Federal Register / Vol. 87, No. 15 / Monday, January 24, 2022 / Notices 3599 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37495, 37499 (June 29, 2005) 

(S7–10–04) (Final Rule) (‘‘Regulation NMS 

Adopting Release’’). 

4See Securities Exchange Act Release No. 84875, 

84 FR 5202, 5253 (February 20, 2019) (File No. S7– 

05–18) (Transaction Fee Pilot for NMS Stocks Final 

Rule) (‘‘Transaction Fee Pilot’’). 

5See FINRA ATS Transparency Data, available at 

https://otctransparency.finra.org/otctransparency/ 

AtsData. A list of alternative trading systems 

registered with the Commission is available at 

https://www.sec.gov/foia/docs/atslist.htm. 

6See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (December 10, 

2021) available at http://markets.cboe.com/us/ 

equities/market_share/. 

7Competing top-of-book products include, 

Nasdaq Basic, BX Basic, PSX Basic, NYSE BQT, 

NYSE BBO/Trades, NYSE Arca BQT, NYSE Arca 

BBO/Trades, NYSE American BBO/Trades, NYSE 

Chicago BBO/Trades, IEX TOPS, MIAX PEARL 

Equities Top of Market Feed, and MEMX MEMOIR 

Top. 

8For example, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’) offers ‘‘Nasdaq Basic’’ which is a realtime market data product that offers best bid and 

offer and last sale information for all U.S. exchangelisted securities based on liquidity within the 

Nasdaq market center and trades reported to the 

FINRA/Nasdaq Trade Reporting Facility (‘‘Nasdaq 

TRF’’). See Nasdaq Equity Rules, Equity 7, Pricing 

Schedule, Section 147(a). The type of information 

contained on the BYX Top Feed is substantially 

similar to that offered through Nasdaq Basic, except 

that the Exchange disseminates information about 

quotes and trades on BYX, whereas Nasdaq Basic 

provides information about quotes and trades on 

Nasdaq and the Nasdaq TRF. Other national 

securities with competing top-of-book products also 

Continued 

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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeEDGA–2022–001 and 

should be submitted on or before 

February 14, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01226 Filed 1–21–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93996; File No. SR– 

CboeBYX–2022–001] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend the 

Fees Applicable to Various Market 

Data Products 

January 18, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 4, 

2022, Cboe BYX Exchange, Inc. 

(‘‘Exchange’’ or ‘‘BYX’’) 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 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 

Cboe BYX Exchange, Inc. (‘‘BYX’’ or 

the ‘‘Exchange’’) is filing with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) a proposed rule 

change to amend the fees applicable to 

various market data products. The text 

of the proposed rule change is provided 

in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/byx/), at 

the Exchange’s Office of the Secretary, 

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 the 

Market Data section applicable to its 

equities trading platform (‘‘BYX 

Equities’’). Particularly, the Exchange 

proposes to (i) decrease the External 

Distribution fee applicable to BYX Top, 

(ii) adopt a New External Distributor 

Credit applicable to Cboe One Premium, 

and (iii) extend the New External 

Distributor Credit applicable to BYX 

Summary Depth Feed from one (1) 

month to three (3) months. 

Market Background 

The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. In 

Regulation NMS, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues, and also recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 3 As 

the Commission itself recognized, the 

market for trading services in NMS 

stocks has become ‘‘more fragmented 

and competitive.’’ 4

Equity trading is currently dispersed 

across sixteen exchanges, more than 50 

alternative trading systems,5 and 

numerous broker-dealer internalizers 

and wholesalers, all competing fiercely 

for order flow. Based on publiclyavailable information, no single U.S. 

equities exchange has more than 17% 

market share.6 In turn, the market for 

top-of-book quotation and transaction 

data is highly competitive as national 

securities exchanges compete vigorously 

with each other to provide efficient, 

reliable, and low-cost data to a wide 

range of investors and market 

participants. In fact, there are twelve 

competing products offered by other 

national securities exchanges today,7

not counting products offered by the 

Exchange’s affiliates, and each of the 

Exchange’s affiliated U.S. equities 

exchanges also offers similar top-ofbook data. Each of those exchanges offer 

top-of-book quotation and last sale 

information based on their own 

quotation and trading activity that is 

substantially similar to the information 

provided by the Exchange through the 

BYX Top Feed.8 Exchange top-of-book 


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offer substantially similar types of information 

through those top-of-book products. 

