Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 1391 

19BOX charges a fee for responses in the 

solicitation or facilitation auction mechanisms for 

all account types that is $0.25 per contract (for 

penny pilot classes) and $0.40 per contract (for nonpenny pilot classes). See BOX Fee Schedule, 

Section I.C. As set forth in the BOX Fee Schedule, 

‘‘[r]esponses to Facilitation and Solicitation Orders 

executed in these mechanisms shall be charged the 

‘‘add’’ fee.’’ Id. at Section III.B, second bullet. For 

all account types, this fee (i.e., the Fee for Adding 

Liquidity) is $0.25 (for penny pilot classes) and 

$0.75 (for non-penny pilot classes). Id. Thus, BOX 

may charge a fee for responses in its solicitation or 

facilitation auction mechanisms of up to $0.50 per 

contract (for penny pilot classes) and $1.15 per 

contract (for non-penny pilot classes). 

20 15 U.S.C. 78s(b)(3)(A)(ii). 

21 17 CFR 240.19b–4(f)(2). 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

index options), is equitable and not 

unfairly discriminatory because the 

proposed changes will apply uniformly 

to all similarly-situated market 

participants. 

Changes to the Fee for Responses to 

Crossing Orders (Excluding PIM) 

The Exchange believes that the 

proposed fees for Responses to Crossing 

Orders (excluding PIM orders), which 

are being increased for all market 

participants to $0.50 per contract in 

Penny Symbols and SPY, and $1.00 per 

contract in Non-Penny Symbols 

(excluding index options), are 

reasonable because they remain 

competitive with similar fees assessed 

by other options exchanges, including, 

for example, BOX Options Exchange 

(‘‘BOX’’), which charges up to $0.50 and 

$1.15 per contract for responses in its 

solicitation or facilitation auction 

mechanisms for penny pilot and nonpenny pilot classes, respectively.19 As 

such, the Exchange believes that the 

response fees proposed herein are set at 

levels that the Exchange believes will 

remain attractive to market participants 

that trade on GEMX. 

Finally, the Exchange believes that 

the proposed fees for Responses to 

Crossing Orders (excluding PIM orders) 

are equitable and not unfairly 

discriminatory because they would 

uniformly apply to all similarly-situated 

market participants. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. As discussed 

above, the Exchange believes that the 

proposed fees and rebates in Section I 

of the Exchange’s Schedule of Fees 

remain competitive with similar fees 

and rebates offered on other options 

exchanges. The Exchange operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive. Because 

competitors are free to modify their own 

fees in response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,20 and Rule 

19b–4(f)(2) 21 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: (i) 

Necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

GEMX–2017–60 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–GEMX–2017–60. 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–GEMX–2017–60 and 

should be submitted on or before 

February 1, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00308 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82450; File No. SR– 

CboeBZX–2017–019] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Related to 

Market Data Fees 

January 5, 2018. 

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 December 

28, 2017, Cboe BZX Exchange, Inc. (the 


srobinson on DSK9F5VC42PROD with NOTICES
1392 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

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

4 17 CFR 240.19b–4(f)(2). 

5A ‘‘Distributor’’ is defined as ‘‘any entity that 

receives the Exchange Market Data product directly 

from the Exchange or indirectly through another 

entity and then distributes it internally or externally 

to a third party.’’ See the Exchange’s fee schedule 

available at http://markets.cboe.com/us/equities/ 

membership/fee_schedule/bzx/. An ‘‘Internal 

Distributor’’ is defined as ‘‘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.’’ Id. 

6A ‘‘Professional User’’ is defined as ‘‘any User 

other than a Non-Professional User.’’ See the 

Exchange’s fee schedule available at http://

markets.cboe.com/us/equities/membership/fee_

schedule/bzx/. 

7A ‘‘Non-Professional User’’ is currently defined 

as ‘‘a natural person who is not: (i) Registered or 

qualified in any capacity with the Commission, the 

Commodity Futures Trading Commission, any state 

securities agency, any securities exchange or 

association, or any commodities or futures contract 

market or association; (ii) engaged as an 

‘‘investment adviser’’ as that term is defined in 

Section 202(a)(11) of the Investment Advisers Act 

of 1940 (whether or not registered or qualified 

under that Act); or (iii) employed by a bank or other 

organization exempt from registration under federal 

or state securities laws to perform functions that 

would require registration or qualification if such 

functions were performed for an organization not so 

exempt.’’ Id. See SR–CboeBZX–2017–016 (filed 

December 15, 2017) (amending the definition of 

Non-Professional User to harmonize it with that of 

its affiliate exchanges, Cboe Exchange, Inc. and C2 

Exchange, Inc. as of January 2, 2018). 

