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[Federal Register Volume 89, Number 222 (Monday, November 18, 2024)]
[Notices]
[Pages 90782-90787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26751]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101584; File No. SR-LTSE-2024-08]

Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend the Fee Schedule To Adopt Certain Market Data Fees

November 12, 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 November 1, 2024, Long-Term Stock Exchange, Inc. (``LTSE'' or 
Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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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 is filing with the Securities and Exchange Commission 
(``Commission'') a proposed rule change to amend the LTSE Fee Schedule 
(the ``Fee Schedule'') to adopt certain market data fees effective 
November 1, 2024. The Exchange notes that it submitted a separate 
filing with the Commission pursuant to Section 19(b)(3)(A) of the Act 
to establish the Fee Schedule and adopt transaction fees upon 
commencement of its transition to a new trading platform on September 
23, 2024.
    The text of the proposed rule change is available at the Exchange's 
website at https://longtermstockexchange.com/, at the principal office 
of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement on 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 self-regulatory organization has

[[Page 90783]]

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 is proposing to establish a new section (D. Market 
Data Fees) in the Long-Term Stock Exchange Fee Schedule and adopt fees 
for its proprietary market data feeds, Depth of Book, Top of Book and 
Last Sale (collectively, the ``Exchange Data Feeds''). The Exchange is 
proposing to implement the proposed fees effective November 1, 2024.
Proposed Market Data Pricing
    The Exchange offers three separate data feeds to subscribers--Depth 
of Book, Top of Book and Last Sale. The Exchange notes that there is no 
requirement that any Firm subscribe to a particular Exchange Data Feed 
or any Exchange Data Feed whatsoever, but instead, a Firm may choose to 
maintain subscriptions to those Exchange Data Feeds they deem 
appropriate based on their business model. The proposed fee will not 
apply differently based upon the size or type of Firm, but rather based 
upon the subscriptions a Firm has to Exchange Data Feeds and their use 
thereof, which are in turn based upon factors deemed relevant by each 
Firm. The proposed pricing for each of the Exchange Data Feeds is set 
forth below.
Depth of Book
    The Depth of Book feed is a LTSE-only market data feed that 
contains all displayed orders for securities trading on the Exchange 
(i.e., top and depth-of-book order data), order executions (i.e., last 
sale data), order cancellations, order modifications, order 
identification numbers, and administrative messages.\3\ For the receipt 
of access to the Depth of Book feed the Exchange proposes to charge 
$2,500 per month. The proposed fee would be charged to any data 
recipient that receives the Depth of Book feed for the purpose of 
either internal distribution within the Company and/or with Affiliates 
\4\ or external distribution to External Parties.\5\ The proposed fee 
for Depth of Book will be charged only once per month per subscribing 
entity (``Firm'').
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    \3\ See LTSE Rule 11.330(a)(1).
    \4\ Internal distribution includes the sharing of any Exchange 
data product to other legal entities affiliated with the Firm that 
have been disclosed to the Exchange. For instance, if a company has 
multiple affiliated broker-dealers under the same holding company, 
that company could have one of the broker-dealers or a non broker-
dealer affiliate subscribe to an Exchange Data product and then 
share the data with other affiliates that have a need for the data. 
This sharing with affiliates would not be considered external 
distribution to a third party but instead would be considered 
internal distribution to data recipients within the Distributor's 
own organization.
    \5\ External distribution would be defined to mean a Firm that 
receives an Exchange data product and then distributes that data to 
a third party or one or more data recipients outside the Firm's 
organization.
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Top of Book
    The Top of Book feed is a LTSE-only market data feed that contains 
