[Federal Register Volume 85, Number 156 (Wednesday, August 12, 2020)]
[Notices]
[Pages 48747-48749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17560]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89497; File No. SR-CboeBZX-2020-059]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
To Introduce a New Data Product To Be Known As Intraday Open-Close Data

August 6, 2020.
    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 July 29, 2020, 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 and II 
below, which Items have been prepared by the Exchange. The Exchange 
filed the proposal as a ``non-controversial'' proposed rule change 
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') is filing 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change to introduce a new data product to be known as Intraday 
Open-Close 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://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), 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 introduce a new data product on BZX to be 
known as Intraday Open-Close Data, which will be available for purchase 
to BZX Members (``Members'') and non-Members.\5\ Cboe LiveVol, LLC 
(``LiveVol''), a wholly owned subsidiary of the Exchange's parent 
company, Cboe Global Markets, Inc., will make the Intraday Open-Close 
Data available for purchase to Members and non-Members on the LiveVol 
DataShop website.\6\ The Exchange also proposes to amend Exchange Rule 
21.15(b) to provide that the Open-Close Data product will be available 
on an end-of-day basis and intraday basis.
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    \5\ The Exchange intends to submit a separate rule filing to 
establish fees for Intraday Open-Close Data.
    \6\ See https://datashop.cboe.com/.
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    Currently, the Exchange offers Open-Close Data, which is an end-of-
day volume summary of trading activity on the Exchange at the option 
level by

[[Page 48748]]

origin (customer, professional customer, broker-dealer, and market 
maker), side of the market (buy or sell), price, and transaction type 
(opening or closing). The customer and professional customer volume is 
further broken down into trade size buckets (less than 100 contracts, 
100-199 contracts, greater than 199 contracts). The Open-Close Data is 
proprietary BZX trade data and does not include trade data from any 
other exchange. It is also a historical data product and not a real-
time data feed.
    Now, the Exchange is proposing to offer an additional product, the 
Intraday Open-Close Data. The Intraday Open-Close Data will provide 
similar information to that of Open-Close Data, but will be produced 
and updated every 10 minutes during the trading day. Data is captured 
in ``snapshots'' taken every 10 minutes throughout the trading day and 
is available to subscribers within five minutes of the conclusion of 
each 10 minute period. For example, subscribers to the intraday product 
will receive the first calculation of intraday data by approximately 
9:45 a.m. ET, which represents data captured from 9:30 a.m. to 9:40 
a.m. Subscribers will receive the next update by 9:55 a.m., 
representing the data previously provided aggregated with data captured 
through 9:50 a.m., and so forth. Each update will represent combined 
data captured from the current ``snapshot'' and all previous 
``snapshots'' and thus will provide open-close data on an aggregate 
basis. The Intraday Open-Close Data will provide a volume summary of 
trading activity on the Exchange at the option level by origin 
(customer, professional customer, broker-dealer, and market maker), 
side of the market (buy or sell), and transaction type (opening or 
closing). The customer and professional customer volume will be further 
broken down into trade size buckets (less than 100 contracts, 100-199 
contracts, greater than 199 contracts). The Intraday Open-Close Data is 
proprietary BZX trade data and does not include trade data from any 
other exchange. In contrast to the existing Open-Close Data product, 
the Intraday Open-Close Data will not provide execution price.\7\
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    \7\ Price information is not included in Intraday Open-Close 
Data because it cannot be provided within the time parameters 
necessary to generate the file.
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    A description of each market data product offered by the Exchange 
is described in Exchange Rule 21.15(b). The Exchange proposes to amend 
Rule 21.15(b)(5) to provide that Open-Close Data will be offered on an 
end-of-day and intraday basis.
    The Exchange will establish a monthly subscriber fee for Intraday 
Open-Close Data by way of a separate proposed rule change, which the 
Exchange will submit in connection with the launch of the Intraday 
Open-Close market data product.
    The Exchange anticipates a wide variety of market participants to 
purchase Intraday Open-Close Data, including, but not limited to, 
individual customers, buy-side investors, and investment banks. The 
Exchange believes the proposed Open-Close Data product may also provide 
helpful trading information regarding investor sentiment that may allow 
market participants to make better trading decisions throughout the day 
and may be used to create and test trading models and analytical 
strategies and provides comprehensive insight into trading on BZX. For 
example, intraday open data may allow a market participant to identify 
new interest or possible risk throughout the trading day, while 
intraday closing data may allow a market participant to identify fading 
interests in a security. 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. The Exchange notes that 
other exchanges offer a similar data product.\8\
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    \8\ See Securities Exchange Act Release No. 62887 (September 10, 
2010), 75 FR 57092 (September 17, 2010) (SR-Phlx-2010-121); See also 
Securities Exchange Act Release No. 65587 (October 18, 2011), 76 FR 
65765 (October 24, 2011) (SR-NASDAQ-2011-144).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and to protect investors and the public 
interest, and that it is not designed to permit unfair discrimination 
among customers, brokers, or dealers.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
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    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 the proposed 
Intraday Open-Close Data would further broaden the availability of U.S. 
option market data to investors consistent with the principles of 
Regulation NMS. The proposal also promotes increased transparency 
through the dissemination of Intraday Open-Close Data. The proposed 
rule change would benefit investors by providing access to the Intraday 
Open-Close Data, which may promote better informed trading throughout 
the trading day. Moreover, other exchanges offer a similar data 
product.\11\
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    \11\ See Supra note 8.
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    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 the proposed 
Intraday Open-Close Data would further broaden the availability of U.S. 
option market data to investors consistent with the principles of 
Regulation NMS. The proposal also promotes increased transparency 
through the dissemination of Intraday Open-Close Data. The proposed 
rule change would benefit investors by providing access to the Intraday 
Open-Close Data, which as noted above, may promote better informed 
trading. Particularly, information regarding opening and closing 
activity across different option series may indicate investor 
sentiment, which can be helpful trading information. Subscribers to the 
data may be able to enhance their ability to analyze option trade and 
volume data on an intraday basis, and create and test trading models 
and analytical strategies. The Exchange believes Intraday Open-Close 
Data provides a valuable tool that subscribers can use to gain 
comprehensive insight into the trading activity in a particular series, 
but also emphasizes such data is not necessary for trading.
    Moreover, other exchanges also off a substantially identical data 
product.\12\ Specifically, NASDAQ OMX PHLX (``PHLX'') and the NASDAQ 
Stock Market LLC (``NASDAQ'') offer the PHLX Options Trade Outline

