Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for the NYSE Aggregated Lite Data Feed, 91843-91852 [2024-27023]
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Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–27021 Filed 11–19–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101626; File No. SR–NYSE–
2024–71]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Establish
Fees for the NYSE Aggregated Lite
Data Feed
November 14, 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 November
4, 2024, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
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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 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.
11 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.
1 15
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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 Proprietary Market Data Fees
Schedule (‘‘Fee Schedule’’) and
establish fees for the NYSE Aggregated
Lite (‘‘NYSE Agg Lite’’) data feed,4
effective November 4, 2024.5
In summary, the NYSE Agg Lite is a
NYSE-only frequency-based depth of
book market data feed of the NYSE’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 Agg Lite
is a compilation of limit order data that
the Exchange provides to vendors and
subscribers. The NYSE 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 Agg Lite includes order
imbalance information prior to the
opening and closing of trading.
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
4 The proposed rule change establishing the
NYSE Agg Lite data feed was immediately effective
on February 27, 2024. See Securities Exchange Act
Release No. 99689 (March 7, 2024), 89 FR 18466
(March 13, 2024) (SR–NYSE–2024–12) (Notice of
Filing and Immediate Effectiveness of Proposed
Rule Change To Establish the NYSE Aggregated Lite
Market Data Feed).
5 The Exchange originally filed to amend the Fee
Schedule on May 13, 2024 (SR–NYSE–2024–29).
On July 11, 2024, the Exchange withdrew SR–
NYSE–2024–29 and replaced it with SR–NYSE–
2024–38. On September 6, 2024, the Exchange
withdrew SR–NYSE–2024–38 and replaced it with
SR–NYSE–2024–54. On November 4, 2024, the
Exchange withdrew SR–NYSE–2024–54 and
replaced it with this filing.
6 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
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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
Proposed NYSE Agg Lite Data Feed Fees
The Exchange proposes to establish
the fees listed below for the NYSE Agg
Lite data feed. The Exchange proposes
to charge fees for the same categories of
market data use as its affiliated
exchanges (namely, NYSE Arca, 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 Agg Lite data feed,
the Exchange proposes to charge $3,000
per month. This proposed Access Fee
would be charged to any data recipient
that receives the NYSE Agg Lite data
feed. Data recipients that only use
display devices to view NYSE 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 $35 per month and a Non(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/divisions
marketregmrexchangesshtml.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/.
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Professional User Fee (Per User) of $6
per month. These user fees would apply
to each display device that has access to
the NYSE Agg Lite data feed.
3. Redistribution Fee. For
redistribution of the NYSE 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 Agg Lite
data feed, which is defined to mean a
vendor or any person that provides a
real-time NYSE 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 Agg Lite data
feed, the Exchange proposes to waive
the Access Fee and Redistribution Fee
for a Redistributor if the Redistributor
provides NYSE 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 Agg Lite data feed will have the
Access Fee and Redistribution Fee
waived if such Redistributor provides
NYSE 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 Agg Lite, the
Exchange believes that this would
provide an incentive for Redistributors
to make the NYSE Agg Lite market data
product available to its customers.
Specifically, if a data recipient is
interested in subscribing to NYSE 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 Agg Lite. The
Exchange believes that this proposed fee
waiver for Redistributors of NYSE Agg
Lite would provide an incentive for
Redistributors to make NYSE 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 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
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maximum of the combination of the
Access Fee and Redistribution Fee for
NYSE 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 $3,250 or
more would receive a maximum credit
of $3,250 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
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
Agg Lite. Subscribers that are brokerdealers will be able to distribute the
NYSE Agg Lite data feed for display
usage to an unlimited number of nonprofessional users for a monthly fee of
$20,000, with an opportunity to lower
that fee to $18,000 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 Agg Lite data feed
for display usage to an unlimited
number of recipients (professional users
and non-professional users) for a
monthly fee of $25,000, with an
opportunity to lower that fee to $22,500
per month if they contract for twelve
months of service in advance.
As proposed, the NYSE 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 Agg Lite.
Further, the Exchange proposes to waive
the Access Fee and the Redistribution
Fee for NYSE 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
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
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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 $18,000 for distribution
of NYSE Agg Lite to an unlimited
number of non-professional users, or
$22,500 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 Agg Lite by paying the standard
fee of $20,000 per month for
distribution of NYSE Agg Lite to an
unlimited number of non-professional
users, or $25,000 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 11 for the NYSE Agg
Lite data feed that are based on the nondisplay use categories charged by NYSE
Arca, NYSE American, NYSE National,
the CTA, and the UTP Plan for nondisplay use.12 Non-display use would
11 See
infra, note 15.
