Document ID: SEC-2018-0135-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe EDGX Exchange, Inc.
Posted Date: 2018-01-23T05:00Z

[Federal Register Volume 83, Number 15 (Tuesday, January 23, 2018)]
[Notices]
[Pages 3194-3196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-01091]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82520; File No. SR-CboeEDGX-2018-001]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Harmonize the Definition of Non-Professional User in Its Fee Schedule 
With That of Its Affiliates

January 17, 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 January 8, 2018, Cboe EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. The Exchange has 
designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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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 harmonize the definition of ``Non-Professional 
User'' with that of its affiliates, Cboe Exchange, Inc. (``Cboe'') and 
Cboe C2 Exchange, Inc. (``C2'').
    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 harmonize the definition of ``Non-Professional User'' with 
that of its affiliates, Cboe and C2. In late 2016, the Exchange and its 
affiliates Cboe EDGA Exchange, Inc. (``EDGA''), Cboe BYX Exchange, Inc. 
(``BYX''), and Cboe BZX Exchange, Inc. (``BZX'') received approval to 
effect a merger (the ``Merger'') of the Exchange's parent company, Bats 
Global Markets, Inc., the parent of EDGA, EDGX, BYX, and BZX with CBOE 
Holding, Inc. (now known as Cboe Global Markets, Inc.) the parent 
company of Cboe and C2.\5\ In order to provide consistent rules and 
terminology amongst the Exchange, Cboe, and C2, the Exchange proposes 
to amend the definition of ``Non-Professional User'' to harmonize it 
with that of its affiliates, Cboe and C2. The EDGX Option's fee 
schedule currently defines ``Non-Professional User'' as:
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    \5\ See Securities Exchange Act Release No. 79585 (December 16, 
2016), 82 FR 6961 (December 22, 2016) (SR-BatsEDGX-2016-60; SR-
BatsEDGA-2016-24; SR-BatsBYX-2017-29; and SR-BatsBYX-2016-68).

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 
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functions were performed for an organization not so exempt.

As amended, ``Non-Professional User'' would be defined as:

a natural person or qualifying trust that uses Data only for 
personal purposes and not for any commercial purpose and, for a 
natural person who works in the United States, is not: (i) 
registered or qualified in any capacity with the Securities and 
Exchange Commission, the Commodities 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 Advisors 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; or, for a natural person who works 
outside of the United States, does not perform the same functions as 
would disqualify such person as a Non-Professional User if he or she 
worked in the United States.

    The revised definition is substantially identical to the definition 
of ``Non-Professional User' included within the Cboe and C2 fee 
schedules.\6\ The Exchange's current definition of ``Non-

[[Page 3195]]

Professional User'' does differ from that contained in the Cboe and C2 
fee schedules in following minor, non-substantive ways. First, the 
harmonized definition will make clear that a Non-Professional User may 
be a natural person or qualifying trust that uses Data only for 
personal purposes and not for any commercial purpose. To date, the 
Exchange is not aware of any entity that receives an Exchange market 
data product would be deemed a qualifying trust and, therefore, has not 
had to determine whether such entity is a Professional or Non-
Professional User under the prior definition. Second, the harmonized 
definition would specify that a natural person who works outside of the 
United States would not be deemed a Non-Professional User where that 
person does not perform the same functions as would disqualify such 
person as a Non-Professional User if he or she worked in the United 
States. The definition with regard to natural persons who work in the 
United States are substantively identical amongst the old and 
harmonized definition.
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    \6\ See the Cboe fee schedule available at https://www.cboe.org/general-info/pdfframed?content=/publish/mdxfees/cboe-cds-fees-schedule-for-cboe-datafeeds.pdf§ion=SEC_MDX_CSM&title=Cboe%20CDS%20Fees%20Schedule 
and the C2 fee schedule available at https://www.cboe.org/general-info/pdfframed?content=/publish/mdxfees/c2-cds-fees-schedule.pdf§ion=SEC_MDX_CSM&title=C2%20CDS%20Fees%20Schedule.
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    None of these differences impact the manner in which the Exchange 
would characterize a User and a Professional or Non-Professional. The 
harmonized definition would provide additional specificity while 
harmonizing the definition with that of its affiliates. Doing so would 
ensure consistent terms amongst the Exchange and its affiliates, 
thereby reducing the potential for confusion amongst market data 
subscribers regarding the type of User they may be considered by the 
Exchange.
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)(5) of the Act \8\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in 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. The harmonized definition of Non-Professional User is 
equitable, reasonable, and removes impediments to and perfect the 
mechanism of a free and open market and a national market system it 
would provide additional specificity while harmonizing the definition 
with that of its affiliates. Doing so would ensure consistent terms 
amongst the Exchange and its affiliates, thereby reducing the potential 
for confusion amongst market data subscribers regarding the type of 
User they may be considered by the Exchange.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
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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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. The 
harmonized definition of Non-Professional User would have no impact on 
competition because it does not materially alter the definition.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\ In addition, Rule 
19b-4(f)(6) requires a self-regulatory organization to give the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has satisfied this requirement.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
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    In its filing, the Exchange requested that the Commission waive the 
30-day operative delay in order to enable the Exchange to immediately 
ensure consistent use of terms amongst the Exchange and its affiliates, 
thereby reducing the potential for confusion amongst market data 
subscribers regarding the type of User they may be considered by the 
Exchange. The Commission believes that such waiver is consistent with 
the protection of investors and the public interest. Therefore, the 
Commission designates the proposed rule change to be operative upon 
filing. For purposes only of waiving the 30-day operative delay, the 
Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation.\11\
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    \11\ See 15 U.S.C. 78c(f).
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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: (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 [email protected]. Please include 
File Number SR-CboeEDGX-2018-001 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 CboeEDGX-2018-001. 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

[[Page 3196]]

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 CboeEDGX-2018-001 and should be 
submitted on or before February 13, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-01091 Filed 1-22-18; 8:45 am]
 BILLING CODE 8011-01-P