top of book quotations based on equity orders entered into the System 
as well as administrative messages.\6\ For the receipt of access to the 
Top of Book feed the Exchange proposes to charge $500 per month. The 
proposed fee would be charged to any data recipient that receives the 
Top of Book feed for the purpose of either internal distribution within 
the Company and/or with Affiliates or external distribution to External 
Parties. The proposed fee for Top of Book will be charged only once per 
month per subscribing entity Firm.
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    \6\ See LTSE Rule 11.330(a)(2).
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Last Sale
    The Last Sale feed is a LTSE-only market data feed that contains 
only execution information based on equity orders entered into the 
System as well as administrative messages.\7\ For the receipt of access 
to the Last Sale feed the Exchange proposes to charge $0 per month.
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    \7\ See LTSE Rule 11.330(a)(3).
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    In proposing to charge fees for Exchange Data Feeds, the Exchange 
has sought to be especially diligent in assessing those fees in a 
transparent way against its own aggregate costs of providing the 
related services, and also carefully and transparently assessing the 
impact on Members--both generally and in relation to other Members, 
i.e., to assure the fee will not create a financial burden on any 
participant and will not have an undue impact in particular on smaller 
Members and competition among Members in general. The Exchange believes 
that this level diligence and transparency is called for by the 
requirements of Section 19(b)(1) under the Act,\8\ and Rule 19b-4 
thereunder,\9\ with respect to the types of information self-regulatory 
organizations (``SROs'') should provide when filing fee changes, and 
Section 6(b) of the Act,\10\ which requires, among other things, that 
exchange fees be reasonable and equitably allocated,\11\ not designed 
to permit unfair discrimination,\12\ and that they not impose a burden 
on competition not necessary or appropriate in furtherance of the 
purposes of the Act.\13\ This rule change proposal addresses those 
requirements, and the analysis and data in each of the sections that 
follow are designed to clearly and comprehensively show how they are 
met.\14\
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    \8\ 15 U.S.C. 78s(b)(1).
    \9\ 17 CFR 240.19b-4.
    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78(b)(5) [sic].
    \13\ 15 U.S.C. 78f(b)(8).
    \14\ In 2019, Commission staff published guidance suggesting the 
types of information that SROs may use to demonstrate that their fee 
filings comply with the standards of the Exchange Act (``Fee 
Guidance''). While LTSE understands that the Fee Guidance does not 
create new legal obligations on SROs, the Fee Guidance is consistent 
with LTSE's view about the type and level of transparency that 
exchanges should meet to demonstrate compliance with their existing 
obligations when they seek to charge new fees. See Staff Guidance on 
SRO Rule Filings Relating to Fees (May 21, 2019).
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Cost Analysis
    The Exchange notes it operates a unique model where the LTSE 
trading system and services are provided on an outsourced basis by MEMX 
Technologies LLC.\15\ As such, most of the Exchange's technology costs, 
including those related to Exchange Data Feeds are incorporated into 
the overall fees that the Exchange pays MEMX Technologies as part of 
its multi-year arrangement to provide a trading system and associated 
services. Because of this arrangement, the Exchange does not possess 
the same level of specificity for cost drivers related to Exchange Data 
Feeds as other exchanges have detailed within their own similar 
filings. However, the Exchange recognizes that the costs associated 
with building out and maintaining a state-of-the-art network 
infrastructure for LTSE were extensive and in line with the costs that 
MEMX LLC, an exchange that also uses the trading system and associated 
services of MEMX Technologies, outlined in its own filing establishing 
market data fees for Members and Non-Members.\16\ These include costs 
associated with maintaining and expanding a team of highly-skilled 
engineers, fees charged by the third-party data center operator, and 
costs

[[Page 90784]]

