81504 Federal Register / Vol. 88, No. 224 / Wednesday, November 22, 2023 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Per User Access Fee is a lower access fee 

that currently applies for subscribers of NYSE BBO 

and NYSE Trades that receive a data feed and use 

those market data products in a display-only 

format. See Fee Schedule. See also Securities 

Exchange Act Release Nos. 87803 (December 19, 

2019), 84 FR 71505 (December 27, 2019) (SR– 

NYSE–2019–70) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change, as Modified 

by Partial Amendment No. 1, To Amend the Fees 

for NYSE BBO and NYSE Trades) (‘‘BQT Fee 

Reduction Filing’’); and 90407 (November 12, 

2020), 85 FR 73570 (November 18, 2020) (SR– 

NYSE–2020–91) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change Amending 

the Fees for NYSE BBO and NYSE Trades by 

Modifying the Application of the Access Fee and 

Amending the Fees for NYSE Trades by Adopting 

a Waiver Applicable to the Redistribution Fee) 

(‘‘Second BQT Fee Reduction Filing’’). 

5A Redistributor is a vendor or any other person 

that provides a NYSE data product to a data 

recipient or to any system that a data recipient uses, 

irrespective of the means of transmission or access. 

6See SR–NYSEAMER–2023–57 and SR– 

NYSEArca–2023–78. 

7See 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’’). 

8See Securities Exchange Act Release No. 61358, 

75 3594, 3597 (January 21, 2010) (File No. S7–02– 

10) (Concept Release on Equity Market Structure). 

9See Cboe U.S. Equities Market Volume 

Summary, available at http://markets.cboe.com/us/ 

equities/market_share/. 

10See FINRA ATS Transparency Data, available 

at https://otctransparency.finra.org/o

tctransparency/AtsIssueData. A list of alternative 

trading systems registered with the Commission is 

available at https://www.sec.gov/foia/docs/

atslist.htm. 

11See Cboe U.S. Equities Market Volume 

Summary, available at http://markets.cboe.com/us/ 

equities/market_share/. 

12As described on the Nasdaq website, available 

here: http://www.nasdaqtrader.com/Trader.

aspx?id=nasdaqbasic, Nasdaq Basic is a ‘‘low cost 

alternative’’ that provides ‘‘Best Bid and Offer and 

Last Sale information for all U.S. exchange-listed 

securities based on liquidity within the Nasdaq 

market center, as well as trades reported to the 

FINRA Trade Reporting Facility (‘‘TRF’’).’’ 

13As described on the Cboe website, available 

here: https://markets.cboe.com/us/equities/market_

data_services/cboe_one/, the Cboe One Feed is a 

‘‘market data product that provides cost-effective, 

high-quality reference quotes and trade data for 

market participants looking for comprehensive, 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98976; File No. SR–NYSE– 

2023–42] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Expand the 

Application of the per User Access Fee 

for Use of Certain Market Data 

Products by Redistributors 

November 16, 2023. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on November 

1, 2023, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

fees for NYSE BBO and NYSE Trades by 

expanding the application of the Per 

User Access Fee. The Exchange 

proposes to implement the proposed fee 

change on November 1, 2023. The 

proposed rule change is available on the 

Exchange’s website at www.nyse.com, at 

the principal office of the Exchange, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to expand the 

application of the Per User Access Fee 4

for certain NYSE market data products, 

as set forth on the NYSE Proprietary 

Market Data Fee Schedule (‘‘Fee 

Schedule’’). Specifically, the Exchange 

proposes to expand the application of 

the Per User Access Fee, which is 

currently available for Redistributors 5

of NYSE BBO and NYSE Trades that 

subscribe to only such data feeds and do 

not subscribe to any other market data 

product listed on the Fee Schedule 

other than NYSE BQT and use such 

market data product for external 

distribution only. The Exchange 

proposes to make the Per User Access 

Fee available to Redistributors of NYSE 

OpenBook as well. 

The proposed fee change, taken 

together with similar fee changes filed 

by the Exchange’s affiliated exchanges, 

NYSE American LLC (‘‘NYSE 

American’’) and NYSE Arca, Inc. 

(‘‘NYSE Arca’’),6 will reduce the fees 

associated with the NYSE BQT 

proprietary data product for 

Redistributors of NYSE OpenBook. As 

described below, NYSE BQT competes 

directly with similar products offered by 

both the Nasdaq and Cboe families of 

U.S. equity exchanges. Collectively, the 

proposed fee changes are intended to 

respond to the competition posed by 

similar products offered by the other 

exchange groups. 

The Exchange proposes to implement 

the proposed fee change on November 1, 

2023. 

Background 

The Securities and Exchange 

Commission (‘‘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.’’ 7

While Regulation NMS has enhanced 

competition, it has also fostered a 

‘‘fragmented’’ market structure where 

trading in a single stock can occur 

across multiple trading centers. When 

multiple trading centers compete for 

order flow in the same stock, the 

Commission has recognized that ‘‘such 

competition can lead to the 

fragmentation of order flow in that 

stock.’’ 8 Indeed, equity trading is 

currently dispersed across 16 

exchanges,9 numerous alternative 

trading systems,10 and broker-dealer 

internalizers and wholesalers, all 

competing for order flow. Based on 

publicly-available information, no 

single exchange currently has more than 

17% market share (whether including or 

excluding auction volume).11

With the NYSE BQT market data 

product, NYSE and its affiliates compete 

head to head with the Nasdaq Basic 12

and Cboe One Feed 13 market data 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 88, No. 224 / Wednesday, November 22, 2023 / Notices 81505 

real-time market data’’ and provides a ‘‘unified 

view of the market from all four Cboe equity 

exchanges: BZX Exchange, BYX Exchange, EDGX 

Exchange, and EDGA Exchange.’’ 

14See Securities Exchange Act Release Nos. 

72750 (August 4, 2014), 79 FR 46494 (August 8, 

2014) (notice—NYSE BQT); and 73553 (November 

6, 2014), 79 FR 67491 (November 13, 2014) 

(approval order—NYSE BQT) (SR–NYSE–2014–40) 

(‘‘NYSE BQT Filing’’). 

15 In 2019, NYSE BQT was amended to include 

NYSE Chicago BBO and NYSE Chicago Trades. See 

Securities Exchange Act Release No. 87511 

(November 12, 2019), 84 FR 63689 (November 18, 

2019) (SR–NYSE–2019–60). 

16 In 2018, NYSE BQT was amended to include 

NYSE National BBO and NYSE National Trades. 

See Securities Exchange Act Release No. 83359 

(June 1, 2018), 83 FR 26507 (June 7, 2018) (SR– 

NYSE–2018–22). 

17See NYSE BQT Filing, supra note 14. 

18See BQT Fee Reduction Filing, supra, note 4. 

