[Federal Register Volume 90, Number 87 (Wednesday, May 7, 2025)]
[Notices]
[Pages 19340-19343]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-07910]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102968; File No. SR-CboeBZX-2025-060]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Update
Its Fee Schedule To Provide a Discount on Fees Assessed to Qualifying
Academic Purchasers for Purchases of Ad Hoc Historical U.S. Equity
Short Volume and Trades Reports
May 1, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 23, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to update its Fee Schedule to provide a
discount on fees assessed to qualifying academic purchasers for
purchases ad hoc historical U.S. Equity Short Volume and Trades
Reports. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/BZX/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to update its Fee Schedule to provide a
discount on fees assessed to qualifying academic purchasers for
purchases ad hoc historical U.S. Equity Short Volume and Trades Reports
(``Short Volume Reports'').
By way of background, the Short Volume Report is an end-of-day
report that summarizes certain equity trading activity on the Exchange,
including trade date,\3\ total volume,\4\ short volume,\5\ and sell
short exempt
[[Page 19341]]
volume,\6\ by symbol.\7\ The Short Volume Report also includes an end-
of-month report that provides a record of all short sale transactions
for the month, including trade date and time (in microseconds),\8\
trade size,\9\ trade price,\10\ and type of short sale execution,\11\
by symbol and exchange.\12\ The Short Volume Report is a completely
voluntary product, in that the Exchange is not required by any rule or
regulation to make this data available and that potential customers may
purchase it on an ad-hoc basis only if they voluntarily choose to do
so.
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\3\ ``Trade date'' is the date of trading activity in yyyy-mm-dd
format.
\4\ ``Total volume'' is the total number of shares transacted.
\5\ ``Short volume'' is the total number of shares sold short.
\6\ ``Short exempt volume'' is the total number of shares sold
short classified as exempt.
\7\ ``Symbol'' refers to the Cboe formatted symbol in which the
trading activity occurred. See https://cdn.cboe.com/resources/membership/US_Symbology_Reference.pdf.
\8\ ``Trade date and time'' is the date and time of trading
activity in yyyy-mm-dd hh:mm:ss.000000 ET format.
\9\ ``Trade size'' is the number of shares transacted.
\10\ ``Trade price'' is the price at which shares were
transacted.
\11\ ``Short type'' is a data field that will indicate whether
the transaction was a short sale or short sale exempt transaction. A
short sale transaction is a transaction in which a seller sells a
security which the seller does not own, or the seller has borrowed
for its own account (see 17 CFR 242.200). A short sale exempt
transaction is a short sale transaction that is exempt from the
short sale price test restrictions of Regulation SHO Rule 201 (see
17 CFR 242.201(c)).
\12\ ``Exchange'' is the market identifier (Z = BZX, Y = BYX, X
= EDGX, A = EDGA).
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Cboe LiveVol, LLC (``LiveVol''), a wholly owned subsidiary of the
Exchange's parent company, Cboe Global Markets, Inc., makes the Short
Volume Report available for purchase to Users on the LiveVol DataShop
website (datashop.cboe.com). Both the end-of-day report and end-of-
month report are included in the cost of the Short Volume Report and
are available for purchase by both Members as well as non-Members on an
annual or monthly \13\ basis. The monthly fee is $750 per Internal
Distributor \14\ and $1,250 per External Distributor.\15\ Additionally,
the Exchange offers historical reports containing both the end-of-day
volume and end-of-month trading activity. The fee per month of
historical data is $500. The Short Volume Report provided on a
historical basis is only for display use redistribution (e.g., the data
may be provided on the User's platform). Therefore, Users of the
historical data may not charge separately for data included in the
Short Volume Report or incorporate such data into their product. The
Exchange notes that the Short Volume Report is subject to direct
competition from other exchanges, as other exchanges offer similar
products for a fee.\16\
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\13\ The monthly fees for the Report are assessed on a rolling
period based on the original subscription date. For example, if a
User subscribes to the Report on October 24, 2023, the monthly fee
will cover the period of October 24, 2023, through November 23,
2023. If the User cancels its subscription prior to November 23,
2023, and no refund is issued, the User will continue to receive
both the end-of-day and end-of-month components of the Report for
the subscription period.