associated with fully-supporting advances in infrastructure and 
expansion of network level services, including customer monitoring, 
alerting and reporting. There are also significant technology expenses 
related to establishing and maintaining Information Security services, 
enhanced network monitoring and customer reporting, as well as 
Regulation SCI mandated processes, associated with the MEMX 
Technologies network technology. Because of this structure, the 
Exchange is unable to separate out the costs for servicing and 
providing Exchange Market Data, as these are intricately combined in 
its DSLA with MEMX Technologies.
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    \15\ The Exchange and MEMX Technologies executed a Development, 
License and Services Agreement on January 23, 2024, with 
accompanying Schedules (collectively, the ``DLSA''). MEMX 
Technologies, an affiliate of the MEMX Exchange, is in the business 
of developing technology systems for use in the financial industry. 
See SR-LTSE-2024-03.
    \16\ See Securities Exchange Act Release No. 34-97130 (March 13, 
2023), 88 FR 16491 (March 17, 2013) (SR-MEMX-2023-04).
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    Further, while the Exchange has been operating since September 
2020, it only entered the DLSA with MEMX Technologies LLC in January of 
this year and launched the new trading system in September 2024. 
Therefore, the Exchange's most recent publicly available financial 
statement (2023 Audited Unconsolidated Financial Statement) is not an 
accurate reflection of the total annual costs associated with the 
development and operation of Market Data on LTSE. Accordingly, the 
Exchange believes it is more appropriate to justify its fees using cost 
figures that are isolated specifically for LTSE on an annualized basis, 
and utilizing a recent monthly billing cycle and extrapolated 
annualized costs on a going-forward basis.
    LTSE recently calculated its aggregate monthly costs for providing 
Market Data at $212,963 beginning October 1, 2024. Before the launch of 
the new trading system in September 2024 the Exchange did not offer any 
market data products. Now, in order to cover some of the aggregate 
costs of providing Market Data to market participants (both Members and 
non-Members) the Exchange is proposing to modify its Fee Schedule and 
charge the Market Data fees detailed above.
    In order to determine the Exchange's costs for providing the 
services associated with the Market Data Fees, the Exchange conducted 
an extensive review in which the Exchange analyzed every expense item 
in the Exchange's general expense ledger to determine whether each such 
expense relates to the services associated with the Market Data Fees, 
and, if such expense did so relate, what portion (or percentage) of 
such expense actually supports those services. The sum of all such 
portions of expenses represents the total cost of the Exchange to 
provide the services associated with the Market Data Fees. For the 
avoidance of doubt, no expense amount was allocated twice. The Exchange 
is also providing detailed information regarding the Exchange's cost 
allocation methodology--namely, information that explains the 
Exchange's rationale for determining that it was reasonable to allocate 
certain expenses described in this filing towards the total cost to 
provide Exchange Data Feeds.
    The Exchange believes that the Market Data Fees are fair and 
reasonable because they will not result in excessive pricing or supra-
competitive profit, when comparing the total annual expense that the 
Exchange projects to incur in connection with providing the services 
associated with the proposed Market Data Fees versus the total annual 
revenue of the Exchange projects to collect in connection with 
providing those services.
Costs Related to Offering Market Data
    The following chart details the individual line-item costs 
considered by LTSE to be related to offering market data as well as the 
percentage of the Exchange's overall costs per year such costs 
represent for such area (e.g., as set forth below, the Exchange 
allocated approximately 10% of its overall Human Resources cost to 
offering market data).

------------------------------------------------------------------------
           Cost drivers                Yearly costs         % of all
------------------------------------------------------------------------
Third-Party Expenses..............         $1,854,420                 32
Human Resources...................            543,100                 10
Data Center.......................            158,040                 30
                                   -------------------------------------
    Total.........................          2,555,560  .................
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    Below are additional details regarding each of the line-item costs 
considered by LTSE to be related to offering the Exchange Data Feeds.
Third-Party Expenses
    As discussed above, LTSE has undertaken a unique model where it has 
outsourced its technology to a third-party technology provider. As such 
the costs associated with Exchange Data Feeds for this provider include 
(1) the network infrastructure costs that includes cabling and switches 
required to generate and disseminate the Exchange Data Feeds. These 
costs also include the servers used at the Exchange's primary and back-
up data centers specifically for the Exchange Data Feeds; (2) costs the 
third-party provider incurs to provide physical connectivity in the 
data centers where it maintains its equipment--such as dedicated space, 
security services, cooling and power, (3) hardware and software 
licenses used to operate and monitor physical assets necessary to offer 
the Exchange Data Feeds, and (4) depreciation of physical assets and 
software, which also includes assets used for generating and 
disseminating the Exchange Data Feeds.
Human Resources
    For personnel costs (Human Resources), LTSE calculated an 
allocation of LTSE employee time for employees whose functions include 
providing services necessary to offer the Exchange Data Feeds, 
including performance thereof, as well as personnel with ancillary 
functions related to establishing and providing such services (such as 
information security and finance personnel). The Exchange notes that it 
has fewer than fifty (50) employees and each department leader has 
direct knowledge of the time spent by each employee with respect to the 
various tasks necessary to operate the Exchange. The estimates of Human 
Resources cost were therefore determined by consulting with such 
department leaders, determining which employees are involved in tasks 
related to providing the Exchange Data Feeds, and confirming that the 
proposed allocations were reasonable based on an understanding of the 
percentage of their time such employees devote to tasks related to 
market data. The Exchange notes that senior level executives were only 
allocated Human Resources costs to the extent the Exchange believed 
they were involved in overseeing tasks related to providing the 
Exchange Data Feeds. The Human Resources cost was calculated using a 
blended rate of compensation reflecting salary, equity and bonus 
compensation, benefits, payroll taxes, and 401(k) matching 
contributions.

