58336 Federal Register / Vol. 88, No. 164 / Friday, August 25, 2023 / Notices 

17 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 August 1, 2023 (SR–CBOE–2023–037). 

On August 2, 2023, the Exchange withdrew that 

filing and submitted SR–CBOE–2023–039. On 

August 11, 2023 the Exchange withdrew SR–CBOE– 

2023–039 and submitted this proposal. 

4See Cboe Global Markets U.S. Options Monthly 

Market Volume Summary (July 26, 2023), available 

at https://markets.cboe.com/us/options/market_

statistics/. 

5For this program, an ‘‘Originating Clearing 

Firm’’ is defined as either (a) the executing clearing 

Options Clearing Corporation (‘‘OCC’’) number on 

any transaction which does not also include a 

Clearing Member Trading Agreement (‘‘CMTA’’) 

OCC clearing number or (b) the CMTA in the case 

of any transaction which does include a CMTA 

OCC clearing number. 

6See Securities Exchange Act Release No. 96856 

(February 9, 2023), 88 FR 9938 (February 15, 2023) 

(SR–CBOE–2023–011). 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CboeBZX–2023–060 and should be 

submitted on or before September 15, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–18305 Filed 8–24–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98187; File No. SR–CBOE– 

2023–040] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Fees 

Schedule Relating to the Select 

Customer Options Reduction Program, 

Livevol Fees, and Routing Fee Codes 

August 21, 2023. 

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 August 

11, 2023, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) 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 Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

its Fees 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://www.cboe.com/ 

AboutCBOE/

CBOELegalRegulatoryHome.aspx), 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 

Fees Schedule.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.4 Thus, in 

such a low-concentrated and highly 

competitive market, no single options 

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. In response to 

competitive pricing, the Exchange, like 

other options exchanges, offers rebates 

and assesses fees for certain order types 

executed on or routed through the 

Exchange. 

Select Customer Options Reduction 

Program Changes 

The Exchange first proposes to amend 

the Select Customer Options Reduction 

program (‘‘SCORe’’). By way of 

background, SCORe is a discount 

program for Retail, Non-FLEX Customer 

(‘‘C’’ origin code) volume in the 

following options classes: SPX 

(including SPXW), VIX, RUT, MXEA, & 

MXEF (‘‘Qualifying Classes’’). The 

SCORe program is available to any 

Trading Permit Holder (‘‘TPH’’) 

Originating Clearing Firm or non-TPH 

Originating Clearing Firm that sign up 

for the program.5

Under the program, to determine the 

Discount Tier, an Originating Firm’s 

Retail volume in the Qualifying Classes 

will be divided by total Retail volume 

in the Qualifying Classes executed on 

the Exchange. The program then 

provides a discount per retail contract, 

based on the determined Discount Tier 

thereunder. The program sets forth four 

discount tiers, with applicable 

discounts ranging from $0.00 to $0.14 

per retail contract. Under the current 

program, and as set forth in Footnote 48 

to the Fees Schedule, ‘‘Retail’’ volume is 

defined as Customer order (‘‘C’’ capacity 

code) for which the original order size 

(in the case of a simple order) or largest 

leg size (in the case of a complex order) 

is 100 contracts or less. The Exchange 

proposes amending Footnote 48 to the 

Fees Schedule, to define ‘‘Retail’’ 

volume as Customer order (‘‘C’’ capacity 

code) for which the original order size 

(in the case of a simple order) or the 

largest leg size (in the case of a complex 

order) is 20 contracts or less. 

