Exchange Act Release No. 20002, File No. S7–433 (July 22, 1983), 48 FR 34552 (July 29, 1983) (establishing Non-Professional fees for CTA data); NASDAQ BX Equity 7 Pricing Schedule, Section 123. VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 automating certain functions. The Exchange believes that it is equitable to charge non-display data subscribers a $4,500 fee for each category of use they make of such data—namely, using the data on their own behalf (Category 1), on behalf of their clients (Category 2), and to internally match buy and sell orders within an organization (Category 3)—because this fee structure results in subscribers with greater uses of the data paying higher fees, and subscribers with fewer uses of the data paying lower fees. This segmented fee structure is also equitable because no subscriber of nondisplay data would be charged a fee for a category of use in which it did not actually engage. The Exchange believes that it is equitable to cap non-display use fees for Category 3 at $13,500 per month per data recipient, because a higher monthly fee may potentially dissuade subscribers from buying the NYSE Arca Agg Lite data feed. Non-Display Use Declaration Late Fee. The Exchange believes that the proposed fee of $1,000 per month for a late Non-Display Use Declaration is equitably allocated because it applies to any data recipient that pays an Access Fee for the NYSE Arca Agg Lite data feed but has failed to complete and submit a Non-Display Use Declaration. In addition, the Exchange believes that it is equitable to charge a late fee to subscribers who fail to timely submit their Non-Display Use Declarations because their failure to do so leads to potentially incorrect billing and administrative burdens on the part of the Exchange. The Exchange believes it is equitable to defray these administrative costs by imposing a late fee only on subscribers’ whose declarations were late, as opposed to all subscribers. Multiple Data Feed Fee. The Exchange believes that the $200 per month per location fee to data recipients taking the NYSE Arca Agg Lite data feed in more than two locations is equitable because it would apply to all such customers, regardless of what type of business they operate or the use they make of the data feed. In addition, the Exchange believes that it is equitable to charge a fee to subscribers for taking a data feed in more than two locations because there are administrative burdens on the part of the Exchange associated with tracking each location at which a data recipient receives the product. The Exchange believes that it is equitable for it to defray these administrative costs by imposing a modest fee only on subscribers who seek to take the feed in more than two locations, as opposed to all subscribers. PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 78385 Three-Month Fee Waiver. The Exchange believes the proposal to waive the Access Fee and the Redistribution Fee for the NYSE Arca Agg Lite data feed to new Redistributors for three calendar months is equitable because it would apply to any first-time Redistributor, regardless of the use they plan to make of the feed. As proposed, any first-time Redistributor of the NYSE Arca Agg Lite data feed would not be charged the Access Fee and the Redistribution Fee for three calendar months. The Exchange believes it is equitable to restrict the availability of this three-month fee waiver to Redistributors that have not previously subscribed to and redistributed the NYSE Arca Agg Lite data feed, since customers who are current or previous subscribers of the feed are already familiar with it and are able to determine whether it suits their needs. For all of the foregoing reasons, the Exchange believes that the proposed fees for the NYSE Arca Agg Lite data feed are equitably allocated. The Proposed Fees Are Not Unfairly Discriminatory The Exchange believes the proposed fees for the NYSE Arca Agg Lite data feed are not unfairly discriminatory because any differences in the application of the fees are based on meaningful distinctions between customers, and those meaningful distinctions are not unfairly discriminatory between customers. Overall. The Exchange believes that the proposed fees are not unfairly discriminatory because they would apply to all data recipients that choose to subscribe to the NYSE Arca Agg Lite data feed. Any subscriber, including Redistributor, that chooses to subscribe to the NYSE Arca Agg Lite data feed is subject to the same Fee Schedule, regardless of what type of business they operate or the use they plan to make of the data feed. Subscribers, including Redistributors, may choose to receive the data on the NYSE Arca Agg Lite data feed regardless of what type of business they operate or the use they plan to make of the data feed. Access Fee. The Exchange believes the proposed monthly Access Fee of $1,500 for the NYSE Arca Agg Lite data feed is not unfairly discriminatory because it would be charged on an equal basis to all data recipients that receive a data feed of the NYSE Arca Agg Lite, regardless of what type of business they operate or the use they plan to make of the data feed. User Fees. The Exchange believes that the fee structure differentiating Professional User fees ($30 per month E:\FR\FM\25SEN1.SGM 25SEN1 ddrumheller on DSK120RN23PROD with NOTICES1 78386 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices per user) from Non-Professional User fees ($4 per month per user) for display device access to the NYSE Arca Agg Lite data feed is not unfairly discriminatory. This structure has long been used by the Exchange to reduce the price of data to Non-Professional Users and make it more broadly available.42 Offering the NYSE Arca Agg Lite data feed to NonProfessional Users with the same data as is available to Professional Users results in greater equity among data recipients. These user fees would be charged uniformly to all display devices that have access to the NYSE Arca Agg Lite data feed. Redistribution Fees. The Exchange believes the proposed monthly fee of $250 for redistributing the NYSE Arca Agg Lite data feed is not unfairly discriminatory because it would be charged on an equal basis to those Redistributors that choose to redistribute the feed. Enterprise Fees. The Exchange believes the proposed enterprise license will not unfairly discriminate between customers, issuers, brokers or dealers. The Act does not prohibit all distinctions among customers, but only discrimination that is unfair, and it is not unfair discrimination to charge those subscribers that are able to reach the largest audiences of investors, including retail investors, a lower fee for incremental investors in order to encourage the widespread distribution of market data. This principle has been repeatedly endorsed by the Commission, as evidenced by the approval of enterprise licenses for other market data products.43 Moreover, the proposed enterprise license will be subject to significant competition, and that competition will ensure that there is no unfair discrimination. Each subscriber will be able to accept or reject the license depending on whether it will or will not lower costs for that particular subscriber, and, if the license is not sufficiently competitive, the Exchange may lose market share. The proposed enterprise license will compete with other enterprise licenses of the Exchange, underlying fee schedules promulgated by the Exchange, and enterprise licenses and fee structures implemented by other exchanges. As such, it is a voluntary product for which market participants 42 Id. 43 See e.g., Securities Exchange Act Release No. 83751 (July 31, 2018), 83 FR 38428 (August 6, 2018) (SR–NASDAQ–2018–058) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Lower Fees and Administrative Costs for Distributors of Nasdaq Basic, Nasdaq Last Sale, NLS Plus and the Nasdaq Depth-of-Book Products Through a Consolidated Enterprise License). VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 can readily find substitutes. Accordingly, the Exchange is constrained from introducing a fee that would be inequitable or unfairly discriminatory. Non-Display Use Fees. The Exchange believes the proposed Non-Display Use fees are not unfairly discriminatory because they would require subscribers for non-display use to pay fees only for the categories of use they actually make of the data. As noted above, non-display data can be used by data recipients for a wide variety of purposes (including trading, risk management, and compliance) as well as purposes that reduce the recipient’s costs by automating certain functions. The Exchange believes that it is not unfairly discriminatory to charge non-display data subscribers a $4,500 per month fee for each category of use they make of such data—namely, using the data on their own behalf (Category 1), on behalf of their clients (Category 2), and to internally match buy and sell orders within an organization (Category 3)— because this fee structure results in subscribers with greater uses for the data paying higher fees, while subscribers with fewer uses of the data pay lower fees. This segmented fee structure is not unfairly discriminatory because no subscriber of non-display data would be charged a fee for a category of use in which it did not actually engage. The Exchange believes that it is not unreasonably discriminatory to cap nondisplay use fees for Category 3 at $13,500 per month per data recipient, because a higher monthly fee may potentially dissuade subscribers from buying the NYSE Arca Agg Lite data feed. Non-Display Use Declaration Late Fee. The Exchange believes that the proposed fee of $1,000 per month for a late Non-Display Use Declaration is not unfairly discriminatory because it applies to any data recipient that pays an Access Fee for the NYSE Arca Agg Lite data feed but has failed to complete and submit a Non-Display Use Declaration. In addition, the Exchange believes that it is not unfairly discriminatory to charge a late fee to subscribers who fail to timely submit their Non-Display Use Declarations because their failure to do so leads to potentially incorrect billing and administrative burdens on the part of the Exchange. Nor is it unfairly discriminatory for the Exchange to defray these administrative costs by imposing a late fee only on subscribers’ whose declarations were late, as opposed to all subscribers. PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 Multiple Data Feed Fee. The Exchange believes that the $200 per month per location fee to data recipients taking the NYSE Arca Agg Lite data feed in more than two locations is not unfairly discriminatory because it would apply to all such customers, regardless of what type of business they operate or the use they make of the data feed. In addition, the Exchange believes that it is not unfairly discriminatory to charge a fee to subscribers for taking a data feed in more than two locations because there are administrative burdens on the part of the Exchange associated with tracking each location at which a data recipient receives the product. The Exchange believes that it is not unfairly discriminatory for it to defray these administrative costs by imposing a modest fee only on subscribers who seek to take the feed in more than two locations, as opposed to all subscribers. Three-Month Fee Waiver. The Exchange believes the proposal to waive the Access Fee and the Redistribution Fee for the NYSE Arca Agg Lite data feed to new Redistributors for three months is not unfairly discriminatory because it would apply to any first-time Redistributor, regardless of the use they plan to make of the feed. As proposed, any first-time Redistributor of the NYSE Arca Agg Lite data feed would not be charged the Access Fee and the Redistribution Fee for three calendar months. The Exchange believes it is not unfairly discriminatory to restrict the availability of this three-month fee waiver to Redistributors that have not previously subscribed to the NYSE Arca Agg Lite data feed, since Redistributors who are current or previous subscribers of the feed are already familiar with it and are able to determine whether it suits their needs. For all of the foregoing reasons, the Exchange believes that the proposed fees for the NYSE Arca Agg Lite data feed are not unfairly discriminatory. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed fees will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Intramarket Competition. The Exchange believes that the proposed fees do not put any market participants at a relative disadvantage compared to other market participants. As noted above, the proposed fees would apply to all subscribers, including Redistributors, of the NYSE Arca Agg Lite data feed, and customers may choose whether to subscribe to the feed at all. The Exchange also believes that the E:\FR\FM\25SEN1.SGM 25SEN1 ddrumheller on DSK120RN23PROD with NOTICES1 Federal Register / Vol. 89, No. 186 / Wednesday, September 25, 2024 / Notices proposed fees neither favor nor penalize one or more categories of market participants in a manner that would impose an undue market on competition. As shown above, to the extent that particular proposed fees apply to only a subset of subscribers (e.g., Category 2 fees apply only to those making non-display use on behalf of clients; late fees apply only to customers who fail to timely submit their declarations), those distinctions are not unfairly discriminatory and do not unfairly burden one set of customers over another. To the contrary, by tailoring the proposed fees in this manner, the Exchange believes that it has eliminated the potential burden on competition that might result from unfairly asking subscribers to pay fees for services they did not use, or late fees they did not actually incur. Intermarket Competition. The Exchange believes that the proposed fees do not impose a burden on competition or on other SROs that is not necessary or appropriate. In setting the proposed fees, the Exchange is constrained by the availability of substitute partial depth of book market data products and by the fact that if its pricing is unattractive, customers will have their pick of alternative partial depth of book market data products to purchase instead of purchasing the Exchange’s products. Specifically, the Exchange believes that the proposed fees do not impose a burden on competition or on other exchanges that is not necessary or appropriate because of the availability of substitute partial depth of book market data products. Many other exchanges offer proprietary data feeds like the NYSE Arca Agg Lite data feed, supplying partial depth of book order data, security status updates, stock summary messages, and the exchange’s best bid and offer at any given time, on a real-time basis. Because market data users can find suitable substitute feeds, an exchange that overprices its market data products stands a high risk that users may purchase another market’s market data product. These competitive pressures ensure that no one exchange’s market data fees can impose an unnecessary burden on competition, and the Exchange’s proposed fees do not do so here. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. VerDate Sep<11>2014 17:28 Sep 24, 2024 Jkt 262001 78387 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 44 of the Act and subparagraph (f)(2) of Rule 19b–4 45 thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 46 of the Act to determine whether the proposed rule change should be approved or disapproved. 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–NYSEARCA–2024–75 and should be submitted on or before October 16, 2024. 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.47 Sherry R. Haywood, Assistant Secretary. 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– NYSEARCA–2024–75 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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–NYSEARCA–2024–75. 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 44 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 46 15 U.S.C. 78s(b)(2)(B). [FR Doc. 2024–21881 Filed 9–24–24; 8:45 am] BILLING CODE 8011–01–P [Investment Company Act Release No. 35327; 812–15598] T. Rowe Price OHA Flexible Credit Income Fund and OHA Private Credit Advisors II, L.P. September 19, 2024. Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’). AGENCY: ACTION: Notice. Notice of an application under section 6(c) of the Investment Company Act of 1940 (the ‘‘Act’’) for an exemption from sections 18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and 23(c) of the Act for an exemption from rule 23c–3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d– 1 under the Act. Applicants request an order to permit certain registered closed-end investment companies to issue multiple classes of shares and to impose asset-based distribution and/or service fees and early withdrawal charges. SUMMARY OF APPLICATION: 45 17 PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 47 17 E:\FR\FM\25SEN1.SGM CFR 200.30–3(a)(12). 25SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 89, Number 186 (Wednesday, September 25, 2024)]
[Notices]
[Pages 78378-78387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-21881]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101110; File No. SR-NYSEARCA-2024-75]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Establish Fees
for the NYSE Arca Aggregated Lite Data Feed