19See Second BQT Fee Reduction Filing, supra, 

note 4. 

20The Per User Access Fee is 93% lower than the 

General Access Fee. Together with the 

corresponding proposed rule changes by NYSE 

American and NYSE Arca to similarly reduce the 

access fees to their BBO and Trades products for 

Redistributors, such Redistributors would be 

eligible for significantly lower access fees for NYSE 

BQT, from $6,250 per month to $850 per month 

($250 + $200 + $200 +$200), a reduction of more 

than 86%. 

products. Similar to those market data 

products, NYSE BQT, which was 

established in 2014,14 consists of certain 

elements from the NYSE BBO and NYSE 

Trades market data products as well as 

from market data products from the 

Exchange’s affiliates, NYSE American, 

NYSE Arca, NYSE Chicago, Inc. (‘‘NYSE 

Chicago’’),15 and NYSE National, Inc. 

(‘‘NYSE National’’).16 Similar to both 

Nasdaq Basic and the Cboe One Feed, 

NYSE BQT provides investors with a 

unified view of comprehensive last sale 

and BBO data in all Tape A, B, and C 

securities that trade on the Exchange, 

NYSE American, NYSE Arca, NYSE 

Chicago, and NYSE National. Also 

similar to Nasdaq Basic and the Cboe 

One Feed, NYSE BQT is not intended to 

be used for purposes of making orderrouting or trading decisions, but rather 

provides indicative prices for Tape A, B, 

and C securities.17

Together with NYSE American and 

NYSE Arca, the Exchange proposes to 

compete for subscribers to NYSE BQT 

by designing the proposed fee change to 

be attractive to Redistributors of NYSE 

OpenBook that intend to subscribe to 

and externally redistribute NYSE BQT. 

Currently, Redistributors of NYSE 

OpenBook that want to subscribe to and 

redistribute NYSE BQT must pay the 

General Access Fee. Redistributors of 

NYSE OpenBook who have data 

recipient customers interested in NYSE 

BQT may not be inclined to subscribe to 

NYSE BQT. When Redistributors do not 

subscribe to NYSE BQT, the prospective 

data recipients that are the customers of 

such Redistributors ae unable to 

subscribe to NYSE BQT. The proposed 

fee change is designed to provide a 

financial incentive for such 

Redistributors to subscribe to NYSE 

BQT so that their customers, which 

have expressed an interest in 

subscribing to NYSE BQT, would be 

able to access the product via such 

Redistributors. 

Currently, subscribers of each of the 

NYSE BBO and NYSE Trades products 

that receive a data feed pay a General 

Access Fee of $1,500 per month. In 

February 2020, the Exchange added the 

Per User Access Fee, which is a reduced 

fee of $100 per month available at that 

time only for subscribers of NYSE BBO 

and NYSE Trades that use those 

products in a display-only format, 

including for internal use for 

Professional Users and external 

distribution to both Professional and 

Non-Professional Users.18

In November 2020, the Exchange 

expanded the application of the reduced 

Per User Access Fee to Redistributors of 

NYSE BBO and NYSE Trades data feeds 

that do not subscribe to any other 

market data product listed on the Fee 

Schedule other than NYSE BQT and use 

such market data products for external 

distribution only.19

As noted above, the Exchange now 

proposes to further expand the 

applicability of the reduced Per User 

Access Fee. Specifically, the Exchange 

proposes that Redistributors of NYSE 

BBO and NYSE Trades that do not 

subscribe to any other market data 

product listed on the Fee Schedule 

other than NYSE BQT and/or NYSE 

OpenBook, and use such market data 

products for external distribution only, 

would be eligible for the reduced Per 

User Access Fee. A Redistributor that 

receives such data feeds and uses the 

market data products for any other 

purpose (such as internal use) would 

continue to pay the $1,500 per month 

General Access Fee. And, as currently 

set forth in footnote 8 to the Fee 

Schedule, a subscriber would be 

charged only one access fee for each of 

the NYSE BBO and NYSE Trades 

products, depending on the use of that 

product. 

To effect this change, the Exchange 

proposes to modify footnote 8 to the Fee 

Schedule as follows (proposed text 

italicized, proposed deletions 

bracketed): 

The Per User Access Fee is charged to: (i) 

a subscriber that receives a data feed and 

uses the market data product only for 

Professional Users and Non-Professional 

Users in a display-only format, including for 

internal use and external redistribution in a 

display-only format, and (ii) a Redistributor 

that subscribes [only] to the NYSE BBO and 

NYSE Trades data feeds, and does not 

subscribe to any other Products listed on this 

Fee Schedule other than NYSE BQT and/or 

the NYSE OpenBook data feed, and uses 

these market data products for external 

distribution only. A subscriber that receives 

a data feed and uses the market data product 

for any other purpose, including if combined 

with Per User use, will be charged the 

General Access Fee. A subscriber will be 

charged only one access fee for each of the 

NYSE BBO and NYSE Trades products, 

depending on the use of that product. 

The proposed rule change would 

result in lower fees for Redistributors 

that receive NYSE BBO, NYSE Trades, 

and NYSE OpenBook data feeds, and 

use such market data products for 

external distribution only.20 The 

Exchange believes that the proposed 

expansion of the reduced Per User 

Access Fee would provide an incentive 

for Redistributors that currently 

subscribe to NYSE OpenBook to also 

subscribe to the NYSE BQT data feeds 

so that such product would be available 

to their customers, which have 

expressed an interest in subscribing to 

NYSE BQT. 

The proposed rule change is intended 

to encourage greater use of NYSE BQT 

by making it more affordable for 

Redistributors that subscribe to NYSE 

OpenBook and also have customers 

interested in subscribing to NYSE BQT. 

The proposed fee change would allow 

the Exchange to compete more 

effectively with Nasdaq Basic and Cboe 

One Feed by expanding the number of 

Redistributors that would subscribe to 

NYSE BQT, and therefore make the 

product more widely available to data 

subscribers interested in NYSE BQT. 

Applicability of Proposed Rule Change 

As noted above, the proposed rule 

change is designed to reduce the overall 

cost for Redistributors of NYSE BQT 

that also redistribute NYSE OpenBook 

by expanding the applicability of the 

Per User Access Fee. Today, the 

Exchange has thirty-one data feed 

subscribers, two of whom became 

Redistributors as a direct result of the 

Second BQT Fee Reduction Filing and 

currently pay the reduced Per User 

Access Fee. The Exchange believes that 

the proposed rule change would provide 

a further incentive for Redistributors 

that already subscribe to NYSE 

OpenBook to subscribe to NYSE BQT 

for purposes of providing external 

distribution of NYSE BQT to potential 

data recipients interested in the 

product. 


khammond on DSKJM1Z7X2PROD with NOTICES
81506 Federal Register / Vol. 88, No. 224 / Wednesday, November 22, 2023 / Notices 

21 15 U.S.C. 78f(b). 

