Federal Register / Vol. 89, No. 209 / Tuesday, October 29, 2024 / Notices 86003 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

recent developments in Delaware law 

are designed to help provide additional 

clarity to stockholders wishing to bring 

business before a stockholder meeting or 

propose a Stockholder Nominee. The 

Exchange believes that this filing 

furthers the objectives of Section 6(b)(5) 

by simplifying the requirements and 

clarifying the information that must be 

disclosed by stockholders. This furthers 

the interests of investors and the public 

by removing potential impediments to 

raising business or proposing 

Stockholder Nominees that may 

otherwise restrict a stockholder’s ability 

to participate in the corporate 

governance of the Corporation. 

Finally, the remaining changes to 

existing provisions of the CGM Bylaws 

are clarifying in nature, and they 

enhance investor protection and the 

public interest by preventing confusion 

with respect to the operation of the 

Bylaw provisions. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Because the proposed rule change 

relates to the governance of the 

Corporation and not to the operations of 

the Exchange, 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. 

The proposed rule change is not 

designed to address any competitive 

issue or have any impact on 

competition; rather, adoption of a 

stockholder special meeting provision, 

updating ‘‘advance notice bylaws,’’ and 

other bylaws updates by the Corporation 

are intended to enhance corporate 

governance and accountability to 

stockholders. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. by order approve or disapprove 

such proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeBYX–2024–034 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–CboeBYX–2024–034. 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–CboeBYX–2024–034 and should be 

submitted on or before November 19, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–25058 Filed 10–28–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101411; File No. SR–BX– 

2024–041] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Allow Unlimited 

External Distribution of Derived Data 

From BX Options Trade Outline 

October 23, 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 October 

9, 2024, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

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 

Exchange’s fees to allow unlimited 

external distribution of Derived Data 

from BX Options Trade Outline. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/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 


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3This proposal was initially filed on September 

27, 2024, as SR–BX–2024–039. On October 9, 2024, 

that filing was withdrawn and replaced with the 

instant filing to provide further clarification. 

4Every options series trades as a distinct symbol; 

the terms ‘‘series’’ and ‘‘symbol’’ are therefore 

synonyms. 

5See Securities Exchange Act Release No. 100792 

(August 21, 2024), 89 FR 68676 (August 27, 2024) 

(SR–BX–2024–028). 

6This would include the aggregate number of 

‘‘opening purchase transactions,’’ defined as a BX 

Options Transaction that creates or increases a long 

position in an options contract, see Options 1, 

Section 1(a)(35), and the aggregate number of 

‘‘opening writing transactions,’’ defined as a BX 

Options Transaction that creates or increases a short 

position in an options contract. See Options 1, 

Section 1(a)(36). 

7The term ‘‘Customer’’ applies to any transaction 

that is identified by a Participant for clearing in the 

Customer range at The Options Clearing 

Corporation (‘‘OCC’’) which is not for the account 

of broker or dealer or for the account of a 

‘‘Professional’’ (as that term is defined in Options 

1, Section 1(a)(48)). See Options 7, Section 1(a). 

8The term ‘‘Broker-Dealer’’ applies to any 

transaction which is not subject to any of the other 

transaction fees applicable within a particular 

category. See Options 7, Section 1(a). 

9The term ‘‘BX Options Market Maker’’ is a 

Participant that has registered as a Market Maker on 

BX Options pursuant to Options 2, Section 1, and 

must also remain in good standing pursuant to 

Options 2, Section 9. In order to receive Market 

Maker pricing in all securities, the Participant must 

be registered as a BX Options Market Maker in at 

least one security. See Options 7, Section 1(a). 

10The term ‘‘Firm’’ applies to any transaction that 

is identified by a Participant for clearing in the Firm 

range at OCC. See Options 7, Section 1(a). 

11The term ‘‘Professional’’ 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) pursuant to 

Options 1, Section 1(a)(48). All Professional orders 

shall be appropriately marked by Participants. See 

Options 7, Section 1(a). 

12This would include the aggregate number of 

‘‘closing purchase transactions’’ in the affected 

series, defined as a BX Options Transaction that 

reduces or eliminates a short position in an options 

contract, see Options 1, Section 1(a)(19), and the 

aggregate number of ‘‘closing writing transactions,’’ 

defined as a BX Options Transaction that reduces 

or eliminates a long position in an options contract. 

See Options 1, Section 1(a)(20). 

13These are the same types of information 

available on PHOTO, and the other trade outline 

products offered by Nasdaq exchanges. 

14The 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. 

15Subscribers 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 IntraDay snapshot will be distributed at 4:15 p.m. 

16Market 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. 

17The End of Day report includes a field that 

presents Total Industry Volume for the Series. 

18See Securities Exchange Act Release No. 93293 

(October 12, 2021), 86 FR 57716 (October 18, 2021) 

(SR–Phlx–2021–58). 

