[Federal Register Volume 88, Number 60 (Wednesday, March 29, 2023)]
[Notices]
[Pages 18609-18616]
[FR Doc No: 2023-06429]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97189; File No. SR-CBOE-2023-015]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Update
Its Fees Schedule

March 23, 2023.
    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 March 10, 2023, Cboe Exchange, Inc. (``Exchange'' or ``Cboe
Options'') 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 update its Fees 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://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 the Market Data section of its Fees
Schedule.\3\ Particularly, the Exchange proposes to (i) adopt a New
External Credit applicable to Cboe Options Top, (ii) adopt a credit
towards the monthly Distribution fees for Cboe Options Top, (iii)
modify the Cboe Options Top Enterprise Fee; and (iv) establish fees for
Cboe One Options Feed.
---------------------------------------------------------------------------

    \3\ The Exchange initially filed the proposed fee changes on
March 1, 2023 (SR-CBOE-2023-014). On March 10, 2023, the Exchange
withdrew that filing and submitted this proposal.
---------------------------------------------------------------------------

Cboe Top Data
    By way of background, the Exchange offers the Cboe Options Top Data
feed, which is an uncompressed data feed that offers top-of-book
quotations and last sale information based on options orders entered
into the Exchange's System. The Cboe Options Top Data feed benefits
investors by facilitating their prompt access to real-time top-of-book
information contained in Cboe Options Top Data. The Exchange's
affiliated options exchanges (i.e., Cboe C2 Exchange, Inc. (``C2
Options''), Cboe BZX Exchange, Inc. (``BZX Options''), and Cboe EDGX
Exchange, Inc. (``EDGX Options'') (collectively, ``Affiliates'') also
offer similar top-of-book data feeds.\4\ 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 Cboe Options Top. The Exchange proposes to make the
following fee changes relating to Cboe Options Top.
---------------------------------------------------------------------------

    \4\ See C2 Options Fees Schedule, EDGX Rule 21.15, and BZX Rule
21.15.
---------------------------------------------------------------------------

New External Distributor Credit
    The Exchange first proposes to adopt a New External Distributor
Credit which will provide that new External Distributors of the Cboe
Options Top feed will not be charged an External Distributor Fee for
their first three (3) months in order to incentivize External
Distributors to enlist new users to receive Cboe Options Top feed. The
Exchange notes that other exchanges, including the Exchange's
affiliated equities exchanges, offer similar credits for similar market
data products. For example, Cboe's equities exchanges currently offer a
three (3) month New External Distributor Credit applicable to External
Distributors of their top-of-book data feeds.\5\
---------------------------------------------------------------------------

    \5\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data
Fees.
---------------------------------------------------------------------------

Distributor Fee Credit
    The Exchange also proposes to provide that each External
Distributor will receive a credit against its monthly Distributor Fee
for the Cboe Options Top equal to the amount of its monthly Usage Fees
up to a maximum of the Distributor Fee for the Cboe Options Top feed.
For example, an External Distributor will be subject to a $9,000
monthly Distributor Fee where they elect to receive the Cboe Options
Top. If that External Distributor reports User quantities totaling
$9,000 or more of monthly usage of the Cboe Options Top, it will pay no
net Distributor Fee, whereas if that same External Distributor were to
report User quantities totaling $8,000 of monthly usage, it will pay a
net of $1,000 for the Distributor Fee. External Distributors will
remain subject to the per User fees applicable to Cboe Options Top. In
every case the Exchange will receive at least $9,000 in connection with
the distribution of the Cboe Options Top (through a combination of the
External Distribution Fee and per User Fees). The Exchange notes that
its affiliated equities exchanges offer a similar credit for a similar
market data product.\6\
---------------------------------------------------------------------------

    \6\ See e.g., EDGX Equities Exchange Fees Schedule, Id.
---------------------------------------------------------------------------

Enterprise Fee Tiers
    The Exchange currently offers Distributors the ability to purchase
a monthly (and optional) Enterprise license to receive the Cboe Options
Top Feed for distribution to an unlimited number of Professional and
Non-Professional Users. The Enterprise Fee is an alternative to
Professional and Non-Professional User fees and permits a Distributor
to pay a flat fee for an unlimited number of Professional and Non-
Professional Users and is in addition to the Distribution fees. The
Exchange currently assesses an Enterprise fee of $300,000 per month.
The Exchange proposes to modify the current Enterprise Fee and adopt a
tiered structure based on the number of Users a Distributor has. The
Exchange proposes to adopt the following monthly Enterprise Fees:
$300,000 for up to 1,500,000 Users (Tier 1), $450,000 for 1,500,001 to
2,500,000 Users (Tier 2) and $600,000 for 2,500,001 or greater Users
(Tier 3). The proposed fees are non-progressive (e.g., if a Distributor
has 2,000,000 Users, it will be subject to $450,000 for Tier 2). The
Enterprise Fee may provide an opportunity to reduce fees. For example,
if a Distributor has 1.4 million Non-Professional Users who each
receive Cboe One Options Feed at $0.30 per month (as proposed), then
that Distributor will pay $420,000 per month in Professional Users
fees. If the Distributor instead were to purchase the proposed
Enterprise license (tier 1), it would alternatively pay a flat fee of
$300,000 for up to 1.5 million Professional and Non-Professional Users.
A Distributor that pays the Tier 1 or Tier 2 Enterprise Fee will have
to report its number of such Users on a monthly basis. A Distributor
that pays the Tier 3 Enterprise Fee will only have to report the number
of its Users every six months.\7\ The Exchange notes that if the
reported number of Users exceed the Enterprise Tier a Distributor has
purchased, the higher Tier will apply (e.g., if a Distributor purchases
Tier 1, but reports 1,600,000 Users for a month, the Distributor will
be assessed the Tier 2 fee).
---------------------------------------------------------------------------