22 15 U.S.C. 78f(b)(4), (5). 

23See Regulation NMS Adopting Release, 70 FR 

37495, at 37499. 

24NetCoalition 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). 

25 Id. at 535. 

26See Securities Exchange Act Release No. 34– 

90217 (October 16, 2020), 85 FR 67392 (October 22, 

2020) (SR–NYSENAT–2020–05) (‘‘National IF 

Approval Order’’) (internal quotation marks 

omitted), quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74781 

(December 9, 2008) (‘‘2008 ArcaBook Approval 

Order’’). 

27Ohio v. American Express, 138 S. Ct. 2274, 

2280–81 (2018). 

28 Id. at 2281. 

29NetCoalition I, 615 F.3d at 544 (internal 

quotation omitted). 

30 Id. 

31See Securities Exchange Act Release No. 61358, 

75 3594, 3597 (January 21, 2010) (File No. S7–02– 

10) (Concept Release on Equity Market Structure). 

Because the proposed rule change is 

targeted to potential Redistributors of 

NYSE BQT that also subscribe to NYSE 

OpenBook, the proposed change to the 

availability of the NYSE BBO and NYSE 

Trades Per User Access Fees, together 

with the proposed changes on NYSE 

American and NYSE Arca, are narrowly 

tailored with that purpose in mind. 

Accordingly, this proposed fee change is 

not designed for Redistributors that are 

existing customers of NYSE market data 

products (other than NYSE OpenBook) 

or that engage in internal use of NYSE 

BQT. This proposed rule change would 

not result in any changes to the market 

data fees for NYSE BBO and NYSE 

Trades for such data subscribers. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,21

in general, and Sections 6(b)(4) and 

6(b)(5) of the Act,22 in particular, in that 

it provides an equitable allocation of 

reasonable fees among users and 

recipients of the data and is not 

designed to permit unfair 

discrimination among customers, 

issuers, and brokers. 

The Proposed Rule Change Is 

Reasonable 

In adopting Regulation NMS, the 

Commission granted SROs and brokerdealers increased authority and 

flexibility to offer new and unique 

market data to the public. 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.’’ 23

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.’’ 24

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.’ ’’ 25

More recently, the Commission 

confirmed that it applies a ‘‘marketbased’’ test in its assessment of market 

data fees, and that under that test: 

the Commission considers whether the 

exchange was subject to significant 

competitive forces in setting the terms of its 

proposal for [market data], including the 

level of any fees. If an exchange meets this 

burden, the Commission will find that its fee 

rule is consistent with the Act unless there 

is a substantial countervailing basis to find 

that the terms of the rule violate the Act or 

the rules thereunder.26

1. The Proposed Fees Are Constrained 

by Significant Competitive Forces 

An exchange may demonstrate that its 

fees are constrained by competitive 

forces by showing that platform 

competition applies. 

As the United States Supreme Court 

recognized in Ohio v. American 

Express, platforms are firms that act as 

intermediaries between two or more sets 

of agents, and typically the choices 

made on one side of the platform affect 

the results on the other side of the 

platform via externalities, or ‘‘indirect 

network effects.’’ 27 Externalities are 

linkages between the different ‘‘sides’’ 

of a platform such that one cannot 

understand pricing and competition for 

goods or services on one side of the 

platform in isolation; one must also 

account for the influence of the other 

side. As the Supreme Court explained: 

To ensure sufficient participation, twosided platforms must be sensitive to the 

prices that they charge each side. . . . 

Raising the price on side A risks losing 

participation on that side, which decreases 

the value of the platform to side B. If the 

participants on side B leave due to this loss 

in value, then the platform has even less 

value to side A—risking a feedback loop of 

declining demand. . . . Two-sided platforms 

therefore must take these indirect network 

effects into account before making a change 

in price on either side.28

The Exchange and its affiliated 

exchanges have long maintained that 

they function as platforms between 

consumers of market data and 

consumers of trading services. Proving 

the existence of linkages between the 

two sides of this platform requires an indepth economic analysis of both public 

data and confidential Exchange data 

about particular customers’ trading 

activities and market data purchases. 

Exchanges, however, are prohibited 

from sharing details about these specific 

customer activities and purchases. For 

example, pursuant to Exchange Rule 

7.41E, transactions executed on the 

Exchange are processed anonymously. 

Exchanges function as platforms for 

market data and transaction services 

mean that exchanges do not set fees for 

market data products without 

considering, and being constrained by, 

the effect the fees will have on the 

order-flow side of the platform. And as 

the D.C. Circuit recognized in 

NetCoalition I, ‘‘[n]o one disputes that 

competition for order flow is fierce.’’ 29

The court further noted that ‘‘no 

exchange possesses a monopoly, 

regulatory or otherwise, in the execution 

of order flow from broker dealers,’’ and 

that an exchange ‘‘must compete 

vigorously for order flow to maintain its 

share of trading volume.’’ 30

As noted above, while Regulation 

NMS has enhanced competition, it has 

also fostered a ‘‘fragmented’’ market 

structure where trading in a single stock 

can occur across multiple trading 

centers. When multiple trading centers 

compete for order flow in the same 

stock, the Commission has recognized 

that ‘‘such competition can lead to the 

fragmentation of order flow in that 

stock.’’ 31 The Commission’s Division of 

Trading and Markets has also 

recognized that with so many 

‘‘operating equities exchanges and 

dozens of ATSs, there is vigorous price 

competition among the U.S. equity 

markets and, as a result, [transaction] 

fees are tailored and frequently 

modified to attract particular types of 

order flow, some of which is highly 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 88, No. 224 / Wednesday, November 22, 2023 / Notices 81507 

32Commission Division of Trading and Markets, 

Memorandum to EMSAC, dated October 20, 2015, 

available here: https://www.sec.gov/spotlight/ 

emsac/memo-maker-taker-fees-on-equitiesexchanges.pdf. 

33See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

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

34See FINRA ATS Transparency Data, available 

at https://otctransparency.finra.org/

otctransparency/AtsIssueData. A list of alternative 

trading systems registered with the Commission is 

available at https://www.sec.gov/foia/docs/ 

atslist.htm. 

35See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://markets.

cboe.com/us/equities/market_share/. 

36See LTSE Market Announcement: MA–2020– 

020, dated August 14, 2020, announcing LTSE 

production securities phase-in planned for August 

28, available here: https://assets-global.websitefiles.com/6462417e8db99f8baa06952c/

6462417e8db99f8baa0698e7_MA-2020-020__

Production_Securities_Launching_August_28_-_

Google_Docs.pdf and LTSE Market Announcement: 

MA–2020–025, available here: https://assets-global.

website-files.com/6462417e8db99f8baa06952c/

6462417e8db99f8baa069873_MA-2020-025.pdf. 

