19550 Federal Register / Vol. 87, No. 64 / Monday, April 4, 2022 / Notices 

6 15 U.S.C. 78s(b)(2)(B). 

7Securities Exchange Act Release No. 93532 

(November 5, 2021), 86 FR 62851 (November 12, 

2021) (SR–NSCC–2021–010). 

8 15 U.S.C. 78s(b)(2). 

9Securities Exchange Act Release No. 94168 

(February 7, 2022), 87 FR 8062 (February 11, 2022) 

(SR–NSCC–2021–010). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes on January 3, 2022 (SR–CboeEDGX–2022– 

002). On March 3, 2022 the Exchange withdrew that 

filing and refiled (SR–CboeEDGX–2022–012). On 

March 15, 2022, the Exchange withdrew that filing 

and refiled (SR–CboeEDGX–2022–016). On March 

16, 2022 the Exchange withdrew that filing and 

submitted this proposal. 

4See 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’’). 

5See 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’’). 

6See 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. 

7See 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/. 

8Competing 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. 

9For 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 

19(b)(2)(B) of the Act,6 to determine 

whether to approve or disapprove the 

Proposed Rule Change.7 On February 7, 

2022, pursuant to Section 19(b)(2) of the 

Act,8 the Commission designated a 

longer period for Commission action on 

the proceedings to determine whether to 

approve or disapprove the Proposed 

Rule Change.9

On March 25, 2022, NSCC withdrew 

the Proposed Rule Change (SR–NSCC– 

2021–010). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06982 Filed 4–1–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94539; File No. SR– 

CboeEDGX–2022–018] 

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 

March 29, 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 March 16, 

2022, Cboe EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) filed with the 

Securities and Exchange Commission 

(the ‘‘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.3

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.’’ 4 As 

the Commission itself recognized, the 

market for trading services in NMS 

stocks has become ‘‘more fragmented 

and competitive.’’ 5

Equity trading is currently dispersed 

across sixteen exchanges, more than 50 

alternative trading systems,6 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.7 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,8

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.9 Exchange top-of-book 


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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. 10See Exchange Rule 13.8(c). 11See Exchange Rule 1.5(cc). 12An 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. 13As an alternative to user fees, a recipient firm 

may purchase a monthly Enterprise license to 

receive EDGX Top from an External Distributor for 

distribution to an unlimited number of professional 

and non-professional users. A recipient firm must 

pay a separate Enterprise Fee for each External 

Distributor that controls the display of EDGX Top 

if it wishes such user to be covered by the 

Enterprise Fee. 

14As an alternative to user fees, a recipient firm 

may purchase a monthly digital media enterprise 

license to receive EDGX Top from an External 

Distributor for distribution to an unlimited number 

of users for viewing via television, websites, and 

mobile devices for informational and non-trading 

purposes only. 

15See Securities Exchange Act Release No. 77888 

(May 24, 2016) 81 FR 34384 (May 31, 2016) (SR– 

BatsEDGX–2016–18). 

16See Exchange Rule 11.9.01. 

17The Exchange notes that the fee for Cboe One 

Summary is equivalent to the aggregate EDGX Top, 

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

Exchange is not proposing to change the current 

Cboe One Summary external distribution fee. 

Instead, the Cboe BYX Exchange, Inc. (‘‘BYX’’) has 

simultaneously with this proposal proposed to 

decrease its fee for BYX Top by $750 in order to 

ensure the proposed fee will continue to not cause 

the combined cost of subscribing to EDGX, EDGA, 

BYX, and BZX individual Top and Last Sale feeds 

to be greater than those currently charged to 

subscribe to the Cboe One Summary fee. 

18See infra notes 43, 44, 45, and 46. 

19See e.g., EDGX Fees Schedule, Small Retail 

Broker Distribution Program, which provides for a 

reduced EDGX Top Distribution Fee for small 

broker-dealers that operate a retail business and 

Retail Membership Program, which provides for 

discounted membership fees, logical and physical 

port fees, and market data fees and provides for an 

opportunity for Members to receive an enhanced 

rebate for retail volume. 

