[Federal Register Volume 89, Number 147 (Wednesday, July 31, 2024)]
[Notices]
[Pages 61534-61544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16807]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100602; File No. SR-NYSE-2024-38]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Establish Fees for the NYSE Aggregated Lite Data Feed

July 25, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on July 11, 2024, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') 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 self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 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

    The Exchange proposes to establish fees for the NYSE Aggregated 
Lite data feed. The proposed rule change is available on the Exchange's 
website at www.nyse.com, at the principal office of the Exchange, 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 self-regulatory organization 
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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the NYSE Proprietary Market Data 
Fees Schedule (``Fee Schedule'') and establish fees for the NYSE 
Aggregated Lite (``NYSE Agg Lite'') data feed,\4\ effective July 11, 
2024.\5\
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    \4\ The proposed rule change establishing the NYSE Agg Lite data 
feed was immediately effective on February 27, 2024. See Securities 
Exchange Act Release No. 99689 (March 7, 2024), 89 FR 18466 (March 
13, 2024) (SR-NYSE-2024-12) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change To Establish the NYSE 
Aggregated Lite Market Data Feed).
    \5\ The Exchange originally filed to amend the Fee Schedule on 
May 13, 2024 (SR-NYSE-2024-29). SR-NYSE-2024-29 was subsequently 
withdrawn and replaced by this filing.
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    In summary, the NYSE Agg Lite is a NYSE-only frequency-based depth 
of book market data feed of the NYSE's limit order book for up to ten 
(10) price levels on both the bid and offer sides of the order book for 
securities traded on the Exchange and for which the Exchange reports 
quotes and trades under the Consolidated Tape Association (``CTA'') 
Plan or the Nasdaq/UTP Plan. The NYSE Agg Lite is a compilation of 
limit order data that the Exchange provides to vendors and subscribers. 
The NYSE Agg Lite includes depth of book order data as well as security 
status messages. The security status message informs subscribers of 
changes in the status of a specific security, such as trading halts, 
short sale restriction, etc. In addition, the NYSE Agg Lite includes 
order imbalance information prior to the opening and closing of 
trading.

Background

    The Exchange operates in a highly competitive market. The 
Commission has repeatedly expressed its preference for competition over 
regulatory intervention in determining prices, products, and services 
in the securities markets. 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.'' \6\
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    \6\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (File No. S7-10-04) (Final 
Rule) (``Regulation NMS'').
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    While Regulation NMS has enhanced competition, it has also fostered 
a ``fragmented'' market structure where trading in a single stock can 
occur across multiple trading centers. When multiple trading centers 
compete for order flow in the same stock, the Commission has recognized 
that ``such competition can lead to the fragmentation of order flow in 
that stock.'' \7\ Indeed, cash equity trading is currently dispersed 
across 16 exchanges,\8\ numerous alternative trading systems,\9\ and 
broker-dealer internalizers and wholesalers, all competing for order 
flow. Based on publicly-available information, no single exchange 
currently has more than 20% market share (whether including or 
excluding auction volume).\10\
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    \7\ See Securities Exchange Act Release No. 61358, 75 FR 3594, 
3597 (January 21, 2010) (File No. S7-02-10) (Concept Release on 
Equity Market Structure).
    \8\ See Cboe U.S Equities Market Volume Summary, available at 
https://markets.cboe.com/us/equities/market_share. See generally 
https://www.sec.gov/fastanswers/divisionsmarketregmrexchangesshtml.html.
    \9\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of 
alternative trading systems registered with the Commission is 
available at https://www.sec.gov/foia/docs/atslist.htm.
    \10\ See Cboe Global Markets, U.S. Equities Market Volume 
Summary, available at http://markets.cboe.com/us/equities/market_share/.
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Proposed NYSE Agg Lite Data Feed Fees
    To reflect the value of NYSE's market data, the Exchange proposes 
to establish the fees listed below for the NYSE Agg Lite data feed. The 
Exchange proposes

[[Page 61535]]

to charge fees for the same categories of market data use as its 
affiliated exchanges (namely, NYSE Arca, NYSE American and NYSE 
National) currently charge. The Exchange believes that adopting the 
same fee structure as its affiliated exchanges would reduce 
administrative burdens on market data subscribers that also currently 
subscribe to market data feeds from the Exchange's affiliates.
    1. Access Fee. For the receipt of access to the NYSE Agg Lite data 
feed, the Exchange proposes to charge $3,000 per month. This proposed 
Access Fee would be charged to any data recipient that receives the 
NYSE Agg Lite data feed. Data recipients that only use display devices 
to view NYSE Agg Lite market data and do not separately receive a data 
feed would not be charged an Access Fee. The proposed Access Fee would 
be charged only once per firm.
    2. User Fees. The Exchange proposes to charge a Professional User 
Fee (Per User) of $35 per month and a Non-Professional User Fee (Per 
User) of $6 per month. These user fees would apply to each display 
device that has access to the NYSE Agg Lite data feed.
    3. Redistribution Fee. For redistribution of the NYSE Agg Lite data 
feed, the Exchange proposes to establish a fee of $250 per month. The 
proposed Redistribution Fee would be charged to any Redistributor of 
the NYSE Agg Lite data feed, which is defined to mean a vendor or any 
person that provides a real-time NYSE market data product externally to 
a data recipient that is not its affiliate or wholly-owned subsidiary, 
or to any system that an external data recipient uses, irrespective of 
the means of transmission or access. The proposed Redistribution Fee 
would be charged only once per Redistributor account. As an incentive 
to potential Redistributors to subscribe to the NYSE Agg Lite data 
feed, the Exchange proposes to waive the Access Fee and Redistribution 
Fee for a Redistributor if the Redistributor provides NYSE Agg Lite 
externally to at least one data feed recipient and reports such data 
feed recipient or recipients to the Exchange. For example, a 
Redistributor that subscribes to the NYSE Agg Lite data feed will have 
the Access Fee and Redistribution Fee waived if such Redistributor 
provides NYSE Agg Lite externally to at least one data feed recipient 
and reports such data feed recipient to the Exchange.
    By targeting this proposed fee waiver to Redistributors that 
provide external distribution of NYSE Agg Lite, the Exchange believes 
that this would provide an incentive for Redistributors to make the 
NYSE Agg Lite market data product available to its customers. 
Specifically, if a data recipient is interested in subscribing to NYSE 
Agg Lite and relies on a Redistributor to obtain market data products 
from the Exchange, that data recipient would need its Redistributor to 
subscribe to and redistribute NYSE Agg Lite. The Exchange believes that 
this proposed fee waiver for Redistributors of NYSE Agg Lite would 
provide an incentive for Redistributors to make NYSE Agg Lite available 
to their customers, which will increase the availability of the 
Exchange's market data products to a larger potential population of 
data recipients.
    Further, the Exchange proposes to adopt a credit that would be 
applicable to Redistributors that provide external distribution of NYSE 
Agg Lite to Professional and Non-Professional Users. As proposed, such 
Redistributors would receive a credit equal to the amount of the 
monthly Professional User and Non-Professional User Fees for such 
external distribution, up to a maximum of the combination of the Access 
Fee and Redistribution Fee for NYSE Agg Lite that the Redistributor 
would otherwise be required to pay to the Exchange. For example, a 
Redistributor that reports external Professional Users and Non-
Professional Users in a month totaling $3,250 or more would receive a 
maximum credit of $3,250 for that month, which could effectively reduce 
its monthly fee for access and redistribution to zero. If that same 
Redistributor were to report external User quantities in a month 
totaling $600 of monthly usage, that Redistributor would receive a 
credit of $600. The Exchange believes the proposed credit would provide 
Redistributors with an incentive to increase their redistribution of 
NYSE Agg Lite because the credit they would be eligible to receive 
would increase if they report additional external User quantities.
    4. Enterprise Fees. The Exchange proposes to establish an 
enterprise license that will reduce Exchange fees and administrative 
costs for subscribers that disseminate NYSE Agg Lite. Subscribers that 
are broker-dealers will be able to distribute the NYSE Agg Lite data 
feed for display usage to an unlimited number of non-professional users 
for a monthly fee of $20,000, with an opportunity to lower that fee to 
$18,000 per month if they contract for twelve months of service in 
advance. Alternatively, subscribers that are broker-dealers will be 
able to distribute the NYSE Agg Lite data feed for display usage to an 
unlimited number of recipients (professional users and non-professional 
users) for a monthly fee of $25,000, with an opportunity to lower that 
fee to $22,500 per month if they contract for twelve months of service 
in advance.
    As proposed, the NYSE Agg Lite data feed may be distributed 
pursuant to the proposed market data enterprise license only for 
display usage and in the context of a brokerage relationship with a 
broker-dealer through such broker-dealer's own devices. Purchase of an 
enterprise license would eliminate per User subscriber fees for NYSE 
Agg Lite. Further, the Exchange proposes to waive the Access Fee and 
the Redistribution Fee for NYSE Agg lite for Redistributors that pay 
either the Non-Professional Enterprise Fee or the Professional and Non-
Professional Enterprise Fee. The Exchange believes the proposed fee 
waiver would provide an incentive for Redistributors to subscribe to 
the NYSE Agg Lite market data product at the enterprise level to reduce 
the fees it would pay to the Exchange and without having to report the 
number of users that receive the data feed from the Redistributor.
    Subscribers that intend to purchase a market data enterprise 
license for at least twelve months may elect to purchase this product 
in advance for a monthly fee of $18,000 for distribution of NYSE Agg 
Lite to an unlimited number of non-professional users, or $22,500 per 
month for distribution to an unlimited number of professional users and 
non-professional users. This feature is intended to simplify cost 
projections and budgeting for both subscribers and the Exchange. 
Subscribers that elect not to purchase this particular feature will 
nevertheless be able to obtain all of the market data information 
offered by NYSE Agg Lite by paying the standard fee of $20,000 per 
month for distribution of NYSE Agg Lite to an unlimited number of non-
professional users, or $25,000 per month for distribution to an 
unlimited number of professional users and non-professional users. 
Subscribers that elect to pay the monthly fee will be able to switch to 
the annual fee at any time, and those that elect to purchase the annual 
contract would be able to change to the monthly contract, with notice, 
at the end of the twelve-month period.
    The Exchange believes that the proposed market data enterprise 
license will reduce exchange fees, lower administrative costs for 
subscribers, and help expand the availability of market information to 
investors, and thereby increase participation in financial markets.
    5. Non-Display Use Fees. The Exchange proposes to establish non-