8This Exchange initially filed the proposed rule 

change on December 15, 2017 (SR–CboeBZX–2017– 

017). On December 18, 2018 the Exchange 

withdrew SR–CboeBZX–2017–017 and submitted 

this filing. 

9BZX’s affiliated exchanges are Cboe EDGA 

Exchange, Inc. (‘‘EDGA’’), Cboe EDGX Exchange, 

Inc. (‘‘EDGX’’), and Cboe BYX Exchange, Inc. 

(‘‘BYX’’, together with EDGX, EDGA, and BZX, the 

‘‘Cboe Equity Exchanges’’). 

10See Exchange Rule 11.22(j). See also Securities 

Exchange Act Release No. 73918 (December 23, 

2014), 79 FR 78920 (December 31, 2014) (File Nos. 

SR–EDGX–2014–25; SR–EDGA–2014–25; SR– 

BATS–2014–055; SR–BYX–2014–030) (Notice of 

Amendment No. 2 and Order Granting Accelerated 

Approval to Proposed Rule Changes, as Modified by 

Amendments Nos. 1 and 2, to Establish a New 

Market Data Product called the Cboe One Feed) 

(‘‘Cboe One Approval Order’’). 

11The Exchange also proposes a non-substantive, 

immaterial change to the fee table headings to 

conform to other heading within the Market Data 

Section of the fee schedule. In particular, the 

Exchange proposes to change the term ‘‘Distributor’’ 

to ‘‘Distribution’’ in both the Internal Distributor 

and External Distributor headings under the Cboe 

One Feed. 

‘‘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 Exchange has 

designated the proposed rule change as 

one establishing or changing a member 

due, fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to 

amend the Market Data section of its fee 

schedule to lower the Internal 

Distribution 5 fees and to adopt per User 

fees for two market data products, the 

Cboe One Summary Feed and the ETF 

Implied Liquidity Feed. 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant parts 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 of its fee schedule 

to lower the fee for Internal Distribution 

and to adopt separate fees for 

Professional 6 and Non-Professional 

Users 7 for the Cboe One Summary Feed 

and the ETF Implied Liquidity Feed.8

Cboe One Feed 

The Cboe One Feed is an optional 

data feed that disseminates, on a realtime basis, the aggregate best bid and 

offer (‘‘BBO’’) of all displayed orders for 

securities traded on BZX and its 

affiliated exchanges 9 and for which 

they report quotes under the 

Consolidated Tape Association (‘‘CTA’’) 

Plan or the Nasdaq/UTP Plan.10 The 

Cboe One Feed also contains the 

individual last sale information for the 

Cboe Equity Exchanges (collectively 

with the aggregate BBO, the ‘‘Cboe One 

Summary Feed’’). In addition, the Cboe 

One Feed contains optional 

functionality which enables recipients 

to receive aggregated two-sided 

quotations from the Cboe Equity 

Exchanges for up to five (5) price levels 

(‘‘Cboe One Premium Feed’’). 

The Exchange proposes to amend its 

fee schedule to lower the fee for Internal 

Distribution for the Cboe One Summary 

Feed and to adopt separate fees for 

Professional and Non-Professional 

Users.11 The Exchange does not propose 

to amend the fees for the Cboe One 

Premium Feed. 

Distribution Fees. Currently, each 

Internal Distributor that receives the 

Cboe One Summary Feed is charged a 

fee of $10,000 per month. The Exchange 

now proposes to lower the fee for 

Internal Distribution to $1,500 per 

month. 

User Fees. Like it does today for 

External Distributors, the Exchange 

proposes to adopt per User fees for 

Internal Distributors that receive the 

Cboe One Summary Feed. The Exchange 

currently charges External Distributors 

that redistribute the Cboe One Summary 

Feed different fees for their Professional 

Users and Non-Professional Users. 

Those fees are $10.00 per month for 

each Professional Users and $0.25 per 

month for each Non-Professional Users. 

To date, the Exchange has not charged 

per User fees to Internal Distributors for 

the Cboe One Summary Feed. To offset 

the proposed reduction to the monthly 

Internal Distribution fee, the Exchange 

proposes to adopt per User fees for 

Internal Distribution, the amounts of 

each fee would be the same as the per 

User fees currently charged to External 

Distributors described above. 