    \7\ See Cboe Global Markets north American Data Policies.
---------------------------------------------------------------------------

    The Exchange also proposes to allow Distributors to purchase the
Enterprise Fee on a monthly or annual basis. Annual licenses will
receive a 5% discount off the applicable Enterprise Tier fee. The
Exchange notes that the purchase of an Enterprise license is voluntary,
and a firm may elect to instead use the per User structure and benefit
from the proposed per User Fees described above. For example, a firm
that does not have a sufficient number of Users to benefit from
purchase of a license need not do so.
Cboe One Options Feed
    By way of background, the Exchange recently adopted a new market
data product called Cboe One Options Feed, which is launching March 1,
2023.\8\ Cboe One Options Feed will provide top-of-book quotation and
last sale information based on the quotation and trading activity on
the Exchange and each of its Affiliates, which the Exchange believes
offers a comprehensive and highly representative view of US options
pricing to market participants. More specifically, Cboe One Options
Feed will contain the aggregate best bid and offer (``BBO'') of all
displayed orders for options traded on the Exchange and its Affiliates,
as well as individual last sale information and volume, which includes
the price, time of execution and individual Cboe options exchange on
which the trade was executed. See

e.g., EDGX Equities Exchange Fees Schedule, Market Data Fees.
---------------------------------------------------------------------------

    \8\ See SR-CBOE-2023-012.
---------------------------------------------------------------------------

    The Cboe One Options Feed will also consist of Symbol Summary,\9\
Market Status,\10\ Trading Status,\11\ and Trade Break \12\ messages
for the Exchange and each of its Affiliates.
---------------------------------------------------------------------------

    \9\ The Symbol Summary message will include the total executed
volume across all Cboe Options Exchanges.
    \10\ The Market Status message is disseminated to reflect a
change in the status of one of the Cboe Options Exchanges. For
example, the Market Status message will indicate whether one of the
Cboe Options Exchanges is experiencing a systems issue or disruption
and quotation or trade information from that market is not currently
being disseminated via the Cboe One Options Feed as part of the
aggregated BBO. The Market Status message will also indicate when a
Cboe Options Exchange is no longer experiencing a systems issue or
disruption to properly reflect the status of the aggregated BBO.
    \11\ The Trade Break message will indicate when an execution on
a Cboe Options Exchange is broken in accordance with the individual
Cboe Options Exchange's rules (e.g., Cboe Options Rule 6.5, C2
Option Rule 6.5, BZX Options Rule 20.6, EDGX Options Rule 20.6).
    \12\ The Trading Status message will indicate the current
trading status of an option contract on each individual Cboe Options
Exchange. A Trading Status message will also be sent whenever a
security's trading status changes. For example, a Trading Status
message will be sent when a symbol is open for trading or when a
symbol is subject to a trading halt or when it resumes trading.
---------------------------------------------------------------------------

    The Exchange will use the following data feeds to create the Cboe
One Options Feed, each of which is available to other vendors and/or
distributors: Cboe Options Top Data, C2 Options Top Data, EDGX Options
Top and BZX Options Top. A vendor and/or distributor that wishes to
create a product like the Cboe One Options Feed could instead subscribe
to each of the aforementioned data feeds. Any entity that receives, or
elects to receive, the individual data feeds or the feeds that may be
used to create a product like the Cboe One Options Feed would be able
to, if it so chooses, to create a data feed with the same information
included in the Cboe One Options Feed and sell and distribute it to its
clients so that it could be received by those clients as quickly as the
Cboe One Options Feed would be received by those same clients.
    The Exchange proposes to amend its fee schedule to incorporate fees
related to the Cboe One Options Feed. The Exchange has taken into
consideration its affiliated relationship with its Affiliates in its
design of the Cboe One Options Feed to assure that vendors \13\ would
be able to offer a similar product on the same terms as the Exchange
from a cost perspective. Although Cboe Options Exchanges are the
exclusive distributors of the individual data feeds from which certain
data elements would be taken to create the Cboe One Options Feed, the
Exchange would not be the exclusive distributor of the aggregated and
consolidated information that compose the proposed Cboe One Options
Feed. Distributors and/or vendors would be able, if they chose, to
create a data feed with the same information as the Cboe One Options
Feed and distribute it to their clients on a level-playing field with
respect to latency and cost as compared to the Exchange's proposed Cboe
One Options Feed. The pricing the Exchange proposes to charge for the
Cboe One Options Feed, as described more fully below, is not lower than
the cost to a distributor or vendor to obtain the underlying data
feeds. In fact, the Distribution and User (Professional and Non-
Professional) fees, as well as the optional Enterprise Fees, that the
Exchange proposes to adopt for the Cboe One Options Feed are equal to
the respective combined fees for subscribing to each individual data
feed. The Exchange also proposes to adopt a ``Data Consolidation Fee,''
which would reflect the value of the aggregation and consolidation
function the Exchange performs in creating the Cboe One Options Feed.
Therefore, vendors would be enabled to create a competing product based
on the individual data feeds and charge their clients a fee that they
believe reflects the value of the aggregation and consolidation
function that is competitive with Cboe One Options Feed pricing. For
these reasons, the Exchange believes that vendors could readily offer a
product similar to the Cboe One Options Feed on a competitive basis at
a similar cost.
---------------------------------------------------------------------------

