[Federal Register Volume 89, Number 186 (Wednesday, September 25, 2024)]
[Notices]
[Pages 78401-78406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-21871]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101099; File No. SR-Phlx-2024-48]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Codify the 
Definition of Phlx Options Trade Outline

September 19, 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 6, 2024, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I and II 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 codify the definition of Phlx Options 
Trade Outline in the Phlx rulebook. This filing also incorporates a 
previous proposal to adjust fees for Phlx Options Trade Outline for 
both the End of Day and Intra-Day product.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/phlx/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.

[[Page 78402]]

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 codify the definition 
of Phlx Options Trade Outline in the Phlx rulebook. This filing also 
incorporates a previous proposal to adjust fees for Phlx Options Trade 
Outline for both the End of Day and Intra-Day product.\3\
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    \3\ The previously introduced fee proposal was initially filed 
on July 1, 2024, as SR-Phlx-2024-31. On July 15, 2024, that filing 
was withdrawn and refiled as SR-Phlx-2024-35. On July 29, 2024, that 
filing was withdrawn and refiled as SR-Phlx-2024-38. On August 12, 
2024, that proposal was withdrawn and replaced with SR-Phlx-2024-41 
to incorporate those fees into a filing that codifies the definition 
of PHLX Options Trade Outline. On August 23, 2024, SR-Phlx-2024-41 
was withdrawn and replaced with SR-Phlx-2024-44 to provide 
additional information. On September 6, 2024, SR-Phlx-2024-44 was 
withdrawn and replaced with the instant filing to provide further 
information.
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PHLX Options Trade Outline (``PHOTO'')
    PHOTO \4\ provides 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 
(Customer,\8\ Broker-Dealer,\9\ Market Maker,\10\ Firm \11\ and 
Professional \12\), and for Customers and Professionals, further 
subdivided by trade size buckets; and (iv) aggregate quantity of trades 
and aggregate trade volume effected to close a position,\13\ 
characterized by origin type, (Customer, Broker-Dealer, Market Maker, 
Firm and Professional), and for Customers and Professionals, further 
subdivided by trade size buckets.
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    \4\ See Securities Exchange Act Release No. 62887 (September 10, 
2010), 75 FR 57092 (September 17, 2010) (SR-Phlx-2010-121) 
(establishing fees for the PHOTO intra-day and end of day products); 
Securities Exchange Act Release No. 63351 (November 19, 2010), 75 FR 
73140 (November 29, 2010) (SR-Phlx-2010-154) (establishing fees for 
PHOTO historical data); Securities Exchange Act Release No. 93293 
(October 12, 2021), 86 FR 57716 (October 18, 2021) (SR-Phlx-2021-58) 
(changing fees and introducing discount for historical data and 
license for the external distribution of Derived Data).
    \5\ Every options series trades as a distinct symbol; the terms 
``series'' and ``symbol'' are therefore synonyms.
    \6\ PHOTO provides information on electronic trades, but 
excludes trades made on the PHLX floor.
    \7\ PHOTO provides subscribers with the aggregate number of 
``opening purchase transactions.'' The term ``opening purchase 
transaction'' means an exchange options transaction in which the 
purchaser's intention is to create or increase a long position in 
the series of options involved in such transaction. See Options 1, 
Section 1(b)(34). PHOTO will also provide subscribers with the 
aggregate number of ``opening writing transactions.'' The term 
``opening writing transaction'' means an Exchange options 
transaction in which the seller's (writer's) intention is to create 
or increase a short position in the series of options involved in 
such transaction. See Options 1, Section 1(b)(35).
    \8\ The term ``Customer'' applies to any transaction that is 
identified by a member or member organization for clearing in the 
Customer range at The Options Clearing Corporation (``OCC'') which 
is not for the account of a broker or dealer or for the account of a 
``Professional'' (as that term is defined in Options 1, Section 
1(b)(45)). Options 7, Section 1(c).
    \9\ The term ``Broker-Dealer'' applies to any transaction which 
is not subject to any of the other transaction fees applicable 
within a particular category. Options 7, Section 1(c).
    \10\ The term ``Market Maker'' is defined in Options 1, Section 
1(b)(28) as a member of the Exchange who is registered as an options 
Market Maker pursuant to Options 2, Section 12(a). A Market Maker 
includes SQTs and RSQTs as well as Floor Market Makers. Options 7, 
Section 1(c). This includes specialists, Registered Options Traders 