[[Page 61536]]

display fees for the NYSE Agg Lite data feed that are based on the non-
display use categories charged by NYSE Arca, NYSE American, NYSE 
National, the CTA, and the UTP Plan for non-display use.\11\ Non-
display use would mean accessing, processing, or consuming the NYSE Agg 
Lite data feed delivered directly or through a Redistributor, for a 
purpose other than in support of a data recipient's display or further 
internal or external redistribution (``Non-Display Use''). Non-Display 
Use would include trading uses such as high frequency or algorithmic 
trading as well as any trading in any asset class, automated order or 
quote generation and/or order pegging, price referencing for 
algorithmic trading or smart order routing, operations control 
programs, investment analysis, order verification, surveillance 
programs, risk management, compliance, and portfolio management.
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    \11\ See Endnote 1 to the NYSE Arca Equites Proprietary Market 
Data Fees, available here: https://www.nyse.com/publicdocs/nyse/data/NYSE_Arca_Equities_Proprietary_Data_Fee_Schedule.pdf; Endnote 1 
to the NYSE American LLC Equities Proprietary Market Data Fees, 
available here: https://www.nyse.com/publicdocs/nyse/data/NYSE_American_Equities_Market_Data_Fee_Schedule.pdf; Endnote 1 to 
the NYSE National Equities Proprietary Market Data Fees, available 
here: https://www.nyse.com/publicdocs/nyse/data/NYSE_National_Market_Data_Fee_Schedule.pdf; Endnote 8 to the 
Schedule of Market Data Charges for the CTA, available here: https://www.ctaplan.com/publicdocs/ctaplan/notifications/trader-update/ScheduleOfMarketDataCharges-January1,2015.pdf; and Non-Display Usage 
Fees as set forth in the UTP Plan Fee Schedule and Non-Display 
Policy, available here: http://utpplan.com/DOC/Datapolicies.pdf. 
See, e.g., Securities Exchange Act Release Nos. 69278 (April 2, 
2013), 78 FR 20973 (April 8, 2013) (SR-NYSE-2013-25) and 72923 (Aug. 
26, 2014), 79 FR 52079 (Sept. 2, 2014) (SR-NYSE-2014-43).
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    Under the proposal, for Non-Display Use of NYSE Agg Lite, there 
would be three categories of, and fees applicable, to data recipients. 
One, two, or three categories of Non-Display Use may apply to a data 
recipient.
     As proposed, the Category 1 Fee would be $4,500 per month 
and would apply when a data recipient's Non-Display Use of the NYSE Agg 
Lite data feed is on its own behalf, not on behalf of its clients.
     As proposed, Category 2 Fees would be $4,500 per month and 
would apply to a data recipient's Non-Display Use of the NYSE Agg Lite 
data feed on behalf of its clients.
     As proposed, Category 3 Fees would be $4,500 per month and 
would apply to a data recipient's Non-Display Use of the NYSE Agg Lite 
data feed for the purpose of internally matching buy and sell orders 
within an organization, including matching customer orders for a data 
recipient's own behalf and/or on behalf of its clients. This category 
would apply to Non-Display Use in trading platforms, such as, but not 
restricted to, alternative trading systems (``ATSs''), broker crossing 
networks, broker crossing systems not filed as ATSs, dark pools, 
multilateral trading facilities, exchanges and systematic 
internalization systems. A data recipient will be charged $4,500 per 
month for each platform on which it uses the Non-Display data 
internally to match buy and sell orders, up to a cap of $13,500 per 
month; even if the data recipient uses the NYSE Agg Lite data feed for 
more than three platforms, it will not pay more than $13,500 for such 
Category 3 use per month.
    The description of the three non-display use categories is set 
forth in the Fee Schedule in endnote 1 and that endnote would be 
referenced in the NYSE Agg Lite data feed fees on the Fee Schedule. The 
text in the endnote would remain unchanged.
    Data recipients that receive the NYSE Agg Lite data feed for Non-
Display Use would be required to complete and submit a Non-Display Use 
Declaration before they would be authorized to receive the feed. A firm 
subject to Category 3 Fees would be required to identify each platform 
that uses the NYSE Agg Lite data feed for a Category 3 Non-Display Use 
basis, such as ATSs and broker crossing systems not registered as ATSs, 
as part of the Non-Display Use Declaration.
    6. Non-Display Use Declaration Late Fee. Data recipients that 
receive the NYSE Agg Lite data feed for Non-Display Use would be 
required to complete and submit a Non-Display Use Declaration before 
they would be authorized to receive the feed. Beginning in 2025, NYSE 
Agg Lite data feed recipients would be required to submit, by January 
31 of each year, the Non-Display Use Declaration. The requirement to 
submit a Non-Display Use Declaration applies to all real-time NYSE data 
feed product recipients. The Exchange proposes to charge a Non-Display 
Use Declaration Late Fee of $1,000 per month to any data recipient that 
pays an Access Fee for the NYSE Agg Lite data feed that has failed to 
timely complete and submit a Non-Display Use Declaration. Specifically, 
with respect to the Non-Display Use Declaration due by January 31 of 
each year, the Non-Display Use Declaration Late Fee would apply to data 
recipients that fail to complete and submit the Non-Display Use 
Declaration by the January 31 due date, and would apply beginning 
February 1 and for each month thereafter until the data recipient has 
completed and submitted the annual Non-Display Use Declaration.
    The proposed Non-Display Use Declaration Late Fee applicable to 
NYSE Agg Lite data feed would be set forth in endnote 2 on the Fee 
Schedule. As proposed, endnote 2 would be amended with the proposed 
addition of the following new text: ``The Non-Display Declaration Late 
Fee will apply, beginning in 2025, to NYSE Aggregated Lite data 
recipients that fail to complete and submit the annual Non-Display Use 
Declaration by the January 31st due date, and applies beginning 
February 1st and for each month thereafter until the data recipient has 
completed and submitted the annual Non-Display use Declaration.''
    In addition, if a data recipient's use of the NYSE Agg Lite data 
feed changes at any time after the data recipient submits a Non-Display 
Use Declaration, the data recipient must inform the Exchange of the 
change by completing and submitting at the time of the change an 
updated declaration reflecting the change of use.
    7. Multiple Data Feed Fee. The Exchange proposes to establish a 
monthly fee, the ``Multiple Data Feed Fee,'' that would apply to data 
recipients that take a data feed for a market data product in more than 
two locations. Data recipients taking the NYSE Agg Lite data feed in 
more than two locations would be charged $200 per additional location 
per month. No new reporting would be required.\12\
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    \12\ Data vendors currently report a unique Vendor Account 
Number for each location at which they provide a data feed to a data 
recipient. The Exchange considers each Vendor Account Number a 
location. For example, if a data recipient has five Vendor Account 
Numbers, representing five locations, for the receipt of the NYSE 
Agg Lite data feed, that data recipient will pay the Multiple Data 
Feed fee with respect to three of the five locations.
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    8. Three-Month Fee Waiver. The Exchange currently provides a one-
month free trial to any firm that subscribes to a particular NYSE 
market data product for the first time. Under the current one-month 
trial, a first-time subscriber is not charged the Access Fee, Non-
Display Fee, any applicable Professional and Non-Professional User Fee 
and Redistribution Fee for one calendar month.\13\ The Exchange now 
proposes an additional three-month fee waiver for any Redistributor 
that subscribes to a particular NYSE market data product for the first 
time for external redistribution. As proposed, a first-time 
Redistributor would be any firm that has not previously subscribed to 
and externally redistributed a particular NYSE market data product

