Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 86891-86894 [2024-25337]
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Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Notices
notice period for fee changes set forth in
the Exchange’s service terms.
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 fee schedule would
continue to apply to all purchasers of
the Exchange’s connectivity products
and services in the same manner as it
does today albeit at inflation-adjusted
rates for certain fees, and customers may
choose whether to purchase these
products and services at all. The
Exchange also believes that the level of
the proposed fees neither favor nor
penalize one or more categories of
market participants in a manner that
would impose an undue burden on
competition. Likewise, the proposed fee
waiver described above will apply to all
purchasers of the Exchange’s
connectivity products and services in
the same manner and therefore will not
burden competition among them.
Intermarket Competition
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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
determining the proposed fees, the
Exchange utilized an objective and
stable metric with limited volatility.
Utilizing Data PPI over a specified
period of time is a reasonable means of
recouping the Exchange’s investment in
maintaining and enhancing its
connectivity products, services, and
facilities. The Exchange believes
utilizing Data PPI, a tailored measure of
inflation, to increase certain fees for
connectivity products and services to
recoup the Exchange’s investment in
maintaining and enhancing such
products, services, and its facilities
would not impose a burden on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.16
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• 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–
Phlx–2024–52 on the subject line.
86891
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–Phlx–2024–52 and should be
submitted on or before November 21,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–25325 Filed 10–30–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101448; File No. SR–
CboeEDGX–2024–065]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule
Paper Comments
October 25, 2024.
• 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–Phlx–2024–52. 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,
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
10, 2024, Cboe EDGX Exchange, Inc.
(the ‘‘Exchange’’ or ‘‘EDGX’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX Options’’)
proposes to amend its Fee Schedule.
The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
16 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
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options/regulation/rule_filings/edgx/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
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The Exchange proposes to update its
Fee Schedule to provide a temporary
20% discount on fees assessed to
Exchange Members 3 and non-Members
that purchase $20,000 or more of ad hoc
purchases of historical Open-Close Data,
effective October 10, 2024 through
December 31, 2024.
By way of background, the Exchange
currently offers End-of-Day (‘‘EOD’’) and
Intraday Open-Close Data (collectively,
‘‘Open-Close Data’’). EOD Open-Close
Data is an end-of-day volume summary
of trading activity on the Exchange at
the option level by origin (customer,
professional customer, broker-dealer,
and market maker), side of the market
(buy or sell), price, and transaction type
(opening or closing). The customer and
professional customer volume is further
broken down into trade size buckets
(less than 100 contracts, 100–199
contracts, greater than 199 contracts).
The EOD Open-Close Data is proprietary
Exchange trade data and does not
include trade data from any other
exchange. It is also a historical data
product and not a real-time data feed.
The Exchange also offers Intraday OpenClose Data, which provides similar
information to that of EOD Open-Close
3 See Rule 1.5(n) (‘‘Member’’). The term
‘‘Member’’ shall mean any registered broker or
dealer that has been admitted to membership in the
Exchange. A Member will have the status of a
‘‘member’’ of the Exchange as that term is defined
in Section 3(a)(3) of the Act. Membership may be
granted to a sole proprietor, partnership,
corporation, limited liability company or other
organization which is a registered broker or dealer
pursuant to Section 15 of the Act, and which has
been approved by the Exchange.
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Data but is produced and updated every
10 minutes during the trading day. Data
is captured in ‘‘snapshots’’ taken every
10 minutes throughout the trading day
and is available to subscribers within
five minutes of the conclusion of each
10-minute period.4 The Intraday OpenClose Data provides a volume summary
of trading activity on the Exchange at
the option level by origin (customer,
professional customer, broker-dealer,
and market maker), side of the market
(buy or sell), and transaction type
(opening or closing). The customer and
professional customer volume are
further broken down into trade size
buckets (less than 100 contracts, 100–
199 contracts, greater than 199
contracts). The Intraday Open-Close
Data is proprietary Exchange trade data
and does not include trade data from
any other exchange. All Open-Close
Data products are completely voluntary
products, in that the Exchange is not
required by any rule or regulation to
make this data available and that
potential customers may purchase it on
an ad-hoc basis only if they voluntarily
choose to do so.
