Notice2024-21034
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Initiate Distributor Fees for MRX Options Trade Outline
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
September 17, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 180 (Tuesday, September 17, 2024)</title>
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[Federal Register Volume 89, Number 180 (Tuesday, September 17, 2024)]
[Notices]
[Pages 76162-76167]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-21034]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100995; File No. SR-MRX-2024-35]
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Initiate
Distributor Fees for MRX Options Trade Outline
September 11, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 3, 2024, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``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
The Exchange proposes to initiate Distributor fees for MRX Options
Trade Outline.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/mrx/rules">https://listingcenter.nasdaq.com/rulebook/mrx/rules</a>, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the 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 purpose of the proposed rule change is to initiate fees for the
distribution of MRX Trade Outline. Distributor fees will be $750 per
month
[[Page 76163]]
for the End of Day product, and $1,500 per month for the Intra-Day
product.
Historical data will be available through ad hoc requests for
information for $500 per month of End of Day information, and $750 per
month for historical information. Current Distributors \3\ will also be
able to purchase the most recent 36 months of historical data \4\ at
the discounted price of $6,000 for End of Day information, and $9,000
for Intra-Day information. Historical information will be available
starting in September 2017.
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\3\ A ``Current Distributor'' is any firm that purchases either
the End of Day Product for the current month, or the Intra-Day
Product for the current month in the same month that the 36 months
of historical End of Day or Intra-Day data is ordered.
\4\ The most recent 36 months is measured based on the date of
purchase of the 36 months of data by a Current Distributor.
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MRX Options Trade Outline
MRX Options Trade Outline will provide aggregate quantity and
volume information for trades on the Exchange for all series \5\ during
a trading session.\6\ Information is provided in the following
categories: (i) total exchange volume for Intra-Day information and
total exchange and industry volume for End of Day information for each
reported series; (ii) open interest for the series; (iii) aggregate
quantity of trades and aggregate trade volume effected to open a
position,\7\ characterized by origin type (Priority Customers,\8\
Broker-Dealers,\9\ Market Makers,\10\ Firm Proprietary,\11\ and
Professional Customers \12\); and (iv) aggregate quantity of trades and
aggregate trade volume effected to close a position,\13\ characterized
by origin type (Priority Customers, Broker-Dealers, Market Makers, Firm
Proprietary, and Professional Customers).\14\
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\5\ Every options series trades as a distinct symbol; the terms
``series'' and ``symbol'' are therefore synonyms.
\6\ See Securities Exchange Act Release No. 100789 (August 21,
2024), 89 FR 68680 (August 27, 2024) (SR-MRX-2024-31).
\7\ This includes the aggregate number of ``opening purchase
transactions,'' defined as an Exchange Transaction that will create
or increase a long position in an options contract, see Options 1,
Section 1(a)(27), and the aggregate number of ``opening writing
transactions,'' defined as an Exchange Transaction that will create
or increase a short position in an options contract. See Options 1,
Section 1(a)(28).
\8\ The term ``Priority Customer'' means a person or entity that
(i) is not a broker or dealer in securities, and (ii) does not place
more than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See Options 1
Sec. 1(a)(36).
\9\ A ``Broker-Dealer'' order is an order submitted by a Member
for a broker-dealer account that is not its own proprietary account.
See Options 7 Sec. 1(c).
\10\ The term ``Market Makers'' refers to ``Competitive Market
Makers'' and ``Primary Market Makers'' collectively. See Options 1
Sec. 1(a)(21). The term ``Competitive Market Maker'' means a Member
that is approved to exercise trading privileges associated with CMM
Rights. See Options 1 Sec. 1(a)(12). The term ``Primary Market
Maker'' means a Member that is approved to exercise trading
privileges associated with PMM Rights. See Options 1 Sec. 1(a)(35).
\11\ A ``Firm Proprietary'' order is an order submitted by a
Member for its own proprietary account. See Options 7 Sec. 1(c).
\12\ A ``Professional Customer'' is a person or entity that is
not a broker/dealer and is not a Priority Customer. See Options 7
Sec. 1(c).
