Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 6719 

8 In Amendment No. 1, the Exchange provided 

additional support for the proposal. The full text of 

Amendment No. 1 is available on the Commission’s 

website at: https://www.sec.gov/comments/sr-cboe2020-034/srcboe2020034.htm. 

9 15 U.S.C. 78s(b)(2). 

10See supra note 3. 

11 15 U.S.C. 78s(b)(2). 

12 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 90608 

(December 8, 2020), 85 FR 80854. 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

6 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

Exchange submitted Amendment No. 1 

to the proposed rule change.8

Section 19(b)(2) of the Act 9 provides 

that, after initiating proceedings, the 

Commission shall issue an order 

approving or disapproving the proposed 

rule change not later than 180 days after 

the date of publication of notice of filing 

of the proposed rule change. The 

Commission may extend the period for 

issuing an order approving or 

disapproving the proposed rule change, 

however, by not more than 60 days if 

the Commission determines that a 

longer period is appropriate and 

publishes the reasons for such 

determination. The proposed rule 

change was published for comment in 

the Federal Register on July 20, 2020.10

The 180th day after publication of the 

Notice is January 16, 2021. The 

Commission is extending the time 

period for approving or disapproving 

the proposal for an additional 60 days. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to issue an order 

approving or disapproving the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change, as 

modified by Amendment No. 1. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,11

designates March 17, 2021, as the date 

by which the Commission shall either 

approve or disapprove or the proposed 

rule change (File Number SR–CBOE– 

2020–034), as modified by Amendment 

No. 1. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01281 Filed 1–21–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90927; SR–NYSEArca– 

2020–105] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Designation of a 

Longer Period for Commission Action 

on a Proposed Rule Change To List 

and Trade the Shares of the Teucrium 

Water Fund Under NYSE Arca Rule 

8.200–E, Commentary .02 

January 14, 2021. 

On November 25, 2020, NYSE Arca, 

Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade the shares of the 

Teucrium Water Fund under NYSE Arca 

Rule 8.200–E, Commentary .02. The 

proposed rule change was published for 

comment in the Federal Register on 

December 14, 2020.3 The Commission 

has received no comment letters on the 

proposed rule change. 

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission will either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is January 28, 

2021. The Commission is extending this 

45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,5

designates March 14, 2021 as the date 

by which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–NYSEArca–2020–105). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01283 Filed 1–21–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90923; File No. SR– 

CboeEDGX–2021–002] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend the 

Fees Applicable to the EDGX Top Feed 

January 14, 2021. 

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 January 4, 

2021, 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. (‘‘EDGX’’ 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) a proposed rule 

change to amend the fees applicable to 

the EDGX Top Feed. 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 


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6720 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 

3See EDGX Rule 13.8(c). 

4See e.g., EDGX Schedule of Fees, EDGX Top, 

Small Retail Broker Distribution Program; EDGX 

Schedule of Fees, Financial Product Distribution 

Program. The Small Retail Broker Distribution 

Program is a pricing program offered by the 

Exchange that allows small retail brokers that 

purchase top-of-book market data from the 

Exchange to benefit from discounted fees for access 

to such market data. The Financial Product 

Distribution Program lowers the cost of distributing 

Derived Data based upon the Exchange’s top-ofbook offerings, including Derived Data that is often 

used by retail investors. 

5See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37495, 37499 (June 29, 2005) 

(S7–10–04) (Final Rule) (‘‘Regulation NMS 

Adopting Release’’). 

6See Securities Exchange Act Release No. 51808, 

84 FR 5202, 5253 (February 20, 2019) (File No. S7– 

05–18) (Transaction Fee Pilot for NMS Stocks Final 

Rule) (‘‘Transaction Fee Pilot’’). 

7See FINRA ATS Transparency Data, available at 

https://otctransparency.finra.org/otctransparency/ 

AtsData. A list of alternative trading systems 

registered with the Commission is available at 

https://www.sec.gov/foia/docs/atslist.htm. 

8See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

9See Rule 602 of Regulation NMS. 

10By contrast, Rule 603(c) of Regulation NMS (the 

‘‘Vendor Display Rule’’) effectively requires that SIP 

data or some other consolidated display be utilized 

in any context in which a trading or order-routing 

decision can be implemented. 

