[Federal Register Volume 89, Number 180 (Tuesday, September 17, 2024)]
[Notices]
[Pages 76162-76167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-21034]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100995; File No. SR-MRX-2024-35]


Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Initiate 
Distributor Fees for MRX Options Trade Outline

September 11, 2024.
    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 September 3, 2024, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to initiate Distributor fees for MRX Options 
Trade Outline.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/mrx/rules, 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 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 purpose of the proposed rule change is to initiate fees for the 
distribution of MRX Trade Outline. Distributor fees will be $750 per 
month

[[Page 76163]]

for the End of Day product, and $1,500 per month for the Intra-Day 
product.
    Historical data will be available through ad hoc requests for 
information for $500 per month of End of Day information, and $750 per 
month for historical information. Current Distributors \3\ will also be 
able to purchase the most recent 36 months of historical data \4\ at 
the discounted price of $6,000 for End of Day information, and $9,000 
for Intra-Day information. Historical information will be available 
starting in September 2017.
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    \3\ A ``Current Distributor'' is any firm that purchases either 
the End of Day Product for the current month, or the Intra-Day 
Product for the current month in the same month that the 36 months 
of historical End of Day or Intra-Day data is ordered.
    \4\ The most recent 36 months is measured based on the date of 
purchase of the 36 months of data by a Current Distributor.
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MRX Options Trade Outline
    MRX Options Trade Outline will provide aggregate quantity and 
volume information for trades on the Exchange for all series \5\ during 
a trading session.\6\ Information is provided in the following 
categories: (i) total exchange volume for Intra-Day information and 
total exchange and industry volume for End of Day information for each 
reported series; (ii) open interest for the series; (iii) aggregate 
quantity of trades and aggregate trade volume effected to open a 
position,\7\ characterized by origin type (Priority Customers,\8\ 
Broker-Dealers,\9\ Market Makers,\10\ Firm Proprietary,\11\ and 
Professional Customers \12\); and (iv) aggregate quantity of trades and 
aggregate trade volume effected to close a position,\13\ characterized 
by origin type (Priority Customers, Broker-Dealers, Market Makers, Firm 
Proprietary, and Professional Customers).\14\
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    \5\ Every options series trades as a distinct symbol; the terms 
``series'' and ``symbol'' are therefore synonyms.
    \6\ See Securities Exchange Act Release No. 100789 (August 21, 
2024), 89 FR 68680 (August 27, 2024) (SR-MRX-2024-31).
    \7\ This includes the aggregate number of ``opening purchase 
transactions,'' defined as an Exchange Transaction that will create 
or increase a long position in an options contract, see Options 1, 
Section 1(a)(27), and the aggregate number of ``opening writing 
transactions,'' defined as an Exchange Transaction that will create 
or increase a short position in an options contract. See Options 1, 
Section 1(a)(28).
    \8\ The term ``Priority Customer'' means a person or entity that 
(i) is not a broker or dealer in securities, and (ii) does not place 
more than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s). See Options 1 
Sec.  1(a)(36).
    \9\ A ``Broker-Dealer'' order is an order submitted by a Member 
for a broker-dealer account that is not its own proprietary account. 
See Options 7 Sec.  1(c).
    \10\ The term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See Options 1 
Sec.  1(a)(21). The term ``Competitive Market Maker'' means a Member 
that is approved to exercise trading privileges associated with CMM 
Rights. See Options 1 Sec.  1(a)(12). The term ``Primary Market 
Maker'' means a Member that is approved to exercise trading 
privileges associated with PMM Rights. See Options 1 Sec.  1(a)(35).