\13\ This includes the aggregate number of ``closing purchase
transactions'' in the affected series, defined as an Exchange
Transaction that will reduce or eliminate a short position in an
options contract, see Options 1, Section 1(a)(9), and the aggregate
number of ``closing writing transactions,'' defined as an Exchange
Transaction that will reduce or eliminate a long position in an
options contract. See Options 1, Section 1(a)(10).
\14\ These are the same types of information available on PHOTO,
and the other trade outline products offered by Nasdaq exchanges.
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Information will be provided on an End of Day, Intra-Day, and
historical basis.
End of Day Information
The MRX Trade Outline End of Day file will also provide opening
buy, closing buy, opening sell and closing sell information, including
option first trade price, option high trade price, option low trade
price, and option last trade price.
The End of Day file will be updated during an overnight process
with additional fields \15\ and will be available the following
morning, providing aggregate data for the entire trading session.
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\15\ The additional fields are: First Trade Price, High Trade
Price, Low Trade Price, Last Trade Price, Underlying Close,
Moneyness, Total Exchange volume, Total Industry Volume for the
Series, and Open Interest.
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Intra-Day Information
Intra-Day information will be released in scheduled ``snapshots''
available every 10 minutes for all options series over the course of
the trading day. These snapshots will be updated to reflect whatever
activity occurred, or to indicate that no activity occurred.\16\ This
is the same schedule currently offered on PHLX, ISE, GEMX, and Nasdaq
Options Market.\17\
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\16\ Subscribers will receive the first snapshot at 9:42 a.m.
ET, representing data captured from 9:30 a.m. to 9:40 a.m., and the
second calculation at 9:52 a.m., representing data from both the
most recent snapshot and previous snapshots, and continuing over the
course of the trading day. The final Intra-Day snapshot will be
distributed at 4:15 p.m.
\17\ See Infra, notes 21 through 23.
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Historical Information
Historical data will be available through ad hoc requests for
information in both End of Day and Intra-Day formats for all option
series traded for every calendar month after September 2017, based on
specific request.\18\ Historical data is useful in analyzing option
trade and volume data, evaluating historical trends in the trading
activity of a particular option series, and creating and testing
trading models and analytical strategies. In Nasdaq's experience,
historical information is often purchased concurrently with a new
subscription to a trade outline product.
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\18\ Market participants generally use historical files for
model testing and research, and the period of time required by a
particular market participant will depend on its unique testing and
research needs as well as whether it is using End of Day or Intra-
Day information. Some customers, for example, may request years of
data, while others only months, or even a single month. The same
principle applies to End of Day vs. Intra-Day information.
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Patterned after PHLX Options Trade Outline ``PHOTO,'' \19\ MRX
Options Trade Outline will replicate in substance \20\ PHOTO and the
other trade outline products currently offered by Nasdaq ISE, LLC
(``ISE''),\21\ Nasdaq GEMX, LLC (``GEMX''),\22\ and the options market
operated by the Nasdaq Stock Market LLC (``Nasdaq Options Market'' or
``NOM'').\23\ Similar products are also available from options markets
not affiliated with Nasdaq such as Cboe
[[Page 76164]]
Options Exchange (``Cboe''),\24\ NYSE American Options (``NYSE
American''),\25\ NYSE Arca Options (``NYSE Arca''),\26\ BOX Options
Market LLC (``BOX''),\27\ MIAX Pearl Options Exchange (``Pearl''),\28\
and others. MRX Options Trade Outline, like all of these other trade
outline products, provides data to help market participants understand
market sentiment on the Exchange and to support the creation of trading
models useful in both options and equities markets.
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\19\ See PHLX Rules, Options 7, Section 10; Securities Exchange
Act Release No. 62887 (September 10, 2010), 75 FR 57092 (September
17, 2010) (SR-Phlx-2010-121) (introducing PHOTO on September 1,
2010).