11Competing top of book products include, 

Nasdaq Basic, BX Basic, PSX Basic, NYSE BQT, 

NYSE BBO/Trades, NYSE BQT, NYSE Arca BBO/ 

Trades, NYSE American BBO/Trades, NYSE 

Chicago BBO/Trades, IEX TOPS, MIAX PEARL 

Equities Top of Market Feed, and MEMX MEMOIR 

Top. 

12See EDGX Schedule of Fees, EDGX Top, 

Internal Distribution. 13The Exchange’s fee schedule defines an 

Internal Distributor of an Exchange Market Data 

product as 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 EDGX Schedule of Fees, Market Data 

Fees, Definitions. 14See Securities Exchange Act Release No. 74282 

(February 17, 2015), 80 FR 9487 (February 23, 2015) 

(SR–EDGX–2015–09). 

15See Securities Exchange Act Release No. 87200 

(October 2, 2019), 84 FR 53788 (October 8, 2019) 

(SR–CboeEDGX–2019–012) (Approval Order). 

16The Exchange is also about to extend its early 

trading hours to begin at 4:00 a.m. ET, which would 

similarly provide additional value to EDGX Top 

subscribers who would receive additional 

information about quotes and trades on EDGX 

during the Early Trading Session. See Securities 

Exchange Act Release No. 90509 (November 24, 

2020), 85 FR 77310 (December 1, 2020) (SR– 

CboeEDGX–2020–056). 

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 purpose of the proposed rule 

change is to amend the fees applicable 

to the EDGX Top Feed, which is an 

uncompressed data feed that offers both 

top-of-book quotations and execution 

information based on equity orders 

entered into the System.3 Specifically, 

the Exchange proposes to: (1) Increase 

the fee for internal distribution of the 

EDGX Top Feed; and (2) introduce 

Professional User fees for internal 

Professional Users of the EDGX Top 

Feed. The current fees for external 

distribution of the EDGX Top Feed will 

continue to apply, without change, 

including various incentive programs 

that the Exchange has adopted to 

facilitate the provision of lower-cost 

market data to retail and other 

investors.4

Market Background 

The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. In 

Regulation NMS, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues, and also recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 5 As 

the Commission itself recognized, the 

market for trading services in NMS 

stocks has become ‘‘more fragmented 

and competitive.’’ 6

Equity trading is currently dispersed 

across sixteen exchanges, including 

three new U.S. equities exchanges that 

launched trading in 2020, 32 alternative 

trading systems,7 and numerous brokerdealer internalizers and wholesalers, all 

competing fiercely for order flow. Based 

on publicly-available information, no 

single U.S. equities exchange has more 

than 20% market share.8 In turn, the 

market for top-of-book data is highly 

competitive as national securities 

exchanges compete both with each other 

and with the securities information 

processors (‘‘SIPs’’) to provide efficient, 

reliable, and low-cost data to a wide 

range of investors and market 

participants. In fact, Regulation NMS 

requires all U.S. equities exchanges to 

provide their best bids and offers, and 

executed transactions, to the two 

registered SIPs for dissemination to the 

public.9 Top-of-book data is therefore 

widely available to investors today at a 

relatively modest cost. National 

securities exchanges may also 

disseminate their own top-of-book data, 

but no rule or regulation of the 

Commission requires market 

participants to purchase top-of-book 

data from an exchange.10 The EDGX Top 

Feed therefore competes with the SIP 

and with similar products offered by 

other national securities exchanges that 

offer their own competing market data 

products. In fact, there are twelve 

competing products offered by other 

national securities exchanges today,11

not counting products offered by the 

Exchange’s affiliates, and each of the 

Exchange’s affiliated U.S. equities 

exchanges also offers similar top-ofbook data. 

Fees for Internal Distribution of the 

EDGX Top Feed 

Currently, the Exchange charges a 

modest fee of $500 per month for 

internal distribution of EDGX Top Feed 

data,12 i.e., distribution within the 

distributor’s own firm,13 and does not 

charge any additional fees for internal 

distribution based on the number of 

Professional or Non-Professional Users 

that receive access to this information. 