    \11\ A ``Firm Proprietary'' order is an order submitted by a 
Member for its own proprietary account. See Options 7 Sec.  1(c).
    \12\ A ``Professional Customer'' is a person or entity that is 
not a broker/dealer and is not a Priority Customer. See Options 7 
Sec.  1(c).
    \13\ This includes the aggregate number of ``closing purchase 
transactions'' in the affected series, defined as an Exchange 
Transaction that will reduce or eliminate a short position in an 
options contract, see Options 1, Section 1(a)(9), and the aggregate 
number of ``closing writing transactions,'' defined as an Exchange 
Transaction that will reduce or eliminate a long position in an 
options contract. See Options 1, Section 1(a)(10).
    \14\ These are the same types of information available on PHOTO, 
and the other trade outline products offered by Nasdaq exchanges.
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    Information will be provided on an End of Day, Intra-Day, and 
historical basis.
End of Day Information
    The MRX Trade Outline End of Day file will also provide opening 
buy, closing buy, opening sell and closing sell information, including 
option first trade price, option high trade price, option low trade 
price, and option last trade price.
    The End of Day file will be updated during an overnight process 
with additional fields \15\ and will be available the following 
morning, providing aggregate data for the entire trading session.
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    \15\ The additional fields are: First Trade Price, High Trade 
Price, Low Trade Price, Last Trade Price, Underlying Close, 
Moneyness, Total Exchange volume, Total Industry Volume for the 
Series, and Open Interest.
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Intra-Day Information
    Intra-Day information will be released in scheduled ``snapshots'' 
available every 10 minutes for all options series over the course of 
the trading day. These snapshots will be updated to reflect whatever 
activity occurred, or to indicate that no activity occurred.\16\ This 
is the same schedule currently offered on PHLX, ISE, GEMX, and Nasdaq 
Options Market.\17\
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    \16\ Subscribers will receive the first snapshot at 9:42 a.m. 
ET, representing data captured from 9:30 a.m. to 9:40 a.m., and the 
second calculation at 9:52 a.m., representing data from both the 
most recent snapshot and previous snapshots, and continuing over the 
course of the trading day. The final Intra-Day snapshot will be 
distributed at 4:15 p.m.
    \17\ See Infra, notes 21 through 23.
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Historical Information
    Historical data will be available through ad hoc requests for 
information in both End of Day and Intra-Day formats for all option 
series traded for every calendar month after September 2017, based on 
specific request.\18\ Historical data is useful in analyzing option 
trade and volume data, evaluating historical trends in the trading 
activity of a particular option series, and creating and testing 
trading models and analytical strategies. In Nasdaq's experience, 
historical information is often purchased concurrently with a new 
subscription to a trade outline product.
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    \18\ Market participants generally use historical files for 
model testing and research, and the period of time required by a 
particular market participant will depend on its unique testing and 
research needs as well as whether it is using End of Day or Intra-
Day information. Some customers, for example, may request years of 
data, while others only months, or even a single month. The same 
principle applies to End of Day vs. Intra-Day information.
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    Patterned after PHLX Options Trade Outline ``PHOTO,'' \19\ MRX 
Options Trade Outline will replicate in substance \20\ PHOTO and the 
other trade outline products currently offered by Nasdaq ISE, LLC 
(``ISE''),\21\ Nasdaq GEMX, LLC (``GEMX''),\22\ and the options market 
operated by the Nasdaq Stock Market LLC (``Nasdaq Options Market'' or 
``NOM'').\23\ Similar products are also available from options markets 
not affiliated with Nasdaq such as Cboe