9See Exchange Rule 11.22(d). 

10See Exchange Rule 1.5(aa). 

11An External Distributor of an Exchange Market 

Data product is a Distributor that receives the 

Exchange Market Data product and then distributes 

that data to a third party or one or more Users 

outside the Distributor’s own entity. 

12See Securities Exchange Act Release No. 77886 

(May 23, 2016) 81 FR 33722 (May 27, 2016) (SR– 

BatsBYX–2016–08). 

13The Exchange notes that the fee for Cboe One 

Summary is equivalent to the aggregate BYX Top, 

BZX, Top, EDGX Top, and EDGA Top fees. The 

Exchange is not proposing to change the current 

Cboe One Summary external distribution fee. 

Instead, the Cboe EDGX Exchange, Inc. (‘‘EDGX’’) 

has simultaneously with this proposal proposed to 

increase its fee for EDGX Top by $750 in order to 

ensure the proposed fee will continue to not cause 

the combined cost of subscribing to BYX, EDGA, 

EDGX, and BZX individual Top and Last Sale feeds 

to be greater than those currently charged to 

subscribe to the Cboe One Summary fee. 

14See infra notes 28, 29, 31, and 32. 

15The Cboe Aggregated Market (‘‘Cboe One’’) 

Feed is a data feed that contains the aggregate best 

bid and offer of all displayed orders for securities 

traded on the Exchange and its affiliated exchanges 

(i.e., EDGX, EDGA, and BZX). See Exchange Rule 

11.22(i). The Cboe One Feed contains optional 

functionality which enables recipients to receive 

aggregated two-sided quotations from the Cboe 

Equities Exchanges for up to five (5) price levels 

(‘‘Cboe One Premium Feed’’). The Cboe One 

Premium external distribution fee is equal to the 

aggregate BYX Summary Depth, BYX Summary 

Depth, EDGA Summary Depth, and BZX Summary 

Depth external distribution fees. 

16See Exchange Rule 11.22(i). 

17The Exchange notes that when it first adopted 

the New External Distributor Credit for Cboe One 

Summary, it similarly applied for a new External 

Distributor’s first three (3) months. See Securities 

Exchange Act Release No. 74284 (February 18, 

2015), 80 FR 9792 (February 24, 2015) (SR–BYX– 

2015–09). 

18See Exchange Rule 11.22(k) 

19 15 U.S.C. 78f. 

20 15 U.S.C. 78f(b)(4). 

21 15 U.S.C. 78k–1. 

22See 17 CFR 242.603. 

data is therefore widely available today 

from a number of different sources. 

Fees for External Distribution of BYX 

Top 

The Exchange first proposes to 

decrease the external distribution fee 

applicable to BYX Top,9 which is an 

uncompressed data feed that offers topof-book quotations and execution 

information based on equity orders 

entered into the System.10 Currently, the 

Exchange charges an external 

distribution fee (i.e., distribution 

outside the distributor’s own firm) of 

$1,000 per month to External 

Distributors 11 of BYX Top. The 

Exchange also charges a professional 

user fee of $1.00 per month, a nonprofessional user fee of $0.025 per 

month, an enterprise fee of $10,000 per 

month, and a digital media enterprise 

fee of $2,500 per month that is 

applicable to External Distributors. The 

external distribution fees have been in 

place, without change, since June 1, 

2016.12 Nonetheless, the Exchange 

proposes to decrease the monthly charge 

for external distribution of BYX Top 

from $1,000 to $250 per month (i.e., a 

decrease of $750 per month),13 which 

would continue to be cheaper than 

similar products offered by certain of 

the Exchange’s competitors.14 The 

Exchange proposes no changes to the 

professional, non-professional, 

enterprise and digital media enterprise 

fees associated with external 

distribution. 

Cboe One Premium and BYX Top Depth 

New External Distributor Credit 

The Exchange next proposes to adopt 

a New External Distributor Credit 

applicable to Cboe One Premium and 

extend the New External Distributor 

Credit applicable to BYX Summary 

Depth Feed from one (1) month to three 

(3) months. By way of background, Cboe 

One Premium is a data feed that 

disseminates, on a real-time basis, the 

aggregate best bid and offer (‘‘BBO’’) of 

all displayed orders for securities traded 

on BYX and its affiliated exchanges (i.e., 

EDGX, Cboe EDGA Exchange, Inc. 