Additionally, the Exchange proposes 

to remove outdated language from 

Footnote 48 related to the SCORe 

program. Effective February 1, 2023, the 

Exchange amended the program by 

eliminating the Qualifying Tiers 

construct.6 As amended, SCORe utilizes 

only one measure for participation and 

discount (i.e., the Discount Tiers). As 

such, the Exchange proposes to remove 

the outdated language related to the 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 164 / Friday, August 25, 2023 / Notices 58337 

7For example, subscribers to the intraday product 

will receive the first calculation of intraday data by 

approximately 9:42 a.m. ET, which represents data 

captured from 9:30 a.m. to 9:40 a.m. Subscribers 

will receive the next update at 9:52 a.m., 

representing the data previously provided together 

with data captured from 9:40 a.m. through 9:50 

a.m., and so forth. Each update will represent the 

aggregate data captured from the current 

‘‘snapshot’’ and all previous ‘‘snapshots.’’ 

8These substitute products are: Nasdaq PHLX 

Options Trade Outline, Nasdaq Options Trade 

Outline, ISE Trade Profile, GEMX Trade Profile 

data; open-close data from C2, BZX, and EDGX; and 

Open Close Reports from MIAX Options, Pearl, and 

Emerald. 

9See e.g., Cboe EDGX U.S. Options Exchange Fee 

Schedule, Cboe LiveVol, LLC Market Data Fees. 

10See Nasdaq ISE, Options 7 Pricing Schedule, 

Section 10A., Nasdaq ISE Open/Close Trade Profile 

End of Day. 

11See e.g., Nasdaq ISE, Options 7 Pricing 

Schedule, Section 10A., Market Data. See also 

Securities Exchange Act Release No. 67955 (October 

1, 2012) 77 FR 61037 (October 5, 2012) (Notice of 

Filing and Immediate Effectiveness of Proposed 

Rule Change To Adopt Reduced Fees for Historical 

ISE Open/Close Trade Profile Intraday Market Data 

Offering) (SR–ISE–2012–76); Securities and 

Exchange Act Release 34–60654 (September 11, 

2009) 74 FR 47848 (September 17, 2009) (Notice of 

Filing of Proposed Rule Change Relating to 

Historical ISE Open/Close Trade Profile Fees) (SR– 

ISE–2009–64); Securities Exchange Act Release No. 

53770 (May 8, 2006) 71 FR 27762 (May 12, 2006) 

(Notice of Filing of Proposed Rule Change and 

Amendment No. 1 Thereto To Establish an Annual 

Administrative Fee for Market Data Distributors 

That Are Recipients of Nasdaq Proprietary Data 

Products) (SR–NASD–2006–030). 

determination of an Originating Firm’s 

Qualifying Tier. 

Livevol Fee Changes 

The Exchange proposes to amend 

certain fees related to its provision of 

Open-Close Data. By way of 

background, the Exchange currently 

offers End-of-Day (‘‘EOD’’) and Intraday 

Open-Close Data (collectively, ‘‘OpenClose Data’’). EOD Open-Close Data is 

an end-of-day volume summary of 

trading activity on the Exchange at the 

option level by origin (customer, 

professional customer, broker-dealer, 

and market maker), side of the market 

(buy or sell), price, and transaction type 

(opening or closing). The customer and 

professional customer volume is further 

broken down into trade size buckets 

(less than 100 contracts, 100–199 

contracts, greater than 199 contracts). 

The Open-Close Data is proprietary 

Cboe Options trade data and does not 

include trade data from any other 

exchange. It is also a historical data 

product and not a real-time data feed. 

The Exchange also offers Intraday 

Open-Close Data, which provides 

similar information to that of OpenClose Data but is produced and updated 

every 10 minutes during the trading 

day. Data is captured in ‘‘snapshots’’ 

taken every 10 minutes throughout the 

trading day and is available to 

subscribers within five minutes of the 

conclusion of each 10-minute period.7

The Intraday Open-Close Data provides 

a volume summary of trading activity on 

the Exchange at the option level by 

origin (customer, professional customer, 

broker-dealer, and market maker), side 

of the market (buy or sell), and 

transaction type (opening or closing). 

The customer and professional customer 

volume are further broken down into 

trade size buckets (less than 100 

contracts, 100–199 contracts, greater 

than 199 contracts). The Intraday OpenClose Data is also proprietary Cboe 

Options trade data and does not include 

trade data from any other exchange. 

