Document ID: SEC-2019-0651-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2019-05-15T04:00Z

[Federal Register Volume 84, Number 94 (Wednesday, May 15, 2019)]
[Notices]
[Pages 21863-21866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09965]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85817; File No. SR-CBOE-2019-026]

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

May 9, 2019.
    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 April 25, 2019, 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, 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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[[Page 21864]]

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 fee schedule to adopt reduced subscription fees for 
academics for the sale of Historical Cboe Open-Close volume data. The 
text of the proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://www.cboe.com/AboutCBOE/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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Cboe LiveVol, LLC (``Cboe 
LiveVol'') Price List to adopt reduced subscription fees for academics 
for the sale of historical Cboe Open-Close volume data. In 2015, former 
Cboe Holdings (now Cboe Global Markets) acquired LiveVol, Inc, a market 
data services and trading analytics platform. In 2016, Cboe LiveVol 
launched its website, Cboe LiveVol DataShop \3\ (``DataShop''), which 
offers clients, both Trading Permit Holders (``TPHs'') and non-TPHs, a 
range of market data sets, including historical data, and subscription 
options. Specifically, Open-Close Data is a Cboe proprietary data set 
offered on DataShop that consists of the volume summary (i.e. contracts 
traded) for each Exchange-listed option. Open-Close Data summarizes 
Cboe Options volume by origin (customer and firm orders only), original 
order size and the opening or closing position of the order. Customers 
may purchase Daily Open-Close Data on a monthly subscription basis or 
Historical Open-Close Data on an ad hoc request basis. The Exchange 
seeks only to amend the price per year for Historical Open-Close Data 
for academic purchasers. Currently, Historical Open-Close Data is 
available to all customers at the same price and in the same manner. 
The current charge for Historical Open-Close Data covering all of the 
Exchange's securities ((Equities, Indexes & ETF's) is $7,200 per year 
for requests for one to four years of data, and a 50% discount 
beginning with the fifth year of data (i.e. Cboe LiveVol charges $7,200 
for each of the first four years of data and $3,600 for data the fifth 
year and on).
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    \3\ Available at: https://datashop.cboe.com/.
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    The Exchange now proposes to charge qualifying academic purchasers 
$1,500 per year for Historical Open-Close Data covering all of the 
Exchange's securities. As proposed, the 50% discount beginning with the 
fifth year of data is not applicable to academic pricing. The Exchange 
believes that academic institutions 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 fees for qualifying academic purchasers 
of Historical 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 purchasers must be (1) an 
accredited academic 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 the 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 be updated to reflect the academic discount program, and 
academic institutions 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 other exchanges currently offer academic 
discounts for similar data feeds.\4\ The Exchange recognizes the high 
value of academic research and educational instruction and 
publications, and believes that the proposed academic discount for 
Historical 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' 
subscriptions to Historical Open-Close Data are educational in use and 
purpose, and not vocational.
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    \4\ See Securities Exchange Act Release No. 67955 (October 1, 
2012) 77 FR 61037 (October 5, 2012) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change To Adopt Reduced Fees for 
Historical ISE Open/Close Trade Profile Intraday Market Data 
Offering) (SR-ISE-2012-76); Securities and Exchange Act Release 34-
60654 (September 11, 2009) 74 FR 47848 (September 17, 2009) (Notice 
of Filing of Proposed Rule Change Relating to Historical ISE Open/
Close Trade Profile Fees) (SR-ISE-2009-64); Securities Exchange Act 
Release No. 53770 (May 8, 2006) 71 FR 27762 (May 12, 2006) (Notice 
of Filing of Proposed Rule Change and Amendment No. 1 Thereto To 
Establish an Annual Administrative Fee for Market Data Distributors 
That Are Recipients of Nasdaq Proprietary Data Products) (SR-NASD-
2006-030).
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    Lastly, the Exchange proposes to relocate the current Open-Close 
Data pricing schedule available on DataShop, along with the proposed 
academic discount, to its Exchange Fees Schedule, under the LiveVol 
Fees Table. The Open-Close Data will continue to be made available on 
DataShop. The Exchange proposes to change the format of the Open-Close 
Data of all Cboe securities received by a purchaser from a DVD to a 
download, noting that file sizes larger than 500GB will be shipped to 
the purchaser on a hard drive. The Exchange notes that this is the 
current process in which a purchaser receives Historical Open-Close 
Data via the DataShop website. As such, the proposed change does not 
substantively change the pricing schedule, but rather reflects the 
format in which purchasers are currently receiving Historical Open-
Close Data via the DataShop website. As such, the Exchange notes no 
substantive changes are being made by relocating the pricing 
information, but rather believes the Open-Close Data fees would be 
better situated among the Exchange's current LiveVol Fees Table in the 
Exchange's Fees Schedule.
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

[[Page 21865]]

Section 6(b) of the Act.\5\ Specifically, the Exchange believes the 
proposed rule change is consistent with the Section 6(b)(5) \6\ 
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) \7\ requirement that the rules of an exchange not be designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ Id.
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    In particular, the Exchange believes that the discount for 
qualifying academic purchasers of the annual subscription to Historical 
Open-Close Data is reasonable because academic institutions 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 to purchase Historical 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 institutions that submit an 
application and meet the accredited academic institution 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. Additionally, the Exchange 
believes its proposal to adopt the pricing schedule for Open-Close Data 
under its Fees Schedule is reasonable and equitable because maintaining 
the pricing information for Cboe proprietary data in a fee schedule in 
a centralized location on the main Cboe website \8\ reduces confusion 
for investors and allows for easier access to such pricing for all 
market participants. Furthermore, the Exchange believes the proposed 
change from a purchaser's receipt of a DVD to a download of Historical 
Open-Close Data is reasonable and equitable because it reflects the 
format in which purchasers are already receiving such data via the 
DataShop website. As a result, this change will reduce confusion for 
all investors once the Open-Close pricing information is adopted under 
the Exchange's Fee Schedule.
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    \8\ Available at: http://www.cboe.com/trading-resources/fee-schedules.
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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 institutions' 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 options 
exchanges currently offer similar historical data to academic 
institutions at a discounted price. Offering a discount for qualifying 
academic institutions that purchase the Exchange's Historical Open-
Close Data may make that data more attractive to such academic 
institutions 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) of the Act \9\ and paragraph (f) of Rule 19b-4 \10\ 
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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2019-026 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-2019-026. 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

[[Page 21866]]

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-
CBOE-2019-026 and should be submitted on or before June 5, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-09965 Filed 5-14-19; 8:45 am]
 BILLING CODE 8011-01-P