September 19, 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 September 6, 2024, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to establish fees for the NYSE Arca
Aggregated Lite data feed. The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
The Exchange proposes to amend the NYSE Arca Equities Proprietary
Market Data Fees Schedule (``Fee Schedule'') and establish fees for the
NYSE Arca Aggregated Lite (``NYSE Arca Agg Lite'') data feed,\4\
effective September 6, 2024.\5\
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\4\ The proposed rule change establishing the NYSE Arca Agg Lite
data feed was immediately effective on February 27, 2024. See
Securities Exchange Act Release No. 99713 (March 12, 2024), 89 FR
19381 (March 18, 2024) (SR-NYSEARCA-2024-22) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Establish the
NYSE Arca Aggregated Lite Market Data Feed).
\5\ The Exchange originally filed to amend the Fee Schedule on
May 13, 2024 (SR-NYSEARCA-2024-39). On July 11, 2024, the Exchange
withdrew SR-NYSEARCA-2024-39 and replaced it with SR-NYSEARCA-2024-
60. On September 6, the Exchange withdrew SR-NYSEARCA-2024-60 and
replaced it with this filing.
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In summary, the NYSE Arca Agg Lite is a NYSE Arca-only frequency-
based depth of book market data feed of the NYSE Arca's limit order
book for up to ten (10) price levels on both the bid and offer sides of
the order book for securities traded on the Exchange and for which the
Exchange reports quotes and trades under the Consolidated Tape
Association (``CTA'') Plan or the Nasdaq/UTP Plan. The NYSE Arca Agg
Lite is a compilation of limit order data that the Exchange provides to
vendors and subscribers. The NYSE Arca Agg Lite includes partial depth
of book order data as well as security status messages. The security
status message informs subscribers of changes in the status of a
specific security, such as trading halts, short sale restriction, etc.
In addition, the NYSE Arca Agg Lite includes order imbalance
information prior to the opening and closing of trading.

[[Page 78379]]

Background
The Exchange operates in a highly competitive market. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. 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.'' \6\
---------------------------------------------------------------------------

\6\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (File No. S7-10-04) (Final
Rule) (``Regulation NMS'').
---------------------------------------------------------------------------

While Regulation NMS has enhanced competition, it has also fostered
a ``fragmented'' market structure where trading in a single stock can
occur across multiple trading centers. When multiple trading centers
compete for order flow in the same stock, the Commission has recognized
that ``such competition can lead to the fragmentation of order flow in
that stock.'' \7\ Indeed, cash equity trading is currently dispersed
across 16 exchanges,\8\ numerous alternative trading systems,\9\ and
broker-dealer internalizers and wholesalers, all competing for order
flow. Based on publicly-available information, no single exchange
currently has more than 20% market share (whether including or
excluding auction volume).\10\
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\7\ See Securities Exchange Act Release No. 61358, 75 FR 3594,
3597 (January 21, 2010) (File No. S7-02-10) (Concept Release on
Equity Market Structure).
\8\ See Cboe U.S Equities Market Volume Summary, available at
https://markets.cboe.com/us/equities/market_share. See generally
https://www.sec.gov/fastanswers/divisionsmarketregmrexchangesshtml.html.
\9\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of
alternative trading systems registered with the Commission is
available at https://www.sec.gov/foia/docs/atslist.htm.
\10\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at https://markets.cboe.com/us/equities/market_share/.
---------------------------------------------------------------------------