Cboe LiveVol, LLC (‘‘LiveVol’’), a 

wholly owned subsidiary of the 

Exchange’s parent company, Cboe 

Global Markets, Inc., makes the OpenClose Data available for purchase to 

TPHs and non-TPHs on the LiveVol 

DataShop website (datashop.cboe.com). 

Customers may currently purchase 

Open-Close Data on a subscription basis 

(monthly or annually) or by ad hoc 

request for a specified month (e.g., 

request for Intraday Open-Close Data for 

month of August 2023). 

Open-Close Data is subject to direct 

competition from similar end-of-day 

and intraday options trading summaries 

offered by several other options 

exchanges.8 All of these exchanges offer 

essentially the same end-of-day and 

intraday options trading summary 

information. 

End-of-Day Open-Close Data 

Currently, End-of-Day Open-Close 

Data is available to purchase and 

download in three formats. Customers 

may (1) download data on a per Cboe 

Security basis, (2) download data for all 

Cboe Securities (equities, indexes and 

ETFs), and/or (3) download daily 

updates for all Cboe Securities (equities, 

indexes and ETFs). Cboe is proposing to 

eliminate the End-of-Day Open-Close 

Data offering to download data on a per 

Cboe Security basis. The End-of-Day 

Open-Close Data offerings will remain 

available on an all Cboe Securities basis. 

The Exchange notes that removing the 

offering to download data on a per Cboe 

Security basis and offering such data for 

all Cboe Securities only is consistent 

with the offering of Open-Close Data at 

the Exchange’s affiliates,9 as well as 

another exchange with a similar data 

product.10 The Exchange further notes 

that the purchase of Open-Close 

historical data is discretionary and not 

compulsory. 

The Exchange also proposes a 

technical amendment to its Livevol fees, 

correcting a spelling error of ‘‘Intrday’’ 

to ‘‘Intraday.’’ 

Options Institute Research Grant 

Program 2023 

Through its educational division, the 

Options Institute, the Exchange has 

established the Options Institute 

Research Grant Program 2023 (‘‘Grant 

Program’’). Under the Grant Program, 

selected grant recipients will conduct a 

research project in an eligible topic(s), 

including Derivatives Products and 

Performance, Market Performance, 

Operations and Risk Management, and 

Decision Theory. The Exchange seeks to 

provide historical data sets to selected 

grant recipients for use as part of the 

research project. As such, the Exchange 

proposes to amend its Fee Schedule to 

add Footnote 51, applicable to the 

Livevol Fees table of the Fee Schedule, 

stating that fees for Open-Close Data 

will be waived for grant recipients of the 

Grant Program. 

In order to qualify for the Grant 

Program, an applicant must be a faculty 

member or student of a qualifying, 

accredited educational institution that 

will use the data solely for their 

completion of the research project (i.e., 

academic use). The data must be used 

solely for the purposes of the research 

project, and any commercial or profitseeking usage is excluded. Researchers 

interested in qualifying for the Grant 

Program are required to submit an 

application, which describes the 

proposed research project. The Options 

Institute has the discretion to review 

such applications and select grant 

recipients. 

The Exchange believes that 

researchers at academic institutions 

provide a valuable service for the 

Exchange in studying and promoting the 

options market. Though academic 

institutions and researchers have a need 

for granular options data sets, they do 

not trade upon the data for which they 

subscribe. The Exchange believes the 

waiver of these Open-Close Data fees for 

any grant recipient under the Grant 

Program will encourage and promote 

research directed at increasing 

understanding and advancement of 

derivatives usage and financial 

exchange marketplace structures. 