(``ROTs''), Streaming Quote Traders (``SQTs'') and Remote Streaming 
Quote Traders (``RSQTs''). A ``Streaming Quote Trader'' or ``SQT'' 
means a Market Maker who has received permission from the Exchange 
to generate and submit option quotations electronically in options 
to which such SQT is assigned. An SQT may only submit such 
quotations while such SQT is physically present on the trading floor 
of the Exchange. An SQT may only submit quotes in classes of options 
in which the SQT is assigned. See Options 1, Section 1(b)(54). A 
``Remote Streaming Quote Trader'' or ``RSQT'' means a Market Maker 
that is a member affiliated with a Remote Streaming Quote Trader 
Organization with no physical trading floor presence who has 
received permission from the Exchange to generate and submit option 
quotations electronically in options to which such RSQT has been 
assigned. A qualified RSQT may function as a Remote Lead Market 
Maker upon Exchange approval. An RSQT is also known as a Remote 
Market Maker (``RMM'') pursuant to Options 2, Section 11. A Remote 
Streaming Quote Organization (``RSQTO'') or Remote Market Maker 
Organization (``RMO'') are Exchange member organizations that have 
qualified pursuant to Options 2, Section 1. See Options 1, Section 
1(b)(49).
    \11\ The term ``Firm'' applies to any transaction that is 
identified by a member or member organization for clearing in the 
Firm range at OCC. Options 7, Section 1(c).
    \12\ The term ``Professional'' applies to transactions for the 
accounts of Professionals, as defined in Options 1, Section 1(b)(45) 
means any person or entity that (i) is not a broker or dealer in 
securities, and (ii) places more than 390 orders in listed options 
per day on average during a calendar month for its own beneficial 
account(s). Options 7, Section 1(c).
    \13\ PHOTO provides subscribers with the aggregate number of 
``closing purchase transactions'' in the affected series. A 
``closing purchase transaction'' means an Exchange options 
transaction in which the purchaser's intention is to reduce or 
eliminate a short position in the series of options involved in such 
transaction. See Options 1, Section 1(b)(11). PHOTO will also 
provide subscribers with the aggregate number of ``closing sale 
transactions.'' A ``closing sale transaction'' means an Exchange 
options transaction in which the seller's intention is to reduce or 
eliminate a long position in the series of options involved in such 
transaction. See Options 1, Section 1(b)(12).
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    PHLX Options Trade Outline End of Day will also provide opening 
buy, closing buy, opening sell and closing sell information, which 
shall include option first trade price, option high trade price, option 
low trade price, and option last trade price.
    End of Day information is available the next business day. Intra-
Day information is updated at 10-minute intervals over the course of 
the trading day. Historical information is available upon request.
    PHOTO provides proprietary Exchange trade data and does not include 
any intraday trade data from any other exchange.\14\ The information 
provided, both in End of Day and Intraday formats, is not a real-time 
data feed.
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    \14\ The End of Day report includes a field that presents Total 
Industry Volume for the Series.
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    PHOTO is a completely voluntary product in that the Exchange is not 
required by any rule or regulation to make this data available and 
potential subscribers may purchase it only if they voluntarily choose 
to do so.
    This information is available to all market participants, including 
both members and non-members, for all series and symbols in End of Day, 
Intra-Day, and historical files (upon request).
    The End of Day file is updated during an overnight process with the 
additional fields described above and is available the following 
morning. The monthly subscriber fee for the End of Day product is 
currently $750.
    The Intra-Day product is captured in ``snapshots'' taken every 10 
minutes throughout the trading day, available to subscribers within 2 
minutes of the conclusion of each period. Subscribers receive the first 
calculation at 9:42 a.m. ET, representing data captured from 9:30 a.m. 
to 9:39 a.m., and the second calculation at 9:52 a.m., representing 
data from both the most recent snapshot and previous snapshots, 
continuing over the course of the trading day. The monthly subscriber 
fee for the Intra-Day product is currently $2,500.
    PHOTO historical data provides information about the past activity 
of all option series traded on the Exchange for each trading session 
conducted during a prior calendar month selected by the subscriber.\15\ 
This data is intended to enhance a purchaser's ability to analyze 
option trade and volume data, evaluate historical trends in the trading 
activity