    \13\ For purposes of this filing, a ``vendor'', which is a type
of distributor, will refer to any entity that receives an exchange
market data product directly from the exchange or indirectly from
another entity (for example, from an extranet) and then resell that
data to a third-party customer (e.g., a data provider that resells
exchange market data to a retail brokerage firm). The term
``distributor'' herein, will refer to any entity that receives an
exchange market data product, directly from the exchange or
indirectly from another entity (e.g., from a data vendor) and then
distributes to individual internal or external end-users (e.g., a
retail brokerage firm who distributes exchange data to its
individual employees and/or customers). An example of a vendor's
``third-party customer'' or ``customer'' is an institutional broker
dealer or a retail broker dealer, who then may in turn distribute
the data to their customers who are individual internal or external
end-users.
---------------------------------------------------------------------------

    The proposed Cboe One Options Feed fees include the following, each
of which are described in further detail below: (i) Distributor Fees;
(ii) User Fees for both Professional and Non-Professional Users; (iii)
Enterprise Fees; and (iv) a Data Consolidation Fee. The Exchange also
proposes to adopt a New External Distributor credit and a credit
against the monthly External Distribution Fee equal to the amount of
monthly User Fees up to a maximum of the External Distributor Fee. To
ensure consistency across the Cboe Options Exchanges, C2 Options, EDGX
Options, and BZX Options will be filing companion proposals to reflect
this proposal in their respective fee schedules.
Distributor Fees
    As proposed, each Internal Distributor that receives the Cboe One
Options Feed shall pay a fee of $15,000 per month. The proposed
Internal Distribution Fee equals the combined monthly Internal
Distribution fees for the underlying individual data feeds of the Cboe
Options Exchanges (i.e., the monthly Internal Distribution fees are
$3,000 for BZX Options Top, $500 for EDGX Options Top, $2,500 for C2
Options Top and $9,000 for Cboe Options Top). The Exchange also
proposes to assess External Distributors a monthly fee of $10,000. The
proposed External Distribution fee equals the combined monthly External
Distribution fees for the underlying individual data feeds of the Cboe
Options Exchanges (i.e., the monthly External Distribution fees are
$5,000 per month for the Cboe Options Top, $2,500 per month for C2
Options Top, $2,000 per month for BZX Options Top, and $500 for EDGX
Options Top). As noted above, the Exchange is proposing to charge
External Distributors an External Distribution Fee that equals the
combined External Distribution fees of each individual Top feed to
ensure that vendors could compete with the Exchange by creating the
same product as the Cboe One Options Feed to sell to their clients.
New External Distributor Credit
    The Exchange proposes to adopt a New External Distributor Credit
which would provide that new External Distributors of the Cboe One
Options Feed will not be charged an External Distributor Fee for their
first three (3) months in order to incentive them to enlist new Users
to receive the Cboe One Options Feed. The Exchange notes that other
exchanges, including the Exchange's affiliated equities exchanges offer
similar credits for similar market data products. For example, Cboe's
equities exchanges currently offer a three (3) month New External
Distributor Credit applicable to Cboe One Summary Feed.\14\ To
alleviate any competitive issues that may arise with a vendor seeking
to offer a product similar to the Cboe One Options Feed

based on the underlying data feeds, the Exchange is proposing, as
discussed above, to also adopt a three-month New External Distributor
Credit for the underlying top-of-book data feeds for the Cboe Options
Exchanges. The respective proposals to adopt a three-month credit
ensures the proposed New External Distributor Credit for Cboe One
Options will not cause the combined cost of subscribing to Cboe
Options, C2 Options, BZX Options and EDGX Options Top feeds for new
External Distributors to be greater than those that would be charged to
subscribe to the Cboe One Options feed.
---------------------------------------------------------------------------

    \14\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data
Fees.
---------------------------------------------------------------------------