19See ISE Options 7, Section 10(A). 

20See GEMX Options 7, Section 7(D). 

21See Nasdaq Options 7, Section 4. 

22 ‘‘Exchange Information’’ is any data or 

information that has been collected, validated, 

processed and/or recorded by the Exchange and 

made available for transmission relating to: (i) 

eligible securities or other financial instruments, 

markets, products, vehicles, indicators, or devices; 

(ii) activities of the Exchange; or (iii) other 

information or data from the Exchange. Information 

includes, but is not limited to, any element of 

information used or processed in such a way that 

Exchange Information or a substitute for such 

Information can be identified, recalculated or reengineered from the processed information. 

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 allow unlimited external 

distribution of Derived Data from BX 

Options Trade Outline for a monthly fee 

of $3,000.3

BX Options Trade Outline 

BX Options Trade Outline provides 

aggregate quantity and volume 

information for trades on the Exchange 

for all series 4 during a trading session.5

Information is provided on an End of 

Day, Intra-Day, and historical basis 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,6 characterized by origin type 

(Customers,7 Broker-Dealers,8 BX 

Options Market Makers,9 Firms,10 and 

Professionals 11); and (iv) aggregate 

quantity of trades and aggregate trade 

volume effected to close a position,12

characterized by origin type (Customers, 

Broker-Dealers, BX Options Market 

Makers, Firms, and Professionals).13

End of Day Information 

The BX Trade Outline End of Day file 

provides 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 is updated 

during an overnight process with 

additional fields 14 and is available the 

following morning, providing aggregate 

data for the entire trading session. 

Intra-Day Information 

Intra-Day information is released in 

scheduled ‘‘snapshots’’ available every 

10 minutes for all options series over 

the course of the trading day. These 

snapshots are updated to reflect 

whatever activity occurred, or to 

indicate that no activity occurred.15

Historical Information 

Historical data is 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 December 2014, based on 

specific request.16

BX Options Trade Outline includes 

proprietary Exchange trading data and 

does not disseminate any intra-day 

trading data from any other exchange.17

The information provided, both in 

End of Day and Intra-Day formats, is not 

a real-time data feed. 

BX Options Trade Outline 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. 

Nasdaq’s experience is that 

investment banks, market makers, asset 

managers and other buy-side investors 

purchase trade outline products. 

Proposed Fees 

The Exchange proposes to allow 

unlimited external distribution of 

Derived Data from BX Options Trade 

Outline for a monthly fee of $3,000. 

This will encourage Distributors to 

create and sell analytic products to the 

general investing public. External 

distribution of Derived Data is not 

currently permitted. The same Derived 

Data license is also offered by the 

Nasdaq PHLX, LLC (‘‘Phlx’’),18 Nasdaq 

ISE, LLC (‘‘ISE’’),19 and Nasdaq GEMX, 

LLC (‘‘GEMX’’) 20 exchanges and the 

Nasdaq Stock Market LLC (‘‘Nasdaq 

Options Market’’ or ‘‘NOM’’).21 A 

Derived Data license is also being 

proposed for the MRX exchange 

concurrently with this proposal. 

Derived Data is ‘‘any information 

generated in whole or in part from 

Exchange Information 22 such that the 

information generated cannot be reverse 

engineered to recreate Exchange 

Information, or be used to create other 

data that is recognizable as a reasonable 

substitute for such Exchange 

Information.’’ 


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23 15 U.S.C. 78f(b). 

24 15 U.S.C. 78f(b)(4) and (5). 

25See 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). 

26See 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). 

27See 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). 

28See Nasdaq Rules, Options 7, Section 4 (Nasdaq 

Options Trade Outline (‘‘NOTO’’)). 

29See, 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). 

30See, 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). 

31See, 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). 

32See, 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). 

33See, 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). 

34See supra notes 24–27. 

35The 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)). 

36See Securities Exchange Act Release No. 59039 

(December 2, 2008), 73 FR 74770 (December 9, 

2008) (SR–NYSEArca–2006–21). 

37See id. 

Fees for external distribution of 

Derived Data from BX Options Trade 

Outline are in addition to fees for the 

End of Day product or the Intraday 

product, or both, as applicable. 

The proposal is designed to promote 

the dissemination of a variety of 

analytical insights—generally used only 

by investment banks, market makers, 

asset managers and other buy-side 

investors—to the general investing 

public by creating an incentive for 

market data vendors to identify, 

develop, and sell sentiment indicators 

and other products. The proposal will 

spur competition among not only 

exchanges, but vendors as well, thereby 

promoting innovation and improving 

the dissemination of information to the 

general investing public. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,23 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,24 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. 

