[Federal Register Volume 88, Number 60 (Wednesday, March 29, 2023)]
[Notices]
[Pages 18609-18616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06429]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97189; File No. SR-CBOE-2023-015]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Update 
Its Fees Schedule

March 23, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 10, 2023, Cboe Exchange, Inc. (``Exchange'' or ``Cboe 
Options'') 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 Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to update its Fees Schedule. 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://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 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.

[[Page 18610]]

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.\3\ Particularly, the Exchange proposes to (i) adopt a New 
External Credit applicable to Cboe Options Top, (ii) adopt a credit 
towards the monthly Distribution fees for Cboe Options Top, (iii) 
modify the Cboe Options Top Enterprise Fee; and (iv) establish fees for 
Cboe One Options Feed.
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    \3\ The Exchange initially filed the proposed fee changes on 
March 1, 2023 (SR-CBOE-2023-014). On March 10, 2023, the Exchange 
withdrew that filing and submitted this proposal.
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Cboe Top Data
    By way of background, the Exchange offers the Cboe Options Top Data 
feed, which is an uncompressed data feed that offers top-of-book 
quotations and last sale information based on options orders entered 
into the Exchange's System. The Cboe Options Top Data feed benefits 
investors by facilitating their prompt access to real-time top-of-book 
information contained in Cboe Options Top Data. The Exchange's 
affiliated options exchanges (i.e., Cboe C2 Exchange, Inc. (``C2 
Options''), Cboe BZX Exchange, Inc. (``BZX Options''), and Cboe EDGX 
Exchange, Inc. (``EDGX Options'') (collectively, ``Affiliates'') also 
offer similar top-of-book data feeds.\4\ Particularly, each of the 
Exchange's Affiliates offer top-of-book quotation and last sale 
information based on their own quotation and trading activity that is 
substantially similar to the information provided by the Exchange 
through the Cboe Options Top. The Exchange proposes to make the 
following fee changes relating to Cboe Options Top.
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    \4\ See C2 Options Fees Schedule, EDGX Rule 21.15, and BZX Rule 
21.15.
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New External Distributor Credit
    The Exchange first proposes to adopt a New External Distributor 
Credit which will provide that new External Distributors of the Cboe 
Options Top feed will not be charged an External Distributor Fee for 
their first three (3) months in order to incentivize External 
Distributors to enlist new users to receive Cboe Options Top feed. The 
Exchange notes that other exchanges, including the Exchange's 
affiliated equities exchanges, offer similar credits for similar market 
data products. For example, Cboe's equities exchanges currently offer a 
three (3) month New External Distributor Credit applicable to External 
Distributors of their top-of-book data feeds.\5\
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    \5\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data 
Fees.
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Distributor Fee Credit
    The Exchange also proposes to provide that each External 
Distributor will receive a credit against its monthly Distributor Fee 
for the Cboe Options Top equal to the amount of its monthly Usage Fees 
up to a maximum of the Distributor Fee for the Cboe Options Top feed. 
For example, an External Distributor will be subject to a $9,000 
monthly Distributor Fee where they elect to receive the Cboe Options 
Top. If that External Distributor reports User quantities totaling 
$9,000 or more of monthly usage of the Cboe Options Top, it will pay no 
net Distributor Fee, whereas if that same External Distributor were to 
report User quantities totaling $8,000 of monthly usage, it will pay a 
net of $1,000 for the Distributor Fee. External Distributors will 
remain subject to the per User fees applicable to Cboe Options Top. In 
every case the Exchange will receive at least $9,000 in connection with 
the distribution of the Cboe Options Top (through a combination of the 
External Distribution Fee and per User Fees). The Exchange notes that 
its affiliated equities exchanges offer a similar credit for a similar 
market data product.\6\
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    \6\ See e.g., EDGX Equities Exchange Fees Schedule, Id.
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Enterprise Fee Tiers
    The Exchange currently offers Distributors the ability to purchase 
a monthly (and optional) Enterprise license to receive the Cboe Options 
Top Feed for distribution to an unlimited number of Professional and 
Non-Professional Users. The Enterprise Fee is an alternative to 
Professional and Non-Professional User fees and permits a Distributor 
to pay a flat fee for an unlimited number of Professional and Non-
Professional Users and is in addition to the Distribution fees. The 
Exchange currently assesses an Enterprise fee of $300,000 per month. 
The Exchange proposes to modify the current Enterprise Fee and adopt a 
tiered structure based on the number of Users a Distributor has. The 
Exchange proposes to adopt the following monthly Enterprise Fees: 
$300,000 for up to 1,500,000 Users (Tier 1), $450,000 for 1,500,001 to 
2,500,000 Users (Tier 2) and $600,000 for 2,500,001 or greater Users 
(Tier 3). The proposed fees are non-progressive (e.g., if a Distributor 
has 2,000,000 Users, it will be subject to $450,000 for Tier 2). The 
Enterprise Fee may provide an opportunity to reduce fees. For example, 
if a Distributor has 1.4 million Non-Professional Users who each 
receive Cboe One Options Feed at $0.30 per month (as proposed), then 
that Distributor will pay $420,000 per month in Professional Users 
fees. If the Distributor instead were to purchase the proposed 
Enterprise license (tier 1), it would alternatively pay a flat fee of 
$300,000 for up to 1.5 million Professional and Non-Professional Users. 
A Distributor that pays the Tier 1 or Tier 2 Enterprise Fee will have 
to report its number of such Users on a monthly basis. A Distributor 
that pays the Tier 3 Enterprise Fee will only have to report the number 
of its Users every six months.\7\ The Exchange notes that if the 
reported number of Users exceed the Enterprise Tier a Distributor has 
purchased, the higher Tier will apply (e.g., if a Distributor purchases 
Tier 1, but reports 1,600,000 Users for a month, the Distributor will 
be assessed the Tier 2 fee).
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    \7\ See Cboe Global Markets north American Data Policies.
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    The Exchange also proposes to allow Distributors to purchase the 
Enterprise Fee on a monthly or annual basis. Annual licenses will 
receive a 5% discount off the applicable Enterprise Tier fee. The 
Exchange notes that the purchase of an Enterprise license is voluntary, 
and a firm may elect to instead use the per User structure and benefit 
from the proposed per User Fees described above. For example, a firm 
that does not have a sufficient number of Users to benefit from 
purchase of a license need not do so.
Cboe One Options Feed
    By way of background, the Exchange recently adopted a new market 
data product called Cboe One Options Feed, which is launching March 1, 
2023.\8\ Cboe One Options Feed will provide top-of-book quotation and 
last sale information based on the quotation and trading activity on 
the Exchange and each of its Affiliates, which the Exchange believes 
offers a comprehensive and highly representative view of US options 
pricing to market participants. More specifically, Cboe One Options 
Feed will contain the aggregate best bid and offer (``BBO'') of all 
displayed orders for options traded on the Exchange and its Affiliates, 
as well as individual last sale information and volume, which includes 
the price, time of execution and individual Cboe options exchange on 
which the trade was executed. See