Proposed NYSE Arca Agg Lite Data Feed Fees
The Exchange proposes to establish the fees listed below for the
NYSE Arca Agg Lite data feed. The Exchange proposes to charge fees for
the same categories of market data use as its affiliated exchanges
(namely, NYSE, NYSE American and NYSE National) currently charge. The
Exchange believes that adopting the same fee structure as its
affiliated exchanges would reduce administrative burdens on market data
subscribers that also currently subscribe to market data feeds from the
Exchange's affiliates.
1. Access Fee. For the receipt of access to the NYSE Arca Agg Lite
data feed, the Exchange proposes to charge $1,500 per month. This
proposed Access Fee would be charged to any data recipient that
receives the NYSE Arca Agg Lite data feed. Data recipients that only
use display devices to view NYSE Arca Agg Lite market data and do not
separately receive a data feed would not be charged an Access Fee. The
proposed Access Fee would be charged only once per firm.
2. User Fees. The Exchange proposes to charge a Professional User
Fee (Per User) of $30 per month and a Non-Professional User Fee (Per
User) of $4 per month. These user fees would apply to each display
device that has access to the NYSE Arca Agg Lite data feed.
3. Redistribution Fee. For redistribution of the NYSE Arca Agg Lite
data feed, the Exchange proposes to establish a fee of $250 per month.
The proposed Redistribution Fee would be charged to any Redistributor
of the NYSE Arca Agg Lite data feed, which is defined to mean a vendor
or any person that provides a real-time NYSE Arca market data product
externally to a data recipient that is not its affiliate or wholly-
owned subsidiary, or to any system that an external data recipient
uses, irrespective of the means of transmission or access. The proposed
Redistribution Fee would be charged only once per Redistributor
account. As an incentive to potential Redistributors to subscribe to
the NYSE Arca Agg Lite data feed, the Exchange proposes to waive the
Access Fee and Redistribution Fee for a Redistributor if the
Redistributor provides NYSE Arca Agg Lite externally to at least one
data feed recipient and reports such data feed recipient or recipients
to the Exchange. For example, a Redistributor that subscribes to the
NYSE Arca Agg Lite data feed will have the Access Fee and
Redistribution Fee waived if such Redistributor provides NYSE Arca Agg
Lite externally to at least one data feed recipient and reports such
data feed recipient to the Exchange.
By targeting this proposed fee waiver to Redistributors that
provide external distribution of NYSE Arca Agg Lite, the Exchange
believes that this would provide an incentive for Redistributors to
make the NYSE Arca Agg Lite market data product available to its
customers. Specifically, if a data recipient is interested in
subscribing to NYSE Arca Agg Lite and relies on a Redistributor to
obtain market data products from the Exchange, that data recipient
would need its Redistributor to subscribe to and redistribute NYSE Arca
Agg Lite. The Exchange believes that this proposed fee waiver for
Redistributors of NYSE Arca Agg Lite would provide an incentive for
Redistributors to make NYSE Arca Agg Lite available to their customers,
which will increase the availability of the Exchange's market data
products to a larger potential population of data recipients.
Further, the Exchange proposes to adopt a credit that would be
applicable to Redistributors that provide external distribution of NYSE
Arca Agg Lite to Professional and Non-Professional Users. As proposed,
such Redistributors would receive a credit equal to the amount of the
monthly Professional User and Non-Professional User Fees for such
external distribution, up to a maximum of the combination of the Access
Fee and Redistribution Fee for NYSE Arca Agg Lite that the
Redistributor would otherwise be required to pay to the Exchange. For
example, a Redistributor that reports external Professional Users and
Non-Professional Users in a month totaling $1,750 or more would receive
a maximum credit of $1,750 for that month, which could effectively
reduce its monthly fee for access and redistribution to zero. If that
same Redistributor were to report external User quantities in a month
totaling $600 of monthly usage, that Redistributor would receive a
credit of $600. The Exchange believes the proposed credit would provide
Redistributors with an incentive to increase their redistribution of
NYSE Arca Agg Lite because the credit they would be eligible to receive
would increase if they report additional external User quantities.
4. Enterprise Fees. The Exchange proposes to establish an
enterprise license that will reduce Exchange fees and administrative
costs for subscribers that disseminate NYSE Arca Agg Lite. Subscribers
that are broker-dealers will be able to distribute the NYSE Arca Agg
Lite data feed for display usage to an unlimited number of non-
professional users for a monthly fee of $35,000, with an opportunity to
lower that fee to $31,500 per month if they contract for twelve months
of service in advance. Alternatively, subscribers that are broker-
dealers will be able to distribute the NYSE Arca Agg Lite data feed for
display usage to an unlimited number of recipients (professional users
and non-professional users) for a monthly fee of $110,000, with an
opportunity to lower that fee to $99,000 per month if they contract for
twelve months of service in advance.

[[Page 78380]]

As proposed, the NYSE Arca Agg Lite data feed may be distributed
pursuant to the proposed market data enterprise license only for
display usage and in the context of a brokerage relationship with a
broker-dealer through such broker-dealer's own devices. Purchase of an
enterprise license would eliminate per User subscriber fees for NYSE
Arca Agg Lite. Further, the Exchange proposes to waive the Access Fee
and the Redistribution Fee for NYSE Arca Agg lite for Redistributors
that pay either the Non-Professional Enterprise Fee or the Professional
and Non-Professional Enterprise Fee. The Exchange believes the proposed
fee waiver would provide an incentive for Redistributors to subscribe
to the NYSE Arca Agg Lite market data product at the enterprise level
to reduce the fees it would pay to the Exchange and without having to
report the number of users that receive the data feed from the
Redistributor.
Subscribers that intend to purchase a market data enterprise
license for at least twelve months may elect to purchase this product
in advance for a monthly fee of $31,500 for distribution of NYSE Arca
Agg Lite to an unlimited number of non-professional users, or $99,000
per month for distribution to an unlimited number of professional users
and non-professional users. This feature is intended to simplify cost
projections and budgeting for both subscribers and the Exchange.
Subscribers that elect not to purchase this particular feature will
nevertheless be able to obtain all of the market data information
offered by NYSE Arca Agg Lite by paying the standard fee of $35,000 per
month for distribution of NYSE Arca Agg Lite to an unlimited number of
non-professional users, or $110,000 per month for distribution to an
unlimited number of professional users and non-professional users.
Subscribers that elect to pay the monthly fee will be able to switch to
the annual fee at any time, and those that elect to purchase the annual
contract would be able to change to the monthly contract, with notice,
at the end of the twelve-month period.
The Exchange believes that the proposed market data enterprise
license will reduce exchange fees, lower administrative costs for
subscribers, and help expand the availability of market information to
investors, and thereby increase participation in financial markets.
5. Non-Display Use Fees. The Exchange proposes to establish non-
display fees for the NYSE Arca Agg Lite data feed that are based on the
non-display use categories charged by NYSE, NYSE American, NYSE
National, the CTA, and the UTP Plan for non-display use.\11\ Non-
display use would mean accessing, processing, or consuming the NYSE
Arca Agg Lite data feed delivered directly or through a Redistributor,
for a purpose other than in support of a data recipient's display or
further internal or external redistribution (``Non-Display Use''). Non-
Display Use would include trading uses such as high frequency or
algorithmic trading as well as any trading in any asset class,
automated order or quote generation and/or order pegging, price
referencing for algorithmic trading or smart order routing, operations
control programs, investment analysis, order verification, surveillance
programs, risk management, compliance, and portfolio management.
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\11\ See Endnote 1 to the NYSE Proprietary Market Data Fees,
available here: https://www.nyse.com/publicdocs/nyse/data/NYSE_Market_Data_Fee_Schedule.pdf; Endnote 1 to the NYSE American
LLC Equities Proprietary Market Data Fees, available here: https://www.nyse.com/publicdocs/nyse/data/NYSE_American_Equities_Market_Data_Fee_Schedule.pdf; Endnote 1 to
the NYSE National Equities Proprietary Market Data Fees, available
here: https://www.nyse.com/publicdocs/nyse/data/NYSE_National_Market_Data_Fee_Schedule.pdf; Endnote 8 to the
Schedule of Market Data Charges for the CTA, available here: https://www.ctaplan.com/publicdocs/ctaplan/notifications/trader-update/Schedule%20Of%20Market%20Data%20Charges%20-%20January%201,%202015.pdf; and Non-Display Usage Fees as set forth
in the UTP Plan Fee Schedule and Non-Display Policy, available here:
https://utpplan.com/DOC/Datapolicies.pdf. See, e.g., Securities
Exchange Act Release Nos. 69315 (April 5, 2013), 78 FR 21668 (April
11, 2013) (SR-NYSEArca-2013-37) and 73011 (September 5, 2014), 79 FR
54315 (September 11, 2014) (SR-NYSEARCA-2014-93).
---------------------------------------------------------------------------