20An ‘‘API Service’’ is a type of data feed 

distribution in which a Distributor delivers an API 

or similar distribution mechanism to a third-party 

entity for use within one or more platforms. The 

service allows Distributors to provide Derived Data 

to a third-party entity for use within one or more 

downstream platforms that are operated and 

maintained by the third-party entity. The 

Distributor maintains control of the entitlements, 

but does not maintain technical control of the usage 

or the display. 

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,10 which is an 

uncompressed data feed that offers topof-book quotations and execution 

information based on equity orders 

entered into the System.11 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 12 of EDGX Top. The 

Exchange also charges a professional 

user fee of $4.00 per month and a nonprofessional user fee of $0.10 per 

month, or an enterprise fee 13 of $15,000 

per month and a digital media 

enterprise fee 14 of $2,500 per month 

that is applicable to External 

Distributors. The external distribution 

fees have been in place, without change, 

since June 1, 2016.15 In the time since, 

the Exchange has made a number of 

significant enhancements to its 

platform, including, among other things, 

trading hours beginning at 4 a.m. 

Eastern time (which has required 

additional operational support) and the 

introduction of Retail Priority Orders.16

These enhancements have resulted in 

improved trading opportunities for 

investors and, consequently, more 

valuable market data. As such, the 

Exchange proposes to increase the 

monthly charge for external distribution 

of EDGX Top from $1,500 to $2,250 per 

month (i.e., an increase of $750 per 

month),17 which would continue to be 

cheaper than similar products offered by 

the certain of the Exchange’s 

competitors.18 The Exchange proposes 

no changes to the professional, nonprofessional, enterprise and digital 

media enterprise fees associated with 

external distribution. Further, various 

incentive programs that the Exchange 

has adopted to facilitate the provision of 

lower-cost market data to retail and 

other investors would continue to 

apply.19 As a result, the Exchange 

believes that the proposed fee changes 

would allow it to be appropriately 

compensated for the value of its market 

data, particularly from professional 

financial services firms that use that 

data for external distribution, while 

simultaneously ensuring that its data 

would continue to be available to a wide 

range of investors and market 

participants at a cost that facilitates 

widespread availability of such data. 

EDGX Top Derived Data API Service 

External Subscriber Fees 

The Exchange next proposes to 

modify fees charged to Distributors that 

distribute EDGX Top Derived Data 

through an Application Programming 

Interface (‘‘API’’)—i.e., the Derived Data 

API Service.20 By way of background, 

‘‘Derived Data’’ is pricing data or other 

data that (i) is created in whole or in 

part from Exchange data, (ii) is not an 

index or financial product, and (iii) 

cannot be readily reverse-engineered to 

recreate Exchange Data or used to create 

other data that is a reasonable facsimile 

or substitute for Exchange Data. The 

Derived Data API Service program offers 

discounted fees for Distributors that 

make Derived Data available through an 

API, thereby allowing Distributors to 

benefit from reduced fees when 

distributing Derived Data to subscribers 

that establish their own platforms 

(rather than relying on a hosted display 

solution). 

As discussed above, the Exchange 

currently charges a fee of $1,500 per 

month for external distribution of EDGX 

Top (which is proposed to be increased 

to $2,250). Instead of being assessed the 

flat regular fee for external distribution, 

Distributors that distribute Derived Data 

through an API are charged a tiered 

External Subscriber Fee based on the 

number of API Service Platforms (i.e., 

‘‘External Subscribers’’) that receive 

Derived Data from the Distributor 

through a Derived Data API Service. 

Currently, Distributors under this 

program continue to be charged a fee of 

$1,500 per month (the fee normally 

assessed to External Distributors for 

EDGX Top) for each External Subscriber 

if the Distributor makes Derived Data 

available to 1—5 External Subscribers. 