Endnote 1 to the NYSE Arca Equites
Proprietary Market Data Fees, available here:
https://www.nyse.com/publicdocs/nyse/data/
NYSE_Arca_Equities_Proprietary_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 NonDisplay Policy, available here: https://utpplan.com/
DOC/Datapolicies.pdf. See, e.g., Securities
Exchange Act Release Nos. 69278 (April 2, 2013),
78 FR 20973 (April 8, 2013) (SR–NYSE–2013–25)
12 See
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mean accessing, processing, or
consuming the NYSE 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 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 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 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 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 NonDisplay 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 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
and 72923 (Aug. 26, 2014), 79 FR 52079 (Sept. 2,
2014) (SR–NYSE–2014–43).
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NYSE Agg Lite data feed fees on the Fee
Schedule. The text in the endnote
would remain unchanged.
Data recipients that receive the NYSE
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 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 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 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 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
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
Agg Lite data feed would be set 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 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 Agg Lite data feed changes at
any time after the data recipient submits
a Non-Display Use Declaration, the data
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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 Agg Lite data feed in more than
two locations would be charged $200
per additional location per month. No
new reporting would be required.13
8. Three-Month Fee Waiver. The
Exchange currently provides a onemonth free trial to any firm that
subscribes to a particular NYSE 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.14 The Exchange now
proposes an additional three-month fee
waiver for any Redistributor that
subscribes to a particular NYSE 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 market data product
listed on the Fee Schedule. As
proposed, a first-time Redistributor that
subscribes to a particular NYSE 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 NonProfessional User Fee, and Enterprise
Fee would be billable after the first
calendar month after a first-time
Redistributor subscribes to a particular
NYSE market data product. For
example, a first-time Redistributor that
chooses to subscribe to NYSE 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
13 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 Agg Lite data
feed, that data recipient will pay the Multiple Data
Feed fee with respect to three of the five locations.
14 See Fee Schedule.
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receive access to the particular NYSE
market data product. The Exchange
would provide the three-month fee
waiver for each particular product to
each Redistributor once.
The Exchange believes that providing
a three-month fee waiver to NYSE
market data products listed on the Fee
Schedule would enable potential
Redistributors to determine whether a
particular NYSE 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 Agg Lite data feed available
or to offer any specific pricing
alternatives to any customers, nor is any
firm required to purchase the NYSE Agg
Lite data feed. Firms that choose to
purchase the NYSE 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 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 Agg Lite and for Redistributors to
subscribe to the product for purposes of
providing external distribution of NYSE
Agg Lite. The Exchange believes that
this proposed rule change also has the
potential to attract new Redistributors
for NYSE Agg Lite.
The proposed fee structure is not
novel as it is based on the fee structure
currently in place for the NYSE
OpenBook feed. The Exchange is
proposing fees for the NYSE Agg Lite
data feed that are based on the existing
fee structure and rates that data
recipients already pay for the NYSE
OpenBook feed. Specifically, the fees for
the NYSE OpenBook feed—which like
the NYSE Agg Lite data feed, includes
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depth of book and security status
messages—consist of an Access Fee of
$5,000 per month, a Professional User
Fee (Per User) of $60 per month, a NonProfessional User Fee (Per User) of $15
per month, Non-Display Fees 15 of
$6,000 per month for each of Categories
1, 2 and 3, and a Redistribution Fee of
$3,000 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 OpenBoook.16
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,17
in general, and Sections 6(b)(4) and
6(b)(5) of the Act,18 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
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.’’ 19
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
15 The
Exchange does not anticipate that data
recipients would use NYSE Agg Lite for nondisplay purpose. However, the Exchange is
adopting Non-Display use fees so that the proposed
fees for NYSE Agg Lite are consistent with the
Exchange’s fee structure for its other proprietary
market data products.
16 See NYSE Proprietary Market Data Fees at
https://www.nyse.com/publicdocs/nyse/data/
NYSE_Market_Data_Fee_Schedule.pdf.
17 15 U.S.C. 78f(b).
18 15 U.S.C. 78f(b)(4), (5).
19 See Regulation NMS Adopting Release, 70 FR
37495, at 37499.
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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.’’ 20
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.’ ’’ 21
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.22
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.’’ 23
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.’’ 24
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
20 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).
21 Id. at 535.
22 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).
23 NetCoalition I, 615 F.3d at 544 (internal
quotation omitted).