Cboe LiveVol, LLC (‘‘LiveVol’’), a
wholly owned subsidiary of the
Exchange’s parent company, Cboe
Global Markets, Inc., makes the OpenClose Data available for purchase to
Members and non-Members on the
LiveVol DataShop website
(datashop.cboe.com). Customers may
currently purchase Open-Close Data on
a subscription basis (monthly or
annually) or by ad hoc request for a
specified month (historical file, e.g.,
request for Intraday Open-Close Data for
month of December 2023 or End-of-Day
Open-Close Data for month of December
2023). An ad-hoc request can be for any
number of months for which the data is
available.
Open-Close Data is subject to direct
competition from similar end-of-day
and intraday options trading summaries
offered by several other options
exchanges.5 All of these exchanges offer
essentially the same end-of-day and
4 For example, subscribers to the intraday product
will receive the first calculation of intraday data by
approximately 9:42 a.m. ET, which represents data
captured from 9:30 a.m. to 9:40 a.m. Subscribers
will receive the next update at 9:52 a.m.,
representing the data previously provided together
with data captured from 9:40 a.m. through 9:50
a.m., and so forth. Each update will represent the
aggregate data captured from the current
‘‘snapshot’’ and all previous ‘‘snapshots.’’
5 These substitute products are: Nasdaq PHLX
Options Trade Outline, Nasdaq Options Trade
Outline, ISE Profile, GEMX Trade Profile data;
open-close data from C2, Cboe Options, and BZX;
Open Close Reports from MIAX Options, Pearl, and
Emerald; and NYSE Options Open-Close Volume
Summary.
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intraday options trading summary
information.
The Exchange proposes to provide a
temporary pricing incentive program in
which Members or Non-Members that
purchase historical Open-Close Data
will receive a percentage fee discount
where specific purchase thresholds are
met. Specifically, the Exchange
proposes to provide a temporary 20%
discount for ad-hoc purchases of
historical Open-Close Data of $20,000 or
more.6 The proposed program will
apply to all market participants
irrespective of whether the market
participant is a new or current
purchaser; however, the discount
cannot be combined with any other
discounts offered by the Exchange,
including the academic discount
provided for Qualifying Academic
Purchasers of historical Open-Close
Data. The Exchange intends to introduce
the discount program beginning October
10, 2024, with the program remaining in
effect through December 31, 2024. The
Exchange also notes that it previously
adopted the same temporary discount
program and proposes to update the
Fees Schedule with the new program
dates accordingly.7
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.8 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 9 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
6 The discount will apply on an order-by-order
basis. To qualify for the discount, an order must
contain End-of-Day Ad-hoc Requests (historical
data) and/or Intraday Ad-hoc Requests (historical
data) and must total $20,000 or more; the Exchange
will not aggregate purchases made throughout a
billing cycle for purposes of the incentive program.
The discount will apply to the total purchase price,
once the $20,000 minimum purchase is satisfied
(for example, a qualifying order of $25,000 would
be discounted to $20,000, i.e. receive a 20%
discount of $5,000).
7 See Securities Exchange Act Release No. 99026
(November 28, 2023), 88 FR 84023 (December 1,
2023) (SR–CboeEDGX–2023–070) and Securities
Exchange Act Release No. 100352 (June 17, 2024),
89 FR 52521 (June 24, 2024) (SR–CboeEDGX–2024–
033).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Notices
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 10 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In adopting Regulation NMS, the
Commission granted self-regulatory
organizations (‘‘SROs’’) and brokerdealers increased authority and
flexibility to offer new and unique
market data to the public. It was
believed that this authority would
expand the amount of data available to
consumers, and also spur innovation
and competition for the provision of
market data. The Exchange believes the
proposed fee changes will further
broaden the availability of U.S. option
market data to investors consistent with
the principles of Regulation NMS.
Open-Close Data is designed to help
investors understand underlying market
trends to improve the quality of
investment decisions. Indeed,
purchasers of the data may be able to
enhance their ability to analyze option
trade and volume data and create and
test trading models and analytical
strategies. The Exchange believes OpenClose Data provides a valuable tool that
purchasers can use to gain
comprehensive insight into the trading
activity in a particular series, but also
emphasizes such data is not necessary
for trading and as noted above, is
entirely optional. Moreover, several
other exchanges offer a similar data
product which offer same type of data
content through end-of-day or intraday
reports.11
The Exchange also operates in a
highly competitive environment.
Indeed, there are currently 17 registered
options exchanges that trade options.