The Exchange notes other exchanges 

offer academic discounts or credit for 

similar data feeds.11 The Exchange 

recognizes the high value of academic 

research and educational instruction 

and publications, and believes that the 

proposed waiver of historical OpenClose Data fees will encourage academic 

research of the options industry, which 

will serve to benefit all market 


ddrumheller on DSK120RN23PROD with NOTICES1
58338 Federal Register / Vol. 88, No. 164 / Friday, August 25, 2023 / Notices 

12See e.g., MIAX Options Exchange Fee 

Schedule, Section 1(c), ‘‘Fees for Customer Orders 

Routed to Another Options Exchange.’’ 

13See Securities Exchange Act Release No. 97800 

(June 26, 2023), 88 FR 42409 (June 30, 2023) (SR– 

MRX–2023–11). 

14 15 U.S.C. 78f(b). 

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

16 Id. 

17 15 U.S.C. 78f(b)(4). 

participants while also opening up a 

new potential user base among students. 

Routing Fee Codes Changes 

Finally, the Exchange proposes to 

modify fees associated with certain 

routing fee codes. The Fees Schedule 

currently lists fee codes and their 

corresponding transaction fee for routed 

Customer orders to other options 

exchanges specifically in Exchange 

Traded Funds (‘‘ETF’’) and equity 

options, and for non-Customer orders 

routed in Penny and Non-Penny options 

classes. 

The Exchange notes that its current 

approach to routing fees is to set forth 

in a simple manner certain subcategories of fees that approximate the 

cost of routing to other options 

exchanges based on the cost of 

transaction fees assessed by each venue 

as well as a flat $0.15 assessment that 

covers costs to the Exchange for routing 

(i.e., clearing fees, connectivity and 

other infrastructure costs, membership 

fees, etc.) (collectively, ‘‘Routing 

Costs’’). The Exchange then monitors 

the fees charged as compared to the 

costs of its routing services and adjusts 

its routing fees and/or sub-categories to 

ensure that the Exchange’s fees do 

indeed result in a rough approximation 

of overall Routing Costs, and are not 

significantly higher or lower in any area. 

The Exchange notes that other options 

exchanges currently assess routing fees 

in a similar manner as the Exchange’s 

current approach to assessing 

approximate routing fees.12

The Exchange assesses fees in 

connection with orders routed away to 

various exchanges. Currently, under the 

Routing Fees table of the Fee Schedule, 

fee codes RD, RF, RI, TD, TE, TF, TG, 

TH, and TI are appended to certain 

Customer orders in ETF and Equity 

options, as follows: 

• fee code RD is appended to 

Customer orders in ETF/Equity options 

routed to NYSE American (‘‘AMEX’’), 

BOX Options Exchange (‘‘BOX’’), 

Nasdaq BX Options (‘‘BX’’), Cboe EDGX 

Exchange, Inc. (‘‘EDGX’’), ISE Mercury, 

LLC (‘‘MERC’’), MIAX Options 

Exchange (‘‘MIAX’’) or Nasdaq PHLX 

LLC (‘‘PHLX’’) (excluding orders in SPY 

options), and assesses a charge of $0.25 

per contract; 

• fee code RF is appended to 

Customer orders in ETF/Equity, Penny 

options routed to NYSE Arca, Inc 

(‘‘ARCA’’), Cboe BZX Exchange, Inc. 

(‘‘BZX’’), Cboe C2 Exchange, Inc. (‘‘C2’’), 

Nasdaq ISE (‘‘ISE’’), ISE Gemini, LLC 

(‘‘GMNI’’), MIAX Emerald Exchange 

(‘‘EMLD’’), MIAX Pearl Exchange 

(‘‘PERL’’), Nasdaq Options Market LLC 

(‘‘NOM’’), or PHLX (for orders in SPY 

options only) and assesses a charge of 

$0.75 per contract; 

• fee code RI is appended to 

Customer orders in ETF/Equity, NonPenny options routed to ARCA, BZX, 

C2, ISE, GMNI, EMLD, PERL or NOMX, 

and assesses a charge of $1.25 per 

contract. 

