[Federal Register Volume 88, Number 44 (Tuesday, March 7, 2023)]
[Notices]
[Pages 14194-14200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04572]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97012; File No. SR-C2-2023-006]


Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a 
New Data Product Called the Cboe One Options Feed

March 1, 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 February 27, 2023, Cboe C2 Exchange, Inc. (``Exchange'' or ``C2'') 
filed with the Securities and Exchange Commission (``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 C2 Exchange, Inc. (the ``Exchange'' or ``C2 Options'') 
proposes to adopt a new data product called the Cboe One Options Feed.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/ctwo/), 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 establish a new market data product called 
the Cboe One Options Feed.\3\ As described more fully below, the Cboe 
One Options Feed is a data feed that that will offer top of book 
quotations and execution information based on options orders entered 
into the Exchange System and its affiliated options exchanges, Cboe 
Exchange, Inc. (``Cboe Options''), Cboe BZX Exchange, Inc. (``BZX 
Options'') and Cboe EDGX Exchange, Inc. (``EDGX Options'') 
(collectively, the ``Affiliates'' and collectively with the Exchange, 
the ``Cboe Options Exchanges'') and for which the Cboe Options 
Exchanges report quotes under the OPRA Plan.\4\
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    \3\ The Exchange previously submitted the proposed rule change 
on January 30, 2023 (SR-C2-2023-005). See Securities Exchange Act 
Release No. 96886 (February 10, 2023), 88 FR 10159, (February 16, 
2023) (SR-C2-2023-005). The Exchange is withdrawing SR-C2-2023-005 
and submitting this filing to make clarifying, non-substantive 
changes to more clearly reflect the obligations under the OPRA Plan, 
which the Exchange believes will avoid potential confusion, as well 
as address the comments raised by another exchange group in a 
comment letter received on February 23, 2023. See Letter from Greg 
Ferrari, Vice President, U.S. Options, Nasdaq Stock Market LLC, 
Nasdaq PHLX LLC, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq GEMX, LLC, 
and Nasdaq MRX, LLC markets (collectively ``Nasdaq''), to Vanessa 
Countryman, Secretary Commission, dated February 23, 2023.
    \4\ The Exchange understands that each of the Cboe Options 
Exchanges will separately file substantially similar proposed rule 
changes to implement Cboe One Options Feed and its related fees.
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    Currently, the Exchange offers C2 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 C2 Options Top Data feed benefits investors by facilitating 
their prompt access to real-time top-of-book information contained in 
C2 Options Top Data. The Exchange notes that C2 Options Top Data is 
ideal for market participants requiring both quote and trade data. The 
Exchange's Affiliates also offer similar top-of-book data.\5\ 
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 C2 Options Top Data.

[[Page 14195]]