The Exchange also proposes to extend 

the current $50,000 per month 

Enterprise Fee available to External 

Distributors of the Cboe One Summary 

Feed to Internal Distributors. In lieu of 

per User fees, the Enterprise fee will 

permit Internal Distributors who 

redistribute the Cboe One Summary 

Feed to an unlimited number of internal 

Professional and Non-Professional Users 

for a set fee of $50,000 per month. For 

example, if an Internal Distributor had 

15,000 Professional Users who each 

receive the Cboe One Summary Feed at 

$10.00 per month, then that Internal 

Distributor will pay $150,000 per month 

in Professional Users fees. Under the 

proposed Enterprise Fee, the Internal 

Distributor will pay a flat fee of $50,000 

for an unlimited number of internal 


srobinson on DSK9F5VC42PROD with NOTICES
Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 1393 

12The securities underlying each of the U.S. 

equity ETFs included in the feed must be 

considered NMS Securities as defined under Rule 

600(b)(46) of Regulation NMS. 17 CFR 

242.600(b)(46). 

13See Exchange Rule 11.22(n). See also Securities 

Exchange Act Release No. 80580 (May 3, 2017) (SR– 

BatsBZX–2017–25) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change to Amend 

Rule 11.22, Data Products, to Adopt a New Market 

Data Product Known as the ETF Implied Liquidity 

Feed). 

14See Securities Exchange Act Release Nos. 

74285 (February 18, 2015); 80 FR 9828 (February 

24, 2015) (SR–BATS–2015–11) (proposing fees for 

the Cboe One Feed); 75406 (July 9, 2015), 80 FR 

41522 (July 15, 2015) (SR–BATS–2015–48) 

(proposing user fees for the BZX Top and Last Sale 

data feeds); 75785 (August 28, 2015), 80 FR 53360 

(September 3, 2015) (SR–BATS–2015–64) 

(proposing fees for BZX Book Viewer); and 79636 

(December 21, 2016), 81 FR 95693 (December 28, 

2016) (SR–BatsBZX–2016–87) (proposing fees for 

BZX Summary Depth). 

15 15 U.S.C. 78f. 

16 15 U.S.C. 78f(b)(4). 

Professional and Non-Professional Users 

of the Cboe One Summary Feed. An 

Internal Distributor that pays the 

Enterprise Fee will not have to report its 

number of such Users (as set forth 

below) on a monthly basis. However, 

every six months, an Internal Distributor 

must provide the Exchange with a count 

of the total number of natural person 

users of each product, including both 

Professional and Non-Professional 

Users. Like for External Distributors, the 

Enterprise Fee for Internal Distributors 

would be in addition to the applicable 

Distribution Fee. 

ETF Implied Liquidity Feed 

The ETF Implied Liquidity feed is an 

optional data feed that provides the 

Exchange’s proprietary calculation of 

the implied liquidity and the aggregate 

best bid and offer (‘‘BBO’’) of all 

displayed orders on the Cboe Equity 

Exchange for all standard, nonleveraged U.S. equity Exchange Traded 

Funds (‘‘ETFs’’) 12 traded on the 

System.13 An ETF’s implied liquidity 

disseminated via the proposed feed 

would consist of the ETF’s implied BBO 

(including the implied size) calculated 

via a proprietary methodology based on 

the national best bid and offer 

(‘‘NBBO’’), the number of shares of 

securities underlying one creation unit 

of the ETF, and the estimated cash 

included in one creation unit of the 

ETF. 

Similar to as proposed above for the 

Cboe One Summary Feed, the Exchange 

proposes to amend its fee schedule to 

lower the fee for Internal Distribution 

and to adopt separate fees for 

Professional and Non-Professional 

Users. 

Distribution Fees. Currently, each 

Internal Distributor that receives the 

ETF Implied Liquidity Feed is charged 

a fee of $5,000 per month. The Exchange 

now proposes to lower the fee for 

Internal Distribution to $1,500 per 

month. Like it does for External 

Distributors today, the Exchange 

proposes to waive the Distribution fee 

for Internal Distributors of the ETF 

Implied Liquidity Feed that also receive 

the Cboe One Feed. The ETF Implied 

Liquidity Feed and the Cboe One Feed 

are similar in that both include the 

aggregate BBO for all displayed orders 

on the Cboe Equity Exchanges. The key 

difference here is that the ETF Implied 

Liquidity Feed also contains the 

Exchange’s proprietary calculation of 

the ETF’s implied liquidity. As such, 

the Exchange believes it is reasonable to 

waive the Distributor fee for Internal 

Distributors of the ETF Implied 

Liquidity Feed where that Internal 

Distributor also receives and is charged 

the Internal Distributor fee for the Cboe 

One Feed. The Exchange notes that the 

proposed lower Internal Distribution fee 

for the ETF Implied Liquidity Feed of 

$1,500 per month would equal the 

proposed Internal Distribution fee for 

Cboe One Summary and less than the 

existing $15,000 per month Internal 

Distribution fee for Cboe One Premium. 