User Fees
    In addition to Internal and External Distributor Fees, the Exchange
proposes to assess Professional \15\ User and Non-Professional \16\
User Fees. The proposed monthly Professional User fee for the Cboe
Options Exchanges is $30.50 per Professional User, which equals the
combined monthly Professional User fees of the underlying individual
Cboe Options Exchanges Top feeds (i.e., $15.50 per Professional User
for the Cboe Options Top, $5 per Professional User for C2 Options Top,
$5 per Professional User for BZX Options Top, and $5 per Professional
User for EDGX Options Top). The Exchange also proposes to adopt a
monthly Non-Professional User fee of $0.60 per Non-Professional User,
which similarly represents the combined total Non-Professional User fee
for the individual data feeds of the Cboe Options (i.e., $0.30 per Non-
Professional User for Cboe Options Top, $0.10 per Non-Professional User
for C2 Options Top, $0.10 per Non-Professional User for BZX Options
Top, and $0.10 per Non-Professional User for EDGX Options Top). Similar
to the individual underlying feeds, Distributors that receive Cboe One
Options Feed will be required to count Professional and Non-
Professional Users to which they provide the data feed.
---------------------------------------------------------------------------

    \15\ A Professional User of an Exchange Market Data product is
any natural person recipient of an Exchange Market Data product who
is not a Non-Professional User.
    \16\ A ``Non-Professional User'' of an Exchange Market Data
product is 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 Exchange also proposes to provide that each External
Distributor will receive a credit against its monthly Distributor Fee
for the Cboe One Feed equal to the amount of its monthly User Fees up
to a maximum of the Distributor Fee for the Cboe One Options Feed. For
example, an External Distributor will be subject to a $10,000 monthly
Distributor Fee where they elect to receive the Cboe One Options Feed.
If that External Distributor reports User quantities totaling $10,000
or more of monthly User fees of the Cboe Options One Feed, it will pay
no net Distributor Fee, whereas if that same External Distributor were
to report User quantities totaling $9,000 of monthly usage, it will pay
a net of $1,000 for the Distributor Fee. External Distributors will
remain subject to the per User fees discussed above. In every case the
Exchange will receive at least $10,000 in connection with the
distribution of the Cboe One Options Feed (through a combination of the
External Distribution Fee and per User Fees). The Exchange notes that
its affiliated equities exchanges offer a similar credit for a similar
market data product.\17\
---------------------------------------------------------------------------

    \17\ See e.g., EDGX Equities Exchange Fees Schedule, Market Data
Fees.
---------------------------------------------------------------------------

Enterprise Fees
    The Exchange also proposes to establish Enterprise Fees that will
permit a Distributor to purchase a monthly (and optional) Enterprise
license to receive the Cboe One Options Feed for distribution to a
specified number of Professional and Non-Professional Users. The
Enterprise Fee will be an alternative to Professional and Non-
Professional User fees and will permit a Distributor to pay a flat fee
to receive the data for a specified number of Professional and Non-
Professional Users, which the Exchange proposes to make clear in the
Fee Schedule. Like User fees, the Enterprise Fee would be assessed in
addition to the Distribution Fees. The Exchange proposes to adopt the
following monthly Enterprise Fees: $350,000 for up to 1,500,000 Users
(Tier 1), $550,000 for 1,500,001 to 2,500,000 Users (Tier 2) and
$750,000 for 2,500,001 or greater Users (Tier 3). The proposed fees are
non-progressive (e.g., if a Distributor has 2,000,000 Users, it will be
subject to $550,000 for Tier 2). The Enterprise Fee may provide an
opportunity to reduce fees. For example, if a Distributor has 1 million
Non-Professional Users who each receive Cboe One Options Feed at $0.60
per month (as proposed), then that Distributor will pay $600,000 per
month in Professional Users fees. If the Distributor instead were to
purchase the proposed Enterprise license (tier 1), it would
alternatively pay a flat fee of $350,000 for up to 1.5 million
Professional and Non-Professional Users. A Distributor must pay a
separate Enterprise Fee for each entity that controls the display of
Cboe One Options Feed if it wishes for such Users to be covered by an
Enterprise Fee rather than by per User fees.\18\ A Distributor that
pays the Tier 1 or Tier 2 Enterprise Fee will have to report its number
of such Users on a monthly basis. A Distributor that pays the Tier 3
Enterprise Fee will only have to report the number of its Users every
six months.\19\ The Exchange notes that if the reported number of Users
exceed the Enterprise Tier a Distributor has purchased, the higher Tier
will apply (e.g., if a Distributor purchases Tier 1, but reports
1,600,000 Users for a month, the Distributor will be assessed the Tier
2 fee).
---------------------------------------------------------------------------

    \18\ For example, if a Distributor that distributes Cboe Options
Top to Retail Brokerage Firm A and Retail Brokerage Firm B and
wishes to have the Users under each firm covered by an Enterprise
license, the Distributor would be subject to two Enterprise Fees.
    \19\ See Cboe Global Markets north American Data Policies.
---------------------------------------------------------------------------

