Notice2022-05982
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Applicable to Various Market Data Products
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 22, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 55 (Tuesday, March 22, 2022)</title>
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[Federal Register Volume 87, Number 55 (Tuesday, March 22, 2022)]
[Notices]
[Pages 16277-16279]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-05982]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94432; File No. SR-CboeBZX-2022-015]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Fees Applicable to Various Market Data Products
March 16, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 3, 2022, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (the ``Commission'') a
proposed rule change to amend the fees applicable to various market
data products. The text of the proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (<a href="http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/">http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Market Data section applicable
to its equities trading platform (``BZX Equities''). Particularly, the
Exchange proposes to (i) adopt a New External Distributor Credit
applicable to Cboe One Premium, and (ii) extend the New External
Distributor Credit applicable to BZX Summary Depth Feed from one (1)
month to three (3) months.\3\
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\3\ The Exchange initially filed the proposed fee changes on
January 3, 2022 (SR-CboeBZX-2022-001). On March 3, 2022 the Exchange
withdrew that filing and submitted this proposal.
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By way of background, Cboe One Premium is a data feed that
disseminates, on a real-time basis, the aggregate best bid and offer
(``BBO'') of all displayed orders for securities traded on BZX and its
affiliated exchanges (i.e., Cboe BYX Exchange, Inc. (``BYX''), Cboe
EDGX Exchange, Inc. (``EDGX''), and Cboe EDGA Exchange, Inc.
(``EDGA'')) and contains optional functionality which enables
recipients to receive aggregated two-sided quotations from BZX and its
affiliated equities exchanges for up to five (5) price levels.\4\
Currently, the Exchange charges an external distribution fee of $12,500
per month to External Distributors \5\ of Cboe One Premium. The
Exchange now proposes to adopt a New External Distributor Credit which
provide that new External Distributors of the Cboe One Premium Feed
will not be charged an External Distributor Fee for their first three
(3) months in order to allow them to enlist new Users to receive the
Cboe One Premium Feed. The Exchange believes the proposal will
incentivize External Distributors to enlist new users to receive Cboe
One Premium. To
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ensure consistency across the Cboe Equity Exchanges, EDGA, EDGX, and
BYX will be filing companion proposals to reflect this proposal in
their respective fee schedules.
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\4\ The Cboe Aggregated Market (``Cboe One'') Feed is a data
feed that contains the aggregate best bid and offer of all displayed
orders for securities traded on the Exchange and its affiliated
exchanges (i.e., BYX, EDGX, and EDGA). See Exchange Rule 11.22(j).
The Cboe One Feed contains optional functionality which enables
recipients to receive aggregated two-sided quotations from the Cboe
Equities Exchanges for up to five (5) price levels (``Cboe One
Premium Feed''). The Cboe One Premium external distribution fee is
equal to the aggregate BZX Summary Depth, BYX Summary Depth, EDGX
Summary Depth, and EDGA Summary Depth external distribution fees.
\5\ An External Distributor of an Exchange Market Data product
is a Distributor that receives the Exchange Market Data product and
then distributes that data to a third party or one or more Users
outside the Distributor's own entity.
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The Exchange notes that it offers similar credits for other market
data products. For example, the Exchange currently offers a one (1)
month New External Distributor Credit applicable to Cboe One
Summary,\6\ which is a data feed that disseminates, on a real-time
basis, the aggregate BBO of all displayed orders for securities traded
on BZX and its affiliated equities exchanges and also contains
individual last sale information for the BZX and its affiliated
equities exchanges.\7\ It also offers a New External Distributor Credit
of one (1) month for subscribers of BZX Summary Depth, which is a data
feed that offers aggregated two-sided quotations for all displayed
orders entered into the System for up to five (5) price levels. BZX
Summary Depth also contains the individual last sale information,
Market Status, Trading Status, and Trade Break messages.\8\ As noted
above, the External Distribution fees for Cboe One Summary is
equivalent to the aggregate BZX Summary Depth, BYX Summary Depth, EDGA
Summary Depth, and EDGX Summary Depth External Distribution fees. In
order to alleviate any competitive issues that may arise with a vendor
seeking to offer a product similar to the Cboe One Premium Feed based
on the underlying data feeds, the Exchange proposes to also extend the
current New External Distributor Credit for BZX Summary Depth from one
(1) month to three (3) months and the Exchange's affiliates BYX, EDGA
and EDGX are also submitting similar proposals to increase the length
of their respective Summary Depth New External Distributor Credits from
one (1) month to three (3) months. The respective proposals to extend
these credits to three months ensures the proposed New External
Distributor Credit for Cboe One Premium will continue to not cause the
combined cost of subscribing to BZX, BYX, EDGA, and EDGX Summary Depth
feeds for new External Distributors to be greater than those currently
charged to subscribe to the Cboe One Premium feed.