(‘‘EDGA’’), and Cboe BZX Exchange, 

Inc. (‘‘BZX’’)) and contains optional 

functionality which enables recipients 

to receive aggregated two-sided 

quotations from BYX and its affiliated 

equities exchanges for up to five (5) 

price levels.15 Currently, the Exchange 

charges an external distribution fee of 

$12,500 per month to External 

Distributors of Cboe One Premium. The 

Exchange now proposes to adopt a New 

External Distributor Credit which 

provide that new External Distributors 

of the Cboe One Premium Feed will not 

be charged an External Distributor Fee 

for their first three (3) months in order 

to allow them to enlist new Users to 

receive the Cboe One Summary[sic] 

Feed. The Exchange believes the 

proposal will incentivize External 

Distributors to enlist new users to 

receive Cboe One Premium. To ensure 

consistency across the Cboe Equity 

Exchanges, BZX, EDGX, and EDGA will 

be filing companion proposals to reflect 

this proposal in their respective fee 

schedules. 

The Exchange notes that it offers 

similar credits for other market data 

products. For example, the Exchange 

currently offers a one (1) month New 

External Distributor Credit applicable to 

Cboe One Summary,16 which is a data 

feed that disseminates, on a real-time 

basis, the aggregate BBO of all displayed 

orders for securities traded on BYX and 

its affiliated equities exchanges and also 

contains individual last sale information 

for the BYX and its affiliated equities 

exchanges.17 It also offers a New 

External Distributor Credit of one (1) 

month for subscribers of BYX Summary 

Depth, which is a data feed that offers 

aggregated two-sided quotations for all 

displayed orders entered into the 

System for up to five (5) price levels. 

BYX Summary Depth also contains the 

individual last sale information, Market 

Status, Trading Status, and Trade Break 

messages.18 The External Distribution 

fees for Cboe One Premium is 

equivalent to the aggregate BYX 

Summary Depth, BZX Summary Depth, 

EDGX Summary Depth, and EDGA 

Summary Depth External Distribution 

fees. In order to alleviate any 

competitive issues that may arise with 

a vendor seeking to offer a product 

similar to the Cboe One Premium Feed 

based on the underlying data feeds, the 

Exchange proposes to also extend the 

current New External Distributor Credit 

for BYX Summary Depth from one (1) 

month to three (3) months and the 

Exchange’s affiliates EDGX, BZX and 

EDGA are also submitting similar 

proposals to increase the length of their 

respective Summary Depth New 

External Distributor Credits from one (1) 

month to three (3) months. The 

respective proposals to extend these 

credits to three months ensures the 

proposed New External Distributor 

Credit for Cboe One Premium will 

continue to not cause the combined cost 

of subscribing to BYX, EDGA, EDGX, 

and BZX Summary Depth feeds for new 

External Distributors to be greater than 

those currently charged to subscribe to 

the Cboe One Premium feed. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,19

in general, and furthers the objectives of 

Section 6(b)(4),20 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other recipients of Exchange data. In 

addition, the Exchange believes that the 

proposed rule change is consistent with 

Section 11(A) of the Act as it supports 

(i) fair competition among brokers and 

dealers, among exchange markets, and 

between exchange markets and markets 

other than exchange markets, and (ii) 

the availability to brokers, dealers, and 

investors of information with respect to 

quotations for and transactions in 

securities.21 Finally, the proposed rule 

change is also consistent with Rule 603 

of Regulation NMS,22 which provides 


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23NetCoalition v. SEC, 615 F.3d 525, 535 (D.C. 

Cir. 2010) (‘‘NetCoalition I’’) (quoting H.R. Rep. No. 

94–229 at 92 (1975), as reprinted in 1975 

U.S.C.C.A.N. 323). 

24 Id. at 535. 

25The Exchange notes that broker-dealers are not 

required to purchase proprietary market data to 

comply with their best execution obligations. See In 

the Matter of the Application of Securities Industry 

and Financial Markets Association for Review of 

Actions Taken by Self-Regulatory Organizations, 

Release Nos. 34- 72182; AP–3–15350; AP–3–15351 

(May16, 2014). Similarly, there is no requirement in 

Regulation NMS or any other rule that proprietary 

data be utilized for order routing decisions, and 

some broker-dealers and ATSs have chosen not to 

do so. 