Under the proposal, for Non-Display Use of NYSE Arca Agg Lite,
there would be three categories of, and fees applicable, to data
recipients. One, two, or three categories of Non-Display Use may apply
to a data recipient.
As proposed, the Category 1 Fee would be $4,500 per month
and would apply when a data recipient's Non-Display Use of the NYSE
Arca Agg Lite data feed is on its own behalf, not on behalf of its
clients.
As proposed, Category 2 Fees would be $4,500 per month and
would apply to a data recipient's Non-Display Use of the NYSE Arca Agg
Lite data feed on behalf of its clients.
As proposed, Category 3 Fees would be $4,500 per month and
would apply to a data recipient's Non-Display Use of the NYSE Arca Agg
Lite data feed for the purpose of internally matching buy and sell
orders within an organization, including matching customer orders for a
data recipient's own behalf and/or on behalf of its clients. This
category would apply to Non-Display Use in trading platforms, such as,
but not restricted to, alternative trading systems (``ATSs''), broker
crossing networks, broker crossing systems not filed as ATSs, dark
pools, multilateral trading facilities, exchanges and systematic
internalization systems. A data recipient will be charged $4,500 per
month for each platform on which it uses the Non-Display data
internally to match buy and sell orders, up to a cap of $13,500 per
month; even if the data recipient uses the NYSE Arca Agg Lite data feed
for more than three platforms, it will not pay more than $13,500 for
such Category 3 use per month.
The description of the three non-display use categories is set
forth in the Fee Schedule in endnote 1 and that endnote would be
referenced in the NYSE Arca Agg Lite data feed fees on the Fee
Schedule. The text in the endnote would remain unchanged.
Data recipients that receive the NYSE Arca Agg Lite data feed for
Non-Display Use would be required to complete and submit a Non-Display
Use Declaration before they would be authorized to receive the feed. A
firm subject to Category 3 Fees would be required to identify each
platform that uses the NYSE Arca Agg Lite data feed for a Category 3
Non-Display Use basis, such as ATSs and broker crossing systems not
registered as ATSs, as part of the Non-Display Use Declaration.
6. Non-Display Use Declaration Late Fee. Data recipients that
receive the NYSE Arca Agg Lite data feed for Non-Display Use would be
required to complete and submit a Non-Display Use Declaration before
they would be authorized to receive the feed. Beginning in 2025, NYSE
Arca Agg Lite data feed recipients would be required to submit, by
January 31 of each year, the Non-Display Use Declaration. The
requirement to submit a Non-Display Use Declaration applies to all
real-time NYSE Arca data feed product recipients. The Exchange proposes
to charge a Non-Display Use Declaration Late Fee of $1,000 per month to
any data recipient that pays an Access Fee for the NYSE Arca Agg Lite
data feed that has failed to timely complete and submit a Non-Display
Use Declaration. Specifically, with respect to the Non-Display Use
Declaration due by January 31 of each year, the Non-Display Use
Declaration Late Fee would apply to data recipients that fail to
complete and submit the Non-Display Use Declaration by the January 31
due date, and would apply beginning February 1 and for each month
thereafter until the data recipient has completed and submitted the
annual Non-Display Use Declaration.
The proposed Non-Display Use Declaration Late Fee applicable to
NYSE Arca Agg Lite data feed would be set

[[Page 78381]]

forth in endnote 2 on the Fee Schedule. As proposed, endnote 2 would be
amended with the proposed addition of the following new text: ``The
Non-Display Declaration Late Fee will apply, beginning in 2025, to NYSE
Arca Aggregated Lite data recipients that fail to complete and submit
the annual Non-Display Use Declaration by the January 31st due date,
and applies beginning February 1st and for each month thereafter until
the data recipient has completed and submitted the annual Non-Display
use Declaration.''
In addition, if a data recipient's use of the NYSE Arca Agg Lite
data feed changes at any time after the data recipient submits a Non-
Display Use Declaration, the data recipient must inform the Exchange of
the change by completing and submitting at the time of the change an
updated declaration reflecting the change of use.
7. Multiple Data Feed Fee. The Exchange proposes to establish a
monthly fee, the ``Multiple Data Feed Fee,'' that would apply to data
recipients that take a data feed for a market data product in more than
two locations. Data recipients taking the NYSE Arca Agg Lite data feed
in more than two locations would be charged $200 per additional
location per month. No new reporting would be required.\12\
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\12\ Data vendors currently report a unique Vendor Account
Number for each location at which they provide a data feed to a data
recipient. The Exchange considers each Vendor Account Number a
location. For example, if a data recipient has five Vendor Account
Numbers, representing five locations, for the receipt of the NYSE
Arca Agg Lite data feed, that data recipient will pay the Multiple
Data Feed fee with respect to three of the five locations.
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8. Three-Month Fee Waiver. The Exchange currently provides a one-
month free trial to any firm that subscribes to a particular NYSE Arca
market data product for the first time. Under the current one-month
trial, a first-time subscriber is not charged the Access Fee, Non-
Display Fee, any applicable Professional and Non-Professional User Fee
and Redistribution Fee for one calendar month.\13\ The Exchange now
proposes an additional three-month fee waiver for any Redistributor
that subscribes to a particular NYSE Arca market data product for the
first time for external redistribution. As proposed, a first-time
Redistributor would be any firm that has not previously subscribed to
and externally redistributed a particular NYSE Arca market data product
listed on the Fee Schedule. As proposed, a first-time Redistributor
that subscribes to a particular NYSE Arca market data product would not
be charged the Access Fee and the Redistribution Fee for that product
for three calendar months. Any other fees, including but not limited
to, Non-Display Fee, any applicable Professional and Non-Professional
User Fee, and Enterprise Fee would be billable after the first calendar
month after a first-time Redistributor subscribes to a particular NYSE
Arca market data product. For example, a first-time Redistributor that
chooses to subscribe to NYSE Arca Agg Lite on September 24, 2024 would
not be charged the Access Fee and the Redistribution Fee for the months
of October, November, and December 2024. The proposed fee waiver would
be for the three calendar months following the date a Redistributor is
approved to receive access to the particular NYSE Arca market data
product. The Exchange would provide the three-month fee waiver for each
particular product to each Redistributor once.
---------------------------------------------------------------------------

\13\ See Fee Schedule.
---------------------------------------------------------------------------

The Exchange believes that providing a three-month fee waiver to
NYSE Arca market data products listed on the Fee Schedule would enable
potential Redistributors to determine whether a particular NYSE Arca
market data product is useful to their business models before fully
committing to expend development and implementation costs related to
the receipt of that product, and is intended to encourage increased use
of the Exchange's market data products by defraying some of the
development and implementation costs Redistributors would ordinarily
have to expend before using a product. The proposed three-month fee
waiver would also provide Redistributors with time to begin onboarding
new clients prior to being liable to the Access Fee and the
Redistribution Fee, allowing time to choose how to allocate costs and
increase revenues to defray costs associated with providing a new feed
to its customers.
Application of Proposed Fees
The Exchange is not required to make the NYSE Arca Agg Lite data
feed available or to offer any specific pricing alternatives to any
customers, nor is any firm required to purchase the NYSE Arca Agg Lite
data feed. Firms that choose to purchase the NYSE Arca Agg Lite data
feed do so for the primary goals of using it to increase their
revenues, reduce their expenses, and in some instances to compete
directly with the Exchange (including for order flow). Those firms are
able to determine for themselves whether or not the NYSE Arca Agg Lite
data feed or any other similar products are attractively priced.
The Exchange believes the proposed rule change would provide an
incentive both for data subscribers to subscribe to NYSE Arca Agg Lite
and for Redistributors to subscribe to the product for purposes of
providing external distribution of NYSE Arca Agg Lite. The Exchange
believes that this proposed rule change also has the potential to
attract new Redistributors for NYSE Arca Agg Lite.
The proposed fee structure is not novel as it is based on the fee
structure currently in place for the NYSE ArcaBook feed. The Exchange
is proposing fees for the NYSE Arca Agg Lite data feed that are based
on the existing fee structure and rates that data recipients already
pay for the NYSE ArcaBook feed. Specifically, the fees for the NYSE
ArcaBook feed--which like the NYSE Arca Agg Lite data feed, includes
depth of book, auction imbalances, and security status messages--
consist of an Access Fee of $2,000 per month, a Professional User Fee
(Per User) of $60 per month, a Non-Professional User Fee (Per User)
that ranges between $3 per month to $10 per month, Non-Display Fees
\14\ of $6,000 per month for each of Categories 1, 2 and 3, and a
Redistribution Fee of $2,000 per month. The Exchange also charges a
Non-Display Use Declaration Late Fee of $1,000 per month and a Multiple
Data Feed Fee of $200 per month for NYSE ArcaBook.\15\
---------------------------------------------------------------------------

\14\ The Exchange does not anticipate that data recipients would
use NYSE Arca Agg Lite for non-display purpose. However, the
Exchange is adopting Non-Display use fees so that the proposed fees
for NYSE Arca Agg Lite are consistent with the Exchange's fee
structure for its other proprietary market data products.
\15\ See NYSE Arca Equities Proprietary Market Data Fees at
https://www.nyse.com/publicdocs/nyse/data/NYSE_Arca_Equities_Proprietary_Data_Fee_Schedule.pdf.
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\16\ in general, and
Sections 6(b)(4) and 6(b)(5) of the Act,\17\ in particular, in that it
provides an equitable allocation of reasonable fees among users and
recipients of the data and is not designed to permit unfair
discrimination among customers, issuers, and brokers.
---------------------------------------------------------------------------

\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(4), (5).
---------------------------------------------------------------------------

The Proposed Rule Change Is Reasonable
In adopting Regulation NMS, the Commission granted SROs and broker-
dealers increased authority and flexibility to offer new and unique

[[Page 78382]]

market data to the public. 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.'' \18\
---------------------------------------------------------------------------

\18\ See Regulation NMS Adopting Release, 70 FR 37495, at 37499.
---------------------------------------------------------------------------

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

In fact, the legislative history indicates that the Congress
intended that the market system ``evolve through the interplay of
competitive forces as unnecessary regulatory restrictions are
removed'' and that the SEC wield its regulatory power ``in those
situations where competition may not be sufficient,'' such as in the
creation of a ``consolidated transactional reporting system.'' \19\
---------------------------------------------------------------------------

\19\ NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. Cir. 2010)
(``NetCoalition I'') (quoting H.R. Rep. No. 94-229 at 92 (1975), as
reprinted in 1975 U.S.C.C.A.N. 323).