[[Page 61537]]

listed on the Fee Schedule. As proposed, a first-time Redistributor 
that subscribes to a particular NYSE market data product would not be 
charged the Access Fee and the Redistribution Fee for that product for 
three calendar months. Any other fees, including but not limited to, 
Non-Display Fee, any applicable Professional and Non-Professional User 
Fee, and Enterprise Fee would be billable after the first calendar 
month after a first-time Redistributor subscribes to a particular NYSE 
market data product. For example, a first-time Redistributor that 
chooses to subscribe to NYSE Agg Lite on July 24, 2024 would not be 
charged the Access Fee and the Redistribution Fee for the months of 
August, September, and October 2024. The proposed fee waiver would be 
for the three calendar months following the date a Redistributor is 
approved to receive access to the particular NYSE market data product. 
The Exchange would provide the three-month fee waiver for each 
particular product to each Redistributor once.
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    \13\ See Fee Schedule.
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    The Exchange believes that providing a three-month fee waiver to 
NYSE market data products listed on the Fee Schedule would enable 
potential Redistributors to determine whether a particular NYSE market 
data product provides value to their business models before fully 
committing to expend development and implementation costs related to 
the receipt 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 Redistributors would ordinarily 
have to expend before using a product. The proposed three-month fee 
waiver would also provide Redistributors with time to begin onboarding 
new clients prior to being liable to the Access Fee and the 
Redistribution Fee, allowing time to choose how to allocate costs and 
increase revenues to defray costs associated with providing a new feed 
to its customers.
Application of Proposed Fees
    The Exchange is not required to make the NYSE Agg Lite data feed 
available or to offer any specific pricing alternatives to any 
customers, nor is any firm required to purchase the NYSE Agg Lite data 
feed. Firms that choose to purchase the NYSE Agg Lite data feed do so 
for the primary goals of using it to increase their revenues, reduce 
their expenses, and in some instances to compete directly with the 
Exchange (including for order flow). Those firms are able to determine 
for themselves whether or not the NYSE Agg Lite data feed or any other 
similar products are attractively priced.
    The Exchange believes the proposed rule change would provide an 
incentive both for data subscribers to subscribe to NYSE Agg Lite and 
for Redistributors to subscribe to the product for purposes of 
providing external distribution of NYSE Agg Lite. The Exchange believes 
that this proposed rule change also has the potential to attract new 
Redistributors for NYSE Agg Lite.
    The proposed fee structure is not novel as it is based on the fee 
structure currently in place for the NYSE OpenBook feed. The Exchange 
is proposing fees for the NYSE Agg Lite data feed that are based on the 
existing fee structure and rates that data recipients already pay for 
the NYSE OpenBook feed. Specifically, the fees for the NYSE OpenBook 
feed--which like the NYSE Agg Lite data feed, includes depth of book 
and security status messages--consist of an Access Fee of $5,000 per 
month, a Professional User Fee (Per User) of $60 per month, a Non-
Professional User Fee (Per User) of $15 per month, Non-Display Fees of 
$6,000 per month for each of Categories 1, 2 and 3, and a 
Redistribution Fee of $3,000 per month. The Exchange also charges a 
Non-Display Use Declaration Late Fee of $1,000 per month and a Multiple 
Data Feed Fee of $200 per month for NYSE OpenBoook.\14\
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    \14\ See NYSE Proprietary Market Data Fees at https://www.nyse.com/publicdocs/nyse/data/NYSE_Market_Data_Fee_Schedule.pdf.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\15\ in general, and 
Sections 6(b)(4) and 6(b)(5) of the Act,\16\ in particular, in that it 
provides an equitable allocation of reasonable fees among users and 
recipients of the data and is not designed to permit unfair 
discrimination among customers, issuers, and brokers.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4), (5).
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The Proposed Rule Change Is Reasonable
    In adopting Regulation NMS, the Commission granted SROs and broker-
dealers increased authority and flexibility to offer new and unique 
market data to the public. The Commission has repeatedly expressed its 
preference for competition over regulatory intervention in determining 
prices, products, and services in the securities markets. Specifically, 
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.'' \17\
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    \17\ See Regulation NMS Adopting Release, 70 FR 37495, at 37499.
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    With respect to market data, the decision of the United States 
Court of Appeals for the District of Columbia Circuit in NetCoalition 
v. SEC upheld the Commission's reliance on the existence of competitive 
market mechanisms to evaluate the reasonableness and fairness of fees 
for proprietary market data:

    In fact, the legislative history indicates that the Congress 
intended that the market system ``evolve through the interplay of 
competitive forces as unnecessary regulatory restrictions are 
removed'' and that the SEC wield its regulatory power ``in those 
situations where competition may not be sufficient,'' such as in the 
creation of a ``consolidated transactional reporting system.'' \18\
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    \18\ NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. Cir. 2010) 
(``NetCoalition I'') (quoting H.R. Rep. No. 94-229 at 92 (1975), as 
reprinted in 1975 U.S.C.C.A.N. 323).

    The court agreed with the Commission's conclusion that ``Congress 
intended that `competitive forces should dictate the services and 
practices that constitute the U.S. national market system for trading 
equity securities.' '' \19\
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    \19\ Id. at 535.
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    More recently, the Commission confirmed that it applies a ``market-
based'' test in its assessment of market data fees, and that under that 
test:

    the Commission considers whether the exchange was subject to 
significant competitive forces in setting the terms of its proposal 
for [market data], including the level of any fees. If an exchange 
meets this burden, the Commission will find that its fee rule is 
consistent with the Act unless there is a substantial countervailing 
basis to find that the terms of the rule violate the Act or the 
rules thereunder.\20\
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    \20\ See Securities Exchange Act Release No. 34-90217 (October 
16, 2020), 85 FR 67392 (October 22, 2020) (SR-NYSENAT-2020-05) 
(``National IF Approval Order'') (internal quotation marks omitted), 
quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74781 (December 9, 2008).