26Although the Exchange does not have access to 

the customer lists for other competing products, it 

understands based on conversations with 

subscribers to BYX Top that they typically view 

exchange top-of-book products as substitutes and 

do not generally look to purchase such data from 

more than one national securities exchange. 

that any national securities exchange 

that distributes information with respect 

to quotations for or transactions in an 

NMS stock do so on terms that are not 

unreasonably discriminatory. 

The Exchange operates in a highly 

competitive environment. Indeed, there 

are now sixteen registered U.S equities 

exchanges, and with the exception of 

Long-Term Stock Exchange, Inc. 

(‘‘LTSE’’), which has determined to not 

offer any proprietary market data feeds, 

each of these exchanges offer associated 

market data products to their customers, 

either with or without a fee. It is in this 

robust and competitive market in which 

the Exchange is proposing to increase its 

fees, while still providing its data at a 

significantly lower price than competing 

products offered by other national 

securities exchanges with similar data 

quality. 

The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. 

Further, with respect to market data, the 

decision of the United States Court of 

Appeals for the District of Columbia 

Circuit in NetCoalition v. SEC upheld 

the Commission’s reliance on the 

existence of competitive market 

mechanisms to evaluate the 

reasonableness and fairness of fees for 

proprietary market data: ‘‘In fact, the 

legislative history indicates that the 

Congress intended that the market 

system ‘evolve through the interplay of 

competitive forces as unnecessary 

regulatory restrictions are removed’ and 

that the SEC wield its regulatory power 

‘in those situations where competition 

may not be sufficient,’ such as in the 

creation of a ‘consolidated transactional 

reporting system.’ ’’ 23 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.’ ’’ 24 As discussed in 

this filing, significant competitive forces 

constrain the ability of the Exchange to 

charge supra-competitive fees. 

BYX Top 

i. The BYX Top Feed Is an Optional 

Market Data Product, and the Exchange 

Is Constrained in its Pricing by 

Significant Competitive Forces 

Subscribing to BYX Top is entirely 

optional. The Exchange is not required 

to make BYX Top available to any 

customers, nor is any customer required 

to purchase BYX Top.25 A customer’s 

decision as to whether to purchase BYX 

Top is therefore entirely discretionary 

and is based on that firms individual 

business needs. Generally, firms that 

choose to subscribe to BYX Top do so 

because they believe that it is a costeffective source for top-of-book data that 

provides valuable information about the 

market for national market system 

(‘‘NMS’’) stocks traded on the Exchange, 

where a consolidated display covering 

all U.S. equities exchanges is not 

required. Such firms are able to 

determine for themselves whether BYX 

Top helps them to achieve their 

business goals, and if so, whether or not 

it is attractively priced compared to 

other similar top-of-book products 

offered by competing exchanges. 

Indeed, if BYX Top does not provide 

sufficient value to firms based on the 

uses those firms may have for it, such 

firms may simply choose to conduct 

their business operations in ways that 

do not use BYX Top. And, as discussed 

later in this filing, any External 

Distributor of top-of-book data that does 

not wish to purchase BYX Top, due to 

the price of that data or for any other 

reason, can choose to substitute similar 

information from other exchanges. 

Although the Exchange is not required 

to make any data, including top-of-book 

data, available through its proprietary 

market data platform, the Exchange 

believes that making such data available 

increases investor choice, and 

contributes to a fair and competitive 

market. Specifically, making such data 

publicly available through proprietary 

data feeds allows investors to choose 

alternative, potentially less costly, 

market data based on their business 

needs. For example, a broker or fintech 

firm may choose to purchase BYX Top, 

or a similar product from another 

exchange, in order to perform 

investment analysis, or to provide 

general information about the market for 

U.S. equity securities, respectively. In 

either case the choice to purchase BYX 

Top would be based on the firm’s 

determination of the value of the data 

offered by their chosen product 

compared to the cost of acquiring this 

data instead of receiving similar data 

from other sources. BYX Top serves as 

a valuable reference for investors that do 

not require a consolidated display. 