[[Page 18611]]

e.g., EDGX Equities Exchange Fees Schedule, Market Data Fees.
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    \8\ See SR-CBOE-2023-012.
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    The Cboe One Options Feed will also consist of Symbol Summary,\9\ 
Market Status,\10\ Trading Status,\11\ and Trade Break \12\ messages 
for the Exchange and each of its Affiliates.
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    \9\ The Symbol Summary message will include the total executed 
volume across all Cboe Options Exchanges.
    \10\ The Market Status message is disseminated to reflect a 
change in the status of one of the Cboe Options Exchanges. For 
example, the Market Status message will indicate whether one of the 
Cboe Options Exchanges is experiencing a systems issue or disruption 
and quotation or trade information from that market is not currently 
being disseminated via the Cboe One Options Feed as part of the 
aggregated BBO. The Market Status message will also indicate when a 
Cboe Options Exchange is no longer experiencing a systems issue or 
disruption to properly reflect the status of the aggregated BBO.
    \11\ The Trade Break message will indicate when an execution on 
a Cboe Options Exchange is broken in accordance with the individual 
Cboe Options Exchange's rules (e.g., Cboe Options Rule 6.5, C2 
Option Rule 6.5, BZX Options Rule 20.6, EDGX Options Rule 20.6).
    \12\ The Trading Status message will indicate the current 
trading status of an option contract on each individual Cboe Options 
Exchange. A Trading Status message will also be sent whenever a 
security's trading status changes. For example, a Trading Status 
message will be sent when a symbol is open for trading or when a 
symbol is subject to a trading halt or when it resumes trading.
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    The Exchange will use the following data feeds to create the Cboe 
One Options Feed, each of which is available to other vendors and/or 
distributors: Cboe Options Top Data, C2 Options Top Data, EDGX Options 
Top and BZX Options Top. A vendor and/or distributor that wishes to 
create a product like the Cboe One Options Feed could instead subscribe 
to each of the aforementioned data feeds. Any entity that receives, or 
elects to receive, the individual data feeds or the feeds that may be 
used to create a product like the Cboe One Options Feed would be able 
to, if it so chooses, to create a data feed with the same information 
included in the Cboe One Options Feed and sell and distribute it to its 
clients so that it could be received by those clients as quickly as the 
Cboe One Options Feed would be received by those same clients.
    The Exchange proposes to amend its fee schedule to incorporate fees 
related to the Cboe One Options Feed. The Exchange has taken into 
consideration its affiliated relationship with its Affiliates in its 
design of the Cboe One Options Feed to assure that vendors \13\ would 
be able to offer a similar product on the same terms as the Exchange 
from a cost perspective. Although Cboe Options Exchanges are the 
exclusive distributors of the individual data feeds from which certain 
data elements would be taken to create the Cboe One Options Feed, the 
Exchange would not be the exclusive distributor of the aggregated and 
consolidated information that compose the proposed Cboe One Options 
Feed. Distributors and/or vendors would be able, if they chose, to 
create a data feed with the same information as the Cboe One Options 
Feed and distribute it to their clients on a level-playing field with 
respect to latency and cost as compared to the Exchange's proposed Cboe 
One Options Feed. The pricing the Exchange proposes to charge for the 
Cboe One Options Feed, as described more fully below, is not lower than 
the cost to a distributor or vendor to obtain the underlying data 
feeds. In fact, the Distribution and User (Professional and Non-
Professional) fees, as well as the optional Enterprise Fees, that the 
Exchange proposes to adopt for the Cboe One Options Feed are equal to 
the respective combined fees for subscribing to each individual data 
feed. The Exchange also proposes to adopt a ``Data Consolidation Fee,'' 
which would reflect the value of the aggregation and consolidation 