These internal distribution fees have 

been in place, without change, since 

early 2015 when the Exchange first 

began offering the EDGX Top Feed.14 In 

the time since, the Exchange has made 

a number of significant enhancements to 

its platform, including notably the 

introduction of priority for retail limit 

orders,15 that have resulted in improved 

trading opportunities for investors and, 

consequently, more valuable market 

data.16

As discussed, the Exchange now 

proposes to increase certain fees 

applicable to firms that consume this 

data as internal distributors, i.e., firms 

that use EDGX Top Feed data for 

internal purposes as opposed to firms 

that distribute such data externally to its 

customers. As proposed, the Exchange 

would increase the monthly charge for 

internal distribution of EDGX Top Feed 

data to $750 per month, which would 

continue to be significantly cheaper 

than similar products offered by the 

Exchange’s main competitors, including 

both other national securities exchanges 

that offer top-of-book data products to 

their customers as well as the SIPs that 

provide similar ‘‘core data’’ to vendors 

and subscribers pursuant to Regulation 

NMS. In addition, the Exchange would 

introduce Professional User fees for 

internal Professional Users of the EDGX 

Top Feed. Those Professional User fees 

will be the same as the modest fee 

currently charged for external 


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Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 6721 

17 15 U.S.C. 78f. 

18 15 U.S.C. 78f(b)(4). 

19 15 U.S.C. 78k–1. 

20See 17 CFR 242.603. 

21NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. 

Cir. 2010) (‘‘NetCoalition I’’) (quoting H.R. Rep. No. 

94–229 at 92 (1975), as reprinted in 1975 

U.S.C.C.A.N. 323). 

22 Id. at 535. 

23The Exchange notes that broker-dealers are not 

required to purchase proprietary market data to 

comply with their best execution obligations. See In 

the Matter of the Application of Securities Industry 

and Financial Markets Association for Review of 

Actions Taken by Self-Regulatory Organizations, 

Release Nos. 34–72182; AP–3–15350; AP–3–15351 

(May 16, 2014). Similarly, there is no requirement 

in Regulation NMS or any other rule that 

proprietary data be utilized for order routing 

decisions, and some broker-dealers and ATSs have 

chosen not to do so. 

24See CTA Quarterly Population Metrics (Q3 

2020), available at https://www.ctaplan.com/ 

publicdocs/ctaplan/CTAPLAN_Population_

Metrics_3Q2020.pdf; UTP Quarterly Population 

Metrics (Q3 2020), available at https://

www.utpplan.com/DOC/UTP_2020_Q3_Stats_with_

Processor_Stats.pdf. 

distribution of the EDGX Top Feed, i.e., 

$4 per month for each Professional User. 

There would continue to be no charge 

associated with internal distribution to 

Non-Professional Users. Further, as 

discussed, the current fees for external 

distribution of the EDGX Top Feed 

would continue to apply, without 

change, including various incentive 

programs that the Exchange has adopted 

to facilitate the provision of lower-cost 

market data to retail and other investors. 

As a result, the Exchange believes that 

the proposed fee changes would allow 

it to be appropriately compensated for 

the value of its market data, particularly 

from professional financial services 

firms that use that data for internal 

purposes, while simultaneously 

ensuring that its data would continue to 

be available to a wide range of market 

participants at a cost that facilitates 

widespread availability of such data. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,17

in general, and furthers the objectives of 

Section 6(b)(4),18 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other recipients of Exchange data. In 

addition, the Exchange believes that the 

proposed rule change is consistent with 

Section 11(A) of the Act as it supports 

(i) fair competition among brokers and 

dealers, among exchange markets, and 

between exchange markets and markets 

other than exchange markets, and (ii) 

the availability to brokers, dealers, and 

investors of information with respect to 

quotations for and transactions in 

securities.19 Finally, the proposed rule 

change is also consistent with Rule 603 

of Regulation NMS,20 which provides 

that any national securities exchange 

that distributes information with respect 

to quotations for or transactions in an 

NMS stock do so on terms that are not 

unreasonably discriminatory. 

The Exchange operates in a highly 

competitive environment. Indeed, with 

the launch of three new national 

securities exchanges that trade U.S. 

equity securities last September, there 

are now sixteen registered U.S equities 

exchanges, and with the exception of 

Long-Term Stock Exchange, Inc. 

