[Federal Register Volume 86, Number 119 (Thursday, June 24, 2021)]
[Notices]
[Pages 33390-33392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13282]
[[Page 33390]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92168; File No. SR-CboeBZX-2021-043]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Open-Close Data Fees
June 14, 2021.
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 June 1, 2021, 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 Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX Options'') is
filing with the Securities and Exchange Commission (``Commission'') a
proposed rule change to amend Open-Close Data fees. 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 amend its Fees Schedule to (i) adopt an
academic discount for its historical End-of-Day Open-Close and Intraday
Open-Close data and (ii) offer a free trial during the months of June
and July 2021 for an ad-hoc request of three (3) historical months of
Intraday Open-Close historical data to all Members and non-Members who
have never before subscribed to the Intraday Open-Close historical
files.
By way of background, the Exchange historically offered Open-Close
Data, which is an end-of-day 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), price, and transaction type (opening or closing) (``End-of-Day
Open-Close Data''). 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 Options 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. The recently adopted Intraday Open-Close Data
provides similar information to that of Open-Close Data but is 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.\3\ The Intraday Open-Close Data provides 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 are further
broken down into trade size buckets (less than 100 contracts, 100-199
contracts, greater than 199 contracts). The Intraday Open-Close Data is
also proprietary BZX Options trade data and does not include trade data
from any other exchange. Cboe LiveVol, LLC (``LiveVol''), a wholly
owned subsidiary of the Exchange's parent company, Cboe Global Markets,
Inc., makes the Open-Close Data and Intraday Open-Close Data available
for purchase to Members and non-Members on the LiveVol DataShop website
(datashop.cboe.com). Customers may currently purchase End-of-Day Open-
Close Data on a subscription basis ($500 per month) or by ad hoc
request for a specified historical month ($400 per request per month).
Customers may also purchase Intraday Open-Close Data on a subscription
basis ($1,500 per month or $18,000 per year) or by ad hoc request for a
specified historical month ($750 per request per month).
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\3\ For example, subscribers to the intraday product will
receive the first calculation of intraday data by approximately 9:42
a.m. ET, which represents data captured from 9:30 a.m. to 9:40 a.m.
Subscribers will receive the next update at 9:52 a.m., representing
the data previously provided together with data captured from 9:40
a.m. through 9:50 a.m., and so forth. Each update will represent the
aggregate data captured from the current ``snapshot'' and all
previous ``snapshots.''
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The Exchange now proposes to adopt an academic discount for ad-hoc
requests of historical months of these data sets. Specifically, the
Exchange proposes to charge qualifying academic purchasers $750 per
year for the first year (instead of $4,800 per year) for historical
End-of-Day Open-Close Data and $1,500 per year for the first year
(instead of $9,000 per year) for historical Intraday Open-Close Data.
Additional months after the first year may be purchased separately and
will be assessed a prorated amount based on the yearly rate (i.e.,
$62.50 per month for historical End-of-Day Open-Close and $125 per
month for historical Intraday Open-Close). Particularly, the Exchange
believes that academic institutions and researchers 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 fee for
qualifying academic purchasers of historical End-of-Day Open-Close Data
and Intraday 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 purchaser must be (1) an
accredited academic institution or member of the faculty or staff of
such an 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 an accredited academic institution, and any commercial
or profit-seeking usage is excluded. Academic pricing will not
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be provided to any purchaser whose research is funded by a securities
industry participant. LiveVol subscriber policies will reflect the
academic discount program, and academic users interested in qualifying
will be required to submit a brief application. 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 another exchange currently offers an
academic discount for a similar data feed.\4\ Additionally, the
Exchange's affiliate Cboe Exchange, Inc. (``Cboe Options'') offers an
academic discount for historical End-of-Day Open-Close and Intraday
Open-Close Data products.\5\ The Exchange recognizes the high value of
academic research and educational instruction and publications, and
believes that the proposed academic discount for historical End-of-Day
Open-Close Data and Intraday Open-Close Data will encourage the
promotion of 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' ad hoc requests of historical End-of-Day Open-
Close an Intraday Open-Close Data would be educational in use and
purpose, and not vocational.
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\4\ See Nasdaq ISE, Options 7 Pricing Schedule, Section 10A.,
Nasdaq ISE Open/Close Trade Profile Intraday.