Further, the quote and last sale data contained in the Exchange's 
Affiliates top feeds is identical to the data sent to OPRA for 
redistribution to the public.
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    \5\ See Cboe Data Services, LLC Fee Schedule, EDGX Rule 21.15, 
and BZX Rule 21.15.
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    The Exchange now proposes to adopt a market data product that 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 will offer a comprehensive and 
highly representative view of US options pricing to market 
participants. More specifically, the proposed 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. The Cboe One Options Feed will also 
consist of Symbol Summary,\6\ Market Status,\7\ Trading Status,\8\ and 
Trade Break \9\ messages for the Exchange and each of its Affiliates.
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    \6\ The Symbol Summary message will include the total executed 
volume across all Cboe Options Exchanges.
    \7\ 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.
    \8\ 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).
    \9\ 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.
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    The Exchange notes its affiliated equities exchanges Cboe BYX 
Exchange, Inc. (``BYX''), Cboe BZX Exchange, Inc. (``BZX Equities''), 
Cboe EDGA Exchange, Inc. (``EDGA'') and Cboe EDGX Exchange, Inc. 
(``EDGX Equities'') already offer a similar data product, the Cboe One 
Summary Feed, which contains the aggregate best bid and offer of all 
displayed orders for securities traded on each of the Exchange's 
affiliated equities exchanges as well as last sale information for each 
of the Exchange's affiliated equities exchanges.\10\ The Cboe One 
Summary Feed also consists of Symbol Summary, Market Status, Trading 
Status, and Trade Break messages for each of its affiliated equities 
exchanges.
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    \10\ See BZX Rule 11.22(j), BYX Rule 11.22(i), EDGA Rule 13.8(b) 
and EDGX Rule 13.8(b).
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    Particularly, the Cboe One Options Feed will offer market 
participants with a new option for receiving Cboe market data that 
provides a consolidated view of activity on all Cboe options exchanges. 
The Exchange proposes to offer the Cboe One Options Feed voluntarily in 
response to demand from market participants (e.g., retail brokerage 
firms) that are interested in receiving the aggregate top of book 
quotation and last sale information from the Cboe Options Exchanges as 
part of a single data feed. Specifically, Cboe One Options Feed can be 
used by industry professionals and retail investors looking for a cost 
effective, easy-to-administer, high quality market data product with 
the characteristics of the Cboe One Options Feed. For example, today an 
entity can subscribe to various market data products offered by single 
exchanges and distribute or resell that data, either separately or in 
the aggregate, to their customers as part of their own market data 
offerings.\11\ Distributors and vendors may incur administrative costs 
when consolidating and augmenting the data to meet their customer's 
need. Consequently, distributors and/or vendors may simply choose to 
not take the data from each of the Cboe Options Exchanges because of 
the effort and cost required to aggregate data from separate feeds into 
their existing products. The Exchange believes those same distributors 
and/or vendors may be interested in distributing the Cboe One Options 
Feed so that they may easily incorporate aggregated or summarized Cboe 
Options Exchange data into their own products without themselves 
incurring the costs of the repackaging and aggregating the data it 
would receive by subscribing to each market data product offered by the 
individual Cboe Options Exchanges. The Exchange therefore believes that 
the Cboe One Options Feed would provide high-quality, comprehensive 
last sale and top-of-book data for the Cboe Options Exchanges in a 
unified view and respond to demand for such a product.
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    \11\ 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 resells 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.
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    The Exchange also notes that it has taken into consideration its 
affiliated relationship with its Affiliates in its design of Cboe One 
Options Feed to assure distributors and/or vendors would be able to 
resell and offer a similar product on the same terms as the Exchange, 
both from a perspective of latency and cost.
    With respect to latency, the path for distribution by the Exchange 
of Cboe One Options Feed would not be faster than the path for 
distribution by a vendor that independently created a Cboe One Options 
Feed-like product could distribute its own product. As such, the 
proposed Cboe One Options data feed is a data product that a vendor 
could create and sell without being in a disadvantaged position 
relative to the Exchange. In recognition that the Exchange is the 
source of its own market data and is affiliated with Cboe Options, BZX 
Options and EDGX Options, the Exchange represents that the source of 
the market data it would use to create the proposed Cboe One Options 
Feed is available to vendors. Specifically, the Exchange would use the 
following data feeds to create the proposed Cboe One Options Feed, each 
of which is available to other vendors: the EDGX Options Top, Cboe 
Options Top Data, the C2 Options Top Data, and the BZX Options Top 
Feeds. The Cboe Options Exchanges will continue to make available these 
individual underlying feeds, and thus, the source of the market data it 
would use to create the proposed Cboe One Options feed is the same as 
the source available to other vendors.
    In order to create the Cboe One Options Feed, the Exchange will 
receive the individual data feeds from each Cboe Options Exchange and, 
in turn, aggregate and summarize that data to create the Cboe One 
Options Feed. This is the same process any entity would undergo should 
it create a market data product similar to the Cboe One Options Feed to 
distribute to its customers. In addition, the servers of most vendors 
could be located in the same facilities as the Exchange, and, 
therefore, should receive the individual data feed from each Cboe 
Options Exchange at the same time the Exchange would for it to

