Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Provide a Temporary Discount for Certain Purchases of BYX Historical Depth Data, 87654-87656 [2024-25537]
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87654
Federal Register / Vol. 89, No. 213 / Monday, November 4, 2024 / Notices
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations
and enforcement proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information, please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: October 31, 2024.
Vanessa A. Countryman,
Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
1. Purpose
[FR Doc. 2024–25678 Filed 10–31–24; 4:15 pm]
[Release No. 34–101467; File No. SR–
CboeBYX–2024–038]
Self-Regulatory Organizations; Cboe
BYX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Provide a
Temporary Discount for Certain
Purchases of BYX Historical Depth
Data
October 29, 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
18, 2024, Cboe BYX Exchange, Inc.
(‘‘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
lotter on DSK11XQN23PROD with NOTICES1
equities/regulation/rule_filings/BYX/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
Cboe BYX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) 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/
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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The Exchange proposes to update its
Fee Schedule to provide a temporary
discount on fees assessed to BYX
Members (‘‘Members’’) 3 and nonMembers that purchase $20,000 or more
of ad hoc purchases of historical BYX
Historical Depth Data (‘‘Historical Depth
Reports’’), effective October 18, 2024
through December 31, 2024.
By way of background, the Exchange
currently makes available for purchase
Depth Data, which is a daily archive of
the Exchange’s depth of book real-time
feed, which provides depth-of-book
quotations and execution information
based on equity orders entered into the
System. The Exchange also offers
Historical Depth Data, which offers such
data on a historical basis, i.e., T+1 or
later. The Historical Depth Report is a
completely voluntary product, in that
the Exchange is not required by any rule
or regulation to make this data available
and that potential customers may
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
Historical Depth Report available for
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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Frm 00118
Fmt 4703
Sfmt 4703
purchase to Users on the LiveVol
DataShop website (datashop.cboe.com).
The Historical Depth Data is available
for purchase to Members and NonMembers; the Exchange charges a fee
per month of historical data of $1,000.
The Historical Depth Report provided
on a historical basis is only provided to
data recipients for internal use only, and
thus, no redistribution will be
permitted. The Exchange notes that the
Historical Depth Report is subject to
direct competition from other
exchanges, as other exchanges offer
similar products for a fee.4
The Exchange’s affiliated equities and
options exchanges (i.e., Cboe Exchange,
Inc. (‘‘Cboe Options’’), Cboe C2
Exchange, Inc. (‘‘C2 Options’’), Cboe
EDGX Exchange, Inc. (‘‘EDGX’’), Cboe
BZX Exchange, Inc. (‘‘BZX’’), and Cboe
EDGA Exchange, Inc. (‘‘EDGA’’),
(collectively, ‘‘Affiliates’’) also offer
similar data products.5 Particularly,
each of the Exchange’s Affiliates offer a
daily and historical archive of their
depth of book real-time feed with
execution information based on their
trading activity that is substantially
similar to the information provided by
the Exchange through its Depth Data
products.
The Exchange proposes to provide a
temporary pricing incentive program in
which Members or Non-Members that
purchase Historical Depth Reports will
receive a percentage fee discount where
specific purchase thresholds are met.
Specifically, the Exchange proposes to
provide a 20% discount for ad-hoc
purchases of Historical Depth 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. The
Exchange intends to introduce the
discount program beginning October 18,
2024, with the program remaining in
effect through December 31, 2024. The
Exchange also notes that it previously
adopted similar discount programs for
other historical data products offered by
the Exchange.7
4 See, e.g., https://www.nasdaqtrader.com/
Trader.aspx?id=DPPriceListOptions#nom; and
https://www.nyse.com/publicdocs/nyse/data/
NYSE_Market_Data_Fee_Schedule.pdf.
5 See, for example, EDGX Fee Schedule, BZX Fee
Schedule, EDGA Fee Schedule.
6 The discount will apply on an order-by-order
basis. The discount will apply to the total purchase
price, once the $20,000 minimum purchase is
satisfied (for example, a qualifying order of $25,000
would be discounted to $20,000, i.e., receive a 20%
discount of $5,000).