Making alternative products available to 

market participants ultimately ensures 

competition in the marketplace, and 

constrains the ability of exchanges to 

charge supra-competitive fees. Further, 

in the event that a market data customer 

views one exchange’s top-of-book data 

product and/or fees as more or less 

attractive than a competitor’s offerings 

they can and often do switch between 

competing products. As discussed, 

similar top-of-book information is 

available from a number of competing 

U.S. equities exchanges.26 This includes 

a number of large established exchanges 

that charge for access to such top-ofbook data, as well as certain smaller or 

new exchange entrants that provide 

similar data without charge, in many 

cases as a way of attracting customers to 

their exchange while they seek to grow 

market share. In this way, BYX Top and 

other top-of-book products offered by a 

number of U.S. equities exchanges, are 

all substitutes. The availability of these 

substitute products constrains the 

Exchange’s ability to charge supracompetitive prices as market 

participants can easily obtain similar 

data from one of the Exchange’s many 

competitors. In fact, the impact of 

competition on the market in which 

BYX Top is offered to market 

participants and investors is showcased 

by Exchange affiliates’ other recent fee 

changes related to this product, which 

involved the reduction of fees to 

facilitate the Exchange affiliates’ ability 

to compete for customers. 

Distributors can discontinue use of 

BYX Top at any time and for any reason, 

including due to an assessment of the 

reasonableness of fees charged. Other 

External Distributors are free to 

similarly cancel their subscriptions in 

favor of a competitor offering, or 

cheaper or free data offered by the 

Exchange’s affiliated U.S. equities 

exchanges, if they believe that the fees 

are too high given their particular use 

case for obtaining the data that the 

Exchange provides over BYX Top. The 

Exchange offers all of its proprietary 

market data products pursuant to a 

month-to-month contract that allows 

subscribers to choose to terminate their 

subscription at any time. As a result, 

there are no contractual or other legal 


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27Market data vendors typically establish 

connectivity to a number of national securities 

exchanges to be able to offer their market data to 

customers. 

28See NYSE PDP Market Data Pricing, Section 

1.3, NYSE BBO. 

29See NYSE PDP Market Data Pricing, Section 

1.4, NYSE Trades. 

30Supra note 3. 

31See NYSE PDP Market Data Pricing, Section 

3.3, NYSE Arca BBO; NYSE PDP Market Data 

Pricing, Section 3.4, NYSE Arca Trades. 

32See Nasdaq Equity Rules, Equity 7, Pricing 

Schedule, Section 147(c)(1). In addition, Nasdaq 

also charges distributors a $100 monthly 

administrative fee. See Nasdaq Equity Rules, Equity 

7, Pricing Schedule, Section 135. 

33An Internal Distributor of an Exchange Market 

Data product is a Distributor that receives the 

Exchange Market Data product and then distributes 

that data to one or more Users within the 

Distributor’s own entity. 

impediments for firms that wish to 

cancel their subscription to the 

Exchange’s market data products, 

including BYX Top. In addition, the 

Exchange notes that a majority of 

External Distributors of BYX Top either 

receive this data through a market data 

vendor, as opposed to directly from the 

Exchange, or is a market data vendor 

itself. Thus, firms can seamlessly switch 

to any other competitor product offered 

by their chosen vendor without 

incurring additional switching costs, 

such as the cost of establishing 

connectivity to another exchange to 

receive its market data.27

In setting the proposed fees for BYX 

Top, the Exchange considered the 

competitiveness of the market for 

proprietary data and all of the 

implications of that competition. 

Indeed, the Exchange is not in a 

position to charge unreasonable fees for 

its top-of-book data as there are a 

number of competing products in the 

market, including products that are 

currently offered free of charge by 

certain other exchanges that have 

determined not to charge for their 

market data. The existence of 

alternatives to BYX Top ensures that the 

Exchange cannot set unreasonable fees 

when vendors and subscribers can 

freely elect these alternatives or choose 

not to purchase a specific proprietary 

data product if the attendant fees are not 

justified by the returns that any 

particular vendor or data recipient 

would achieve through the purchase. 

ii. The Proposed Fees Are Reasonable 

Given the Value of the Data Provided to 

Customers, and When Compared to 

Competing Market Data Products 

The proposed fees are also reasonable 

they would represent a decreased fee for 

top-of-book data that has proven 

valuable for investors. BYX Top is a 

competitively-priced alternative to topof-book data disseminated by other 

national securities exchanges. It is 

purchased by a wide variety of market 

participants and vendors, including data 

platforms, websites, fintech firms, buyside investors, retail brokers, regional 

banks, and securities firms inside and 

outside of the U.S. that desire low cost, 

high quality, real-time U.S. equity 

market data. By providing lower cost 

access to U.S. equity market data, BYX 

Top benefits a wide range of investors 

that participate in the national market 

system. As discussed, the decision to 

purchase a particular market data 

product from a particular exchange is 

largely based on two factors: (1) The 

quality of the data, and (2) the price 

charged for access to that data. The 

Exchange believes that BYX Top is 

competitive on both of these factors. 