(‘‘LTSE’’), which has determined to not 

offer any proprietary market data feeds, 

each of these exchanges offer associated 

market data products to their customers, 

either with or without a fee. The 

national securities exchanges also 

compete with the SIPs for market data 

customers, as much of the information 

offered to market participants and 

investors through the EDGX Top Feed is 

similarly made available to market 

participants and investors through the 

SIPs, consolidated with data from each 

of the other fifteen exchanges. It is in 

this robust and competitive market in 

which the Exchange is proposing to 

modestly increase its fees. 

The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. 

Further, with respect to market data, the 

decision of the United States Court of 

Appeals for the District of Columbia 

Circuit in NetCoalition v. SEC upheld 

the Commission’s reliance on the 

existence of competitive market 

mechanisms to evaluate the 

reasonableness and fairness of fees for 

proprietary market data: ‘‘In fact, the 

legislative history indicates that the 

Congress intended that the market 

system ‘evolve through the interplay of 

competitive forces as unnecessary 

regulatory restrictions are removed’ and 

that the SEC wield its regulatory power 

‘in those situations where competition 

may not be sufficient,’ such as in the 

creation of a ‘consolidated transactional 

reporting system.’ ’’ 21 The court agreed 

with the Commission’s conclusion that 

‘‘Congress intended that ‘competitive 

forces should dictate the services and 

practices that constitute the U.S. 

national market system for trading 

equity securities.’ ’’ 22 As discussed in 

this filing, significant competitive forces 

constrain the ability of the Exchange to 

charge supra-competitive fees. 

i. The EDGX Top Feed Is an Optional 

Market Data Product, and the Exchange 

is Constrained in Its Pricing by 

Significant Competitive Forces 

Subscribing to the EDGX Top Feed is 

entirely optional. The Exchange is not 

required to make the EDGX Top Feed 

available to any customers, nor is any 

customer required to purchase the 

EDGX Top Feed. Unlike certain other 

data products that firms may be 

required to purchase in order to fulfill 

regulatory obligations,23 e.g., the 

consolidated quotation and last-sale 

information feeds offered by the SIPs, a 

customer’s decision as to whether to 

purchase the EDGX Top Feed is entirely 

discretionary, and is based on that firms 

individual business needs. Generally, 

firms that choose to subscribe to the 

EDGX Top Feed do so because they 

believe that it is a cost-effective 

alternative to core data offered by the 

SIPs that provides valuable information 

about the market for securities traded on 

the Exchange, particularly in cases 

where a consolidated display is not 

required pursuant to the Vendor Display 

Rule. Such firms are able to determine 

for themselves whether the EDGX Top 

Feed helps them to achieve their 

business goals, and if so, whether or not 

it is attractively priced compared to 

other similar products. 

Indeed, if the EDGX Top Feed does 

not provide sufficient value to firms 

based on the uses those firms may have 

for it, such firms may simply choose to 

conduct their business operations in 

ways that do not use the EDGX Top 

Feed. In fact, comparing the number of 

internal distributors that currently 

subscribe to the EDGX Top Feed, based 

on data compiled by the Exchange as of 

November 2020, to the total number of 

internal distributors that subscribe to 

core data offered by the CTA and UTP 

SIPs, as published on plan websites for 

Q3 2020,24 less than 1.9% of internal 

distributors that purchase U.S. equities 

data choose to subscribe to the EDGX 

Top Feed. The EDGX Top Feed 

therefore represents an insignificant 

proportion of the relevant market for 

such market data, and significantly 

more internal distributors choose not to 

purchase this product than those that 

do. Given the insignificant percentage of 

internal distributors that consume the 

EDGX Top Feed, it is clear that such 

firms can and do exercise their right to 

choose to purchase, or not purchase, 

this particular market data product. 

Although the Exchange is not 

required to make any data, including 

top-of-book data, available through its 

proprietary market data platform, the 

Exchange believes that making such 


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6722 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 

25Although the Exchange does not have access to 

the customer lists for other competing products, it 

understands based on conversations with 

subscribers to the EDGX Top Feed that they 

typically view exchange top-of-book products as 

substitutes and do not generally look to purchase 

such data from more than one national securities 

exchange. 

26See supra note 4. The Exchange also notes that 

while this proposed fee change involves an increase 

in fees, it is simultaneously filing another proposed 

fee change to expand its Financial Products 

Distribution Program and further reduce certain 

fees. See SR–CboeEDGX–2021–003 (pending 

publication). 

