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[Federal Register Volume 89, Number 248 (Friday, December 27, 2024)]
[Notices]
[Pages 105665-105669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30905]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101990; File No. SR-CboeBZX-2024-125]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Update 
Its Fee Schedule Regarding Uncontrolled External Distributors

December 19, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 16, 2024, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to 
update its Fee Schedule. The text of the proposed rule change is 
provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/BZX/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the 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 of its Fee 
Schedule to adopt a new fee waiver for Uncontrolled External 
Distributors.\3\ Particularly, the Exchange proposes to: (i) adopt a 
waiver of External Distribution fees for Uncontrolled External 
Distributors of the Summary Depth Feed and Top Feed, and (ii) adopt fee 
waiver of External Distribution fees and Data Consolidation fees for 
Uncontrolled External Distributors of the Cboe One Summary Feed and 
Cboe One Premium Feed.\4\
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    \3\ The Exchange initially adopted this fee waiver on December 
2, 2024 (SR-CboeBZX-2024-123). On December 16, 2024, the Exchange 
withdrew that filing and submitted this filing.
    \4\ For clarity, the Exchange also proposes to modify the 
applicable sections of its Fee Schedule for these data feeds to use 
numbered footnotes in lieu of asterisks.
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BZX Top and Summary Depth Data
    By way of background, the Exchange offers the BZX Top Data Feed, 
which is a data feed that offers top-of-book quotations and last sale 
information based on orders entered into the Exchange's System. The BZX 
Top Data Feed benefits investors by facilitating their prompt access to 
real-time top-of-book information contained in BZX Top Data. The 
Exchange's affiliated equities exchanges (i.e., Cboe EDGA, Inc. 
(``EDGA''), Cboe BYX Exchange, Inc. (``BYX''), and Cboe EDGX Exchange, 
Inc. (``EDGX'') (collectively, ``Affiliates'' and together with the 
Exchange, ``Cboe Equities Exchanges'') also offer similar top-of-book 
data feeds. Particularly, each of the Exchange's Affiliates 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 BZX Top Data Feed.
    In addition to BZX Top Data Feed, the Exchange offers BZX Summary 
Depth Data Feed, 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. The BZX Summary Depth Data Feed also contains 
the individual last sale information, Market Status, Trading Status, 
and Trade Break messages.\5\ The BZX Summary Depth Data Feed benefits 
investors by facilitating their prompt access to real-time market depth 
information contained in BZX Summary

[[Page 105666]]

Depth Data. The Exchange's Affiliates also offer similar depth-of-book 
data feeds. Particularly, each of the Exchange's Affiliates offer 
depth-of-book quotations up to five (5) price levels based on their own 
quotation and trading activity that is substantially similar to the 
information provided by the Exchange through the BZX Summary Depth.
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    \5\ See Exchange Rule 11.22(m)
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    The Exchange proposes to make the following fee changes relating to 
both BZX Top and BZX Summary Depth.