37As of October 29, 2020, MEMX is trading all 

NMS symbols. See https://info.memxtrading.com/ 

trader-alert-20-10-memx-trading-symbols-update/. 

38See MIAX Pearl Press release, dated September 

29, 2020, available here: https://www.miaxoptions.

com/sites/default/files/alert-files/MIAX_Press_

Release_09292020.pdf. 

39MEMX Home Page (‘‘Founded by members and 

investors, MEMX aims to drive simplicity, 

efficiency, and competition in equity markets.’’), 

available at https://memx.com/. 

40MEMX home page, available at https://

memx.com/. 

41See ‘‘MEMX turns up the heat on US stock 

exchanges,’’ Financial Times, January 9, 2019, 

available at https://www.ft.com/content/4908c8b0- 

1418-11e9-a581-4ff78404524e; see also ‘‘US 

equities exchanges: If you can’t beat them, join 

them,’’ Euromoney, February 13, 2019, available at 

https://www.euromoney.com/article/

b1d3tfby4p3y4v/us-equities-exchanges-if-you-cantbeat-them-join-them. 

42United States v. SunGard Data Sys., 172 F. 

Supp. 2d 172, 186 (D.D.C. 2001) (recognizing that 

‘‘[a]s a matter of law, courts have generally 

recognized that when a customer can replace the 

services of an external product with an internallycreated system, this captive output (i.e. the selfproduction of all or part of the relevant product) 

should be included in the same market.’’). In 

SunGard, the court rejected the Antitrust Division’s 

attempt to block SunGuard’s acquisition of the 

disaster recovery assets of Comdisco on the basis 

that the acquisition would ‘‘substantially lessen 

competition in the market for shared hotsite 

disaster recovery services,’’ when the evidence 

showed that ‘‘internal hotsites’’ created by 

customers competed with the ‘‘external shared 

hotsite business’’ engaged in by the merging parties. 

Id. at 173–74, 187. 

43United States v. Baker Hughes, 908 F.2d 981, 

987 (1990) (‘‘In the absence of significant barriers 

[to entry], a company probably cannot maintain 

supracompetitive pricing for any length of time.’’); 

see also David S. Evans and Richard Schmalensee, 

Markets with Two-Sided Platforms, in 1 Issues In 

Competition Law and Policy 667, 685 (ABA Section 

of Antitrust Law 2008) (noting that exchange 

mergers in 2005 and 2006 were approved by 

competition authorities in part in reliance on 

planned and likely entry of other firms). 

44For example, in the National IF Approval 

Order, the Commission recognized that for some 

customers, the best bid and offer information from 

consolidated data feeds may function as a substitute 

for the NYSE National Integrated Feed product, 

which contains order by order information. See 

National IF Approval Order, supra note 26, at 67397 

[release p. 21] (‘‘[I]nformation provided by NYSE 

National demonstrates that a number of executing 

broker-dealers do not subscribe to the NYSE 

National Integrated Feed and executing brokerdealers can otherwise obtain NYSE National best 

bid and offer information from the consolidated 

data feeds.’’ (internal quotations omitted)). 

fluid and price sensitive.’’ 32 Indeed, 

today, equity trading is currently 

dispersed across 16 exchanges,33

numerous alternative trading systems,34

broker-dealer internalizers and 

wholesalers, all competing for order 

flow. Based on publicly-available 

information, no single exchange 

currently has more than 17% market 

share.35

Further, low barriers to entry mean 

that new exchanges may, and do, 

rapidly and inexpensively enter the 

market and offer additional substitute 

platforms to compete with the 

Exchange. For example, since 2020, 

three new exchanges have entered the 

market: Long Term Stock Exchange 

(LTSE), which began operations as an 

exchange on August 28, 2020; 36

Members Exchange (MEMX), which 

began operations as an exchange on 

September 29, 2020; 37 and Miami 

International Holdings (MIAX), which 

began operations of its first equities 

exchange on September 29, 2020.38

These low barriers enable existing 

exchange customers to disintermediate 

and start their own exchanges if they 

think the prices charged for exchange 

proprietary market data products are too 

high. This is precisely the rationale 

behind the creation of MEMX, which 

was formed by some of the largest and 

most well capitalized financial firms 

that are also Exchange customers 

(including Bank of America, BlackRock, 

Charles Schwab, Citadel, Citi, E*Trade, 

Fidelity, Goldman Sachs, J.P. Morgan, 

Jane Street, Morgan Stanley, TD 

Ameritrade, and others).39

For example, one of MEMX’s 

founding principles is that exchange 

proprietary market data prices are too 

high, and that MEMX will benefit its 

members by offering ‘‘[l]ower pricing on 

market data.’’ 40 Nor is this a new 

phenomenon: exchange customers 

formed BATS to compete with 

incumbent exchanges and once 

registered as an exchange in 2008, BATS 

did not initially charge for market data. 

The BATS venture was a financial 

success for its founders, first through 

recouping their investment in its initial 

public offering and then in the 

subsequent sale of BATS to Cboe, which 

now charges for market data from those 

exchanges. Notably, MEMX has some of 

the same founding broker-dealer 

customers, leading some to dub MEMX 

‘‘BATS 2.0.’’ 41

The fact that this cycle is viable and 

repeatable by entities that both trade on 

and compete with existing exchanges 

confirms that barriers to entry are low 

and that these markets are competitive 

and contestable.42 And low barriers to 

entry act as a market check on high 

prices.43

In sum, the fierce competition for 

order flow thus constrains any exchange 

from pricing its market data at a 

supracompetitive price and constrains 

the Exchange in setting its fees at issue 

here. 

The proposed expansion of the Per 

User Access Fee is therefore reasonable 

because in setting it, the Exchange is 

constrained by the availability of 

numerous substitute platforms offering 

market data products and trading. Such 

substitutes need not be identical, but 

only substantially similar to the product 

at hand. 

More specifically, in expanding the 

applicability of the Per User Access Fee 

to Redistributors of NYSE OpenBook, 

the Exchange is constrained by the fact 

that, if its pricing across the platform is 

unattractive to customers, customers 

have their pick of an increasing number 

of alternative platforms to use instead of 

the Exchange. The Exchange believes 

that it has considered all relevant factors 

and has not considered irrelevant 

factors in order to establish reasonable 

fees. The existence of numerous 

alternative platforms to the Exchange’s 

platform ensures that the Exchange 

cannot set unreasonable market data 

fees without suffering the negative 

effects of that decision in the fiercely 

competitive market for trading order 

flow. 