    The Exchange also proposes to allow Distributors to purchase the
Enterprise Fee on a monthly or annual basis. Annual licenses will
receive a 5% discount off the applicable Enterprise Fee tier. The
Exchange notes that the purchase of an Enterprise license is voluntary,
and a firm may elect to instead use the per User structure and benefit
from the proposed per User Fees described above. For example, a firm
that does not have a sufficient number of Users to benefit from
purchase of a license need not do so.
Data Consolidation Fee
    The Exchange also proposes to charge External Distributors of the
Cboe One Options Feed a separate Data Consolidation Fee, which reflects
the value of the aggregation and consolidation function the Exchange
performs in creating the Cboe One Options Feed. As stated above, the
Exchange creates the Cboe One Options Feed from data derived from the
Cboe Options Top, C2 Options Top, BZX Options Top, and EDGX Options Top
Feeds. External Distributors could

similarly create a competing product to the Cboe One Options Feed based
on these individual data feeds, or, alternatively, the applicable Top
and Last Sale products offered by the Exchanges, and could charge its
clients a fee that it believes reflects the value of the aggregation
and consolidation function. Accordingly, the Exchange believes that
vendors could readily offer a product similar to the Cboe One Options
Feed on a competitive basis at a similar cost.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\20\ in general, and
furthers the objectives of Section 6(b)(4),\21\ 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. 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.\22\ Finally, the proposed rule change is also consistent
with Rule 603 of Regulation NMS,\23\ 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.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f.
    \21\ 15 U.S.C. 78f(b)(4).
    \22\ 15 U.S.C. 78k-1.
    \23\ See 17 CFR 242.603.
---------------------------------------------------------------------------

    The Exchange first notes that it operates in a highly competitive
environment. Indeed, there are currently 16 registered options
exchanges that trade options. Based on publicly available information,
no single options exchange has more than 17% of the market share.\24\
The Exchange believes top-of-book quotation and transaction data is
highly competitive as national securities exchanges compete vigorously
with each other to provide efficient, reliable, and low-cost data to a
wide range of investors and market participants. Indeed, there are
several competing products offered by other national securities
exchanges today, not counting products offered by the Exchange's
affiliates, and each of the Exchange's affiliated U.S. options
exchanges also offers similar top-of-book data.\25\ Each of those
exchanges 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 Cboe
Options Top Data Feed. Further, the quote and last sale data contained
in the Cboe Data Feed is identical to the data sent to OPRA for
redistribution to the public.\26\ Accordingly, Exchange top-of-book
data is widely available today from a number of different sources.
---------------------------------------------------------------------------

    \24\ See Cboe Global Markets U.S. Options Market Month-to-Date
Volume Summary (February 23, 2024), available at https://markets.cboe.com/us/options/market_statistics/.
    \25\ See e.g., NYSE Arca Options Proprietary Market Data Fees
Schedule, MIAX Options Exchange, Fee Schedule, Section 6 (Market
Data Fees), Nasdaq PHLX Options 7 Pricing Schedule, Section 10
(Proprietary Data Feed Fees) and Cboe Data Services, LLC Fees
Schedule.
    \26\ The Exchange makes available the top-of-book data and last
sale data that is included in the Cboe Options Top Data Feed no
earlier than the time at which the Exchange sends that data to OPRA.
---------------------------------------------------------------------------

    Moreover, the Cboe Options Top Data Feed and Cboe One Options 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. Accordingly,
Distributors (including vendors) and Users can 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. Moreover, persons
(including broker-dealers) who subscribe to any exchange proprietary
data feed must also have equivalent access to consolidated Options
Information \27\ from OPRA for the same classes or series of options
that are included in the proprietary data feed, and proprietary data
feeds cannot be used to meet that particular requirement.\28\ As such,
all proprietary data feeds are optional.
---------------------------------------------------------------------------

    \27\ ``Consolidated Options Information'' means consolidated
Last Sale Reports combined with either consolidated Quotation
Information or the BBO furnished by OPRA. Access to consolidated
Options Information is deemed ``equivalent'' if both kinds of
information are equally accessible on the same terminal or work
station. See Limited Liability Company Agreement of Options Price
Reporting Authority, LLC (``OPRA Plan''), Section 5.2(c)(iii). The
Exchange notes that this requirement under the OPRA Plan is also
reiterated under the Cboe Global Markets Global Data Agreement and
Cboe Global Markets North American Data Policies, which subscribers
to any exchange proprietary product must sign and are subject to,
respectively. Additionally, the Exchange's Data Order Form (used for
requesting the Exchange's market data products) requires
confirmation that the requesting market participant receives data
from OPRA.
    \28\ Id.
---------------------------------------------------------------------------

    The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. Particularly, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \29\ Making
similar data products available to market participants fosters
competition in the marketplace, and constrains the ability of exchanges
to charge supracompetitive fees. In the event that a market participant
views one exchange's data product as more or less attractive than the
competition they can and do switch between similar products. The
proposed fees are a result of the competitive environment, as the
Exchange seeks to adopt fees to attract purchasers of Cboe Options Top
Data and Cboe One Options Feed.
---------------------------------------------------------------------------