7 See Securities Exchange Act Release No. 99181
(December 14, 2023), 88 FR 88176 (December 20,
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Federal Register / Vol. 89, No. 213 / Monday, November 4, 2024 / Notices
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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
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.
The Exchange also believes the
proposed rule change is consistent with
Section 6(b)(4) of the Act,11 which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
Members and other persons using its
facilities.
In adopting Regulation NMS, the
Commission granted self-regulatory
organizations (‘‘SROs’’) and brokerdealers increased authority and
flexibility to offer new and unique
market data to the public. It was
believed that this authority would
expand the amount of data available to
consumers, and also spur innovation
and competition for the provision of
market data. The Exchange believes that
the proposed fee changes will further
broaden the availability of U.S. equity
market data to investors consistent with
the principles of Regulation NMS. The
Exchange believes the dissemination of
historical market depth data via
Historical Depth Reports benefits
investors through increased
transparency and may promote better
informed trading, as well as research
and studies of the equities industry.
2023) (SR–CboeBYX–2023–017) and Securities
Exchange Act Release No. 100331 (June 13, 2024),
89 FR 51916 (June 20, 2024) (SR–CboeBYX–2024–
022).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
10 Id.
11 15 U.S.C. 78f(b)(4).
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Nevertheless, the Exchange notes that
such data is not necessary for trading
and as noted above, is entirely optional.
Moreover, several other exchanges offer
a similar data product which offer the
same type of data content through
similar reports.12
The Exchange operates in a highly
competitive environment. Indeed, there
are currently 16 registered equities
exchanges that trade equities. Based on
publicly available information, no single
equities exchange has more than 13% of
the equity market share.13 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.’’ 14
Making similar data products available
to market participants fosters
competition in the marketplace, and
constrains the ability of exchanges to
charge supercompetitive fees. In the
event that a market participant views
one exchange’s data product as more
attractive than the competition, that
market participant can, and often does,
switch between similar products. The
proposed fees are a result of the
competitive environment of the U.S.
equities industry as the Exchange seeks
to adopt fees to attract purchasers of
Historical Depth Reports.
The Exchange believes that the
proposed incentive program for any
Member or non-Member who purchases
Historical Depth Reports is reasonable
because such purchasers would receive
a 20% discount for purchasing $20,000
or more worth of Historical Depth
Reports. The Exchange believes the
proposed discount is reasonable as it
will give purchasers the ability to use
and test the Historical Depth Reports at
a discounted rate, prior to purchasing
additional months or a monthly
subscription, and will therefore
encourage users to purchase Historical
Depth Reports. Further, the proposed
discount is intended to promote
increased use of the Exchange’s
12 See
supra note 4.
Cboe Global Markets, U.S. Equities Market
Volume Summary, Month-to-Date (October 3, 2024),
available at https://www.cboe.com/us/equities/
market_statistics/.
14 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
87655
Historical Depth Reports by defraying
some of the costs a purchaser would
ordinarily have to expend before using
the data product. The Exchange believes
that the proposed discount is equitable
and not unfairly discriminatory because
it will apply equally to all Members and
non-Members who purchase Historical
Depth Reports. Lastly, the purchase of
this data product is discretionary and
not compulsory. Indeed, no market
participant is required to purchase the
Historical Depth Reports, and the
Exchange is not required to make
Historical Depth Reports available to all
investors. Potential purchasers may
request the data at any time if they
believe it to be valuable or may decline
to purchase such data. As noted above,
the Exchange has previously adopted
similar discount programs.15
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, the
Exchange’s Historical Depth Reports
offering is subject to direct competition
from several other options exchanges
that offer similar data products.
Moreover, purchase of Historical Depth
Reports is optional. It is designed to
help investors understand underlying
market trends to improve the quality of
investment decisions, but is not
necessary to execute a trade.