• fee code TD is appended to 

Customer orders in ETF options 

originating on an Exchange-sponsored 

terminal for greater than or equal to 100 

contracts routed to AMEX, BOX, BX, 

EDGX, MERC, MIAX, or PHLX, and 

assesses a charge of $0.18 per contract; 

• fee code TE is appended to 

Customer orders in ETF/Equity options 

originating on an Exchange-sponsored 

terminal for less than 100 contracts 

routed to AMEX, BOX, BX, EDGX, 

MERC, MIAX, PHLX, and assesses no 

charge per contract; 

• fee code TF is appended to 

Customer orders in ETF, Penny options 

originating on an Exchange-sponsored 

terminal for greater than or equal to 100 

contracts routed to ARCA, BZX, C2, ISE, 

GMNI, EMLD, PERL, or NOM, and 

assesses a charge of $0.18 per contract; 

• fee code TG is appended to 

Customer orders in ETF, Non-Penny 

options originating on an Exchangesponsored terminal for greater than or 

equal to 100 contracts routed to ARCA, 

BZX, C2, ISE, GMNI, EMLD, PERL, or 

NOM, and assesses $0.18 per contract; 

• fee code TH is appended to 

Customer orders in ETF/Equity, Penny 

options originating on an Exchangesponsored terminal for less than 100 

contracts routed to ARCA, BZX, C2, ISE, 

GMNI, EMLD, PERL, or NOM, and 

assesses no charge per contract; and 

• fee code TI is appended to 

Customer orders in ETF/Equity, NonPenny options originating on an 

Exchange-sponsored terminal for less 

than 100 contracts routed to ARCA, 

BZX, C2, ISE, GMNI, EMLD, PERL, or 

NOM, and assesses no charge per 

contract. 

The Exchange proposes to amend fee 

codes RD, TD, and TE to exclude 

applicable Customer orders routed to 

ISE Mercury, LLC (MERC) and to amend 

fee codes RF, RI, TF, TG, TH, and TI to 

add applicable Customer orders routed 

to MERC. The Exchange further 

proposes to amend fee codes RF, RI, TF, 

TG, TH, and TI to add applicable 

Customer orders routed to MEMX LLC 

(‘‘MEMX’’), in anticipation of the launch 

of the new options exchange. The 

charges assessed per contract for each 

fee code remain the same under the 

proposed rule change. 

The proposed changes result in an 

assessment of fees that, following fee 

changes by an away options exchanges 

and in anticipation of the launch of 

another options exchange, is more in 

line with the Exchange’s current 

approach to routing fees, that is, in a 

manner that approximates the cost of 

routing Customer orders to other away 

options exchanges, based on the general 

cost of transaction fees assessed by the 

sub-category of away options exchanges 

for such orders (as well as the 

Exchange’s Routing Costs).13 The 

Exchange notes that routing through the 

Exchange is optional and that TPHs will 

continue to be able to choose where to 

route their Customer orders in ETF and 

equity options. 

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.14 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the section 

6(b)(5) 15 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) 16 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,17 which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Trading Permit Holders and other 

persons using its facilities. 

First, the Exchange believes the 

proposal to amend the SCORe program 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 164 / Friday, August 25, 2023 / Notices 58339 

18See supra note 8. 

19See supra note 4 

20See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

21See supra note 9. 

22See supra note 10. 23See supra note 11. 

to define ‘‘Retail’’ volume as Customer 

order (‘‘C’’ capacity code) for which the 

original order size (in the case of a 

simple order) or the largest leg size (in 

the case of a complex order) is 20 

contracts or less (changing from 100) is 

reasonable as Members are still eligible 

to receive discounts under the program, 

albeit at a smaller scale. Moreover, the 

Exchange is not required to maintain 

this program nor provide such discounts 

as are provided under the program. 

Further, the Exchange believes the 

program remains equitable and 

reasonable, as the proposed change to 

the number of contracts in the ‘‘Retail’’ 

definition does not substantively change 

the program, but rather adjusts a 

considered metric of the program. The 

Exchange believes the proposed change 

is also equitable and not unfairly 

discriminatory because it applies 

uniformly to any TPH Originating 

Clearing Firm or non-TPH Originating 

Firm who participates in the program. 