    As discussed below, the Exchange believes that its proposed fees 
are constrained by competitive forces.
    As the D.C. Circuit recognized in NetCoalition I, ``[n]o one 
disputes that competition for order flow is fierce.'' \21\ The court 
further noted that ``no exchange possesses a monopoly, regulatory or 
otherwise, in the execution

[[Page 61538]]

of order flow from broker dealers,'' and that an exchange ``must 
compete vigorously for order flow to maintain its share of trading 
volume.'' \22\
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    \21\ NetCoalition I, 615 F.3d at 544 (internal quotation 
omitted).
    \22\ Id.
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    As noted above, while Regulation NMS has enhanced competition, it 
has also fostered a ``fragmented'' market structure where trading in a 
single stock can occur across multiple trading centers. When multiple 
trading centers compete for order flow in the same stock, the 
Commission has recognized that ``such competition can lead to the 
fragmentation of order flow in that stock.'' \23\ Indeed, today, equity 
trading is currently dispersed across 16 exchanges,\24\ numerous 
alternative trading systems,\25\ broker-dealer internalizers and 
wholesalers, all competing for order flow. Based on publicly-available 
information, no single exchange currently has more than 20% market 
share.\26\
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    \23\ See Securities Exchange Act Release No. 61358, 75 3594, 
3597 (January 21, 2010) (File No. S7-02-10) (Concept Release on 
Equity Market Structure).
    \24\ See Cboe Global Markets, U.S. Equities Market Volume 
Summary, available at http://markets.cboe.com/us/equities/market_share/.
    \25\ See FINRA ATS Transparency Data, available at https://otctransparency.finra.org/otctransparency/AtsIssueData. A list of 
alternative trading systems registered with the Commission is 
available at https://www.sec.gov/foia/docs/atslist.htm.
    \26\ See Cboe Global Markets, U.S. Equities Market Volume 
Summary, available at http://markets.cboe.com/us/equities/market_share/.
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    Further, low barriers to entry mean that new exchanges may rapidly 
and inexpensively enter the market to compete with the Exchange. For 
example, since 2020, three new ones have entered the market: Long Term 
Stock Exchange (LTSE), which began operations as an exchange on August 
28, 2020; \27\ Members Exchange (MEMX), which began operations as an 
exchange on September 29, 2020; \28\ and Miami International Holdings 
(MIAX), which began operations of its first equities exchange on 
September 29, 2020.\29\
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    \27\ See LTSE Market Announcement: MA-2020-020, dated August 14, 
2020, announcing LTSE production securities phase-in planned for 
August 28, available here: https://assets-global.website-files.com/6462417e8db99f8baa06952c/6462417e8db99f8baa0698e7_MA-2020-020__Production_Securities_Launching_August_28_-_Google_Docs.pdf and 
LTSE Market Announcement: MA-2020-025, available here: https://assets-global.website-files.com/6462417e8db99f8baa06952c/6462417e8db99f8baa069873_MA-2020-025.pdf.
    \28\ As of October 29, 2020, MEMX is trading all NMS symbols. 
See https://info.memxtrading.com/trader-alert-20-10-memx-trading-symbols-update/.
    \29\ See MIAX Pearl Press release, dated September 29, 2020, 
available here: https://www.miaxoptions.com/sites/default/files/alert-files/MIAX_Press_Release_09292020.pdf.
---------------------------------------------------------------------------

    These low barriers enable existing exchange customers to 
disintermediate and start their own exchanges if they think the prices 
charged for exchange proprietary market data products are too high. 
This is precisely the rationale behind the creation of MEMX, which was 
formed by some of the largest and most well capitalized financial firms 
that are also Exchange customers (including Bank of America, BlackRock, 
Charles Schwab, Citadel, Citi, E*Trade, Fidelity, Goldman Sachs, J.P. 
Morgan, Jane Street, Morgan Stanley, TD Ameritrade, and others).\30\
---------------------------------------------------------------------------

    \30\ MEMX Home Page (``Founded by members and investors, MEMX 
aims to drive simplicity, efficiency, and competition in equity 
markets.''), available at https://memx.com/.
---------------------------------------------------------------------------

    For example, one of MEMX's founding principles is that exchange 
proprietary market data prices are too high, and that MEMX will benefit 
its members by offering ``[l]ower pricing on market data.'' \31\ Nor is 
this a new phenomenon: exchange customers formed BATS to compete with 
incumbent exchanges and once registered as an exchange in 2008, BATS 
did not initially charge for market data. The BATS venture was a 
financial success for its founders, first through recouping their 
investment in its initial public offering and then in the subsequent 
sale of BATS to Cboe, which now charges for market data from those 
exchanges. Notably, MEMX has some of the same founding broker-dealer 
customers, leading some to dub MEMX ``BATS 2.0.'' \32\
---------------------------------------------------------------------------

    \31\ MEMX home page, available at https://memx.com/.
    \32\ See ``MEMX turns up the heat on US stock exchanges,'' 
Financial Times, January 9, 2019, available at https://www.ft.com/content/4908c8b0-1418-11e9-a581-4ff78404524e; see also ``US equities 
exchanges: If you can't beat them, join them,'' Euromoney, February 
13, 2019, available at https://www.euromoney.com/article/b1d3tfby4p3y4v/us-equities-exchanges-if-you-cant-beat-them-join-them.
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    The fact that this cycle is viable and repeatable by entities that 
both trade on and compete with existing exchanges confirms that 
barriers to entry are low and that these markets are competitive and 
contestable.\33\ And low barriers to entry act as a market check on 
high prices.\34\
---------------------------------------------------------------------------

    \33\ United States v. SunGard Data Sys., 172 F. Supp. 2d 172, 
186 (D.D.C. 2001) (recognizing that ``[a]s a matter of law, courts 
have generally recognized that when a customer can replace the 
services of an external product with an internally-created system, 
this captive output (i.e. the self-production of all or part of the 
relevant product) should be included in the same market.''). In 
SunGard, the court rejected the Antitrust Division's attempt to 
block SunGuard's acquisition of the disaster recovery assets of 
Comdisco on the basis that the acquisition would ``substantially 
lessen competition in the market for shared hotsite disaster 
recovery services,'' when the evidence showed that ``internal 
hotsites'' created by customers competed with the ``external shared 
hotsite business'' engaged in by the merging parties. Id. at 173-74, 
187.
    \34\ United States v. Baker Hughes, 908 F.2d 981, 987 (1990) 
(``In the absence of significant barriers [to entry], a company 
probably cannot maintain supracompetitive pricing for any length of 
time.''); see also David S. Evans and Richard Schmalensee, Markets 
with Two-Sided Platforms, in 1 Issues In Competition Law And Policy 
667, 685 (ABA Section of Antitrust Law 2008) (noting that exchange 
mergers in 2005 and 2006 were approved by competition authorities in 
part in reliance on planned and likely entry of other firms).
---------------------------------------------------------------------------

    In sum, the fierce competition thus constrains any exchange from 
pricing its market data at a supracompetitive price and constrains the 
Exchange in setting its fees at issue here.
    More specifically, in setting fees for the NYSE Agg Lite data feed, 
the Exchange is constrained by the fact that, if its pricing is 
unattractive to customers, customers have their pick of an increasing 
number of alternatives to purchase similar data from instead of 
purchasing it from the Exchange. The existence of alternatives to the 
Exchange's data product ensures that the Exchange cannot set 
unreasonable market data fees without suffering the negative effects of 
that decision in the fiercely competitive market for proprietary market 
data.
    The Exchange notes that the NYSE Agg Lite is entirely optional. The 
Exchange is not required to make the NYSE Agg Lite available to any 
customers, nor is any customer required to purchase the NYSE Agg Lite 
market data feed. Unlike some other data products (e.g., the 
consolidated quotation and last-sale information feeds) that firms are 
required to purchase in order to fulfil regulatory obligations,\35\ a 
customer's decision whether to purchase any of the Exchange's 
proprietary market data feeds, including the NYSE Agg Lite, is entirely 
discretionary. Most firms that choose to subscribe to the proprietary 
market data feeds from the Exchange, including NYSE Agg Lite, would do 
so for the primary goals of using it to increase their revenues, reduce 
their expenses, and in some instances to compete directly with the 
Exchange for order flow. Such firms are able to determine for 
themselves whether the NYSE Agg Lite data feed is necessary for their 
business needs, and if so, whether

[[Page 61539]]

or not it is attractively priced. If the NYSE Agg Lite data feed does 
not provide sufficient value to firms based on the uses those firms may 
have for it, such firms may simply choose to conduct their business 
operations in ways that do not use the NYSE Agg Lite data feed.
---------------------------------------------------------------------------