function the Exchange performs in creating the Cboe One Options Feed. 
Therefore, vendors would be enabled to create a competing product based 
on the individual data feeds and charge their clients a fee that they 
believe reflects the value of the aggregation and consolidation 
function that is competitive with Cboe One Options Feed pricing. For 
these reasons, the Exchange believes that vendors could readily offer a 
product similar to the Cboe One Options Feed on a competitive basis at 
a similar cost.
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    \13\ For purposes of this filing, a ``vendor'', which is a type 
of distributor, will refer to any entity that receives an exchange 
market data product directly from the exchange or indirectly from 
another entity (for example, from an extranet) and then resell that 
data to a third-party customer (e.g., a data provider that resells 
exchange market data to a retail brokerage firm). The term 
``distributor'' herein, will refer to any entity that receives an 
exchange market data product, directly from the exchange or 
indirectly from another entity (e.g., from a data vendor) and then 
distributes to individual internal or external end-users (e.g., a 
retail brokerage firm who distributes exchange data to its 
individual employees and/or customers). An example of a vendor's 
``third-party customer'' or ``customer'' is an institutional broker 
dealer or a retail broker dealer, who then may in turn distribute 
the data to their customers who are individual internal or external 
end-users.
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    The proposed Cboe One Options Feed fees include the following, each 
of which are described in further detail below: (i) Distributor Fees; 
(ii) User Fees for both Professional and Non-Professional Users; (iii) 
Enterprise Fees; and (iv) a Data Consolidation Fee. The Exchange also 
proposes to adopt a New External Distributor credit and a credit 
against the monthly External Distribution Fee equal to the amount of 
monthly User Fees up to a maximum of the External Distributor Fee. To 
ensure consistency across the Cboe Options Exchanges, C2 Options, EDGX 
Options, and BZX Options will be filing companion proposals to reflect 
this proposal in their respective fee schedules.
Distributor Fees
    As proposed, each Internal Distributor that receives the Cboe One 
Options Feed shall pay a fee of $15,000 per month. The proposed 
Internal Distribution Fee equals the combined monthly Internal 
Distribution fees for the underlying individual data feeds of the Cboe 
Options Exchanges (i.e., the monthly Internal Distribution fees are 
$3,000 for BZX Options Top, $500 for EDGX Options Top, $2,500 for C2 
Options Top and $9,000 for Cboe Options Top). The Exchange also 
proposes to assess External Distributors a monthly fee of $10,000. The 
proposed External Distribution fee equals the combined monthly External 
Distribution fees for the underlying individual data feeds of the Cboe 
Options Exchanges (i.e., the monthly External Distribution fees are 
$5,000 per month for the Cboe Options Top, $2,500 per month for C2 
Options Top, $2,000 per month for BZX Options Top, and $500 for EDGX 
Options Top). As noted above, the Exchange is proposing to charge 
External Distributors an External Distribution Fee that equals the 
combined External Distribution fees of each individual Top feed to 
ensure that vendors could compete with the Exchange by creating the 
same product as the Cboe One Options Feed to sell to their clients.
New External Distributor Credit
    The Exchange proposes to adopt a New External Distributor Credit 
which would provide that new External Distributors of the Cboe One 
Options Feed will not be charged an External Distributor Fee for their 
first three (3) months in order to incentive them to enlist new Users 
to receive the Cboe One Options Feed. The Exchange notes that other 
exchanges, including the Exchange's affiliated equities exchanges offer 
similar credits for similar market data products. For example, Cboe's 
equities exchanges currently offer a three (3) month New External 
Distributor Credit applicable to Cboe One Summary Feed.\14\ To 
alleviate any competitive issues that may arise with a vendor seeking 
to offer a product similar to the Cboe One Options Feed