The Exchange believes SCORe, 

currently and as amended, continues to 

provide an incremental incentive for 

Originating Firms to strive for the 

highest tier level, which provides 

increasingly higher discounts. As such, 

the changes are designed to encourage 

increased Retail volume in the 

Qualifying Classes, which provides 

increased volume and greater trading 

opportunities for all market 

participants. Finally, the Exchange 

believes eliminating outdated language 

from Footnote 48 related to the SCORe 

program is reasonable as the Exchange 

no longer utilizes Qualifying Tiers 

under the program. The proposed 

deletions reduce potential confusion 

and maintain clarity in the Fees 

Schedule. 

The Exchange also believes the 

proposed changes to amend its End-ofDay Open-Close Data offering to remove 

the offering to download data on a per 

Cboe Security basis and to offer such 

data on an all Cboe Securities basis only 

are reasonable. In adopting Regulation 

NMS, the Commission granted selfregulatory organizations (‘‘SROs’’) and 

broker-dealers increased authority and 

flexibility to offer new and unique 

market data to the public. It was 

believed that this authority would 

expand the amount of data available to 

consumers, and also spur innovation 

and competition for the provision of 

market data. The Exchange believes the 

proposed change will continue to 

broaden the availability of U.S. option 

market data to investors consistent with 

the principles of Regulation NMS. 

Open-Close Data is designed to help 

investors understand underlying market 

trends to improve the quality of 

investment decisions. Indeed, 

subscribers to the data will still be able 

to enhance their ability to analyze 

option trade and volume data and create 

and test trading models and analytical 

strategies. The Exchange believes OpenClose Data continues to provide a 

valuable tool that subscribers can use to 

gain comprehensive insight into the 

trading activity in a particular series, 

but also emphasizes such data is not 

necessary for trading and as noted 

above, is entirely optional. Moreover, 

several other exchanges offer a similar 

data product which offer the same type 

of data content through end-of-day or 

intraday reports.18

The Exchange also operates in a 

highly competitive environment. 

Indeed, there are currently 16 registered 

options exchanges that trade options. 

Based on publicly available information, 

no single options exchange has more 

than 16% of the market share.19 The 

Commission has repeatedly expressed 

its preference for competition over 

regulatory intervention in determining 

prices, products, and services in the 

securities markets. Particularly, in 

Regulation NMS, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 20

Making similar data products available 

to market participants fosters 

competition in the marketplace, and 

constrains the ability of exchanges to 

charge supracompetitive fees. In the 

event that a market participant views 

one exchange’s data product as more or 

less attractive than the competition they 

can and do switch between similar 

products. The Exchange notes the 

proposed change merely aligns the 

Exchange’s offering of End-of-Day OpenClose Data with the data products of the 

Exchange’s affiliates,21 as well as 

another exchange with a similar data 

product, in that such offerings do not 

include the ability to purchase the Endof-Day Open-Close Data on a per 

securities basis.22 The Exchange 

believes that the proposed changes to 

the Exchange’s End-of-Day Open-Close 

Data offering are equitable and not 

unfairly discriminatory because the 

change to the offering applies to all 

current and potential subscribers of the 

product uniformly, in that no subscriber 

will be able to purchase the End-of-Day 

Open-Close Data on a per Cboe 

Securities basis. Further, End-of-Day the 

Open-Close Data will continue to be 

available for purchase to all subscribers 

on an all Cboe Securities basis. 