    \35\ The Exchange notes that broker-dealers are not required to 
purchase proprietary market data to comply with their best execution 
obligations. See In the Matter of the Application of Securities 
Industry and Financial Markets Association for Review of Actions 
Taken by Self-Regulatory Organizations, Release Nos. 34-72182; AP-3-
15350; AP-3-15351 (May 16, 2014). Similarly, there is no requirement 
in Regulation NMS or any other rule that proprietary data be 
utilized for order routing decisions, and some broker-dealers and 
ATSs have chosen not to do so.
---------------------------------------------------------------------------

    Further, in the case of products that are also redistributed 
through market data vendors such as Bloomberg and Refinitiv, the 
vendors themselves provide additional price discipline for proprietary 
data products because they control the primary means of access to 
certain end users. These vendors impose price discipline based upon 
their business models. For example, vendors that assess a surcharge on 
data they sell are able to refuse to offer proprietary products that 
their end users do not or will not purchase in sufficient numbers. 
Vendors may elect not to make NYSE Agg Lite available to its customers 
unless their customers request it, and customers will not elect to pay 
the proposed fees unless NYSE Agg Lite can provide value by 
sufficiently increasing revenues or reducing costs in the customer's 
business in a manner that will offset the fees. All of these factors 
operate as constraints on pricing proprietary data products.
    In setting the proposed fees for the NYSE Agg Lite data feed, 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 reasonable fees. 
The proposed fees are therefore reasonable because in setting them, the 
Exchange is constrained by the availability of numerous substitute 
market data products. The Commission has been clear that substitute 
products need not be identical, but only substantially similar to the 
product at hand.\36\
---------------------------------------------------------------------------

    \36\ For example, in the National IF Approval Order, the 
Commission recognized that for some customers, the best bid and 
offer information from consolidated data feeds may function as a 
substitute for the NYSE National Integrated Feed product, which 
contains order by order information. See National IF Approval Order, 
supra note 20, at 67397 [release p. 21] (``[I]nformation provided by 
NYSE National demonstrates that a number of executing broker-dealers 
do not subscribe to the NYSE National Integrated Feed and executing 
broker-dealers can otherwise obtain NYSE National best bid and offer 
information from the consolidated data feeds.'' (internal quotations 
omitted)).
---------------------------------------------------------------------------

    The NYSE Aggregated Lite market data feed is subject to significant 
competitive forces that constrain its pricing. Specifically, the NYSE 
Agg Lite data feed competes head-to-head with similar market data 
products currently offered by the four U.S. equities exchanges operated 
by Cboe Exchange, Inc.--Cboe BZX Exchange, Inc. (``BZX''), Cboe BYX 
Exchange, Inc. (``BYX''), Cboe EDGA Exchange, Inc. (``EDGA''), and Cboe 
EDGX Exchange, Inc. (``EDGX''), each of which offers a market data 
product called BZX Summary Depth, BYX Summary Depth, EDGA Summary Depth 
and EDGX Summary Depth, respectively (collectively, the ``Cboe Summary 
Depth'').\37\ Similar to Cboe Summary Depth, NYSE Agg Lite can be 
utilized by vendors and subscribers to quickly access and distribute 
aggregated order book data. As noted above, NYSE Agg Lite, similar to 
Cboe Summary Depth, would provide aggregated depth per security, 
including the bid, ask and share quantity for orders received by NYSE, 
except unlike Cboe Summary Depth, which provides aggregated depth per 
security for up to five price levels, NYSE Agg Lite would provide 
aggregated depth per security for up to ten price levels on both the 
bid and offer sides of the NYSE limit order book as well as auction 
imbalance data.
---------------------------------------------------------------------------

    \37\ See BZX Rule 11.22(m) BZX Summary Depth; BYX Rule 11.22(k) 
BYX Summary Depth; EDGA Rule 13.8(f) EDGA Summary Depth; and EDGX 
Rule 13.8(f) EDGX Summary Depth. The Cboe Summary Depth offered by 
BZX, BYX, EDGA and EDGX are each a data feed that offers aggregated 
two-sided quotations for all displayed orders for up to five (5) 
price levels and contains the individual last sale information, 
market status, trading status and trade break messages.
---------------------------------------------------------------------------

    The specific fees that the Exchange proposes for the NYSE Agg Lite 
data feed are reasonable for the following additional reasons.
    Overall. The Exchange believes that the proposed fees for the NYSE 
Agg Lite data feed are reasonable because they represent the value of 
receiving the data on an aggregated basis. The Exchange believes that 
providing vendors and subscribers with the option to subscribe to a 
market data product that integrates a subset of data from existing 
products and where such aggregated data is published at a pre-defined 
interval, thus lowering bandwidth, infrastructure and operational 
requirements, would allow vendors and subscribers to choose the best 
solution for their specific business needs.
    The Exchange believes the proposed fees for the NYSE Agg Lite data 
feed are also reasonable when compared to fees for comparable products, 
such as the Cboe Summary Depth.\38\ Additionally, the Exchange is 
proposing fees for the NYSE Agg Lite data feed that are based on the 
existing fee structure that data recipients already pay for the NYSE's 
other market data products. The Exchange believes that adopting the 
same fee structure would reduce administrative burdens on NYSE data 
subscribers that also currently subscribe to market data feeds from 
NYSE.
---------------------------------------------------------------------------

    \38\ See https://cdn.cboe.com/resources/membership/US_Market_Data_Product_Price_List.pdf.
---------------------------------------------------------------------------

    Access Fee. The Exchange believes that the proposed monthly Access 
Fee of $3,000 for the NYSE Aggregated Lite data feed is reasonable 
because it is comparable to the fees charged by BZX, BYX, EDGA, and 
EDGX, each of which charges between $2,500 per month to $5,000 per 
month for both Internal Distribution and External Distribution of the 
Cboe Summary Depth market data product.\39\
---------------------------------------------------------------------------

    \39\ Id.
---------------------------------------------------------------------------

    User Fees. The Exchange believes that having separate Professional 
and Non-Professional User fees for the NYSE Agg Lite data feed is 
reasonable because it will make the product more affordable and result 
in greater availability to Professional and Non-Professional Users. 
Setting a modest Non-Professional User fee is reasonable because it 
provides an additional method for Non-Professional Users to access the 
NYSE Agg Lite data feed by providing the same data that is available to 
Professional Users. The proposed monthly Professional User Fee (Per 
User) of $35 and monthly Non-Professional User Fee (Per User) of $6 are 
reasonable because they are comparable to user fees generally charged 
by exchanges. For example, NYSE charges a monthly Professional User Fee 
(Per User) of $60 and a monthly Non-Professional User Fee (Per User) of 
$15 for the NYSE OpenBook feed.\40\ Although the proposed User Fees for 
Professional and Non-Professional Users are higher than those charged 
by BZX, BYX, EDGA and EDGX, the Exchange notes that User fees are only 
a subset of the total fees that vendors and subscribers pay and the 
lower fees proposed to access and redistribute NYSE Agg Lite would 
provide such market data recipients with a more affordable alternative 
to existing substitutes offered by the Exchange and its competitors.
---------------------------------------------------------------------------

    \40\ See Fee Schedule.
---------------------------------------------------------------------------

    Redistribution Fees. The Exchange believes that it is reasonable to 
charge redistribution fees because vendors receive value from 
redistributing the data in their business products for their customers. 
The Exchange believes that charging a Redistribution Fee is reasonable 
because the vendors that would be charged such a fee profit by re-
transmitting the Exchange's market data to their customers. This fee 
would be charged only once per month to each

[[Page 61540]]

vendor account that redistributes the NYSE Agg Lite data feed, 
regardless of the number of customers to which that vendor 
redistributes the data. The Exchange believes the proposed monthly 
Redistribution Fee of $250 for the NYSE Agg Lite data feed is 
reasonable because it is nominal and lower than the fees charged by 
BZX, BYX, EDGA and EDGX, each of which charges considerably more for 
both Internal Distribution and External Distribution of the Cboe 
Summary Depth market data feed.\41\
---------------------------------------------------------------------------

    \41\ See supra, note 38.
---------------------------------------------------------------------------

