85706 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 

11 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Section 6(d) of the MIAX Fee Schedule, 

Section 6(c) of the MIAX PEARL Options Fee 

Schedule, and Section 3(c) of the MIAX PEARL 

Equities Fee Schedule. 

4See Securities Exchange Act Release No. 85207 

(February 27, 2019), 84 FR 7963 (March 5, 2019) 

(SR–EMERALD–2019–09) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

To Establish MIAX Emerald Top of Market (‘‘ToM’’) 

Data Feed, MIAX Emerald Complex Top of Market 

(‘‘cToM’’) Data Feed, MIAX Emerald Administrative 

Information Subscriber (‘‘AIS’’) Data Feed, and 

MIAX Emerald Order Feed (‘‘MOR’’)). 

5See Fee Schedule, proposed Section 6(d). 

All submissions should refer to File 

Number SR–ICEEU–2020–016. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filings will also be available for 

inspection and copying at the principal 

office of ICE Clear Europe and on ICE 

Clear Europe’s website at https://

www.theice.com/notices/Notices.shtml?

regulatoryFilings. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–ICEEU–2020–016 and 

should be submitted on or before 

January 19, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28660 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90738; File No. SR– 

EMERALD–2020–20] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Fee 

Schedule To Establish a Fee for 

Historical Market Data 

December 21, 2020. 

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 December 

10, 2020, MIAX Emerald, LLC (‘‘MIAX 

Emerald’’ or ‘‘Exchange’’) 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend the MIAX Emerald Fee Schedule 

(the ‘‘Fee Schedule’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings/emerald, at MIAX’s principal 

office, 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 amend the 

Fee Schedule to adopt new section 6(d), 

Historical Market Data, to describe the 

production of Exchange historical data 

and set forth the corresponding fee. The 

Exchange notes that the description of 

Historical Market Data and the proposed 

fee is identical to that currently charged 

by the Exchange’s affiliates, the Miami 

International Securities Exchange LLC 

(‘‘MIAX’’) and MIAX PEARL, LLC 

(‘‘MIAX PEARL’’).3

The Exchange proposes to offer 

Historical Market Data for MIAX 

Emerald, which is a data product that 

offers historical market data for orders 

entered on MIAX Emerald upon request. 

The Exchange proposes to charge a 

modest fee for the Historical Market 

Data, which will be based on the cost 

incurred by the Exchange in providing 

that data. Proposed Section 6(d) of the 

Fee Schedule describes the fee to be 

charged market participants that request 

Historical Market Data from MIAX 

Emerald. Historical Market Data is 

intended to aid market participants in 

analyzing trade and volume data, 

evaluating historical trends in the 

trading activity of a particular security, 

and enabling those market participants 

to test trading models and analytical 

strategies. Specifically, Historical 

Market Data includes all data that is 

captured and disseminated on the MIAX 

Emerald Top of Market (‘‘ToM’’) data 

feed, MIAX Emerald Complex Top of 

Market (‘‘cToM’’) data feed, MIAX 

Emerald Administrative Information 

Subscriber (‘‘AIS’’) data feed, and MIAX 

Emerald Order feed (‘‘MOR’’),4 and is 

available on a T + 1 basis.5

The Exchange proposes to only assess 

the fee for Historical Market Data on a 

user (whether Member or non-Member) 

that specifically requests such Historical 

Market Data. Historical Market Data will 

be uploaded onto an Exchange-provided 

device, which the Exchange will incur 

a cost to procure and provide to those 

that request the data. 

The Exchange proposed to charge a 

flat fee of $500 per device requested. 

Each device shall have a maximum 

storage capacity of 8 terabytes. Users 

may request up to six months of 

Historical Market Data per device, 

subject to the device’s storage capacity. 

Historical Data will be made available 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85707 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(4). 

8 15 U.S.C. 78f(b)(5). 

9See supra note 3. 

10See, e.g., Cboe BZX Exchange, Inc. fee schedule 

available at https://markets.cboe.com/us/equities/ 

membership/fee_schedule/bzx/. 