\5\ See Cboe Options Fees Schedule, Livevol Fees, Open Close
Data.
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The Exchange next seeks to adopt a free trial for historical ad hoc
requests for Intraday Open-Close Data for new purchasers. Particularly,
the Exchange proposes to adopt a free trial available during the months
of June and July 2021 to provide up to three (3) historical months of
Intraday Open-Close Data to any Member or non-Member that has not
previously subscribed to this offering.\6\ The Exchange believes the
proposed trial will serve as an incentive for new users to start
purchasing Intraday Open-Close historical data. More specifically, the
Exchange believes it will give potential subscribers the ability to use
and test the data offering before signing up for additional months. The
Exchange also notes another exchange offers a free trial for new
subscribers of a similar data product.\7\ Lastly, the purchase of
Intraday Open-Close historical data is discretionary and not
compulsory.
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\6\ For example, if a Member or non-Member that has never made
an ad-hoc request for a specified month of Intraday Open-Close
historical data wishes to purchase Intraday Open-Close Data for the
months of January, February and March 2021 during the month of June
2021, the historical files for those months would be provided free
of charge. If a new user wishes to purchase Intraday Open-Close
historical data for the months of January, February, March and April
2021 during the month of June 2021, then the data for January,
February and March 2021 would be provided free of charge, and the
new user would be charged $1,000 for the April 2021 historical file.
\7\ See Nasdaq ISE, Options 7 Pricing Schedule, Section 10A.,
Nasdaq ISE Open/Close Trade Profile End of Day.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\9\ 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. The Exchange also believes that
its proposal to adopt fees for Intraday Open-Close Data is consistent
with Section 6(b) of the Act in general, and furthers the objectives of
Section 6(b)(4) of the Act \10\ in particular, in that it is an
equitable allocation of dues, fees and other charges among its members
and other recipients of Exchange data.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78f(b)(4).
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In particular, the Exchange believes that the discount for
qualifying academic purchasers of the ad hoc historical End-of-Day
Open-Close and Intraday Open-Close Data is reasonable because academic
users 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 and faculty members to purchase
historical End-of-Day Open-Close and Intraday 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 users that submit an application
and meet the accredited academic institution or faculty member 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.
The Exchange also believes that the proposed free trial for any
Member or non-Member who has not previously purchased Intraday Open-
Close historical data is reasonable because such users would not be
subject to fees for up to 3 months' worth of Intraday Open-Close
historical data. The Exchange believes the proposed free trial is also
reasonable as it will give potential subscribers the ability to use and
test the Intraday Open-Close historical data prior to purchasing
additional months and will therefore encourage and promote new users to
purchase the Intraday Open-Close historical data. The Exchange believes
that the proposed discount is equitable and not unfairly discriminatory
because it will apply equally to all Members and non-Members who have
not previously purchased Intraday Open-Close historical data. Lastly,
as noted above, another exchange offers a free trial to new users for a
similar data product \11\ and purchase of this data product is
discretionary and not compulsory.
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\11\ See Nasdaq ISE, Options 7 Pricing Schedule, Section 10A.,
Nasdaq ISE Open/Close Trade Profile End of Day.
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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
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
relating to the academic discount will apply to all qualifying academic
purchasers uniformly. While the proposed fee reduction applies only to
qualifying academic purchasers, academic purchasers' 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 relating to the free trial will impose any burden
on intramarket competition that is not necessary or appropriate in
furtherance of the
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purposes of the Act because the proposed rule change will apply to all
Members and non-Members who have never made an ad-hoc request to
purchase Intraday Open-Close historical data. Moreover, purchase of
Intraday Open-Close historical files is discretionary and not
compulsory.
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 because the
proposed change applies only to the Exchange. Furthermore, another
exchange currently offers similar historical data to academic users at
a discounted price as well as a similar free-trial period for similar
data.\12\
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\12\ 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
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \13\ of the Act and subparagraph (f)(2) of Rule
19b-4 \14\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(2).
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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 under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
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-2021-043 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-2021-043. 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeBZX-2021-043 and should be submitted
on or before July 15, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-13282 Filed 6-23-21; 8:45 am]
BILLING CODE 8011-01-P