User Fees. Like it does today for 

External Distributors, the Exchange 

proposes to charge per User fees to 

Internal Distributors that receive the 

ETF Implied Liquidity Feed. The 

Exchange currently charges External 

Distributors that redistribute the ETF 

Implied Liquidity Feed different fees for 

their Professional Users and NonProfessional Users. Those fees are 

$25.00 per month for each Professional 

Users and $1.00 per month for each 

Non-Professional Users. To date, the 

Exchange has not charged per User fees 

to Internal Distributors. To offset the 

proposed reduction to the monthly 

Internal Distribution fee, the Exchange 

proposes to adopt per User fees for 

Internal Distribution, the amounts of 

each would be the same as the per User 

fees currently charged to External 

Distributors. 

User Count Policy 

Like External Distributors of the Cboe 

One Summary Feed and the ETF 

Implied Liquidity Feed, Internal 

Distributors that receive the Cboe One 

Summary Feed and/or ETF Implied 

Liquidity Feed will be required to count 

every Professional User and NonProfessional User to which they provide 

the Cboe One Summary Feed and/or 

ETF Implied Liquidity Feed, the 

requirements for which are identical to 

that currently in place for External 

Distributors of the Cboe One Summary 

Feed and ETF Implied Liquidity Feed, 

as well as other market data products 

offered by the Exchange.14 Thus, the 

Internal Distributor’s count will include 

every person and device that accesses 

the data regardless of the purpose for 

which the individual or device uses the 

data. Internal Distributors must report 

all Professional and Non-Professional 

Users in accordance with the following: 

• In connection with an Internal 

Distributor’s distribution of the Cboe 

One Summary Feed and/or ETF Implied 

Liquidity Feed, the Internal Distributor 

must count as one User each unique 

User that the Internal Distributor has 

entitled to have access to the Cboe One 

Summary Feed and/or ETF Implied 

Liquidity Feed. However, where a 

device is dedicated specifically to a 

single individual, the Internal 

Distributor must count only the 

individual and need not count the 

device. 

• The Internal Distributor must 

identify and report each unique User. If 

a User uses the same unique method to 

gain access to the Cboe One Summary 

Feed and/or ETF Implied Liquidity 

Feed, the Internal Distributor must 

count that as one User. However, if a 

unique User uses multiple methods to 

gain access to the Cboe One Summary 

Feed and/or the ETF Implied Liquidity 

Feed (e.g., a single User has multiple 

passwords and user identifications), the 

Internal Distributor must report each of 

those methods as an individual User. 

• Internal Distributors must report 

each unique individual person who 

receives access through multiple 

devices as one User so long as each 

device is dedicated specifically to that 

individual. 

• If an Internal Distributor entitles 

one or more individuals to use the same 

device, the Distributor must include 

only the individuals, and not the device, 

in the count. 

Implementation Date 

The Exchange intends to implement 

the proposed fees on January 2, 2018. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,15

in general, and furthers the objectives of 

Section 6(b)(4),16 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. The 

Exchange believes that the proposed 

rates are equitable and nondiscriminatory in that they apply 


srobinson on DSK9F5VC42PROD with NOTICES
1394 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

17 15 U.S.C. 78k–1. 

18 17 CFR 242.603. 

19The Exchange believes that cost-based pricing 

would be impractical because it would create 

enormous administrative burdens for all parties, 

including the Commission, to cost-regulate a large 

number of participants and standardize and analyze 

extraordinary amounts of information, accounts, 

and reports. In addition, it is impossible to regulate 

market data prices in isolation from prices charged 

by markets for other services that are joint products. 

Cost-based rate regulation would also lead to 

litigation and may distort incentives, including 

those to minimize costs and to innovate, leading to 

further waste. Under cost-based pricing, the 

Commission would be burdened with determining 

a fair rate of return, and the industry could 

experience frequent rate increases based on 

escalating expense levels. Even in industries 

historically subject to utility regulation, cost-based 

ratemaking has been discredited. As such, the 

Exchange believes that cost-based ratemaking 

would be inappropriate for proprietary market data 

and inconsistent with Congress’s direction that the 

Commission use its authority to foster the 

development of the national market system, and 

that market forces will continue to provide 

appropriate pricing discipline. See Appendix C to 

NYSE’s comments to the Commission’s 2000 

Concept Release on the Regulation of Market 

Information Fees and Revenues, which can be 

found on the Commission’s website at http://

www.sec.gov/rules/concept/s72899/buck1.htm. See 

also Securities Exchange Act Release No. 73816 

(December 11, 2014), 79 FR 75200 (December 17, 

2014) (SR–NYSE–2014–64) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

to Establish an Access Fee for the NYSE Best Quote 

and Trades Data Feed, Operative December 1, 

2014). 

uniformly to all recipients of Exchange 

data. The Exchange believes the 

proposed fees are competitive with 

those charged by other venues and, 

therefore, reasonable and equitably 

allocated to recipients. 