[[Page 14196]]

create the Cboe One Options Feed.\12\ Therefore, a vendor that is 
located in the same facilities as the Exchange could obtain the 
underlying data feeds from the Cboe Options Exchanges on the same 
latency basis as the system that would be performing the aggregation 
and consolidation of the proposed Cboe One Options Feed and provide the 
same type of product to its customers with the same latency they could 
achieve by purchasing the Cboe One Options Feed from the Exchange. As 
such, the Exchange would not have any unfair advantage over vendors 
with respect to obtaining data from the individual Cboe Options 
Exchanges. In fact, the technology supporting the Cboe One Options Feed 
would similarly need to obtain the Exchange's data feed as well and 
even this connection would be on a level playing field with a vendor 
located at the same facility as the Exchange. The Exchange has designed 
the Cboe One Options data feed so that it would not have a competitive 
advantage over a vendor with respect to the speed of access to those 
underlying data feeds. Likewise, the Cboe One Options data feed would 
not have a speed advantage vis-[agrave]-vis vendors located in the same 
data center as the Exchange with respect to access to its customers, 
whether those customers are also located in the same data center or 
not.
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    \12\ The Exchange notes that it does not own the facilities in 
which its servers are located but is aware that there are vendors 
that currently locate their servers in the same facilities as the 
Exchange and on an equal basis as the Exchange. The Exchange is not 
aware of any reasons why vendors would not be able to locate their 
servers on an equal basis as the Exchange on an on-going basis.
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    With regard to cost, the Exchange will file a separate rule filing 
with the Commission to establish fees for Cboe One Options Feed, which 
would be designed to ensure that vendors could compete with the 
Exchange by creating a similar product as the Cboe One Options Feed. 
The pricing the Exchange would charge for the Cboe One Options Feed 
would not be lower than the cost to a vendor (or distributor) to obtain 
the underlying Cboe Options Exchanges' top-of-book data feeds. The 
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 data feeds 
and offer a similar product on a competitive basis and with no greater 
latency than the Exchange. The Distribution and User (Professional and 
Non-Professional) fees that the Exchange intends to propose for the 
Cboe One Options Feed would be equal to the combined fees for 
subscribing to each individual data feed. Additionally, the Exchange 
also intends to propose a separate ``Data Consolidation Fee'', which 
would reflect the value of the aggregation and consolidation function 
the Exchange performs in creating the Cboe One Options Feed. The 
intended proposed pricing would therefore enable a vendor to create a 
competing product based on the individual data feeds and charge its 
customer a fee that it believes 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.
Implementation
    The Exchange will announce when it intends to make available the 
Cboe One Options feed, subject to the effectiveness of the proposed 
rule change and the effectiveness of a rule filing to establish the 
fees (via a separate rule filing).\13\
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    \13\ The Exchange also represents that should it wish to modify 
the proposed Cboe One Options Feed data product in the future, it 
will submit a proposed rule change as required under the Act.
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2. Statutory Basis
    The Exchange believes that the proposed Cboe One Options Feed is 
consistent with Section 6(b) of the Act,\14\ in general, and furthers 
the objectives of Section 6(b)(5) of the Act,\15\ in particular, in 
that it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and to protect investors and the public 
interest, and that it is not designed to permit unfair discrimination 
among customers, brokers, or dealers. The Exchange also believes this 
proposal is consistent with Section 6(b)(5) of the Act because it 
protects investors and the public interest and promotes just and 
equitable principles of trade by providing investors with new options 
for receiving market data as requested by market participants and 
Section 6(b)(8) of the Act, which requires that the rules of an 
exchange not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.\16\
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    \14\ 15 U.S.C. 78f.
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ 15 U.S.C. 78f(b)(8).
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    The Exchange also believes that the proposed rule change is 
consistent with Section 11(A) of the Act \17\ in that 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.
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    \17\ 15 U.S.C. 78k-1.
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to consumers of such data. It was 
believed that this authority would expand the amount of data available 
to users and consumers of such data and also spur innovation and 
competition for the provision of market data. The Exchange believes 
that the proposed Cboe One Options Feed would further broaden the 
availability of U.S. option market data to investors consistent with 
the principles of Regulation NMS. Particularly, the Exchange believes 
the proposed Cboe One Options Feed promotes transparency by 
disseminating the Cboe Options Exchanges' market data more widely 
through additional distribution channels, which will enable investors 
to better monitor trading activity on the Cboe Options Exchanges, and 
thereby serve the public interest. The Exchange is providing additional 
distribution channels because it believes market participants may be 
more inclined to purchase a combined data feed and redistribute it. 
Particularly, the Exchange believes that market participants would 
welcome a market data product that would provide high-quality, 
comprehensive top-of-book and last sale data for the Cboe Options 
Exchanges in a unified view (i.e., the Cboe One Options Feed).
    The Exchange also 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 18% of the market share.\18\ 
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. While there is not 
currently an aggregated top-of-book data product offered at competitor 
options