[[Page 48749]]

(``PHOTO'') and NASDAQ Options Trade Outline (``NOTO''), respectively. 
PHOTO and NOTO provide substantially the same information as that 
included in the proposed Intraday Open-Close Data product. Further, 
like the proposed product, the data is provided to subscribers 
cumulatively every 10 minutes and is available to subscribers within 
five minutes of the conclusion of each 10 minute period.
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    \12\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that 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. Rather, the 
Exchange believes that the proposal will promote competition by 
permitting the Exchange to offer a data product similar to those 
offered by other competitor options exchanges.\13\ The Exchange is 
proposing to introduce Intraday Open-Close Data in order to keep pace 
with changes in the industry and evolving customer needs, and believes 
this proposed rule change would contribute to robust competition among 
national securities exchanges. As noted, at least two other U.S. 
options exchanges offer a market data product that is similar to the 
Intraday Open-Close Data.\14\ As a result, the Exchange believes this 
proposed rule change permits fair competition among national securities 
exchanges. Therefore, 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.
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    \13\ Id.
    \14\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written 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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6) 
\16\ thereunder.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay.\17\ The Commission finds that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest. 
Specifically, waiver of the operative delay will allow the Exchange to 
offer to investors without delay an optional historical data product 
that is substantially similar to products offered by other options 
exchanges. The proposal therefore does not present any novel issues 
and, accordingly, the Commission designates the proposal operative upon 
filing.\18\
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    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    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 shall institute proceedings to 
determine whether the proposed rule 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

     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-CboeBZX-2020-059 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-CboeBZX-2020-059. 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 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; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CboeBZX-2020-059 and should 
be submitted on or before September 2, 2020.
     
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of rading and Markets, 
pursuant to delegated authority.\19\
J. Matthew DeLesDernier
Assistant Secretary.
[FR Doc. 2020-17560 Filed 8-11-20; 8:45 am]
BILLING CODE 8011-01-P