[Federal Register Volume 87, Number 163 (Wednesday, August 24, 2022)]
[Notices]
[Pages 52099-52101]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18186]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95546; File No. SR-CboeBZX-2022-044]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Introduce a New Data Product To Be Known as the Short Volume Report

August 18, 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 August 9, 2022, Cboe BZX Exchange, Inc. (``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``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'') is filing 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change to Exchange Rule 11.22(f) to introduce a new data product 
to be known as the Short Volume Report. 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 seeks to amend Rule 11.22 to adopt paragraph 11.22(f), 
which introduces a new data product, the Short Volume Report. A 
description of each market data product offered by the Exchange is 
provided in Exchange Rule 11.22 and proposed Rule 11.22(f) provides 
that the Short Volume Report is an end-of-day report that summarizes 
certain equity trading activity on the Exchange, and includes trade 
date,\3\ total volume,\4\ sell short volume,\5\ and sell short exempt 
volume,\6\ by symbol.\7\ The Short Volume Report will be available for 
purchase to both BZX Members (``Members'') \8\ as well as non-
Members.\9\
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    \3\ ``Trade date'' is the date of the trading activity.
    \4\ ``Total volume'' is the total share volume of all order 
executions.
    \5\ ``Sell Short volume'' is the total share volume of all short 
order executions, (Sell Short + Sell Short Exempt).
    \6\ ``Short exempt volume'' is the total share volume of all 
short exempt order executions.
    \7\ Symbol refers to the Cboe formatted symbol in which the 
trading activity occurred. See https://cdn.cboe.com/resources/membership/US_Symbology_Reference.pdf.
    \8\ The term ``Member'' shall mean any registered broker or 
dealer that has been admitted to membership in the Exchange. A 
Member will have the status of a ``member'' of the Exchange as that 
term is defined in Section 3(a)(3) of the Act. Membership may be 
granted to a sole proprietor, partnership, corporation, limited 
liability company or other organization which is a registered broker 
or dealer pursuant to Section 15 of the Act, and which has been 
approved by the Exchange. See Exchange Rule 1.5(n), definition of 
``Member''.
    \9\ The Exchange intends to submit a separate filing to 
establish fees for the Short Volume Report.
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    The Exchange notes that the data fields included in the Short 
Volume Report are essentially identical to the fields included by the 
New York Stock Exchange LLC (``NYSE'') in their Daily Short Volume 
file.\10\ Specifically, the NYSE Daily Short Volume file also includes 
trade date,\11\ symbol,\12\ short exempt volume,\13\ short volume,\14\ 
and total volume.\15\ The proposed Short Volume Report is also similar 
to Nasdaq's Daily Short Sale Volume file \16\

[[Page 52100]]