\20\ The underlying information for MRX Options Trade Outline
will be the same as the other trade outline products offered by the
Nasdaq exchanges. Presentation will differ, however, in that data
will not be subdivided into categories. For example, the trade
outline products offered by PHLX, ISE, GEMX and NOM subdivide the
aggregate volume traded for each reported series into categories
according to the quantity of contracts (less than 100, 100-199, and
greater than 200). MRX Options Trade Outline will not separate this
information into quantitative categories, but rather will provide
the same aggregate volume information as PHOTO and the other Nasdaq
exchanges without separating the information into categories
according to the quantity of contracts.
\21\ See Nasdaq ISE Rules, Options 7, Section 10(A) and (B)
(Nasdaq ISE Open/Close Trade Profile End of Day; Nasdaq ISE Open/
Close Trade Profile Intraday).
\22\ See Nasdaq GEMX Rules, Options 7, Sections 7(D) (Nasdaq
GEMX Open/Close End of Day Trade Profile) and 7(E) (Nasdaq GEMX
Open/Close Intraday Trade Profile).
\23\ See Nasdaq Rules, Options 7, Section 4 (Nasdaq Options
Trade Outline (``NOTO'')).
\24\ See, e.g., Securities Exchange Act Release No. 94913 (May
13, 2022), 87 FR 30534 (May 19, 2022) (SR-Cboe-2022-023) (describing
End of Day and Intra-Day Open-Close Data as a summary of trading
activity on the exchange at the option level by origin, side of the
market, price, and transaction type).
\25\ See, e.g., Securities Exchange Act Release No. 93803
(December 16, 2021, 86 FR 72647 (December 22, 2021) (SR-NYSEAMER-
2021-46) (describing the NYSE Options Open-Close Volume Summary as a
volume summary of trading activity on the exchange at the option
level by origin, side of the market, contract volume and transaction
type).
\26\ See, e.g., Securities Exchange Act Release No. 93132
(September 27, 2021), 86 FR 54499 (October 1, 2021) (SR-NYSEArca-
2021-82) (describing the NYSE Options Open-Close Volume Summary as a
volume summary of trading activity on the exchange at the option
level by origin, side of the market, contract volume and transaction
type).
\27\ See, e.g., Securities Exchange Act Release No. 97174 (March
21, 2023), 88 FR 18201 (March 27, 2023) (SR-BOX-2023-09) (describing
the BOX exchange Open-Close Data report as providing volume by
origin, buying/selling, and opening/closing criteria).
\28\ See, e.g., Securities Exchange Act Release No. 91964 (May
21, 2021), 86 FR 28667 (May 27, 2021) (SR-PEARL-2021-24)
(introducing the Open-Close Report).
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Nasdaq's experience is that investment banks, market makers, asset
managers and other buy-side investors purchase trade outline products.
In general, the relative value of these products depends on the volume
of transactions included; the greater the volume of transactions, the
greater the value of the data.
MRX Options Trade Outline will provide proprietary Exchange trading
data and will not include any intra-day trading data from any other
exchange.\29\ The information provided, both in End of Day and Intra-
Day formats, will not be a real-time data feed.
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\29\ The End of Day report includes a field that presents Total
Industry Volume for the Series.
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Proposed Fees
End of Day and Intra-Day Information
The Exchange proposes to offer the End of Day product for $750 per
month and the Intra-Day product at $1,500 per month.
Historical Information
The Exchange proposes to offer historical data for $500 per month
for End of Day data, and $750 per month for Intra-Day information based
on ad hoc requests for particular months of information.
The Exchange also proposes to offer a discounted fee of $9,000 in
total for the most recent 36 months \30\ of historical Intra-Day data
for Current Distributors,\31\ and a discounted fee of $6,000 in total
for the most recent 36 months of End of Day data for Current
Distributors.
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\30\ The most recent 36 months is measured based on the date of
purchase of the 36 months of data by a Current Distributor.
\31\ A ``Current Distributor'' is any firm that purchases either
the End of Day Product for the current month, or the Intra-Day
Product for the current month in the same month that the 36 months
of historical End of Day or Intra-Day data is ordered.
