[Federal Register Volume 86, Number 232 (Tuesday, December 7, 2021)]
[Notices]
[Pages 69299-69301]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26449]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93694; File No. SR-CboeEDGA-2021-025]


Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice 
of Filing of a Proposed Rule Change To Introduce a New Data Product To 
Be Known as the Short Volume Report, Modify the Name of Rule 13.8 to 
``Data Products'', and Add a Preamble to Rule 13.8

December 1, 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 November 17, 2021, Cboe EDGA Exchange, Inc. (``Exchange'' or 
``EDGA'') filed with the Securities and Exchange Commission 
(``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

    Cboe EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') is filing 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change to adopt Exchange Rule 13.8(h) to introduce a new data 
product to be known as the Short Volume Report, modify the name of Rule 
13.8 to ``Data Products'', and add a preamble to Rule 13.8. The text of 
the proposed rule change is provided in Exhibit 5. 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/edga/), 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 adopt Rule 13.8(h) to provide for a new 
data product to be known as the Short Volume Report. The proposal 
introduces the Short Volume Report which will be available for purchase 
to EDGA Members (``Members'') and non-Members. The Exchange notes that 
the proposed data product is substantially similar to information 
included in the short sale volume report offered by the Nasdaq Stock 
Market LLC (``Nasdaq'') \3\ and the TAQ Group Short Volume file offered 
by the New York Stock Exchange LLC (``NYSE''),\4\ with the exception 
that the proposed product will include buy and sell volume as well as 
trade counts for buy, sell, sell short, and sell short exempt volume. 
The Exchange also proposes to change the name of Rule 13.8 to ``Data 
Products'' and add a preamble to Rule 13.8 to conform to Cboe BZX 
Exchange, Inc. (``BZX'') and Cboe BYX Exchange, Inc. (``BYX'') Rule 
11.22.
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    \3\ See the Nasdaq Price List--Equities, Nasdaq Web-based 
Reports, Nasdaq Short Sale Volume Reports at Price List--NASDAQ 
Global Data Products (nasdaqtrader.com).
    \4\ See the NYSE Historical Proprietary Market Data Pricing, 
NYSE Group Summary Data Products, TAQ NYSE Group Short Volume (Daily 
File) at https://www.nyse.com/publicdocs/nyse/data/NYSE_Historical_Market_Data_Pricing.pdf.
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    A description of each market data product offered by the Exchange 
is described in Exchange Rule 13.8. The Exchange proposes to amend Rule 
13.8(h) to introduce and add a description of the Short Volume Report. 
The Exchange proposes to describe the Short Volume Report as ``an end-
of-day report that summarizes equity trading activity on the Exchange, 
including trade count and volume by symbol for buy, sell, sell short, 
and sell short exempt trades.'' Specifically, the end-of-day report 
will include the following information: Trade date, symbol, total 
volume, buy volume, buy trade count, sell volume, sell trade count, 
sell short volume, sell short trade count, sell short exempt volume, 
and sell short exempt trade count. The Exchange notes that the proposed 
product includes substantially similar information as that included in 
comparable products offered on Nasdaq and NYSE except that the Exchange 
proposes to also include

[[Page 69300]]