[[Page 76164]]

Options Exchange (``Cboe''),\24\ NYSE American Options (``NYSE 
American''),\25\ NYSE Arca Options (``NYSE Arca''),\26\ BOX Options 
Market LLC (``BOX''),\27\ MIAX Pearl Options Exchange (``Pearl''),\28\ 
and others. MRX Options Trade Outline, like all of these other trade 
outline products, provides data to help market participants understand 
market sentiment on the Exchange and to support the creation of trading 
models useful in both options and equities markets.
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    \19\ See PHLX Rules, Options 7, Section 10; Securities Exchange 
Act Release No. 62887 (September 10, 2010), 75 FR 57092 (September 
17, 2010) (SR-Phlx-2010-121) (introducing PHOTO on September 1, 
2010).
    \20\ The underlying information for MRX Options Trade Outline 
will be the same as the other trade outline products offered by the 
Nasdaq exchanges. Presentation will differ, however, in that data 
will not be subdivided into categories. For example, the trade 
outline products offered by PHLX, ISE, GEMX and NOM subdivide the 
aggregate volume traded for each reported series into categories 
according to the quantity of contracts (less than 100, 100-199, and 
greater than 200). MRX Options Trade Outline will not separate this 
information into quantitative categories, but rather will provide 
the same aggregate volume information as PHOTO and the other Nasdaq 
exchanges without separating the information into categories 
according to the quantity of contracts.
    \21\ See Nasdaq ISE Rules, Options 7, Section 10(A) and (B) 
(Nasdaq ISE Open/Close Trade Profile End of Day; Nasdaq ISE Open/
Close Trade Profile Intraday).
    \22\ See Nasdaq GEMX Rules, Options 7, Sections 7(D) (Nasdaq 
GEMX Open/Close End of Day Trade Profile) and 7(E) (Nasdaq GEMX 
Open/Close Intraday Trade Profile).
    \23\ See Nasdaq Rules, Options 7, Section 4 (Nasdaq Options 
Trade Outline (``NOTO'')).
    \24\ See, e.g., Securities Exchange Act Release No. 94913 (May 
13, 2022), 87 FR 30534 (May 19, 2022) (SR-Cboe-2022-023) (describing 
End of Day and Intra-Day Open-Close Data as a summary of trading 
activity on the exchange at the option level by origin, side of the 
market, price, and transaction type).
    \25\ See, e.g., Securities Exchange Act Release No. 93803 
(December 16, 2021, 86 FR 72647 (December 22, 2021) (SR-NYSEAMER-
2021-46) (describing the NYSE Options Open-Close Volume Summary as a 
volume summary of trading activity on the exchange at the option 
level by origin, side of the market, contract volume and transaction 
type).
    \26\ See, e.g., Securities Exchange Act Release No. 93132 
(September 27, 2021), 86 FR 54499 (October 1, 2021) (SR-NYSEArca-
2021-82) (describing the NYSE Options Open-Close Volume Summary as a 
volume summary of trading activity on the exchange at the option 
level by origin, side of the market, contract volume and transaction 
type).
    \27\ See, e.g., Securities Exchange Act Release No. 97174 (March 
21, 2023), 88 FR 18201 (March 27, 2023) (SR-BOX-2023-09) (describing 
the BOX exchange Open-Close Data report as providing volume by 
origin, buying/selling, and opening/closing criteria).
    \28\ See, e.g., Securities Exchange Act Release No. 91964 (May 
21, 2021), 86 FR 28667 (May 27, 2021) (SR-PEARL-2021-24) 
(introducing the Open-Close Report).
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    Nasdaq's experience is that investment banks, market makers, asset 
managers and other buy-side investors purchase trade outline products. 
In general, the relative value of these products depends on the volume 
of transactions included; the greater the volume of transactions, the 
greater the value of the data.
    MRX Options Trade Outline will provide proprietary Exchange trading 
data and will not include any intra-day trading data from any other 
exchange.\29\ The information provided, both in End of Day and Intra-
Day formats, will not be a real-time data feed.
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    \29\ The End of Day report includes a field that presents Total 
Industry Volume for the Series.
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Proposed Fees
End of Day and Intra-Day Information
    The Exchange proposes to offer the End of Day product for $750 per 
month and the Intra-Day product at $1,500 per month.
Historical Information
    The Exchange proposes to offer historical data for $500 per month 
for End of Day data, and $750 per month for Intra-Day information based 
on ad hoc requests for particular months of information.
    The Exchange also proposes to offer a discounted fee of $9,000 in 
total for the most recent 36 months \30\ of historical Intra-Day data 
for Current Distributors,\31\ and a discounted fee of $6,000 in total 