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This is a substantial discount from the proposed fees for ad hoc
data requests. With respect to End of Day data, ad hoc requests are
$500 per month. Thirty-six months would cost a total of $18,000. The
proposed discounted fee of $6,000 is two-thirds less than the standard
rate. With respect to Intra-Day information, ad hoc requests are $750
per month. Thirty-six months would cost a total of $27,000. The
proposed discounted fee of $9,000 for Intra-Day information is also
two-thirds less than the standard rate.
Eligibility for the discount will depend on the type of current
subscription. A current purchaser of End of Day data would be eligible
for the historical End of Day product at the reduced rate. A current
purchaser of the Intra-Day product would similarly be able to purchase
the historical Intra-Day product at the reduced rate. A purchaser of
both the current End of Day and Intra-Day products would be entitled to
purchase both types of history at the reduced rate. The fees for
historical data are linked to the current product because effective
historical testing requires a comparison of similar licenses. Effective
testing of the End of Day product, for example, requires End of Day
historical data, and the same would hold true for Intra-Day data.
The 36-month period will be based on the date of purchase of the 36
months of data by a Current Distributor. For example, a customer that
buys the End of Day product for the first time in September 2024 would
also be able to purchase historical End of Day data for the period
September 2021 through September 2024 (inclusive) at the discounted
rate. Similarly, a customer with an existing End of Day subscription in
September 2024 would be able to purchase the historical End of Day data
from September 2021 through September 2024 at the discounted rate. The
same reasoning would apply to Intra-Day customers.\32\
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\32\ A customer may use the proposed historical data discount
more than once. For example, a Current Distributor that purchases 36
months of historical data at a discount, but later terminates that
subscription, would be eligible to purchase another 36 months of
historical data (based on the date of purchase) upon renewing that
subscription. (Current Distributors that never terminate would have
no need for a second purchase, as they would already possess the
most recent months of historical data.).
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Many customers use historical data to test their strategies and
models, and our discussions with current and former customers and
experience indicate that 36 months of data is sufficient for most
customer needs, and is an effective baseline for review.
For customers that request historical information outside of the
three year period, end of day historical information can be purchased
through ad hoc requests for monthly information for $500 per request
per month, and Intra-Day information can be purchased at $750 per
request per month.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\33\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\34\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees, and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\33\ 15 U.S.C. 78f(b).
\34\ 15 U.S.C. 78f(b)(4) and (5).
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Equitable Allocation of Reasonable Dues, Fees and Other Charges
The proposed changes are an equitable allocation of reasonable
dues, fees and other charges because: (i) the trade outline products
offered by multiple exchanges are substitutes, and customers are free
to choose which product they purchase; and (ii) the proposed fees are
comparable to the fees charged by other exchanges, and customers are
free to purchase other products if the Exchange has mistaken the value
of its product.
Substitution
Trade outline products have been available on multiple exchanges
for many years and are well known in the market and used by many market
participants. PHLX Options Trade Outline, which is a model for MRX
Options Trade Outline, has been available for well over a decade.\35\
[[Page 76165]]
Similar products available on other Nasdaq exchanges include ISE Trade
Profile,\36\ GEMX Trade Profile,\37\ and Nasdaq Options Trade
Outline.\38\ Trade outline products are also offered by competitor
exchanges such a Cboe,\39\ NYSE American,\40\ NYSE Arca,\41\ BOX,\42\
and MIAX PEARL.\43\ The trade outline products offered by the Nasdaq-
affiliated exchanges provide exactly the same information as MRX
Options Trade outline, and those offered by other exchanges provide
substantially the same information, including both Intra-Day and End of
Day data.
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\35\ See Securities Exchange Act Release No. 62887 (September
10, 2010), 75 FR 57092 (September 17, 2010) (SR-Phlx-2010-121)
(introducing PHOTO on September 1, 2010).
