[Federal Register Volume 84, Number 94 (Wednesday, May 15, 2019)]
[Notices]
[Pages 21863-21866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09965]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85817; File No. SR-CBOE-2019-026]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule To Adopt Reduced Subscription Fees for Academics for
the Sale of Historical Cboe Open-Close Volume Data
May 9, 2019.
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 April 25, 2019, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 21864]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend its fee schedule to adopt reduced subscription fees for
academics for the sale of Historical Cboe Open-Close volume data. 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 (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Cboe LiveVol, LLC (``Cboe
LiveVol'') Price List to adopt reduced subscription fees for academics
for the sale of historical Cboe Open-Close volume data. In 2015, former
Cboe Holdings (now Cboe Global Markets) acquired LiveVol, Inc, a market
data services and trading analytics platform. In 2016, Cboe LiveVol
launched its website, Cboe LiveVol DataShop \3\ (``DataShop''), which
offers clients, both Trading Permit Holders (``TPHs'') and non-TPHs, a
range of market data sets, including historical data, and subscription
options. Specifically, Open-Close Data is a Cboe proprietary data set
offered on DataShop that consists of the volume summary (i.e. contracts
traded) for each Exchange-listed option. Open-Close Data summarizes
Cboe Options volume by origin (customer and firm orders only), original
order size and the opening or closing position of the order. Customers
may purchase Daily Open-Close Data on a monthly subscription basis or
Historical Open-Close Data on an ad hoc request basis. The Exchange
seeks only to amend the price per year for Historical Open-Close Data
for academic purchasers. Currently, Historical Open-Close Data is
available to all customers at the same price and in the same manner.
The current charge for Historical Open-Close Data covering all of the
Exchange's securities ((Equities, Indexes & ETF's) is $7,200 per year
for requests for one to four years of data, and a 50% discount
beginning with the fifth year of data (i.e. Cboe LiveVol charges $7,200
for each of the first four years of data and $3,600 for data the fifth
year and on).
---------------------------------------------------------------------------
\3\ Available at: https://datashop.cboe.com/.
---------------------------------------------------------------------------
The Exchange now proposes to charge qualifying academic purchasers
$1,500 per year for Historical Open-Close Data covering all of the
Exchange's securities. As proposed, the 50% discount beginning with the
fifth year of data is not applicable to academic pricing. The Exchange
believes that academic institutions provide a valuable service for the
Exchange in studying and promoting the options market. Though academic
institutions and researchers have need for granular options data sets,
they do not trade upon the data for which they subscribe. The Exchange
believes the proposed reduced fees for qualifying academic purchasers
of Historical Open-Close Data will encourage and promote academic
studies of its market data by academic institutions. In order to
qualify for the academic pricing, an academic purchasers must be (1) an
accredited academic institution, (2) that will use the data in
independent academic research, academic journals and other
publications, teaching and classroom use, or for other bona fide
educational purposes (i.e. academic use). Furthermore, use of the data
must be limited to faculty and students of the accredited academic
institution, and any commercial or profit-seeking usage is excluded.
Academic pricing will not be provided to any purchaser whose research
is funded by a securities industry participant. Cboe LiveVol subscriber
policies will be updated to reflect the academic discount program, and
academic institutions interested in qualifying will be required to
submit a brief application. Cboe LiveVol Business Development will have
the discretion to review and approve such applications and request
additional information when it deems necessary.
The Exchange notes that other exchanges currently offer academic
discounts for similar data feeds.\4\ The Exchange recognizes the high
value of academic research and educational instruction and
publications, and believes that the proposed academic discount for
Historical Open-Close Data will encourage the promotion academic
research of the options industry, which will serve to benefit all
market participants while also opening up a new potential user base
among students. Finally, the Exchange notes that academic purchasers'
subscriptions to Historical Open-Close Data are educational in use and
purpose, and not vocational.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 67955 (October 1,
2012) 77 FR 61037 (October 5, 2012) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change To Adopt Reduced Fees for
Historical ISE Open/Close Trade Profile Intraday Market Data
Offering) (SR-ISE-2012-76); Securities and Exchange Act Release 34-
60654 (September 11, 2009) 74 FR 47848 (September 17, 2009) (Notice
of Filing of Proposed Rule Change Relating to Historical ISE Open/
Close Trade Profile Fees) (SR-ISE-2009-64); Securities Exchange Act
Release No. 53770 (May 8, 2006) 71 FR 27762 (May 12, 2006) (Notice
of Filing of Proposed Rule Change and Amendment No. 1 Thereto To
Establish an Annual Administrative Fee for Market Data Distributors
That Are Recipients of Nasdaq Proprietary Data Products) (SR-NASD-
2006-030).