First, BYX Top would remain 

competitively priced compared to 

similar products offered by other 

comparable U.S. equities exchanges. 

Although BYX Top is not offered free of 

charge like certain other competitor 

offerings, particularly those offered by 

newer U.S. equities exchanges that are 

seeking to grow market share, it is made 

available at a price that is less than the 

prices charged by the Exchange’s main 

competitors—i.e., those with 

comparable market shares and data 

quality. Notably, BYX Top would 

remain significantly cheaper than 

similar products offered by New York 

Stock Exchange LLC (‘‘NYSE’’), NYSE 

Arca, Inc. (‘‘Arca’’) and Nasdaq in terms 

of the fees charged for external 

distribution. For example, NYSE 

charges a total of $4,000 per month for 

access and redistribution of their 

equivalent products, i.e., $1,500 per 

month for applicable top-of-book 

quotation information,28 and an 

additional $1,500 per month for 

transaction information,29 both of which 

are included in BYX Top for a single 

fee.30 In addition, a $1,000 per month 

redistribution fee is applied. Arca, 

which has a similar pricing model to 

NYSE, charges a rate of $2,250 per 

month for access and redistribution of 

its equivalent products, separated into a 

$750 per month charge for top-of-book 

quotation information, an additional 

$750 per month charge for transaction 

information, and $750 per month for 

redistribution.31 Finally, Nasdaq 

charges its External Distributors a fee of 

$2,000 per month for Nasdaq Basic, 

which includes both top-of-book 

quotation information and transaction 

information for the same fee, a $350 per 

month Data Consolidation fee, and a 

$100 per month Monthly 

Administrative Fee.32 The external 

distribution charges associated with 

obtaining comparable U.S. equities 

market data from NYSE, Arca and 

Nasdaq runs significantly more than the 

proposed fee to be charged by the 

Exchange, meaning that the Exchange 

would continue to be offering its data at 

a price that is attractive compared to the 

prices charged by its competitors. 

iii. The Proposed Fees Are Equitable 

and Not Unfairly Discriminatory as 

External Distributors Will Be Subject to 

Uniform Pricing Based on Their Usage 

of the Data and Differences Between the 

Fees Charged for Internal and External 

Distribution Are Appropriate 

The Exchange believes the proposed 

fees for external distribution of BYX 

Top will continue to be allocated fairly 

and equitably among subscribers, and 

are not unfairly discriminatory, as the 

proposed fees will apply equally to all 

data recipients that choose to subscribe 

to BYX Top and distribute that data to 

external subscribers. As proposed, all 

External Distributors of BYX Top will 

continue to be subject to the same 

external distribution fee, regardless of 

the type of business that they operate, 

or the use they plan to make of the data 

feed. Thus, all External Distributors 

would have access to BYX Top on the 

same equitable and non-discriminatory 

terms. 

The Exchange believes that it is also 

fair and equitable, and not unfairly 

discriminatory to charge different fees 

for internal and external distribution of 

the BYX Top. As the proposed 

distribution fee charged to External 

Distributors is higher[sic] than the 

existing distribution fee charged to 

Internal Distributors,33 the proposal is 

designed to incentivize External 

Distributors to subscribe to BYX Top. 

Nonetheless, External Distributors are 

subject to professional user fees, nonprofessional user fees, an enterprise fee, 

and a digital media enterprise fee to 

which Internal Distributors are not 

subject. 

New External Distributor Fee Credit 

The Exchange also believes that 

adopting a New External Distributor 

Credit for Cboe One Premium is 

equitable and reasonable. As discussed 

above, a similar New External 

Distributor Fee Credit was initially 

adopted at the time the Exchange began 

to offer the Cboe One Summary to 

subscribers. It was intended to 

incentivize new Distributors to enlist 

Users to subscribe to Cboe One 

Summary in an effort to broaden the 

product’s distribution. Now the 

Exchange proposes to adopt a similar 


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Federal Register / Vol. 87, No. 15 / Monday, January 24, 2022 / Notices 3603 

34 15 U.S.C. 78s(b)(3)(A). 