Even putting aside the facts that 

exchanges are platforms and that pricing 

decisions on the two sides of the 

platform are intertwined, the Exchange 

is constrained in setting the proposed 

market data fees by the availability of 

numerous substitute market data 

products. The Commission has been 

clear that substitute products need not 

be identical, but only substantially 

similar to the product at hand.44

The NYSE BQT market data product 

is subject to significant competitive 

forces that constrain its pricing. 

Specifically, as described above, NYSE 

BQT competes head-to-head with the 

Nasdaq Basic product and the Cboe One 

Feed. These products each serve as 

reasonable substitutes for one another as 

they are each designed to provide 

investors with a unified view of realVerDate Sep<11>2014 17:30 Nov 21, 2023 Jkt 262001 PO 00000 Frm 00147 Fmt 4703 Sfmt 4703 E:\FR\FM\22NON1.SGM 22NON1

khammond on DSKJM1Z7X2PROD with NOTICES
81508 Federal Register / Vol. 88, No. 224 / Wednesday, November 22, 2023 / Notices 

45See Cboe Global Markets U.S. Equities Market 

Volume Summary, available at https://

www.cboe.com/us/equities/market_share/. 

46See Securities Exchange Act Release Nos. 

86667 (August 14, 2019) (SR–CboeBZX–2019–069); 

86670 (August 14, 2019) (SR–CboeBYX–2019–012); 

86676 (August 14, 2019) (SR–CboeEDGA–2019– 

013); and 86678 (August 14, 2019) (SR–CboeEDGX– 

2019–048) (Notices of filing and Immediate 

effectiveness of proposed rule change to reduce fees 

for the Cboe One Feed) (collectively ‘‘Cboe One Fee 

Filings’’). The Cboe One Fee Filings were in effect 

from August 1, 2019 until September 30, 2019, 

when the Commission suspended them and 

instituted proceedings to determine whether to 

approve or disapprove those proposals. See, e.g., 

Securities Exchange Act Release No. 87164 

(September 30, 2019), 84 FR 53208 (October 4, 

2019) (SR–CboeBZX–2019–069). On October 1, 

2019, the Cboe equities exchanges refiled the Cboe 

One Fee Filings on the basis that they had new 

customers subscribe as a result of the Cboe One Fee 

Filings, and therefore its fee proposal had increased 

competition for top-of-book market data. See 

Securities Exchange Act Release Nos. 87312 

(October 15, 2019), 84 FR 56235 (October 21, 2019) 

(SR–CboeBZX–2019–086); 87305 (October 14, 

2019), 84 FR 56210 (October 21, 2019) (SR– 

CboeBYX–2019–015); 87295 (October 11, 2019), 84 

FR 55624 (October 17, 2019) (SR–CboeEDGX–2019– 

059); and 87294 (October 11, 2019), 84 FR 55638 

(October 17, 2019) (SR–CboeEDGA–2019–015) 

(Notices of filing and immediate effectiveness of 

proposed rule changes to re-file the Small Retail 

Broker Distribution Program) (‘‘Cboe One Fee ReFilings’’). On November 26, 2019, the Commission 

suspended the Cboe One Fee Re-Filings and 

instituted proceedings to determine whether to 

approve or disapprove those proposals. See, e.g., 

Securities Exchange Act Release No. 87629 

(November 26, 2019), 84 FR 66245 (December 3, 

2019) (SR–CboeBZX–2019–086). On November 27, 

2019, the Cboe equities exchanges refiled the Cboe 

One Fee Filings with one revision to the 

requirements for participating in the Small Retail 

Broker Distribution Program and additional 

information about the basis for the proposed fee 

changes. See Securities Exchange Act Release Nos. 

87712 (December 10, 2019), 84 FR 68508 (December 

16, 2019) (SR–CboeBZX–2019–101); 88713 

(December 10, 2019), 84 FR 68530 (December 16, 

2019) (SR–CboeBYX–2019–023); 87709 (December 

10, 2019), 84 FR 68523 (December 16, 2019) (SR– 

CboeEDGA–2019–021); and 87711 (December 10, 

2019), 84 FR 68501 (December 16, 2019) (SR–Cboe– 

EDGX–2019–071) (Notices of filing and immediate 

effectiveness of proposed rule changes to introduce 

a Small Retail Broker Distribution Program) (‘‘Cboe 

One Third Fee Re-Filings’’). On February 4, 2020, 

the Cboe equities exchanges withdrew the Cboe 

One Third Fee Re-Filings and, on the same date, 

refiled the Cboe One Fee Filings. See Securities 

Exchange Act Release Nos. 88221 (February 14, 

2020), 85 FR 9904 (February 20, 2020) (SR– 

CboeBYX–2020–007); 88218 (February 14, 2020), 85 

FR 9827 (February 20, 2020) (SR–CboeBZX–2020– 

014); 88220 (February 14, 2020), 85 FR 9912 

(February 20, 2020) (SR–CboeEDGA–2020–004); 

and 88219 (February 14, 2020), 85 FR 9872 

(February 20, 2020) (SR–CboeEDGX–2020–008) 

(Notices of filing and immediate effectiveness of 

proposed rule changes to introduce a Small Retail 

Broker Distribution Program) (‘‘Cboe One Fourth 

Fee Re-Filings’’). On April 15, 2020, the Cboe 

equities exchanges withdrew the Cboe One Fee 

Filings and the Cboe One Fee Re-Filings. Pursuant 

to the Cboe One Fourth Fee Re-Filings, the Small 

Retail Broker Distribution Program is currently in 

effect at the Cboe equities exchanges. 

47See Securities Exchange Act Release No. 90177 

(October 14, 2020), 85 FR 66620 (October 20, 2020) 

(SR–NASDAQ–2020–065) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Lower the Enterprise License Fee for BrokerDealers Distributing Nasdaq Basic to Internal 

Professional Subscribers as Set Forth in the Equity 

7 Pricing Schedule, Section 147, and the Enterprise 

License Fee for Broker-Dealers Distributing Nasdaq 

Last Sale to Professional Subscribers at Equity 7, 

Section 139). 

48The 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. 

time quotes and last-sale prices in all 

Tape A, B, and C securities. Each 

product provides subscribers with 

consolidated top-of-book quotes and 

trades from multiple U.S. equities 

markets. In the case of NYSE BQT, this 

product provides top-of-book quotes 

and trades data from five NYSEaffiliated U.S. equities exchanges, which 

together account for approximately 20% 

of consolidated U.S. equities trading 

volume as of October 2023.45 Cboe One 

Feed similarly provides top-of-book 

quotes and trades data from Cboe’s four 

U.S. equities exchanges. NYSE BQT, 

Nasdaq Basic, and Cboe One Feed are 

all intended to provide indicative 

pricing and are not intended to be used 

for order routing or trading decisions. 