[[Page 18612]]

based on the underlying data feeds, the Exchange is proposing, as 
discussed above, to also adopt a three-month New External Distributor 
Credit for the underlying top-of-book data feeds for the Cboe Options 
Exchanges. The respective proposals to adopt a three-month credit 
ensures the proposed New External Distributor Credit for Cboe One 
Options will not cause the combined cost of subscribing to Cboe 
Options, C2 Options, BZX Options and EDGX Options Top feeds for new 
External Distributors to be greater than those that would be charged to 
subscribe to the Cboe One Options feed.
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    \14\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data 
Fees.
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User Fees
    In addition to Internal and External Distributor Fees, the Exchange 
proposes to assess Professional \15\ User and Non-Professional \16\ 
User Fees. The proposed monthly Professional User fee for the Cboe 
Options Exchanges is $30.50 per Professional User, which equals the 
combined monthly Professional User fees of the underlying individual 
Cboe Options Exchanges Top feeds (i.e., $15.50 per Professional User 
for the Cboe Options Top, $5 per Professional User for C2 Options Top, 
$5 per Professional User for BZX Options Top, and $5 per Professional 
User for EDGX Options Top). The Exchange also proposes to adopt a 
monthly Non-Professional User fee of $0.60 per Non-Professional User, 
which similarly represents the combined total Non-Professional User fee 
for the individual data feeds of the Cboe Options (i.e., $0.30 per Non-
Professional User for Cboe Options Top, $0.10 per Non-Professional User 
for C2 Options Top, $0.10 per Non-Professional User for BZX Options 
Top, and $0.10 per Non-Professional User for EDGX Options Top). Similar 
to the individual underlying feeds, Distributors that receive Cboe One 
Options Feed will be required to count Professional and Non-
Professional Users to which they provide the data feed.
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    \15\ A Professional User of an Exchange Market Data product is 
any natural person recipient of an Exchange Market Data product who 
is not a Non-Professional User.
    \16\ A ``Non-Professional User'' of an Exchange Market Data 
product is a natural person or qualifying trust that uses Data only 
for personal purposes and not for any commercial purpose and, for a 
natural person who works in the United States, is not: (i) 
registered or qualified in any capacity with the Securities and 
Exchange Commission, the Commodities Futures Trading Commission, any 
state securities agency, any securities exchange or association, or 
any commodities or futures contract market or association; (ii) 
engaged as an ``investment adviser'' as that term is defined in 
Section 202(a)(11) of the Investment Advisors Act of 1940 (whether 
or not registered or qualified under that Act); or (iii) employed by 
a bank or other organization exempt from registration under federal 
or state securities laws to perform functions that would require 
registration or qualification if such functions were performed for 
an organization not so exempt; or, for a natural person who works 
outside of the United States, does not perform the same functions as 
would disqualify such person as a Non-Professional User if he or she 
worked in the United States.
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    The Exchange also proposes to provide that each External 
Distributor will receive a credit against its monthly Distributor Fee 
for the Cboe One Feed equal to the amount of its monthly User Fees up 
to a maximum of the Distributor Fee for the Cboe One Options Feed. For 
example, an External Distributor will be subject to a $10,000 monthly 
Distributor Fee where they elect to receive the Cboe One Options Feed. 
If that External Distributor reports User quantities totaling $10,000 
or more of monthly User fees of the Cboe Options One Feed, it will pay 
no net Distributor Fee, whereas if that same External Distributor were 
to report User quantities totaling $9,000 of monthly usage, it will pay 
a net of $1,000 for the Distributor Fee. External Distributors will 
remain subject to the per User fees discussed above. In every case the 
Exchange will receive at least $10,000 in connection with the 
distribution of the Cboe One Options Feed (through a combination of the 
External Distribution Fee and per User Fees). The Exchange notes that 
its affiliated equities exchanges offer a similar credit for a similar 
market data product.\17\
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    \17\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data 
Fees.
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Enterprise Fees
    The Exchange also proposes to establish Enterprise Fees that will 
permit a Distributor to purchase a monthly (and optional) Enterprise 
license to receive the Cboe One Options Feed for distribution to a 
specified number of Professional and Non-Professional Users. The 
Enterprise Fee will be an alternative to Professional and Non-
Professional User fees and will permit a Distributor to pay a flat fee 
to receive the data for a specified number of Professional and Non-
Professional Users, which the Exchange proposes to make clear in the 
Fee Schedule. Like User fees, the Enterprise Fee would be assessed in 
addition to the Distribution Fees. The Exchange proposes to adopt the 
following monthly Enterprise Fees: $350,000 for up to 1,500,000 Users 
(Tier 1), $550,000 for 1,500,001 to 2,500,000 Users (Tier 2) and 
$750,000 for 2,500,001 or greater Users (Tier 3). The proposed fees are 
non-progressive (e.g., if a Distributor has 2,000,000 Users, it will be 
subject to $550,000 for Tier 2). The Enterprise Fee may provide an 
opportunity to reduce fees. For example, if a Distributor has 1 million 
Non-Professional Users who each receive Cboe One Options Feed at $0.60 
per month (as proposed), then that Distributor will pay $600,000 per 
month in Professional Users fees. If the Distributor instead were to 
purchase the proposed Enterprise license (tier 1), it would 
alternatively pay a flat fee of $350,000 for up to 1.5 million 
Professional and Non-Professional Users. A Distributor must pay a 
separate Enterprise Fee for each entity that controls the display of 
Cboe One Options Feed if it wishes for such Users to be covered by an 
Enterprise Fee rather than by per User fees.\18\ A Distributor that 
pays the Tier 1 or Tier 2 Enterprise Fee will have to report its number 
of such Users on a monthly basis. A Distributor that pays the Tier 3 
Enterprise Fee will only have to report the number of its Users every 
six months.\19\ The Exchange notes that if the reported number of Users 
exceed the Enterprise Tier a Distributor has purchased, the higher Tier 
will apply (e.g., if a Distributor purchases Tier 1, but reports 
1,600,000 Users for a month, the Distributor will be assessed the Tier 
2 fee).
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    \18\ For example, if a Distributor that distributes Cboe Options 
Top to Retail Brokerage Firm A and Retail Brokerage Firm B and 
wishes to have the Users under each firm covered by an Enterprise 
license, the Distributor would be subject to two Enterprise Fees.
    \19\ See Cboe Global Markets north American Data Policies.
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    The Exchange also proposes to allow Distributors to purchase the 
Enterprise Fee on a monthly or annual basis. Annual licenses will 
receive a 5% discount off the applicable Enterprise Fee tier. The 
Exchange notes that the purchase of an Enterprise license is voluntary, 
and a firm may elect to instead use the per User structure and benefit 
from the proposed per User Fees described above. For example, a firm 
that does not have a sufficient number of Users to benefit from 
purchase of a license need not do so.
Data Consolidation Fee
    The Exchange also proposes to charge External Distributors of the 
Cboe One Options Feed a separate Data Consolidation Fee, which reflects 
the value of the aggregation and consolidation function the Exchange 
performs in creating the Cboe One Options Feed. As stated above, the 
Exchange creates the Cboe One Options Feed from data derived from the 
Cboe Options Top, C2 Options Top, BZX Options Top, and EDGX Options Top 
Feeds. External Distributors could