[[Page 90785]]

Data Center
    Data Center costs include an allocation of the costs the Exchange 
incurs to monitor its trading platform and the Exchange Data Feeds in 
third-party data centers where it maintains its equipment as well as 
related costs (the Exchange does not own the Primary Data Center or the 
Secondary Data Center, but instead, leases space in data centers 
operated by third parties).
Proposed Fees--Additional Discussion
    In conducting its Cost Analysis, the Exchange did not allocate any 
of its expenses in full to any core service and did not double-count 
any expenses. Instead, as described above, the Exchange identified and 
allocated applicable cost drivers across its core services and used the 
same approach to analyzing costs to form the basis of a separate 
proposal to adopt fees for connectivity services (the ``Connectivity 
Filing'') \17\ and this filing proposing fees for Exchange Data Feeds. 
Thus, the Exchange's allocations of cost across core services were 
based on real costs of operating the Exchange and were not double-
counted across the core services or their associated revenue streams.
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    \17\ See Securities Exchange Act Release No. 34-101320 (October 
11, 2024), 89 FR 83731 (October 17, 2024) (SR-LTSE-2024-07).
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    The Exchange anticipates that the proposed fees for Exchange Data 
Feeds will generate approximately $50,000 monthly ($600,000 annually) 
based on the subscriptions to Exchange Data Feeds in the last six 
weeks, as well as projections of new subscriptions as the Exchange 
ramps up trading within its new trading platform. The proposed fees for 
Exchange Data Feeds are designed to permit the Exchange to cover a 
portion of costs for providing Exchange Data Feeds, which the Exchange 
believes is fair and reasonable after taking into account the costs 
related to creating, generating, and disseminating the Exchange Data 
Feeds and the fact that the Exchange will need to fund future 
expenditures (increased costs, improvements, etc.). LTSE notes that 
like other exchanges, it is after all, a for-profit business. 
Accordingly, while the Exchange believes in transparency around costs 
and potential margins, as well as periodic review of revenues and 
applicable costs (as discussed below), the Exchange does not believe 
that these estimates should form the sole basis of whether or not a 
proposed fee is reasonable or can be adopted. Instead, the Exchange 
believes that the information should be used solely to confirm that an 
Exchange is not earning supra-competitive profits, and the Exchange 
believes its Cost Analysis and related projections demonstrate this 
fact. As a general matter, the Exchange believes that its costs will 
remain relatively similar in future years. It is possible however that 
such costs will either decrease or increase. To the extent the Exchange 
sees growth in use of Exchange Data Feeds it will receive additional 
revenue to offset future cost increases. However, if use of Exchange 
Data Feeds is static or decreases, the Exchange might not realize the 
revenue that it anticipates or needs in order to cover applicable 
costs. Accordingly, the Exchange is committing to conduct a one-year 
review after implementation of these fees. The Exchange expects that it 
may propose to adjust fees at that time, to increase fees in the event 
that revenues fail to cover costs and a reasonable mark-up of such 
costs.
    Similarly, the Exchange expects that it would propose to decrease 
fees in the event that revenue materially exceeds current projections. 
In addition, the Exchange will periodically conduct a review to inform 
its decision making on whether a fee change is appropriate (e.g., to 
