[Federal Register Volume 86, Number 232 (Tuesday, December 7, 2021)]
[Notices]
[Pages 69306-69308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26450]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93696; File No. SR-CboeEDGX-2021-049]
Self-Regulatory Organizations; Cboe EDGX 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 EDGX Exchange, Inc. (``Exchange'' or
``EDGX'') 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 EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') 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 also available on the
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), 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 EDGX 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 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
[[Page 69307]]
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 ``EDGX 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 ``EDGX 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.
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
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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-CboeEDGX-2021-049 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-CboeEDGX-2021-049. 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-CboeEDGX-2021-049, and should be
submitted on or before December 28, 2021.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-26450 Filed 12-6-21; 8:45 am]
BILLING CODE 8011-01-P