for the most recent 36 months of End of Day data for Current 
Distributors.
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    \30\ The most recent 36 months is measured based on the date of 
purchase of the 36 months of data by a Current Distributor.
    \31\ A ``Current Distributor'' is any firm that purchases either 
the End of Day Product for the current month, or the Intra-Day 
Product for the current month in the same month that the 36 months 
of historical End of Day or Intra-Day data is ordered.
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    This is a substantial discount from the proposed fees for ad hoc 
data requests. With respect to End of Day data, ad hoc requests are 
$500 per month. Thirty-six months would cost a total of $18,000. The 
proposed discounted fee of $6,000 is two-thirds less than the standard 
rate. With respect to Intra-Day information, ad hoc requests are $750 
per month. Thirty-six months would cost a total of $27,000. The 
proposed discounted fee of $9,000 for Intra-Day information is also 
two-thirds less than the standard rate.
    Eligibility for the discount will depend on the type of current 
subscription. A current purchaser of End of Day data would be eligible 
for the historical End of Day product at the reduced rate. A current 
purchaser of the Intra-Day product would similarly be able to purchase 
the historical Intra-Day product at the reduced rate. A purchaser of 
both the current End of Day and Intra-Day products would be entitled to 
purchase both types of history at the reduced rate. The fees for 
historical data are linked to the current product because effective 
historical testing requires a comparison of similar licenses. Effective 
testing of the End of Day product, for example, requires End of Day 
historical data, and the same would hold true for Intra-Day data.
    The 36-month period will be based on the date of purchase of the 36 
months of data by a Current Distributor. For example, a customer that 
buys the End of Day product for the first time in September 2024 would 
also be able to purchase historical End of Day data for the period 
September 2021 through September 2024 (inclusive) at the discounted 
rate. Similarly, a customer with an existing End of Day subscription in 
September 2024 would be able to purchase the historical End of Day data 
from September 2021 through September 2024 at the discounted rate. The 
same reasoning would apply to Intra-Day customers.\32\
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    \32\ A customer may use the proposed historical data discount 
more than once. For example, a Current Distributor that purchases 36 
months of historical data at a discount, but later terminates that 
subscription, would be eligible to purchase another 36 months of 
historical data (based on the date of purchase) upon renewing that 
subscription. (Current Distributors that never terminate would have 
no need for a second purchase, as they would already possess the 
most recent months of historical data.).
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    Many customers use historical data to test their strategies and 
models, and our discussions with current and former customers and 
experience indicate that 36 months of data is sufficient for most 
customer needs, and is an effective baseline for review.
    For customers that request historical information outside of the 
three year period, end of day historical information can be purchased 
through ad hoc requests for monthly information for $500 per request 
per month, and Intra-Day information can be purchased at $750 per 
request per month.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\33\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\34\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among members and issuers and other persons using any 
facility, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \33\ 15 U.S.C. 78f(b).
    \34\ 15 U.S.C. 78f(b)(4) and (5).
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Equitable Allocation of Reasonable Dues, Fees and Other Charges
    The proposed changes are an equitable allocation of reasonable 
dues, fees and other charges because: (i) the trade outline products 
offered by multiple exchanges are substitutes, and customers are free 
to choose which product they purchase; and (ii) the proposed fees are 
comparable to the fees charged by other exchanges, and customers are 
free to purchase other products if the Exchange has mistaken the value 
of its product.
Substitution
    Trade outline products have been available on multiple exchanges 
for many years and are well known in the market and used by many market 
participants. PHLX Options Trade Outline, which is a model for MRX 
Options Trade Outline, has been available for well over a decade.\35\