35 17 CFR 240.19b–4(f). 

credit for Cboe One Premium 

subscribers for their first three (3) 

months to similarly incentivize new 

Distributors to enlist Users to subscribe 

to Cboe One Premium in an effort to 

broaden the product’s distribution. 

While this incentive is not available to 

Internal Distributors of Cboe One 

Premium, the Exchange believes it is 

appropriate as Internal Distributors have 

no subscribers outside of their own firm. 

The Exchange believes extending the 

New External Distributor Credit for BYX 

Summary Depth from one (1) month to 

three (3) months is also equitable and 

reasonable, as it (along with 

simultaneous corresponding proposals 

by the Exchange’s affiliates) ensures the 

proposed New External Distributor 

Credit for Cboe One Premium will 

continue to not cause the combined cost 

of subscribing to BYX, EDGA, EDGX, 

and BZX Summary Depth feeds for new 

External Distributors to be greater than 

those currently charged to subscribe to 

the Cboe One Premium feed. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would result 

in any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange operates in a highly 

competitive environment, and its ability 

to price these data products is 

constrained by competition among 

exchanges that offer similar data 

products to their customers. Top-ofbook data and depth-of-book data is 

broadly disseminated by competing U.S. 

equities exchanges. There are therefore 

a number of alternative products 

available to market participants and 

investors, including products offered by 

certain competing exchanges without 

charge. In this competitive environment 

potential subscribers are free to choose 

which competing product to purchase to 

satisfy their need for market 

information. Often, the choice comes 

down to price, as market data customers 

look to purchase cheaper data products, 

and quality, as market participants seek 

to purchase data that represents 

significant market liquidity. 

Intramarket Competition. The 

Exchange believes that the proposed 

fees do not put any market participants 

at a relative disadvantage compared to 

other market participants. As discussed, 

the proposed fees and credit would 

apply to all External Distributors of BYX 

Top and Cboe One Premium, 

respectively, on an equal and nondiscriminatory basis. The difference in 

fees for internal and external 

distribution of BYX Top are reasonably 

designed to incentivize External 

Distributors to subscribe to BYX To. 

Further, the credit applicable to only 

External Distributors is appropriate as it 

incentivizes such External Distributors 

to enlist subscribers, whereas Internal 

Distributors have no subscribers outside 

their firm. The Exchange therefore 

believes that the proposed fees neither 

favor nor penalize one or more 

categories of market participants in a 

manner that would impose an undue 

burden on competition. 

Intermarket Competition. The 

Exchange believes that the proposed 

fees do not impose a burden on 

competition or on other SROs that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. In setting the 

proposed fees, the Exchange is 

constrained by the availability of 

numerous substitute products offered by 

other national securities exchanges. 

Because market data customers can find 

suitable substitute feeds, an exchange 

that overprices its market data products 

stands a high risk that users may 

substitute another product. These 

competitive pressures ensure that no 

one exchange’s market data fees can 

impose an undue burden on 

competition, and the Exchange’s 

proposed fees do not do so here. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 34 and paragraph (f) of Rule 

19b–4 35 thereunder. 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 will institute proceedings 

to determine whether the proposed rule 

change 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBYX–2022–001 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–2022–001. 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 (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBYX–2022–001 and 

should be submitted on or before 

February 14, 2022. 


jspears on DSK121TN23PROD with NOTICES1
3604 Federal Register / Vol. 87, No. 15 / Monday, January 24, 2022 / Notices 

36 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37495, 37499 (June 29, 2005) 

(S7–10–04) (Final Rule) (‘‘Regulation NMS 

Adopting Release’’). 4See Securities Exchange Act Release No. 84875, 

84 FR 5202, 5253 (February 20, 2019) (File No. S7– 

05–18) (Transaction Fee Pilot for NMS Stocks Final 

Rule) (‘‘Transaction Fee Pilot’’). 5See FINRA ATS Transparency Data, available at 

https://otctransparency.finra.org/otctransparency/ 

AtsData. A list of alternative trading systems 

registered with the Commission is available at 

https://www.sec.gov/foia/docs/atslist.htm. 

6See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (December 10, 

2021) available at http://markets.cboe.com/us/ 

equities/market_share/. 