The Exchange believes that the 

proposed rule change is consistent with 

Section 11(A) of the Act 17 in that 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. 

Furthermore, the proposed rule change 

is consistent with Rule 603 of 

Regulation NMS,18 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. In 

adopting Regulation NMS, the 

Commission granted self-regulatory 

organizations and broker-dealers 

increased authority and flexibility to 

offer new and unique market data to the 

public. It was believed that this 

authority would expand the amount of 

data available to consumers, and also 

spur innovation and competition for the 

provision of market data. 

In addition, the proposed fees would 

not permit unfair discrimination 

because all of the Exchange’s customers 

and market data vendors who subscribe 

to the Cboe One Summary Feed and 

ETF Implied Liquidity Feed will be 

subject to the proposed fees. The Cboe 

One Summary Feed and ETF Implied 

Liquidity Feed are distributed and 

purchased on a voluntary basis, in that 

neither the Exchange nor market data 

distributors are required by any rule or 

regulation purchase this data or to make 

this data available. Accordingly, 

Distributors and Users can discontinue 

use at any time and for any reason, 

including due to an assessment of the 

reasonableness of fees charged. Firms 

have a wide variety of alternative 

market data products from which to 

choose, such as similar proprietary data 

products offered by other exchanges and 

consolidated data. Moreover, the 

Exchange is not required to make any 

proprietary data products available or to 

offer any specific pricing alternatives to 

any customers. 

In addition, the fees that are the 

subject of this rule filing are constrained 

by competition. As explained below in 

the Exchange’s Statement on Burden on 

Competition, the existence of 

alternatives to the Cboe One Summary 

Feed and ETF Implied Liquidity Feed 

further ensure that the Exchange cannot 

set unreasonable fees, or fees that are 

unreasonably discriminatory, when 

vendors and subscribers can elect such 

alternatives. That is, the Exchange 

competes with other exchanges (and 

their affiliates) that provide similar 

market data products. For example, the 

Cboe One Summary Feed and/or ETF 

Implied Liquidity Feed provides 

investors with alternative market data 

and competes with similar market data 

product currently offered by other 

exchanges. If another exchange (or its 

affiliate) were to charge less to distribute 

its similar product than the Exchange 

charges to create the Cboe One 

Summary Feed and/or ETF Implied 

Liquidity Feed, prospective Users likely 

would not subscribe to, or would cease 

subscribing to either market data 

product. 

The Exchange notes that the 

Commission is not required to 

undertake a cost-of-service or ratemaking approach. The Exchange 

believes that, even if it were possible as 

a matter of economic theory, cost-based 

pricing for non-core market data would 

be so complicated that it could not be 

done practically.19

The Exchange believes that lowering 

the Internal Distribution fee for both the 

Cboe One Summary Feed and the ETF 

Implied Liquidity Feed is equitable and 

reasonable because the lower fee 

coupled with the adoption of per User 

fees is designed to provide a price 

structure for Internal Distributors that is 

competitive and attracts additional 

subscribers to each market data feed. 

The Exchange also believes that it is 

reasonable to charge a lower fee to 

Internal Distributors than External 

Distributors because External 

Distributors redistribute the data to their 

subscribers for a fee while Internal 

Distributors do not. 

The Exchange believes it is reasonable 

to waive the Distributor fee for Internal 

Distributors of the ETF Implied 

Liquidity Feed that also receive the 

Cboe One Feed as both include the 

aggregate BBO for all displayed orders 

on the Cboe Equity Exchanges and an 

identical waiver is currently granted to 

External Distributors. The key difference 

here is that the ETF Implied Liquidity 

Feed also contains the Exchange’s 

proprietary calculation of the ETF’s 

implied liquidity. Waiver of the 

Distributor fee for Internal Distributors 

that also receive and pay the Internal 

Distributor for the Cboe One Feed is 

equitable and reasonable because those 

Internal Distributors are being charged 

the Internal Distributor fees for the Cboe 

One Feed, which would be charged the 

proposed rate of $1,500 per month for 

Cboe One Summary and the existing 

rate of $15,000 per month for Cboe One 

Premium. The fee waiver here is 

equitable due to both products 

providing the same key data element— 

the aggregated BBO of the Cboe Equity 

Exchanges. While the ETF Implied 

Liquidity Feed also includes the 

Exchange’s proprietary calculation of an 

ETF’s implied liquidity, the Exchange 

notes that Internal Distributors of the 

ETF Implied Liquidity Feed would now 

be subject to the per User fees. 

