Document ID: SEC-2021-0430-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange,Inc.
Posted Date: 2021-03-29T04:00Z

[Federal Register Volume 86, Number 58 (Monday, March 29, 2021)]
[Notices]
[Pages 16431-16433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06347]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91394; File No. SR-CBOE-2021-017]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Fees Schedule To Adopt Reduced Fees for Academics for the Sale of 
Historical Intraday Open-Close Volume Data

March 23, 2021.
    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 12, 2021, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe 
Options'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
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 Exchange, Inc. (the ``Exchange'' or ``Cboe Options) proposes 
to amend its Fees Schedule to adopt reduced fees for academics for the 
sale of historical Intraday Open-Close volume data. The text of the 
proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is available on the Exchange's 
website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.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 to adopt reduced 
fees for academics for the sale of historical Intraday Open-Close Data 
product, which is currently available for purchase to Cboe Options 
Trading Permit Holders (``TPHs'') and non-TPHs.\3\ By way of 
background, the Exchange historically offered Open-Close Data, which is 
an end-of-day volume summary of trading activity on the Exchange at the 
option level by origin (customer, professional customer, broker-dealer, 
and market maker), side of the market (buy or sell), price, and 
transaction type (opening or closing). The customer and professional 
customer volume is further broken down into trade size buckets (less 
than 100 contracts, 100-199 contracts, greater than 199 contracts). The 
Open-Close Data is proprietary Cboe Options trade data and does not 
include trade data from any other exchange. It is also a historical 
data product and not a real-time data feed. The recently adopted 
Intraday Open-Close Data provides similar information to that of Open-
Close Data but is produced and updated every 10 minutes during the 
trading day. Data is captured in ``snapshots'' taken every 10 minutes 
throughout the trading day and is available to subscribers within five 
minutes of the conclusion of each 10-minute period.\4\ The Intraday 
Open-Close Data provides a volume summary of trading activity on the 
Exchange at the option level by origin (customer, professional 
customer, broker-dealer, and market maker), side of the market (buy or 
sell), and transaction type (opening or closing). The customer and 
professional customer volume are further broken down into trade size 
buckets (less than 100 contracts, 100-199 contracts, greater than 199 
contracts). The Intraday Open-Close Data is also proprietary Cboe 
Options trade data and does not include trade data from any other 
exchange.
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    \3\ The Exchange initially filed the proposed fee changes on 
March 1, 2021 (SR-CBOE-2021-016). On March 12, 2021, the Exchange 
withdrew that filing and submitted this filing.
    \4\ For example, subscribers to the intraday product will 
receive the first calculation of intraday data by approximately 9:42 
a.m. ET, which represents data captured from 9:30 a.m. to 9:40 a.m. 
Subscribers will receive the next update at 9:52 a.m., representing 
the data previously provided together with data captured from 9:40 
a.m. through 9:50 a.m., and so forth. Each update will represent the 
aggregate data captured from the current ``snapshot'' and all 
previous ``snapshots.''
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    Cboe LiveVol, LLC (``LiveVol''), a wholly owned subsidiary of the 
Exchange's parent company, Cboe Global Markets, Inc., makes the 
Intraday Open-Close Data available for purchase to TPHs and non-TPHs on 
the LiveVol DataShop website (datashop.cboe.com). Customers may 
currently purchase Intraday Open-Close Data on a subscription basis 
(monthly or annually) or by ad hoc request for a specified month 
(historical file). The Exchange seeks only to amend the price per year 
for historical ad hoc requests for Intraday Open-Close Data for 
academic purchasers. Currently, ad hoc requests for historical Intraday 
Open-Close Data is available to all customers at the same price and in 
the same manner. The current charge for this historical Intraday Open-
Close Data covering all of the Exchange's securities ((Equities, 
Indexes & ETF's) is $1,000 per month

[[Page 16432]]