\36\ See Nasdaq ISE Rules, Options 7, Section 10(A) and (B)
(Nasdaq ISE Open/Close Trade Profile End of Day; Nasdaq ISE Open/
Close Trade Profile Intraday).
\37\ See Nasdaq GEMX Rules, Options 7, Sections 7(D) (Nasdaq
GEMX Open/Close End of Day Trade Profile) and 7(E) (Nasdaq GEMX
Open/Close Intraday Trade Profile).
\38\ See Nasdaq Rules, Options 7, Section 4 (Nasdaq Options
Trade Outline (``NOTO'')).
\39\ See, e.g., Securities Exchange Act Release No. 94913 (May
13, 2022), 87 FR 30534 (May 19, 2022) (SR-Cboe-2022-023) (describing
End-of-Day and Intraday Open-Close Data as a summary of trading
activity on the exchange at the option level by origin, side of the
market, price and transaction type).
\40\ See, e.g., Securities Exchange Act Release No. 93803
(December 16, 2021, 86 FR 72647 (December 22, 2021) (SR-NYSEAMER-
2021-46) (describing the NYSE Options Open-Close Volume Summary as a
volume summary of trading activity on the exchange at the option
level by origin, side of the market, contract volume and transaction
type).
\41\ See, e.g., Securities Exchange Act Release No. 93132
(September 27, 2021), 86 FR 54499 (October 1, 2021) (SR-NYSEArca-
2021-82) (describing the NYSE Options Open-Close Volume Summary as a
volume summary of trading activity on the exchange at the option
level by origin, side of the market, contract volume and transaction
type).
\42\ See, e.g., Securities Exchange Act Release No. 97174 (March
21, 2023), 88 FR 18201 (March 27, 2023) (SR-BOX-2023-09) (describing
the BOX exchange Open-Close Data report as providing volume by
origin, buying/selling, and opening/closing criteria).
\43\ See, e.g., Securities Exchange Act Release No. 91964 (May
21, 2021), 86 FR 28667 (May 27, 2021) (SR-PEARL-2021-24)
(introducing the Open-Close Report).
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The information provided by one exchange in its trade outline
product is generally similar to that provided by other exchanges for
competing products because order flow can move from one exchange to
another, and market sentiment trends that appear on one exchange are
likely to be similar to the sentiment trends on other exchanges. The
key differentiator in the quality of the data depends on the volume of
transactions on a given exchange; the greater the volume of
transactions, the greater the value of the data. Customers can choose
not to purchase the trade outline product of one exchange and
substitute it for that of another exchange. This applies to both
current and historical data.
Customers can also choose not to purchase a trade outline product
at all. Trade outline products are designed to help investors
understand underlying market trends to improve the quality of
investment decisions, but are not necessary to execute a trade.
Customers may choose to forego the information from MRX Options Trade
Outline or any of its competitor products when making a trade.
Nasdaq and its affiliates have observed that customers purchase
sufficient data to provide a view of the market, but not more, as the
value of data from each additional exchange yields diminishing returns.
As a result, all exchanges are limited in what they will be able to
charge for Trade Outline.
As the Commission and courts \44\ have recognized, ``[i]f
competitive forces are operative, the self-interest of the exchanges
themselves will work powerfully to constrain unreasonable or unfair
behavior.'' \45\ Accordingly, ``the existence of significant
competition provides a substantial basis for finding that the terms of
an exchange's fee proposal are equitable, fair, reasonable, and not
unreasonably or unfairly discriminatory.'' \46\ The Commission and the
courts have repeatedly expressed their preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. In Regulation NMS, while adopting a series
of steps to improve the current market model, 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.'' \47\ MRX Options Trade Outline is in direct competition
with multiple exchanges that offer similar products in end of day and
intra-day formats.\48\
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\44\ The decision of the United States Court of Appeals for the
District of Columbia Circuit in NetCoalition v. SEC 615 F.3d 525
(D.C. Cir. 2010). upheld the Commission's reliance upon competitive
markets to set reasonable and equitably allocated fees for 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.''