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 profile 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 

Products similar to Trade Outline are 

offered by many exchanges, including 

Nasdaq affiliates such as Phlx,25 ISE,26

GEMX,27 and NOM,28 and options 

markets not affiliated with Nasdaq such 

as Cboe Options Exchange (‘‘Cboe’’),29

NYSE American Options (‘‘NYSE 

American’’),30 NYSE Arca Options 

(‘‘NYSE Arca’’),31 BOX Options Market 

LLC (‘‘BOX’’),32 and MIAX Pearl 

Options Exchange (‘‘Pearl’’).33

All of the trade outline products 

offered by the Nasdaq-affiliated 

exchanges include a license for the 

unlimited external distribution of 

Derived Data.34 As noted above, MRX 

will be proposing the same license 

together with this proposal. All of these 

Derived Data licenses are direct 

substitutes. 

The underlying trade outline data 

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 among 

trade outline products depends on the 

volume of transactions on a given 

exchange; the greater the volume of 

transactions, the greater the value of the 

data. Customers generally 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. Because 

customers can substitute trade outline 

products among exchanges, customers 

can also substitute the proposed Derived 

Data license for BX with the Derived 

Data licenses of any of its affiliates. 

The proposed Derived Data license is 

also subject to potential competition 

from exchanges not affiliated with 

Nasdaq. Although the Exchange is not 

aware of any exchanges offering a 

Derived Data license for trade outline 

other than its own affiliates, any 

exchange that wishes to allow 

distribution of a Derived Data product 

based on options trading information 

would be able to do so with an 

immediately effective fee filing similar 

to this proposal. 

All trade outline products are 

optional. Customers can, and do, choose 

to forego the information from Trade 

Outline or any of its competitor 

products when making a trade, and the 

same holds for Derived Data from trade 

outline products. 

As the Commission and courts 35 have 

recognized, ‘‘[i]f competitive forces are 

operative, the self-interest of the 

exchanges themselves will work 

powerfully to constrain unreasonable or 

unfair behavior.’’ 36 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.’’ 37 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 


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38See Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

39See NasdaqTrader.com, ‘‘Options Market 

Statistics,’’ available at https://

www.nasdaqtrader.com/Trader.aspx?id=

OptionsVolumeSummary. 

40See GEMX Options 7, Section 7(D). 

41See supra note 38. 

42See id. 

43See Nasdaq Options 7, Section 4. 

44See supra note 38. 

45See ISE Options 7, Section 10(A). 

46See supra note 38. 

47See PHLX Options 7, Section 10. 48 15 U.S.C. 78s(b)(3)(A)(ii). 

broader forms that are most important to 

investors and listed companies.’’ 38

Because the proposed Derived Data 

license is currently subject to 

competition from other Nasdaq 

exchanges, and potentially subject to 

competition from other exchanges, the 

Exchange will be limited in what it is 

able to charge for the license, and the 

proposed fee is therefore a reasonable 

allocation of dues, fees and other 

charges. 

Comparability 

The proposed fees for the Derived 

Data license are comparable to the fees 

charged by similarly situated exchanges 

for the same license. 

All of the Nasdaq-affiliated exchanges 

offer a Derived Data license for their 

trade outline products. As explained 

above, the value of any trade outline 

product is determined in part by the 

number of underlying transactions 

reflected in the data. 

The proposed fees for the Derived 

Data license are the same as the fees 

charged by similarly situated exchanges. 

BX has a market share of approximately 

2 percent, similar to that of GEMX (at 

approximately 3 percent).39 The 

proposed monthly fee of $3,000 for the 

unlimited external distribution of 

Derived Data is identical to the fee 

charged by GEMX.40

The volume of trading on the BX 

exchange is also similar to that on the 

MRX exchange, which has a market 

share of approximately 4 percent.41

Together with this filing, MRX will 

propose the same monthly fee of $3,000 

as BX for the unlimited external 

distribution of Derived Data. 

The Nasdaq-affiliated exchanges with 

larger market shares have comparably 

higher fees for the unlimited external 

distribution of Derived Data. Nasdaq 

Options Market, with a market share of 

approximately 5 percent,42 has a fee of 

$4,000 per month for the unlimited 

external distribution of Derived Data.43

ISE, with a market share of 

approximately 7 percent,44 has a fee of 

$4,500 per month for the unlimited 

external distribution of Derived Data.45

PHLX, with a market share of 

approximately 9 percent,46 has a fee of 

$5,000 per month for the unlimited 

external distribution of Derived Data.47

The proposed fees are therefore 

comparable to those charged by 

similarly situated exchanges and 

consistent with the fees for Derived Data 

licenses in the market overall. If the 

Exchange is wrong in its assessment of 

fees, it will lose sales as a result. 