The court agreed with the Commission's conclusion that ``Congress
intended that `competitive forces should dictate the services and
practices that constitute the U.S. national market system for trading
equity securities.' '' \20\
---------------------------------------------------------------------------

\20\ Id. at 535.
---------------------------------------------------------------------------

More recently, the Commission confirmed that it applies a ``market-
based'' test in its assessment of market data fees, and that under that
test:

the Commission considers whether the exchange was subject to
significant competitive forces in setting the terms of its proposal
for [market data], including the level of any fees. If an exchange
meets this burden, the Commission will find that its fee rule is
consistent with the Act unless there is a substantial countervailing
basis to find that the terms of the rule violate the Act or the
rules thereunder.\21\
---------------------------------------------------------------------------

\21\ See Securities Exchange Act Release No. 34-90217 (October
16, 2020), 85 FR 67392 (October 22, 2020) (SR-NYSENAT-2020-05)
(``National IF Approval Order'') (internal quotation marks omitted),
quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74781 (December 9, 2008).

As discussed below, the Exchange believes that its proposed fees
are constrained by competitive forces.
As the D.C. Circuit recognized in NetCoalition I, ``[n]o one
disputes that competition for order flow is fierce.'' \22\ The court
further noted that ``no exchange possesses a monopoly, regulatory or
otherwise, in the execution of order flow from broker dealers,'' and
that an exchange ``must compete vigorously for order flow to maintain
its share of trading volume.'' \23\
---------------------------------------------------------------------------

\22\ NetCoalition I, 615 F.3d at 544 (internal quotation
omitted).
\23\ Id.
---------------------------------------------------------------------------

As noted above, while Regulation NMS has enhanced competition, it
has also fostered a ``fragmented'' market structure where trading in a
single stock can occur across multiple trading centers. When multiple
trading centers compete for order flow in the same stock, the
Commission has recognized that ``such competition can lead to the
fragmentation of order flow in that stock.'' \24\ Indeed, today, equity
trading is currently dispersed across 16 exchanges,\25\ numerous
alternative trading systems,\26\ broker-dealer internalizers and
wholesalers, all competing for order flow. Based on publicly-available
information, no single exchange currently has more than 20% market
share.\27\
---------------------------------------------------------------------------

\24\ See Securities Exchange Act Release No. 61358, 75 3594,
3597 (January 21, 2010) (File No. S7-02-10) (Concept Release on
Equity Market Structure).
\25\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at https://markets.cboe.com/us/equities/market_share/.
\26\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of
alternative trading systems registered with the Commission is
available at https://www.sec.gov/foia/docs/atslist.htm.
\27\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at https://markets.cboe.com/us/equities/market_share/.
---------------------------------------------------------------------------

Further, low barriers to entry mean that new exchanges may rapidly
and inexpensively enter the market to compete with the Exchange. For
example, since 2020, three new ones have entered the market: Long Term
Stock Exchange (LTSE), which began operations as an exchange on August
28, 2020; \28\ Members Exchange (MEMX), which began operations as an
exchange on September 29, 2020; \29\ and Miami International Holdings
(MIAX), which began operations of its first equities exchange on
September 29, 2020.\30\
---------------------------------------------------------------------------

\28\ See LTSE Market Announcement: MA-2020-020, dated August 14,
2020, announcing LTSE production securities phase-in planned for
August 28, available here: https://assets-global.website-files.com/6462417e8db99f8baa06952c/6462417e8db99f8baa0698e7_MA-2020-020__Production_Securities_Launching_August_28_-_Google_Docs.pdf and
LTSE Market Announcement: MA-2020-025, available here: https://assets-global.website-files.com/6462417e8db99f8baa06952c/6462417e8db99f8baa069873_MA-2020-025.pdf.
\29\ As of October 29, 2020, MEMX is trading all NMS symbols.
See https://info.memxtrading.com/trader-alert-20-10-memx-trading-symbols-update/.
\30\ See MIAX Pearl Press release, dated September 29, 2020,
available here: https://www.miaxoptions.com/sites/default/files/alert-files/MIAX_Press_Release_09292020.pdf.
---------------------------------------------------------------------------

More specifically, in setting fees for the NYSE Arca Agg Lite data
feed, the Exchange is constrained by the fact that, if its pricing is
unattractive to customers, customers have their pick of alternatives to
purchase similar data from instead of purchasing it from the Exchange.
The existence of alternatives to the Exchange's data product ensures
that the Exchange cannot set unreasonable market data fees without
suffering the negative effects of that decision in the fiercely
competitive market for proprietary partial depth of book market data.
The Exchange notes that the NYSE Arca Agg Lite is entirely
optional. The Exchange is not required to make the NYSE Arca Agg Lite
available to any customers, nor is any customer required to purchase
the NYSE Arca Agg Lite market data feed. Unlike some other data
products (e.g., the consolidated quotation and last-sale information
feeds) that firms are required to purchase in order to fulfil
regulatory obligations,\31\ a customer's decision whether to purchase
the NYSE Arca Agg Lite is entirely discretionary. The Exchange believes
NYSE Arca Agg Lite would provide high-quality, comprehensive partial
depth of book data that an anticipated end user might use for purposes
of identifying an indicative price of Tape A, B and C securities
without having to purchase consolidated data and thus it would not be a
latency-sensitive product. The Exchange does not anticipate that an end
user would, or could, use NYSE Arca Agg Lite data for purposes of
making order-routing or trading decisions. Firms that choose to
subscribe to NYSE Arca Agg Lite are able to determine for themselves
whether the NYSE Arca Agg Lite data feed is necessary for their
business needs, and if so, whether or not it is attractively priced. If
the NYSE Arca Agg Lite data feed does not provide sufficient benefit to
firms based on the uses those firms may have for it, such firms may
simply choose to conduct

[[Page 78383]]

their business operations in ways that do not use the NYSE Arca Agg
Lite data feed.
---------------------------------------------------------------------------

\31\ The Exchange notes that broker-dealers are not required to
purchase proprietary market data to comply with their best execution
obligations. See In the Matter of the Application of Securities
Industry and Financial Markets Association for Review of Actions
Taken by Self-Regulatory Organizations, Release Nos. 34-72182; AP-3-
15350; AP-3-15351 (May 16, 2014). Similarly, there is no requirement
in Regulation NMS or any other rule that proprietary data be
utilized for order routing decisions, and some broker-dealers and
ATSs have chosen not to do so.
---------------------------------------------------------------------------

In setting the proposed fees for the NYSE Arca Agg Lite data feed,
the Exchange considered the competitiveness of the market for
proprietary partial depth of book data and all of the implications of
that competition. The Exchange believes that it has considered all
relevant factors and has not considered irrelevant factors in order to
establish reasonable fees. The proposed fees are therefore reasonable
because in setting them, the Exchange is constrained by the
availability of substitute partial depth of book market data products.
The Commission has been clear that substitute products need not be
identical, but only substantially similar to the product at hand.\32\
---------------------------------------------------------------------------

\32\ For example, in the National IF Approval Order, the
Commission recognized that for some customers, the best bid and
offer information from consolidated data feeds may function as a
substitute for the NYSE National Integrated Feed product, which
contains order by order information. See National IF Approval Order,
supra note 21, at 67397 [release p. 21] (``[I]nformation provided by
NYSE National demonstrates that a number of executing broker-dealers
do not subscribe to the NYSE National Integrated Feed and executing
broker-dealers can otherwise obtain NYSE National best bid and offer
information from the consolidated data feeds.'' (internal quotations
omitted)).
---------------------------------------------------------------------------

The NYSE Arca Aggregated Lite market data feed is subject to
significant competitive forces that constrain its pricing.
Specifically, the NYSE Arca Agg Lite data feed competes head-to-head
with similar market data products currently offered by the four U.S.
equities exchanges operated by Cboe Exchange, Inc.--Cboe BZX Exchange,
Inc. (``BZX''), Cboe BYX Exchange, Inc. (``BYX''), Cboe EDGA Exchange,
Inc. (``EDGA''), and Cboe EDGX Exchange, Inc. (``EDGX''), each of which
offers a market data product called BZX Summary Depth, BYX Summary
Depth, EDGA Summary Depth and EDGX Summary Depth, respectively
(collectively, the ``Cboe Summary Depth'').\33\ Similar to Cboe Summary
Depth, NYSE Arca Agg Lite can be utilized by vendors and subscribers to
quickly access and distribute aggregated order book data. As noted
above, NYSE Arca Agg Lite, similar to Cboe Summary Depth, would provide
aggregated depth per security, including the bid, ask and share
quantity for orders received by NYSE Arca, except unlike Cboe Summary
Depth, which provides aggregated depth per security for up to five
price levels, NYSE Arca Agg Lite would provide aggregated depth per
security for up to ten price levels on both the bid and offer sides of
the NYSE Arca limit order book as well as auction imbalance data.
---------------------------------------------------------------------------