24 Id.
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stock.’’ 25 Indeed, today, equity trading
is currently dispersed across 16
exchanges,26 numerous alternative
trading systems,27 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.28
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; 29 Members Exchange (MEMX),
which began operations as an exchange
on September 29, 2020; 30 and Miami
International Holdings (MIAX), which
began operations of its first equities
exchange on September 29, 2020.31
More specifically, in setting fees for
the NYSE 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 competitive market for
non-latency-sensitive proprietary partial
depth of book market data.
The Exchange notes that the NYSE
Agg Lite is entirely optional. The
25 See Securities Exchange Act Release No. 61358,
75 3594, 3597 (January 21, 2010) (File No. S7–02–
10) (Concept Release on Equity Market Structure).
26 See Cboe Global Markets, U.S. Equities Market
Volume Summary, available at https://
markets.cboe.com/us/equities/market_share/.
27 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.
28 See Cboe Global Markets, U.S. Equities Market
Volume Summary, available at https://
markets.cboe.com/us/equities/market_share/.
29 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/6462417
e8db99f8baa0698e7_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/6462417e8db99f8
baa06952c/6462417e8db99f8baa069873_MA-2020025.pdf.
30 As of October 29, 2020, MEMX is trading all
NMS symbols. See https://info.memxtrading.com/
trader-alert-20-10-memx-trading-symbols-update/.
31 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.
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Exchange is not required to make the
NYSE Agg Lite available to any
customers, nor is any customer required
to purchase the NYSE 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,32 a customer’s decision
whether to purchase the NYSE Agg Lite
is entirely discretionary. The Exchange
believes NYSE 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 Agg Lite data for
purposes of making order-routing or
trading decisions. Firms that choose to
subscribe to NYSE Agg Lite are able to
determine for themselves whether the
NYSE Agg Lite data feed is necessary for
their business needs, and if so, whether
or not it is attractively priced. If the
NYSE 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 their business operations in
ways that do not use the NYSE Agg Lite
data feed.
In setting the proposed fees for the
NYSE Agg Lite data feed, the Exchange
considered the competitiveness of the
market for non-latency-sensitive
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.33
32 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.
33 For example, in the National IF Approval
Order, the Commission recognized that for some
customers, the best bid and offer information from
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The NYSE Aggregated Lite market
data feed is subject to significant
competitive forces that constrain its
pricing. Specifically, the NYSE 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’’).34 Similar to Cboe
Summary Depth, NYSE Agg Lite can be
utilized by vendors and subscribers to
quickly access and distribute aggregated
order book data. As noted above, NYSE
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, except unlike Cboe Summary
Depth, which provides aggregated depth
per security for up to five price levels,
NYSE Agg Lite would provide
aggregated depth per security for up to
ten price levels on both the bid and offer
sides of the NYSE limit order book as
well as auction imbalance data.
The specific fees that the Exchange
proposes for the NYSE Agg Lite data
feed are reasonable for the following
additional reasons.
Overall. The Exchange believes that
the proposed fees for the NYSE 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 Agg Lite data feed are
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 22, 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)).
34 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.
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also reasonable when compared to fees
for comparable products, such as the
Cboe Summary Depth.35 Additionally,
the Exchange is proposing fees for the
NYSE Agg Lite data feed that are based
on the existing fee structure that data
recipients already pay for the NYSE’s
other market data products. The
Exchange believes that adopting the
same fee structure would reduce
administrative burdens on NYSE data
subscribers that also currently subscribe
to market data feeds from NYSE.
Access Fee. The Exchange believes
that the proposed monthly Access Fee
of $3,000 for the NYSE Aggregated Lite
data feed is reasonable because it is
comparable to 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.36
User Fees. The Exchange believes that
having separate Professional and NonProfessional User fees for the NYSE 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 NonProfessional User fee is reasonable
because it provides an additional
method for Non-Professional Users to
access the NYSE Agg Lite data feed by
providing the same data that is available
to Professional Users. The proposed
monthly Professional User Fee (Per
User) of $35 and monthly NonProfessional User Fee (Per User) of $6
are reasonable because they are
comparable to user fees generally
charged by exchanges. For example,
NYSE charges a monthly Professional
User Fee (Per User) of $60 and a
monthly Non-Professional User Fee (Per
User) of $15 for the NYSE OpenBook
feed.37 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 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
35 See https://cdn.cboe.com/resources/
membership/US_Market_Data_Product_Price_
List.pdf.