Distributors that make Derived Data 

available to additional External 

Subscribers however benefit from 

discounted pricing based on the number 

of subscribers. Specifically, the external 

distribution fee is lowered to $1,250 per 

month for each External Subscriber if 

the Distributor makes Derived Data 

available to 6—20 External Subscribers, 

and further lowered to $1,000 per 

month for each External Subscriber if 

the Distributor makes Derived Data 

available to 21 or more External 

Subscribers. In light of the proposed 

increase of the EDGX Top external 

distribution fee to $2,250, the Exchange 

proposes to make corresponding 

changes to the distribution fees for 

Distributors of Derived Data through a 

Derived API Service. Particularly, the 

Exchange proposes to modify the 

External Subscriber fees as follows: 

Number of 

external 

subscribers 

Current fee Proposed fee 

1—5 .......... $1,500 $2,250 

6–20 .......... 1,250 1,800 

21 and 

above .... 1,000 1,500 

The Exchange notes that the External 

Subscriber Fee is non-progressive and 

based on the number of External 

Subscribers that receive Derived Data 

from the Distributor. To illustrate how 

the discount is applied, the Exchange 

has codified an example in the Fees 


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21The 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, Cboe EDGA Exchange, Inc. (‘‘EDGA’’), 

and Cboe BZX Exchange, Inc. (‘‘BZX’’)). See 

Exchange Rule 13.8(b). 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’’). See Exchange 

Rule 13.8(b)(i). The Cboe One Premium external 

distribution fee is equal to the aggregate EDGX 

Summary Depth, BYX Summary Depth, EDGA 

Summary Depth, and BZX Summary Depth external 

distribution fees. 

22An 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. 

23See Exchange Rule 13.8(b). 

24The 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. 74282 (February 17, 

2015), 80 FR 9487 (February 23, 2015) (SR–EDGX– 

2015–09). 

25See Exchange Rule 13.8(f). 

26EDGX Depth is a data feed that contains all 

displayed orders for listed securities trading on the 

Exchange, order executions, order cancellations, 

order modifications, order identification numbers, 

and administrative messages. See Exchange Rule 

13.8(a). 

27EDGX Last Sale is an uncompressed data feed 

that offers only execution information based on 

orders entered into the System. See Exchange Rule 

13.8(d). 

28Supra note 15. 

29 15 U.S.C. 78f. 

30 15 U.S.C. 78f(b)(4). 

31 15 U.S.C. 78k–1. 

32See 17 CFR 242.603. 

Schedule under the notes section of the 

Derived Data Platform Service section, 

which it now proposes to update in 

connection with the proposed changes 

to the External Subscriber fees. 

Currently, the example provides that a 

Distributor providing Derived Data 

based on EDGX Top to six (6) External 

Subscribers that are API Service 

Platforms would be charged a monthly 

fee of $7,500 (i.e., 6 External Subscribers 

x $1,250 each). The Exchange proposes 

to update the example to provide that 

Distributor providing Derived Data 

based on EDGX Top to six (6) External 

Subscribers that are API Service 

Platforms would be charged a monthly 

fee of $10,800 (i.e., 6 External 

Subscribers × $1,800 each). 

Cboe One Premium and EDGX 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 EDGX 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 EDGX and its affiliated exchanges 

(i.e., BYX, Cboe EDGA Exchange, Inc. 

(‘‘EDGA’’), and Cboe BZX Exchange, 

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

functionality which enables recipients 

to receive aggregated two-sided 

quotations from EDGX and its affiliated 

equities exchanges for up to five (5) 

price levels.21 Currently, the Exchange 

charges an external distribution fee of 

$12,500 per month to External 

Distributors 22 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 Premium 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, BYX, 

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,23 which is a data 

feed that disseminates, on a real-time 

basis, the aggregate BBO of all displayed 

orders for securities traded on EDGX 

and its affiliated equities exchanges and 

also contains individual last sale 

information for the EDGX and its 

affiliated equities exchanges.24 It also 

offers a New External Distributor Credit 

of one (1) month for subscribers of 

EDGX 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. EDGX Summary Depth also 

contains the individual last sale 

information, Market Status, Trading 

Status, and Trade Break messages.25 The 

External Distribution fees for Cboe One 

Premium is equivalent to the aggregate 

EDGX Summary Depth, BZX Summary 

Depth, BYX 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 EDGX Summary Depth from one (1) 

month to three (3) months and the 

Exchange’s affiliates BYX, 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 EDGX, EDGA, BYX, 

and BZX Summary Depth feeds for new 

External Distributors to be greater than 

those currently charged to subscribe to 

the Cboe One Premium feed. 