[[Page 18613]]

similarly create a competing product to the Cboe One Options Feed based 
on these individual data feeds, or, alternatively, the applicable Top 
and Last Sale products offered by the Exchanges, and could charge its 
clients a fee that it believes reflects the value of the aggregation 
and consolidation function. Accordingly, the Exchange believes that 
vendors could readily offer a product similar to the Cboe One Options 
Feed on a competitive basis at a similar cost.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\20\ in general, and 
furthers the objectives of Section 6(b)(4),\21\ 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.\22\ Finally, the proposed rule change is also consistent 
with Rule 603 of Regulation NMS,\23\ 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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    \20\ 15 U.S.C. 78f.
    \21\ 15 U.S.C. 78f(b)(4).
    \22\ 15 U.S.C. 78k-1.
    \23\ See 17 CFR 242.603.
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    The Exchange first notes that it operates in a highly competitive 
environment. Indeed, there are currently 16 registered options 
exchanges that trade options. Based on publicly available information, 
no single options exchange has more than 17% of the market share.\24\ 
The Exchange believes top-of-book quotation and transaction data is 
highly competitive as national securities exchanges compete vigorously 
with each other to provide efficient, reliable, and low-cost data to a 
wide range of investors and market participants. Indeed, there are 
several competing products offered by other national securities 
exchanges today, not counting products offered by the Exchange's 
affiliates, and each of the Exchange's affiliated U.S. options 
exchanges also offers similar top-of-book data.\25\ Each of those 
exchanges offer top-of-book quotation and last sale information based 
on their own quotation and trading activity that is substantially 
similar to the information provided by the Exchange through the Cboe 
Options Top Data Feed. Further, the quote and last sale data contained 
in the Cboe Data Feed is identical to the data sent to OPRA for 
redistribution to the public.\26\ Accordingly, Exchange top-of-book 
data is widely available today from a number of different sources.
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    \24\ See Cboe Global Markets U.S. Options Market Month-to-Date 
Volume Summary (February 23, 2024), available at https://markets.cboe.com/us/options/market_statistics/.
    \25\ See e.g., NYSE Arca Options Proprietary Market Data Fees 
Schedule, MIAX Options Exchange, Fee Schedule, Section 6 (Market 
Data Fees), Nasdaq PHLX Options 7 Pricing Schedule, Section 10 
(Proprietary Data Feed Fees) and Cboe Data Services, LLC Fees 
Schedule.
    \26\ The Exchange makes available the top-of-book data and last 
sale data that is included in the Cboe Options Top Data Feed no 
earlier than the time at which the Exchange sends that data to OPRA.
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    Moreover, the Cboe Options Top Data Feed and Cboe One Options Feeds 
are distributed and purchased on a voluntary basis, in that neither the 
Exchange nor market data distributors are required by any rule or 
regulation to make these data products available. Accordingly, 
Distributors (including vendors) and Users can discontinue use at any 
time and for any reason, including due to an assessment of the 
reasonableness of fees charged. Further, the Exchange is not required 
to make any proprietary data products available or to offer any 
specific pricing alternatives to any customers. Moreover, persons 
(including broker-dealers) who subscribe to any exchange proprietary 
data feed must also have equivalent access to consolidated Options 
Information \27\ from OPRA for the same classes or series of options 
that are included in the proprietary data feed, and proprietary data 
feeds cannot be used to meet that particular requirement.\28\ As such, 
all proprietary data feeds are optional.
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    \27\ ``Consolidated Options Information'' means consolidated 
Last Sale Reports combined with either consolidated Quotation 
Information or the BBO furnished by OPRA. Access to consolidated 
Options Information is deemed ``equivalent'' if both kinds of 
information are equally accessible on the same terminal or work 
station. See Limited Liability Company Agreement of Options Price 
Reporting Authority, LLC (``OPRA Plan''), Section 5.2(c)(iii). The 
Exchange notes that this requirement under the OPRA Plan is also 
reiterated under the Cboe Global Markets Global Data Agreement and 
Cboe Global Markets North American Data Policies, which subscribers 
to any exchange proprietary product must sign and are subject to, 
respectively. Additionally, the Exchange's Data Order Form (used for 
requesting the Exchange's market data products) requires 
confirmation that the requesting market participant receives data 
from OPRA.
    \28\ Id.
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    The Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. Particularly, in 
Regulation NMS, the Commission highlighted the importance of market 
forces in determining prices and SRO revenues and, also, recognized 
that current regulation of the market system ``has been remarkably 
successful in promoting market competition in its broader forms that 
are most important to investors and listed companies.'' \29\ Making 
similar data products available to market participants fosters 
competition in the marketplace, and constrains the ability of exchanges 
to charge supracompetitive fees. In the event that a market participant 
views one exchange's data product as more or less attractive than the 
competition they can and do switch between similar products. The 
proposed fees are a result of the competitive environment, as the 
Exchange seeks to adopt fees to attract purchasers of Cboe Options Top 
Data and Cboe One Options Feed.
---------------------------------------------------------------------------