[[Page 76165]]

Similar products available on other Nasdaq exchanges include ISE Trade 
Profile,\36\ GEMX Trade Profile,\37\ and Nasdaq Options Trade 
Outline.\38\ Trade outline products are also offered by competitor 
exchanges such a Cboe,\39\ NYSE American,\40\ NYSE Arca,\41\ BOX,\42\ 
and MIAX PEARL.\43\ The trade outline products offered by the Nasdaq-
affiliated exchanges provide exactly the same information as MRX 
Options Trade outline, and those offered by other exchanges provide 
substantially the same information, including both Intra-Day and End of 
Day data.
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    \35\ See Securities Exchange Act Release No. 62887 (September 
10, 2010), 75 FR 57092 (September 17, 2010) (SR-Phlx-2010-121) 
(introducing PHOTO on September 1, 2010).
    \36\ See Nasdaq ISE Rules, Options 7, Section 10(A) and (B) 
(Nasdaq ISE Open/Close Trade Profile End of Day; Nasdaq ISE Open/
Close Trade Profile Intraday).
    \37\ See Nasdaq GEMX Rules, Options 7, Sections 7(D) (Nasdaq 
GEMX Open/Close End of Day Trade Profile) and 7(E) (Nasdaq GEMX 
Open/Close Intraday Trade Profile).
    \38\ See Nasdaq Rules, Options 7, Section 4 (Nasdaq Options 
Trade Outline (``NOTO'')).
    \39\ See, e.g., Securities Exchange Act Release No. 94913 (May 
13, 2022), 87 FR 30534 (May 19, 2022) (SR-Cboe-2022-023) (describing 
End-of-Day and Intraday Open-Close Data as a summary of trading 
activity on the exchange at the option level by origin, side of the 
market, price and transaction type).
    \40\ See, e.g., Securities Exchange Act Release No. 93803 
(December 16, 2021, 86 FR 72647 (December 22, 2021) (SR-NYSEAMER-
2021-46) (describing the NYSE Options Open-Close Volume Summary as a 
volume summary of trading activity on the exchange at the option 
level by origin, side of the market, contract volume and transaction 
type).
    \41\ See, e.g., Securities Exchange Act Release No. 93132 
(September 27, 2021), 86 FR 54499 (October 1, 2021) (SR-NYSEArca-
2021-82) (describing the NYSE Options Open-Close Volume Summary as a 
volume summary of trading activity on the exchange at the option 
level by origin, side of the market, contract volume and transaction 
type).
    \42\ See, e.g., Securities Exchange Act Release No. 97174 (March 
21, 2023), 88 FR 18201 (March 27, 2023) (SR-BOX-2023-09) (describing 
the BOX exchange Open-Close Data report as providing volume by 
origin, buying/selling, and opening/closing criteria).
    \43\ See, e.g., Securities Exchange Act Release No. 91964 (May 
21, 2021), 86 FR 28667 (May 27, 2021) (SR-PEARL-2021-24) 
(introducing the Open-Close Report).
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    The information provided by one exchange in its trade outline 
product is generally similar to that provided by other exchanges for 
competing products because order flow can move from one exchange to 
another, and market sentiment trends that appear on one exchange are 
likely to be similar to the sentiment trends on other exchanges. The 
key differentiator in the quality of the data depends on the volume of 
transactions on a given exchange; the greater the volume of 
transactions, the greater the value of the data. Customers can choose 
not to purchase the trade outline product of one exchange and 
substitute it for that of another exchange. This applies to both 
current and historical data.
    Customers can also choose not to purchase a trade outline product 
at all. Trade outline products are designed to help investors 
understand underlying market trends to improve the quality of 
investment decisions, but are not necessary to execute a trade. 
Customers may choose to forego the information from MRX Options Trade 
Outline or any of its competitor products when making a trade.
    Nasdaq and its affiliates have observed that customers purchase 
sufficient data to provide a view of the market, but not more, as the 
value of data from each additional exchange yields diminishing returns. 
As a result, all exchanges are limited in what they will be able to 
charge for Trade Outline.
    As the Commission and courts \44\ have recognized, ``[i]f 