Based on publicly available information,
no single options exchange has more
than 18% of the market share.12 The
Commission has repeatedly expressed
its preference for competition over
regulatory intervention in determining
prices, products, and services in the
securities markets. Particularly, in
Regulation NMS, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
10 Id.
11 See
supra note 4.
Cboe Global Markets U.S. Options Market
Month-to-Date Volume Summary (September 30,
2024), available at https://markets.cboe.com/us/
options/market_statistics/.
12 See
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‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 13
Making similar data products available
to market participants fosters
competition in the marketplace, and
constrains the ability of exchanges to
charge supracompetitive fees. In the
event that a market participant views
one exchange’s data product as more or
less attractive than the competition they
can and do switch between similar
products. The proposed fees are a result
of the competitive environment, as the
Exchange seeks to adopt fees to attract
purchasers of historical Open-Close
Data.
The Exchange believes that the
proposed incentive program for any
Member or non-Member who purchases
historical Open-Close Data is reasonable
because such purchasers would receive
a 20% discount for purchasing $20,000
or more worth of historical Open-Close
Data. The Exchange believes the
proposed discount is reasonable as it
will give purchasers the ability to use
and test the historical Open-Close Data
at a discounted rate, prior to purchasing
additional months or a monthly
subscription, and will therefore
encourage and promote users to
purchase the historical Open-Close
Data. Further, the proposed discount is
intended to promote increased use of
the Exchange’s historical Open-Close
Data by defraying some of the costs a
purchaser would ordinarily have to
expend before using the data product.
The Exchange believes that the
proposed discount is equitable and not
unfairly discriminatory because it will
apply equally to all Members and nonMembers who purchase historical OpenClose Data. Lastly, the purchase of this
data product is discretionary and not
compulsory. Indeed, no market
participant is required to purchase the
historical Open-Close Data, and the
Exchange is not required to make the
historical Open-Close Data available to
all investors. Potential purchasers may
request the data at any time if they
believe it to be valuable or may decline
to purchase such data. As noted above,
the Exchange has previously adopted
the same temporary discount program.14
13 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
14 See Securities Exchange Act Release No. 99026
(November 28, 2023), 88 FR 84023 (December 1,
2023) (SR–CboeEDGX–2023–070) and Securities
Exchange Act Release No. 100352 (June 17, 2024),
89 FR 52521 (June 24, 2024) (SR–CboeEDGX–2024–
033).
PO 00000
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86893
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange operates in a highly
competitive environment in which the
Exchange must continually adjust its
fees to remain competitive. Because
competitors are free to modify their own
fees in response, including the adoption
of similar discounts to those fees, the
Exchange believes that the degree to
which fee changes (including discounts
and rebates) in this market may impose
any burden on competition is extremely
limited. As discussed above, OpenClose Data is subject to direct
competition from several other options
exchanges that offer substitutes to OpenClose Data. Moreover, purchase of
Open-Close Data is optional. It is
designed to help investors understand
underlying market trends to improve the
quality of investment decisions, but is
not necessary to execute a trade.
The proposed rule changes are
grounded in the Exchange’s efforts to
compete more effectively. In this
competitive environment, potential
purchasers are free to choose which, if
any, similar product to purchase to
satisfy their need for market
information. As a result, the Exchange
believes this proposed rule change
permits fair competition among national
securities exchanges. Further, the
Exchange believes that these changes
will not cause any unnecessary or
inappropriate burden on intermarket
competition, as the proposed incentive
program applies uniformly to any
purchaser of historical Open-Close Data.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 15 and paragraph (f) of Rule
19b–4 16 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
15 15
16 17
E:\FR\FM\31OCN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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Federal Register / Vol. 89, No. 211 / Thursday, October 31, 2024 / Notices
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
lotter on DSK11XQN23PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeEDGX–2024–065 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–CboeEDGX–2024–065. 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
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18:18 Oct 30, 2024
Jkt 265001
submissions should refer to file number
SR–CboeEDGX–2024–065 and should be
submitted on or before November 21,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–25337 Filed 10–30–24; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101439; File No. SR–
GEMX–2024–38]
Self-Regulatory Organizations; Nasdaq
GEMX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Its Fees for
Connectivity and Co-Location Services
October 25, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
11, 2024, Nasdaq GEMX, LLC (‘‘GEMX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s fees for connectivity and colocation services, as described further
below.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/gemx/rules, 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
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
BILLING CODE 8011–01–P
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places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
Sfmt 4703
The purpose of the proposed rule
change is to amend the Exchange’s fees
relating to connectivity and co-location
services.3 Specifically, the Exchange
proposes to raise its fees for
connectivity and co-location services in
General 8 as well as certain fees related
to its Testing Facilities in Options 7,
Section 6 by 10%, with certain
exceptions.