which includes, date,\17\ symbol,\18\ short volume,\19\ total 
volume,\20\ and market center.\21\ The Short Volume Report will be 
available for purchase \22\ by both Members and non-Members on a 
monthly subscription basis, and subscribers will receive a daily end-
of-day file. Additionally, like NYSE, the Exchange will offer 
historical daily Short Volume Reports. Historical daily Short Volume 
Reports will be available for purchase dating back to January 2, 
2015,\23\ and will include the same data fields as the daily end-of-day 
files.\24\
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    \10\ See NYSE Daily Short Volume Client Specification, available 
at: https://www.nyse.com/publicdocs/nyse/data/Daily_Short_Volume_Client_Spec_v1.3.pdf. The NYSE Daily Short Volume 
includes trade date, symbol, short exempt volume, short volume, and 
total volume. Unlike NYSE, the proposed Short Volume Report will not 
include the trading exchange, as the proposed report includes short 
sale volume only for transactions executed on BZX. Additionally, 
NYSE's Daily Short Volume file specifies that short volume is 
comprised of the sum of, (sell short volume + sell short exempt 
volume + sell short with slide). While the Exchange does not 
specifically flag sell short with slide transactions, such 
transactions are recognized simply as sell short or sell short 
exempt and are thus included in the Exchange's sell short and sell 
short exempt volume.
    \11\ NYSE ``Trade date'' is the date of trading session 
activity.
    \12\ NYSE ``Symbol'' is defined in the NYSE Symbology 
Specification, available at: https://www.nyse.com/publicdocs//data/Daily_Short_Volume_Client_Spec_v1.3.pdf.
    \13\ NYSE ``Short Exempt Volume'' is the total share volume of 
all Short Exempt order executions.
    \14\ NYSE ``Short Volume'' is the total share volume of all 
short order executions, (Sell Short + Sell Short Exempt + Sell Short 
with Slide).
    \15\ NYSE ``Total Volume'' is the total share volume of all 
order executions.
    \16\ See Specifications for Daily Short Sale Volume file, 
available at: https://www.nasdaqtrader.com/content/technicalsupport/specifications/dataproducts/ShortSaleFileSpecifications.pdf. The 
Exchange notes that Nasdaq's comparable product, the Daily Short 
Sale Volume File, reflects aggregate information across their 
affiliated equity exchanges. The Exchange is not proposing an 
aggregated Short Volume Report across its affiliated equity 
exchanges, and the proposal includes only volume on BZX. As such, 
the volumes calculated on Nasdaq reports will differ from that in 
the proposed Short Volume Report.
    \17\ Nasdaq ``Date'' is the trade date (YYYYMMDD).
    \18\ Nasdaq ``Symbol'' is the Trading Symbol.
    \19\ Nasdaq ``Short Volume'' is the aggregate reported share 
volume of executed short sales during regular trading hours.
    \20\ Nasdaq ``Total Volume'' is the aggregate reported share 
volume of all executed trades during regular trading hours.
    \21\ Nasdaq ``Market Center'' is the market identifier (Q = 
NASDAQ for NASDAQ file, B = Boston for Boston file, X = PSX).
    \22\ The Exchange notes that short sale information that is 
available free of charge on the Cboe website will continue to be 
publicly available upon approval of this proposal.
    \23\ Historical Short Volume Reports will be available for 
purchase on an ad hoc basis.
    \24\ The Exchange notes that NYSE also offers historical daily 
short sale files. See https://www.nyse.com/market-data/historical/taq-nyse-group-short-sales.
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    The Exchange anticipates that a wide variety of market participants 
will purchase the proposed Short Volume Report, including, but not 
limited to, active equity trading firms and academic institutions. For 
example, the Exchange notes that academic institutions may utilize the 
Short Volume Report data and as a result promote research and studies 
of the equities industry to the benefit of all market participants. The 
Exchange further believes the proposed Short Volume Report may provide 
helpful trading information regarding investor sentiment that may allow 
market participants to make more informed trading decisions and may be 
used to create and test trading models and analytical strategies and 
provide comprehensive insight into trading on the Exchange. The 
proposal 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 purchase it only if they voluntarily choose 
to do so.
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.\25\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \26\ 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) \27\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \25\ 15 U.S.C. 78f(b).
    \26\ 15 U.S.C. 78f(b)(5).
    \27\ Id.
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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 short volume data. The proposed rule change would 
benefit investors by providing access to the Short Volume Report data, 
which may promote better informed trading, as well as research and 
studies of the equities industry.
    Moreover, as noted above, NYSE offers a Daily Short Volume file 
which provides data that is essentially identical to that currently 
proposed by the Exchange--trade date, symbol, short volume, short 
exempt volume, and total volume.\28\ The proposed Short Volume Report 
is also similar to Nasdaq's Daily Short Sale Volume file which 
includes, date, symbol, short volume, total volume, and market 
center.\29\ Accordingly, the proposed Short Volume Report does not 
provide a unique or novel data offering, but rather offers data points 
consistent with other data products already available and utilized by 
market participants today.
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    \28\ Supra note 10.
    \29\ Supra note 16.
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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. Rather, the Exchange 
believes that the proposal will promote fair competition among the 
national securities exchanges by permitting the Exchange to offer a 
data product that provides substantially the same data offered by other 
competitor equities exchanges. Additionally, the Short Volume Report 
will be available equally to Members and non-Members. Market 
participants are not required to purchase the Short Volume Report, and 
the Exchange is not required to make the Short Volume Report available 
to investors. Rather, the Exchange is voluntarily making the Short 
Volume Report available, as requested by customers, and market 
participants may choose to receive (and pay for) this data based on 
their own business needs. Potential purchasers may request the data at 
any time if they believe it to be valuable or may decline to purchase 
such data. Given the above, 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.

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

    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

[[Page 52101]]

19(b)(3)(A) of the Act \30\ and Rule 19b-4(f)(6) thereunder.\31\
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    \30\ 15 U.S.C. 78s(b)(3)(A).
    \31\ 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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    A proposed rule change filed under Rule 19b-4(f)(6) \32\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\33\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
requested that the Commission waive the 30-day operative delay so that 
the proposal may become operative prior to 30 days after the date of 
the filing. The Exchange states that waiver of the operative delay is 
consistent with the protection of investors and the public interest 
because the proposed Short Volume Report is nearly identical to the 
currently available NYSE Daily Short Volume file and Nasdaq Daily Short 
Volume file and would permit the Exchange to immediately make the Short 
Volume Report available to subscribers as an alternative to similar 
products offered by NYSE and Nasdaq. The Commission believes that 
waiver of the 30-day operative delay is consistent with the protection 
of investors and the public interest because the proposed rule change 
does not raise any new or novel issues. Accordingly, the Commission 
hereby waives the operative delay and designates the proposed rule 
change operative upon filing.\34\
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    \32\ 17 CFR 240.19b-4(f)(6).
    \33\ 17 CFR 240.19b-4(f)(6)(iii).
    \34\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 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-CboeBZX-2022-044 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-2022-044. 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-2022-044 and should be submitted 
on or before September 14, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\35\
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    \35\ 17 CFR 200.30-3(a)(12), (59).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2022-18186 Filed 8-23-22; 8:45 am]
BILLING CODE 8011-01-P