The Exchange also believes that the 

waiver of Open-Close data fees for 

recipients of the Grant Program is 

reasonable because such data is utilized 

for a strict, limited purpose under the 

terms of the Grant Program and selected 

grant recipients are not able to monetize 

access to the data as they do not trade 

on the data set. The Exchange believes 

the waiver of fees for grant recipients 

will promote research and studies of the 

options industry to the benefit of all 

market participants. The Exchange 

believes that the proposed waiver is 

equitable and not unfairly 

discriminatory because it will apply 

equally to all selected grant recipients 

and in exchange, the Exchange will be 

granted certain usage rights with respect 

to the recipients’ final research papers. 

Further, as noted above, other 

exchanges offer academic discounts or 

credit for similar data feeds.23

The Exchange also believes the 

proposed rule change to amend fee 

codes RD, RF, RI, TD, TE, TF, TG, TH, 

and TI to account for MERC’s current 

assessment of fees for Customer orders 

and MEMX’s expected assessment of 

fees for Customer orders is reasonable 

because it is reasonably designed to 

assess routing fees in line with the 

Exchange’s current approach to routing 

fees. That is, the proposed rule change 

is intended to include Customer orders 

in ETF and equity options routed to 

MERC and MEMX in the most 

appropriate sub-category of fees that 

approximates the cost of routing to a 

group of away options exchanges based 

on the cost of transaction fees assessed 

by each venue as well as Routing Costs 

to the Exchange. As noted above, the 

Exchange 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. The Exchange notes that 

routing through the Exchange is 

optional and that TPHs will continue to 

be able to choose where to route their 

Customer orders in ETF and equity 

options in the same sub-category group 

of away exchanges as they currently 

may choose to route. The proposed rule 


ddrumheller on DSK120RN23PROD with NOTICES1
58340 Federal Register / Vol. 88, No. 164 / Friday, August 25, 2023 / Notices 

24See supra note 12. 

25See supra note 9. 

26See supra note 10. 

27See supra note 12. 

28See supra note 4. 

29See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 

30NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 

31See supra note 11. 

change reflects a competitive pricing 

structure designed to incentivize market 

participants to direct their order flow to 

the Exchange, which the Exchange 

believes would enhance market quality 

to the benefit of all Members. The 

Exchange further notes that other 

options exchanges currently 

approximate routing fees in a similar 

manner as the Exchange’s current 

approach.24 The Exchange believes that 

the proposed rule change is equitable 

and not unfairly discriminatory because 

all Members’ applicable Customer 

orders in ETF and equity options routed 

to MERC and MEMX will be 

automatically and uniformly assessed 

the applicable routing charges. 

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 does not believe that the 

proposed changes to the SCORe 

program will impose any burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because the 

proposed changes apply to all registered 

Originating Firms uniformly, in that the 

updated definition of ‘‘Retail’’ volume 

will, for purposes of calculating 

discounts under the program, be applied 

to all Originating Firms. 

Further, the Exchange does not 

believe that the proposed changes to its 

offering of End-of-Day Open-Close Data 

will impose any burden on intramarket 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. As noted above, the 

proposed amendments align the 

Exchange’s offering of End-of-Day OpenClose Data with the data products of the 

Exchange’s affiliates,25 as well as 

another exchange with a similar data 

product.26 The changes to the offering 

apply to all current and potential 

subscribers of the product uniformly, in 

that no subscriber will be able to 

purchase the End-of-Day Open-Close 

Data on a per Cboe Securities basis. 

Further, End-of-Day the Open-Close 

Data will continue to be available for 

purchase to all subscribers on an all 

Cboe Securities basis. 

Additionally, the Exchange does not 

believe that the proposed waiver of 

Open-Close data fees for recipients of 

the Grant Program will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

All qualifying researchers are eligible to 

apply to the Grant Program, and the 

waiver of Open-Close data fees for 

recipients of the Grant Program will 

apply equally to all selected grant 

recipients. In exchange, the Exchange 

will be granted certain usage rights with 

respect to the recipients’ final research 

papers. Further, while the waiver 

applies only to grant recipients, 

academic institutions’ research and 

publications as a result of access to 

historical market data benefits all 

market participants. 