    \29\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    The Exchange has also taken into consideration its affiliated
relationship with its Affiliates in its design of the Cboe One Options
Feed to ensure that vendors would be able to offer a similar product on
the same terms as the Exchange from a cost perspective. While the Cboe
Options Exchanges are the exclusive distributors of the individual data
feeds from which certain data elements may be taken to create the Cboe
One Options Feed, they are not the exclusive distributors of the
aggregated and consolidated information that comprises the Cboe One
Options Feed. 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 the Cboe One Options
Feed and sell and distribute it to its clients so that it could be
received by those clients as quickly as the Cboe One Options Feed would
be received by those same clients with no greater cost than the
Exchange.
    In addition, vendors and Distributors that do not wish to purchase
the Cboe One Options Feed may separately purchase the individual
underlying products, and if they so choose, perform a similar
aggregation and consolidation function that the Exchange performs in
creating the Cboe One Options Feed. To enable such competition, the
Exchange is offering the Cboe One Options Feed on terms that a vendor
of those

underlying feeds could offer a competing product if it so chooses.
    In addition, the fees that are the subject of this rule filing are
constrained by competition. Particularly, the Exchange competes with
other exchanges (and their affiliates) that may choose to offer similar
market data products. If another exchange (or its affiliate) were to
charge less to consolidate and distribute a similar product than the
Exchange charges to consolidate and distribute the Cboe One Options
Feed, prospective Users likely could choose to not subscribe to, or
would cease subscribing to, the Cboe One Options Feed. In addition, the
Exchange would compete with unaffiliated market data vendors who would
be in a position to consolidate and distribute the same data that
comprises the Cboe One Options Feed into the vendor's own comparable
market data product. If the third-party vendor is able to provide the
exact same data for a lower cost, prospective Users would avail
themselves of that lower cost and elect not to take the Cboe One
Options Feed.
    For these reasons, the Exchange believes that the proposed fees are
reasonable, equitable, and not unfairly discriminatory.
    User Fees. The Exchange believes that the proposed Professional and
Non-Professional User fees for the Cboe One Options Feed are reasonable
because they represent the combined monthly fees for Professional and
Non-Professional User fees, respectively for the underlying individual
data feeds, which have previously been filed with the Commission. The
Exchange believes that the proposed fees are equitable and not unfairly
discriminatory because they will be charged uniformly to Distributors.
Moreover, the proposed fee structure of differentiated Professional and
Non-Professional fees that are paid by both Internal and External
Distributors has long been used by other exchanges, including the
Exchange, for their proprietary data products, and by the OPRA plan in
order to reduce the price of data to retail investors and make it more
broadly available.\30\ The Exchange also believes offering Cboe One
Options Feed to Non-Professional Users at a lower cost than
Professional Users results in greater equity among data recipients, as
Professional Users are categorized as such based on their employment
and participation in financial markets, and thus, are compensated to
participate in the markets. Although Non-Professional Users too can
receive significant financial benefits through their participation in
the markets, the Exchange believes it is reasonable to charge more to
those Users who are more directly engaged in the markets.
---------------------------------------------------------------------------

    \30\ See e.g., Securities Exchange Act Release No. 59544 (March
9, 2009), 74 FR 11162 (March 16, 2009) (SR-NYSE-2008-131)
(establishing the $15 Non-Professional User Fee (Per User) for NYSE
OpenBook); See e.g., Securities Exchange Act Release No. 67589
(August 2, 2012), 77 FR 47459 (August 8, 2012) (revising OPRA's
definition of the term ``Nonprofessional''); and See Securities
Exchange Act Release No. 70683 (October 15, 2013), 78 FR 62798
(October 22, 2013) (SR-CBOE-2013-087) (establishing Professional and
Non-Professional User fees for Cboe Options COB Data Feed).
---------------------------------------------------------------------------