In addition to competing with 

proprietary data products from Nasdaq 

and Cboe, NYSE BQT also competes 

with the consolidated data feed. 

However, the Exchange does not claim 

that NYSE BQT is a substitute for 

consolidated data with respect to 

requirements under the Vendor Display 

Rule, which is Regulation NMS Rule 

603(c). 

The fact that this filing is proposing 

to further expand the application of the 

reduced Per User Access Fee is itself 

confirmation of the inherently 

competitive nature of the market for the 

sale of proprietary market data. For 

example, in August 2019, Cboe filed 

proposed rule changes to reduce certain 

of its Cboe One Feed fees and noted that 

it attracted two additional customers 

because of the reduced fees.46 More 

recently, Nasdaq filed a proposed rule 

change to lower the enterprise license 

fee for broker-dealers distributing 

Nasdaq Basic to internal Professional 

subscribers and the enterprise license 

fee for broker-dealers distributing 

Nasdaq Last Sale to Professional 

subscribers.47

The Exchange notes that NYSE 

proprietary market data products are 

entirely optional. The Exchange is not 

required to make the proprietary data 

products that are the subject of this 

proposed rule change available or to 

offer any specific pricing alternatives to 

any customers, nor is any firm or 

investor required to purchase the 

Exchange’s data products. Unlike some 

other data products (e.g., the 

consolidated quotation and last-sale 

information feeds) that firms are 

required to purchase in order to fulfil 

regulatory obligations,48 a customer’s 

decision whether to purchase any of the 

Exchange’s proprietary market data 

feeds is entirely discretionary. Most 

firms that choose to subscribe to 

proprietary market data feeds from the 

Exchange and its affiliates do so for the 

primary goals of using them to increase 

their revenues, reduce their expenses, 

and in some instances compete directly 

with the Exchange’s trading services. 

Such firms are able to determine for 

themselves whether or not the products 

in question or any other similar 

products are attractively priced. If 

market data feeds from the Exchange 

and its affiliates do 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 products. 

In addition, in the case of products 

that are also redistributed through 

market data vendors, such as Bloomberg 

and Refinitiv, the vendors themselves 

provide additional price discipline for 

proprietary data products because they 

control the primary means of access to 

certain end users. These vendors impose 

price discipline based upon their 

business models. For example, vendors 

that assess a surcharge on data they sell 

are able to refuse to offer proprietary 

products that their end users do not or 

will not purchase in sufficient numbers. 

This competitive constraint is precisely 

what is driving the proposed fee 

changes here, which are designed to 

attract new market data vendors, and 

through them new subscribers, to the 

NYSE BQT product. Currently, only 

seven data feed vendors subscribe to 

NYSE BQT, and each vendor has 

limited redistribution of NYSE BQT. No 

other vendors currently subscribe to 

NYSE BQT and likely will not unless 

their customers request it, and 

customers will not elect to pay the 

proposed fees unless such product can 

provide value by sufficiently increasing 

revenues or reducing costs in the 

customer’s business in a manner that 

will offset the fees. All of these factors 

operate as constraints on pricing 

proprietary data products. 

Because of the availability of 

substitutes, an exchange that overprices 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 88, No. 224 / Wednesday, November 22, 2023 / Notices 81509 

49See Regulation NMS Adopting Release, 70 FR 

37495, at 37503. 

50See e.g., Securities Exchange Act Release No. 

83751 (July 31, 2018), 83 FR 38428 (August 6, 2018) 

(SR–NASDAQ–2018–058) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Lower Fees and Administrative Costs for 

Distributors of Nasdaq Basic, Nasdaq Last Sale, NLS 

Plus and the Nasdaq Depth-of-Book Products 

Through a Consolidated Enterprise License). 

Nasdaq filed the proposed fee change to lower the 

Enterprise Fee for Nasdaq Basic and other market 

data products in response to the Enterprise Fee for 

the Cboe One Feed adopted by Cboe family of 

exchanges. 

its market data products stands a high 

risk that users may substitute another 

source of market data information for its 

own. Those competitive pressures 

imposed by available alternatives are 

evident in the Exchange’s proposed 

pricing. 

In setting the proposed fees, 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. The existence 

of numerous alternatives to the 

Exchange’s platform and, more 

specifically, alternatives to the market 

data products, including proprietary 

data from other sources, ensures that the 

Exchange cannot set unreasonable fees 

when vendors and subscribers can 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. 

The proposed expansion of the Per 

User Access Fee is reasonable, for the 

following additional reasons. 

Overall. This proposed fee change is 

a result of the competitive environment, 

as the Exchange seeks to decrease 

certain of its fees to attract 

Redistributors that do not currently 

subscribe to the NYSE BQT market data 

product. The Exchange is proposing the 

fee reduction at issue to make the 

Exchange’s fees more competitive for a 

specific segment of market participants, 

thereby increasing the availability of the 

Exchange’s data products, and 

expanding the options available to firms 

making data purchasing decisions based 

on their business needs. The Exchange 

believes that this is consistent with the 

principles contained 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.’’ 49

Access Fee. By making the reduced 

Per User Access Fee available to 

Redistributors of NYSE OpenBook for 

external distribution who do not 

subscribe to any other products listed 

on the Fee Schedule other than NYSE 

BBO and NYSE Trades, the Exchange 

believes that more Redistributors may 

choose to subscribe to these products, 

thereby expanding the distribution of 

this market data for the benefit of 

investors that participate in the national 

market system and increasing 

competition generally. The Exchange 

also believes that offering the Per User 

Access Fee to these Redistributors 

would expand the availability of NYSE 

BQT to potential data recipients that are 

interested in subscribing to NYSE BQT 

but do not have access to a Redistributor 

who subscribes to the data feeds. 

The Exchange determined to make the 

reduced Per User Access Fee available 

to these Redistributors because it 

constitutes a substantial reduction of the 

current fee, with the intended purpose 

of increasing use of NYSE BQT by 

Redistributors. NYSE BQT has been in 

place since 2014 but has a very small 

number of subscribers. The Exchange 

believes that in order to compete with 

other indicative pricing products such 

as Nasdaq Basic and Cboe One Feed, it 

needs to provide a meaningful financial 

incentive for more Redistributors to 

choose to subscribe to NYSE BQT so 

that they can make it available to their 

customers. Accordingly, the proposed 

expansion of the Per User Access Fee, 

together with the proposed expansion of 

the Per User Access Fee by the 

Exchange’s affiliates, is reasonable 

because the reductions will make NYSE 

BQT a more attractive offering for 

Redistributors that do not currently 

subscribe to any NYSE market data 

products other than NYSE OpenBook 

and make it more competitive with 

Nasdaq Basic and Cboe One Feed. 