36 Id.
37 See Fee Schedule.
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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 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
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.38
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 Agg Lite data
feed for display usage to an unlimited
number of non-professional users for a
monthly fee of $20,000, or $18,000 if
they contract for twelve months of
service in advance. Alternatively,
subscribers that are broker-dealers
would be able to disseminate the NYSE
Agg Lite data feed for display usage to
an unlimited number of professional
users and non-professional users for a
monthly fee of $25,000, or $22,500 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.39
Non-Display Use Fees.40 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
38 See
supra, note 35.
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).
40 See supra, note 15.
39 For
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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 OpenBook for
Categories 1, 2 and 3 is $6,000 per
month.41 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 Agg Lite data
feed.
The proposed Non-Display Use fees
for the NYSE 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 Agg Lite data
feed and can correctly assess fees for the
uses of the NYSE 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 Agg Lite data
feed, the Exchange needs to have
current and accurate information about
the use of the NYSE 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,
41 See
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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 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
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 threemonth fee waiver proposed by the
Exchange.42
42 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).
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For all of the foregoing reasons, the
Exchange believes that the proposed
fees for the NYSE Agg Lite data feed are
reasonable.
The Proposed Fees Are Equitably
Allocated
The Exchange believes the proposed
fees for the NYSE 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 Agg Lite data feed. Any
subscriber or vendor that chooses to
subscribe to the NYSE 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 Agg Lite
data feed and may choose to receive the
data on the NYSE 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
$3,000 for the NYSE 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 Agg Lite data feed, 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 ($35 per month
per user) from Non-Professional User
fees ($6 per month per user) for display
device access to the NYSE 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.43
Offering the NYSE 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 Agg Lite
data feed.
Redistribution Fees. The Exchange
believes the proposed monthly fee of
43 See, e.g., Securities Exchange Act Release No.
59544 (March 9, 2009), 74 FR 11162 (March 16,
2009) (SR–NYSE–2008–131) (establishing the $15
Non-Professional User Fee (Per User) for NYSE
OpenBook); 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.
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$250 for redistributing the NYSE 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 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 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
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any data recipient that pays an Access
Fee for the NYSE 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 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 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 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 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 Agg Lite data feed are
equitably allocated.
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The Proposed Fees Are Not Unfairly
Discriminatory
The Exchange believes the proposed
fees for the NYSE 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 Agg Lite data
feed. Any subscriber, including
Redistributor, that chooses to subscribe
to the NYSE 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 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
$3,000 for the NYSE 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 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 ($35 per month
per user) from Non-Professional User
fees ($6 per month per user) for display
device access to the NYSE 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.44 Offering the
NYSE 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 Agg Lite data
feed.
Redistribution Fees. The Exchange
believes the proposed monthly fee of
$250 for redistributing the NYSE 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
44 Id.
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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.45 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.
Non-Display Use Fees.46 The
Exchange believes the proposed NonDisplay 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 nondisplay 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
45 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).
46 See supra, note 15.
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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 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 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 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 Agg Lite data feed to
new Redistributors for three months is
not unfairly discriminatory because it
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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
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 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 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 Agg Lite data feed, and
customers may choose whether to
subscribe to the feed at all. The
Exchange also believes that 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. 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
PO 00000
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91851
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 nonlatency-sensitive 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. As noted above,
BZX, BYX, EDGA, and EDGX each offers
a proprietary data feed like the NYSE
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
Pursuant to Section 19(b)(3)(A)(ii) of
the Act,47 and Rule 19b–4(f)(2)
thereunder 48 the Exchange has
designated this proposal as establishing
or changing a due, fee, or other charge
imposed on any person, whether or not
the person is a member of the selfregulatory organization, which renders
the proposed rule change effective upon
filing. 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.
47 15
48 17
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CFR 240.19b–4.
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Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices
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:
[FR Doc. 2024–27023 Filed 11–19–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSE–2024–71 on the subject line.
[Investment Company Act Release No.
35385; 812–15571]
Diamond Hill Securitized Credit Fund
and Diamond Hill Capital Management,
Inc.
November 14, 2024.
Paper Comments
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
ACTION: Notice.
AGENCY:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
khammond on DSK9W7S144PROD with NOTICES
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.49
Vanessa A. Countryman,
Secretary.
All submissions should refer to file
number SR–NYSE–2024–71. 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–NYSE–2024–71 and should be
submitted on or before December 11,
2024.
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 17d1 under the Act.
SUMMARY OF APPLICATION: 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.