\14\ An Internal Distributor of an Exchange Market Data product
is a Distributor that receives the Exchange Market Data product and
then distributes that data to one or more Users within the
Distributor's own entity. See Cboe BZX U.S. Equities Exchange Fee
Schedule.
\15\ An External Distributor of an Exchange Market Data product
is a Distributor that receives the Exchange Market Data product and
then distributes that data to a third party or one or more Users
outside the Distributor's own entity. See Cboe BZX U.S. Equities
Exchange Fee Schedule.
\16\ See the Nasdaq Fee Schedule, Equity 7, Section 152. See
also, the TAQ Group Short Sales (Monthly File) and Short Volume
product, offered by the New York Stock Exchange LLC (``NYSE'') and
affiliated equity markets (the ``NYSE Group'') at NYSE Exchange
Proprietary Market Data [verbar] TAQ NYSE Group Short Sales.
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The Exchange proposes to provide a pricing incentive program in
which qualifying academic purchasers may purchase the historical
reports for the greater fee of (i) a 50% discount off of their total
purchase of historical Short Volume Reports or (ii) $500. For example,
if a qualifying academic purchaser purchases a month and a half of
data, for a total cost of $750 before the discount (for what would be a
discounted price of $375), they will be charged the greater fee of
$500.\17\ The Exchange believes that academic institutions provide a
valuable service for the Exchange in studying and promoting the
equities market. Though academic institutions and researchers have a
need for granular equities data sets, they do not trade upon the data
for which they subscribe. The Exchange believes the proposed reduced
fees for qualifying academic purchasers of historical Short Volume
Reports will encourage and promote academic studies of its market data
by academic institutions. In order to qualify for the academic pricing,
an academic purchaser must be (1) an accredited academic institution,
(2) that will use the data in independent academic research, academic
journals and other publications, teaching and classroom use, or for
other bona fide educational purposes (i.e. academic use). Furthermore,
use of the data must be limited to faculty and students of the
accredited academic institution, and any commercial or profit-seeking
usage is excluded. Academic pricing will not be provided to any
purchaser whose research is funded by a securities industry
participant. The Exchange will have the discretion to review and
approve such qualifying academic purchasers who submit a brief
application in accordance with existing LiveVol subscriber policies and
request additional information when it deems necessary.
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\17\ The Exchange proposes to amend its fee schedule to include
this example for clarity as well.
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The Exchange notes that other exchanges currently offer academic
discounts for similar data feeds.\18\ The Exchange recognizes the high
value of academic research and educational instruction and
publications, and believes that the proposed academic discount for
historical Short Volume Reports will encourage the promotion academic
research of the equities industry, which will serve to benefit all
market participants while also opening up a new potential user base
among students. Finally, the Exchange notes that academic purchases for
historical Short Volume Reports are educational in use and purpose, and
not vocational.
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\18\ See Securities Exchange Act Release No. 67955 (October 1,
2012) 77 FR 61037 (October 5, 2012) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change To Adopt Reduced Fees for
Historical ISE Open/Close Trade Profile Intraday Market Data
Offering) (SR-ISE-2012-76); Securities and Exchange Act Release 34-
60654 (September 11, 2009) 74 FR 47848 (September 17, 2009) (Notice
of Filing of Proposed Rule Change Relating to Historical ISE Open/
Close Trade Profile Fees) (SR-ISE-2009-64); Securities Exchange Act
Release No. 53770 (May 8, 2006) 71 FR 27762 (May 12, 2006) (Notice
of Filing of Proposed Rule Change and Amendment No. 1 Thereto To
Establish an Annual Administrative Fee for Market Data Distributors
That Are Recipients of Nasdaq Proprietary Data Products) (SR-NASD-
2006-030); Securities Exchange Act Release No. 85817 (April 25,
2019) 84 FR 21863(May 5, 2019) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule To
Adopt Reduced Subscription Fees for Academics for the Sale of
Historical Cboe Open-Close Volume Data) (SR-CBOE-2019-026).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\19\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \20\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and
[[Page 19342]]
open market and a national market system, and, in general, to protect
investors and the public interest. Additionally, the Exchange believes
the proposed rule change is consistent with the Section 6(b)(5) \21\
requirement that the rules of an exchange not be designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
The Exchange also believes the proposed rule change is consistent with
Section 6(b)(4) of the Act,\22\ which requires that Exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among its Members and other persons using its facilities.