[[Page 14197]]

exchanges, the quote and last sale data contained in the proposed Cboe 
One Options Feed is identical to data already provided in the 
Exchange's and its Affiliate's individual top-of-book data products as 
well as to the data sent to OPRA for redistribution to the public.\19\ 
Accordingly, Exchange top-of-book data is therefore widely available 
today from a number of different sources.
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    \18\ See Cboe Global Markets U.S. Options Market Month-to-Date 
Volume Summary (January 9, 2023), available at https://markets.cboe.com/us/options/market_statistics/.
    \19\ The Exchange notes that it and its Affiliates, make 
available their respective top-of-book data and last sale data that 
is included in each exchange's top-of-book data feed no earlier than 
the time at which the Exchange sends that data to OPRA.
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    Moreover, exchange top-of-book data is distributed and purchased on 
a voluntary basis, in that neither the Exchange nor market data 
distributors or vendors are required by any rule or regulation to make 
this data available. Accordingly, distributors and vendors 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 \20\ 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.\21\ As 
such, all proprietary data feeds are optional.
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    \20\ ``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.
    \21\ Id.
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    Similar to exchanges' individual top-of-book data feeds, the 
proposed Cboe One Options Feed would be distributed and purchased on a 
voluntary basis, in that neither the Exchange, its Affiliates, nor 
market data distributors or vendors are required by any rule or 
regulation to make this data feed available. Accordingly, distributors 
and vendors can discontinue use at any time and for any reason, 
including due to an assessment of the reasonableness of fees charged. 
The Exchange believes that the proposed Cboe One Options Feed will 
offer an alternative to subscribing to the Cboe Options Exchanges four 
individual top-of-book data feeds. Also, as noted above, there is a 
history of offering similar consolidated data products in the equities 
industry. Indeed, the Exchange's affiliated equities exchanges offer 
the Cboe One Summary Feed, which is a substantially similar data 
product which contains the aggregate BBO of all displayed orders for 
securities (instead of options) traded on the Cboe's equities 
exchanges, along with last sale information.\22\ The Cboe One Summary 
Feed also consists of Symbol Summary, Market Status, Trading Status, 
and Trade Break messages.\23\
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    \22\ See BZX Rule 11.22(j), BYX Rule 11.22(i), EDGA Rule 13.8(b) 
and EDGX Rule 13.8(b).
    \23\ Id.
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    The Exchange believes the proposal would not permit unfair 
discrimination because the product will be available to all market data 
distributors and vendors on an equivalent basis. Any distributor or 
vendor that wishes to instead purchase one or more of the individual 
data feeds offered by the Cboe Options Exchanges separately will still 
be able to do so. Further, the Exchange and its Affiliates will 
continue to make the data contained in the proposed Cboe One Options 
Feed available no earlier than the time at which the exchanges send 
that data to OPRA.
    In addition, the Exchange does not believe that the proposal would 
permit unfair discrimination among customers, brokers, or dealers and 
thus is consistent with the Act because the Exchange will be offering 
the product on terms that a vendor could offer a competing product. 
Specifically, the proposed data feed merely represents an aggregation 
and consolidation of data contained in existing, previously filed 
individual market data products of the Cboe Options Exchanges. As such, 
a vendor could similarly obtain the underlying data feeds and perform a 
similar aggregation and consolidation function to create the same data 
product as being proposed with the same latency and cost as the 
Exchange.
    The Exchange has taken into consideration its affiliated 
relationship with Cboe Options, BZX Options and EDGX Options in its 
design of the Cboe One Options Feed to assure that distributors and/or 
vendors would be able to offer a similar product on the same terms as 
the Exchange, both from the perspective of latency and cost. As 
discussed above, the Exchange proposes to offer the Cboe One Options 
Feed voluntarily in response to demand from market participants such as 
retail brokerage firms that are interested in receiving and 
distributing the top-of-book quotation and last sale information from 
the Cboe Options Exchanges as part of a single data feed. Specifically, 
Cboe One Options Feed can be used by industry professionals and retail 
investors looking for a cost effective, easy-to-administer, high 
quality market data product with the characteristics of the Cboe One 
Options Feed. The Cboe One Options Feed would help protect a free and 
open market by providing market participants additional choices in 
receiving this type of market data, thus promoting competition and 
innovation.
    With respect to latency, the path for distribution by the Exchange 
of Cboe One Options Feed would not be faster than the path for 
distribution a vendor that independently created a Cboe One Options 
Feed-like product could distribute its own product. As such, the 
proposed Cboe One Options data feed is a data product that a vendor 
could create and sell without being in a disadvantaged position 
relative to the Exchange. In recognition that the Exchange is the 
source of its own market data and is affiliated with Cboe Options, BZX 
Options and EDGX Options, the Exchange represents that the source of 
the market data it would use to create the proposed Cboe One Options 
Feed is available to other vendors. Specifically, the Exchange would 
use the following data feeds to create the proposed Cboe One Options 
Feed, each of which is available to other vendors: the EDGX Options 
Top, Cboe Options Top Data, the C2 Options Top Data, and the BZX 
Options Top Feeds. The Cboe Options Exchanges will continue to make 
available these individual underlying feeds, and thus, the source of 
the market data it would use to create the proposed Cboe One Options 
feed is the same as the source available to other vendors.
    In order to create the Cboe One Options Feed, the Exchange will 
receive the individual data feeds from each Cboe Options Exchange and, 
in turn, aggregate and summarize that data to create the Cboe One 
Options Feed. This is the same process any vendor would undergo should 
it create a market data product similar to the Cboe One Options Feed to 
distribute to its customers. In addition, the servers of most vendors 
could be located in the same facilities as the Exchange, and, 
therefore, should receive the individual data feed from each Cboe 
Options Exchange at the same time the Exchange would for it to