Waiver of External Distribution Fees for 

EDGX Top and EDGX Last Sale 

The Exchange currently provides 

External Distributors of EDGX Depth,26

upon request and at no additional 

External Distribution Fee, access to the 

EDGX Top or EDGX Last Sale 27 feeds 

for External Distribution. This waiver 

was intended to encourage the 

distribution of the EDGX Top and Last 

Sale data products. The waiver has been 

in place, without change, since June 1, 

2016.28 The Exchange believes such 

waiver has been in place for ample time 

to allow External Distributors to grow 

their respective subscriber bases and no 

longer wishes to provide this waiver of 

the External Distribution fees for EDGX 

Top and EDGX Last Sale feeds. 

Accordingly, the Exchange proposes to 

strike this language from the fees 

schedule. 

Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,29

in general, and furthers the objectives of 

Section 6(b)(4),30 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.31 Finally, the proposed rule 

change is also consistent with Rule 603 

of Regulation NMS,32 which provides 

that any national securities exchange 

that distributes information with respect 

to quotations for or transactions in an 


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33NetCoalition 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). 

34 Id. at 535. 

35The 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. 

36See CTA Quarterly Population Metrics (Q1 

2021), available at https://www.ctaplan.com/ 

publicdocs/ctaplan/CTAPLAN_Population_

Metrics_3Q2021.pdf; UTP Quarterly Population 

Metrics (Q1 2021), available at https://

www.utpplan.com/DOC/UTP_2021_Q1_Stats_with_

Processor_Stats.pdf. 

37This statistic reflects the number of External 

Distributors that purchase EDGX Top divided by 

the number of External Distributors that purchase 

consolidated market data from the SIPs, as reflected 

in publicly available information. Id. The Exchange 

does not have similar information about the number 

of External Distributors that purchase top-of-book 

data from other exchanges as competing exchanges 

do not typically make this information publicly 

available due to the commercially sensitive nature 

of such information. 

38Although the Exchange does not have access to 

the customer lists for other competing products, it 

understands based on conversations with 

subscribers to EDGX 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. 

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.’ ’’ 33 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.’’’ 34 As discussed in 

this filing, significant competitive forces 

constrain the ability of the Exchange to 

charge supra-competitive fees. 

EDGX Top and EDGX Top Derived Data 

API Service 

i. The EDGX Top Feed Is an Optional 

Market Data Product, and the Exchange 

Is Constrained in Its Pricing by 

Significant Competitive Forces 

Subscribing to EDGX Top is entirely 

optional. The Exchange is not required 

to make EDGX Top available to any 

customers, nor is any customer required 

to purchase EDGX Top.35 A customer’s 

decision as to whether to purchase 

EDGX Top is therefore entirely 

discretionary and is based on that firms 

individual business needs. Generally, 

firms that choose to subscribe to EDGX 

Top do so because they believe that it 

is a cost-effective 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 

EDGX 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 EDGX 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 EDGX Top. In fact, 

comparing the number of External 

Distributors that currently subscribe to 

EDGX Top, based on data compiled by 

the Exchange as of November 2021, to 

the total number of External Distributors 

that subscribe to core data offered by the 

CTA and UTP SIPs, as published on 

plan websites for Q1 2021,36 less than 

7.37% of External Distributors that 

purchase U.S. equities data choose to 

subscribe to EDGX Top.37 The EDGX 

Top Feed therefore represents an 

insignificant proportion of the market 

for such market data, and significantly 

more External Distributors choose not to 

purchase this product than those that 

do. Given the insignificant percentage of 

External Distributors that consume 

EDGX Top, it is clear that such firms 

can and do exercise their right to choose 

to purchase, or not purchase, this 

particular market data product. And, as 

discussed later in this filing, any 

External Distributor of top-of-book data 

that does not wish to purchase EDGX 

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 EDGX 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 EDGX 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. EDGX 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.38 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, EDGX Top 

and other top-of-book products offered 


khammond on DSKJM1Z7X2PROD with NOTICES
19554 Federal Register / Vol. 87, No. 64 / Monday, April 4, 2022 / Notices 

39See, e.g., Securities Exchange Act Release No. 