11See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005). 

on a T + 1 basis. Only the most recent 

six months of Historical Market Data 

shall be available for purchase from the 

request date. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 6

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 7 in particular, 

in that it is an equitable allocation of 

reasonable dues, fees, and other charges 

among its members and issuers and 

other persons using its facilities. The 

Exchange also believes the proposal 

furthers the objectives of Section 6(b)(5) 

of the Act 8 in that it is designed to 

promote just and equitable principles of 

trade, 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 and is 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers and dealers. 

The Exchange believes the proposed 

fee for Historical Market Data is a 

reasonable allocation of its costs and 

expenses among its Members and other 

persons using its facilities since it is 

recovering the costs associated with 

distributing such data should a Member 

request Historical Market Data. Access 

to the Exchange is provided on fair and 

non-discriminatory terms. The 

Exchange believes the proposed fee for 

Historical Market Data is equitable and 

not unfairly discriminatory because the 

fee level results in a reasonable and 

equitable allocation of fees amongst 

users for similar services. Moreover, the 

decision as to whether or not to 

purchase Historical Market Data is 

entirely optional to all users. Potential 

purchasers are not required to purchase 

the Historical Market Data, and the 

Exchange is not required to make the 

Historical Market Data available. 

Purchasers may request the data at any 

time or may decline to purchase such 

data. The allocation of fees among users 

is fair and reasonable because, if the 

market deems the proposed fees to be 

unfair or inequitable, firms can 

diminish or discontinue their use of this 

data. 

The Exchange believes that the 

proposed fee for Historical Market Data 

is consistent with Section 6(b)(4) of the 

Act because the proposed fee will 

permit recovery of the Exchange’s costs 

and will not result in excessive or 

supra-competitive profit. The proposed 

fee for Historical Market Data will allow 

the Exchange to recover a portion (less 

than all) of the costs incurred by the 

Exchange associated with providing and 

maintaining the necessary hardware and 

other infrastructure as well as network 

monitoring and support services in 

order to provide Historical Market Data. 

The Exchange believes that it is 

reasonable and appropriate to establish 

a fee for Historical Market Data at a level 

that will partially offset the costs to the 

Exchange associated with maintaining 

and providing Historical Market Data. 

For example, Historical Market Data is 

uploaded onto an Exchange-provided 

device. Each device shall have a 

maximum storage capacity of 8 

terabytes. The Exchange incurs costs in 

providing the device, storing the 

historical data, and utilizing resources 

to upload the data onto the device. 

Specifically, the device provided by the 

Exchange costs approximately $200 to 

$300. Moreover, the Exchange tracks the 

number of hours spent by Exchange 

personnel procuring Historical Data. 

Based on the Exchange’s average cost 

per full-time employee (‘‘FTE’’), the 

Exchange represents that its cost to 

provide this service is reasonably 

related to (and often exceeds) the 

amount of the Historical Market Data fee 

the Exchange proposes to charge. 

Accordingly, the proposed fee would 

enable the Exchange to recover a 

material portion of such cost. 

The Exchange also notes that the 

proposed fee is identical to the same fee 

charged by its affiliate options 

exchanges, MIAX and MIAX PEARL,9

for options historical data and less than 

that charged by other exchanges for 

their own historical data. For example, 

all four of the Cboe equity exchanges 

charge a fee of $500 for one month of 

historical data and $2,500 for one 

terabyte drive of data.10

Further, in adopting Regulation NMS, 

the Commission granted self-regulatory 

organizations 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: 

‘‘[E]fficiency is promoted when brokerdealers 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 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.’’ 11

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. If the free market should 

determine whether proprietary data is 

sold to broker-dealers at all, it follows 

that the price at which such data is sold 

should be set by the market as well. 

In July, 2010, Congress adopted H.R. 

4173, the Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 

2010 (‘‘Dodd-Frank Act’’), which 

amended Section 19 of the Act. Among 

other things, Section 916 of the DoddFrank Act amended paragraph (A) of 

Section 19(b)(3) of the Act by inserting 

the phrase ‘‘on any person, whether or 

not the person is a member of the selfregulatory organization’’ after ‘‘due, fee 

or other charge imposed by the selfregulatory organization.’’ As a result, all 

SRO rule proposals establishing or 

changing dues, fees or other charges are 

immediately effective upon filing 

regardless of whether such dues, fees or 

other charges are imposed on members 

of the SRO, non-members, or both. 