\33\ See BZX Rule 11.22(m) BZX Summary Depth; BYX Rule 11.22(k)
BYX Summary Depth; EDGA Rule 13.8(f) EDGA Summary Depth; and EDGX
Rule 13.8(f) EDGX Summary Depth. The Cboe Summary Depth offered by
BZX, BYX, EDGA and EDGX are each a data feed that offers aggregated
two-sided quotations for all displayed orders for up to five (5)
price levels and contains the individual last sale information,
market status, trading status and trade break messages.
---------------------------------------------------------------------------

The specific fees that the Exchange proposes for the NYSE Arca Agg
Lite data feed are reasonable for the following additional reasons.
Overall. The Exchange believes that the proposed fees for the NYSE
Arca Agg Lite data feed are reasonable because they would provide
vendors and subscribers with the option to subscribe to a market data
product that integrates a subset of data from existing products and
where such aggregated data is published at a pre-defined interval, thus
lowering bandwidth, infrastructure and operational requirements.
The Exchange believes the proposed fees for the NYSE Arca Agg Lite
data feed are also reasonable when compared to fees for comparable
products, such as the Cboe Summary Depth.\34\ Additionally, the
Exchange is proposing fees for the NYSE Arca Agg Lite data feed that
are based on the existing fee structure that data recipients already
pay for the NYSE Arca's other market data products. The Exchange
believes that adopting the same fee structure would reduce
administrative burdens on NYSE Arca data subscribers that also
currently subscribe to market data feeds from NYSE Arca.
---------------------------------------------------------------------------

\34\ See https://cdn.cboe.com/resources/membership/US_Market_Data_Product_Price_List.pdf.
---------------------------------------------------------------------------

Access Fee. The Exchange believes that the proposed monthly Access
Fee of $1,500 for the NYSE Arca Aggregated Lite data feed is reasonable
because it is lower than the fees charged by BZX, BYX, EDGA, and EDGX,
each of which charges between $2,500 per month to $5,000 per month for
both Internal Distribution and External Distribution of the Cboe
Summary Depth market data product.\35\
---------------------------------------------------------------------------

\35\ Id.
---------------------------------------------------------------------------

User Fees. The Exchange believes that having separate Professional
and Non-Professional User fees for the NYSE Arca Agg Lite data feed is
reasonable because it will make the product more affordable and result
in greater availability to Professional and Non-Professional Users.
Setting a modest Non-Professional User fee is reasonable because it
provides an additional method for Non-Professional Users to access the
NYSE Arca Agg Lite data feed by providing the same data that is
available to Professional Users. The proposed monthly Professional User
Fee (Per User) of $30 and monthly Non-Professional User Fee (Per User)
of $4 are reasonable because they are comparable to user fees generally
charged by exchanges. For example, NYSE Arca charges a monthly
Professional User Fee (Per User) of $60 and a monthly Non-Professional
User Fee (Per User) of up to $10 for the NYSE ArcaBook feed.\36\
Although the proposed User Fees for Professional and Non-Professional
Users are higher than those charged by BZX, BYX, EDGA and EDGX, the
Exchange notes that User fees are only a subset of the total fees that
vendors and subscribers pay and the lower fees proposed to access and
redistribute NYSE Arca Agg Lite would provide such market data
recipients with a more affordable alternative to existing substitutes
offered by the Exchange and its competitors.
---------------------------------------------------------------------------

\36\ See Fee Schedule.
---------------------------------------------------------------------------

Redistribution Fees. The Exchange believes that charging a
Redistribution Fee is reasonable because the vendors that would be
charged such a fee profit by re-transmitting the Exchange's market data
to their customers. This fee would be charged only once per month to
each vendor account that redistributes the NYSE Arca Agg Lite data
feed, regardless of the number of customers to which that vendor
redistributes the data. The Exchange believes the proposed monthly
Redistribution Fee of $250 for the NYSE Arca Agg Lite data feed is
reasonable because it is nominal and lower than the fees charged by
BZX, BYX, EDGA and EDGX, each of which charges considerably more for
both Internal Distribution and External Distribution of the Cboe
Summary Depth market data feed.\37\
---------------------------------------------------------------------------

\37\ See supra, note 34.
---------------------------------------------------------------------------

Enterprise Fees. The Exchange believes the proposed enterprise
license is reasonable because it would reduce exchange fees, lower
administrative costs for subscribers that are broker-dealers and help
expand the availability of market information to investors, and thereby
increase participation in financial markets. Subscribers that are
broker-dealers would be able to disseminate the NYSE Arca Agg Lite data
feed for display usage to an unlimited number of non-professional users
for a monthly fee of $35,000, or $31,500 if they contract for twelve
months of service in advance. Alternatively, subscribers that are
broker-dealers would be able to disseminate the NYSE Arca Agg Lite

[[Page 78384]]

data feed for display usage to an unlimited number of professional
users and non-professional users for a monthly fee of $110,000, or
$99,000 if they contract for twelve months of service in advance. The
proposed enterprise license would result in lower fees for subscribers
able to reach the largest audience of investors, including retail
investors. Discounts for broader dissemination of market data
information have routinely been adopted by exchanges and permitted by
the Commission as equitable allocations of reasonable dues, fees and
charges.\38\
---------------------------------------------------------------------------

\38\ For example, the Commission has permitted pricing discounts
for market data under Nasdaq Rules 7023(c) and 7047(b). See also
Securities Exchange Act Release No. 82182 (November 30, 2017), 82 FR
57627 (December 6, 2017) (SR-NYSE-2017-60) (changing an enterprise
fee for NYSE BBO and NYSE Trades).
---------------------------------------------------------------------------

Non-Display Use Fees. Non-display data can be used by data
recipients for a wide variety of uses, including proprietary and agency
trading and smart order routing, as well as by data recipients that
operate order matching and execution platforms. Non-display data also
can be used for a variety of non-trading purposes that indirectly
support trading, such as risk management and compliance. Although some
of these non-trading uses do not directly generate revenues, they can
nonetheless substantially reduce a recipient's costs by automating such
functions so that they can be carried out in a more efficient and
accurate manner and reduce errors and labor costs, thereby benefiting
recipients. The Exchange believes that charging for non-trading uses is
reasonable because data recipients can derive substantial benefit from
such uses, for example, by automating tasks so that they can be
performed more quickly and accurately and less expensively than if they
were performed manually.
The Exchange believes that the proposed fees of $4,500 per month
for each of Categories 1, 2, and 3 is reasonable. These fees are
comparable to non-display use fees generally charged by exchanges. For
example, the fees for Non-Display Use of NYSE ArcaBook for Categories
1, 2 and 3 is $6,000 per month.\39\ The Exchange believes that it is
reasonable to cap non-display use fees for Category 3 at $13,500 per
month per data recipient, because a higher monthly fee may potentially
dissuade subscribers from buying the NYSE Arca Agg Lite data feed.
---------------------------------------------------------------------------

\39\ See Fee Schedule.
---------------------------------------------------------------------------