    \29\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    The Exchange has also taken into consideration its affiliated 
relationship with its Affiliates in its design of the Cboe One Options 
Feed to ensure that vendors would be able to offer a similar product on 
the same terms as the Exchange from a cost perspective. While the Cboe 
Options Exchanges are the exclusive distributors of the individual data 
feeds from which certain data elements may be taken to create the Cboe 
One Options Feed, they are not the exclusive distributors of the 
aggregated and consolidated information that comprises the Cboe One 
Options Feed. Any entity that receives, or elects to receive, the 
individual data feeds would be able to, if it so chooses, to create a 
data feed with the same information included in the Cboe One Options 
Feed and sell and distribute it to its clients so that it could be 
received by those clients as quickly as the Cboe One Options Feed would 
be received by those same clients with no greater cost than the 
Exchange.
    In addition, vendors and Distributors that do not wish to purchase 
the Cboe One Options Feed may separately purchase the individual 
underlying products, and if they so choose, perform a similar 
aggregation and consolidation function that the Exchange performs in 
creating the Cboe One Options Feed. To enable such competition, the 
Exchange is offering the Cboe One Options Feed on terms that a vendor 
of those

[[Page 18614]]

underlying feeds could offer a competing product if it so chooses.
    In addition, the fees that are the subject of this rule filing are 
constrained by competition. Particularly, the Exchange competes with 
other exchanges (and their affiliates) that may choose to offer similar 
market data products. If another exchange (or its affiliate) were to 
charge less to consolidate and distribute a similar product than the 
Exchange charges to consolidate and distribute the Cboe One Options 
Feed, prospective Users likely could choose to not subscribe to, or 
would cease subscribing to, the Cboe One Options Feed. In addition, the 
Exchange would compete with unaffiliated market data vendors who would 
be in a position to consolidate and distribute the same data that 
comprises the Cboe One Options Feed into the vendor's own comparable 
market data product. If the third-party vendor is able to provide the 
exact same data for a lower cost, prospective Users would avail 
themselves of that lower cost and elect not to take the Cboe One 
Options Feed.
    For these reasons, the Exchange believes that the proposed fees are 
reasonable, equitable, and not unfairly discriminatory.
    User Fees. The Exchange believes that the proposed Professional and 
Non-Professional User fees for the Cboe One Options Feed are reasonable 
because they represent the combined monthly fees for Professional and 
Non-Professional User fees, respectively for the underlying individual 
data feeds, which have previously been filed with the Commission. The 
Exchange believes that the proposed fees are equitable and not unfairly 
discriminatory because they will be charged uniformly to Distributors. 
Moreover, the proposed fee structure of differentiated Professional and 
Non-Professional fees that are paid by both Internal and External 
Distributors has long been used by other exchanges, including the 
Exchange, for their proprietary data products, and by the OPRA plan in 
order to reduce the price of data to retail investors and make it more 
broadly available.\30\ The Exchange also believes offering Cboe One 
Options Feed to Non-Professional Users at a lower cost than 
Professional Users results in greater equity among data recipients, as 
Professional Users are categorized as such based on their employment 
and participation in financial markets, and thus, are compensated to 
participate in the markets. Although Non-Professional Users too can 
receive significant financial benefits through their participation in 
the markets, the Exchange believes it is reasonable to charge more to 
those Users who are more directly engaged in the markets.
---------------------------------------------------------------------------

