[Federal Register Volume 87, Number 15 (Monday, January 24, 2022)]
[Notices]
[Pages 3613-3615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01225]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93994; File No. SR-CboeBZX-2022-001]


Self-Regulatory Organizations; Cboe BZX 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 BZX Exchange, Inc. (``Exchange'' or 
``BZX'') 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (``BZX'' 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/bzx/), 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

[[Page 3614]]

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 (``BZX Equities''). Particularly, the 
Exchange proposes to (i) adopt a New External Distributor Credit 
applicable to Cboe One Premium, and (ii) extend the New External 
Distributor Credit applicable to BZX 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 BZX and its 
affiliated exchanges (i.e., Cboe BYX Exchange, Inc. (``BYX''), Cboe 
EDGX Exchange, Inc. (``EDGX''), and Cboe EDGA Exchange, Inc. 
(``EDGA'')) and contains optional functionality which enables 
recipients to receive aggregated two-sided quotations from BZX and its 
affiliated equities exchanges for up to five (5) price levels.\3\ 
Currently, the Exchange charges an external distribution fee of $12,500 
per month to External Distributors \4\ 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, 
EDGA, EDGX, and BYX will be filing companion proposals to reflect this 
proposal in their respective fee schedules.
---------------------------------------------------------------------------

    \3\ The 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., BYX, EDGX, and EDGA). See Exchange Rule 11.22(j). 
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 BZX Summary Depth, BYX Summary Depth, EDGX 
Summary Depth, and EDGA Summary Depth external distribution fees.
    \4\ An 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.
---------------------------------------------------------------------------

    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,\5\ which is a data feed that disseminates, on a real-time 
basis, the aggregate BBO of all displayed orders for securities traded 
on BZX and its affiliated equities exchanges and also contains 
individual last sale information for the BZX and its affiliated 
equities exchanges.\6\ It also offers a New External Distributor Credit 
of one (1) month for subscribers of BZX 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. BZX 
Summary Depth also contains the individual last sale information, 
Market Status, Trading Status, and Trade Break messages.\7\ As noted 
above, the External Distribution fees for Cboe One Summary is 
equivalent to the aggregate BZX Summary Depth, BYX Summary Depth, EDGA 
Summary Depth, and EDGX 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 BZX Summary Depth from one 
(1) month to three (3) months and the Exchange's affiliates BYX, EDGA 
and EDGX 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 BZX, BYX, EDGA, and EDGX Summary Depth 
feeds for new External Distributors to be greater than those currently 
charged to subscribe to the Cboe One Premium feed.
---------------------------------------------------------------------------

    \5\ See Exchange Rule 11.22(j).
    \6\ The 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. 74285 (February 18, 2015), 80 FR 
9828 (February 24, 2015) (SR-BATS-2015-11).
    \7\ See Exchange Rule 11.22(a)[sic].
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(4),\9\ 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.\10\ Finally, the proposed rule change is also consistent 
with Rule 603 of Regulation NMS,\11\ which provides 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78k-1.
    \11\ See 17 CFR 242.603.
---------------------------------------------------------------------------

    The Exchange 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 
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 BZX 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 
BZX, BYX, EDGA, and EDGX Summary Depth feeds for new

[[Page 3615]]

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. 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 credits would apply to all External Distributors Cboe One 
Premium and BZX Depth on an equal and non-discriminatory basis. 
Further, 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. As discussed 
above, the proposed amendments are designed to enhance competition by 
providing an incentive to new Distributors to enlist new subscribers.

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 \12\ and paragraph (f) of Rule 19b-4 \13\ 
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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

    <bullet> Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#cfbdbaa3aae2aca0a2a2aaa1bbbc8fbcaaace1a8a0b9"><span class="__cf_email__" data-cfemail="2654534a430b45494b4b434852556655434508414950">[email protected]</span></a>. Please include 
File Number SR-CboeBZX-2022-001 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeBZX-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-CboeBZX-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\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01225 Filed 1-21-22; 8:45 am]
BILLING CODE 8011-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>