BZX Top Data Feed and BZX Summary Depth Data Feed New Uncontrolled 
External Distributor External Distribution Fee Waiver
    Currently, the Exchange assesses all External Distributors of BZX 
Top Data Feed an External Distribution fee of $2,500 per month and 
External Distributors of BZX Summary Depth Data Feed an External 
Distribution fee of $5,000 per month.\6\ The Exchange proposes to adopt 
a fee waiver which will provide that new Uncontrolled External 
Distributors of the BZX Top and/or Summary Depth feeds will not be 
charged the External Distributor fees until such time they enlist one 
or more Users \7\ to receive the BZX Top Feed or Summary Depth Feed 
(the ``New Uncontrolled External Distributor BZX Top and Depth Fee 
Waiver'').\8\ ``Uncontrolled External Distributors'' distribute data 
externally to a User that is not an affiliate of the Uncontrolled 
Distributor and is unable to control the entitlements of and display of 
information to such User (i.e., a data feed subscriber).\9\ To be 
eligible for the New Uncontrolled External Distributor BZX Top and 
Depth Fee Waiver, a new Uncontrolled External Distributor must not have 
received the data feed(s) for which it seeks a waiver (BZX Top and/or 
Depth) within the last 18 months.\10\ As discussed further below, the 
Exchange seeks to adopt the proposed New Uncontrolled External 
Distributor BZX Top and Depth Fee Waiver to incentivize vendors to 
adopt the BZX Top and Summary Depth feeds proactively without having to 
wait for customer demand to start development and integration of data 
feeds. The Exchange notes that both the Exchange and its Affiliates 
currently offer similar credits to External Distributors (which both 
Uncontrolled and Controlled External Distributors are eligible for) for 
the purposes of allowing them time to enlist new users to receive 
certain data feeds. For example, the Exchange and its Affiliates 
currently offer a one (1) month New External Distributor Credit 
applicable to External Distributors of top-of-book data feeds.\11\ They 
also offer a three (3) month new External Credit applicable to External 
Distributors of summary depth-of-book feeds.\12\
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    \6\ External Distribution Fees for both BZX Top and Summary 
Depth are subject to the New External Distributor Credit and 
eligible for a free trial. See BZX Equities Exchange Fees Schedule, 
Market Data Fees.
    \7\ The Exchange defines a ``User'' of an Exchange Market Data 
Product as a natural person, a proprietorship, corporation, 
partnership or entity, or device (computer or other automated 
service), that is entitled to receive Exchange data. See BZX 
Equities Exchange Fees Schedule, Market Data Fees.
    \8\ The proposed waivers of the External Distribution fees for 
each of BZX Top and BZX Summary Depth will be applied separately. 
For example, when an Uncontrolled External Distributor that is 
receiving a fee waiver for both BZX Top and BZX Summary Depth 
enlists a first User for BZX Top, the Uncontrolled External 
Distributor will no longer eligible to receive the waiver for BZX 
Top, but will still receive the waiver for BZX Summary Depth until 
and unless it enlists a new subscriber for BZX Summary Depth. 
Additionally Uncontrolled External Distributors will receive at 
least the one month New External Distributor Credit for BZX Top and 
the New External Distributor credit of at least three months for BZX 
Summary Depth. For example, if an Uncontrolled Distributor enlists a 
new subscriber of BZX Summary Depth during its second month taking 
BZX Summary Depth, the Uncontrolled External Distributor will still 
receive a credit for the remainder of the second month, as well as 
the third month under the existing New External Distributor Credit 
program.
    \9\ See Cboe Global Markets North American Data Policies. The 
Exchange proposes to codify the definition of an ``Uncontrolled 
External Distributor'' in the Definitions section of the Market Data 
Fees schedule in the Exchange's Fees Schedule for transparency and 
clarity.
    \10\ The Exchange notes that its affiliate exchange, EDGA, has a 
similar 18 moth requirement for participants to be considered 
eligible for the New Member Program. See EDGA Equities Exchange Fees 
Schedule, New Member Program.
    \11\ With the exception that EDGA does not offer this credit as 
the monthly cost is $0. See e.g., EDGA Equities Exchange Fees 
Schedule, Market Data Fees and EDGX Equities Exchange Fees Schedule, 
Market Data Fees.
    \12\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data 
Fees.
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Cboe One Summary and Premium
    By way of background, Cboe One Premium is a data feed that 
disseminates, on a real-time basis, the aggregate best bid and offer 
(``BBO'') of all displayed orders for securities traded on BZX and its 
Affiliates and contains optional functionality which enables recipients 
to receive aggregated two-sided quotations from BZX and its Affiliates 
for up to five (5) price levels.\13\ The Cboe One Premium Data Feed is 
created using the data from the Exchange and its Affiliates' Summary 
Depth data feeds. In contract, Cboe One Summary is a data feed that 
disseminates, on a real-time basis, the aggregate BBO of all displayed 
orders for securities traded on BZX and its affiliated equities 
exchanges and also contains individual last sale information for the 
BZX and its affiliated equities exchanges.\14\ The Cboe One Summary 
Data Feed is created using the data from the Exchange and its 
Affiliates' Top data feeds. Currently, the Exchange offers the New 
External Distributor Credit which provide that new External 
Distributors of the Cboe One Premium Feed and Cboe One Summary Feed 
will not be charged an External Distributor Fee for their first three 
(3) months and one (1) month, respectively, in order to allow them to 
enlist new Users to receive the respective feed.\15\ The Exchange 
proposes to make the following fee change relating to both the Cboe One 
Summary Data Feed and the Cboe One Premium Data Feed.