Therefore, the Exchange believes it is 

equitable and reasonable to waive the 

Internal Distributor fees in such case. 

The Exchange did not previously extend 

this waiver to Internal Distributors 

because Internal Distributors of the Cboe 

One Feed were not charged User fees 

like External Distributors. Since that is 

no longer the case, the Exchange 

believes it is reasonable to extend the 

waiver to Internal Distributors as 

proposed herein. 

The Exchange believes that 

implementing the Professional and NonProfessional User fees for the Cboe One 

Summary Feed and the ETF Implied 

Liquidity Feed are equitable and 

reasonable because they will result in 

greater availability to Professional and 

Non-Professional Users. The addition of 

per User fees also enables the fee for 


srobinson on DSK9F5VC42PROD with NOTICES
Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 1395 

20See Securities Exchange Act Release Nos. 

74285 (February 18, 2015), 80 FR 9828 (February 

24, 2015) (SR–BATS–2015–11); 74283 (February 18, 

2015), 80 FR 9809 (February 24, 2015) (SR–EDGA– 

2015–09); 74282 (February 17, 2015), 80 FR 9487 

(February 23, 2015) (SR–EDGX–2015–09); and 

74284 (February 18, 2015), 80 FR 9792 (February 

24, 2015) (SR–BYX–2015–09) (‘‘Initial Cboe One 

Feed Fee Filings’’). See also, e.g., Securities 

Exchange Act Release No. 20002, File No. S7–433 

(July 22, 1983) (establishing nonprofessional fees 

for CTA data); and Nasdaq Rules 7023(b) and 7047. 

21See Nasdaq Basic, http://

www.nasdaqtrader.com/Trader.aspx?

id=nasdaqbasic (data feed offering the BBO and 

Last Sale information for all U.S. exchange-listed 

securities based on liquidity within the Nasdaq 

market center, as well as trades reported to the 

FINRA/Nasdaq Trade Reporting Facility 

(‘‘TRF’’));Nasdaq NLS Plus, http://

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

(data feed providing last sale data as well as 

consolidated volume from the following Nasdaq 

OMX markets for U.S. exchange-listed securities: 

Nasdaq, FINRA/Nasdaq TRF, Nasdaq OMX BX, and 

Nasdaq OMX PSX); Securities Exchange Act 

Release No. 73553 (November 6, 2014), 79 FR 67491 

(November 13, 2014) (SR–NYSE–2014–40) (Notice 

of Amendment No. 1 and Order Granting 

Accelerated Approval to a Proposed Rule Change, 

as Modified by Amendment No.1, To Establish the 

NYSE Best Quote & Trades (‘‘BQT’’) Data Feed); 

https://www.nyse.com/market-data/real-time/nysebqt (data feed providing unified view of BBO and 

last sale information for the NYSE, NYSE Arca, and 

NYSE MKT). 

22 Id. See also Nasdaq’s Global Index Data Service 

(‘‘GIDS’’) available at http://business.nasdaq.com/ 

intel/indexes/index-data/index.html#!/tcm:5044- 

12151 (providing on a real-time basis intraday 

portfolio values, daily valuation information, such 

as NAV per Share, estimated cash per Share, 

estimated cash per creation unit, total cash per 

creation unit and total shares outstanding of the 

fund and ETF directory messages designed to 

provide the symbols of the ETF valuations). See 

footnote 28 of Securities Exchange Act Release No. 

77714 (April 26, 2016), 81 FR 26281 (May 2, 2016) 

(describing Nasdaq’s GIDS within the order 

approving SR–Nasdaq–2016–028). See also footnote 

29 of Securities Exchange Act Release No. 78592 

(August 16, 2016), 81 FR 56729 (August 22, 2016) 

(describing Nasdaq’s GIDS within the order 

approving SR–Nasdaq–2016–061). See, e.g., the 

NYSE Arca, Inc.’s (‘‘NYSE Arca’’) EOD ETF Report 

available at http://www.nyxdata.com/DataProducts/NYSE-Arca-EOD-ETF-Report (providing 

information such as the ETF’s closing trades and 

quotes at different key points during the trading 

day, as well referential information such as shares 

outstanding, the primary market, and NAV). 

Internal Distribution, thereby lowering 

their overall costs where the number of 

Users they account for is low. Moreover, 

introducing a modest Non-Professional 

User fee is reasonable because it 

provides an additional method for NonProfessional investors to access the data 

by providing the same data that is 

available to Professional Users. The 

Exchange believes that the proposed 

fees are equitable and not unfairly 

discriminatory because they will be 

charged uniformly to Internal 

Distributors and Users. The Exchange 

notes that the amount of the per User 

fees for Internal Distribution equal those 

charged for External Distribution for 

both the Cboe One Summary Feed and 

ETF Implied Liquidity Feed. 