88221 (February 14, 2020), 85 FR 9904 (February 

20, 2020) (SR–CboeBYX–2020–007). 

40See, e.g., Securities Exchange Act Release No. 

90616 (December 9, 2020), 85 FR 81237 (December 

15, 2020) (SR–NASDAQ–2020–086). 

41Market data vendors typically establish 

connectivity to a number of national securities 

exchanges to be able to offer their market data to 

customers. 

42See 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. 

43See NYSE PDP Market Data Pricing, Section 

1.3, NYSE BBO. 

44See NYSE PDP Market Data Pricing, Section 

1.4, NYSE Trades. 

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 

EDGX 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.39 And, other 

exchanges have similarly filed to reduce 

the prices of their top-of-book data in 

order to compete with products offered 

by the Exchange and other competing 

exchanges.40

Distributors can discontinue use of 

EDGX 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 EDGX 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 

impediments for firms that wish to 

cancel their subscription to the 

Exchange’s market data products, 

including EDGX Top. In addition, the 

Exchange notes that a majority of 

External Distributors of EDGX 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.41

In setting the proposed fees for EDGX 

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 EDGX 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. 

Similarly, in an effort to widen 

distribution to market participants that 

use equities market data to compute 

pricing for certain derivatives 

instruments, national securities 

exchanges, including for example the 

Exchange and The Nasdaq Stock Market 

LLC (‘‘Nasdaq’’),42 offer discounted 

pricing for Derived Data that is created 

using their top of book products. 

Derived Data is largely used to create 

derivative instruments, such as 

contracts for difference, rather than to 

trade equity securities, and is often 

purchased by market data customers 

outside of the U.S. where such 

derivative instruments are more 

commonly offered. As a result, 

customers that purchase top of book 

data to create Derived Data do not need 

a consolidated quotation, and typically 

only purchase top of book data to create 

Derived Data from one source. If a 

competing exchange were to charge less 

for a similar product than the Exchange 

proposes to charge under the EDGX Top 

Derived Data API Service fee structure, 

prospective subscribers may choose not 

subscribe to, or cease subscribing to, the 

EDGX Top Derived Data API Service. 

The existence of alternatives ensures 

that the Exchange cannot set 

unreasonable or unfairly discriminatory 

fees, as subscribers are free to elect such 

alternatives. 

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 

as even with the proposed fee increase 

they would continue to represent a 

relatively modest fee for top-of-book 

data that has proven valuable for 

investors. EDGX Top is a competitivelypriced alternative to top-of-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, buy-side 

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, EDGX 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 EDGX Top is 

competitive on both of these factors. 

First, EDGX Top would remain 

competitively priced compared to 

similar products offered by other 

comparable U.S. equities exchanges. 

Although EDGX 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, even with the 

proposed fee increase, EDGX Top would 

remain significantly cheaper than 

similar products offered by New York 

Stock Exchange LLC (‘‘NYSE’’) 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,43 and an 

additional $1,500 per month for 

transaction information,44 both of which 

are included in EDGX Top for a single 

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

redistribution fee is applied by NYSE. 

NYSE Arca, Inc. (‘‘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 


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Federal Register / Vol. 87, No. 64 / Monday, April 4, 2022 / Notices 19555 

45See NYSE PDP Market Data Pricing, Section 

3.3, NYSE Arca BBO; NYSE PDP Market Data 

Pricing, Section 3.4, NYSE Arca Trades. 