27See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

28See NYSE PDP Market Data Pricing, Section 

1.3, NYSE BBO. 

data available increases investor choice, 

and contributes to a fair and competitive 

market. Specifically, making such data 

publicly available through proprietary 

data feeds allows investors to choose 

alternative, potentially less costly, 

market data based on their business 

needs. While some market participants 

that desire a consolidated display often 

choose the SIP to satisfy their top-ofbook data needs, and in some cases are 

effectively required to do so under the 

Vendor Display Rule, others may prefer 

to purchase data directly from one or 

more national securities exchanges. For 

example, a buy-side investor or fintech 

firm may choose to purchase the EDGX 

Top Feed, or a similar product from 

another exchange, in order to perform 

investment analysis, or to provide 

general information about the market for 

U.S. equity securities, respectively. In 

either case the choice to purchase the 

EDGX Top Feed would be based on the 

firm’s determination of the value of the 

data offered by their chosen product 

compared to the cost of acquiring this 

data instead of receiving similar data 

from other sources. The EDGX Top Feed 

serves as a valuable reference for 

investors that do not require a 

consolidated display that contains 

quotations for all sixteen U.S. equities 

exchanges. Making alternative products 

available to market participants 

ultimately ensures competition in the 

marketplace, and constrains the ability 

of exchanges to charge supracompetitive fees. 

Further, in the event that a market 

data customer views one exchange’s 

top-of-book data product and/or fees as 

more or less attractive than a 

competitor’s offerings they can and 

often do switch between competing 

products. As discussed, much of the 

top-of-book quotation information and 

last-sale information offered within the 

EDGX Top Feed is also available on the 

SIP feeds, and for firms that do not 

require a consolidated display, as is 

typically the case for the subscribers to 

the EDGX Top Feed, similar top-of-book 

information is available from a number 

of competing U.S. equities exchanges.25

This include a number of large 

established exchanges that charge for 

access to such top-of-book data, as well 

as certain smaller or new exchange 

entrants that provide similar data 

without charge, in many cases as a way 

of attracting customers to their exchange 

while they seek to grow market share. In 

this way, the EDGX Top Feed, SIP data 

products, and other top-of-book 

products offered by a number of U.S. 

equities exchanges, are all substitutes. 

The availability of these substitute 

products constrains the Exchange’s 

ability to charge supra-competitive 

prices as market participants can easily 

obtain similar data from one of the 

Exchange’s many competitors. In fact, 

the impact of competition on the market 

in which the EDGX Top Feed is offered 

to market participants and investors is 

showcased by the Exchange’s other 

recent fee changes related to this 

product, which involved the reduction 

of fees to facilitate the Exchange’s 

ability to compete for customers.26

Distributors can discontinue use of the 

EDGX Top Feed at any time and for any 

reason, including due to an assessment 

of the reasonableness of fees charged. 

In setting the proposed fees for the 

EDGX Top Feed, the Exchange 

considered the competitiveness of the 

market for proprietary data and all of 

the implications of that competition. 

The Exchange believes that it has 

considered all relevant factors and has 

not considered irrelevant factors in 

order to establish reasonable fees. 

Indeed, the Exchange has no market 

power and is not in a position to charge 

unreasonable fees for its top-of-book 

data as there are a number of competing 

products in the market, including 

products that are currently offered free 

of charge by certain other exchanges 

that have determined not to charge for 

their market data. The existence of 

alternatives to the EDGX Top Feed 

ensures that the Exchange cannot set 

unreasonable fees when vendors and 

subscribers can freely elect these 

alternatives or choose not to purchase a 

specific proprietary data product if the 

attendant fees are not justified by the 

returns that any particular vendor or 

data recipient would achieve through 

the purchase. 