monitor for costs increasing/decreasing or subscribers increasing/
decreasing, etc. in ways that suggest the then-current fees are 
becoming dislocated from the prior cost-based analysis) and expects 
that it would propose to increase fees in the event that revenues fail 
to cover its costs and a reasonable mark-up, or decrease fees in the 
event that revenue or the mark-up materially exceeds current 
projections. In the event that the Exchange determines to propose a fee 
change, the results of a timely review, including an updated cost 
estimate, will be included in the rule filing proposing the fee change. 
More generally, the Exchange believes that it is appropriate for an 
exchange to refresh and update information about its relevant costs and 
revenues in seeking any future changes to fees, and the Exchange 
commits to do so.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) \18\ of the Act in general, and 
furthers the objectives of Section 6(b)(4) \19\ of the Act, in 
particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees and other charges among its Members 
and other persons using its facilities. Additionally, the Exchange 
believes that the proposed fees are consistent with the objectives of 
Section 6(b)(5) \20\ of the Act in that they are designed to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to a free and open market and 
national market system, and, in general, to protect investors and the 
public interest, and, particularly, are not designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers.
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    \18\ 15 U.S.C. 78f.
    \19\ 15 U.S.C. 78f(b)(4).
    \20\ 15 U.S.C. 78f(b)(5).
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    The Exchange notes prior to addressing the specific reasons the 
Exchange believes the proposed fees and fee structure are reasonable, 
equitably allocated and not unreasonably discriminatory, that the 
proposed definitions and fee structure described above are consistent 
with the definitions and fee structure used by most U.S. securities 
exchanges, and the Investors Exchange LLC (``IEX'') \21\ in particular. 
As such, the Exchange believes it is adopting a model that is easily 
understood by Members and non-Members, most of which also subscribe to 
market data products from other exchanges. For this reason, the 
Exchange believes that the proposed definitions and fee structure 
described above are consistent with the Act generally, and Section 
6(b)(5) \22\ of the Act in particular.
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    \21\ IEX charges $2,500 per month for its Depth of Book Feed 
(DEEP Feed) and $500 per month for its Top of Book Feed (TOPS Feed). 
All other market data products on IEX are free.
    \22\ 15 U.S.C. 78f(b)(5).
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Reasonableness
    With regard to reasonableness, the Exchange understands that the 
Commission has traditionally taken a market-based approach to examine 
whether the SRO making the fee proposal was subject to significant 
competitive forces in setting the terms of the proposal. The Exchange 
understands that in general the analysis considers whether the SRO has 
demonstrated in its filing that (i) there are reasonable substitutes 
for the product or service; (ii) ``platform'' competition constrains 
the ability to set the fee; and/or (iii) revenue and cost analysis 
shows the fee would not result in the SRO taking supracompetitive 
profits. If the SRO demonstrates that the fee is subject to significant 
competitive forces, the Exchange understands that in general the 
analysis will next consider whether there is any substantial 
countervailing basis to suggest the fee's terms fail to meet one or 
more standards under the Exchange Act. The Exchange

[[Page 90786]]