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\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
\21\ Id.
\22\ 15 U.S.C. 78f(b)(4).
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. The Exchange believes that the proposed fee
changes will further broaden the availability of U.S. equity market
data to investors consistent with the principles of Regulation NMS. The
Exchange believes the dissemination of historical short volume data via
historical Short Volume Reports benefits investors through increased
transparency and may promote better informed trading, as well as
research and studies of the equities industry. Nevertheless, the
Exchange notes that such data is not necessary for trading and as noted
above, is entirely optional. Moreover, several other exchanges offer a
similar data product which offer the same type of data content through
similar reports.\23\
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\23\ See supra note 17 [sic].
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The Exchange operates in a highly competitive environment. Indeed,
there are currently 16 registered equities exchanges that trade
equities. Based on publicly available information, no single equities
exchange has more than 14% of the equity market share.\24\ 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.'' \25\ Making similar data products
available to market participants fosters competition in the
marketplace, and constrains the ability of exchanges to charge
supercompetitive fees. In the event that a market participant views one
exchange's data product as more attractive than the competition, that
market participant can, and often does, switch between similar
products. The proposed fees are a result of the competitive environment
of the U.S. equities industry as the Exchange seeks to adopt fees to
attract purchasers of historical Short Volume Reports.
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\24\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (April 21, 2025), available at https://www.cboe.com/us/equities/market_statistics/.
\25\ 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 believes that the discount for qualifying academic
purchasers for the historical Short Volume Reports is reasonable
because academic institutions are not able to monetize access to the
data as they do not trade on the data set. The Exchange believes the
proposed discount will allow for more academic institutions to purchase
the historical Short Volume Reports, and, as a result, promote research
and studies of the equities industry to the benefit of all market
participants. The Exchange believes that the proposed discount is
equitable and not unfairly discriminatory because it will apply equally
to all academic institutions that submit an application and meet the
accredited academic institution and academic use criteria. As stated
above, qualified academic purchasers will subscribe to the data set for
educational use and purposes and are not permitted to use the data for
commercial or monetizing purposes, nor can they qualify if they are
funded by an industry participant. As a result, the Exchange believes
the proposed discount is equitable and not unfairly discriminatory
because it maintains equal treatment for all industry participants or
other subscribers that use the data for vocational, commercial or other
for-profit purposes.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange operates in a
highly competitive environment in which the Exchange must continually
adjust its fees to remain competitive. Because competitors are free to
modify their own fees in response, including the adoption of similar
discounts to those fees, the Exchange believes that the degree to which
fee changes (including discounts and rebates) in this market may impose
any burden on competition is extremely limited. As discussed above, the
Exchange's historical Short Volume Reports offering is subject to
direct competition from several other options exchanges that offer
similar data products. Moreover, purchase of historical Short Volume
Reports is optional. It is designed to help investors understand
underlying market trends to improve the quality of investment
decisions, but is not necessary to execute a trade.
The Exchange does not believe that the proposed rule change will
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed rule change will apply to all qualifying academic purchasers
uniformly. While the proposed fee reduction applies only to qualifying
academic purchasers, academic institutions' research and publications
as a result of access to historical market data benefits all market
participants. The Exchange also does not believe that the proposed rule
change will impose any burden on intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act as
other options exchanges currently offer similar historical data to
academic institutions at a discounted price.\26\ Offering a discount
for qualifying academic institutions that purchase the Exchange's
historical Short Volume Reports may make that data more attractive to
such academic institutions and further increase competition with
exchanges that offer similar historical data products.
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\26\ See supra note 19 [sic].
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \27\ and paragraph (f) of Rule
[[Page 19343]]
19b-4 \28\ 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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\27\ 15 U.S.C. 78s(b)(3)(A).
\28\ 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-CboeBZX-2025-060 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CboeBZX-2025-060. 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-CboeBZX-2025-060 and should
be submitted on or before May 28, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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\29\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-07910 Filed 5-6-25; 8:45 am]
BILLING CODE 8011-01-P