The fee structure of differentiated 

Professional and Non-Professional fees 

is utilized by the Exchange for the Cboe 

One Feed and has long been used by 

other exchanges for their proprietary 

data products, and by the Nasdaq UTP 

and the CTA and CQ Plans in order to 

reduce the price of data to retail 

investors and make it more broadly 

available.20 Offering the Cboe One 

Summary Feed and ETF Implied 

Liquidity Feed to Non-Professional 

Users with the same data available to 

Professional Users results in greater 

equity among data recipients. 

The proposed expansion of the 

Enterprise Fee to Internal Distributors of 

the Cboe One Summary Feed is 

reasonable because it could result in a 

fee reduction for Internal Distributors 

with a large number of Professional and 

Non-Professional Users. If an Internal 

Distributor has a smaller number of 

Professional Users of the Cboe One 

Summary Feed, then it may continue 

using the per User structure. By 

reducing prices for Internal Distributors 

with a large number of Professional and 

Non-Professional Users, the Exchange 

believes that more Internal Distributors 

may choose to receive and to distribute 

the Cboe One Summary Feed, thereby 

expanding the distribution of this 

market data for the benefit of investors. 

The Exchange further believes that the 

proposed Enterprise Fee is reasonable 

because it will simplify reporting for 

certain Internal Distributors that have 

large numbers of Professional and NonProfessional Users. Internal Distributors 

that pay the proposed Enterprise Fee 

will not have to report the number of 

Users on a monthly basis as they 

currently do, but rather will only have 

to count natural person users every six 

months, which is a significant reduction 

in administrative burden. Finally, the 

Exchange believes that it is equitable 

and not unfairly discriminatory to 

establish an Enterprise Fee because it 

reduces the Exchange’s costs and the 

Distributor’s administrative burdens in 

tracking and auditing large numbers of 

Users. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

The Exchange’s ability to price the Cboe 

One Summary Feed and the ETF 

Implied Liquidity Feed is constrained 

by: (i) Competition among exchanges, 

other trading platforms, and Trade 

Reporting Facilities (‘‘TRF’’) that 

compete with each other in a variety of 

dimensions; (ii) the existence of 

inexpensive real-time consolidated data 

and market-specific data and free 

delayed data; and (iii) the inherent 

contestability of the market for 

proprietary data. 

The Exchange and its market data 

products are subject to significant 

competitive forces and the proposed 

fees represent responses to that 

competition. To start, the Exchange 

competes intensely for order flow. It 

competes with the other national 

securities exchanges that currently trade 

equities, with electronic communication 

networks, with quotes posted in 

FINRA’s Alternative Display Facility, 

with alternative trading systems, and 

with securities firms that primarily 

trade as principal with their customer 

order flow. The Cboe One Summary 

Feed will enhance competition because 

it not only provides content that is 

competitive with the similar products 

offered by other exchanges, but will 

provide pricing that is competitive as 

well. The Cboe One Summary Feed 

provides investors with an alternative 

option for receiving market data and 

competes directly with similar market 

data products currently offered by the 

NYSE and Nasdaq.21

In addition, when establishing the 

proposed fees, the Exchange considered 

the competitiveness of the market for 

proprietary data and all of the 

implications of that competition. The 

Exchange believes that it has considered 

all relevant factors and has not 

considered irrelevant factors in order to 

establish fair, reasonable, and not 

unreasonably discriminatory fees and an 

equitable allocation of fees among all 

Users. The existence of alternatives to 

the Cboe One Summary Feed and the 

ETF Implied Liquidity Feed ensures that 

the Exchange cannot set unreasonable 

fees, or fees that are unreasonably 

discriminatory, when vendors and 

subscribers can elect these alternatives 

or choose not to purchase a specific 

proprietary data product if its cost to 

purchase is not justified by the returns 

any particular vendor or subscriber 

would achieve through the purchase. 

Lastly, the Exchange represents that 

the proposed pricing of the Cboe One 

Summary Feed and the ETF Implied 

Liquidity Feed provides investors with 

alternative market data and competes 

with similar market data product 

currently offered by other exchanges.22

In addition, the Exchange notes the 

concerns regarding whether a competing 

vendor could create a similar product 

on the same price basis as the Exchange 


srobinson on DSK9F5VC42PROD with NOTICES
1396 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Notices 

23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4(f). 25 17 CFR 200.30–3(a)(12). 