ii. The Proposed Fees Are Reasonable 

Given the Value of the Data Provided to 

Customers, and When Compared to 

Competing Market Data Products 

The proposed fees are also reasonable 

as they represent a modest increase for 

top-of-book data that has proven 

valuable for investors, particularly as 

the Exchange grows market share due to 

its innovative market model that has 

been successful in attracting retail limit 

orders, increasing the Exchange’s 

market share to over 7% consolidated 

U.S. equities volume.27 Specifically, the 

EDGX Top Feed offers competitivelypriced alternative to top-of-book data 

disseminated by SIPs, i.e., core data, for 

firms that do not need or desire a 

consolidated display covering all 

sixteen U.S. equities exchanges, or 

similar data disseminated by other 

national securities exchanges. It is 

purchased by a wide variety of market 

participants and vendors, including data 

platforms, websites, fintech firms, buyside investors, retail brokers, regional 

banks, and securities firms inside and 

outside of the U.S. that desire low cost, 

high quality, real-time U.S. equity 

market data. By providing lower cost 

access to U.S. equity market data, the 

EDGX Top Feed benefits a wide range 

of investors that participate in the 

national market system. As discussed, 

the decision to purchase a particular 

market data product from a particular 

exchange is largely based on two factors: 

(1) The quality of the data, and (2) the 

price charged for access to that data. 

The Exchange believes that the EDGX 

Top Feed is competitive on both of 

these factors. 

First, the EDGX Top Feed would 

remain competitively priced compared 

to similar products offered by other 

comparable U.S. equities exchanges and 

core data offered by the SIPs. Although 

the EDGX Top Feed is not offered free 

of charge like certain other competitor 

offerings, particularly those offered by 

newer U.S. equities exchanges that are 

seeking to grow market share, it is made 

available at a price that is significantly 

lower than the prices charged by the 

Exchange’s main competitors—i.e., 

those with comparable market shares 

and data quality. Notably, even with the 

proposed fee increase, the EDGX Top 

Feed would remain significantly 

cheaper than similar products offered by 

New York Stock Exchange LLC 

(‘‘NYSE’’), NYSE Arca, Inc. (‘‘Arca’’), 

and The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’) both in terms of the fees 

charged for internal distribution and the 

fees charge for each Professional User 

that is provided access to the feed. For 

example, NYSE charges a total of $3,000 

per month for internal distribution of 

their equivalent products, i.e., $1,500 

per month for applicable top-of-book 

quotation information,28 and an 


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Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 6723 

29See NYSE PDP Market Data Pricing, Section 

1.4, NYSE Trades. 

30See supra note 3 and accompanying text. The 

Exchange also offers a separate market data product, 

i.e., EDGX Last Sale, that exclusively provides last 

sale information. See EDGX Rule 13.8(d). However, 

all of the information contained in the EDGX Last 

Sale Feed is also made available in the EDGX Top 

Feed at no additional charge. 

31See NYSE PDP Market Data Pricing, Section 

3.3, NYSE Arca BBO; NYSE PDP Market Data 

Pricing, Section 3.4, NYSE Arca Trades. 

32See Nasdaq Equity Rules, Equity 7, Pricing 

Schedule, Section 147(c)(1). In addition, Nasdaq 

also charges distributors a $100 monthly 

administrative fee. See Nasdaq Equity Rules, Equity 

7, Pricing Schedule, Section 135. 

33Nasdaq’s Professional User fee is divided into 

Nasdaq issues ($13), NYSE issues ($6.50), and other 

issues ($6.50) for a total of $26 per month for each 

Professional User. See Nasdaq Equity Rules, Equity 

7, Pricing Schedule, Section 147(b)(1). 

34NYSE and Arca’s fees are both broken down 

into $4 per month for BBO information and an 

additional $4 per month for Trades information. See 

supra notes 28, 29, and 31. 

35See CTA Schedule of Market Data Charges, 

available at https://www.ctaplan.com/pricing; UTP 

Fee Schedule, available at https://utpplan.com/ 

DOC/Datapolicies.pdf. 

36See https://markets.cboe.com/us/equities/ 

market_share/. 

37See e.g., Investors Exchange Fee Schedule, 

Market Data fees. 

38See e.g., Cboe EDGA Exchange, Inc., Fee 

Schedule, EDGA Top. 