    Enterprise Fees. The Exchange believes the proposed enterprise 
license is reasonable because it would reduce exchange fees, lower 
administrative costs for subscribers that are broker-dealers and help 
expand the availability of market information to investors, and thereby 
increase participation in financial markets. Subscribers that are 
broker-dealers would be able to disseminate the NYSE Agg Lite data feed 
for display usage to an unlimited number of non-professional users for 
a monthly fee of $20,000, or $18,000 if they contract for twelve months 
of service in advance. Alternatively, subscribers that are broker-
dealers would be able to disseminate the NYSE Agg Lite data feed for 
display usage to an unlimited number of professional users and non-
professional users for a monthly fee of $25,000, or $22,500 if they 
contract for twelve months of service in advance. The proposed 
enterprise license would result in lower fees for subscribers able to 
reach the largest audience of investors, including retail investors. 
Discounts for broader dissemination of market data information have 
routinely been adopted by exchanges and permitted by the Commission as 
equitable allocations of reasonable dues, fees and charges.\42\
---------------------------------------------------------------------------

    \42\ For example, the Commission has permitted pricing discounts 
for market data under Nasdaq Rules 7023(c) and 7047(b). See also 
Securities Exchange Act Release No. 82182 (November 30, 2017), 82 FR 
57627 (December 6, 2017) (SR-NYSE-2017-60) (changing an enterprise 
fee for NYSE BBO and NYSE Trades).
---------------------------------------------------------------------------

    Non-Display Use Fees. The Exchange believes that the proposed Non-
Display Use fees reflect the value of the non-display data use to data 
recipients, which purchase such data on an entirely voluntary basis. 
Non-display data can be used by data recipients for a wide variety of 
uses, including proprietary and agency trading and smart order routing, 
as well as by data recipients that operate order matching and execution 
platforms. Non-display data also can be used for a variety of non-
trading purposes that indirectly support trading, such as risk 
management and compliance. Although some of these non-trading uses do 
not directly generate revenues, they can nonetheless substantially 
reduce a recipient's costs by automating such functions so that they 
can be carried out in a more efficient and accurate manner and reduce 
errors and labor costs, thereby benefiting recipients. The Exchange 
believes that charging for non-trading uses is reasonable because data 
recipients can derive substantial value from such uses, for example, by 
automating tasks so that they can be performed more quickly and 
accurately and less expensively than if they were performed manually.
    Previously, the non-display use data pricing policies of many 
exchanges required customers to count, and the exchanges to audit the 
count of, the number of non-display devices used by a customer. As non-
display use grew more prevalent and varied, however, exchanges received 
an increasing number of complaints about the impracticality and 
administrative burden associated with that approach. In response, the 
Exchange and its affiliated exchanges developed a non-display use 
pricing structure that does not require non-display devices to be 
counted or those counts to be audited, and instead looks merely at the 
three following categories of potential use of non-display data: use of 
the data on the customer's own behalf (Category 1), use on behalf of 
clients (Category 2), and use to internally match buy and sell orders 
within an organization (Category 3).
    The Exchange believes that it is reasonable to segment the fee for 
non-display use into these three categories. As noted above, the uses 
to which customers can put the NYSE Agg Lite data feed are numerous and 
varied, and the Exchange believes that charging separate fees for these 
separate categories of use is reasonable because it reflects the actual 
value the customer derives from the data, based upon how many 
categories of use the customer makes of the data. Segmenting the fees 
for non-display data in this way avoids the unreasonable result of 
customers that make only limited non-display use of the data paying the 
same fees as customers that use the data for numerous different 
purposes.
    The Exchange believes that the proposed fees of $4,500 per month 
for each of Categories 1, 2, and 3 is reasonable. These fees are 
comparable to non-display use fees generally charged by exchanges. For 
example, the fees for Non-Display Use of NYSE OpenBook for Categories 
1, 2 and 3 is $6,000 per month.\43\ The Exchange believes that the 
proposed fees directly and appropriately reflect the value of using 
non-display data in a wide range of computer-automated functions 
relating to both trading and non-trading activities and that the number 
and range of these functions continue to grow through innovation and 
technology developments.
---------------------------------------------------------------------------

    \43\ See Fee Schedule.
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to cap non-display use 
fees for Category 3 at $13,500 per month per data recipient, because a 
higher monthly fee may potentially dissuade competitors from buying the 
NYSE Agg Lite data feed.
    The proposed Non-Display Use fees for the NYSE Agg Lite data feed 
are also reasonable because they take into account the value of 
receiving the data for Non-Display Use on an integrated basis. The 
Exchange believes that the proposed fees directly and appropriately 
reflect the value of using the NYSE Agg Lite data feed on a non-display 
basis in a wide range of computer-automated functions relating to both 
trading and non-trading activities and that the number and range of 
these functions continue to grow through innovation and technology 
developments.\44\
---------------------------------------------------------------------------

    \44\ See also Exchange Act Release No. 69157, March 18, 2013, 78 
FR 17946, 17949 (March 25, 2013) (SR-CTA/CQ-2013-01) (``[D]ata feeds 
have become more valuable, as recipients now use them to perform a 
far larger array of non-display functions. Some firms even base 
their business models on the incorporation of data feeds into black 
boxes and application programming interfaces that apply trading 
algorithms to the data, but that do not require widespread data 
access by the firm's employees. As a result, these firms pay little 
for data usage beyond access fees, yet their data access and usage 
is critical to their businesses.'').
---------------------------------------------------------------------------

    Non-Display Use Declaration Late Fee. The Exchange believes that it 
is reasonable to require annual submissions of the Non-Display Use 
Declaration so that the Exchange will have current and accurate 
information about the use of the NYSE Agg Lite data feed and can 
correctly assess fees for the uses of the NYSE Agg Lite data feed. 
Requiring annual submissions of such declarations is reasonable because 
it also allows users to re-assess their own usage each year.
    The Exchange believes that it is reasonable to impose a late fee in 
connection with the submission of the Non-Display Use Declaration. In 
order to correctly assess fees for the non-display use of the NYSE Agg 
Lite data feed, the Exchange needs to have current and accurate 
information about the use of the NYSE Agg Lite data feed. The failure 
of data recipients to submit the Non-Display Use Declaration on

[[Page 61541]]

time leads to potentially incorrect billing and administrative burdens, 
including tracking and obtaining late Non-Display Use Declarations and 
correcting and following up on payments owed in connection with late 
Non-Display Use Declarations. The purpose of the late fee is to incent 
data recipients to submit the Non-Display Use Declaration promptly to 
avoid the administrative burdens associated with the late submission of 
Non-Display Use Declarations.
    Multiple Data Feed Fee. The Exchange believes that it is reasonable 
to require data recipients to pay a modest fee for taking a data feed 
for a market data product in more than two locations, because such data 
recipients can derive substantial value from being able to consume the 
product in as many locations as they want. In addition, there are 
administrative burdens associated with tracking each location at which 
a data recipient receives the product. The Multiple Data Feed Fee is 
designed to encourage data recipients to better manage their requests 
for additional data feeds and to monitor their usage of data feeds. The 
proposed fee is designed to apply to data feeds received in more than 
two locations so that each data recipient can have one primary and one 
backup data location before having to pay a multiple data feed fee.
    Three-Month Fee Waiver. The Exchange believes the proposal to waive 
the Access Fee and the Redistribution Fee for the NYSE Agg Lite data 
feed to new Redistributors for three calendar months is reasonable 
because it would enable potential Redistributors to determine whether a 
particular NYSE market data product provides value to their business 
models before fully committing to expend development and implementation 
costs related to the receipt 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 
Redistributors would ordinarily have to expend before using a product. 
The proposed fee waiver would also allow Redistributors to become 
familiar with the feed and determine whether it suits their needs 
without incurring fees. Making a new market data product available 
without charging a fee for three months is consistent with offerings of 
other exchanges. For example, BZX offers subscribers of BZX Summary 
Depth a three-month credit for external distribution, which is akin to 
the three-month fee waiver proposed by the Exchange.\45\
---------------------------------------------------------------------------

    \45\ See e.g., Securities Exchange Act Release No. 94432 (March 
16, 2022), 87 FR 16277 (March 22, 2022) (SR-CboeBZX-2022-015) 
(Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change To Amend the Fees Applicable to Various Market Data 
Products).
---------------------------------------------------------------------------