Section 916 further amended paragraph 

(C) of Section 19(b)(3) of the Act to read, 

in pertinent part, ‘‘At any time within 

the 60-day period beginning on the date 

of filing of such a proposed rule change 

in accordance with the provisions of 

paragraph (1) [of Section 19(b)], the 

Commission summarily may 

temporarily suspend the change in the 

rules of the self-regulatory organization 

made thereby, 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 this title. If the Commission 

takes such action, the Commission shall 

institute proceedings under paragraph 

(2)(B) [of Section 19(b)] to determine 

whether the proposed rule should be 

approved or disapproved.’’ 

The Exchange believes that these 

amendments to Section 19 of the Act 

reflect Congress’s intent to allow the 

Commission to rely upon the forces of 

competition to ensure that fees for 

market data are reasonable and 

equitably allocated. Although Section 

19(b) had formerly authorized 

immediate effectiveness for a ‘‘due, fee 

or other charge imposed by the selfregulatory organization,’’ the 

Commission adopted a policy and 

subsequently a rule stating that fees for 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
85708 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 

12See 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). 

13NetCoalition, at 15 (quoting H.R. Rep. No. 94– 

229, at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 

321, 323). 

14See supra note 3. 

15See supra note 10. 

16 15 U.S.C. 78s(b)(3)(A)(ii). 

17 17 CFR 240.19b–4(f)(2). 

data and other products available to 

persons that are not members of the selfregulatory organization must be 

approved by the Commission after first 

being published for comment. At the 

time, the Commission supported the 

adoption of the policy and the rule by 

pointing out that unlike members, 

whose representation in self-regulatory 

organization governance was mandated 

by the Act, non-members should be 

given the opportunity to comment on 

fees before being required to pay them, 

and that the Commission should 

specifically approve all such fees. The 

Exchange believes that the amendment 

to Section 19 reflects Congress’s 

conclusion that the evolution of selfregulatory organization governance and 

competitive market structure have 

rendered the Commission’s prior policy 

on non-member fees obsolete. 

Specifically, many exchanges have 

evolved from member-owned, not-forprofit corporations into for-profit, 

investor-owned corporations (or 

subsidiaries of investor-owned 

corporations). Accordingly, exchanges 

no longer have narrow incentives to 

manage their affairs for the exclusive 

benefit of their members, but rather 

have incentives to maximize the appeal 

of their products to all customers, 

whether members or non-members, so 

as to broaden distribution and grow 

revenues. Moreover, the Exchange 

believes that the change also reflects an 

endorsement of the Commission’s 

determinations that reliance on 

competitive markets is an appropriate 

means to ensure equitable and 

reasonable prices. Simply put, the 

change reflects a presumption that all 

fee changes should be permitted to take 

effect immediately, since the level of all 

fees are constrained by competitive 

forces. 

Selling proprietary market data, such 

as Historical Data, is a means by which 

exchanges compete to attract business. 

To the extent that exchanges are 

successful in such competition, they 

earn trading revenues and also enhance 

the value of their data products by 

increasing the amount of data they 

provide. The need to compete for 

business places substantial pressure 

upon exchanges to keep their fees for 

both executions and data reasonable.12

The Exchange therefore believes that the 

fees for Historical Data are properly 

assessed on Members and Non-Member 

users. 

The decision of the United States 

Court of Appeals for the District of 

Columbia Circuit in NetCoalition v. 