Evidence of the competition among 

exchange groups for these products has 

previously been demonstrated via fee 

changes. For example, following the 

introduction of the Cboe One Feed, 

Nasdaq responded by reducing its fees 

for the Nasdaq Basic product.50 With the 

proposed changes by the Exchange, 

NYSE American, and NYSE Arca, the 

Exchange is similarly seeking to 

compete by decreasing the total access 

fees for NYSE BQT from $6,250 to $850 

for Redistributors that do not currently 

subscribe to any NYSE market data 

products other than NYSE OpenBook 

and have customers that are interested 

in subscribing to NYSE BQT but cannot 

do so until their Redistributor also 

subscribes. This proposed rule change 

therefore demonstrates the existence of 

an effective, competitive market because 

this proposal resulted from a need to 

generate innovative approaches in 

response to competition from other 

exchanges that offer market data for a 

specific segment of market participants. 

For all of the foregoing reasons, the 

Exchange believes that the proposed 

fees are reasonable. 

The Proposed Fees Are Equitably 

Allocated 

The Exchange believes the proposed 

expansion of the Per User Access Fee is 

allocated fairly and equitably among the 

various categories of users of the 

Exchange’s market data feed, and any 

differences among categories of users 

are justified. 

Overall. As noted above, this 

proposed fee change is a result of the 

competitive environment for market 

data products that provide indicative 

pricing information across a family of 

exchanges. To respond to this 

competitive environment, the Exchange 

seeks to expand the application of the 

Per User Access Fee for Redistributors 

that would be subscribing to the NYSE 

BBO, NYSE Trades and NYSE 

OpenBook data feeds and would use 

these market data products for external 

distribution only, which the Exchange 

hopes will attract new Redistributor 

subscribers for the NYSE BQT market 

data product so that the product can be 

made available to prospective market 

data recipients. The Exchange is 

proposing to expand the application of 

the reduced Per User Access Fee to 

make the Exchange’s fees more 

competitive for a specific segment of 

market participants, thereby increasing 

the availability of the Exchange’s data 

products, expanding the options 

available to firms making data 

purchasing decisions based on their 

business needs, and generally increasing 

competition. 

Access Fee. The Exchange believes 

that making the Per User Access Fee 

available to Redistributors that would be 

subscribing to the NYSE BBO, NYSE 

Trades and NYSE OpenBook data feeds 

and would use these market data 

products for external distribution only 

is equitable as the reduced fee would 

apply equally to all data recipients that 

choose to subscribe to NYSE BBO, 

NYSE Trades and NYSE OpenBook for 

external distribution only. Because 

NYSE BBO, NYSE Trades and NYSE 

OpenBook are optional products, any 

data recipient could choose to subscribe 

to such data feeds to distribute 

externally and be eligible for the Per 

User Access Fee. The Exchange does not 

believe that it is inequitable that the Per 

User Access Fee would be available 

only to data recipients that subscribe to 


khammond on DSKJM1Z7X2PROD with NOTICES
81510 Federal Register / Vol. 88, No. 224 / Wednesday, November 22, 2023 / Notices 

NYSE BBO, NYSE Trades and NYSE 

OpenBook and only for external 

distribution. Internal use of data 

represents a different set of use cases 

than a Redistributor that is engaged only 

in external distribution of data. For 

example, non-display data can be used 

by data recipients for a wide variety of 

profit-generating purposes, including 

proprietary and agency trading and 

smart order routing, as well as by data 

recipients that operate order matching 

and execution platforms that compete 

directly with the Exchange for order 

flow. The data also can be used for a 

variety of non-trading purposes that 

indirectly support trading, such as risk 

management and compliance. Although 

some of these non-trading uses do not 

directly generate revenues, they can 

nonetheless substantially reduce the 

recipient’s costs by automating such 

functions so that they can be carried out 

in a more efficient and accurate manner 

and reduce errors and labor costs, 

thereby benefiting end users. The 

Exchange believes that charging a 

different access fee for a Redistributor 

that is engaged solely in external 

distribution of only the NYSE BBO, 

NYSE Trades and NYSE OpenBook 

products is equitable because it would 

make NYSE BQT available to more data 

recipients that are customers of such 

Redistributors and who would not 

otherwise be able to access NYSE BQT 

if their Redistributor did not subscribe 

to and redistribute NYSE BQT. 

For all of the foregoing reasons, the 

Exchange believes that the proposed 

fees for the NYSE market data products 

are equitably allocated. 

The Proposed Fees Are Not Unfairly 

Discriminatory 

The Exchange believes the proposed 

fees are not unfairly discriminatory 

because any differences in the 

application of the fees are based on 

meaningful distinctions between 

customers, and those meaningful 

distinctions are not unfairly 

discriminatory between customers. 

Overall. As noted above, this 

proposed fee change is a result of the 

competitive environment for market 

data products that provide indicative 

pricing information across a family of 

exchanges. To respond to this 

competitive environment, the Exchange 

seeks to amend its fees to provide a 

financial incentive for Redistributors of 

NYSE OpenBook that do not currently 

subscribe to any NYSE market data 

products that decide to subscribe to 

NYSE BQT, which the Exchange hopes 

will attract more subscribers for the 

NYSE BQT market data product. The 

Exchange is proposing to expand the 

application of the Per User Access Fee 

to make the Exchange’s fees more 

competitive for a specific segment of 

market participants, thereby increasing 

the availability of the Exchange’s data 

products, expanding the options 

available to firms making data 

purchasing decisions based on their 

business needs, and generally increasing 

competition. 

Access Fee. The Exchange believes 

that making the Per User Access Fee 

available to Redistributors that would be 

subscribing to the NYSE BBO, NYSE 

Trades and NYSE OpenBook data feeds 

and would use these market data 

products for external distribution only 

is not unfairly discriminatory as the 

reduced fee would apply equally to all 

Redistributors that choose to subscribe 

to NYSE BBO, NYSE Trades and NYSE 

OpenBook for external distribution 

only. Because NYSE BBO, NYSE Trades 

and NYSE OpenBook are optional 

products, any data recipient could 

choose to subscribe to such data feeds 

to distribute externally and be eligible 

for the Per User Access Fee. The 

Exchange does not believe that it is 

unfairly discriminatory that the Per User 

Access Fee would be available only to 

data recipients that subscribe to NYSE 

BBO, NYSE Trades and NYSE 

OpenBook and only for external 

distribution. Internal use of data 

represents a different set of use cases 

than a Redistributor that is engaged only 

in external distribution of data. For 

example, non-display data can be used 

by data recipients for a wide variety of 

profit-generating purposes, including 

proprietary and agency trading and 

smart order routing, as well as by data 

recipients that operate order matching 

and execution platforms that compete 

directly with the Exchange for order 

flow. The data also can be used for a 

variety of non-trading purposes that 

indirectly support trading, such as risk 

management and compliance. While 

some of these non-trading uses do not 

directly generate revenues, they can 

nonetheless substantially reduce the 

recipient’s costs by automating such 

functions so that they can be carried out 

in a more efficient and accurate manner 

and reduce errors and labor costs, 

thereby benefiting end users. The 

Exchange therefore believes that there is 

a meaningful distinction between 

internal use and redistribution of market 

data and that charging a different access 

fee to a Redistributor that is engaged 

solely in external distribution of only 

the NYSE BBO, NYSE Trades and NYSE 

OpenBook products is not unfairly 

discriminatory because it would make 

NYSE BQT available to more data 

recipients that are customers of such 

Redistributors and who would not 

otherwise be able to access NYSE BQT 

if their Redistributor did not subscribe 

to and redistribute NYSE BQT. 