    For all of the foregoing reasons, the Exchange believes that the 
proposed fees for the NYSE Agg Lite data feed are reasonable.
The Proposed Fees Are Equitably Allocated
    The Exchange believes the proposed fees for the NYSE Agg Lite data 
feed are allocated fairly and equitably among the various categories of 
users of the feed, and any differences among categories of users are 
justified.
    Overall. The Exchange believes that the proposed fees are equitably 
allocated because they will apply to all data recipients that choose to 
subscribe to the NYSE Agg Lite data feed. Any subscriber or vendor that 
chooses to subscribe to the NYSE Agg Lite data feed is subject to the 
same Fee Schedule, regardless of what type of business they operate or 
the use they plan to make of the data feed. Subscribers and vendors are 
not required to purchase the NYSE Agg Lite data feed and may choose to 
receive the data on the NYSE Agg Lite data feed regardless of what type 
of business they operate or the use they plan to make of the data feed.
    Access Fee. The Exchange believes the proposed monthly Access Fee 
of $3,000 for the NYSE Agg Lite data feed is equitably allocated 
because it would be charged on an equal basis to all data recipients 
that receive a data feed of the NYSE Agg Lite data feed, regardless of 
what type of business they operate or the use they plan to make of the 
data feed.
    User Fees. The Exchange believes that the fee structure 
differentiating Professional User fees ($35 per month per user) from 
Non-Professional User fees ($6 per month per user) for display device 
access to the NYSE Agg Lite data feed is equitable. This structure has 
long been used by the Exchange to reduce the price of data to Non-
Professional Users and make it more broadly available.\46\ Offering the 
NYSE Agg Lite data feed to Non-Professional Users with the same data as 
is available to Professional Users results in greater equity among data 
recipients. These user fees would be charged uniformly to all display 
devices that have access to the NYSE Agg Lite data feed.
---------------------------------------------------------------------------

    \46\ 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); Securities Exchange Act Release No. 20002, File No. S7-
433 (July 22, 1983), 48 FR 34552 (July 29, 1983) (establishing Non-
Professional fees for CTA data); NASDAQ BX Equity 7 Pricing 
Schedule, Section 123.
---------------------------------------------------------------------------

    Redistribution Fees. The Exchange believes the proposed monthly fee 
of $250 for redistributing the NYSE Agg Lite data feed is equitably 
allocated because it would be charged on an equal basis to those 
Redistributors that choose to redistribute the feed.
    Enterprise Fees. The Exchange believes the proposed enterprise 
license is equitably allocated because it would be available on an 
equal basis to all subscribers that are broker-dealers, each of whom 
would benefit from reduced exchange fees and from lower administrative 
costs. Moreover, the specific feature of the proposed enterprise 
license that will allow subscribers to lower fees by subscribing to a 
twelve-month contract is also an equitable allocation because all 
subscribers will have the same option of choosing between the stability 
of a fixed, lower rate, and the more flexible option of maintaining the 
ability to change market data products after a month of service. 
Subscribers will be free to move from the monthly to the annual rate at 
any time, or from annual to a monthly fee, with notice, at the 
expiration of the twelve-month period.
    Non-Display Use Fees. The Exchange believes the proposed Non-
Display Use fees are equitably allocated because they would require 
subscribers to pay fees only for the uses they actually make of the 
data. As noted above, non-display data can be used by data recipients 
for a wide variety of purposes (including trading, risk management, and 
compliance) as well as purposes that reduce the recipient's costs by 
automating certain functions. The Exchange believes that it is 
equitable to charge non-display data subscribers a $4,500 fee for each 
category of use they make of such data--namely, using the data on their 
own behalf (Category 1), on behalf of their clients (Category 2), and 
to internally match buy and sell orders within an organization 
(Category 3)--because this fee structure results in subscribers with 
greater uses of the data paying higher fees, and subscribers with fewer 
uses of the data paying lower fees. This segmented fee structure is 
also equitable because no subscriber of non-display data would be 
charged a fee for a category of use in which it did not actually 
engage.
    The Exchange believes that it is equitable to cap non-display use 
fees for Category 3 at $13,500 per month per data recipient, because a 
higher monthly fee may potentially dissuade

[[Page 61542]]

competitors from buying the NYSE Agg Lite data feed.
    Non-Display Use Declaration Late Fee. The Exchange believes that 
the proposed fee of $1,000 per month for a late Non-Display Use 
Declaration is equitably allocated because it applies to any data 
recipient that pays an Access Fee for the NYSE Agg Lite data feed but 
has failed to complete and submit a Non-Display Use Declaration. In 
addition, the Exchange believes that it is equitable to charge a late 
fee to subscribers who fail to timely submit their Non-Display Use 
Declarations because their failure to do so leads to potentially 
incorrect billing and administrative burdens on the part of the 
Exchange. The Exchange believes it is equitable to defray these 
administrative costs by imposing a late fee only on subscribers' whose 
declarations were late, as opposed to all subscribers.
    Multiple Data Feed Fee. The Exchange believes that the $200 per 
month per location fee to data recipients taking the NYSE Agg Lite data 
feed in more than two locations is equitable because it would apply to 
all such customers, regardless of what type of business they operate or 
the use they make of the data feed. In addition, the Exchange believes 
that it is equitable to charge a fee to subscribers for taking a data 
feed in more than two locations because there are administrative 
burdens on the part of the Exchange associated with tracking each 
location at which a data recipient receives the product. The Exchange 
believes that it is equitable for it to defray these administrative 
costs by imposing a modest fee only on subscribers who seek to take the 
feed in more than two locations, as opposed to all subscribers.
    Three-Month Fee Waiver. The Exchange believes the proposal to waive 
the Access Fee and the Redistribution Fee for the NYSE Agg Lite data 
feed to new Redistributors for three calendar months is equitable 
because it would apply to any first-time Redistributor, regardless of 
the use they plan to make of the feed. As proposed, any first-time 
Redistributor of the NYSE Agg Lite data feed would not be charged the 
Access Fee and the Redistribution Fee for three calendar months. The 
Exchange believes it is equitable to restrict the availability of this 
three-month fee waiver to Redistributors that have not previously 
subscribed to and redistributed the NYSE Agg Lite data feed, since 
customers who are current or previous subscribers of the feed are 
already familiar with it and are able to determine whether it suits 
their needs.
    For all of the foregoing reasons, the Exchange believes that the 
proposed fees for the NYSE Agg Lite data feed are equitably allocated.
The Proposed Fees Are Not Unfairly Discriminatory
    The Exchange believes the proposed fees for the NYSE Agg Lite data 
feed are not unfairly discriminatory because any differences in the 
application of the fees are based on meaningful distinctions between 
customers, and those meaningful distinctions are not unfairly 
discriminatory between customers.
    Overall. The Exchange believes that the proposed fees are not 
unfairly discriminatory because they would apply to all data recipients 
that choose to subscribe to the NYSE Agg Lite data feed. Any 
subscriber, including Redistributor, that chooses to subscribe to the 
NYSE Agg Lite data feed is subject to the same Fee Schedule, regardless 
of what type of business they operate or the use they plan to make of 
the data feed. Subscribers, including Redistributors, may choose to 
receive the data on the NYSE Agg Lite data feed regardless of what type 
of business they operate or the use they plan to make of the data feed.
    Access Fee. The Exchange believes the proposed monthly Access Fee 
of $3,000 for the NYSE Agg Lite data feed is not unfairly 
discriminatory because it would be charged on an equal basis to all 
data recipients that receive a data feed of the NYSE Agg Lite, 
regardless of what type of business they operate or the use they plan 
to make of the data feed.
    User Fees. The Exchange believes that the fee structure 
differentiating Professional User fees ($35 per month per user) from 
Non-Professional User fees ($6 per month per user) for display device 
access to the NYSE Agg Lite data feed is not unfairly discriminatory. 
This structure has long been used by the Exchange to reduce the price 
of data to Non-Professional Users and make it more broadly 
available.\47\ Offering the NYSE Agg Lite data feed to Non-Professional 
Users with the same data as is available to Professional Users results 
in greater equity among data recipients. These user fees would be 
charged uniformly to all display devices that have access to the NYSE 
Agg Lite data feed.
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    \47\ Id.
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    Redistribution Fees. The Exchange believes the proposed monthly fee 
of $250 for redistributing the NYSE Agg Lite data feed is not unfairly 
discriminatory because it would be charged on an equal basis to those 
Redistributors that choose to redistribute the feed.
    Enterprise Fees. The Exchange believes the proposed enterprise 
license will not unfairly discriminate between customers, issuers, 
brokers or dealers. The Act does not prohibit all distinctions among 
customers, but only discrimination that is unfair, and it is not unfair 
discrimination to charge those subscribers that are able to reach the 
largest audiences of investors, including retail investors, a lower fee 
for incremental investors in order to encourage the widespread 
distribution of market data. This principle has been repeatedly 
endorsed by the Commission, as evidenced by the approval of enterprise 
licenses for other market data products.\48\ Moreover, the proposed 
enterprise license will be subject to significant competition, and that 
competition will ensure that there is no unfair discrimination. Each 
subscriber will be able to accept or reject the license depending on 
whether it will or will not lower costs for that particular subscriber, 
and, if the license is not sufficiently competitive, the Exchange may 
lose market share. The proposed enterprise license will compete with 
other enterprise licenses of the Exchange, underlying fee schedules 
promulgated by the Exchange, and enterprise licenses and fee structures 
implemented by other exchanges. As such, it is a voluntary product for 
which market participants can readily find substitutes. Accordingly, 
the Exchange is constrained from introducing a fee that would be 
inequitable or unfairly discriminatory.
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    \48\ See e.g., Securities Exchange Act Release No. 83751 (July 
31, 2018), 83 FR 38428 (August 6, 2018) (SR-NASDAQ-2018-058) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Lower Fees and Administrative Costs for Distributors of Nasdaq 
Basic, Nasdaq Last Sale, NLS Plus and the Nasdaq Depth-of-Book 
Products Through a Consolidated Enterprise License).
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    Non-Display Use Fees. The Exchange believes the proposed Non-
Display Use fees are not unfairly discriminatory because they would 
require subscribers for non-display use to pay fees only for the 
categories of use they actually make of the data. As noted above, non-
display data can be used by data recipients for a wide variety of 
purposes (including trading, risk management, and compliance) as well 
as purposes that reduce the recipient's costs by automating certain 
functions. The Exchange believes that it is not unfairly discriminatory 
to charge non-display data subscribers a $4,500 per month fee for each 
category of use they make of such data--namely, using the data on

