Notice2022-18188
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Introduce a New Data Product To Be Known as the Short Volume Report
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
August 24, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 163 (Wednesday, August 24, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 163 (Wednesday, August 24, 2022)]
[Notices]
[Pages 52084-52087]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-18188]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95551; File No. SR-CboeEDGX-2022-036]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Introduce a New Data Product To Be Known as the Short Volume Report
August 18, 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 August 9, 2022, Cboe EDGX Exchange, Inc. (``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') is filing
with the Securities and Exchange Commission (``Commission'') a proposed
rule change to Exchange Rule 13.8 to introduce a new data product to be
known as the Short Volume Report. 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/options/regulation/rule_filings/edgx/">http://markets.cboe.com/us/options/regulation/rule_filings/edgx/</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
[[Page 52085]]
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 seeks to amend Rule 13.8 to adopt paragraph 13.8(h),
which introduces a new data product, the Short Volume Report. A
description of each market data product offered by the Exchange is
provided in Exchange Rule 13.8 and proposed Rule 13.8(h) provides that
the Short Volume Report is an end-of-day report that summarizes certain
equity trading activity on the Exchange, and includes trade date,\3\
total volume,\4\ sell short volume,\5\ and sell short exempt volume,\6\
by symbol.\7\ The Short Volume Report will be available for purchase to
both EDGX Members (``Members'') \8\ as well as non-Members.\9\
---------------------------------------------------------------------------
\3\ ``Trade date'' is the date of the trading activity.
\4\ ``Total volume'' is the total share volume of all order
executions.
\5\ ``Sell Short volume'' is the total share volume of all short
order executions, (Sell Short + Sell Short Exempt).
\6\ ``Short exempt volume'' is the total share volume of all
short exempt order executions.
\7\ Symbol refers to the Cboe formatted symbol in which the
trading activity occurred. See <a href="https://cdn.cboe.com/resources/membership/US_Symbology_Reference.pdf">https://cdn.cboe.com/resources/membership/US_Symbology_Reference.pdf</a>.
\8\ The term ``Member'' shall mean any registered broker or
dealer that has been admitted to membership in the Exchange. A
Member will have the status of a ``member'' of the Exchange as that
term is defined in Section 3(a)(3) of the Act. Membership may be
granted to a sole proprietor, partnership, corporation, limited
liability company or other organization which is a registered broker
or dealer pursuant to Section 15 of the Act, and which has been
approved by the Exchange. See Exchange Rule 1.5(n), definition of
``Member''.
\9\ The Exchange intends to submit a separate filing to
establish fees for the Short Volume Report.
---------------------------------------------------------------------------
The Exchange notes that the data fields included in the Short
Volume Report are essentially identical to the fields included by the
New York Stock Exchange LLC (``NYSE'') in their Daily Short Volume
file.\10\ Specifically, the NYSE Daily Short Volume file also includes
trade date,\11\ symbol,\12\ short exempt volume,\13\ short volume,\14\
and total volume.\15\ The proposed Short Volume Report is also similar
to Nasdaq's Daily Short Sale Volume file \16\ which includes, date,\17\
symbol,\18\ short volume,\19\ total volume,\20\ and market center.\21\
The Short Volume Report will be available for purchase \22\ by both
Members and non-Members on a monthly subscription basis, and
subscribers will receive a daily end-of-day file. Additionally, like
NYSE, the Exchange will offer historical daily Short Volume Reports.
Historical daily Short Volume Reports will be available for purchase
dating back to January 2, 2015,\23\ and will include the same data
fields as the daily end-of-day files.\24\
---------------------------------------------------------------------------
\10\ See NYSE Daily Short Volume Client Specification, available
at: <a href="https://www.nyse.com/publicdocs/nyse/data/Daily_Short_Volume_Client_Spec_v1.3.pdf">https://www.nyse.com/publicdocs/nyse/data/Daily_Short_Volume_Client_Spec_v1.3.pdf</a>. The NYSE Daily Short Volume
includes trade date, symbol, short exempt volume, short volume, and
total volume. Unlike NYSE, the proposed Short Volume Report will not
include the trading exchange, as the proposed report includes short
sale volume only for transactions executed on EDGX. Additionally,
NYSE's Daily Short Volume file specifies that short volume is
comprised of the sum of, (sell short volume + sell short exempt
volume + sell short with slide). While the Exchange does not
specifically flag sell short with slide transactions, such
transactions are recognized simply as sell short or sell short
exempt and are thus included in the Exchange's sell short and sell
short exempt volume totals.
\11\ NYSE ``Trade date'' is the date of trading session
activity.
\12\ NYSE ``Symbol'' is defined in the NYSE Symbology
Specification, available at: <a href="https://www.nyse.com/publicdocs/nyse/data/Daily_Short_Volume_Clien_Spec_v1.3.pdf">https://www.nyse.com/publicdocs/nyse/data/Daily_Short_Volume_Clien_Spec_v1.3.pdf</a>.
\13\ NYSE ``Short Exempt Volume'' is the total share volume of
all Short Exempt order executions.
\14\ NYSE ``Short Volume'' is the total share volume of all
short order executions, (Sell Short + Sell Short Exempt + Sell Short
with Slide).
\15\ NYSE ``Total Volume'' is the total share volume of all
order executions.