APPLICANTS: Diamond Hill Securitized
Credit Fund and Diamond Hill Capital
Management, Inc.
FILING DATES: The application was filed
on May 7, 2024, and amended on
August 13, 2024.
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
Secretarys-Office@sec.gov and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on December 9, 2024, and
should be accompanied by proof of
service on the Applicants, in the form
of an affidavit, or, for lawyers, a
certificate of service. Pursuant to rule 0–
5 under the Act, hearing requests should
state the nature of the writer’s interest,
49 17
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any facts bearing upon the desirability
of a hearing on the matter, the reason for
the request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
Michael V. Wible, Esq., Thompson Hine
LLP, at Michael.Wible@
thompsonhine.com and Jo Ann Quinif,
President, Diamond Hill Securitized
Credit Fund, at jquinif@diamondhill.com.
FOR FURTHER INFORMATION CONTACT:
Kieran G. Brown, Senior Counsel, or
Terri Jordan, Branch Chief, at (202) 551–
6825 (Division of Investment
Management, Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ amended and restated
application, dated August 13, 2024,
which may be obtained via the
Commission’s website by searching for
the file number at the top of this
document, or for an Applicant using the
Company name search field on the
SEC’s EDGAR 3 system. The SEC’s
EDGAR system may be searched at
https://www.sec.gov/edgar/searchedgar/
legacy/companysearch.html. You may
also call the SEC’s Public Reference
Room at (202) 551–8090.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–27014 Filed 11–19–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–139, OMB Control No.
3235–0128]
Submission for OMB Review;
Comment Request; Reinstatement
With Change: Rule 12f–1
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
E:\FR\FM\20NON1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 224 (Wednesday, November 20, 2024)]
[Notices]
[Pages 91843-91852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27023]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101626; File No. SR-NYSE-2024-71]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Establish Fees for the NYSE Aggregated Lite Data Feed
November 14, 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 November 4, 2024, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the 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.
---------------------------------------------------------------------------
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 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 Proprietary Market Data
Fees Schedule (``Fee Schedule'') and establish fees for the NYSE
Aggregated Lite (``NYSE Agg Lite'') data feed,\4\ effective November 4,
2024.\5\
---------------------------------------------------------------------------
\4\ The proposed rule change establishing the NYSE Agg Lite data
feed was immediately effective on February 27, 2024. See Securities
Exchange Act Release No. 99689 (March 7, 2024), 89 FR 18466 (March
13, 2024) (SR-NYSE-2024-12) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change To Establish the NYSE
Aggregated Lite Market Data Feed).
\5\ The Exchange originally filed to amend the Fee Schedule on
May 13, 2024 (SR-NYSE-2024-29). On July 11, 2024, the Exchange
withdrew SR-NYSE-2024-29 and replaced it with SR-NYSE-2024-38. On
September 6, 2024, the Exchange withdrew SR-NYSE-2024-38 and
replaced it with SR-NYSE-2024-54. On November 4, 2024, the Exchange
withdrew SR-NYSE-2024-54 and replaced it with this filing.
---------------------------------------------------------------------------
In summary, the NYSE Agg Lite is a NYSE-only frequency-based depth
of book market data feed of the NYSE'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 Agg Lite is a compilation of
limit order data that the Exchange provides to vendors and subscribers.
The NYSE 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 Agg
Lite includes order imbalance information prior to the opening and
closing of trading.
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\
---------------------------------------------------------------------------
\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 Agg Lite Data Feed Fees
The Exchange proposes to establish the fees listed below for the
NYSE Agg Lite data feed. The Exchange proposes to charge fees for the
same categories of market data use as its affiliated exchanges (namely,
NYSE Arca, 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 Agg Lite data
feed, the Exchange proposes to charge $3,000 per month. This proposed
Access Fee would be charged to any data recipient that receives the
NYSE Agg Lite data feed. Data recipients that only use display devices
to view NYSE 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 $35 per month and a Non-
[[Page 91844]]
Professional User Fee (Per User) of $6 per month. These user fees would
apply to each display device that has access to the NYSE Agg Lite data
feed.
3. Redistribution Fee. For redistribution of the NYSE 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 Agg Lite data feed, which is defined to mean a vendor or any
person that provides a real-time NYSE 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 Agg Lite data
feed, the Exchange proposes to waive the Access Fee and Redistribution
Fee for a Redistributor if the Redistributor provides NYSE 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 Agg Lite data feed will have
the Access Fee and Redistribution Fee waived if such Redistributor
provides NYSE 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 Agg Lite, the Exchange believes
that this would provide an incentive for Redistributors to make the
NYSE Agg Lite market data product available to its customers.