    \30\ See e.g., Securities Exchange Act Release No. 59544 (March 
9, 2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-2008-131) 
(establishing the $15 Non-Professional User Fee (Per User) for NYSE 
OpenBook); See e.g., Securities Exchange Act Release No. 67589 
(August 2, 2012), 77 FR 47459 (August 8, 2012) (revising OPRA's 
definition of the term ``Nonprofessional''); and See Securities 
Exchange Act Release No. 70683 (October 15, 2013), 78 FR 62798 
(October 22, 2013) (SR-CBOE-2013-087) (establishing Professional and 
Non-Professional User fees for Cboe Options COB Data Feed).
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    Enterprise Fee. The Exchange believes the proposed Enterprise Fees 
for the Cboe One Options Feed and proposed changes to the Enterprise 
Fee for the Cboe Options Top feed are reasonable as the fees proposed 
could result in a fee reduction for Distributors of the respective 
products with a large number of Professional and Non-Professional 
Users. If a Distributor has a smaller number of Professional Users of 
the Cboe One Options Feed, then it may continue using the per User 
structure and benefit from the per User Fee reductions. By reducing 
prices for Distributors with a large number of Professional and Non-
Professional Users, the Exchange believes that more firms may choose to 
receive and to distribute the Cboe One Options Feed, thereby expanding 
the distribution of this market data for the benefit of investors. Also 
as described above, the Enterprise Fees are entirely optional. A firm 
that does not have a sufficient number of Users to benefit from 
purchase of a license need not do so.
    Distributor Fees. The Exchange believes that the proposed 
Distributor fees for the Cboe One Options Feed are reasonable because 
they represent the combined monthly fees for Internal and External 
Distributor fees, respectively for the underlying individual data 
feeds, which have previously been filed with the Commission. The 
Exchange believes that the proposed fees are equitable and not unfairly 
discriminatory because they will be charged uniformly to Internal and 
External Distributors. The Exchange believes that it is also fair and 
equitable, and not unfairly discriminatory to charge different fees for 
internal and external distribution of the Cboe One Options Feed. 
Although the proposed distribution fee charged to External Distributors 
will be lower than the existing distribution fee charged to Internal 
Distributors, External Distributors are subject to Non-Professional 
user fees to which Internal Distributors are not subject, in addition 
to Professional User fees (or alternatively the proposed Enterprise 
Fee). Furthermore, the proposal is designed to incentivize External 
Distributors to subscribe to Cboe One Options Feed.
    The proposed Distributor Fees for the Cboe One Options Feed are 
also designed to ensure that vendors could compete with the Exchange by 
creating a similar product as the Cboe One Options Feed. The Exchange 
believes that the proposed Distributor Fees are equitable and 
reasonable as they equal the combined fee of subscribing to each 
individual data feed of the Cboe Options Exchanges, which have been 
previously published by the Commission.
    In addition, the Exchange believes it is reasonable to not charge 
External Distributors of C2 Options Top and Cboe One Options Feed a 
Distribution Fee during their first three (3) months and does not 
believe this would inhibit a vendor from creating a competing product 
and offer a similar free period as the Exchange. Specifically, a vendor 
seeking to create the Cboe One Options Feed could do so by subscribing 
to the underlying individual data feeds, all of which will also include 
a New External Distributor Credit identical to that proposed for the 
Cboe One Options Feed. As a result, a competing vendor would incur 
similar costs as the Exchange in offering such free period for a 
competing product and may do so on the same terms as the Exchange.
    Data Consolidation Fee. The Exchange believes that the proposed 
$500 per month Data Consolidation Fee charged to Distributors who 
receive the Cboe One Options Feed is reasonable because it represents 
the value of the data aggregation and consolidation function that the 
Exchange performs. The Exchange further believes the proposed Data 
Consolidation Fee is not designed to permit unfair discrimination 
because all Distributor who obtain the Cboe One Options Feed will be 
charged the same fee. The increased cost of the Cboe One Options Feed 
is designed to include the value of the aggregation and consolidation 
function the Exchange performs in creating the Cboe One Options Feed. 
Therefore, the Exchange believes the proposed application of the Data 
Consolidation Fee is reasonable would not permit unfair discrimination.
    In addition, a vendor could create a competing product based on the 
individual data feeds and charge its clients a fee that it believes 
reflects the value of the aggregation and consolidation function that 
is competitive with the Cboe One Options Feed pricing. Therefore, the 
Exchange believes the proposed pricing would enable a vendor to create 
a competing

[[Page 18615]]

product based on the individual data feeds and charge its clients a fee 
that it believes reflects the value of the aggregation and 
consolidation function that is competitive with Cboe One Options Feed 
pricing.