The Proposal Does Not Permit Unfair 

Discrimination 

The proposed Derived Data license is 

available to all market participants, 

including members and non-members, 

and all current and potential 

distributors, on the same terms. Nothing 

in the proposal treats any category of 

market participant any differently from 

any other category. 

It is reasonable and not unfair 

discrimination to charge an external 

distributor of Derived Data a $3,000 

licensing fee that is not charged for 

internal usage. External distribution is 

fundamentally different than internal 

use. Vendors ordinarily charge a fee to 

their downstream customers for this 

service, and, even if the vendor is not 

charging a specific fee for this particular 

service, Derived Data products from the 

Exchange will be part of a suite of 

offerings that generally promote sales. It 

is not unfair discrimination to charge a 

licensing fee for a product that generates 

downstream revenue. 

It is also not unfair discrimination to 

allow the redistribution of Derived Data, 

but not the underlying information. 

Neither exchanges nor vendors 

ordinarily allow redistribution of 

analytic products—such products are 

typically designed solely for the use of 

direct customers, not for redistribution 

to the customers of customers in the 

manner of a data feed. 

The proposed licensing structure 

provides an incentive for vendors to 

innovate with new compelling and 

varied analytic products for the general 

investing public that will provide access 

to market sentiment insights currently 

available only to sophisticated 

investors. 

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, BX 

Trade Outline is subject to direct 

competition from other options 

exchanges that offer similar products. 

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 a license to 

distribute Derived Data can do so on a 

non-discriminatory basis. 

Indeed, the proposal is designed to 

foster competition for vendors as well as 

exchanges by creating an incentive for 

market data vendors to identify, 

develop, and sell analytic indicators to 

help investors inform their investments 

strategies and analytic models. 

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.48


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 89, No. 209 / Tuesday, October 29, 2024 / Notices 86007 

49 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Phlx Options 8, Section 34 rule text was 

previously amended by two rule changes which are 

effective, but not yet operative. These two prior rule 

changes will be implemented at the same time as 

the rule changes proposed herein. See Securities 

Exchange Act Release Nos. 97658 (June 7, 2023), 88 

FR 38562 (June 13, 2023) (SR–Phlx–2023–22); and 

100321 (June 12, 2024), 89 FR 51580 (June 18, 2024) 

(SR–Phlx–2024–24). Phlx further delayed the 

implementation so that it could implement SR– 

Phlx–2023–22 while also completing an OCC 

industry rule change prior. 

4See Securities Exchange Act Release No. 97658 

(June 7, 2023), 88 FR 38562 (June 13, 2023) (SR– 

Phlx–2023–22) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

Various Options 8 Rules). SR–Phlx–2023–22 

amended FLEX Orders in 3 ways. First, the 

Exchange amended the rules to require FLEX 

Orders to be reported into Phlx’s Options Floor 

Based Management System or ‘‘FBMS,’’ thereby 

further automating the execution and reporting of 

FLEX Options. All executed FLEX contracts will be 

reported to OPRA and sent to the OCC for clearing, 

similar to all other equity, equity index and U.S. 

dollar-settled foreign currency options orders 

executed on the Exchange’s trading floor. Second, 

the Exchange removed its RFQ process including 

the BBO Improvement Interval Process, with the 

rule change. Third, the Exchange reorganized 

Options 8, Section 34 to restructure the rule to 

include additional information which describes 

current FLEX trading on Phlx. With respect to 

Cabinet Orders, SR–Phlx–2023–22 amended 

Options 8, Section 33 to require Cabinet Orders to 

be reported into FBMS. With this change, members 

and member organizations will be required to 

record all Cabinet Orders represented in the trading 

crowd into FBMS. All executed contracts will be 

reported to OPRA and sent to OCC for clearing 

similar to all other equity, equity index and U.S. 

dollar-settled foreign currency options orders 

executed on the Exchange’s trading floor. 

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. 

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– 

BX–2024–041 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–BX–2024–041. 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–BX–2024–041 and should be 

submitted on or before November 19, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.49

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–25050 Filed 10–28–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101413; File No. SR–Phlx– 

2024–51] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing of 

Proposed Rule Change To Amend 

FLEX Floor Trading Rules 

October 23, 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 October 

8, 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, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Options 8, Section 34, FLEX Trading.3

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Options 8, Section 34, FLEX Trading. 

The Exchange also proposes a technical 

amendment to Options 8, Section 33, 

Accommodation Transactions. 

Options 8, Section 34 

FLEX Options are customized equity, 

index, and currency contracts that allow 

investors to tailor contract terms for 

exchange-listed equity and index 

options. By way of background, in 2023, 

the Exchange filed a rule change to 

amend the manner in which FLEX 

Options are transacted on Phlx’s 

Trading Floor.4 Thereafter, the 

Exchange filed to delay the 

implementation of SR–Phlx–2023–22 to 


khammond on DSKJM1Z7X2PROD with NOTICES