General 8, Section 1 includes the
Exchange’s fees that relate to
connectivity, including fees for cabinets,
external telco/inter-cabinet connectivity
fees, fees for connectivity to the
Exchange, fees for connectivity to third
party services, fees for market data
connectivity, fees for cabinet power
install, and fees for additional charges
and services. General 8, Section 2
includes the Exchange’s fees for direct
connectivity services, including fees for
direct circuit connection to the
Exchange, fees for direct circuit
connection to third party services, and
fees for point of presence connectivity.
With the exception of the Exchange’s
GPS Antenna fees and the Cabinet
Proximity Option Fee for cabinets with
power density >10kW,4 the Exchange
3 The Exchange initially filed the proposed
pricing change on March 1, 2024 (SR–GEMX–2024–
05). On April 29, 2024, the Exchange withdrew that
filing and submitted SR–GEMX–2024–09. On June
27, 2024, the Exchange withdrew SR–GEMX–2024–
09 and submitted SR–GEMX–2024–15. The
Exchange withdrew SR–GEMX–2024–15 and
replaced it with SR–GEMX–2024–33 on September
10, 2024. The instant filing replaces SR–GEMX–
2024–33.
4 The Exchange proposes to exclude the GPS
Antenna fees from the proposed fee increase
because, unlike the other fees in General 8, the
Exchange recently increased its GPS Antenna fees.
See Securities Exchange Act Release No. 34–99129
(December 11, 2023), 88 FR 87017 (December 15,
2023) (SR–GEMX–2023–17). The Exchange also
proposes to exclude the Cabinet Proximity Option
Fee for cabinets with power density >10kW from
the proposed fee increase because the Exchange
recently established such fee. See Securities
Exchange Act Release No. 34–100210 (May 22,
2024), 89 FR 46476 (May 29, 2024) (SR–GEMX–
2024–11). Similarly, the Exchange proposes to
exclude from the proposed fee increase those fees
that the Exchange recently established for services
in its new NY11–4 expansion facility. See
Securities Exchange Act Release No. 34–101262
(October 7, 2024), 89 FR 82649 (October 11, 2024)
(SR–GEMX–2024–36).
E:\FR\FM\31OCN1.SGM
31OCN1
]]>Agencies
[Federal Register Volume 89, Number 211 (Thursday, October 31, 2024)]
[Notices]
[Pages 86891-86894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25337]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101448; File No. SR-CboeEDGX-2024-065]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule
October 25, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on October 10, 2024, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 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
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX Options'')
proposes to amend its Fee Schedule. The text of the proposed rule
change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/
[[Page 86892]]
options/regulation/rule_filings/edgx/), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to update its Fee Schedule to provide a
temporary 20% discount on fees assessed to Exchange Members \3\ and
non-Members that purchase $20,000 or more of ad hoc purchases of
historical Open-Close Data, effective October 10, 2024 through December
31, 2024.
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\3\ See Rule 1.5(n) (``Member''). The term ``Member'' shall mean
any registered broker or dealer that has been admitted to membership
in the Exchange. A Member will have the status of a ``member'' of
the Exchange as that term is defined in Section 3(a)(3) of the Act.
Membership may be granted to a sole proprietor, partnership,
corporation, limited liability company or other organization which
is a registered broker or dealer pursuant to Section 15 of the Act,
and which has been approved by the Exchange.
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By way of background, the Exchange currently offers End-of-Day
(``EOD'') and Intraday Open-Close Data (collectively, ``Open-Close
Data''). EOD Open-Close Data is an end-of-day volume summary of trading
activity on the Exchange at the option level by origin (customer,
professional customer, broker-dealer, and market maker), side of the
market (buy or sell), price, and transaction type (opening or closing).