    Enterprise Fee. The Exchange believes the proposed Enterprise Fees
for the Cboe One Options Feed and proposed changes to the Enterprise
Fee for the Cboe Options Top feed are reasonable as the fees proposed
could result in a fee reduction for Distributors of the respective
products with a large number of Professional and Non-Professional
Users. If a Distributor has a smaller number of Professional Users of
the Cboe One Options Feed, then it may continue using the per User
structure and benefit from the per User Fee reductions. By reducing
prices for Distributors with a large number of Professional and Non-
Professional Users, the Exchange believes that more firms may choose to
receive and to distribute the Cboe One Options Feed, thereby expanding
the distribution of this market data for the benefit of investors. Also
as described above, the Enterprise Fees are entirely optional. A firm
that does not have a sufficient number of Users to benefit from
purchase of a license need not do so.
    Distributor Fees. The Exchange believes that the proposed
Distributor fees for the Cboe One Options Feed are reasonable because
they represent the combined monthly fees for Internal and External
Distributor fees, respectively for the underlying individual data
feeds, which have previously been filed with the Commission. The
Exchange believes that the proposed fees are equitable and not unfairly
discriminatory because they will be charged uniformly to Internal and
External Distributors. The Exchange believes that it is also fair and
equitable, and not unfairly discriminatory to charge different fees for
internal and external distribution of the Cboe One Options Feed.
Although the proposed distribution fee charged to External Distributors
will be lower than the existing distribution fee charged to Internal
Distributors, External Distributors are subject to Non-Professional
user fees to which Internal Distributors are not subject, in addition
to Professional User fees (or alternatively the proposed Enterprise
Fee). Furthermore, the proposal is designed to incentivize External
Distributors to subscribe to Cboe One Options Feed.
    The proposed Distributor Fees for the Cboe One Options Feed are
also designed to ensure that vendors could compete with the Exchange by
creating a similar product as the Cboe One Options Feed. The Exchange
believes that the proposed Distributor Fees are equitable and
reasonable as they equal the combined fee of subscribing to each
individual data feed of the Cboe Options Exchanges, which have been
previously published by the Commission.
    In addition, the Exchange believes it is reasonable to not charge
External Distributors of C2 Options Top and Cboe One Options Feed a
Distribution Fee during their first three (3) months and does not
believe this would inhibit a vendor from creating a competing product
and offer a similar free period as the Exchange. Specifically, a vendor
seeking to create the Cboe One Options Feed could do so by subscribing
to the underlying individual data feeds, all of which will also include
a New External Distributor Credit identical to that proposed for the
Cboe One Options Feed. As a result, a competing vendor would incur
similar costs as the Exchange in offering such free period for a
competing product and may do so on the same terms as the Exchange.
    Data Consolidation Fee. The Exchange believes that the proposed
$500 per month Data Consolidation Fee charged to Distributors who
receive the Cboe One Options Feed is reasonable because it represents
the value of the data aggregation and consolidation function that the
Exchange performs. The Exchange further believes the proposed Data
Consolidation Fee is not designed to permit unfair discrimination
because all Distributor who obtain the Cboe One Options Feed will be
charged the same fee. The increased cost of the Cboe One Options Feed
is designed to include the value of the aggregation and consolidation
function the Exchange performs in creating the Cboe One Options Feed.
Therefore, the Exchange believes the proposed application of the Data
Consolidation Fee is reasonable would not permit unfair discrimination.
    In addition, a vendor could create a competing product based on the
individual data feeds and charge its clients a fee that it believes
reflects the value of the aggregation and consolidation function that
is competitive with the Cboe One Options Feed pricing. Therefore, the
Exchange believes the proposed pricing would enable a vendor to create
a competing

product based on the individual data feeds and charge its clients a fee
that it believes reflects the value of the aggregation and
consolidation function that is competitive with Cboe One Options Feed
pricing.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
operates in a highly competitive environment, and its ability to price
top-of-book data is constrained by competition among exchanges that
offer similar data products to their customers. Top-of-book data is
broadly disseminated by competing U.S. options exchanges and through
OPRA. In this competitive environment potential Distributors are free
to choose which competing product to purchase to satisfy their
respective needs for market information. Often, the choice comes down
to price, as market data participants look to purchase cheaper data
products, and quality, as market participants seek to purchase data
that represents significant market liquidity.
    The Exchange believes that the proposed fees do not impose a burden
on competition or on other SROs that is not necessary or appropriate in
furtherance of the purposes of the Act. In particular, market
participants are not forced to subscribe to Cboe Options Top, Cboe One
Options Feed or any of the Exchange's data feeds, as described above.
As noted, the quote and last sale data contained in the Exchange's Cboe
Options Top feed is identical to the data sent to OPRA for
redistribution to the public. Accordingly, Exchange top-of-book data is
widely available today from a number of different sources.
    The Exchange believes that the proposed fees do not put any market
participants at a relative disadvantage compared to other market
participants. As discussed, the proposed waiver, credits and Enterprise
Fees would apply to all similarly situated Distributors of Cboe Options
Top on an equal and non-discriminatory basis. Because market data
customers can find suitable substitute feeds, an exchange that
overprices its market data products stands a high risk that users may
substitute another product. These competitive pressures ensure that no
one exchange's market data fees can impose an undue burden on
competition, and the Exchange's proposed fees do not do so here.
    Additionally, the Cboe One Options Feed will enhance competition
because it provides investors with an alternative option for receiving
market data. Although the Cboe Options Exchanges are the exclusive
distributors of the individual data feeds from which certain data
elements would be taken to create the Cboe One Options Feed, the
Exchange would not be the exclusive distributor of the aggregated and
consolidated information that would compose the proposed Cboe One
Options Feed. Any entity that receives, or elects to received, the
underlying data feeds would be able to, if it so chooses, to create a
data feed with the same information included in the Cboe One Options
Feed and sell and distribute it to its clients so that it could be
received by those clients as quickly as the Cboe One Options Feed would
be received by those same clients and at a similar cost.
    The proposed pricing the Exchange would charge for the Cboe One
Options Feed compared to the cost of the individual data feeds from the
Cboe Options Exchanges would enable a vendor to receive the underlying
individual data feeds and offer a similar product on a competitive
basis and with no greater cost than the Exchange. The pricing the
Exchange proposes to charge for the Cboe One Options Feed is not lower
than the cost to a vendor of receiving the underlying data feeds.
Indeed, the proposed pricing equals the combined costs of the
respective fees, and the proposed waivers are also being proposed for
the underlying individual feeds as well, thereby enabling a vendor to
receive the underlying data feeds and offer a similar product on a
competitive basis and with no greater cost than the Exchange.
    The Exchange further believes that its proposed monthly Data
Consolidation Fee would be pro-competitive because a vendor could
create a competing product, perform a similar aggregating and
consolidating function, and similarly charge for such service. The
Exchange notes that a competing vendor might engage in a different
analysis of assessing the cost of a competing product. For these
reasons, the Exchange believes the proposed pricing, fee waiver and
credit, would enable a vendor to create a competing product based on
the individual data feeds and charge its clients a fee that it believes
reflects the value of the aggregation and consolidation function that
is competitive with Cboe One Options Feed pricing.
    In 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 Options Feed,
including the existing underlying feeds and data from other sources,
such as OPRA, constrains the Exchange from setting unreasonable fees,
or fees that are unreasonably discriminatory, when vendors and
Distributors 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 Distributor would
achieve through the purchase.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