buy and sell volume as well as trade counts for buy, sell, sell short, 
and sell short exempt volume.\5\ The Exchange believes the additional 
data points will benefit market participants because they will allow 
market participants to better understand the changing risk environment 
on a daily basis.
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    \5\ The Exchange notes that the Nasdaq and NYSE comparable 
products reflect aggregate information across their affiliated 
equity exchanges. The Exchange is not proposing an aggregated Short 
Volume Report across its affiliated equity exchanges; thus, the 
proposal is only applicable to trades executed on BZX [sic].
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    The Short Volume Report will be available for purchase \6\ on a 
monthly subscription basis for which subscribers will receive a daily 
end-of-day file that will be delivered after the conclusion of the 
Post-Closing Session.\7\ Additionally, historical Short Volume Reports 
dating as far back as January 2, 2015 will be available for purchase on 
an ad hoc basis in monthly increments. The subscription files and 
historical files will include the same data points. Lastly, the 
Exchange notes the proposed product 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 subscribe to it 
only if they voluntarily choose to do so.
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    \6\ The Exchange intends to submit a separate rule filing to 
adopt fees for the Short Volume Report product.
    \7\ See Exchange Rule 1.5(r).
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    Based on the above proposal, the Exchange also proposes to amend 
the name of Rule 13.8 from ``EDGA Book Feeds'' to ``Data Products''. 
Such an amendment would accurately describe the Rule as the proposed 
product is not a book feed, but rather a data product. Further, the 
existing data feeds identified in Rule 13.8 are also data products. The 
Exchange also proposes to add the following preamble to Rule 13.8: 
``The Exchange offers the following data products free of charge, 
unless otherwise noted in the Exchange's fee schedule''. The proposed 
language conforms to rule text provided in BZX and BYX Rules 11.22.
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 Section 6(b) of the Act.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ 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) \10\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ See Supra notes 3 and 4.
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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 Short 
Volume Report would further broaden the availability of U.S. equity 
market data to investors consistent with the principles of Regulation 
NMS. The proposal also promotes increased transparency through the 
dissemination of data included in the Short Volume Report. The proposed 
rule change would benefit investors by providing access to the Short 
Volume Report, which may promote better informed trading. Particularly, 
information included in the Short Volume Report may allow a market 
participant to identify the source of selling pressure and whether it 
is long or short.
    Moreover, other exchanges offer substantially similar data 
products. The Nasdaq daily short sale volume file reflects the 
aggregate number of shares executed on Nasdaq, Nasdaq BX, Inc. and 
Nasdaq PHLX LLC.\11\ Specifically, the Nasdaq daily short volume report 
provides the following information: Trade date, symbol, volume during 
regular trading hours, and CTA market identifier. Additionally, the 
NYSE Group Short Volume daily file reflects a summary of short sale 
volume for securities traded on NYSE, NYSE American LLC, NYSE Arca, 
Inc., NYSE National, Inc., and NYSE Chicago, Inc. Specifically, the 
NYSE Group Short Volume product provides the following information: 
Trade date, symbol, short exempt volume, short volume, total volume of 
all transactions, and market identifier. While the proposed product 
offers volume and trade counts which are not offered in the comparable 
NYSE and Nasdaq short sale volume reports, similar data is otherwise 
available or determinable in other NYSE data product offerings. 
Specifically, the NYSE TAQ product provides trade and quote information 
for orders entered on the NYSE affiliated equity exchanges, which 
include buy, sell, and sell short volume.\12\ Thus, subscribers to NYSE 
TAQ could determine volume and trade counts from such data. 
Additionally, the NYSE Monthly Short Sales report provides a record of 
every short sale transaction on NYSE during the month, which includes a 
size and short sale indicator.\13\ Thus, subscribers to the NYSE 
Monthly Short Sales report could determine the sell short and sell 
short exempt volume and trade count, albeit on a monthly basis rather 
than a daily basis. Moreover, the Exchange believes the proposed Short 
Volume Report will benefit market participants because they will 
provide visibility into market activity that is not currently 
available. Further it will allow market participants to better 
understand the changing risk environment on a daily basis. Therefore, 
the Exchange believes it is reasonable to include such data in the 
proposed product.
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    \11\ See Supra note 3. As noted in the Nasdaq Price List, BX and 
PSX short sale files are available for free.
    \12\ See https://www.nyse.com/publicdocs/nyse/data/TAQ_XDP_Products_Client_Spec_v2.3c.pdf.
    \13\ See https://www.nyse.com/publicdocs/nyse/data/Monthly_Short_Sales_Client_Spec_v1.3.pdf.
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    Finally, as noted above the proposed Short Sale Report 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 subscribe to it only if they voluntarily choose to do 
so.
    The Exchange believes the proposal to change the name of Rule 13.8 
to ``Data Products'' is reasonable because the proposed Short Volume 
Report is not a book feed, and thus ``EDGA Book Feeds'' does not 
accurately describe all of the paragraphs under Rule 13.8. The Exchange 
also believes the proposal to add the preamble to Rule 13.8 is 
reasonable because it will eliminate potential investor confusion as to 
which data products the Exchange charges a fee. Furthermore, both of 
the aforementioned changes to Rule 13.8 are identical to the text of 
BZX and BYX Rule 11.22.

[[Page 69301]]

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 data products similar to those offered 
by other competitor equities exchanges.\14\ The Exchange is proposing 
to introduce the Short Volume Report 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. equity 
exchanges offer a market data product that is substantially similar to 
the proposed Short Volume Report.\15\ 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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    \14\ See Supra notes 3 and 4.
    \15\ 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 neither solicited nor received comments on the 
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be 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-CboeEDGA-2021-025 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-CboeEDGA-2021-025. 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-CboeEDGA-2021-025, and should be 
submitted on or before December 28, 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. 2021-26449 Filed 12-6-21; 8:45 am]
BILLING CODE 8011-01-P