Finally, the Exchange does not believe 

the proposed rule change to amend fee 

codes RD, RF, RI, TD, TE, TF, TG, TH, 

and TI will impose any burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. All Members’ 

Customer orders routing to MERC and 

currently yielding fee code RD, TD, or 

TE will yield fee code RF, RI, RF, TG, 

TH, or TI (depending on the order) and 

will automatically and uniformly be 

assessed the current fees already in 

place for such routed orders, as 

applicable. Likewise, all Members’ 

Customer orders routed to MEMX will 

automatically yield fee code RF, RI, RF, 

TG, TH, or TI (depending on the order) 

and uniformly be assessed the 

corresponding fee. The Exchange notes 

that other options exchange 

approximate routing costs in a similar 

manner as the Exchange’s current 

approach.27

The Exchange also does not believe 

that the proposed rule changes will 

impose any burden on intermarket 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. As previously 

discussed, the Exchange operates in a 

highly competitive market. Members 

have numerous alternative venues that 

they may participate on and direct their 

order flow, including 15 other options 

exchanges and off-exchange venues. 

Additionally, the Exchange represents a 

small percentage of the overall market. 

Based on publicly available information, 

no single options exchange has more 

than 16% of the market share.28

Therefore, no exchange possesses 

significant pricing power in the 

execution of option order flow. Indeed, 

participants can readily choose to send 

their orders to other exchange and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. Moreover, the Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, 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.’’ 29 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the D.C. Circuit 

stated as follows: ‘‘[n]o one disputes 

that competition for order flow is 

‘fierce.’ . . . As the SEC explained, ‘[i]n 

the U.S. national market system, buyers 

and sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’.30 Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

Additionally, the Exchange also does 

not believe that the proposed rule 

change to waive Open-Close data fees 

for recipients of the Grant Program will 

impose any burden on intermarket 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act as other options 

exchanges offer academic discounts or 

credit for similar data feeds.31 Offering 

a discount for qualifying academic 

institutions that purchase the 

Exchange’s historical Open-Close Data 

may make that data more attractive to 

such academic institutions and further 

increase competition with exchanges 

that offer similar historical data 

products. 

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. 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 164 / Friday, August 25, 2023 / Notices 58341 

32 15 U.S.C. 78s(b)(3)(A). 

33 17 CFR 240.19b–4(f). 

34 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 97833 

(July 3, 2023), 88 FR 43637. 

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. 

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 32 and paragraph (f) of Rule 

19b–4 33 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CBOE–2023–040 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–CBOE–2023–040. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CBOE–2023–040 and should be 

submitted on or before September 15, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–18308 Filed 8–24–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98172; File No. SR– 

NASDAQ–2023–017] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Designation of a Longer Period for 

Commission Action on a Proposed 

Rule Change To Modify the Package of 

Complimentary Services Provided to 

Certain Eligible Switches and Make 

Other Changes to IM–5900–7 and IM– 

5900–7A 

August 21, 2023. 

On June 21, 2023, The Nasdaq Stock 

Market LLC (‘‘Exchange’’) 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 

modify the package of complimentary 

services provided to certain Eligible 

Switches, to update the values of 

complimentary services provided under 

Listing Rules IM–5900–7 and IM–5900– 

7A, and to remove certain obsolete 

provisions. The proposed rule change 

was published for comment in the 

Federal Register on July 10, 2023.3

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 shall 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 August 24, 

2023. The Commission is extending this 

45-day time period. 

The Commission finds that it is 

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 October 

8, 2023, 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– 

NASDAQ–2023–017). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–18298 Filed 8–24–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98176; File No. SR– 

EMERALD–2023–19] 

Self-Regulatory Organizations; MIAX 

Emerald, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fee 

Schedule To Modify Certain 

Connectivity and Port Fees 

August 21, 2023. 

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 August 8, 

2023, MIAX Emerald, LLC (‘‘MIAX 

Emerald’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a 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 


ddrumheller on DSK120RN23PROD with NOTICES1