[Federal Register Volume 90, Number 152 (Monday, August 11, 2025)]
[Notices]
[Pages 38688-38690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-15171]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103648; File No. SR-CboeEDGA-2025-022]
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Fees for Cboe Timestamping Service Reports To Allow Sponsored
Participants To Purchase These Reports Directly
August 6, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 25, 2025, Cboe EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') proposes to
amend fees for Cboe Timestamping Service reports to allow Sponsored
Participants to purchase these reports directly.
The text of the proposed rule change is available on the Exchange's
website (http://markets.cboe.com/us/equities/regulation/rule_filings/edga/) 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 amend fees for Cboe Timestamping Service
reports, effective July 25, 2025. The Exchange previously adopted a
data product known as the Cboe Timestamping Service \3\ and
subsequently adopted fees for the Cboe Timestamping Service.\4\ The
Cboe Timestamping Service provides timestamp information for orders and
cancels for market participants. More specifically, the Cboe
Timestamping Service reports provide various timestamps relating to the
message lifecycle throughout the exchange system. The first report--the
Missed Liquidity Report--covers order messages of the subscribing firm
only and the second report--Cancels Report--covers cancel messages of
the subscribing firm only. The reports are optional products that a
participant may opt to choose both reports, one report, or neither
report.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 100803 (August 28,
2024), 89 FR 68948 (August 22, 2024) (SR-CboeEDGA-2024-034).
\4\ See Securities Exchange Act Release No. 101581 (November 18,
2024), 89 FR 90807 (November 12, 2024) (SR-CboeEDGA-2024-046).
---------------------------------------------------------------------------
The Cancels Report provides response time details for orders that
rest on the book where the subscribing firm attempted to cancel that
resting order or any other resting order but was unable to do so as the
resting order was executed before the system processed the cancel
message. The Cancels Report assists the subscribing firm in determining
by how much time that order missed being canceled instead of executing.
The Missed Liquidity Report provides time details for executions of
orders that rest on the book where the subscribing firm attempted to
execute against that resting order within an Exchange-determined amount
of time (not to exceed 1 millisecond) after receipt of the first
attempt to execute against the resting order and within an Exchange-
determined amount of time (not to exceed 100 microseconds) before
receipt of the first attempt to execute against the resting order.
The Exchange notes that the data included in the reports are based
only on the data of the market participant that opts to subscribe to
the reports (``Recipient Firm'') and do not include information related
to any firm other than the Recipient Firm. Additionally, neither report
includes real-time market data. Rather, the reports contain
[[Page 38689]]
historical data from the prior trading day and are available after the
end of the trading day, generally on a T + 1 basis.
Currently, the Exchange assess the following monthly fees for
Members that purchase the Cancels Report and/or the Missed Liquidity
Report. The Exchange assess a monthly flat fee of $1,000 for the
Cancels Report for a subscribing Member. The Exchange also proposes a
progressive monthly fee structure for the Missed Liquidity Report based
on the Member's subscribing logical (FIX or BOE) order entry ports (the
``Ports'') \5\ with the following tiers: $1,500 for 1-10 Ports, $2,000
for 11-20 Ports and $2,500 for 21 and more Ports.\6\ For a mid-month
subscription, the monthly fee(s) shall be prorated based on the initial
date of the subscription.\7\
---------------------------------------------------------------------------
\5\ Based on a firms' unique needs, firms may choose which Ports
(if any) it would like to subscribe to the Missed Liquidity Report.
For example, a firm that has 20 Ports, but is only interested in
receiving data on 10 of their Ports would then be charged the $1,500
tier fee for its subscribing Ports.
\6\ The Exchange makes clear in the Fees Schedule that the fees
are not progressive (i.e., if a firm requests the Missed Liquidity
Report for 20 Ports, it will be assessed $2,000 per month).
\7\ Fees will be assessed on a look-back basis based on the
maximum number of subscribing Ports a firm had in the prior calendar
month. For example, if a firm had 10 Ports that were subscribed to
the Missed Liquidity Report from September 1st-September 26th and
the Member added an additional Port to the Missed Liquidity Report
on September 27th (for a total of 11 subscribing Ports), the firm
would then be assessed a fee of $2,000 for the month of September
for the Missed Liquidity Report. Additionally, the Exchange proposes
to make clear in its fee schedule that new subscribers will be
charged a prorated fee for a mid-month subscription based on the
initial date of the subscription.
---------------------------------------------------------------------------
Currently, a Member who has Sponsored Participants may choose to
purchase one or both of these reports and can provide this data to its
Sponsored Participants. A Sponsoring Member may then provide this
information to Sponsored Participants, but the Sponsoring Member must
first filter the larger data report to provide only the Sponsored
Participant's activity from its report and must do this for each
individual Sponsored Participant. This may take more time and lead to
Sponsored Participants waiting longer to receive their data. In
response, the Exchange has received feedback from both Members and
Sponsored Participants requesting that Sponsored Participants may be
able to directly subscribe and pay for this data.
The Exchange now proposes to amend its Fees Schedule to allow a
Member's Sponsored Participants to subscribe and be charged directly
for this report. This will permit a Sponsored Participant to request
and have access to their information directly. The same fees that are
currently in place shall apply to a Sponsored Participant.
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.\8\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \9\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ 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,\11\ 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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
\11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
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 consumers of such
data. It was believed that this authority would expand the amount of
data available to users and consumers of such data and also spur
innovation and competition for the provision of market data. The
Exchange believes that the proposed reports are the sort of market data
product that the Commission envisioned when it adopted Regulation NMS.