46See 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. 

47See generally, the Nasdaq Basic fees at http:// 

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

MDDPricingALLN. 

48See, e.g., Cboe EDGA Exchange, Inc., Fee 

Schedule, EDGA Top. 

49See https://www.cboe.com/us/equities/market_

statistics/market_quality/. 

redistribution.45 Therefore, while Arca’s 

fees are slightly less than the proposal, 

the proposed fees are in-line with those 

charged by Arca. 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.46 The external 

distribution charges associated with 

obtaining comparable U.S. equities 

market data from NYSE and Nasdaq 

runs 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. The fee for 

EDGX Top Derived Data API Service 

would remain competitively priced 

compared to Nasdaq which also offers 

pricing discounts for Derived Data.47

Second, the proposed fees are 

reasonable given the value of the data 

provided in EDGX and used by data 

recipients in their profit-generating 

activities. EDGX Top provides top-ofbook quotations and transactions 

executed on the Exchange, and provides 

a valuable window into the market for 

securities traded on a market that 

accounts for about 5% of U.S. equity 

market volume today. As discussed, the 

Exchange offers EDGX Top in a 

competitive environment where firms 

may freely choose which market data 

products best suit their business needs. 

Invariably, firms that choose to 

purchase EDGX Top instead of receiving 

one of the many free products offered by 

other exchanges,48 have decided that the 

value of EDGX Top is greater than that 

offered by those other products. The 

Exchange consistently ranks among the 

top U.S. equities exchanges in terms of 

various market quality measures, e.g., 

NBBO quote quality and NBBO market 

share.49 In turn, investors may choose to 

rely on the Exchange’s market data 

products instead of other competitor 

offerings based on the value they 

provide in relation to any additional 

cost associated with obtaining that 

market data from the Exchange. For 

example, investors may wish to obtain 

market data from an exchange that has 

a higher time at the inside, as data 

obtained from an exchange that is 

quoting more often at the NBBO may 

better reflect the applicable market for 

securities it trades. Similarly, an 

exchange with greater overall market 

share will produce more transaction 

information that may be valuable to 

consumers of its data. Improvements in 

market quality will therefore directly 

impact the value of the market data that 

an exchange is able to offer to investors. 

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 EDGX 

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 EDGX Top and distribute that data to 

external subscribers. As proposed, all 

External Distributors of EDGX 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 EDGX Top on the 

same equitable and non-discriminatory 

terms. 

The Exchange believes that it is also 

fair and equitable, and not unfairly 

discriminatory to continue to charge 

different fees for internal and external 

distribution of the EDGX Top. As is 

common practice, the Exchange charges 

lower fees to distributors that use its 

market data products for internal 

distribution only than to distributors 

that redistribute that data externally to 

their customers. In the case of EDGX 

Top, External Distributors are subject to 

a higher distribution fee, and are also 

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

fee, and a digital media enterprise fee. 

The Exchange continues to believe that 

it is appropriate to distinguish between 

internal and External Distributors in 

setting fees for EDGX Top as External 

Distributors can redistribute the 

Exchange’s market data to its clients for 

a fee, whereas Internal Distributors are 

not allowed to redistribute the data. 

Finally, the Exchange believes the 

proposed changes to the distribution 

fees for Distributors of EDGX Top 

Derived Data through a Derived API 

Service is equitable and not unfairly 

discriminatory because the Exchange 

will apply the same fees to any similarly 

situated Distributors that elect to 

participate in the program based on the 

number of External Subscribers 

provided access to the Derived Data 

through an API Service. The Exchange 

believes that it is equitable and not 

unfairly discriminatory to continue to 

provide discounted rates to Distributors 

that provide access to at least six 

External Subscribers as the discounted 

rates are designed to incentivize firms to 

grow the number of External 

Subscribers that purchase Derived Data 

from the Exchange. 

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 

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. 

Furthermore, External Distributors are 

subject to higher risks of launch as the 

data is provided outside their own firm. 