[[Page 14198]]

create the Cboe One Options Feed. Therefore, a vendor that is located 
in the same facilities as the Exchange could obtain the underlying data 
feeds from the Cboe Options Exchanges on the same latency basis as the 
system that would be performing the aggregation and consolidation of 
the proposed Cboe One Options Feed and provide the same type of product 
to its customers with the same latency they could achieve by purchasing 
the Cboe One Options Feed from the Exchange. As such, the Exchange 
would not have any unfair advantage over vendors with respect to 
obtaining data from the individual Cboe Options Exchanges. In fact, the 
technology supporting the Cboe One Options Feed would similarly need to 
obtain the Exchange's data feed as well and even this connection would 
be on a level playing field with a vendor located at the same facility 
as the Exchange. The Exchange has designed the Cboe One Options data 
feed so that it would not have a competitive advantage over a vendor 
with respect to the speed of access to those underlying data feeds. 
Likewise, the Cboe One Options data feed would not have a speed 
advantage vis-[agrave]-vis vendors located in the same data center as 
the Exchange with respect to access to customers, whether those 
customers are also located in the same data center or not.
    With regard to cost, the Exchange will file a separate rule filing 
with the Commission to establish fees for Cboe One Options Feed, which 
would be designed to ensure that vendors could compete with the 
Exchange by creating a similar product as the Cboe One Options Feed to 
offer and resell. The pricing the Exchange would charge for the Cboe 
One Options Feed would not be lower than the cost to a vendor (or 
distributor) to obtain the underlying Cboe Options Exchanges' top-of-
book data feeds. The pricing the Exchange would charge clients 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 data feeds and offer a similar product on a competitive 
basis and with no greater latency than the Exchange. The Distribution 
and User (Professional and Non-Professional) fees that the Exchange 
intends to propose for the Cboe One Options Feed would be equal to the 
combined fees for subscribing to each individual data feed.\24\ The 
Exchange also intends to propose a separate ``Data Consolidation Fee'', 
which would reflect the value of the aggregation and consolidation 
function the Exchange performs in creating the Cboe One Options Feed. 
The intended proposed fees would therefore enable a vendor to create a 
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. 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.
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    \24\ For example, the combined external distribution fee for the 
individual data feeds of the Cboe Options Exchanges is $10,000 per 
month (i.e., the monthly external distribution fee is $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). The combined monthly Professional User fee for the individual 
data feeds of the Cboe Options Exchanges is $30.50 per Professional 
User (i.e., the monthly Professional User fee is $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 combined 
monthly Non-Professional User fee for the individual data feeds of 
the Cboe Options Exchanges is $0.60 per Non-Professional User (i.e., 
the monthly Non-Professional User fee is $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).
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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. Because the Exchange and its 
affiliates, along with other exchanges already offer the similar 
underlying data products, the Exchange's proposed Cboe One Options Feed 
will enhance competition. This proposed new data feed provides 
investors with new options for receiving market data, which was a 
primary goal of the market data amendments adopted by Regulation 
NMS.\25\ As the Cboe Options Exchanges are consistently one of the top 
exchange operators by market share for U.S. options trading the data 
included within the Cboe One Options Feed will provide investors a new 
option for obtaining a broad market view, consistent with the primary 
goal of the market data amendments adopted by Regulation NMS.
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    \25\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, at 37503 (June 29, 2005) (Regulation NMS 