The customer and professional customer volume is further broken down
into trade size buckets (less than 100 contracts, 100-199 contracts,
greater than 199 contracts). The EOD Open-Close Data is proprietary
Exchange trade data and does not include trade data from any other
exchange. It is also a historical data product and not a real-time data
feed. The Exchange also offers Intraday Open-Close Data, which provides
similar information to that of EOD Open-Close Data but is produced and
updated every 10 minutes during the trading day. Data is captured in
``snapshots'' taken every 10 minutes throughout the trading day and is
available to subscribers within five minutes of the conclusion of each
10-minute period.\4\ The Intraday Open-Close Data provides a volume
summary of trading activity on the Exchange at the option level by
origin (customer, professional customer, broker-dealer, and market
maker), side of the market (buy or sell), and transaction type (opening
or closing). The customer and professional customer volume are further
broken down into trade size buckets (less than 100 contracts, 100-199
contracts, greater than 199 contracts). The Intraday Open-Close Data is
proprietary Exchange trade data and does not include trade data from
any other exchange. All Open-Close Data products are completely
voluntary products, in that the Exchange is not required by any rule or
regulation to make this data available and that potential customers may
purchase it on an ad-hoc basis only if they voluntarily choose to do
so.
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\4\ For example, subscribers to the intraday product will
receive the first calculation of intraday data by approximately 9:42
a.m. ET, which represents data captured from 9:30 a.m. to 9:40 a.m.
Subscribers will receive the next update at 9:52 a.m., representing
the data previously provided together with data captured from 9:40
a.m. through 9:50 a.m., and so forth. Each update will represent the
aggregate data captured from the current ``snapshot'' and all
previous ``snapshots.''
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Cboe LiveVol, LLC (``LiveVol''), a wholly owned subsidiary of the
Exchange's parent company, Cboe Global Markets, Inc., makes the Open-
Close Data available for purchase to Members and non-Members on the
LiveVol DataShop website (datashop.cboe.com). Customers may currently
purchase Open-Close Data on a subscription basis (monthly or annually)
or by ad hoc request for a specified month (historical file, e.g.,
request for Intraday Open-Close Data for month of December 2023 or End-
of-Day Open-Close Data for month of December 2023). An ad-hoc request
can be for any number of months for which the data is available.
Open-Close Data is subject to direct competition from similar end-
of-day and intraday options trading summaries offered by several other
options exchanges.\5\ All of these exchanges offer essentially the same
end-of-day and intraday options trading summary information.
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\5\ These substitute products are: Nasdaq PHLX Options Trade
Outline, Nasdaq Options Trade Outline, ISE Profile, GEMX Trade
Profile data; open-close data from C2, Cboe Options, and BZX; Open
Close Reports from MIAX Options, Pearl, and Emerald; and NYSE
Options Open-Close Volume Summary.
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The Exchange proposes to provide a temporary pricing incentive
program in which Members or Non-Members that purchase historical Open-
Close Data will receive a percentage fee discount where specific
purchase thresholds are met. Specifically, the Exchange proposes to
provide a temporary 20% discount for ad-hoc purchases of historical
Open-Close Data of $20,000 or more.\6\ The proposed program will apply
to all market participants irrespective of whether the market
participant is a new or current purchaser; however, the discount cannot
be combined with any other discounts offered by the Exchange, including
the academic discount provided for Qualifying Academic Purchasers of
historical Open-Close Data. The Exchange intends to introduce the
discount program beginning October 10, 2024, with the program remaining
in effect through December 31, 2024. The Exchange also notes that it
previously adopted the same temporary discount program and proposes to
update the Fees Schedule with the new program dates accordingly.\7\
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\6\ The discount will apply on an order-by-order basis. To
qualify for the discount, an order must contain End-of-Day Ad-hoc
Requests (historical data) and/or Intraday Ad-hoc Requests
(historical data) and must total $20,000 or more; the Exchange will
not aggregate purchases made throughout a billing cycle for purposes
of the incentive program. The discount will apply to the total
purchase price, once the $20,000 minimum purchase is satisfied (for
example, a qualifying order of $25,000 would be discounted to
$20,000, i.e. receive a 20% discount of $5,000).
\7\ See Securities Exchange Act Release No. 99026 (November 28,
2023), 88 FR 84023 (December 1, 2023) (SR-CboeEDGX-2023-070) and
Securities Exchange Act Release No. 100352 (June 17, 2024), 89 FR
52521 (June 24, 2024) (SR-CboeEDGX-2024-033).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\8\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \9\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in
[[Page 86893]]
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. Additionally, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) \10\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. The Exchange believes the proposed fee
changes will further broaden the availability of U.S. option market
data to investors consistent with the principles of Regulation NMS.