SEC, No. 09–1042 (D.C. Cir. 2010), 

although reviewing a Commission 

decision made prior to the effective date 

of the Dodd-Frank Act, upheld the 

Commission’s reliance upon 

competitive markets to set reasonable 

and equitably allocated fees for 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.’ ’’ 13

The court’s conclusions about 

Congressional intent are therefore 

reinforced by the Dodd-Frank Act 

amendments, which create a 

presumption that exchange fees, 

including market data fees, may take 

effect immediately, without prior 

Commission approval, and that the 

Commission should take action to 

suspend a fee change and institute a 

proceeding to determine whether the fee 

change should be approved or 

disapproved only where the 

Commission has concerns that the 

change may not be consistent with the 

Act. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

The Exchange believes that the 

proposed Historical Market Data fee 

does not place certain market 

participants at a relative disadvantage to 

other market participants because the 

pricing of the proposed fee will allow 

the Exchange to recover a portion (less 

than all) of the costs incurred by the 

Exchange associated with providing and 

maintaining the necessary hardware and 

other infrastructure as well as network 

monitoring and support services in 

order to provide Historical Data, and 

will not impose a barrier to entry to 

smaller participants. The Exchange 

believes the proposed fee does not favor 

certain categories of market participants 

in a manner that would impose a 

burden on competition; rather, the 

allocation of the proposed fee reflects 

the Exchange’s costs in providing the 

device, storing the historical data, and 

utilizing resources to upload the data 

onto the device. Specifically, the device 

provided by the Exchange costs 

approximately $200 to $300 and the 

proposed fee represents this cost plus 

the Exchange’s average cost per FTE to 

procure the Historical Data and send it 

to the recipient, regardless of the 

category of market participant. 

The Exchange believes the proposed 

fee does not place an undue burden on 

competition on other SROs that is not 

necessary or appropriate. MIAX 

Emerald launched trading operations on 

March 1, 2019 and has a market share 

of approximately 3–4%, with 

significantly less members than other 

SROs. The Exchange’s affiliate options 

exchanges, MIAX and MIAX PEARL, 

charge the same price that the Exchange 

proposes to charge for their historical 

data.14 Additionally, other exchanges 

have similar historical data products, 

but with much higher rates.15 The 

Exchange is also unaware of any 

assertion that the proposed fee would 

somehow unduly impair its competition 

with other exchanges. To the contrary, 

if the fees charged are deemed too high 

by market participants, they can simply 

not request historical data from the 

Exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

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)(ii) of the Act,16 and Rule 

19b–4(f)(2) 17 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 shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Notices 85709 

18 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes on December 1, 2020 (SR–CboeEDGX– 

2020–057). On December 9, 2020, the Exchange 

withdrew that filing and submitted this proposal. 

4See Cboe Global Markets U.S. Options Market 

Month-to-Date Volume Summary (November 23, 

2020), available at https://markets.cboe.com/us/ 

options/market_statistics/. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

EMERALD–2020–20 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–EMERALD–2020–20. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–EMERALD–2020–20, and 

should be submitted on or before 

January 19, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28680 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90742; File No. SR– 

CboeEDGX–2020–062] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Relating To 

Amend Its Fees Schedule 

December 21, 2020. 

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 December 

10, 2020, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) is filing with 

the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change to amend its Fee 

Schedule. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

options/regulation/rule_filings/edgx/), 

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 amend its 

fee schedule for its equity options 

platform (‘‘EDGX Options’’) by 

removing certain fee codes related to 

routed orders, by updating certain fee 

codes in connection with routing orders 

in SPY options to Nasdaq PHLX LLC 

(‘‘PHLX’’), and removing certain fee 

codes in light of the recent delisting of 

XSP options on the Exchange.3

The Exchange first notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. More 

specifically, the Exchange is only one of 

16 options venues to which market 

participants may direct their order flow. 

Based on publicly available information, 

no single options exchange has more 

than 16% of the market share and 

currently the Exchange represents 

approximately 4% of the market share.4

Thus, in such a low-concentrated and 

highly competitive market, no single 

options exchange, including the 

Exchange, possesses significant pricing 

power in the execution of option order 

flow. The Exchange believes that the 

ever-shifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue to 

reduce use of certain categories of 

products, in response to fee changes. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees, and market participants can readily 

trade on competing venues if they deem 

pricing levels at those other venues to 

be more favorable. 

The Exchange assesses fees in 

connection with orders routed away to 

various exchanges. Currently, under the 

Fee Codes and Associated Fees section 

of the Fee Schedule, fee codes D1, D2, 

D3 and D4 are appended to Members’ 


KHAMMOND on DSKJM1Z7X2PROD with NOTICES