further understands that if the filing fails to demonstrate that the 
fee is constrained by competitive forces, the SRO must provide a 
substantial basis, other than competition, to show that it is 
consistent with the Exchange Act, which may include production of 
relevant revenue and cost data pertaining to the product or service.
    The Exchange has not determined its proposed overall market data 
fees based on assumptions about market competition, instead relying 
upon a cost-plus model to determine a reasonable fee structure that is 
informed by the Exchange's understanding of different uses of the 
products by different types of participants. In this context, the 
Exchange believes the proposed fees overall are fair and reasonable as 
a form of cost recovery plus the possibility of a reasonable return for 
Exchange's aggregate costs of offering the Exchange Data Feeds. The 
Exchange believes the proposed fees are reasonable because they are 
designed to generate annual revenue to recoup some of Exchange's annual 
costs of providing market data. Accordingly, the Exchange believes that 
this fee methodology is reasonable because it allows the Exchange to 
recoup some or all of its expenses for providing market data products. 
The Exchange also believes that the proposed fees are reasonable 
because they are generally less than the fees charged by competing 
equities exchanges for comparable market data products, notwithstanding 
that the competing exchanges may have different system architectures 
that may result in different cost structures for the provision of 
market data.
    The Exchange believes the proposed fees for the Exchange Data Feeds 
are reasonable when compared to fees for comparable products, such as 
the MEMX LLC (``MEMX'') \23\ MEMOIR Depth Feed,\24\ MEMOIR Top Feed 
\25\ and MEMOIR Last Sale Feed \26\ compared to which the Exchange's 
proposed fees are generally lower, as well as other comparable data 
feeds priced significantly higher than the Exchange's proposed fees for 
the Exchange Data Feeds. Specifically with respect to the Depth of Book 
feed, the Exchange believes that the proposed fees for such feed are 
reasonable because they represent not only the value of the data 
available from the Top of Book and Last Sale data feeds, which have 
lower proposed fees, but also the value of receiving the depth-of-book 
data on an order-by order basis. The Exchange believes it is reasonable 
to have pricing based, in part, upon the amount of information 
contained in each data feed and the value of that information to market 
participants. The Top of Book and Last Sale data feeds, as described 
above, can be utilized to trade on the Exchange but contain less 
information than that is available on the Depth of Book feed (i.e., 
even for a subscriber who takes both feeds, such feeds do not contain 
depth-of-book information). Thus, the Exchange believes it reasonable 
for the products to be priced as proposed, with Last Sale having the 
lowest price, Top of Book the next lowest price, and Depth of Book the 
highest price (and more than Last Sale and Top of Book combined).
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    \23\ See the MEMX fee schedule, available at: https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/.
    \24\ MEMX charges between $1,500 and $5,000 for its Depth of 
Book Feed.
    \25\ MEMX charges between $750 and $10,000 for its Top of Book 
Feed.
    \26\ MEMX charges between $500 and $10,000 for its Last Sale 
Feed.
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Equitable Allocation
    The Exchange believes that its proposed fees are reasonable, fair, 
and equitable, and not unfairly discriminatory because they are 
designed to align fees with services provided. The Exchange believes 
the proposed fees for the Exchange Data Feeds are allocated fairly and 
equitably among the various categories of users of the feeds, and any 
differences among categories of users are justified and appropriate. 
The Exchange believes that the proposed fees are equitably allocated 
because they will apply uniformly to all data recipients that choose to 
subscribe to the Exchange Data Feeds. Any subscriber or vendor that 
chooses to subscribe to one or more Exchange Data Feeds is subject to 
the same Fee Schedule, regardless of what type of business they 
operate, and the decision to subscribe to one or more Exchange Data 
Feeds is based on objective differences in usage of Exchange Data Feeds 
among different Firms, which are still ultimately in the control of any 
particular Firm. The Exchange believes the proposed pricing between 
Exchange Data Feeds is equitably allocated because it is based, in 
part, upon the amount of information contained in each data feed and 
the value of that information to market participants. The Top of Book 
and Last Sale data feeds, as described above, can be utilized to trade 
on the Exchange but contain less information than that is available on 
the Depth of Book feed (i.e., even for a subscriber who takes both 
feeds, such feeds do not contain depth-of-book information). Thus, the 
Exchange believes it is an equitable allocation of fees for the 
products to be priced as proposed, with Last Sale having the lowest 
price, Top of Book the next lowest price, and Depth of Book the highest 
price (and more than Last Sale and Top of Book combined).
The Proposed Fees Are Not Unfairly Discriminatory
    The Exchange believes that the proposed fees are not unfairly 
discriminatory because they would apply to all data recipients that 
choose to subscribe to the same Exchange Data Feed(s). Any vendor or 
subscriber that chooses to subscribe to the Exchange Data Feeds is 
subject to the same Fee Schedule, regardless of what type of business 
they operate. Because the proposed fees for Depth of Book are higher, 
vendors and subscribers seeking lower cost options may instead choose 
to receive data from the SIPs or through the Top of Book and/or Last 
Sale feed for a lower cost. Alternatively, vendors and subscribers can 
choose to pay for the Depth of Book feed in order to receive data in a 
single feed with depth-of-book information if such information is 
valuable to such vendors or subscribers. The Exchange notes that 
vendors or subscribers can also choose to subscribe to a combination of 
data feeds for redundancy purposes or to use different feeds for 
different purposes. In sum, each vendor or subscriber has the ability 
to choose the best business solution for itself. The Exchange does not 
believe it is unfairly discriminatory to base pricing upon the amount 
of information contained in each data feed and the value of that 
information to market participants. As described above, the Top of Book 
and Last Sale data feeds, can be utilized to trade on the Exchange but 
contain less information than that is available on the Depth of Book 
feed (i.e., even for a subscriber who takes both feeds, such feeds do 
not contain depth-of-book information). Thus, the Exchange believes it 
is not unfairly discriminatory for the products to be priced as 
proposed, with Last Sale having the lowest price, Top of Book the next 
lowest price, and Depth of Book the highest price (and more than Last 
Sale and Top of Book combined).