The proposed Non-Display Use fees for the NYSE Arca Agg Lite data
feed are also reasonable because they take into account the usefulness
of receiving the data for Non-Display Use on an integrated basis.
Non-Display Use Declaration Late Fee. The Exchange believes that it
is reasonable to require annual submissions of the Non-Display Use
Declaration so that the Exchange will have current and accurate
information about the use of the NYSE Arca Agg Lite data feed and can
correctly assess fees for the uses of the NYSE Arca Agg Lite data feed.
Requiring annual submissions of such declarations is reasonable because
it also allows users to re-assess their own usage each year.
The Exchange believes that it is reasonable to impose a late fee in
connection with the submission of the Non-Display Use Declaration. In
order to correctly assess fees for the non-display use of the NYSE Arca
Agg Lite data feed, the Exchange needs to have current and accurate
information about the use of the NYSE Arca Agg Lite data feed. The
failure of data recipients to submit the Non-Display Use Declaration on
time leads to potentially incorrect billing and administrative burdens,
including tracking and obtaining late Non-Display Use Declarations and
correcting and following up on payments owed in connection with late
Non-Display Use Declarations. The purpose of the late fee is to incent
data recipients to submit the Non-Display Use Declaration promptly to
avoid the administrative burdens associated with the late submission of
Non-Display Use Declarations.
Multiple Data Feed Fee. The Exchange believes that it is reasonable
to require data recipients to pay a modest fee for taking a data feed
for a market data product in more than two locations. In addition,
there are administrative burdens associated with tracking each location
at which a data recipient receives the product. The Multiple Data Feed
Fee is designed to encourage data recipients to better manage their
requests for additional data feeds and to monitor their usage of data
feeds. The proposed fee is designed to apply to data feeds received in
more than two locations so that each data recipient can have one
primary and one backup data location before having to pay a multiple
data feed fee.
Three-Month Fee Waiver. The Exchange believes the proposal to waive
the Access Fee and the Redistribution Fee for the NYSE Arca Agg Lite
data feed to new Redistributors for three calendar months is reasonable
because it would enable potential Redistributors to determine whether a
particular NYSE Arca market data product is useful to their business
models before fully committing to expend development and implementation
costs related to the receipt of that product, and is intended to
encourage increased use of the Exchange's market data products by
defraying some of the development and implementation costs
Redistributors would ordinarily have to expend before using a product.
The proposed fee waiver would also allow Redistributors to become
familiar with the feed and determine whether it suits their needs
without incurring fees. Making a new market data product available
without charging a fee for three months is consistent with offerings of
other exchanges. For example, BZX offers subscribers of BZX Summary
Depth a three-month credit for external distribution, which is akin to
the three-month fee waiver proposed by the Exchange.\40\
---------------------------------------------------------------------------

\40\ See e.g., Securities Exchange Act Release No. 94432 (March
16, 2022), 87 FR 16277 (March 22, 2022) (SR-CboeBZX-2022-015)
(Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change To Amend the Fees Applicable to Various Market Data
Products).
---------------------------------------------------------------------------

For all of the foregoing reasons, the Exchange believes that the
proposed fees for the NYSE Arca Agg Lite data feed are reasonable.
The Proposed Fees Are Equitably Allocated
The Exchange believes the proposed fees for the NYSE Arca Agg Lite
data feed are allocated fairly and equitably among the various
categories of users of the feed, and any differences among categories
of users are justified.
Overall. The Exchange believes that the proposed fees are equitably
allocated because they will apply to all data recipients that choose to
subscribe to the NYSE Arca Agg Lite data feed. Any subscriber or vendor
that chooses to subscribe to the NYSE Arca Agg Lite data feed is
subject to the same Fee Schedule, regardless of what type of business
they operate or the use they plan to make of the data feed. Subscribers
and vendors are not required to purchase the NYSE Arca Agg Lite data
feed and may choose to receive the data on the NYSE Arca Agg Lite data
feed regardless of what type of business they operate or the use they
plan to make of the data feed.
Access Fee. The Exchange believes the proposed monthly Access Fee
of $1,500 for the NYSE Arca Agg Lite data feed is equitably allocated
because it would be charged on an equal basis to all data recipients
that receive a data feed of the NYSE Arca Agg Lite data feed,
regardless of what type of business they operate or the use they plan
to make of the data feed.

[[Page 78385]]

User Fees. The Exchange believes that the fee structure
differentiating Professional User fees ($30 per month per user) from
Non-Professional User fees ($4 per month per user) for display device
access to the NYSE Arca Agg Lite data feed is equitable. This structure
has long been used by the Exchange to reduce the price of data to Non-
Professional Users and make it more broadly available.\41\ Offering the
NYSE Arca Agg Lite data feed to Non-Professional Users with the same
data as is available to Professional Users results in greater equity
among data recipients. These user fees would be charged uniformly to
all display devices that have access to the NYSE Arca Agg Lite data
feed.
---------------------------------------------------------------------------

\41\ See, e.g., Securities Exchange Act Release No. 72560 (July
8, 2014), 79 FR 40801 (July 14, 2014) (SR-NYSEARCA-2014-72)
(establishing tiered Non-Professional User Fees (Per User) for NYSE
ArcaBook); Securities Exchange Act Release No. 20002, File No. S7-
433 (July 22, 1983), 48 FR 34552 (July 29, 1983) (establishing Non-
Professional fees for CTA data); NASDAQ BX Equity 7 Pricing
Schedule, Section 123.
---------------------------------------------------------------------------

Redistribution Fees. The Exchange believes the proposed monthly fee
of $250 for redistributing the NYSE Arca Agg Lite data feed is
equitably allocated because it would be charged on an equal basis to
those Redistributors that choose to redistribute the feed.
Enterprise Fees. The Exchange believes the proposed enterprise
license is equitably allocated because it would be available on an
equal basis to all subscribers that are broker-dealers, each of whom
would benefit from reduced exchange fees and from lower administrative
costs. Moreover, the specific feature of the proposed enterprise
license that will allow subscribers to lower fees by subscribing to a
twelve-month contract is also an equitable allocation because all
subscribers will have the same option of choosing between the stability
of a fixed, lower rate, and the more flexible option of maintaining the
ability to change market data products after a month of service.
Subscribers will be free to move from the monthly to the annual rate at
any time, or from annual to a monthly fee, with notice, at the
expiration of the twelve-month period.
Non-Display Use Fees. The Exchange believes the proposed Non-
Display Use fees are equitably allocated because they would require
subscribers to pay fees only for the uses they actually make of the
data. As noted above, non-display data can be used by data recipients
for a wide variety of purposes (including trading, risk management, and
compliance) as well as purposes that reduce the recipient's costs by
automating certain functions. The Exchange believes that it is
equitable to charge non-display data subscribers a $4,500 fee for each
category of use they make of such data--namely, using the data on their
own behalf (Category 1), on behalf of their clients (Category 2), and
to internally match buy and sell orders within an organization
(Category 3)--because this fee structure results in subscribers with
greater uses of the data paying higher fees, and subscribers with fewer
uses of the data paying lower fees. This segmented fee structure is
also equitable because no subscriber of non-display data would be
charged a fee for a category of use in which it did not actually
engage.
The Exchange believes that it is equitable to cap non-display use
fees for Category 3 at $13,500 per month per data recipient, because a
higher monthly fee may potentially dissuade subscribers from buying the
NYSE Arca Agg Lite data feed.
Non-Display Use Declaration Late Fee. The Exchange believes that
the proposed fee of $1,000 per month for a late Non-Display Use
Declaration is equitably allocated because it applies to any data
recipient that pays an Access Fee for the NYSE Arca Agg Lite data feed
but has failed to complete and submit a Non-Display Use Declaration. In
addition, the Exchange believes that it is equitable to charge a late
fee to subscribers who fail to timely submit their Non-Display Use
Declarations because their failure to do so leads to potentially
incorrect billing and administrative burdens on the part of the
Exchange. The Exchange believes it is equitable to defray these
administrative costs by imposing a late fee only on subscribers' whose
declarations were late, as opposed to all subscribers.
Multiple Data Feed Fee. The Exchange believes that the $200 per
month per location fee to data recipients taking the NYSE Arca Agg Lite
data feed in more than two locations is equitable because it would
apply to all such customers, regardless of what type of business they
operate or the use they make of the data feed. In addition, the
Exchange believes that it is equitable to charge a fee to subscribers
for taking a data feed in more than two locations because there are
administrative burdens on the part of the Exchange associated with
tracking each location at which a data recipient receives the product.
The Exchange believes that it is equitable for it to defray these
administrative costs by imposing a modest fee only on subscribers who
seek to take the feed in more than two locations, as opposed to all
subscribers.
Three-Month Fee Waiver. The Exchange believes the proposal to waive
the Access Fee and the Redistribution Fee for the NYSE Arca Agg Lite
data feed to new Redistributors for three calendar months is equitable
because it would apply to any first-time Redistributor, regardless of
the use they plan to make of the feed. As proposed, any first-time
Redistributor of the NYSE Arca Agg Lite data feed would not be charged
the Access Fee and the Redistribution Fee for three calendar months.
The Exchange believes it is equitable to restrict the availability of
this three-month fee waiver to Redistributors that have not previously
subscribed to and redistributed the NYSE Arca Agg Lite data feed, since
customers who are current or previous subscribers of the feed are
already familiar with it and are able to determine whether it suits
their needs.
For all of the foregoing reasons, the Exchange believes that the
proposed fees for the NYSE Arca Agg Lite data feed are equitably
allocated.
The Proposed Fees Are Not Unfairly Discriminatory
The Exchange believes the proposed fees for the NYSE Arca Agg Lite
data feed are not unfairly discriminatory because any differences in
the application of the fees are based on meaningful distinctions
between customers, and those meaningful distinctions are not unfairly
discriminatory between customers.
Overall. The Exchange believes that the proposed fees are not
unfairly discriminatory because they would apply to all data recipients
that choose to subscribe to the NYSE Arca Agg Lite data feed. Any
subscriber, including Redistributor, that chooses to subscribe to the
NYSE Arca Agg Lite data feed is subject to the same Fee Schedule,
regardless of what type of business they operate or the use they plan
to make of the data feed. Subscribers, including Redistributors, may
choose to receive the data on the NYSE Arca Agg Lite data feed
regardless of what type of business they operate or the use they plan
to make of the data feed.
Access Fee. The Exchange believes the proposed monthly Access Fee
of $1,500 for the NYSE Arca Agg Lite data feed is not unfairly
discriminatory because it would be charged on an equal basis to all
data recipients that receive a data feed of the NYSE Arca Agg Lite,
regardless of what type of business they operate or the use they plan
to make of the data feed.
User Fees. The Exchange believes that the fee structure
differentiating Professional User fees ($30 per month