NetCoalition I at 535. (quoting H.R. Rep. No. 94-229, at 92 (1975),
as reprinted in 1975 U.S.C.C.A.N. 321, 323) (internal quotation
marks omitted). 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.'' Id. (quoting Securities
Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770,
74771 (December 9, 2008) (SR-NYSEArca-2006-21)).
\45\ See Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
\46\ See id.
\47\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
\48\ These substitute products include NOTO, ISE Trade Profile,
GEMX Trade Profile data; open-close data from Cboe C1, C2, BZX, and
EDGX; and Open Close Reports from MIAX Options, Pearl, and Emerald.
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The discounted fees for historical data, like the purchase of the
end of day, Intra-Day and Derived Data licenses, is also subject to
competition. Any exchange that wishes to provide discounts for
historical data would be able to do so with an immediately effective
fee filing in response.
Comparability
The proposed fees are comparable to the fees charged by similarly
situated exchanges.
As explained above, the value of a trade outline product is
determined in part by the number of underlying transactions reflected
in the data. MRX has a market share comparable to Cboe C2 and MIAX
Emerald, in the range of approximately 2% to 4% at the time of this
filing.\49\ For intra-day products, MIAX Emerald charges $2,000 \50\
and Cboe C2 charges $1,000.\51\ The proposed fee of $1,500 is within
that range and comparable to those fees.
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\49\ See <a href="http://NasdaqTrader.com">NasdaqTrader.com</a>, ``Options Market Statistics,''
available at <a href="https://www.nasdaqtrader.com/Trader.aspx?id=OptionsVolumeSummary">https://www.nasdaqtrader.com/Trader.aspx?id=OptionsVolumeSummary</a>.
\50\ See MIAX Emerald Options Exchange Fee Schedule as of April
18, 2024,'' available at <a href="https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Emerald_Fee_Schedule_04182024.pdf">https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Emerald_Fee_Schedule_04182024.pdf</a>.
\51\ See Cboe DataShop, ``Cboe Open-Close Volume Summary,''
available at <a href="https://datashop.cboe.com/cboe-options-open-close-volume-summary">https://datashop.cboe.com/cboe-options-open-close-volume-summary</a>.
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For End of Day products, MIAX Emerald charges $600,\52\ and Cboe C2
charges $500.\53\ Although the proposed fees of $750 are above that
range, MRX believes that the relative value of Intra-Day and End of Day
fees should be in the ratio of 2:1, and therefore MIAX Emerald and Cboe
C2 have somewhat undervalued their end of day products. If Nasdaq is
incorrect in that
[[Page 76166]]
assessment, customers will purchase the products of its competitors.
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\52\ See MIAX Emerald Options Exchange Fee Schedule as of April
18, 2024,'' available at <a href="https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Emerald_Fee_Schedule_04182024.pdf">https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Emerald_Fee_Schedule_04182024.pdf</a>.
\53\ See Cboe DataShop, ``Cboe Open-Close Volume Summary,''
available at <a href="https://datashop.cboe.com/cboe-options-open-close-volume-summary">https://datashop.cboe.com/cboe-options-open-close-volume-summary</a>.
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Nasdaq is not aware of another exchange that provides a discount
for historical data other than its own affiliates. Volume on MRX is
comparable to volume on BX and GEMX. The proposed discounted prices of
$6,000 for 36 months of historical End of Day data and $9,000 for 36
months of historical Intra-Day data for MRX are identical to the
proposed discounts for the BX exchange, submitted congruently with this
filing. The proposed discounted prices for Intra-Day data for MRX and
BX are also identical to that of GEMX. Although proposed fees for 36
months of End of Day data for MRX and BX ($6,000) are higher than those
for GEMX ($4,800), the overall pricing methodology of offering three
years of historical data for the price of one year of ad hoc requests
for information is consistent across all of these exchanges, and
therefore comparable.\54\
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\54\ The fee for an ad hoc request for one month of End of Day
data on the GEMX exchange is $400, and the discounted fee for 12
months of data is $400 x 12, or $4,800. The fee for an ad hoc
request for one month of End of Day data on the BX and MRX exchanges
is $500, and the discounted fee for 12 months of data is $500 x 12,
or $6,000.
