[Federal Register Volume 86, Number 174 (Monday, September 13, 2021)]
[Notices]
[Pages 50915-50917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19612]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92887; File No. SR-NYSEArca-2021-75]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Modify the Arca 
Options Deep Market Data Product

September 7, 2021.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on August 24, 2021, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') 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 self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 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 modify the Arca Options Deep market data 
product. The proposed rule change is available on the Exchange's 
website at www.nyse.com, 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 self-regulatory organization 
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 those 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 parts 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 modify the Arca Options Deep market data 
product.
    The Exchange currently offers the following real-time options 
market data feeds: ``Arca Options Top,'' ``Arca Options Deep,'' and 
``Arca Options Complex'' (the ``Arca Options Products''). ``Arca 
Options Top'' is a single market data product that combines last sale 
data, best bids and offers (``BBO''), order imbalance information and 
series status and underlying status messages. ``Arca Options Complex,'' 
also a single market data product, provides subscribers NYSE Arca 
Options quote and trade information (including orders/quotes, requests 
for responses, and trades) for the complex order book on a real-time 
basis. ``Arca Options Deep'' is also a single market data product that 
provides subscribers NYSE Arca Options quotes and orders at the first 
three price levels in each series on a real-time basis.
    The Exchange charges a single fee for Arca Options Products and 
subscribers of Arca Options Products receive all three data feeds 
described above.\4\ The Exchange charges a separate fee for Arca 
Options Complex for subscribers that seek to obtain this data feed on a 
standalone basis.\5\
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    \4\ See Securities Exchange Act Release No. 68005 (October 9, 
2012), 77 FR 63362 (October 16, 2012) (SR-NYSEArca-2012-106) 
(establishing fees for certain proprietary options market data 
products). See also Securities Exchange Act Release Nos. 69523 (May 
6, 2013), 78 FR 27452 (May 10, 2013) (SR-NYSEArca-2013-41) 
(establishing a schedule of NYSE Arca Options proprietary market 
data fees); 69554 (May 10, 2013), 78 FR 28917 (May 16, 2013) (SR-
NYSEArca-2013-47) (establishing non-display usage fees and amending 
the professional end-user fees); 71933 (April 11, 2014), 79 FR 21821 
(April 17, 2014) (SR-NYSEArca-2014-34) (amending the professional 
user fees); 73010 (September 5, 2014), 79 FR 54307 (September 11, 
2014) (SR-NYSEArca-2014-94) (amending fees for non-display use); 
76023 (September 29, 2015), 80 FR 60208 (October 5, 2015) (SR-
NYSEArca-2015-83) (modifying certain proprietary options data 
products); and 77111 (February 11, 2016), 81 FR 8291 (February 18, 
2016) (SR-NYSEArca-2016-29) (Modifying the Arca Options Deep market 
data product).
    \5\ See Securities Exchange Act Release No. 73588 (November 13, 
2014), 79 FR 68922 (November 19, 2014) (SR-NYSEArca-2014-129) 
(establishing fees for the complex order book feed).
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    The Exchange proposes to modify the Arca Options Deep market data 
product so that quotes and orders would be available for the full order 
book in each series on a real-time basis rather than at the first three 
price levels. As modified, Arca Options Deep would provide vendors and 
subscribers with a unified view of events, in sequence, as they appear 
on the Exchange's matching engine. The modified Arca Options Deep would 
include depth of book order data, last sale data, opening imbalance 
data, series status updates (e.g., trade corrections and trading halts) 
and series summary messages. The series summary message would update 
every minute and would include the opening price, high price, low 
price, closing price, and cumulative volume for each series traded on 
the Exchange. The Exchange is not making any changes to the current 
product other than providing quotes and orders for the full order book 
rather than at the first three price levels and the inclusion of 
opening imbalance data.
    The Exchange believes that Arca Options Deep, as modified, 
addresses requests received from vendors and subscribers that would 
like to receive the data described above in an integrated fashion. An 
integrated data feed would provide greater efficiencies and reduce 
errors for vendors and subscribers that currently choose to integrate 
the data after receiving it from the Exchange. The Exchange believes 
that providing vendors and subscribers with the option of a market data 
product that both integrates existing products and includes additional 
market data would allow vendors and subscribers to choose the best 
solution for their specific businesses while also enhancing the 
functionality of the product.
    The proposed modification to the Arca Options Deep data feed will 
allow subscribers who currently obtain depth of market data at three 
price levels to receive the full order book market data in a single 
data feed. Offering a data product that provides the full order book in 
one market data product would provide greater efficiencies and better 
sequencing for vendors and subscribers. As it does currently, Arca 
Options Deep would continue to provide last sale and BBO information on 
a real-time basis as reported to the Options Price Reporting Authority 
(``OPRA'') and disseminated on a consolidated basis under the OPRA 
Plan.\6\
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    \6\ The OPRA Plan is a national market system plan approved by 
the Securities and Exchange Commission (``Commission'') pursuant to 
Section 11A of the Act and Rule 608 thereunder (formerly Rule 11Aa3-
2). See Securities Exchange Act Release No. 17638 (March 18, 1981), 
22 SEC. Docket 484 (March 31, 1981). The full text of the OPRA Plan 
is available at https://www.opraplan.com/. The OPRA Plan provides 
for the collection and dissemination of last sale and quotation 
information on options that are traded on the participant exchanges. 
Section 5.2(c) of the OPRA Plan also permits OPRA Plan participants 
to disseminate unconsolidated market information to certain of their 
members under certain circumstances. The manner in which the 
Exchange proposes to disseminate the products would comply with 
Section 5.2(c) of the OPRA Plan, pursuant to which the Exchange may 
not disseminate the products ``on any more timely basis than the 
same information is furnished to the OPRA System for inclusion in 
OPRA's consolidated dissemination of Options Information.''
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    The Exchange does not propose to make any change to the fees for 
Arca Options Deep. The single fee charged for the Arca Options Products 
that comprise the Arca Options Top, Arca