[[Page 78403]]

of a particular option series, and create and test trading models and 
analytical strategies. Historical files provide the same fields of 
information as the End of Day and Intraday files, respectively. 
Historical data is available starting in January 2009.
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    \15\ See Securities Exchange Act Release 63351 (November 19, 
2010), 75 FR 73140 (November 29, 2010) (SR-Phlx-2010-154).
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    Products similar to Trade Outline have been available on multiple 
exchanges for many years and are well-established in the market. Such 
products are available from Nasdaq Options Market (``NOM''),\16\ Nasdaq 
ISE LLC (``ISE''),\17\ Nasdaq GEMX LLC (``GEMX''),\18\ Cboe Options 
Exchange (``Cboe''),\19\ NYSE American Options (``NYSE American''),\20\ 
NYSE Arca Options (``NYSE Arca''),\21\ BOX Options Market LLC 
(``BOX''),\22\ MIAX Pearl Options Exchange (``Pearl''),\23\ and others. 
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. The current purchasers of Trade Outline 
are investment banks, market makers, asset managers and other buy-side 
investors.
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    \16\ See Nasdaq Stock Market Rules, Options 7, Section 4 (Nasdaq 
Options Market Data Distributor Fees).
    \17\ 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 Intra-day).
    \18\ 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 Intra-day Trade Profile).
    \19\ 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).
    \20\ 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).
    \21\ 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).
    \22\ 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).
    \23\ 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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Proposed Changes
Definition of PHOTO
    The Exchange proposes to codify the definition of PHOTO. Nothing in 
this codification is intended to change the product in any way, but 
rather is intended to describe the product exactly as it exists. 
Specifically, the Exchange proposes the following definition:

    PHLX Options Trade Outline provides aggregate quantity and 
volume information for trades on the Exchange for all series during 
a trading session. 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, characterized by origin type (Customer, Broker-
Dealer, Market Maker, Firm, and Professional), and for Customers and 
Professionals, further subdivided by trade size buckets; and (iv) 
aggregate quantity of trades and aggregate trade volume effected to 
close a position, characterized by origin type (Customer, Broker-
Dealer, Market Maker, Firm, and Professional), and for Customers and 
Professionals, further subdivided by trade size buckets.
    PHLX Options Trade Outline End of Day will also provide opening 
buy, closing buy, opening sell and closing sell information, which 
shall include option first trade price, option high trade price, 
option low trade price, and option last trade price.
    End of Day information will be available the next business day. 
Intra-Day information is updated at 10-minute intervals over the 
course of the trading day. Historical information will be available 
upon request.
Previously Introduced Fee Changes
    The Exchange previously proposed to increase the fee for the End of 
Day product from $750 to $850 per month, and the Intra-Day Product from 
$2,500 to $3,000 per month.
    The Exchange also proposes to clarify that ad hoc requests for 
historical data are $500 per month for End of Day data and $1,000 per 
month for Intra-Day data, and that historical data will be available 
starting in January 2009. These rates will apply to any request for 
historical data that does not fall within the existing discounts for 
the most recent 36 months of information for Current Distributors. The 
proposed language is intended to avoid confusion over fees for 
historical data, and to specify the availability of such data, but will 
not change any applicable fees.
    In addition, the Exchange proposes to insert a comma after the 
phrase ``or the Intra-Day Product for the current month'' into the 
definition of Current Distributor. The revised sentence will read as 
follows:

    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.

    The change is designed to clarify that the phrase ``the same month 
that the 36 months of historical End of Day or Intra-Day data is 
ordered'' applies to both firms that purchase End of Day data in the 
current month and firms that purchase Intra-Day data for the current 
month. The clarification will not change how the fee is charged.
2. Statutory Basis
    The Exchange believes that its proposal to codify the definition of 
PHOTO is consistent with Section 6(b) of the Act,\24\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act,\25\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and, in general 
to protect investors and the public interest.
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    \24\ 15 U.S.C. 78f(b).
    \25\ 15 U.S.C. 78f(b)(5).
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    Adding the definition of PHOTO will provide additional clarity and 
specificity to the Phlx rulebook. Nothing in this codification is 
intended to change the product or the way it functions, but rather is 
intended to describe the product exactly as it exists today. Providing 
additional clarity about an exchange product will help investors make 
better informed decisions about PHOTO, and therefore will help protect 
investors and promote the public interest.
    Similarly, adding language regarding fees for ad hoc requests for 
historical data that do not fall within existing discounts for 
historical data will also provide additional clarity and specificity to 
the rulebook. Nothing in this codification is intended to change the 
product or the way it functions, but rather is intended to describe the 
product as it exists today.
    The same holds true for the clarification of the definition of 
Current Distributor, which is also designed to add clarity and 
specificity to the rulebook without changing the underlying fees. This 
additional clarity will help investors make better informed decisions 
about PHOTO, and thereby help protect investors and promote the public 
interest.
    The Exchange also believes that its proposal to change fees is 
consistent with Section 6(b) of the Act,\26\ in general, and furthers 
the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\27\ in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among members

[[Page 78404]]