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    \13\ The Cboe Aggregated Market (``Cboe One'') Feed is a data 
feed that contains the aggregate best bid and offer of all displayed 
orders for securities traded on the Exchange and its affiliated 
exchanges (i.e., EDGX, EDGA, and BZX). See Exchange Rule 11.22(j). 
The Cboe One Feed contains optional functionality which enables 
recipients to receive aggregated two-sided quotations from the Cboe 
Equities Exchanges for up to five (5) price levels (``Cboe One 
Premium Feed''). The Cboe One Premium external distribution fee is 
equal to the aggregate EDGX Summary Depth, BYX Summary Depth, EDGA 
Summary Depth, and BZX Summary Depth external distribution fees.
    \14\ The Exchange notes that when it first adopted the New 
External Distributor Credit for Cboe One Summary, it similarly 
applied for a new External Distributor's first three (3) months. See 
Securities Exchange Act Release No. 74285 (February 18, 2015), 80 FR 
9828 (February 24, 2015) (SR-BATS-2015-11).
    \15\ See BZX Fee Schedule.
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Cboe One Summary and Premium New Uncontrolled External Distributor 
External Distribution and Data Consolidation Fee Waivers
    Currently, the Exchange assesses all External Distributors of Cboe 
One Summary an External Distribution fee of $5,000 per month and 
External Distributors of Cboe One Premium an External Distribution fee 
of $12,500 per month.\16\ The Exchange proposes to adopt fee waivers 
which will provide that new Uncontrolled External Distributors of the 
Cboe One Summary and Cboe One Premium feeds will not be charged either 
the (i) External Distribution fees nor (ii) Data Consolidation fee 
until such time they enlist one or more Users to receive the Cboe One 
Summary or Cboe One Premium Feeds (the ``New Uncontrolled External 
Distributor Cboe One Summary and Cboe One Premium Fee Waiver'').\17\

[[Page 105667]]

To be eligible for either fee waiver for the applicable feed(s) (Cboe 
One Summary and/or Cboe One Premium), the new Uncontrolled Data 
Distributor must not have received the applicable data feed(s) for 
which it seeks a waiver in the last 18 months.\18\ For clarity, similar 
to the New Uncontrolled External Distributor BZX Top and Depth Fee 
Waiver, while the Uncontrolled External Distributor receives the New 
Uncontrolled External Distributor Cboe One Summary and Cboe One Premium 
Fee Waiver, the Uncontrolled External Distributor will not have any 
customers receiving this data. As described herein, once the New 
Uncontrolled External Distributor enlists its first User, it is no 
longer eligible to receive the New Uncontrolled External Distributor 
Cboe One Summary and Cboe One Premium Fee Waiver.
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    \16\ External Distribution Fees for both Cboe One Summary and 
Cboe One Premium are subject to the New External Distribution Credit 
and eligible for a free trial. See BZX Equities Exchange Fees 
Schedule.
    \17\ The proposed waivers of the External Distribution fees for 
each of Cboe One Summary and Cboe One Premium will be applied 
separately. For example, when an Uncontrolled External Distributor 
that is receiving a fee waiver for both Cboe One Summary and Cboe 
One Premium enlists a first User for Cboe One Summary, the 
Uncontrolled External Distributor will no longer eligible to receive 
the waiver for Cboe One Summary, but will still receive the waiver 
for Cboe One Premium until and unless it enlists a new subscriber 
for Cboe One Premium. Additionally Uncontrolled External 
Distributors will receive at least the one month New External 
Distributor Credit for Cboe One Summary and the New External 
Distributor credit of at least three months for Cboe One Premium. 