Moreover, the Exchange does not 

believe that it is unfairly discriminatory 

to offer the Per User Access Fee only to 

those Redistributors that would 

subscribe to the NYSE BBO, NYSE 

Trades and NYSE OpenBook data feeds, 

and only for external distribution. This 

proposed rule change is designed to 

provide an incentive for Redistributors 

that currently subscribe to NYSE 

OpenBook, but do not subscribe to 

NYSE BQT, and may have customers 

that are interested in subscribing to 

NYSE BQT, to subscribe to the NYSE 

BBO and NYSE Trades data feeds so 

that they can make NYSE BQT available 

to their customers. This fee incentive is 

not necessary for Redistributors that 

currently subscribe to the NYSE BBO 

and NYSE Trades data feeds because 

such Redistributors could already 

subscribe to NYSE BQT, but have 

chosen not to, and a reduction in their 

existing access fees would likely not 

result in such Redistributors choosing to 

subscribe to NYSE BQT. 

For all of the foregoing reasons, the 

Exchange believes that the proposed 

fees are not unfairly discriminatory. 

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. Indeed, as 

demonstrated above, the Exchange 

believes the proposed rule changes are 

pro-competitive. 

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 noted 

above, the proposed fee schedule would 

apply to all subscribers of NYSE market 

data products, and customers may not 

only choose whether to subscribe to the 

products at all, but also may tailor their 

subscriptions to include only the 

products and uses that they deem 

suitable for their business needs. The 

Exchange also believes that the 

proposed fees neither favor nor penalize 

one or more categories of market 

participants in a manner that would 

impose an undue market on 

competition. As shown above, to the 

extent that particular proposed fees 

apply to only a subset of subscribers, 

those distinctions are not unfairly 

discriminatory and do unfairly burden 

one set of customers over another. 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 88, No. 224 / Wednesday, November 22, 2023 / Notices 81511 

51 15 U.S.C. 78s(b)(3)(A). 

52 17 CFR 240.19b–4(f). 

53 17 CFR 200.30–3(a)(12). 

1On September 17, 2018, DesertXpress’ 

ownership group entered into an agreement to sell 

the company to Brightline Holdings LLC 

(Brightline). Fortress Inv. Grp. LLC—Continuance in 

Control—Cent. Me. & Que. Ry., FD 36225, slip op. 

at 1–2 (STB served Oct. 11, 2018). Brightline’s 

acquisition of DesertXpress was consummated on 

March 4, 2019. (Pet. to Reopen 4.) 

Intermarket Competition. The 

Exchange believes that the proposed 

fees do not impose a burden on 

competition on other exchanges that is 

not necessary or appropriate; indeed, 

the Exchange believes the proposed fee 

changes would have the effect of 

increasing competition. As described 

above, exchanges are platforms for 

market data and trading. In setting the 

proposed fees, the Exchange is 

constrained by the availability of 

substitute platforms also offering market 

data products and trading, and low 

barriers to entry mean new exchange 

platforms are frequently introduced. 

The fact that exchanges are platforms 

ensures that no exchange can make 

pricing decisions for one side of its 

platform without considering, and being 

constrained by, the effects that price 

will have on the other side of the 

platform. In setting fees at issue here, 

the Exchange is constrained by the fact 

that, if its pricing across the platform is 

unattractive to customers, customers 

will have its pick of an increasing 

number of alternative platforms to use 

instead of the Exchange. Given this 

intense competition between platforms, 

no one exchange’s market data fees can 

impose an unnecessary burden on 

competition, and the Exchange’s 

proposed fees do not do so here. 

In addition, the Exchange believes 

that the proposed fees do not impose a 

burden on competition or on other 

exchanges that is not necessary or 

appropriate because of the availability 

of numerous substitute market data 

products. Specifically, as described 

above, NYSE BQT competes head-tohead with the Nasdaq Basic product and 

the Cboe One Feed. These products each 

serve as reasonable substitutes for one 

another as they are each designed to 

provide investors with a unified view of 

real-time quotes and last-sale prices in 

all Tape A, B, and C securities. Each 

product provides subscribers with 

consolidated top-of-book quotes and 

trades from multiple U.S. equities 

markets. NYSE BQT provides top-ofbook quotes and trades data from five 

NYSE-affiliated U.S. equities exchanges, 

while Cboe One Feed similarly provides 

top-of-book quotes and trades data from 

Cboe’s four U.S. equities exchanges. 

NYSE BQT, Nasdaq Basic, and Cboe 

One Feed are all intended to provide 

indicative pricing and therefore, are 

reasonable substitutes for one another. 

Additionally, market data vendors are 

also able to offer close substitutes to 

NYSE BQT. Because market data users 

can find suitable substitute feeds, an 

exchange that overprices its market data 

products stands a high risk that users 

may substitute another source of market 

data information for its own. These 

competitive pressures ensure that no 

one exchange’s market data fees can 

impose an unnecessary 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 solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A) 51 of the Act and paragraph 

(f) of Rule 19b–4 thereunder.52 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. 

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– 

NYSE–2023–42 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–NYSE–2023–42. 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–NYSE–2023–42 and should be 

submitted on or before December 13, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.53

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25788 Filed 11–21–23; 8:45 am] 

BILLING CODE 8011–01–P 

SURFACE TRANSPORTATION BOARD 

[Docket No. FD 35544] 

Desertxpress Enterprises, LLC, and 

Desertxpress HSR Corporation— 

Construction and Operation 

Exemption—In Victorville, Cal., and 

Las Vegas, Nev. 

In 2019, DesertXpress Enterprises, 

LLC, (DesertXpress) 1 filed a petition to 

reopen this proceeding, seeking 

modification of a 2011 condition 

concerning the construction of an 

approximately 190-mile rail line for 

high-speed passenger rail service 

between Victorville, Cal., and Las Vegas, 

Nev. (the LV Line). That condition 

authorized construction of a designated 

alignment. DesertXpress seeks authority 


khammond on DSKJM1Z7X2PROD with NOTICES