[[Page 61543]]

their own behalf (Category 1), on behalf of their clients (Category 2), 
and to internally match buy and sell orders within an organization 
(Category 3)--because this fee structure results in subscribers with 
greater uses for the data paying higher fees, while subscribers with 
fewer uses of the data pay lower fees. This segmented fee structure is 
not unfairly discriminatory because no subscriber of non-display data 
would be charged a fee for a category of use in which it did not 
actually engage.
    The Exchange believes that it is not unreasonably discriminatory to 
cap non-display use fees for Category 3 at $13,500 per month per data 
recipient, because a higher monthly fee may potentially dissuade 
competitors from buying the NYSE Agg Lite data feed.
    Non-Display Use Declaration Late Fee. The Exchange believes that 
the proposed fee of $1,000 per month for a late Non-Display Use 
Declaration is not unfairly discriminatory because it applies to any 
data recipient that pays an Access Fee for the NYSE Agg Lite data feed 
but has failed to complete and submit a Non-Display Use Declaration. In 
addition, the Exchange believes that it is not unfairly discriminatory 
to charge a late fee to subscribers who fail to timely submit their 
Non-Display Use Declarations because their failure to do so leads to 
potentially incorrect billing and administrative burdens on the part of 
the Exchange. Nor is it unfairly discriminatory for the Exchange to 
defray these administrative costs by imposing a late fee only on 
subscribers' whose declarations were late, as opposed to all 
subscribers.
    Multiple Data Feed Fee. The Exchange believes that the $200 per 
month per location fee to data recipients taking the NYSE Agg Lite data 
feed in more than two locations is not unfairly discriminatory because 
it would apply to all such customers, regardless of what type of 
business they operate or the use they make of the data feed. In 
addition, the Exchange believes that it is not unfairly discriminatory 
to charge a fee to subscribers for taking a data feed in more than two 
locations because there are administrative burdens on the part of the 
Exchange associated with tracking each location at which a data 
recipient receives the product. The Exchange believes that it is not 
unfairly discriminatory for it to defray these administrative costs by 
imposing a modest fee only on subscribers who seek to take the feed in 
more than two locations, as opposed to all subscribers.
    Three-Month Fee Waiver. The Exchange believes the proposal to waive 
the Access Fee and the Redistribution Fee for the NYSE Agg Lite data 
feed to new Redistributors for three months is not unfairly 
discriminatory because it would apply to any first-time Redistributor, 
regardless of the use they plan to make of the feed. As proposed, any 
first-time Redistributor of the NYSE Agg Lite data feed would not be 
charged the Access Fee and the Redistribution Fee for three calendar 
months. The Exchange believes it is not unfairly discriminatory to 
restrict the availability of this three-month fee waiver to 
Redistributors that have not previously subscribed to the NYSE Agg Lite 
data feed, since Redistributors who are current or previous subscribers 
of the feed are already familiar with it and are able to determine 
whether it suits their needs.
    For all of the foregoing reasons, the Exchange believes that the 
proposed fees for the NYSE Agg Lite data feed are not unfairly 
discriminatory.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed fees will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
    Intramarket Competition. The Exchange believes that the proposed 
fees do not put any market participants at a relative disadvantage 
compared to other market participants. As noted above, the proposed 
fees would apply to all subscribers, including Redistributors, of the 
NYSE Agg Lite data feed, and customers may not only choose whether to 
subscribe to the feed at all, but also may tailor their subscription to 
include only the products offered by the Exchange that they deem 
suitable for their business needs. The Exchange also believes that the 
proposed fees neither favor nor penalize one or more categories of 
market participants in a manner that would impose an undue market on 
competition. As shown above, to the extent that particular proposed 
fees apply to only a subset of subscribers (e.g., Category 2 fees apply 
only to those making non-display use on behalf of clients; late fees 
apply only to customers who fail to timely submit their declarations), 
those distinctions are not unfairly discriminatory and do not unfairly 
burden one set of customers over another. To the contrary, by tailoring 
the proposed fees in this manner, the Exchange believes that it has 
eliminated the potential burden on competition that might result from 
unfairly asking subscribers to pay fees for services they did not use, 
or late fees they did not actually incur.
    Intermarket Competition. 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 setting the proposed fees, the Exchange is 
constrained by the availability of numerous substitute platforms also 
offering market data products, and low barriers to entry mean new 
exchanges are frequently introduced. In setting fees for the NYSE Agg 
Lite data feed, the Exchange is constrained by the fact that if its 
pricing for the NYSE Agg Lite data feed is unattractive to customers, 
customers will have their pick of an increasing number of alternative 
market data products to purchase instead of purchasing the Exchange's 
products.
    In addition, the Exchange believes that the proposed fees do not 
impose a burden on competition or on other exchanges that is not 
necessary or appropriate because of the availability of numerous 
substitute market data products. Many other exchanges offer proprietary 
data feeds like the NYSE Agg Lite data feed, supplying depth of book 
order data, security status updates, stock summary messages, and the 
exchange's best bid and offer at any given time, on a real-time basis. 
Because market data users can find suitable substitute feeds, an 
exchange that overprices its market data products stands a high risk 
that users may purchase another market's market data product. These 
competitive pressures ensure that no one exchange's market data fees 
can impose an unnecessary burden on competition, and the Exchange's 
proposed fees do not do so here.

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

    No written comments were solicited or received with respect to 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 upon filing pursuant 
to Section 19(b)(3)(A) \49\ of the Act and paragraph (f) 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

[[Page 61544]]

investors, or otherwise in furtherance of the purposes of the Act.
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    \49\ 15 U.S.C. 78s(b)(3)(A).
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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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSE-2024-38 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-NYSE-2024-38. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NYSE-2024-38 and should be 
submitted on or before August 21, 2024.
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    \50\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\50\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-16807 Filed 7-30-24; 8:45 am]
BILLING CODE 8011-01-P