For example, if an Uncontrolled Distributor enlists a new subscriber 
of Cboe One Premium during its second month taking Cboe One Premium, 
the Uncontrolled External Distributor will still receive a credit 
for the remainder of the second month, as well as the third month 
under the existing New External Distributor Credit program.
    \18\ See supra note 8.
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    To start, the Exchange's proposal to waive the External Distributor 
fee for New Uncontrolled External Distributors until a User is 
enlisted, will prevent the combined cost of subscribing to BYX, EDGA, 
EDGX, and BZX Summary Depth feeds for new Uncontrolled External 
Distributors to be greater than those currently charged to subscribe to 
the Cboe One Premium feed. Similarly, the proposed External Distributor 
fee waiver for Cboe One Summary will prevent the combined cost of 
subscribing to BYX, EDGA, EDGX, and BZX Top feeds for new Uncontrolled 
External Distributors to be greater than those currently charged to 
subscribe to the Cboe One Summary feed.
    Next, the Exchange proposes to waive the Data Consolidation fee for 
New Uncontrolled External Distributors its first User enlists for the 
Cboe One feeds. The Exchange currently charges Distributors of the Cboe 
One Feeds a separate Data Consolidation Fee of $1,000 per month, which 
reflects the value of the aggregation and consolidation function the 
Exchange performs in creating the Cboe One Options Feed.\19\ As stated 
above, the Exchange creates the Cboe One feeds from data derived from 
the Cboe Equities Exchanges. Distributors (including vendors) could 
similarly create a competing product to the Cboe One feeds based on 
these individual data feeds offered by the Exchanges and could charge 
its clients a fee that it believes reflects the value of the 
aggregation and consolidation function.
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    \19\ See Cboe BZX Fee Schedule. If a vendor distributes the Cboe 
One Options Feed to another firm, who then re-distributes the Cboe 
One Options Feed, both entities would be subject to the Data 
Consolidation Fee. A vendor will only be assessed a single Data 
Consolidated Fee, even if it distributes Cboe One Options Feed to 
more than one entity.
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    The Exchange proposes to adopt this fee waiver to similarly prevent 
new Uncontrolled External Distributors of the Cboe One Summary or Cboe 
One Premium feeds from being charged a Data Consolidation Fee until 
such time they enlist one or more Users to receive the Cboe One Premium 
or Cboe One Summary feeds.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\20\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \21\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. The Exchange also believes this proposal is 
consistent with Section 6(b)(8) of the Act, which requires that the 
rules of an exchange not impose any burden on competition that is not 
necessary or appropriate in furtherance of the purposes of the Act.\22\ 
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.\23\
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    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(5).
    \22\ 15 U.S.C. 78f(b)(8).
    \23\ 15 U.S.C. 78k-1.
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    First, the Exchange notes that BZX Top Feed, BZX Summary Depth 
Feed, Cboe One Summary Data Feed and Cboe One Premium Data Feed 
(together, the ``Applicable Feeds'') are distributed and purchased on a 
voluntary basis, in that neither the Exchange nor market data 
distributors are required by any rule or regulation to make these data 
products available. Distributors (including vendors) and Users can 
therefore discontinue use at any time and for any reason, including due 
to an assessment of the reasonableness of fees charged. Further, the 
Exchange is not required to make any proprietary data products 
available or to offer any specific pricing alternatives to any 
customers.