Open-Close Data is designed to help investors understand underlying
market trends to improve the quality of investment decisions. Indeed,
purchasers of the data may be able to enhance their ability to analyze
option trade and volume data and create and test trading models and
analytical strategies. The Exchange believes Open-Close Data provides a
valuable tool that purchasers can use to gain comprehensive insight
into the trading activity in a particular series, but also emphasizes
such data is not necessary for trading and as noted above, is entirely
optional. Moreover, several other exchanges offer a similar data
product which offer same type of data content through end-of-day or
intraday reports.\11\
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\11\ See supra note 4.
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The Exchange also operates in a highly competitive environment.
Indeed, there are currently 17 registered options exchanges that trade
options. Based on publicly available information, no single options
exchange has more than 18% of the market share.\12\ The Commission has
repeatedly expressed its preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. Particularly, in Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \13\ Making similar data products available to
market participants fosters competition in the marketplace, and
constrains the ability of exchanges to charge supracompetitive fees. In
the event that a market participant views one exchange's data product
as more or less attractive than the competition they can and do switch
between similar products. The proposed fees are a result of the
competitive environment, as the Exchange seeks to adopt fees to attract
purchasers of historical Open-Close Data.
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\12\ See Cboe Global Markets U.S. Options Market Month-to-Date
Volume Summary (September 30, 2024), available at https://markets.cboe.com/us/options/market_statistics/.
\13\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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The Exchange believes that the proposed incentive program for any
Member or non-Member who purchases historical Open-Close Data is
reasonable because such purchasers would receive a 20% discount for
purchasing $20,000 or more worth of historical Open-Close Data. The
Exchange believes the proposed discount is reasonable as it will give
purchasers the ability to use and test the historical Open-Close Data
at a discounted rate, prior to purchasing additional months or a
monthly subscription, and will therefore encourage and promote users to
purchase the historical Open-Close Data. Further, the proposed discount
is intended to promote increased use of the Exchange's historical Open-
Close Data by defraying some of the costs a purchaser would ordinarily
have to expend before using the data product. The Exchange believes
that the proposed discount is equitable and not unfairly discriminatory
because it will apply equally to all Members and non-Members who
purchase historical Open-Close Data. Lastly, the purchase of this data
product is discretionary and not compulsory. Indeed, no market
participant is required to purchase the historical Open-Close Data, and
the Exchange is not required to make the historical Open-Close Data
available to all investors. Potential purchasers may request the data
at any time if they believe it to be valuable or may decline to
purchase such data. As noted above, the Exchange has previously adopted
the same temporary discount program.\14\
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\14\ See Securities Exchange Act Release No. 99026 (November 28,
2023), 88 FR 84023 (December 1, 2023) (SR-CboeEDGX-2023-070) and
Securities Exchange Act Release No. 100352 (June 17, 2024), 89 FR
52521 (June 24, 2024) (SR-CboeEDGX-2024-033).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange operates in a
highly competitive environment in which the Exchange must continually
adjust its fees to remain competitive. Because competitors are free to
modify their own fees in response, including the adoption of similar
discounts to those fees, the Exchange believes that the degree to which
fee changes (including discounts and rebates) in this market may impose
any burden on competition is extremely limited. As discussed above,
Open-Close Data is subject to direct competition from several other
options exchanges that offer substitutes to Open-Close Data. Moreover,
purchase of Open-Close Data is optional. It is designed to help
investors understand underlying market trends to improve the quality of
investment decisions, but is not necessary to execute a trade.
The proposed rule changes are grounded in the Exchange's efforts to
compete more effectively. In this competitive environment, potential
purchasers are free to choose which, if any, similar product to
purchase to satisfy their need for market information. As a result, the
Exchange believes this proposed rule change permits fair competition
among national securities exchanges. Further, the Exchange believes
that these changes will not cause any unnecessary or inappropriate
burden on intermarket competition, as the proposed incentive program
applies uniformly to any purchaser of historical Open-Close Data.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \15\ and paragraph (f) of Rule 19b-4 \16\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the
[[Page 86894]]
public interest, for the protection of investors, or otherwise in
furtherance of the purposes of the Act. If the Commission takes such
action, the Commission will institute proceedings to determine whether
the proposed rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-CboeEDGX-2024-065 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CboeEDGX-2024-065. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-CboeEDGX-2024-065 and should
be submitted on or before November 21, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-25337 Filed 10-30-24; 8:45 am]
BILLING CODE 8011-01-P