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\6\ See Exchange Rule 11.22(j).
\7\ The Exchange notes that when it first adopted the New
External Distributor Credit for Cboe One Summary, it similarly
applied for a new External Distributor's first three (3) months. See
Securities Exchange Act Release No. 74285 (February 18, 2015), 80 FR
9828 (February 24, 2015) (SR-BATS-2015-11).
\8\ See Exchange Rule 11.22(a).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\9\ in general, and
furthers the objectives of Section 6(b)(4),\10\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its members and other recipients of
Exchange data. In addition, the Exchange believes that the proposed
rule change is consistent with Section 11(A) of the Act as it supports
(i) fair competition among brokers and dealers, among exchange markets,
and between exchange markets and markets other than exchange markets,
and (ii) the availability to brokers, dealers, and investors of
information with respect to quotations for and transactions in
securities.\11\ Finally, the proposed rule change is also consistent
with Rule 603 of Regulation NMS,\12\ which provides that any national
securities exchange that distributes information with respect to
quotations for or transactions in an NMS stock do so on terms that are
not unreasonably discriminatory.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4).
\11\ 15 U.S.C. 78k-1.
\12\ See 17 CFR 242.603.
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The Exchange believes that adopting a New External Distributor
Credit for Cboe One Premium is equitable and reasonable. As discussed
above, a similar New External Distributor Fee Credit was initially
adopted at the time the Exchange began to offer the Cboe One Summary to
subscribers. It was intended to incentivize new Distributors to enlist
Users to subscribe to Cboe One Summary in an effort to broaden the
product's distribution. Now, the Exchange proposes to adopt a similar
credit for Cboe One Premium subscribers for their first three (3)
months to similarly incentivize new Distributors to enlist Users to
subscribe to Cboe One Premium in an effort to broaden the product's
distribution. While this incentive is not available to Internal
Distributors of Cboe One Premium, the Exchange believes it is
appropriate as Internal Distributors have no subscribers outside of
their own firm. Furthermore, External Distributors are subject to
higher risks of launch as the data is provided outside their own firm.
For these reasons, the Exchange believes it is appropriate to provide
this incentive so that External Distributors have sufficient time to
test the data within their own systems prior to going live externally.
The Exchange believes extending the New External Distributor Credit for
BZX Summary Depth from one (1) month to three (3) months is also
equitable and reasonable, as it (along with simultaneous corresponding
proposals by the Exchange's affiliates) ensures the proposed New
External Distributor Credit for Cboe One Premium will continue to not
cause the combined cost of subscribing to BZX, BYX, EDGA, and EDGX
Summary Depth feeds for new External Distributors to be greater than
those currently charged to subscribe to the Cboe One Premium feed.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
believes that the proposed fees do not put any market participants at a
relative disadvantage compared to other market participants. As
discussed, the proposed credits would apply to all External
Distributors Cboe One Premium and BZX Depth on an equal and non-
discriminatory basis. Further, 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 furtherance of the purposes of the Act.
Other exchanges are free to adopt a similar waiver if they choose. As
discussed above, the proposed amendments are designed to enhance
competition by providing an incentive to new Distributors to enlist new
subscribers.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \13\ and paragraph (f) of Rule 19b-4 \14\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule
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change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1c6e697079317f7371717972686f5c6f797f327b736a"><span class="__cf_email__" data-cfemail="d4a6a1b8b1f9b7bbb9b9b1baa0a794a7b1b7fab3bba2">[email protected]</span></a>. Please include
File Number SR-CboeBZX-2022-015 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-CboeBZX-2022-015. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeBZX-2022-015 and should be submitted
on or before April 12, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-05982 Filed 3-21-22; 8:45 am]
BILLING CODE 8011-01-P
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