    The Exchange proposes that the proposed waivers applicable to BZX 
Top & Depth and Cboe One Feeds (together, the ``New Uncontrolled 
External Distributor Fee Waivers'') only apply to Uncontrolled External 
Distributors for two reasons. The first is to account for Uncontrolled 
External Distributors needing to develop to the data feed itself. By 
way of background, the other category of External Data Distributors are 
Controlled Distributors.\24\ Controlled Distributors both (i) provides 
data to a User and (ii) controls the entitlements of and display of 
information to such User.\25\ Therefore, the key distinction between 
Uncontrolled Distributors and Controlled Distributors is that 
Uncontrolled Distributors distribute a data feed and Controlled 
Distributors enable visible data for one of its Users. The proposed fee 
waivers will allow Uncontrolled External Distributors the necessary 
time to develop to the data feed itself and program all of the 
different messages, fields and flags and not subject them to any fees 
until such time they are able to recoup their costs from end-users. 
Additionally, once the data feed is setup on the Uncontrolled External 
Distributors end, there are

[[Page 105668]]

typically long lead times for Uncontrolled External Distributors to 
onboard new downstream data feed customers. The lead times, or sales 
cycles, are vastly different for Uncontrolled versus Controlled 
Distributors, as Uncontrolled Distributors are attempting to locate 
Users who need to receive a real-time market data feed for downstream 
ingestion on their side (whether this be for trading, analysis, or 
application development). In contrast, Controlled Distributors are only 
entitling individual Users to view the data on a pre-existing Display 
application. For an Uncontrolled Distributor to both set up and find 
its first User as a data feed subscriber, it can easily take several 
months. As there is more uncertainty with the viability of both 
developing a data feed and finding Users for this data feed after the 
Uncontrolled External Distributor develops it, the Exchange believes it 
is therefore reasonable, equitable and not unfairly discriminatory for 
this discount to only apply to Uncontrolled External Distributors to 
encourage development of their data offerings.
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    \24\ Controlled Distributors may be Internal or External 
Distributors. See supra note 7. ``Controlled External Distributors'' 
provide data to an unaffiliated User (i.e., externally distribute) 
and unlike Uncontrolled External Distributors, they control the 
entitlement of and display of info to such User.
    \25\ Id.
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    The Exchange has also taken into consideration its affiliated 
relationship with its Affiliates in its design of the proposed waivers 
\26\ to ensure that vendors would be able to offer similar products to 
its Cboe One Summary and Cboe One Premium Feeds on the same terms as 
the Exchange from a cost perspective. While the Cboe Equities Exchanges 
are the exclusive distributors of the individual data feeds from which 
certain data elements may be taken to create the Cboe One feeds, they 
are not the exclusive distributors of the aggregated and consolidated 
information that comprises the Cboe One feeds. Any entity that 
receives, or elects to receive, the individual data feeds would be able 
to, if it so chooses, to create a data feed with the same information 
included in either of the Cboe One feeds and sell and distribute it to 
its clients so that it could be received by those clients as quickly as 
the Cboe One feeds would be received by those same clients. Such 
entities would also not be assessed any greater fees by the Exchange 
than the Exchange assess for the Cboe One feeds (i.e., those who elect 
to distribute and consolidate the individual data fees and those who 
elect to distribute the Cboe One feeds will all be eligible for the 
proposed fee waivers offered by the Exchange).
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    \26\ The Exchange notes that its Affiliates will also be 
proposing to adopt these same credits with the exception of the EDGA 
Top Data Feed as the External Distribution monthly cost is $0 for 
that particular data feed. See EDGA Equities Fees Schedule, Market 
Data Fees.
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New External Distributor Credit
    The Exchange believes it is reasonable to not charge Uncontrolled 
External Distributors of an Applicable Feed(s) until such time they 
enlist one or more Users to receive the applicable feed as such 
Distributors will not be subject to the External Distribution Fees for 
the applicable product(s) during this period.\27\ Additionally, the 
Exchange and its Affiliates offer a similar credit now that all 
External Distributors, including Controlled External Distributors, may 
receive.\28\ The proposed credit is intended to incentivize new 
Uncontrolled External Distributors to enlist Users to subscribe to the 
Applicable Feeds in an effort to broaden the products' distribution to 
data feed Users. While this incentive is not available to Internal 
Distributors of these products, the Exchange believes it is appropriate 
as Internal Distributors have no Users outside of their own firm. 