[[Page 78386]]

per user) from Non-Professional User fees ($4 per month per user) for
display device access to the NYSE Arca Agg Lite data feed is not
unfairly discriminatory. This structure has long been used by the
Exchange to reduce the price of data to Non-Professional Users and make
it more broadly available.\42\ Offering the NYSE Arca Agg Lite data
feed to Non-Professional Users with the same data as is available to
Professional Users results in greater equity among data recipients.
These user fees would be charged uniformly to all display devices that
have access to the NYSE Arca Agg Lite data feed.
---------------------------------------------------------------------------

\42\ Id.
---------------------------------------------------------------------------

Redistribution Fees. The Exchange believes the proposed monthly fee
of $250 for redistributing the NYSE Arca Agg Lite data feed is not
unfairly discriminatory because it would be charged on an equal basis
to those Redistributors that choose to redistribute the feed.
Enterprise Fees. The Exchange believes the proposed enterprise
license will not unfairly discriminate between customers, issuers,
brokers or dealers. The Act does not prohibit all distinctions among
customers, but only discrimination that is unfair, and it is not unfair
discrimination to charge those subscribers that are able to reach the
largest audiences of investors, including retail investors, a lower fee
for incremental investors in order to encourage the widespread
distribution of market data. This principle has been repeatedly
endorsed by the Commission, as evidenced by the approval of enterprise
licenses for other market data products.\43\ Moreover, the proposed
enterprise license will be subject to significant competition, and that
competition will ensure that there is no unfair discrimination. Each
subscriber will be able to accept or reject the license depending on
whether it will or will not lower costs for that particular subscriber,
and, if the license is not sufficiently competitive, the Exchange may
lose market share. The proposed enterprise license will compete with
other enterprise licenses of the Exchange, underlying fee schedules
promulgated by the Exchange, and enterprise licenses and fee structures
implemented by other exchanges. As such, it is a voluntary product for
which market participants can readily find substitutes. Accordingly,
the Exchange is constrained from introducing a fee that would be
inequitable or unfairly discriminatory.
---------------------------------------------------------------------------

\43\ See e.g., Securities Exchange Act Release No. 83751 (July
31, 2018), 83 FR 38428 (August 6, 2018) (SR-NASDAQ-2018-058) (Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To
Lower Fees and Administrative Costs for Distributors of Nasdaq
Basic, Nasdaq Last Sale, NLS Plus and the Nasdaq Depth-of-Book
Products Through a Consolidated Enterprise License).
---------------------------------------------------------------------------

Non-Display Use Fees. The Exchange believes the proposed Non-
Display Use fees are not unfairly discriminatory because they would
require subscribers for non-display use to pay fees only for the
categories of use they actually make of the data. As noted above, non-
display data can be used by data recipients for a wide variety of
purposes (including trading, risk management, and compliance) as well
as purposes that reduce the recipient's costs by automating certain
functions. The Exchange believes that it is not unfairly discriminatory
to charge non-display data subscribers a $4,500 per month fee for each
category of use they make of such data--namely, using the data on their
own behalf (Category 1), on behalf of their clients (Category 2), and
to internally match buy and sell orders within an organization
(Category 3)--because this fee structure results in subscribers with
greater uses for the data paying higher fees, while subscribers with
fewer uses of the data pay lower fees. This segmented fee structure is
not unfairly discriminatory because no subscriber of non-display data
would be charged a fee for a category of use in which it did not
actually engage.
The Exchange believes that it is not unreasonably discriminatory to
cap non-display use fees for Category 3 at $13,500 per month per data
recipient, because a higher monthly fee may potentially dissuade
subscribers from buying the NYSE Arca Agg Lite data feed.
Non-Display Use Declaration Late Fee. The Exchange believes that
the proposed fee of $1,000 per month for a late Non-Display Use
Declaration is not unfairly discriminatory because it applies to any
data recipient that pays an Access Fee for the NYSE Arca Agg Lite data
feed but has failed to complete and submit a Non-Display Use
Declaration. In addition, the Exchange believes that it is not unfairly
discriminatory to charge a late fee to subscribers who fail to timely
submit their Non-Display Use Declarations because their failure to do
so leads to potentially incorrect billing and administrative burdens on
the part of the Exchange. Nor is it unfairly discriminatory for the
Exchange to defray these administrative costs by imposing a late fee
only on subscribers' whose declarations were late, as opposed to all
subscribers.
Multiple Data Feed Fee. The Exchange believes that the $200 per
month per location fee to data recipients taking the NYSE Arca Agg Lite
data feed in more than two locations is not unfairly discriminatory
because it would apply to all such customers, regardless of what type
of business they operate or the use they make of the data feed. In
addition, the Exchange believes that it is not unfairly discriminatory
to charge a fee to subscribers for taking a data feed in more than two
locations because there are administrative burdens on the part of the
Exchange associated with tracking each location at which a data
recipient receives the product. The Exchange believes that it is not
unfairly discriminatory for it to defray these administrative costs by
imposing a modest fee only on subscribers who seek to take the feed in
more than two locations, as opposed to all subscribers.
Three-Month Fee Waiver. The Exchange believes the proposal to waive
the Access Fee and the Redistribution Fee for the NYSE Arca Agg Lite
data feed to new Redistributors for three months is not unfairly
discriminatory because it would apply to any first-time Redistributor,
regardless of the use they plan to make of the feed. As proposed, any
first-time Redistributor of the NYSE Arca Agg Lite data feed would not
be charged the Access Fee and the Redistribution Fee for three calendar
months. The Exchange believes it is not unfairly discriminatory to
restrict the availability of this three-month fee waiver to
Redistributors that have not previously subscribed to the NYSE Arca Agg
Lite data feed, since Redistributors who are current or previous
subscribers of the feed are already familiar with it and are able to
determine whether it suits their needs.
For all of the foregoing reasons, the Exchange believes that the
proposed fees for the NYSE Arca Agg Lite data feed are not unfairly
discriminatory.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed fees will impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
Intramarket Competition. The Exchange believes that the proposed
fees do not put any market participants at a relative disadvantage
compared to other market participants. As noted above, the proposed
fees would apply to all subscribers, including Redistributors, of the
NYSE Arca Agg Lite data feed, and customers may choose whether to
subscribe to the feed at all. The Exchange also believes that the

[[Page 78387]]

proposed fees neither favor nor penalize one or more categories of
market participants in a manner that would impose an undue market on
competition. As shown above, to the extent that particular proposed
fees apply to only a subset of subscribers (e.g., Category 2 fees apply
only to those making non-display use on behalf of clients; late fees
apply only to customers who fail to timely submit their declarations),
those distinctions are not unfairly discriminatory and do not unfairly
burden one set of customers over another. To the contrary, by tailoring
the proposed fees in this manner, the Exchange believes that it has
eliminated the potential burden on competition that might result from
unfairly asking subscribers to pay fees for services they did not use,
or late fees they did not actually incur.
Intermarket Competition. The Exchange believes that the proposed
fees do not impose a burden on competition or on other SROs that is not
necessary or appropriate. In setting the proposed fees, the Exchange is
constrained by the availability of substitute partial depth of book
market data products and by the fact that if its pricing is
unattractive, customers will have their pick of alternative partial
depth of book market data products to purchase instead of purchasing
the Exchange's products.
Specifically, the Exchange believes that the proposed fees do not
impose a burden on competition or on other exchanges that is not
necessary or appropriate because of the availability of substitute
partial depth of book market data products. Many other exchanges offer
proprietary data feeds like the NYSE Arca Agg Lite data feed, supplying
partial depth of book order data, security status updates, stock
summary messages, and the exchange's best bid and offer at any given
time, on a real-time basis. Because market data users can find suitable
substitute feeds, an exchange that overprices its market data products
stands a high risk that users may purchase another market's market data
product. These competitive pressures ensure that no one exchange's
market data fees can impose an unnecessary burden on competition, and
the Exchange's proposed fees do not do so here.

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

No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \44\ of the Act and subparagraph (f)(2) of Rule
19b-4 \45\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

\44\ 15 U.S.C. 78s(b)(3)(A).
\45\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \46\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

\46\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSEARCA-2024-75 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-NYSEARCA-2024-75. 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-NYSEARCA-2024-75 and should
be submitted on or before October 16, 2024.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
---------------------------------------------------------------------------

\47\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-21881 Filed 9-24-24; 8:45 am]
BILLING CODE 8011-01-P

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