39See Regulation NMS Adopting Release, supra 

note 5, at 37503. 

additional $1,500 per month for 

transaction information,29 both of which 

are included in the EDGX Top Feed for 

a single fee.30 Arca, which has a similar 

pricing model to NYSE, also charges a 

higher rate of $1,500 per month for 

internal distribution of its equivalent 

products, separated into a $750 per 

month charge for top-of-book quotation 

information and an additional $750 per 

month charge for transaction 

information.31 Finally, Nasdaq charges 

its internal distributors a fee of $1,500 

per month for Nasdaq Basic, which 

includes both top-of-book quotation 

information and transaction information 

for the same fee, similar to the 

Exchange’s pricing model, but again at 

a higher cost.32 In each case, the internal 

distribution charges associated with 

obtaining comparable U.S. equities 

market data from NYSE, Arca, and 

Nasdaq runs at least double and up to 

four times as much as the proposed fee 

to be charged by the Exchange, meaning 

that the Exchange would continue to be 

offering its data at a price that is 

attractive compared to the prices 

charged by its competitors. Similarly, 

each of these exchanges charges a fee for 

each Professional User that is higher 

than that proposed by the Exchange— 

i.e., $26 per month for Nasdaq,33 and $8 

per month total for both NYSE and 

Arca.34 Finally, the EDGX Top Feed also 

remains competitively priced compared 

to core data provided by the SIPs for 

firms, e.g., buy-side investors or fintech 

firms, that do not need or desire a 

consolidated display covering all 

sixteen U.S. equities exchanges.35

Second, the proposed fees are 

reasonable given the value of the data 

provided in the EDGX Top Feed and 

used by data recipients in their profitgenerating activities. The EDGX Top 

Feed provides top-of-book quotations 

and transactions executed on the 

Exchange, and provides a valuable 

window into the market for securities 

traded on a market that accounts for 

more than 7% of U.S. equity market 

volume today.36 As discussed, the 

Exchange offers the EDGX Top Feed in 

a competitive environment where firms 

may freely choose which market data 

products best suit their business needs. 

Invariably, firms that choose to 

purchase the EDGX Top Feed instead of 

receiving one of the many free products 

offered by other exchanges,37 including 

free products offered by an affiliate of 

the Exchange,38 have decided that the 

value of the EDGX Top Feed is greater 

than that offered by those other 

products. Indeed, by attracting liquidity 

providing orders, e.g., through retail 

priority, the Exchange is able to offer 

market data products that benefit from 

increased market quality. In turn, 

investors may choose to rely on those 

products instead of other competitor 

offerings based on the value they 

provide in relation to any additional 

cost associated with obtaining that 

market data from the Exchange. The 

Exchange therefore believes that its 

proposal is consistent with the 

principles enshrined in Regulation NMS 

to ‘‘promote the wide availability of 

market data and to allocate revenues to 

SROs that produce the most useful data 

for investors.’’ 39

iii. The Proposed Fees Are Equitable 

and Not Unfairly Discriminatory as 

Internal Distributors Will Be Subject to 

Uniform Pricing Based on Their Usage 

of the Data 

The Exchange believes the proposed 

fees for internal distribution of the 

EDGX Top Feed will continue to be 

allocated fairly and equitably among 

subscribers, and are not unfairly 

discriminatory, as the proposed fees 

will apply equally to all data recipients 

that choose to subscribe to the EDGX 

Top Feed and distribute that data to 

internal subscribers. As proposed, all 

internal distributors of the EDGX Top 

Feed will be subject to the same internal 

distribution fee, regardless of the type of 

business that they operate, or the use 

they plan to make of the data feed. 

Thus, all internal distributors would 

have access to the EDGX Top Feed on 

the same equitable and nondiscriminatory terms. Similarly, with 

the introduction of Professional User 

fees, internal distributors of the EDGX 

Top Feed will be subject to the same 

modest fees based solely on the number 

of Professional Users that each internal 

distributor has chosen to permission for 

access to this information. The 

Exchange does not believe that it is 

inequitable, or unfairly discriminatory, 

to charge a fee based on the number of 

Professional Users within a firm that 

have access to the EDGX Top Feed as 

this ensures that firms with the highest 

usage pay their equitable share for the 

data. 

The Exchange also believes that it is 

fair and equitable, and not unfairly 

discriminatory, to continue not to 

charge a fee for internal distribution to 

Non-Professional Users. The Exchange’s 

fee structure is generally designed to 

facilitate lower cost access to its market 

data by retail investors, either through 

substantially lower User fees for NonProfessional Users, or other incentive 

programs, such as the Small Retail 

Broker Distribution Program, which was 

recently implemented to lower the cost 

of the Exchange’s market data to small 

broker-dealers that serve retail investors. 