Specifically, if a data recipient is interested in subscribing to NYSE
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 Agg Lite. The Exchange believes that
this proposed fee waiver for Redistributors of NYSE Agg Lite would
provide an incentive for Redistributors to make NYSE 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
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 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 $3,250 or more would receive a
maximum credit of $3,250 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 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 Agg Lite. Subscribers that are broker-dealers will be
able to distribute the NYSE Agg Lite data feed for display usage to an
unlimited number of non-professional users for a monthly fee of
$20,000, with an opportunity to lower that fee to $18,000 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
Agg Lite data feed for display usage to an unlimited number of
recipients (professional users and non-professional users) for a
monthly fee of $25,000, with an opportunity to lower that fee to
$22,500 per month if they contract for twelve months of service in
advance.
As proposed, the NYSE 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
Agg Lite. Further, the Exchange proposes to waive the Access Fee and
the Redistribution Fee for NYSE 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 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 $18,000 for distribution of NYSE Agg
Lite to an unlimited number of non-professional users, or $22,500 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 Agg Lite by paying the standard fee of $20,000 per
month for distribution of NYSE Agg Lite to an unlimited number of non-
professional users, or $25,000 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 \11\ for the
NYSE Agg Lite data feed that are based on the non-display use
categories charged by NYSE Arca, NYSE American, NYSE National, the CTA,
and the UTP Plan for non-display use.\12\ Non-display use would
[[Page 91845]]
mean accessing, processing, or consuming the NYSE 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 infra, note 15.
\12\ See Endnote 1 to the NYSE Arca Equites Proprietary Market
Data Fees, available here: https://www.nyse.com/publicdocs/nyse/data/NYSE_Arca_Equities_Proprietary_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. 69278 (April 2, 2013), 78 FR 20973 (April
8, 2013) (SR-NYSE-2013-25) and 72923 (Aug. 26, 2014), 79 FR 52079
(Sept. 2, 2014) (SR-NYSE-2014-43).
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Under the proposal, for Non-Display Use of NYSE 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 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 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 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 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 Agg Lite data feed fees on the Fee Schedule. The
text in the endnote would remain unchanged.
Data recipients that receive the NYSE 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 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 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
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 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 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 Agg Lite data feed would be set 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 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 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 Agg Lite data feed in
more than two locations would be charged $200 per additional location
per month. No new reporting would be required.\13\
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\13\ 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
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
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.\14\ The Exchange now
proposes an additional three-month fee waiver for any Redistributor
that subscribes to a particular NYSE 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 market data product
listed on the Fee Schedule. As proposed, a first-time Redistributor
that subscribes to a particular NYSE 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
market data product. For example, a first-time Redistributor that
chooses to subscribe to NYSE 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
[[Page 91846]]
receive access to the particular NYSE market data product. The Exchange
would provide the three-month fee waiver for each particular product to
each Redistributor once.
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\14\ See Fee Schedule.
---------------------------------------------------------------------------
The Exchange believes that providing a three-month fee waiver to
NYSE market data products listed on the Fee Schedule would enable
potential Redistributors to determine whether a particular NYSE 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 Agg Lite data feed
available or to offer any specific pricing alternatives to any
customers, nor is any firm required to purchase the NYSE Agg Lite data
feed. Firms that choose to purchase the NYSE 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 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 Agg Lite and
for Redistributors to subscribe to the product for purposes of
providing external distribution of NYSE Agg Lite. The Exchange believes
that this proposed rule change also has the potential to attract new
Redistributors for NYSE Agg Lite.
The proposed fee structure is not novel as it is based on the fee
structure currently in place for the NYSE OpenBook feed. The Exchange
is proposing fees for the NYSE Agg Lite data feed that are based on the
existing fee structure and rates that data recipients already pay for
the NYSE OpenBook feed. Specifically, the fees for the NYSE OpenBook
feed--which like the NYSE Agg Lite data feed, includes depth of book
and security status messages--consist of an Access Fee of $5,000 per
month, a Professional User Fee (Per User) of $60 per month, a Non-
Professional User Fee (Per User) of $15 per month, Non-Display Fees
\15\ of $6,000 per month for each of Categories 1, 2 and 3, and a
Redistribution Fee of $3,000 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 OpenBoook.\16\
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\15\ The Exchange does not anticipate that data recipients would
use NYSE Agg Lite for non-display purpose. However, the Exchange is
adopting Non-Display use fees so that the proposed fees for NYSE Agg
Lite are consistent with the Exchange's fee structure for its other
proprietary market data products.