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With respect to ad hoc requests for information, MRX provides a
discount from current requests. Current End of Day information is
available for $750 per month, while ad hoc requests for historical End
of Day information is available for $500 per month. Similarly, Current
Intra-Day information is available for $1,500 per month, while ad hoc
requests for historical Intra-Day information is available for $750 per
month. This is identical to the fee structure proposed for the BX
exchange, and comparable to the fee structure for the GEMX exchange
(which offers current End of Day data for $575 per month and historical
End of Day data for $400 per month; current Intra-Day data is offered
for $1,500 per month, and historical Intra-Day data is offered for $750
per month).
If the Exchange is incorrect in its assessments for any of these
fees, current and prospective customers will elect not to purchase
Trade Outline.
The Proposal Does Not Permit Unfair Discrimination
Nothing in the proposal treats any category of market participant
any differently from any other category of market participant.
The proposed fees, including both current and historical
information, apply equally to all current and potential distributors.
Trade Outline is available to all market participants, including
members and non-members, and all market participants receive the same
information.
It is not unfair discrimination to provide a discount for 36 months
of historical data to Current Distributors, but not former distributors
or firms that have never purchased the product. Any firm would be able
to become a Current Distributor at any time by subscribing to Trade
Outline, and would be able to cancel the subscription at any time after
receiving the 36 months of historical data for the proposed discounted
fee. More specifically, a firm that is not a Current Distributor may
obtain access to the 36 months of historical data at a discount by
becoming a Current Distributor for a limited time and then terminating
the subscription.
It is not unfair discrimination to limit the discount for 36 months
of historical data to Current Distributors. Historical information is
generally used by Current Distributors to test their strategies and
trading models, and Current Distributors are therefore in the best
position to benefit from the historical data. Outside of the 36 month
period, all firms will have the opportunity to purchase historical data
on an ad hoc basis.
For all of these reasons, the proposal does not permit unfair
discrimination.
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 not necessary or appropriate in
furtherance of the purposes of the Act. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
Intermarket Competition
Nothing in the proposal burdens inter-market competition (the
competition among self-regulatory organizations).
As discussed above, Trade Outline is subject to direct competition
from other options exchanges that offer substitutes. Any of these
exchanges can replicate this proposal in full or in part, and nothing
in the proposal would interfere with the ability of any exchange to do
so.
Intra-Market Competition
Nothing in the proposal burdens intra-market competition (the
competition among consumers of exchange data). Trade Outline is
available to any customer under the same fee schedule as any other
customer, and any market participant that wishes to purchase these
products can do so on a non-discriminatory basis.
Offering the 36 months of historical data to Current Distributors,
but not former distributors or firms that have never purchased the
product, will not burden competition because non-subscribers are free
to purchase a current subscription. Moreover, a firm that is not a
Current Distributor may become a Current Distributor and then cancel
the product after receiving the historical discount. As such, firms
that are not Current Distributors will have an opportunity to pay the
same fees for the most recent 36 months of historical data as Current
Distributors. Outside of the 36 month period, all firms will have the
opportunity to purchase historical data on an ad hoc basis.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\55\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is: (i) necessary or appropriate in the public
interest; (ii) for the protection of investors; or (iii) otherwise in
furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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\55\ 15 U.S.C. 78s(b)(3)(A)(ii).
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[[Page 76167]]
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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1361667f763e707c7e7e767d6760536076703d747c65"><span class="__cf_email__" data-cfemail="a4d6d1c8c189c7cbc9c9c1cad0d7e4d7c1c78ac3cbd2">[email protected]</span></a>. Please include
file number SR-MRX-2024-35 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-MRX-2024-35. 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="https://www.sec.gov/rules/sro.shtml">https://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
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-MRX-2024-35 and should be
submitted on or before October 8, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\56\
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\56\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-21034 Filed 9-16-24; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on September 17, 2024.
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.