7Competing top-of-book products include, 

Nasdaq Basic, BX Basic, PSX Basic, NYSE BQT, 

NYSE BBO/Trades, NYSE Arca BQT, NYSE Arca 

BBO/Trades, NYSE American BBO/Trades, NYSE 

Chicago BBO/Trades, IEX TOPS, MIAX PEARL 

Equities Top of Market Feed, and MEMX MEMOIR 

Top. 8For example, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’) offers ‘‘Nasdaq Basic’’ which is a realtime market data product that offers best bid and 

offer and last sale information for all U.S. exchangelisted securities based on liquidity within the 

Nasdaq market center and trades reported to the 

FINRA/Nasdaq Trade Reporting Facility (‘‘Nasdaq 

TRF’’). See Nasdaq Equity Rules, Equity 7, Pricing 

Schedule, Section 147(a). The type of information 

contained on the EDGX Top Feed is substantially 

similar to that offered through Nasdaq Basic, except 

that the Exchange disseminates information about 

quotes and trades on EDGX, whereas Nasdaq Basic 

provides information about quotes and trades on 

Nasdaq and the Nasdaq TRF. Other national 

securities with competing top-of-book products also 

offer substantially similar types of information 

through those top-of-book products. 

9See Exchange Rule 13.8(c). 10See Exchange Rule 1.5(cc). 11An External Distributor of an Exchange Market 

Data product is a Distributor that receives the 

Exchange Market Data product and then distributes 

that data to a third party or one or more Users 

outside the Distributor’s own entity. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01227 Filed 1–21–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93997; File No. SR– 

CboeEDGX–2022–002] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend the 

Fees Applicable to Various Market 

Data Products 

January 18, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 4, 

2022, Cboe EDGX Exchange, Inc. 

(‘‘Exchange’’ or ‘‘EDGX’’) 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 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 

Cboe EDGX Exchange, Inc. (‘‘EDGX’’ 

or the ‘‘Exchange’’) is filing with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) a proposed rule 

change to amend the fees applicable to 

various market data products. The text 

of the proposed rule change is provided 

in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

options/regulation/rule_filings/edgx/), 

at the Exchange’s Office of the 

Secretary, 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 the 

Market Data section applicable to its 

equities trading platform (‘‘EDGX 

Equities’’). Particularly, the Exchange 

proposes to (i) increase the External 

Distribution fee applicable to EDGX 

Top, (ii) modify the External Subscriber 

fees applicable to EDGX Top Derived 

Data API Service, (iii) adopt a New 

External Distributor Credit applicable to 

Cboe One Premium, (iv) extend the New 

External Distributor Credit applicable to 

EDGX Summary Depth Feed from one 

(1) month to three (3) months, and (v) 

eliminate the waiver of EDGX Top and 

EDGX Last Sale External Distribution 

fees for External Distributors of EDGX 

Depth. 

Market Background 

The Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. In 

Regulation NMS, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues, and also recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 3 As 

the Commission itself recognized, the 

market for trading services in NMS 

stocks has become ‘‘more fragmented 

and competitive.’’ 4

Equity trading is currently dispersed 

across sixteen exchanges, more than 50 

alternative trading systems,5 and 

numerous broker-dealer internalizers 

and wholesalers, all competing fiercely 

for order flow. Based on publiclyavailable information, no single U.S. 

equities exchange has more than 17% 

market share.6 In turn, the market for 

top-of-book quotation and transaction 

data is highly competitive as national 

securities exchanges compete vigorously 

with each other to provide efficient, 

reliable, and low-cost data to a wide 

range of investors and market 

participants. In fact, there are twelve 

competing products offered by other 

national securities exchanges today,7

not counting products offered by the 

Exchange’s affiliates, and each of the 

Exchange’s affiliated U.S. equities 

exchanges also offers similar top-ofbook data. Each of those exchanges offer 

top-of-book quotation and last sale 

information based on their own 

quotation and trading activity that is 

substantially similar to the information 

provided by the Exchange through the 

EDGX Top Feed.8 Exchange top-of-book 

data is therefore widely available today 

from a number of different sources. 

Fees for External Distribution of EDGX 

Top 

The Exchange first proposes to 

increase the external distribution fee 

applicable to EDGX Top,9 which is an 

uncompressed data feed that offers topof-book quotations and execution 

information based on equity orders 

entered into the System.10 Currently, the 

Exchange charges an external 

distribution fee (i.e., distribution 

outside the distributor’s own firm) of 

$1,500 per month to External 

Distributors 11 of EDGX Top. The 


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