(i.e., $12,000 per year). The Exchange now proposes to charge 
qualifying academic purchasers $3,000 per year for the first year 
(instead of $12,000 per year) and $250 per month thereafter for 
historical Intraday Open-Close Data covering all of the Exchange's 
securities. Particularly, the Exchange believes that academic 
institutions and researchers provide a valuable service for the 
Exchange in studying and promoting the options market. Though academic 
institutions and researchers have need for granular options data sets, 
they do not trade upon the data for which they subscribe. The Exchange 
believes the proposed reduced fee for qualifying academic purchasers of 
historical Intraday Open-Close Data will encourage and promote academic 
studies of its market data by academic institutions. In order to 
qualify for the academic pricing, an academic purchaser must be (1) an 
accredited academic institution or member of the faculty or staff of 
such an institution, (2) that will use the data in independent academic 
research, academic journals and other publications, teaching and 
classroom use, or for other bona fide educational purposes (i.e., 
academic use). Furthermore, use of the data must be limited to faculty 
and students of an accredited academic institution, and any commercial 
or profit-seeking usage is excluded. Academic pricing will not be 
provided to any purchaser whose research is funded by a securities 
industry participant. Cboe LiveVol subscriber policies will reflect the 
academic discount program, and academic users interested in qualifying 
will be required to submit a brief application. Cboe LiveVol Business 
Development will have the discretion to review and approve such 
applications and request additional information when it deems 
necessary.
    The Exchange notes that another exchange currently offers an 
academic discount for a similar data feed.\5\ Additionally, the 
Exchange offers an academic discount for the similar historical Open-
Close Data product.\6\ The Exchange recognizes the high value of 
academic research and educational instruction and publications, and 
believes that the proposed academic discount for historical Intraday 
Open-Close Data will encourage the promotion academic research of the 
options industry, which will serve to benefit all market participants 
while also opening up a new potential user base among students. 
Finally, the Exchange notes that academic purchasers' ad hoc requests 
of historical Intraday Open-Close Data would be educational in use and 
purpose, and not vocational.
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    \5\ See Nasdaq ISE, Options 7 Pricing Schedule, Section 10A., 
Nasdaq ISE Open/Close Trade Profile Intraday.
    \6\ See Cboe Options Fees Schedule, Livevol Fees, Open Close 
Data.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\7\ in general, and 
furthers the objectives of Section 6(b)(4),\8\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and issuers and other persons 
using its facilities. The Exchange also believes that the proposed rule 
change is consistent with the objectives of Section 6(b)(5) \9\ 
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, and, particularly, is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. Additionally, the Exchange believes the proposed 
rule change is consistent with the Section 6(b)(5) \10\ requirement 
that the rules of an exchange not be designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f.(b)(5).
    \10\ Id.
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    In particular, the Exchange believes that the discount for 
qualifying academic purchasers of the ad hoc historical Intraday Open-
Close Data is reasonable because academic users are not able to 
monetize access to the data as they do not trade on the data set. The 
Exchange believes the proposed discount will allow for more academic 
institutions and faculty members to purchase historical Intraday Open-
Close Data, and, as a result, promote research and studies of the 
options industry to the benefit of all market participants. The 
Exchange believes that the proposed discount is equitable and not 
unfairly discriminatory because it will apply equally to all academic 
users that submit an application and meet the accredited academic 
institution or faculty member and academic use criteria. As stated 
above, qualified academic users will subscribe to the data set for 
educational use and purposes and are not permitted to use the data for 
commercial or monetizing purposes, nor can qualify if they are funded 
by an industry participant. As a result, the Exchange believes the 
proposed discount is equitable and not unfairly discriminatory because 
it maintains equal treatment for all industry participants or other 
subscribers that use the data for vocational, commercial or other for-
profit purposes.

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 Exchange does not 
believe that the proposed rule change will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the proposed rule change 
will apply to all qualifying academic purchasers uniformly. While the 
proposed fee reduction applies only to qualifying academic purchasers, 
academic purchasers' research and publications as a result of access to 
historical market data benefits all market participants. The Exchange 
also does not believe that the proposed rule change will impose any 
burden on intermarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act as other another exchange 
currently offers similar historical intraday data to academic users at 
a discounted price. Offering a discount for qualifying academic 
institutions and faculty members that purchase the Exchange's 
historical Intraday Open-Close Data may make that data more attractive 
to such academic users and further increase competition with exchanges 
that offer similar historical data products.

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)

[[Page 16433]]

of the Act \11\ and paragraph (f)(2) of Rule 19b-4 \12\ thereunder, 
because it establishes a due, fee, or other charge imposed by the 
Exchange.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
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    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-CBOE-2021-017 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-CBOE-2021-017. 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; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CBOE-2021-017 and should be 
submitted on or before April 19, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-06347 Filed 3-26-21; 8:45 am]
BILLING CODE 8011-01-P