competitive forces are operative, the self-interest of the exchanges 
themselves will work powerfully to constrain unreasonable or unfair 
behavior.'' \45\ Accordingly, ``the existence of significant 
competition provides a substantial basis for finding that the terms of 
an exchange's fee proposal are equitable, fair, reasonable, and not 
unreasonably or unfairly discriminatory.'' \46\ The Commission and the 
courts have repeatedly expressed their preference for competition over 
regulatory intervention in determining prices, products, and services 
in the securities markets. In Regulation NMS, while adopting a series 
of steps to improve the current market model, 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.'' \47\ MRX Options Trade Outline is in direct competition 
with multiple exchanges that offer similar products in end of day and 
intra-day formats.\48\
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    \44\ The decision of the United States Court of Appeals for the 
District of Columbia Circuit in NetCoalition v. SEC 615 F.3d 525 
(D.C. Cir. 2010). upheld the Commission's reliance upon competitive 
markets to set reasonable and equitably allocated fees for market 
data. ``In fact, the legislative history indicates that the Congress 
intended that the market system evolve through the interplay of 
competitive forces as unnecessary regulatory restrictions are 
removed and that the SEC wield its regulatory power in those 
situations where competition may not be sufficient, such as in the 
creation of a consolidated transactional reporting system.'' 
NetCoalition I at 535. (quoting H.R. Rep. No. 94-229, at 92 (1975), 
as reprinted in 1975 U.S.C.C.A.N. 321, 323) (internal quotation 
marks omitted). 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.'' Id. (quoting Securities 
Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 
74771 (December 9, 2008) (SR-NYSEArca-2006-21)).
    \45\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
    \46\ See id.
    \47\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
    \48\ These substitute products include NOTO, ISE Trade Profile, 
GEMX Trade Profile data; open-close data from Cboe C1, C2, BZX, and 
EDGX; and Open Close Reports from MIAX Options, Pearl, and Emerald.
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    The discounted fees for historical data, like the purchase of the 
end of day, Intra-Day and Derived Data licenses, is also subject to 
competition. Any exchange that wishes to provide discounts for 
historical data would be able to do so with an immediately effective 
fee filing in response.
Comparability
    The proposed fees are comparable to the fees charged by similarly 
situated exchanges.
    As explained above, the value of a trade outline product is 
determined in part by the number of underlying transactions reflected 
in the data. MRX has a market share comparable to Cboe C2 and MIAX 
Emerald, in the range of approximately 2% to 4% at the time of this 
filing.\49\ For intra-day products, MIAX Emerald charges $2,000 \50\ 
and Cboe C2 charges $1,000.\51\ The proposed fee of $1,500 is within 
that range and comparable to those fees.
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    \49\ See NasdaqTrader.com, ``Options Market Statistics,'' 
available at https://www.nasdaqtrader.com/Trader.aspx?id=OptionsVolumeSummary.
    \50\ See MIAX Emerald Options Exchange Fee Schedule as of April 
18, 2024,'' available at https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Emerald_Fee_Schedule_04182024.pdf.
    \51\ See Cboe DataShop, ``Cboe Open-Close Volume Summary,'' 
available at https://datashop.cboe.com/cboe-options-open-close-volume-summary.
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    For End of Day products, MIAX Emerald charges $600,\52\ and Cboe C2 
charges $500.\53\ Although the proposed fees of $750 are above that 
range, MRX believes that the relative value of Intra-Day and End of Day 
fees should be in the ratio of 2:1, and therefore MIAX Emerald and Cboe 
C2 have somewhat undervalued their end of day products. If Nasdaq is 
incorrect in that