1Public Law 114–74 Sec. 701, 129 Stat. 599–601 

(Nov. 2, 2015), codified at 28 U.S.C. 2461 note. 

2Public Law 101–410, 104 Stat. 890–892 (1990), 

codified at 28 U.S.C. 2461 note. 

3Public Law 104–134, Title III, § 31001(s)(1), 110 

Stat. 1321–373 (1996), codified at 28 U.S.C. 2461 

note. 

4See Release Nos. 33–7361, 34–37912, IA–1596, 

IC–22310, dated November 1, 1996 (effective 

December 9, 1996), previously found at 17 CFR 

201.1001 and Table I to Subpart E of Part 201; 

Release Nos. 33–7946, 34–43897, IA–1921, IC– 

24846, dated January 31, 2001 (effective February 

2, 2001), previously found at 17 CFR 201.1002 and 

Table II to Subpart E of Part 201; Release Nos. 33– 

8530, 34–51136, IA–2348, IC–26748, dated 

February 9, 2005 (effective February 14, 2005), 

previously found at 17 CFR 201.1003 and Table III 

to Subpart E of Part 201; Release Nos. 33–9009, 34– 

59449, IA–2845, IC–28635, dated February 25, 2009 

(effective March 3, 2009), previously found at 17 

CFR 201.1004 and Table IV to Subpart E of Part 201; 

and Release Nos. 33–9387, 34–68994, IA–3557, IC– 

30408, dated February 27, 2013 (effective March 5, 

2013), previously found at 17 CFR 201.1005 and 

Table V to Subpart E of Part 201. The penalty 

amounts contained in these releases have now been 

consolidated into Table I to 17 CFR 201.1001. 

are not present here. The proposed 

changes are limited to fees for Internal 

Distributers who use the data for 

internal use only and not for the 

redistribution and sale to external 

parties. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received from 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written 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 23 and paragraph (f) of Rule 

19b–4 thereunder.24 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. 

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– 

CboeBZX–2017–019 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CboeBZX–2017–019. 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–2017–019 and 

should be submitted on or before 

February 1, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00309 Filed 1–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release Nos. 33–10451; 34–82455; IA– 

4842; IC–32963] 

Adjustments to Civil Monetary Penalty 

Amounts 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Notice of annual inflation 

adjustment of civil monetary penalties. 

SUMMARY: The Securities and Exchange 

Commission (the ‘‘Commission’’) is 

publishing this notice pursuant to the 

Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 

2015 (the ‘‘2015 Act’’). This Act requires 

all agencies to annually adjust for 

inflation the civil monetary penalties 

that can be imposed under the statutes 

administered by the agency and publish 

the adjusted amounts in the Federal 

Register. This notice sets forth the 

annual inflation adjustment of the 

maximum amount of civil monetary 

penalties (‘‘CMPs’’) administered by the 

Commission under the Securities Act of 

1933, the Securities Exchange Act of 

1934 (the ‘‘Exchange Act’’), the 

Investment Company Act of 1940, the 

Investment Advisers Act of 1940, and 

certain penalties under the SarbanesOxley Act of 2002. These amounts are 

effective beginning on January 15, 2018, 

and will apply to all penalties imposed 

after that date for violations of the 

aforementioned statutes that occurred 

after November 2, 2015. 

FOR FURTHER INFORMATION CONTACT: 

James A. Cappoli, Assistant General 

Counsel, Office of the General Counsel, 

at (202) 551–7923, or Stephen M. Ng, 

Senior Special Counsel, Office of the 

General Counsel, at (202) 551–7957. 

SUPPLEMENTARY INFORMATION: 

I. Background 

This notice is being published 

pursuant to the 2015 Act,1 which 

amended the Federal Civil Penalties 

Inflation Adjustment Act of 1990 (the 

‘‘Inflation Adjustment Act’’).2 The 

Inflation Adjustment Act previously had 

been amended by the Debt Collection 

Improvement Act of 1996 (the ‘‘DCIA’’) 3

to require that each federal agency adopt 

regulations at least once every four years 

that adjust for inflation the CMPs that 

can be imposed under the statutes 

administered by the agency. Pursuant to 

this requirement, the Commission 

previously adopted regulations in 1996, 

2001, 2005, 2009, and 2013 to adjust the 

maximum amount of the CMPs that 

could be imposed under the statutes the 

Commission administers.4

The 2015 Act replaces the inflation 

adjustment formula prescribed in the 

DCIA with a new formula for calculating 

the inflation-adjusted amount of CMPs. 

The 2015 Act requires that agencies use 

this new formula to re-calculate the 

inflation-adjusted amounts of the 


srobinson on DSK9F5VC42PROD with NOTICES