\16\ See Specifications for Daily Short Sale Volume file,
available at: <a href="https://www.nasdaqtrader.com/content/technicalsupport/specifications/dataproducts/ShortSaleFileSpecifications.pdf">https://www.nasdaqtrader.com/content/technicalsupport/specifications/dataproducts/ShortSaleFileSpecifications.pdf</a>. The
Exchange notes that Nasdaq's comparable product, the Daily Short
Sale Volume file, reflects aggregate information across their
affiliated equity exchanges. The Exchange is not proposing an
aggregated Short Volume Report across its affiliated equity
exchanges, and the proposal includes only volume on EDGX. As such,
the volumes calculated on Nasdaq reports will differ from that in
the proposed Short Volume Report.
\17\ Nasdaq ``Date'' is the trade date (YYYMMDD).
\18\ Nasdaq ``Symbol'' is the Trading Symbol.
\19\ Nasdaq ``Short Volume'' is the aggregate reported share
volume of executed short sales during regular trading hours.
\20\ Nasdaq ``Total Volume'' is the aggregate reported share
volume of all executed trades during regular trading hours.
\21\ Nasdaq ``Market Center'' is the market identifier (Q =
NASDAQ for NASDAQ file, B = Boston for Boston file, X = PSX).
\22\ The Exchange notes that short sale information that is
available free of charge on the Cboe website will continue to be
publicly available upon approval of this proposal.
\23\ Historical Short Volume Reports will be available for
purchase on an ad hoc basis.
\24\ The Exchange notes that NYSE also offers historical daily
short sale files. See <a href="https://www.nyse.com/market-data/historical/taq-nyse-group-short-sales">https://www.nyse.com/market-data/historical/taq-nyse-group-short-sales</a>.
---------------------------------------------------------------------------
The Exchange anticipates that a wide variety of market participants
will purchase the proposed Short Volume Report, including, but not
limited to, active equity trading firms and academic institutions. For
example, the Exchange notes that academic institutions may utilize the
Short Volume Report data and as a result promote research and studies
of the equities industry to the benefit of all market participants. The
Exchange further believes the proposed Short Volume Report may provide
helpful trading information regarding investor sentiment that may allow
market participants to make more informed trading decisions and may be
used to create and test trading models and analytical strategies and
provide comprehensive insight into trading on the Exchange. The
proposal is a completely voluntary product, in that the Exchange is not
required by any rule or regulation to make this data available and that
potential subscribers may purchase it only if they voluntarily choose
to do so.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\25\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \26\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \27\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78f(b).
\26\ 15 U.S.C. 78f(b)(5).
\27\ Id.
---------------------------------------------------------------------------
In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. The Exchange believes that
[[Page 52086]]
the proposed Short Volume Report would further broaden the availability
of U.S. equity market data to investors consistent with the principles
of Regulation NMS. The proposal also promotes increased transparency
through the dissemination of short volume data. The proposed rule
change would benefit investors by providing access to the Short Volume
Report data, which may promote better informed trading, as well as
research and studies of the equities industry.
Moreover, as noted above, NYSE offers a Daily Short Volume file
which provides data that is essentially identical to that currently
proposed by the Exchange--trade date, symbol, short volume, short
exempt volume, and total volume.\28\ The proposed Short Volume Report
is also similar to Nasdaq's Daily Short Sale Volume file which
includes, date, symbol, short volume, total volume, and market
center.\29\ Accordingly, the proposed Short Volume Report does not
provide a unique or novel data offering, but rather offers data points
consistent with other data products already available and utilized by
market participants today.
---------------------------------------------------------------------------
\28\ Supra note 10.
\29\ Supra note 16.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Rather, the Exchange
believes that the proposal will promote fair competition among the
national securities exchanges by permitting the Exchange to offer a
data product that provides substantially the same data offered by other
competitor equities exchanges. Additionally, the Short Volume Report
will be available equally to Members and non-Members. Market
participants are not required to purchase the Short Volume Report, and
the Exchange is not required to make the Short Volume Report available
to investors. Rather, the Exchange is voluntarily making the Short
Volume Report available, as requested by customers, and market
participants may choose to receive (and pay for) this data based on
their own business needs. Potential purchasers may request the data at
any time if they believe it to be valuable or may decline to purchase
such data. Given the above, the Exchange does not believe the proposed
rule change will result in any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
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
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \30\ and Rule 19b-
4(f)(6) thereunder.\31\
---------------------------------------------------------------------------
\30\ 15 U.S.C. 78s(b)(3)(A).
\31\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \32\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\33\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative prior to 30 days after the date of
the filing. The Exchange states that waiver of the operative delay is
consistent with the protection of investors and the public interest
because the proposed Short Volume Report is nearly identical to the
currently available NYSE Daily Short Volume file and Nasdaq Daily Short
Volume file and would permit the Exchange to immediately make the Short
Volume Report available to subscribers as an alternative to similar
products offered by NYSE and Nasdaq. The Commission believes that
waiver of the 30-day operative delay is consistent with the protection
of investors and the public interest because the proposed rule change
does not raise any new or novel issues. Accordingly, the Commission
hereby waives the operative delay and designates the proposed rule
change operative upon filing.\34\
---------------------------------------------------------------------------
\32\ 17 CFR 240.19b-4(f)(6).
\33\ 17 CFR 240.19b-4(f)(6)(iii).
\34\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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#3745425b521a54585a5a525943447744525419505841"><span class="__cf_email__" data-cfemail="99ebecf5fcb4faf6f4f4fcf7edead9eafcfab7fef6ef">[email protected]</span></a>. Please include
File Number SR-CboeEDGX-2022-036 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-CboeEDGX-2022-036. 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,
[[Page 52087]]
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-CboeEDGX-2022-036 and should
be submitted on or before September 14, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
---------------------------------------------------------------------------
\35\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2022-18188 Filed 8-23-22; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on August 24, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.