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 
top-of-book data is constrained by competition among exchanges that 
offer similar data products to their customers. Top-of-book data is 
broadly disseminated by competing U.S. options exchanges and through 
OPRA. In this competitive environment potential Distributors are free 
to choose which competing product to purchase to satisfy their 
respective needs for market information. Often, the choice comes down 
to price, as market data participants look to purchase cheaper data 
products, and quality, as market participants seek to purchase data 
that represents significant market liquidity.
    The Exchange believes that the proposed fees do not impose a burden 
on competition or on other SROs that is not necessary or appropriate in 
furtherance of the purposes of the Act. In particular, market 
participants are not forced to subscribe to Cboe Options Top, Cboe One 
Options Feed or any of the Exchange's data feeds, as described above. 
As noted, the quote and last sale data contained in the Exchange's Cboe 
Options Top feed is identical to the data sent to OPRA for 
redistribution to the public. Accordingly, Exchange top-of-book data is 
widely available today from a number of different sources.
    The Exchange believes that the proposed fees do not put any market 
participants at a relative disadvantage compared to other market 
participants. As discussed, the proposed waiver, credits and Enterprise 
Fees would apply to all similarly situated Distributors of Cboe Options 
Top on an equal and non-discriminatory basis. Because market data 
customers can find suitable substitute feeds, an exchange that 
overprices its market data products stands a high risk that users may 
substitute another product. These competitive pressures ensure that no 
one exchange's market data fees can impose an undue burden on 
competition, and the Exchange's proposed fees do not do so here.
    Additionally, the Cboe One Options Feed will enhance competition 
because it provides investors with an alternative option for receiving 
market data. Although the Cboe Options Exchanges are the exclusive 
distributors of the individual data feeds from which certain data 
elements would be taken to create the Cboe One Options Feed, the 
Exchange would not be the exclusive distributor of the aggregated and 
consolidated information that would compose the proposed Cboe One 
Options Feed. Any entity that receives, or elects to received, the 
underlying data feeds would be able to, if it so chooses, to create a 
data feed with the same information included in the Cboe One Options 
Feed and sell and distribute it to its clients so that it could be 
received by those clients as quickly as the Cboe One Options Feed would 
be received by those same clients and at a similar cost.
    The proposed pricing the Exchange would charge for the Cboe One 
Options Feed compared to the cost of the individual data feeds from the 
Cboe Options Exchanges would enable a vendor to receive the underlying 
individual data feeds and offer a similar product on a competitive 
basis and with no greater cost than the Exchange. The pricing the 
Exchange proposes to charge for the Cboe One Options Feed is not lower 
than the cost to a vendor of receiving the underlying data feeds. 
Indeed, the proposed pricing equals the combined costs of the 
respective fees, and the proposed waivers are also being proposed for 
the underlying individual feeds as well, thereby enabling a vendor to 
receive the underlying data feeds and offer a similar product on a 
competitive basis and with no greater cost than the Exchange.
    The Exchange further believes that its proposed monthly Data 
Consolidation Fee would be pro-competitive because a vendor could 
create a competing product, perform a similar aggregating and 
consolidating function, and similarly charge for such service. The 
Exchange notes that a competing vendor might engage in a different 
analysis of assessing the cost of a competing product. For these 
reasons, the Exchange believes the proposed pricing, fee waiver and 
credit, would enable a vendor to create a competing product based on 
the individual data feeds and charge its clients a fee that it believes 
reflects the value of the aggregation and consolidation function that 
is competitive with Cboe One Options Feed pricing.
    In establishing the proposed fees, the Exchange considered the 
competitiveness of the market for proprietary data and all of the 
implications of that competition. The Exchange believes that it has 
considered all relevant factors and has not considered irrelevant 
factors in order to establish fair, reasonable, and not unreasonably 
discriminatory fees and an equitable allocation of fees among all 
users. The existence of alternatives to the Cboe One Options Feed, 
including the existing underlying feeds and data from other sources, 
such as OPRA, constrains the Exchange from setting unreasonable fees, 
or fees that are unreasonably discriminatory, when vendors and 
Distributors can elect these alternatives or choose not to purchase a 
specific proprietary data product if its cost to purchase is not 
justified by the returns any particular vendor or Distributor would 
achieve through the purchase.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any written comments from members or other interested parties.

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 \31\ and paragraph (f) of Rule 19b-4 \32\ 
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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    \31\ 15 U.S.C. 78s(b)(3)(A).
    \32\ 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. 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

[[Page 18616]]

     Send an email to [email protected]. Please include 
File Number SR-CBOE-2023-015 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-CBOE-2023-015. 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-CBOE-2023-015 and should be submitted on 
or before April 19, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-06429 Filed 3-28-23; 8:45 am]
BILLING CODE 8011-01-P