The Commission concluded that Regulation NMS--by deregulating the
market in proprietary data--would itself further the Act's goals of
facilitating efficiency and competition: ``[E]fficiency is promoted
when broker-dealers who do not need the data beyond the prices, sizes,
market center identifications of the NBBO and consolidated last sale
information are not required to receive (and pay for) such data. The
Commission also believes that efficiency is promoted when broker-
dealers may choose to receive (and pay for) additional market data
based on their own internal analysis of the need for such data.'' \12\
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history. The
Cboe Timestamping Service (i.e., the Missed Liquidity and Cancels
Reports) provides investors with new options for receiving market data,
which was a primary goal of the market data amendments adopted by
Regulation NMS.\13\
---------------------------------------------------------------------------
\13\ See Regulation NMS Adopting Release, supra, at 37503.
---------------------------------------------------------------------------
The reports are designed for firms that are interested in gaining
insight into latency in connection with their respective (1) orders
that failed to execute against an order resting on the Exchange order
book and/or (2) cancel messages that failed to cancel resting orders.
The Exchange believes that providing this optional data to be purchased
directly by Sponsored Participants if they desire to receive this is
consistent with facilitating transactions in securities, removing
impediments to and perfecting the mechanism of a free and open market
and a national market system, and, in general, protecting investors and
the public interest because it provides Sponsored Participants with an
opportunity to receive additional information and insight into their
trading activity on the Exchange, that they may not otherwise receive
from their Sponsoring Members.
The Exchange previously only allowed Members to subscribe and be
billed for this as during the initial launch, it did not yet have the
capabilities to pull activities on a per Sponsored Participant basis.
Due to requests from Sponsored Participants and Members alike to permit
Sponsored Participants to subscribe directly, the Exchange proposes to
amend its Fees Schedule to allow a Sponsored Participant to subscribe
and be billed directly for this.
The Exchange believes the fee proposals for both the Missed
Liquidity Report and Cancels Report are
[[Page 38690]]
reasonable as the Exchange is offering any Sponsored Participant or
Member access to subscribe to one or both report(s) in the firm's sole
discretion based on their unique business needs. The Exchange notes
that these existing fees have previously been established \14\ and the
Exchange now only proposes to expand this to be offered and billed
directly to a Sponsored Participant. The reports are optional for a
firm to subscribe to if they believe it to be helpful and are not
required for firms to purchase in order to access the Exchange.
Additionally, firms may cancel their usage of this report at any time.
---------------------------------------------------------------------------
\14\ See supra note 4.
---------------------------------------------------------------------------
The proposal would also not permit unfair discrimination as both
the Cancels Report and Missed Liquidity Report will be available to all
Sponsored Participants, in addition to Members, who may opt to
subscribe to one, both, or neither, and will help to protect a free and
open market by continuing to provide additional non-core data (offered
on an optional basis for a fee) to the marketplace and by providing
investors with greater choices.\15\ As such, the Exchange believes that
the proposed fees are reasonable and set at a level to compete with
other exchanges that may choose to offer similar reports. Moreover, if
a market participant views another exchange's potential report as more
attractive, then such market participant can merely choose not to
purchase the Exchange's reports and instead purchase another exchange's
similar data product(s), which may offer similar data points, albeit
based on that other market's trading activity.
---------------------------------------------------------------------------
\15\ See Sec. Indus. Fin. Mkts. Ass'n (SIFMA), Initial Decision
Release No. 1015, 2016 SEC LEXIS 2278 (ALJ June 1, 2016) (finding
the existence of vigorous competition with respect to non-core
market data). See also the decision of the United States Court of
Appeals for the District of Columbia Circuit in NetCoalition v. SEC,
615 F.3d 525 (D.C. Cir. 2010) (``NetCoalition I'') (upholding the
Commission's reliance upon competitive markets to set reasonable and
equitably allocated fees for market data).
---------------------------------------------------------------------------
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 believes
expanding the scope of who may directly subscribe to the reports will
contribute to robust competition among national securities exchanges.
The Missed Liquidity Report and Cancels Report further enhances
competition between exchanges by allowing the Exchange to provide these
reports directly to a broader group similar to reports that are
currently offered by other exchanges.\16\
---------------------------------------------------------------------------
\16\ See e.g., MIAX Emerald Rule 531.
---------------------------------------------------------------------------
The Exchange also does not believe the proposed fees would cause
any unnecessary or inappropriate burden on intermarket competition as
other exchanges are free to introduce their own comparable reports with
lower prices to better compete with the Exchange's offerings and this
fee does not change based on if a subscribing firm is a Member or
Sponsored Participant The Exchange operates in a highly competitive
environment, and its ability to price the reports is constrained by
competition among exchanges who choose to adopt similar products. The
Exchange must consider this in its pricing discipline in order to
compete for subscribers of the Exchange's market data via the reports.
For example, proposing fees that are excessively higher than fees for
potentially similar data products would simply serve to reduce demand
for the Exchange's reports, which as discussed, firms are under no
obligation to utilize. 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.
The Exchange does not believe the proposed rule change would cause
any unnecessary or inappropriate burden on intramarket competition.
Particularly, the proposed fees apply uniformly to any purchaser in
that the Exchange does not differentiate between the different
subscribing firms that may purchase the reports directly from the
Exchange. The proposed fees are set at a modest level that would allow
any interested Member or Sponsored Participant to purchase such data
based on their business needs.
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 \17\ and paragraph (f) of Rule 19b-4 \18\
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.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
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-CboeEDGA-2025-022 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-CboeEDGA-2025-022. 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-CboeEDGA-2025-022 and should be
submitted on or before September 2, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------
\19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-15171 Filed 8-8-25; 8:45 am]
BILLING CODE 8011-01-P