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Options Deep and Arca Options Complex would continue to apply. The 
separate fee that now applies to Arca Options Complex, would likewise 
continue to apply to the Arca Options Complex market data product.
    Arca Options Deep would continue to be offered through the 
Exchange's Liquidity Center Network (``LCN''), a local area network in 
the Exchange's Mahwah, New Jersey data center that is available to 
users of the Exchange's co-location services. The Exchange would also 
continue to offer the Arca Options Deep through the Exchange's Secure 
Financial Transaction Infrastructure (``SFTI'') network, through which 
all other users and members access the Exchange's trading and execution 
systems and other proprietary market data products.
    The Exchange plans to introduce the modified Arca Options Deep 
market data product when the Exchange transitions to the Pillar trading 
platform, anticipated for the fourth quarter of 2021.\7\ The Exchange 
will announce the exact date that the modified Arca Options Product 
market data product will become available through a NYSE Trader Update.
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    \7\ See Securities Exchange Act Release No. 92304 (June 30, 
2021), 86 FR 36440 (July 9, 2021) (SR-NYSE-Arca-2021-47) (Notice of 
Filing of Proposed Rule Change for New Rules 6.1P-O, 6.37AP-O, 
6.40P-O, 6.41P-O, 6.62P-O, 6.64P-O, 6.76P-O, and 6.76AP-O and 
Amendments to Rules 1.1, 6.1-O, 6.1A-O, 6.37-O, 6.65A-O and 6.96-O).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \8\ of the 
Act, in general, and furthers the objectives of Section 6(b)(5) \9\ of 
the Act, in particular, in that it is 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 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, and it is not designed to permit unfair discrimination 
among customers, brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes this proposal is consistent with Section 
6(b)(5) of the Act because it protects investors and the public 
interest and promotes just and equitable principles of trade by 
providing investors with improved options for receiving market data. 
The proposed rule change would benefit investors by facilitating their 
prompt access to the additional real-time information contained in a 
modified Arca Options Deep market data product.
    The Exchange believes the proposed change is reasonable because it 
would provide vendors and subscribers with a higher quality market data 
product.
    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to consumers of such data. It was 
believed that this authority would expand the amount of data available 
to users and consumers of such data and also spur innovation and 
competition for the provision of market data. The Exchange believes 
that the options data product changes proposed herein are precisely the 
sort of market data product evolutions that the Commission envisioned 
when it adopted Regulation NMS. The Commission concluded that 
Regulation NMS--by lessening regulation of the market in proprietary 
data--would itself further the Act's goals of facilitating efficiency 
and competition:

[E]fficiency is promoted when broker-dealers who do not need the 
data beyond the prices, sizes, market center identifications of the 
NBBO and consolidated last sale information are not required to 
receive (and pay for) such data. The Commission also believes that 
efficiency is promoted when broker-dealers may choose to receive 
(and pay for) additional market data based on their own internal 
analysis of the need for such data.\10\
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    \10\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005).

    By removing ``unnecessary regulatory restrictions'' on the ability 
of exchanges to sell their own data, Regulation NMS advanced the goals 
of the Act and the principles reflected in its legislative history.
    The proposed modified Arca Options Deep market data feed will help 
to protect a free and open market by providing additional data to the 
marketplace and give investors greater choices. In addition, the 
proposal would not permit unfair discrimination because the products 
will be available to all of the Exchange's customers and broker-dealers 
through both the LCN and SFTI.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\11\ 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 market for proprietary data products is 
currently competitive and inherently contestable because there is 
fierce competition for the inputs necessary to the creation of 
proprietary data. Numerous exchanges compete with each other for 
listings, trades, and market data itself, providing virtually limitless 
opportunities for entrepreneurs who wish to produce and distribute 
their own market data. This proprietary data is produced by each 
individual exchange, as well as other entities (such as internalizing 
broker-dealers and various forms of alternative trading systems, 
including dark pools and electronic communication networks), in a 
vigorously competitive market. It is common for market participants to 
further and exploit this competition by sending their order flow and 
transaction reports to multiple markets, rather than providing them all 
to a single market. Because the Exchange's competitors already offer 
similar products, the proposed modified Arca Options Deep market data 
product will enhance competition. For example, Arca Options Deep would 
provide an alternative to Nasdaq ITCH-to-Trade Options, offered by The 
Nasdaq Stock Market, Inc. (``Nasdaq'').\12\
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    \11\ 15 U.S.C. 78f(b)(8).
    \12\ See Nasdaq ITCH-to-Trade Options (ITTO), https://www.nasdaqtrader.com/micro.aspx?id=Dapos (ITTO is designed to 
provide full quote and order depth . ITTO uses a series of messages 
to track the life of a quote or order through the Nasdaq Options 
Market (NOM). ITTO supports NOM last sale data as well as Net Order 
Imbalance data for the opening auction).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.

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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 change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     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-NYSEArca-2021-75 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-NYSEArca-2021-75. 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-NYSEArca-2021-75, and should be 
submitted on or before October 4, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19612 Filed 9-10-21; 8:45 am]
BILLING CODE 8011-01-P