[[Page 76166]]

assessment, customers will purchase the products of its competitors.
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    \52\ See MIAX Emerald Options Exchange Fee Schedule as of April 
18, 2024,'' available at https://www.miaxglobal.com/sites/default/files/fee_schedule-files/MIAX_Emerald_Fee_Schedule_04182024.pdf.
    \53\ See Cboe DataShop, ``Cboe Open-Close Volume Summary,'' 
available at https://datashop.cboe.com/cboe-options-open-close-volume-summary.
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    Nasdaq is not aware of another exchange that provides a discount 
for historical data other than its own affiliates. Volume on MRX is 
comparable to volume on BX and GEMX. The proposed discounted prices of 
$6,000 for 36 months of historical End of Day data and $9,000 for 36 
months of historical Intra-Day data for MRX are identical to the 
proposed discounts for the BX exchange, submitted congruently with this 
filing. The proposed discounted prices for Intra-Day data for MRX and 
BX are also identical to that of GEMX. Although proposed fees for 36 
months of End of Day data for MRX and BX ($6,000) are higher than those 
for GEMX ($4,800), the overall pricing methodology of offering three 
years of historical data for the price of one year of ad hoc requests 
for information is consistent across all of these exchanges, and 
therefore comparable.\54\
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    \54\ The fee for an ad hoc request for one month of End of Day 
data on the GEMX exchange is $400, and the discounted fee for 12 
months of data is $400 x 12, or $4,800. The fee for an ad hoc 
request for one month of End of Day data on the BX and MRX exchanges 
is $500, and the discounted fee for 12 months of data is $500 x 12, 
or $6,000.
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    With respect to ad hoc requests for information, MRX provides a 
discount from current requests. Current End of Day information is 
available for $750 per month, while ad hoc requests for historical End 
of Day information is available for $500 per month. Similarly, Current 
Intra-Day information is available for $1,500 per month, while ad hoc 
requests for historical Intra-Day information is available for $750 per 
month. This is identical to the fee structure proposed for the BX 
exchange, and comparable to the fee structure for the GEMX exchange 
(which offers current End of Day data for $575 per month and historical 
End of Day data for $400 per month; current Intra-Day data is offered 
for $1,500 per month, and historical Intra-Day data is offered for $750 
per month).
    If the Exchange is incorrect in its assessments for any of these 
fees, current and prospective customers will elect not to purchase 
Trade Outline.
The Proposal Does Not Permit Unfair Discrimination
    Nothing in the proposal treats any category of market participant 
any differently from any other category of market participant.
    The proposed fees, including both current and historical 
information, apply equally to all current and potential distributors. 
Trade Outline is available to all market participants, including 
members and non-members, and all market participants receive the same 
information.
    It is not unfair discrimination to provide a discount for 36 months 
of historical data to Current Distributors, but not former distributors 
or firms that have never purchased the product. Any firm would be able 
to become a Current Distributor at any time by subscribing to Trade 
Outline, and would be able to cancel the subscription at any time after 
receiving the 36 months of historical data for the proposed discounted 
fee. More specifically, a firm that is not a Current Distributor may 
obtain access to the 36 months of historical data at a discount by 
becoming a Current Distributor for a limited time and then terminating 
the subscription.
    It is not unfair discrimination to limit the discount for 36 months 
of historical data to Current Distributors. Historical information is 
generally used by Current Distributors to test their strategies and 
trading models, and Current Distributors are therefore in the best 
position to benefit from the historical data. Outside of the 36 month 
period, all firms will have the opportunity to purchase historical data 
on an ad hoc basis.
    For all of these reasons, the proposal does not permit unfair 
discrimination.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. In terms of inter-market 
competition, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive, or rebate opportunities available at other venues to be more 
favorable. In such an environment, the Exchange must continually adjust 
its fees to remain competitive with other exchanges and with 
alternative trading systems that have been exempted from compliance 
with the statutory standards applicable to exchanges. Because 
competitors are free to modify their own fees in response, and because 
market participants may readily adjust their order routing practices, 
the Exchange believes that the degree to which fee changes in this 
market may impose any burden on competition is extremely limited.
Intermarket Competition
    Nothing in the proposal burdens inter-market competition (the 
competition among self-regulatory organizations).
    As discussed above, Trade Outline is subject to direct competition 
from other options exchanges that offer substitutes. Any of these 
exchanges can replicate this proposal in full or in part, and nothing 
in the proposal would interfere with the ability of any exchange to do 
so.
Intra-Market Competition
    Nothing in the proposal burdens intra-market competition (the 
competition among consumers of exchange data). Trade Outline is 
available to any customer under the same fee schedule as any other 
customer, and any market participant that wishes to purchase these 
products can do so on a non-discriminatory basis.
    Offering the 36 months of historical data to Current Distributors, 
but not former distributors or firms that have never purchased the 
product, will not burden competition because non-subscribers are free 
to purchase a current subscription. Moreover, a firm that is not a 
Current Distributor may become a Current Distributor and then cancel 
the product after receiving the historical discount. As such, firms 
that are not Current Distributors will have an opportunity to pay the 
same fees for the most recent 36 months of historical data as Current 
Distributors. Outside of the 36 month period, all firms will have the 
opportunity to purchase historical data on an ad hoc basis.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\55\ 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: (i) necessary or appropriate in the public 
interest; (ii) for the protection of investors; or (iii) otherwise in 
furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
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    \55\ 15 U.S.C. 78s(b)(3)(A)(ii).

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[[Page 76167]]

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

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1361667f763e707c7e7e767d6760536076703d747c65"><span class="__cf_email__" data-cfemail="a4d6d1c8c189c7cbc9c9c1cad0d7e4d7c1c78ac3cbd2">[email protected]</span></a>. Please include 
file number SR-MRX-2024-35 on the subject line.

Paper Comments

    <bullet> 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-MRX-2024-35. 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-MRX-2024-35 and should be 
submitted on or before October 8, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\56\
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    \56\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-21034 Filed 9-16-24; 8:45 am]
BILLING CODE 8011-01-P


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