The proposed rule changes are
grounded in the Exchange’s efforts to
compete more effectively. In this
competitive environment, potential
purchasers are free to choose which, if
any, similar product to purchase to
satisfy their need for market
information. As a result, the Exchange
believes this proposed rule change
permits fair competition among national
securities exchanges. Further, the
Exchange believes that these changes
13 See
PO 00000
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Fmt 4703
Sfmt 4703
15 See Securities Exchange Act Release No. 99181
(December 14, 2023), 88 FR 88176 (December 20,
2023) (SR–CboeBYX–2023–017) and Securities
Exchange Act Release No. 100331 (June 13, 2024),
89 FR 51916 (June 20, 2024) (SR–CboeBYX–2024–
022).
E:\FR\FM\04NON1.SGM
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87656
Federal Register / Vol. 89, No. 213 / Monday, November 4, 2024 / Notices
will not cause any unnecessary or
inappropriate burden on intermarket
competition, as the proposed incentive
program applies uniformly to any
purchaser of Historical Depth Reports.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 16 and paragraph (f) of Rule
19b–4 17 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
lotter on DSK11XQN23PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBYX–2024–038 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–CboeBYX–2024–038. 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–CboeBYX–2024–038 and should be
submitted on or before November 25,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–25537 Filed 11–1–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101469; File No. SR–LCH
SA–2024–004]
Self-Regulatory Organizations; LCH
SA; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Cash Spreads and
Fees on Securities Collateral
October 29, 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
23, 2024, Banque Centrale de
Compensation, which conducts
business under the name LCH SA (‘‘LCH
SA’’), filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change (‘‘Proposed
Rule Change’’) described in Items I, II
and III below, which Items have been
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
16 15
U.S.C. 78s(b)(3)(A).
17 17 CFR 240.19b–4(f).
VerDate Sep<11>2014
17:28 Nov 01, 2024
1 15
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Frm 00120
Fmt 4703
Sfmt 4703
primarily prepared by LCH SA. LCH SA
filed the proposed rule change pursuant
to Section 19(b)(3)(A) of the Act,3 and
Rule 19b–4(f)(2) 4 thereunder, so that the
proposal was effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the Proposed Rule Change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
LCH SA is proposing to amend the
fees it charges clearing members for
cash and securities collateral posted as
initial margin for its clearing services
including CDSClear (the ‘‘Proposed Rule
Change’’).
The text of the Proposed Rule Change
has been annexed as Exhibit 5 to File
No. SR–LCH SA–2024–004.5 The
implementation of the Proposed Rule
Change will be contingent on LCH SA’s
receipt of all necessary regulatory
approvals.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
LCH SA 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. LCH
SA has prepared summaries, set forth in
sections A, B, and C below, of the most
significant aspects of such statements.
A. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
LCH SA currently applies a spread for
clearing member cash collateral and
charges fees on securities collateral
posted to cover initial margin
requirements for its CDSClear business.
Cash collateral spreads are primarily
based on underlying market conditions
for a given currency and are subtracted
from a reference index to determine a
total rate to be applied to CDSClear
house and client accounts. Securities
collateral fees are primarily based on a
combination of factors, including, but
not limited to operational costs to
manage a specific non-cash collateral
type, the liquidation profile and
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
5 All capitalized terms not defined herein have
the same definition as in the CDS Clearing Rule
Book available at https://www.lch.com/system/files/
media_root/CDSClear_Rule_Book_01.02.2024.pdf.
4 17
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]]>Agencies
[Federal Register Volume 89, Number 213 (Monday, November 4, 2024)]
[Notices]
[Pages 87654-87656]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25537]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101467; File No. SR-CboeBYX-2024-038]
Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Provide
a Temporary Discount for Certain Purchases of BYX Historical Depth Data
October 29, 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 18, 2024, Cboe BYX Exchange, Inc. (``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BYX Exchange, Inc. (the ``Exchange'' or ``BYX'') proposes to
amend its Fee Schedule. The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/BYX/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to update its Fee Schedule to provide a
temporary discount on fees assessed to BYX Members (``Members'') \3\
and non-Members that purchase $20,000 or more of ad hoc purchases of
historical BYX Historical Depth Data (``Historical Depth Reports''),
effective October 18, 2024 through December 31, 2024.