For these reasons, the Exchange believes 

it is appropriate to provide this 

incentive so that External Distributors 

have sufficient time to test the data 

within their own systems prior to going 

live externally. The Exchange believes 

extending the New External Distributor 

Credit for EDGX 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 EDGX, 

EDGA, BYX, and BZX Summary Depth 

feeds for new External Distributors to be 

greater than those currently charged to 

subscribe to the Cboe One Premium 

feed. 


khammond on DSKJM1Z7X2PROD with NOTICES
19556 Federal Register / Vol. 87, No. 64 / Monday, April 4, 2022 / Notices 

50Supra note 15. 

51 15 U.S.C. 78s(b)(3)(A). 

52 17 CFR 240.19b–4(f). 

EDGX Top and EDGX Last Sale External 

Distribution Fee Waiver For Fees for 

External Distributors of EDGX Depth 

Finally, the Exchange amending the 

fee waiver of EDGX Top and EDGX Last 

Sale feeds for External Distributors of 

EDGX Depth is equitable and 

reasonable. The Exchange believes 

eliminating the fee waiver is equitable 

and reasonable because it has been 

available, without change, since June 1, 

2016 50 providing External Distributors 

with ample time to grow their 

subscriber bases. Moreover, the 

Exchange is not required to provide any 

such waiver to External Distributors of 

EDGX Depth. 

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 top-of-book data and derived 

data is constrained by competition 

among exchanges that offer similar data 

products to their customers. Top-ofbook data and derived 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. Further, the Exchange’s proposal 

to extend the New External Distributor 

Credit applicable to EDGX Summary 

Depth from one (1) month to three (3) 

months, adopt a new External 

Distributor credit for Cboe 

Premium[sic], and eliminate the waiver 

of EDGX Top and EDGX Last Sale 

External Distribution fees for External 

Distributors of EDGX Depth involves no 

change to the existing fees, but simply 

extends offers or eliminates a waiver, 

respectively. Other exchanges are free to 

adopt a similar waiver if they choose. 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, credit, and 

eliminated waiver would apply to all 

External Distributors of EDGX Top, 

Cboe One Premium, and EDGX Depth, 

respectively, on an equal and nondiscriminatory basis. The continued 

difference in fees for internal and 

external distribution of EDGX Top are 

appropriate given the ability for 

External Distributors to redistribute data 

externally to their clients. Similarly, 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 for EDGX Top, 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 51 and paragraph (f) of Rule 

19b–4 52 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– 

CboeEDGX–2022–018 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–CboeEDGX–2022–018. 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 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 64 / Monday, April 4, 2022 / Notices 19557 

53 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes on March 14, 2022 (SR–CBOE–2022–010). 

On March 23, 2022, the Exchange withdrew that 

filing and submitted this filing. 

4See Securities Exchange Act Release Nos. 90853 

(January 5, 2021), 86 FR 2006 (January 11, 2021) 

(SR–CBOE–2020–117); and 91528 (April 9. 2021), 

86 FR 19933 (April 15, 2021) (SR–CBOE–2020– 

117). 

5Underlying Symbol List A includes OEX, XEO, 

RUT, RLG, RLV, RUI, UKXM, SPX (includes 

SPXW), SPESG and VIX. See Cboe Options Fees 

Schedule, Footnote 34. 

Number SR–CboeEDGX–2022–018 and 

should be submitted on or before April 

25, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.53

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06988 Filed 4–1–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94540; File No. SR–CBOE– 

2022–014] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Update Its Fees 

Schedule in Connection With the 

Exchange’s Plans To List and Trade 

Nanos S&P 500 Index Options 

March 29, 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 March 23, 

2022, Cboe Exchange, Inc. (‘‘Exchange’’ 

or ‘‘Cboe Options’’) 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 Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to update 

its Fees Schedule in connection with 

the Exchange’s plans to list and trade 

Nanos S&P 500 (‘‘NANOS’’) Index 

options. 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://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.aspx), 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 its 