---------------------------------------------------------------------------
Lastly, the Exchange proposes to relocate the current Open-Close
Data pricing schedule available on DataShop, along with the proposed
academic discount, to its Exchange Fees Schedule, under the LiveVol
Fees Table. The Open-Close Data will continue to be made available on
DataShop. The Exchange proposes to change the format of the Open-Close
Data of all Cboe securities received by a purchaser from a DVD to a
download, noting that file sizes larger than 500GB will be shipped to
the purchaser on a hard drive. The Exchange notes that this is the
current process in which a purchaser receives Historical Open-Close
Data via the DataShop website. As such, the proposed change does not
substantively change the pricing schedule, but rather reflects the
format in which purchasers are currently receiving Historical Open-
Close Data via the DataShop website. As such, the Exchange notes no
substantive changes are being made by relocating the pricing
information, but rather believes the Open-Close Data fees would be
better situated among the Exchange's current LiveVol Fees Table in the
Exchange's Fees Schedule.
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
[[Page 21865]]
Section 6(b) of the Act.\5\ Specifically, the Exchange believes the
proposed rule change is consistent with the Section 6(b)(5) \6\
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) \7\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes that the discount for
qualifying academic purchasers of the annual subscription to Historical
Open-Close Data is reasonable because academic institutions are not
able to monetize access to the data as they do not trade on the data
set. The Exchange believes the proposed discount will allow for more
academic institutions to purchase Historical Open-Close Data, and, as a
result, promote research and studies of the options industry to the
benefit of all market participants. The Exchange believes that the
proposed discount is equitable and not unfairly discriminatory because
it will apply equally to all academic institutions that submit an
application and meet the accredited academic institution and academic
use criteria. As stated above, qualified academic users will subscribe
to the data set for educational use and purposes and are not permitted
to use the data for commercial or monetizing purposes, nor can qualify
if they are funded by an industry participant. As a result, the
Exchange believes the proposed discount is equitable and not unfairly
discriminatory because it maintains equal treatment for all industry
participants or other subscribers that use the data for vocational,
commercial or other for-profit purposes. Additionally, the Exchange
believes its proposal to adopt the pricing schedule for Open-Close Data
under its Fees Schedule is reasonable and equitable because maintaining
the pricing information for Cboe proprietary data in a fee schedule in
a centralized location on the main Cboe website \8\ reduces confusion
for investors and allows for easier access to such pricing for all
market participants. Furthermore, the Exchange believes the proposed
change from a purchaser's receipt of a DVD to a download of Historical
Open-Close Data is reasonable and equitable because it reflects the
format in which purchasers are already receiving such data via the
DataShop website. As a result, this change will reduce confusion for
all investors once the Open-Close pricing information is adopted under
the Exchange's Fee Schedule.
---------------------------------------------------------------------------
\8\ Available at: http://www.cboe.com/trading-resources/fee-schedules.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the proposed rule change
will apply to all qualifying academic purchasers uniformly. While the
proposed fee reduction applies only to qualifying academic purchasers,
academic institutions' research and publications as a result of access
to historical market data benefits all market participants. The
Exchange also does not believe that the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act as other options
exchanges currently offer similar historical data to academic
institutions at a discounted price. Offering a discount for qualifying
academic institutions that purchase the Exchange's Historical Open-
Close Data may make that data more attractive to such academic
institutions and further increase competition with exchanges that offer
similar historical data products.
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 \9\ and paragraph (f) of Rule 19b-4 \10\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2019-026 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-CBOE-2019-026. 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 (http://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
[[Page 21866]]
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-
CBOE-2019-026 and should be submitted on or before June 5, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-09965 Filed 5-14-19; 8:45 am]
BILLING CODE 8011-01-P