---------------------------------------------------------------------------
\3\ See Rule 1.5(n) (``Member''). The term ``Member'' shall mean
any registered broker or dealer that has been admitted to membership
in the Exchange. A Member will have the status of a ``member'' of
the Exchange as that term is defined in Section 3(a)(3) of the Act.
Membership may be granted to a sole proprietor, partnership,
corporation, limited liability company or other organization which
is a registered broker or dealer pursuant to Section 15 of the Act,
and which has been approved by the Exchange.
---------------------------------------------------------------------------
By way of background, the Exchange currently makes available for
purchase Depth Data, which is a daily archive of the Exchange's depth
of book real-time feed, which provides depth-of-book quotations and
execution information based on equity orders entered into the System.
The Exchange also offers Historical Depth Data, which offers such data
on a historical basis, i.e., T+1 or later. The Historical Depth Report
is a completely voluntary product, in that the Exchange is not required
by any rule or regulation to make this data available and that
potential customers may 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
Historical Depth Report available for purchase to Users on the LiveVol
DataShop website (datashop.cboe.com). The Historical Depth Data is
available for purchase to Members and Non-Members; the Exchange charges
a fee per month of historical data of $1,000. The Historical Depth
Report provided on a historical basis is only provided to data
recipients for internal use only, and thus, no redistribution will be
permitted. The Exchange notes that the Historical Depth Report is
subject to direct competition from other exchanges, as other exchanges
offer similar products for a fee.\4\
---------------------------------------------------------------------------
\4\ See, e.g., https://www.nasdaqtrader.com/Trader.aspx?id=DPPriceListOptions#nom; and https://www.nyse.com/publicdocs/nyse/data/NYSE_Market_Data_Fee_Schedule.pdf.
---------------------------------------------------------------------------
The Exchange's affiliated equities and options exchanges (i.e.,
Cboe Exchange, Inc. (``Cboe Options''), Cboe C2 Exchange, Inc. (``C2
Options''), Cboe EDGX Exchange, Inc. (``EDGX''), Cboe BZX Exchange,
Inc. (``BZX''), and Cboe EDGA Exchange, Inc. (``EDGA''), (collectively,
``Affiliates'') also offer similar data products.\5\ Particularly, each
of the Exchange's Affiliates offer a daily and historical archive of
their depth of book real-time feed with execution information based on
their trading activity that is substantially similar to the information
provided by the Exchange through its Depth Data products.
---------------------------------------------------------------------------
\5\ See, for example, EDGX Fee Schedule, BZX Fee Schedule, EDGA
Fee Schedule.
---------------------------------------------------------------------------
The Exchange proposes to provide a temporary pricing incentive
program in which Members or Non-Members that purchase Historical Depth
Reports will receive a percentage fee discount where specific purchase
thresholds are met. Specifically, the Exchange proposes to provide a
20% discount for ad-hoc purchases of Historical Depth 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. The Exchange intends to introduce
the discount program beginning October 18, 2024, with the program
remaining in effect through December 31, 2024. The Exchange also notes
that it previously adopted similar discount programs for other
historical data products offered by the Exchange.\7\
---------------------------------------------------------------------------
\6\ The discount will apply on an order-by-order basis. The
discount will apply to the total purchase price, once the $20,000
minimum purchase is satisfied (for example, a qualifying order of
$25,000 would be discounted to $20,000, i.e., receive a 20% discount
of $5,000).
\7\ See Securities Exchange Act Release No. 99181 (December 14,
2023), 88 FR 88176 (December 20, 2023) (SR-CboeBYX-2023-017) and
Securities Exchange Act Release No. 100331 (June 13, 2024), 89 FR
51916 (June 20, 2024) (SR-CboeBYX-2024-022).