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

    In accordance with Section 6(b)(8) of the Act,\27\ the Exchange 
does not believe that the proposed rule change would impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act.
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    \27\ 15 U.S.C. 78f(b)(8).

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[[Page 90787]]

Intramarket Competition
    The Exchange does not believe that the proposed fees for Exchange 
Data Feeds place certain market participants at a relative disadvantage 
to other market participants because, as noted above, the proposed fees 
are associated with usage of Exchange Data Feeds by each market 
participant based on the type of business they operate, and the 
decision to subscribe to one or more Exchange Data Feeds is based on 
objective differences in usage of Exchange Data Feeds among different 
Firms, which are still ultimately in the control of any particular 
Firm, and such fees do not impose a barrier to entry to smaller 
participants. Accordingly, the proposed fees for Exchange Data Feeds do 
not favor certain categories of market participants in a manner that 
would impose a burden on competition; rather, the allocation of the 
proposed fees reflects the types of Exchange Data Feeds consumed by 
various market participants and their usage thereof.
Intermarket Competition
    The Exchange does not believe the proposed fees place an undue 
burden on competition on other SROs that is not necessary or 
appropriate. In particular, market participants are not forced to 
subscribe to any of the Exchange Data Feeds, as described above. 
Additionally, other exchanges have similar market data fees in place 
for their participants, but with comparable and in many cases higher 
rates for market data feeds. The proposed fees are based on actual 
costs and are designed to enable the Exchange to recoup its applicable 
costs with the possibility of a reasonable profit on its investment as 
described in the Purpose and Statutory Basis sections. Competing 
equities exchanges are free to adopt comparable fee structures subject 
to the SEC rule filing process.

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

    This proposed rule change establishes dues, fees or other charges 
among its members and, as such, may take effect upon filing with the 
Commission pursuant to Section 19(b)(3)(A)(ii) of the Act \28\ and 
paragraph (f)(2) of Rule 19b-4 thereunder.\29\ Accordingly, the 
proposed rule change would take effect upon filing with the Commission.
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    \28\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \29\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend the rule 
change if it appears to the Commission that the action is necessary or 
appropriate in the public interest, for the protection of investors, or 
would otherwise further 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 [email protected]. Please include 
file number SR-LTSE-2024-08 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-LTSE-2024-08. 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-LTSE-2024-08 and should be 
submitted on or before December 9, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-26751 Filed 11-15-24; 8:45 am]
BILLING CODE 8011-01-P
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