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 \31\ and paragraph (f) of Rule 19b-4 \32\
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.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(3)(A).
    \32\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-CBOE-2023-015 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-2023-015. 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-CBOE-2023-015 and should be submitted on
or before April 19, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-06429 Filed 3-28-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 213 (Tuesday, November 4, 2014)]
[Notices]
[Pages 65390-65391]
[FR Doc No: 2014-26156]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

Filings Instituting Proceedings

    Docket Numbers: PR15-3-000.
    Applicants: Pelico Pipeline, LLC.
    Description: Tariff filing per 284.123(b)(2) + (g): Rate Case to be
effective 11/1/2014; TOFC: 1310.
    Filed Date: 10/27/14.
    Accession Number: 20141027-5032.
    Comments Due: 5 p.m. ET 11/17/14.
    284.123(g) Protests Due: 5 p.m. ET 12/26/14.

    Docket Numbers: RP15-68-000.
    Applicants: Iroquois Gas Transmission System, L.P.
    Description: Sec.  4(d) rate filing per 154.204: 10/28/14
Negotiated Rates--Cargill Incorporated (RTS) 3085-21 & 22 to be
effective 11/1/2014.
    Filed Date: 10/28/14.
    Accession Number: 20141028-5074.
    Comments Due: 5 p.m. ET 11/10/14.

    Docket Numbers: RP15-69-000.
    Applicants: Iroquois Gas Transmission System, L.P.
    Description: Sec.  4(d) rate filing per 154.204: 10/28/14
Negotiated Rates--United Energy Trading, LLC (HUB) to be effective 11/
1/2014.
    Filed Date: 10/28/14.
    Accession Number: 20141028-5075.
    Comments Due: 5 p.m. ET 11/10/14.

    Docket Numbers: RP15-70-000.
    Applicants: Iroquois Gas Transmission System, L.P.
    Description: Sec.  4(d) rate filing per 154.204: 10/28/14
Negotiated Rates--Emera Energy Services (RTS) 2715-20 to be effective
11/1/2014.
    Filed Date: 10/28/14.
    Accession Number: 20141028-5077.
    Comments Due: 5 p.m. ET 11/10/14.

    Docket Numbers: RP15-71-000.
    Applicants: Iroquois Gas Transmission System, L.P.
    Description: Sec.  4(d) rate filing per 154.204: 10/28/14
Negotiated Rates--Tenaska Gas Storage (HUB) 1175-89 to be effective 11/
1/2014.
    Filed Date: 10/28/14.
    Accession Number: 20141028-5080.
    Comments Due: 5 p.m. ET 11/10/14.

    Docket Numbers: RP15-72-000.
    Applicants: Iroquois Gas Transmission System, L.P.
    Description: Sec.  4(d) rate filing per 154.204: 10/28/14
Negotiated Rates--Sequent Energy Management (HUB) 3075-89 to be
effective 11/1/2014.

    Filed Date: 10/28/14.
    Accession Number: 20141028-5113.
    Comments Due: 5 p.m. ET 11/10/14.

    Docket Numbers: RP15-73-000.
    Applicants: Iroquois Gas Transmission System, L.P.
    Description: Sec.  4(d) rate filing per 154.204: 10/28/14
Negotiated Rates--Rainbow Energy Marketing Corp. (HUB) 7400-89 to be
effective 11/1/2014.
    Filed Date: 10/28/14.
    Accession Number: 20141028-5114.
    Comments Due: 5 p.m. ET 11/10/14.

    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified date(s). Protests may be considered,
but intervention is necessary to become a party to the proceeding.

Filings in Existing Proceedings

    Docket Numbers: RP14-945-001.
    Applicants: WBI Energy Transmission, Inc.
    Description: Compliance filing per 154.203: Compliance Filing on
Order to Show Cause to be effective 10/16/2014.
    Filed Date: 10/28/14.
    Accession Number: 20141028-5039.
    Comments Due: 5 p.m. ET 11/10/14.

    Any person desiring to protest in any of the above proceedings must
file in accordance with Rule 211 of the Commission's Regulations (18
CFR 385.211) on or before 5:00 p.m. Eastern time on the specified
comment date.
    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated October 29, 2014.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2014-26156 Filed 11-3-14; 8:45 am]
BILLING CODE 6717-01-P