\16\ See NYSE Proprietary Market Data Fees at https://www.nyse.com/publicdocs/nyse/data/NYSE_Market_Data_Fee_Schedule.pdf.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\17\ in general, and
Sections 6(b)(4) and 6(b)(5) of the Act,\18\ 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.
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\17\ 15 U.S.C. 78f(b).
\18\ 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
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.'' \19\
---------------------------------------------------------------------------
\19\ 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.'' \20\
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\20\ 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.' '' \21\
---------------------------------------------------------------------------
\21\ 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.\22\
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\22\ 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.'' \23\ 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.'' \24\
---------------------------------------------------------------------------
\23\ NetCoalition I, 615 F.3d at 544 (internal quotation
omitted).
\24\ Id.
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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
[[Page 91847]]
stock.'' \25\ Indeed, today, equity trading is currently dispersed
across 16 exchanges,\26\ numerous alternative trading systems,\27\
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.\28\
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\25\ See Securities Exchange Act Release No. 61358, 75 3594,
3597 (January 21, 2010) (File No. S7-02-10) (Concept Release on
Equity Market Structure).
\26\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at https://markets.cboe.com/us/equities/market_share/.
\27\ 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.
\28\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, available at https://markets.cboe.com/us/equities/market_share/.
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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; \29\ Members Exchange (MEMX), which began operations as an
exchange on September 29, 2020; \30\ and Miami International Holdings
(MIAX), which began operations of its first equities exchange on
September 29, 2020.\31\
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\29\ 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.
\30\ As of October 29, 2020, MEMX is trading all NMS symbols.
See https://info.memxtrading.com/trader-alert-20-10-memx-trading-symbols-update/.
\31\ 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 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 competitive
market for non-latency-sensitive proprietary partial depth of book
market data.
The Exchange notes that the NYSE Agg Lite is entirely optional. The
Exchange is not required to make the NYSE Agg Lite available to any
customers, nor is any customer required to purchase the NYSE 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,\32\ a
customer's decision whether to purchase the NYSE Agg Lite is entirely
discretionary. The Exchange believes NYSE 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 Agg Lite
data for purposes of making order-routing or trading decisions. Firms
that choose to subscribe to NYSE Agg Lite are able to determine for
themselves whether the NYSE Agg Lite data feed is necessary for their
business needs, and if so, whether or not it is attractively priced. If
the NYSE 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 their business operations in ways that do not
use the NYSE Agg Lite data feed.
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\32\ 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 Agg Lite data feed, the
Exchange considered the competitiveness of the market for non-latency-
sensitive 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.\33\
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\33\ 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 22, 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 Aggregated Lite market data feed is subject to significant
competitive forces that constrain its pricing. Specifically, the NYSE
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'').\34\ Similar to Cboe Summary Depth, NYSE Agg Lite can be
utilized by vendors and subscribers to quickly access and distribute
aggregated order book data. As noted above, NYSE 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,
except unlike Cboe Summary Depth, which provides aggregated depth per
security for up to five price levels, NYSE Agg Lite would provide
aggregated depth per security for up to ten price levels on both the
bid and offer sides of the NYSE limit order book as well as auction
imbalance data.
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\34\ 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 Agg Lite
data feed are reasonable for the following additional reasons.
Overall. The Exchange believes that the proposed fees for the NYSE
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 Agg Lite data
feed are
[[Page 91848]]
also reasonable when compared to fees for comparable products, such as
the Cboe Summary Depth.\35\ Additionally, the Exchange is proposing
fees for the NYSE Agg Lite data feed that are based on the existing fee
structure that data recipients already pay for the NYSE's other market
data products. The Exchange believes that adopting the same fee
structure would reduce administrative burdens on NYSE data subscribers
that also currently subscribe to market data feeds from NYSE.
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\35\ See https://cdn.cboe.com/resources/membership/US_Market_Data_Product_Price_List.pdf.
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Access Fee. The Exchange believes that the proposed monthly Access
Fee of $3,000 for the NYSE Aggregated Lite data feed is reasonable
because it is comparable to 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.\36\
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\36\ Id.