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[[Page 87655]]
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 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. The Exchange also believes the proposed rule
change is consistent with Section 6(b)(4) of the Act,\11\ which
requires that Exchange rules provide for the equitable allocation of
reasonable dues, fees, and other charges among its Members and other
persons using its facilities.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
\11\ 15 U.S.C. 78f(b)(4).
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. The Exchange believes that the proposed fee
changes will further broaden the availability of U.S. equity market
data to investors consistent with the principles of Regulation NMS. The
Exchange believes the dissemination of historical market depth data via
Historical Depth Reports benefits investors through increased
transparency and may promote better informed trading, as well as
research and studies of the equities industry. Nevertheless, the
Exchange notes that such data is not necessary for trading and as noted
above, is entirely optional. Moreover, several other exchanges offer a
similar data product which offer the same type of data content through
similar reports.\12\
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\12\ See supra note 4.
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The Exchange operates in a highly competitive environment. Indeed,
there are currently 16 registered equities exchanges that trade
equities. Based on publicly available information, no single equities
exchange has more than 13% of the equity market share.\13\ 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.'' \14\ Making similar data products
available to market participants fosters competition in the
marketplace, and constrains the ability of exchanges to charge
supercompetitive fees. In the event that a market participant views one
exchange's data product as more attractive than the competition, that
market participant can, and often does, switch between similar
products. The proposed fees are a result of the competitive environment
of the U.S. equities industry as the Exchange seeks to adopt fees to
attract purchasers of Historical Depth Reports.
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\13\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (October 3, 2024), available at https://www.cboe.com/us/equities/market_statistics/.
\14\ 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 Depth Reports is
reasonable because such purchasers would receive a 20% discount for
purchasing $20,000 or more worth of Historical Depth Reports. The
Exchange believes the proposed discount is reasonable as it will give
purchasers the ability to use and test the Historical Depth Reports at
a discounted rate, prior to purchasing additional months or a monthly
subscription, and will therefore encourage users to purchase Historical
Depth Reports. Further, the proposed discount is intended to promote
increased use of the Exchange's Historical Depth Reports by defraying
some of the costs a purchaser would ordinarily have to expend before
using the data product. The Exchange believes that the proposed
discount is equitable and not unfairly discriminatory because it will
apply equally to all Members and non-Members who purchase Historical
Depth Reports. Lastly, the purchase of this data product is
discretionary and not compulsory. Indeed, no market participant is
required to purchase the Historical Depth Reports, and the Exchange is
not required to make Historical Depth Reports available to all
investors. Potential purchasers may request the data at any time if
they believe it to be valuable or may decline to purchase such data. As
noted above, the Exchange has previously adopted similar discount
programs.\15\
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\15\ See Securities Exchange Act Release No. 99181 (December 14,
2023), 88 FR 88176 (December 20, 2023) (SR-CboeBYX-2023-017) and
Securities Exchange Act Release No. 100331 (June 13, 2024), 89 FR
51916 (June 20, 2024) (SR-CboeBYX-2024-022).
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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, the
Exchange's Historical Depth Reports offering is subject to direct
competition from several other options exchanges that offer similar
data products. Moreover, purchase of Historical Depth Reports is
optional. It is designed to help investors understand underlying market
trends to improve the quality of investment decisions, but is not
necessary to execute a trade.
The proposed rule changes are grounded in the Exchange's efforts to
compete more effectively. In this competitive environment, potential
purchasers are free to choose which, if any, similar product to
purchase to satisfy their need for market information. As a result, the
Exchange believes this proposed rule change permits fair competition
among national securities exchanges. Further, the Exchange believes
that these changes
[[Page 87656]]
will not cause any unnecessary or inappropriate burden on intermarket
competition, as the proposed incentive program applies uniformly to any
purchaser of Historical Depth Reports.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \16\ and paragraph (f) of Rule 19b-4 \17\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 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-CboeBYX-2024-038 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-CboeBYX-2024-038. 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-CboeBYX-2024-038 and should
be submitted on or before November 25, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-25537 Filed 11-1-24; 8:45 am]
BILLING CODE 8011-01-P