The Exchange does not anticipate any 

significant number of Non-Professional 

Users to receive EDGX Top Feed Data 

through internal, i.e., within the 

distributor’s firm, as opposed to external 

distribution, and in the event that 

certain firms may distribute data 

internally to Users that qualify as NonProfessional, providing such Users 

access without any User fees would 

facilitate the Exchange’s overall goals of 

facilitating access to its data by retail 

investors, which the Commission has 

continually found to be consistent with 

the Exchange Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would result 

in 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, and its ability 

to price these data products is 

constrained by: (i) Competition among 

exchanges that offer similar data 

products to their customers; and (ii) the 

existence of inexpensive real-time 

consolidated data disseminated by the 

SIPs. Top-of-book data is broadly 

disseminated by both the SIPs and the 

sixteen U.S. equities exchanges. There 

are therefore a number of alternative 


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6724 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 

40 15 U.S.C. 78s(b)(3)(A). 

41 17 CFR 240.19b–4(f). 

42 17 CFR 200.30–3(a)(12). 

1 12 U.S.C. 5465(e)(1). 

2 17 CFR 240.19b–4(n)(1)(i). 

3 15 U.S.C. 78a et seq. 

products available to market 

participants and investors, including 

products offered by certain competing 

U.S. equities exchanges without charge. 

In this competitive environment 

potential subscribers are free to choose 

which competing product to purchase to 

satisfy their need for market 

information. Often, the choice comes 

down to price, as market data customers 

look to purchase cheaper top-of-book 

data products, and quality, as market 

participants seek to purchase data that 

represents significant market liquidity. 

Intramarket Competition. The 

Exchange believes that the proposed 

fees do not put any market participants 

at a relative disadvantage compared to 

other market participants. As discussed, 

the proposed fees would apply to all 

internal distributors of the EDGX Top 

Feed on an equal and nondiscriminatory basis. The Exchange 

therefore believes that the proposed fees 

neither favor nor penalize one or more 

categories of market participants in a 

manner that would impose an undue 

burden on competition. To the extent 

that particular fees would apply to only 

a subset of subscribers, e.g., Professional 

versus Non-Professional Users, those 

distinctions are not unfairly 

discriminatory and do not unfairly 

burden one set of customers over 

another. 

Intermarket Competition. The 

Exchange believes that the proposed 

fees do not impose a burden on 

competition or on other SROs that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. In setting the 

proposed fees, the Exchange is 

constrained by the availability of 

numerous substitute products offered by 

other national securities exchanges as 

well as core data offered by the SIPs. 

Because market data customers can find 

suitable substitute feeds, an exchange 

that overprices its market data products 

stands a high risk that users may 

substitute another product. These 

competitive pressures ensure that no 

one exchange’s market data fees can 

impose an undue burden on 

competition, and the Exchange’s 

proposed fees do not do so here. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or 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) 

of the Act 40 and paragraph (f) of Rule 

19b–4 41 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. 

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– 

CboeEDGX–2021–002 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–2021–002. 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–CboeEDGX–2021–002 and 

should be submitted on or before 

February 12, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01280 Filed 1–21–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90931; File No. SR–FICC– 

2020–803] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

No Objection To Advance Notice To 

Include Same-Day Settling Trades in 

the Risk Management, Novation, 

Guarantee, and Settlement Services of 

the Government Securities Division’s 

Delivery-Versus-Payment Service, and 

Make Other Changes 

January 14, 2021. 

On November 19, 2020, Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) advance 

notice SR–FICC–2020–803 (‘‘Advance 

Notice’’) pursuant to Section 806(e)(1) of 

Title VIII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, 

entitled Payment, Clearing and 

Settlement Supervision Act of 2010 

(‘‘Clearing Supervision Act’’),1 and Rule 

19b–4(n)(1)(i) 2 under the Securities 

Exchange Act of 1934 (‘‘Exchange 

Act’’).3 In the Advance Notice, FICC 

proposes to (1) expand its provision of 

central counterparty services to include 

the start leg of certain repurchase 

agreement (‘‘repo’’) transactions, and (2) 

enable participating FICC members to 

pair-off and settle certain offsetting 

obligations, as described more fully 

below. The Advance Notice was 

published for public comment in the 

Federal Register on December 29, 


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