---------------------------------------------------------------------------
User Fees. The Exchange believes that having separate Professional
and Non-Professional User fees for the NYSE 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 Agg Lite data feed by providing the same data that is available to
Professional Users. The proposed monthly Professional User Fee (Per
User) of $35 and monthly Non-Professional User Fee (Per User) of $6 are
reasonable because they are comparable to user fees generally charged
by exchanges. For example, NYSE charges a monthly Professional User Fee
(Per User) of $60 and a monthly Non-Professional User Fee (Per User) of
$15 for the NYSE OpenBook feed.\37\ 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 Agg Lite would
provide such market data recipients with a more affordable alternative
to existing substitutes offered by the Exchange and its competitors.
---------------------------------------------------------------------------
\37\ 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 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 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.\38\
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\38\ See supra, note 35.
---------------------------------------------------------------------------
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 Agg Lite data feed
for display usage to an unlimited number of non-professional users for
a monthly fee of $20,000, or $18,000 if they contract for twelve months
of service in advance. Alternatively, subscribers that are broker-
dealers would be able to disseminate the NYSE Agg Lite data feed for
display usage to an unlimited number of professional users and non-
professional users for a monthly fee of $25,000, or $22,500 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.\39\
---------------------------------------------------------------------------
\39\ 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.\40\ 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.
---------------------------------------------------------------------------
\40\ See supra, note 15.
---------------------------------------------------------------------------
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 OpenBook for Categories
1, 2 and 3 is $6,000 per month.\41\ 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 Agg Lite data feed.
---------------------------------------------------------------------------
\41\ See Fee Schedule.
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The proposed Non-Display Use fees for the NYSE 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 Agg Lite data feed and can
correctly assess fees for the uses of the NYSE 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 Agg
Lite data feed, the Exchange needs to have current and accurate
information about the use of the NYSE 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,
[[Page 91849]]
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 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 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.\42\
---------------------------------------------------------------------------
\42\ 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 Agg Lite data feed are reasonable.
The Proposed Fees Are Equitably Allocated
The Exchange believes the proposed fees for the NYSE 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 Agg Lite data feed. Any subscriber or vendor that
chooses to subscribe to the NYSE 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 Agg Lite data feed and may choose to
receive the data on the NYSE 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 $3,000 for the NYSE 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 Agg Lite data feed, 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 ($35 per month per user) from
Non-Professional User fees ($6 per month per user) for display device
access to the NYSE 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.\43\ Offering the
NYSE 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 Agg Lite data feed.
---------------------------------------------------------------------------
\43\ See, e.g., Securities Exchange Act Release No. 59544 (March
9, 2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-2008-131)
(establishing the $15 Non-Professional User Fee (Per User) for NYSE
OpenBook); 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 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 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
[[Page 91850]]
any data recipient that pays an Access Fee for the NYSE 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 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 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 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 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 Agg Lite data feed are equitably allocated.
The Proposed Fees Are Not Unfairly Discriminatory
The Exchange believes the proposed fees for the NYSE 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 Agg Lite data feed. Any
subscriber, including Redistributor, that chooses to subscribe to the
NYSE 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 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 $3,000 for the NYSE 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 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 ($35 per month per user) from
Non-Professional User fees ($6 per month per user) for display device
access to the NYSE 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.\44\ Offering the NYSE 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
Agg Lite data feed.
---------------------------------------------------------------------------
\44\ Id.
---------------------------------------------------------------------------
Redistribution Fees. The Exchange believes the proposed monthly fee
of $250 for redistributing the NYSE 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.\45\ 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.
---------------------------------------------------------------------------
\45\ 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.\46\ 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
[[Page 91851]]
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.
---------------------------------------------------------------------------
\46\ See supra, note 15.
---------------------------------------------------------------------------
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 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 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 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 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 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 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 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 Agg Lite data feed, and customers may choose whether to subscribe
to the feed at all. The Exchange also believes that 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. 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 non-
latency-sensitive 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. As noted above, BZX, BYX,
EDGA, and EDGX each offers a proprietary data feed like the NYSE 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
Pursuant to Section 19(b)(3)(A)(ii) of the Act,\47\ and Rule 19b-
4(f)(2) thereunder \48\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge imposed on any
person, whether or not the person is a member of the self-regulatory
organization, which renders the proposed rule change effective upon
filing. 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.
---------------------------------------------------------------------------
\47\ 15 U.S.C. 78s(b)(3)(A)(ii).
\48\ 17 CFR 240.19b-4.
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[[Page 91852]]
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-NYSE-2024-71 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-NYSE-2024-71. 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-NYSE-2024-71 and should be
submitted on or before December 11, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\49\
---------------------------------------------------------------------------
\49\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-27023 Filed 11-19-24; 8:45 am]
BILLING CODE 8011-01-P