Fees Schedule in connection with its 

plans to list and trade Nanos options.3

NANOS options are options on the 

Mini-S&P 500 (‘‘XSP’’) Index (the value 

of which is 1/10th the value of the S&P 

500 (‘‘SPX’’) Index) that have an index 

multiplier of one, and thus a smaller 

notional value. The Exchange believes 

that investors will benefit from the 

availability of NANOS options by 

making options overlying the largervalued SPX Index more readily 

available as an investing tool and at 

more affordable prices for investors.4

The Exchange also believes that the 

investor-base for NANOS options will 

be a similar investor-base for XSP 

options, as well as Mini-Russell 2000 

(‘‘MRUT’’) options, which are also 

proprietary, reduced-value (1/10th) 

options on a broad-based index. XSP 

and MRUT options are also designed to 

provide low-cost means to hedge 

investors’ portfolios in connection with 

larger-value broad-based indexes (i.e., 

the RUT and SPX Index) with a smaller 

outlay of capital. The Exchange now 

proposes to amend its Fees Schedule to 

accommodate the planned listing and 

trading of NANOS options. The 

Exchange notes that because NANOS, 

MRUT and XSP are all options on miniindexes and are intended for a similar 

investor-base, the majority of the 

proposed changes amend the Fees 

Schedule in connection with trading in 

NANOS options in a manner that is 

generally consistent with the way in 

which existing transactions fees and 

programs currently apply to trading in 

XSP and MRUT options. 

Standard Transaction Rates and 

Surcharges 

First, the Exchange proposes to adopt 

certain standard transaction fees in 

connection with NANOS options. 

Specifically, the proposed rule change 

adopts certain fees for NANOS options 

in the Rate Table for All Products 

Excluding Underlying Symbol A,5 as 

follows: 

• Adopts fee code NO, appended to 

all Customer (capacity ‘‘C’’) orders in 

NANOS options and assesses no fee; 

• Adopts fee code NN, appended to 

all non-Customer, non-Market-Maker 

(i.e., Clearing Trading Permit Holders 

(capacity ‘‘F’’), Non-Clearing Trading 

Permit Holder Affiliates (capacity ‘‘L’’), 

Broker-Dealers (capacity ‘‘B’’), Joint 

Back-Offices (capacity ‘‘J’’), NonTrading Permit Holder Market-Makers 

(capacity ‘‘N’’), and Professionals 

(capacity ‘‘U’’)) orders in NANOS 

options and assesses a fee of $0.01 per 

contract; and 

• Adopts fee code NM, which is 

appended to all Market-Maker (capacity 

‘‘M’’) orders in NANOS options and 

assesses a fee of $0.01 per contract. 

The Exchange notes that the proposed 

standard transaction fees in connection 

with NANOS options are slightly less 

than the fees assessed for XSP options. 

As described above, both NANOS 

options and XSP options overly the 

Mini-S&P 500 Index; however, NANOS 

options are lower-priced given their 

multiplier of one. 

The Exchange proposes to exclude 

NANOS orders from the AIM Contra Fee 

by amending footnote 18 (appended to 

the AIM Contra Fee) to provide that the 

AIM Contra Execution Fee applies to all 

orders (excluding facilitation orders, per 

footnote 11) in all products, except 

MRUT, NANOS, XSP, Sector Indexes 

and Underlying Symbol List A, 

executed in the Automated 

Improvement Mechanism (‘‘AIM’’), 

Solicitation Auction Mechanism 

(‘‘SAM’’), FLEX AIM and FLEX SAM 

auctions, that were initially entered as 

the contra party to an Agency/Primary 

Order. Applicable standard transaction 

fees will apply to AIM, SAM, FLEX AIM 

and FLEX SAM executions in MRUT, 

NANOS, XSP, Sector Indexes and 

Underlying Symbol List A. The 

Exchange also proposes to exclude 

Market-Maker and non-Customer, nonMarket-Maker complex orders in 

NANOS from the Complex Surcharge by 

amending footnote 35 (appended to the 

Complex Surcharge) to provide that the 


khammond on DSKJM1Z7X2PROD with NOTICES