Furthermore, External Distributors are subject to higher risks of 
launch as the data is provided outside their own firm. In contrast, 
Internal Distributors who only subscribe to a specific Exchange offered 
market data product when there is a need as they themselves are using 
the information, External Distributors do not use the data themselves, 
but as noted, take the risk of onboarding the data to sell as a service 
to downstream customers.\29\ For these reasons, the Exchange believes 
it is appropriate, equitable and not unfairly discriminatory to provide 
additional incentives to External Distributors so they have sufficient 
time to test the data within their own systems prior to going live 
externally. As discussed above, the Exchange also believes it is 
appropriate to limit this specific credit to Uncontrolled External 
Distributors given the longer development times associated with both 
the integration of the data feed and onboarding Users.
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    \27\ As noted above, Distributors may still receive this credit 
for any of the applicable feeds of which there are no Users (i.e., 
the Uncontrolled Distributor may still receive this credit for Cboe 
One Summary if there is a User subscribed for BZX Top).
    \28\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data 
Fees.
    \29\ The Exchange notes that in addition to the existing New 
External Distributor Credit offered by it and its affiliates, other 
exchanges have offered similar waivers for external redistribution. 
See BZX Equities Exchange Fees Schedule, Market Data Fees and 
Securities Exchange Act Release No. 90407 (November 12, 2020), 85 FR 
73570 (November 18, 2020 (SR-NYSE-2020-91).
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Data Consolidation Fee
    The Exchange believes it is reasonable to not charge Uncontrolled 
External Distributors of Cboe One Summary and Cboe One Premium a Data 
Consolidation Fee until such time they enlist one or more Users to 
receive the applicable feed as such Distributors will not be subject to 
the Data Consolidation Fee for the applicable product(s) during this 
period. For the avoidance of doubt, once an Uncontrolled External 
Distributor enlists its first User, this waiver will no longer be 
applicable--at no time will an Uncontrolled External Distributor 
receive this waiver while it has customers receiving the applicable 
data feed. As previously discussed, the Exchange believes the proposed 
Data Consolidation Fee Waiver for Uncontrolled External Distributors is 
not designed to permit unfair discrimination against Controlled 
External Distributors because of the longer lead times in the 
development Uncontrolled External Distributors experience. Further, as 
previously discussed, the Exchange believes only applying this to a 
subset of External Distributors and not any Internal Distributors is 
equitable and not unfairly discriminatory given the additional risk 
External Distributors assume when building out a product for which they 
have no existing use cases. Therefore, the Exchange believes the 
proposed application of the Data Consolidation Fee Waiver is reasonable 
and would not permit unfair discrimination.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.
    The proposed rule changes are grounded in the Exchange's efforts to 
compete more effectively and to assist in mitigating business costs 
(i.e., the costs associated with the development of data feeds and 
seeking Users to onboard for such data feeds) for Uncontrolled External 
Distributors. Further, as previously discussed, the Exchange believes 
the proposed Data Consolidation Fee Waiver for Uncontrolled External 
Distributors is not designed to permit unfair discrimination against 
Controlled External Distributors because of the longer lead times in 
the development Uncontrolled External Distributors experience. As a 
result, the Exchange believes this proposed rule change permits fair 
competition among national securities exchanges. Further, the Exchange 
believes that these changes will not cause any unnecessary or 
inappropriate burden on intermarket

[[Page 105669]]

competition, as the proposed incentive program applies uniformly to all 
Uncontrolled External Distributors.

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 \30\ and paragraph (f) of Rule 19b-4 \31\ 
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.
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    \30\ 15 U.S.C. 78s(b)(3)(A).
    \31\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2024-125 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-CboeBZX-2024-125. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2024-125 and should 
be submitted on or before January 17, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
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    \32\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-30905 Filed 12-26-24; 8:45 am]
BILLING CODE 8011-01-P
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