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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    \26\ 15 U.S.C. 78f(b).
    \27\ 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
    As noted above, products similar to Trade Outline have been 
available on multiple exchanges for many years and are well-established 
in the market. Such products are available from the Phlx,\28\ ISE,\29\ 
GEMX,\30\ Cboe,\31\ NYSE American,\32\ NYSE Arca,\33\ BOX,\34\ 
Pearl,\35\ and others.
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    \28\ 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).
    \29\ 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 Intra-day).
    \30\ 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 Intra-day Trade Profile).
    \31\ 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).
    \32\ 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).
    \33\ 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).
    \34\ 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).
    \35\ 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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    Trade outline products offer the same categories of data through 
end of day or intra-day reports. The information provided by one 
exchange is generally similar to that provided by other exchanges 
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.
    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 can, and do, choose to forego the information from 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 \36\ have recognized, ``[i]f 
competitive forces are operative, the self-interest of the exchanges 
themselves will work powerfully to constrain unreasonable or unfair 
behavior.'' \37\ 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.'' \38\ 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.'' \39\ Trade Outline is in direct competition with multiple 
exchanges that offer similar products in end of day and intra-day 
formats.\40\
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    \36\ 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), 73bFR 74770 
(December 9, 2008) (SR-NYSEArca-2006-21)).
    \37\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
    \38\ See id.
    \39\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
    \40\ 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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Comparability of Proposed Fees
    The proposed fees are comparable to the fees charged by similarly 
situated exchanges.
    As explained above, the value of Trade Outline is determined in 
part by the number of underlying transactions reflected in the data. 
The Phlx Exchange has a market share comparable to the Cboe C1 
exchange, which has a market share of approximately 9%, while PHLX has 
a market share of approximately 10% during the second quarter of 
2024.\41\ As the Cboe C1 exchange charges $3,000 for its intra-day 
product,\42\ the proposed fee of $3,000 for the PHLX Intra-day product 
is comparable.
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    \41\ See NasdaqTrader.com, ``Options Market Statistics,'' 
available at https://www.nasdaqtrader.com/Trader.aspx?id=OptionsVolumeSummary.
    \42\ 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 the end of day trade outline product, Cboe C1 charges $600.\43\ 
The Exchange believes that a fee of $600 understates the true value of 
the end of day product. The Intra-day to end of day price ratio for 
Cboe C1 is 5:1 ($3,000 v. $600). Most trade outline products have a 
lower ratio. EDGX, with an 8% market share, has a ratio of 2:1 ($1,000 
for intra-day data and $500 for end of day data).\44\ PHLX believes 
that the proposed end of day fee of $850 (with a ratio of 3.5:1) better 
reflects the

[[Page 78405]]

relative value of the products, and therefore is proposing a fee of 
$850 for its end of day product.
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    \43\ Id.
    \44\ Id.
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    If the Exchange is incorrect in its assessment of the marketplace, 
current and prospective customers will elect not to purchase Trade 
Outline.
    As noted above, clarifying fees for ad hoc requests for historical 
data, and the definition of Current Distributor, will not change fees, 
and therefore will not impact the equitable allocation of reasonable 
dues, fees and other charges.
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. Trade 
Outline is available to all market participants, including members and 
non-members, and all market participants receive the same information 
in the Trade Outline data feed.

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.
    Adding the definition of PHOTO will promote competition by helping 
investors make better informed decisions about PHOTO. Nothing about the 
addition of a definition will impact inter-market competition or intra-
market competition negatively.
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. Nothing in the 
proposal would interfere with the ability of any exchange to change its 
fees.
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.
    Adding language to clarify fees for ad hoc requests for historical 
data, and to clarify the definition of Current Distributor, will not 
change fees, and will promote competition by better informing 
investors.

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

    Because the foregoing proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \45\ and Rule 19b-
4(f)(6) \46\ thereunder.
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    \45\ 15 U.S.C. 78s(b)(3)(A).
    \46\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \47\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\48\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative upon filing. The Exchange states that 
adding the definition of PHOTO will provide additional clarity and 
specificity to the Phlx rulebook, and nothing in the clarification 
changes the product or the way it functions, but rather describes the 
product exactly as it exists today. The Exchange also states that the 
fees included in this filing have been in effect since July 1, 2024, 
and waiver of the operative delay will allow application of those fees 
to continue uninterrupted. For these reasons, the Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Therefore, the 
Commission hereby waives the operative delay and designates the 
proposal operative upon filing.\49\
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    \47\ 17 CFR 240.19b-4(f)(6).
    \48\ 17 CFR 240.19b-4(f)(6)(iii).
    \49\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

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#1765627b723a74787a7a727963645764727439707861"><span class="__cf_email__" data-cfemail="8af8ffe6efa7e9e5e7e7efe4fef9caf9efe9a4ede5fc">[email protected]</span></a>. Please include 
file number SR-Phlx-2024-48 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-Phlx-2024-48. 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

[[Page 78406]]

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-Phlx-2024-48 and should be submitted on or before October 16, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\50\
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    \50\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-21871 Filed 9-24-24; 8:45 am]
BILLING CODE 8011-01-P


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