[Federal Register Volume 90, Number 150 (Thursday, August 7, 2025)]
[Notices]
[Pages 38191-38194]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-14964]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103627; File No. SR-CboeEDGX-2025-062]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend its Fee Schedule To Provide a Temporary Discount for Historical
U.S. Equity Short Volume and Trade Reports
August 4, 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 July 29, 2025, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to
amend its Fee Schedule to provide a temporary discount on fees assessed
to EDGX Members and non-Members that purchase $20,000 or more of ad hoc
purchases of historical U.S. Equity Short
[[Page 38192]]
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/options/regulation/rule_filings/edgx/) and at the Exchange's Office of the Secretary.
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
temporary 20% discount on fees assessed to EDGX Members (``Members'')
\3\ and non-Members that purchase $20,000 or more of ad hoc purchases
of historical U.S. Equity Short Volume and Trades Reports (``Short
Volume Reports''), effective July 29, 2025 through September 30, 2025.
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\3\ See Rule 1.5(n) (``Member''). The term ``Member'' shall mean
any registered broker or dealer that has been admitted to membership
in the Exchange. A Member will have the status of a ``member'' of
the Exchange as that term is defined in Section 3(a)(3) of the Act.
Membership may be granted to a sole proprietor, partnership,
corporation, limited liability company or other organization which
is a registered broker or dealer pursuant to Section 15 of the Act,
and which has been approved by the Exchange.
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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,\4\ total volume,\5\ short volume,\6\ and sell
short exempt volume,\7\ by symbol.\8\ 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),\9\ trade size,\10\ trade price,\11\ and type of short
sale execution,\12\ by symbol and exchange.\13\ 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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\4\ ``Trade date'' is the date of trading activity in yyyy-mm-dd
format.
\5\ ``Total volume'' is the total number of shares transacted.
\6\ ``Short volume'' is the total number of shares sold short.
\7\ ``Short exempt volume'' is the total number of shares sold
short classified as exempt.
\8\ ``Symbol'' refers to the Cboe formatted symbol in which the
trading activity occurred. See https://cdn.cboe.com/resources/membership/US_Symbology_Reference.pdf.
\9\ ``Trade date and time'' is the date and time of trading
activity in yyyy-mm-dd hh:mm:ss.000000 ET format.
\10\ ``Trade size'' is the number of shares transacted.
\11\ ``Trade price'' is the price at which shares were
transacted.
\12\ ``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)).
\13\ ``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 \14\ basis. The monthly fee is $750 per Internal
Distributor \15\ and $1,250 per External Distributor.\16\ 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.\17\
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\14\ 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.
\15\ 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 EDGX U.S. Equities Exchange Fee
Schedule.
\16\ 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 EDGX U.S. Equities
Exchange Fee Schedule.
\17\ 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 temporary pricing incentive
program in which Members or Non-Members that purchase historical Short
Volume Reports will receive a percentage fee discount where specific
purchase thresholds are met. Specifically, the Exchange proposes to
provide a temporary 20% discount for ad-hoc purchases of historical
Short Volume Reports of $20,000 or more.\18\ The proposed program will
apply to all market participants irrespective of whether the market
participant is a new or current purchaser; however, the discount cannot
be combined with any other discounts offered by the Exchange. The
Exchange intends to introduce the discount program beginning July 29,
2025, with the program remaining in effect through September 30, 2025.
The Exchange also notes that it has previously adopted the same
discount program and proposes to update the Fees Schedule with the new
program dates accordingly.\19\
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\18\ The discount will apply on an order-by-order basis. The
discount will apply to the total purchase price, once the $20,000
minimum purchase is satisfied (for example, a qualifying order of
$25,000 would be discounted to $20,000, i.e. receive a 20% discount
of $5,000).
\19\ See Securities Exchange Act Release No. 99185 (December 14,
2023), 88 FR 88182 (December 20, 2023) (SR-CboeEDGX-2023-072) and
Securities Exchange Act Release No. 100333 (June 14, 2024), 89 FR
52115 (June 21, 2024) (SR-CboeEDGX-2024-034).
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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.\20\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \21\ requirements that the rules of
[[Page 38193]]
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \22\ 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,\23\
which requires that Exchange rules provide for the equitable allocation
of reasonable dues, fees, and other charges among its Trading Permit
Holders and other persons using its facilities.
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\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(5).
\22\ Id.
\23\ 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.\24\
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\24\ See supra note 17.
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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 15% of the equity market share.\25\ 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.'' \26\ 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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\25\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (July 28, 2025), available at https://www.cboe.com/us/equities/market_statistics/.
\26\ 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 proposed incentive program for any
Member or non-Member who purchases historical Short Volume Reports is
reasonable because such purchasers would receive a 20% discount for
purchasing $20,000 or more worth of historical Short Volume Reports.
The Exchange believes the proposed discount is reasonable as it will
give purchasers the ability to use and test the historical Short Volume
Reports at a discounted rate, prior to purchasing additional months or
a monthly subscription, and will therefore encourage users to purchase
historical Short Volume Reports. Further, the proposed discount is
intended to promote increased use of the Exchange's historical Short
Volume Reports by defraying some of the costs a purchaser would
ordinarily have to expend before using the data product. The Exchange
believes that the proposed discount is equitable and not unfairly
discriminatory because it will apply equally to all Members and non-
Members who purchase historical Short Volume Reports. Lastly, the
purchase of this data product is discretionary and not compulsory.
Indeed, no market participant is required to purchase the historical
Short Volume Reports, and the Exchange is not required to make
historical Short Volume Reports available to all investors. Potential
purchasers may request the data at any time if they believe it to be
valuable or may decline to purchase such data. As noted above, the
Exchange has previously adopted similar discount programs.\27\
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\27\ See e.g., Securities Exchange Act Release No. 99185
(December 14, 2023), 88 FR 88182 (December 20, 2023) (SR-CboeEDGX-
2023-072) and Securities Exchange Act Release No. 100333 (June 14,
2024), 89 FR 52115 (June 21, 2024) (SR-CboeEDGX-2024-034).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. 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
discount 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 proposed rule changes are grounded in the Exchange's efforts to
compete more effectively. In this competitive environment, potential
purchasers are free to choose which, if any, similar product to
purchase to satisfy their need for market information. As a result, the
Exchange believes this proposed rule change permits fair competition
among national securities exchanges. Further, the Exchange believes
that these changes will not cause any unnecessary or inappropriate
burden on intermarket competition, as the proposed incentive program
applies uniformly to any purchaser of historical Short Volume Reports.
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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 \28\ and paragraph (f) of Rule 19b-4 \29\
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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\28\ 15 U.S.C. 78s(b)(3)(A).
\29\ 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-CboeEDGX-2025-062 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CboeEDGX-2025-062. 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 filing 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-CboeEDGX-2025-062 and should be
submitted on or before August 28, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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\30\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14964 Filed 8-6-25; 8:45 am]
BILLING CODE 8011-01-P