[Federal Register Volume 87, Number 72 (Thursday, April 14, 2022)]
[Notices]
[Pages 22269-22271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07947]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94645; File No. SR-CboeEDGX-2022-020]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Fees Applicable to Various Market Data Products
April 8, 2022.
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 April 1, 2022, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission (the
``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. (``EDGX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (the ``Commission'') a
proposed rule change to amend the fees applicable to various market
data products. 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/) [sic], 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 the Market Data section of its Fees
Schedule for its equities trading platform (``EDGX Equities'').
Particularly, the Exchange proposes to adopt a free trial program for
Exchange market data products, effective April 1, 2022.
The Exchange proposes a 30-day free trial for any User or
Distributor that subscribes to or distributes, respectively, an
Exchange real-time market data product (``Product'') listed on the Fee
Schedule for the first time. As proposed, a first-time User would be
any entity or individual that has not previously subscribed to a
particular Product and a first-time Distributor would be any entity
that has not previously distributed, internally or externally, a
particular Product. A first-time User or Distributor of a particular
Exchange market data product would not be charged any applicable fees
listed in the Fee Schedule for that product for the duration of the 30
days.\3\ For example, a firm that currently subscribes to EDGX Top
would be eligible to receive a free 30-day trial of EDGX Depth, whether
in a display-only format or for non-display use. However, a firm that
currently receives EDGX Depth for non-display use would not be eligible
to receive a free 30-day trial of EDGX Depth in a display-only format.
The Exchange would provide the 30-day free trial for each particular
product to each first-time User or Distributor once.
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\3\ For example, if a User that has elected to participate in
the free trial program for EDGX Top data is approved on April 15,
2022, that User will not be subject to any applicable fees (i.e.,
User Fee) through May 14, 2022.
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The Exchange believes that providing a 30-day free trial to
Exchange real-time market data products listed on the Exchange's Fee
Schedule would enable potential Users and Distributors to determine
whether a particular Exchange market data product provides value to
their business models or investment strategies, as applicable, before
fully committing to expend development and implementation costs related
to the receipt or distribution of that product, and is intended to
encourage increased use of the Exchange's market data products by
defraying some of the development and implementation costs Users or
Distributors would ordinarily have to expend before using a product.
The
[[Page 22270]]
Exchange notes that other exchanges have similar free trial
programs.\4\
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\4\ See The Nasdaq Stock Market LLC (``Nasdaq'') Equity 7
Pricing Schedule, Section 112(b)(1) and New York Stock Exchange LLC
(``NYSE'') Proprietary Market Data Fees Schedule, General.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\5\ in general, and
furthers the objectives of Section 6(b)(4),\6\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its members and other recipients of
Exchange data. In addition, the Exchange believes that the proposed
rule change is consistent with Section 11(A) of the Act as it supports
(i) fair competition among brokers and dealers, among exchange markets,
and between exchange markets and markets other than exchange markets,
and (ii) the availability to brokers, dealers, and investors of
information with respect to quotations for and transactions in
securities.\7\ Finally, the proposed rule change is also consistent
with Rule 603 of Regulation NMS,\8\ which provides that any national
securities exchange that distributes information with respect to
quotations for or transactions in an NMS stock do so on terms that are
not unreasonably discriminatory.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4).
\7\ 15 U.S.C. 78k-1.
\8\ See 17 CFR 242.603.
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The Exchange believes that adopting a free trial program for real-
time market data products listed in its Fees Schedule is equitable and
reasonable. Particularly, providing Exchange real-time market data
products to new Users and Distributors free-of-charge for the first 30
days is reasonable because it would allow vendors and subscribers to
become familiar with the feeds and determine whether they suit their
needs without incurring fees. It is also intended to incentivize
Distributors to enlist more Users to subscribe to Exchange market data
products in an effort to broaden the products' distribution. Making a
new market data product available for free for a trial period is also
consistent with offerings of other exchanges. For example, NYSE and
Nasdaq offer similar free trial programs.\9\
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\9\ See Nasdaq Equity 7 Pricing Schedule, Section 112(b)(1) and
NYSE Proprietary Market Data Fees Schedule, General.
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The Exchange believes the proposal to provide the Exchange market
data products to new Users or Distributors free-of-charge for their
first 30 days subscribing or distributing the data, as applicable, is
equitable and not unfairly discriminatory because it applies to any
first-time User or Distributor, regardless of the use they plan to make
of the feed. As proposed, any first-time User or Distributor would not
be charged any applicable fee listed in the Fee Schedule for any of the
Exchange's real-time market data products listed in the Fee Schedule
for 30 days. The Exchange believes it is equitable to restrict the
availability of this free trial to Users or Distributors that have not
previously subscribed to, or distributed, respectively the particular
market data product, since Users or Distributors who are current or
previous subscribers or Distributors, respectively of that product are
already familiar with the product and whether it would suit their
needs.
The Exchange believes that the proposed rule change providing for a
free trial period to test is not unfairly discriminatory because the
financial benefit of the fee waiver would be available to all Users
subscribing to, and all Distributors distributing, an Exchange Product
for the first time on a free-trial basis. The Exchange believes there
is a meaningful distinction between Users and Distributors that are
subscribing to or distributing a market data product for the first
time, who may benefit from a period within which to set up and test use
of the product before it becomes fee liable, and Users and Distributors
that are already receiving or distributing the Exchange's market data
products and are deriving value from such use. The Exchange believes
that the limited period of the free trial would not be unfairly
discriminatory to other users of the Exchange's market data products
because it is designed to provide a reasonable period of time to set up
and test a new market data product. The Exchange further believes that
providing a free trial for 30 days would ease administrative burdens
for data recipients to subscribe to or distribute a new data product
and eliminate fees for a period before such users are able to derive
any benefit from the data.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
operates in a highly competitive environment, and its ability to price
these data products is constrained by competition among exchanges that
offer similar data products to their customers. The Exchange believes
that the proposed free trial program does not put any market
participants at a relative disadvantage compared to other market
participants. As discussed, the proposed trial would apply to first
time Users and Distributors on an equal and non-discriminatory basis.
Further, the Exchange believes that the proposed program does not
impose a burden on competition or on other SROs that is not necessary
or appropriate in furtherance of the purposes of the Act. The Exchange
does not believe that the proposal would cause any unnecessary or
inappropriate burden on intermarket competition as other exchanges are
free to lower their prices or provide a free trial to better compete
with the Exchange's offering. Indeed, other national securities
exchanges already offer similar free trial programs today.\10\ The
proposed amendments are also designed to enhance competition by
providing an incentive to Distributors to enlist new subscribers and
Users to subscribe to Exchange real-time market data products.
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\10\ See Nasdaq Equity 7 Pricing Schedule, Section 112(b)(1) and
NYSE Proprietary Market Data Fees Schedule, General.
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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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\
thereunder. 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 will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
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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.
[[Page 22271]]
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-2022-020 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-2022-020. 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. 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-2022-020, and
should be submitted on or before May 5, 2022.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2022-07947 Filed 4-13-22; 8:45 am]
BILLING CODE 8011-01-P