Adopting Release).
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    The Exchange believes the Cboe One Options Feed will further 
enhance competition by providing distributors and vendors with a data 
feed that allows them to more quickly and efficiently integrate into 
their existing products. For example, today, vendors may subscribe to 
various market data products offered by single exchanges and resell 
that data, either separately or in the aggregate, to their customers as 
part of their own market data offerings. Distributors and vendors may 
incur administrative costs when consolidating and augmenting the data 
to meet their customer's need. Consequently, many distributors and/or 
vendors will simply choose to not take the data from each of the Cboe 
Options Exchanges because of the effort and cost required to aggregate 
data from separate feeds into their existing products. Those same 
distributors and/or vendors may therefore be interested in the Cboe One 
Options Feed as they may easily incorporate aggregated or summarized 
Cboe Options Exchanges' data into their own products without themselves 
incurring the costs of the repackaging and aggregating the data it 
would receive by purchasing each market data product offered by the 
individual Cboe Options Exchanges separately. The Exchange therefore 
believes that by providing market data that encompasses combined data 
from affiliated exchanges, the Exchange enables vendors with the 
ability to compete in the provision of similar content with other 
vendors, where they may not have done so previously if they were 
required to purchase the top-of-book feeds from each individual Cboe 
options exchanges separately.
    Although the Exchange considers the acceptance of the Cboe One 
Options Feed by distributors and vendors as important to the success of 
the product, depending on their needs, such distributors and vendors 
may choose not to subscribe to the Cboe One Options Feed and may rather 
receive the Cboe Options Exchanges' individual market data products and 
incorporate them into their specific market data products. The Cboe One 
Options Feed simply provides another option for distributors and 
vendors to choose from when selecting a product that meets their market 
data needs.
Exchange Not the Exclusive Distributor of Cboe One Options Feed
    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. As 
discussed above,

[[Page 14199]]

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 would charge for the Cboe One 
Options Feed would not be lower than the cost to a distributor or 
vendor to obtain the underlying data feeds. In addition, the pricing 
the Exchange would charge clients for the Cboe One Options Feed 
compared to the cost of the individual data feeds from the Cboe Options 
Exchanges would enable a distributor and/or vendor to receive the 
underlying data feeds and offer a similar product on a competitive 
basis and with no greater latency than the Exchange.
Latency
    The Cboe One Options Feed is also not intended to compete with 
similar products offered by distributors. Rather, it is intended to 
assist them in incorporating aggregated and summarized data from the 
Cboe Options Exchanges into their own market data products that are 
provided to their customers. Therefore, distributors will receive the 
data, who will, in turn, make available Cboe One Options Feed to their 
end users, either separately or as incorporated into the various market 
data products they provide. As stated above distributors may prefer a 
product like the Cboe One Options Feed so that they may easily 
incorporate aggregated or summarized Cboe Options Exchange data into 
their own products without themselves incurring the administrative 
costs of repackaging and aggregating the data it would receive by 
subscribing to each market data product offered by the individual Cboe 
Options Exchanges.
    Notwithstanding the above, the Exchange believes that vendors may 
create a product similar to Cboe One Options Feed based on the market 
data products offered by the individual Cboe Options Exchanges with no 
greater latency than the Exchange. As discussed above, in order to 
create the Cboe One Options Feed, the Exchange will receive the 
individual data feeds from each Cboe Options Exchange and, in turn, 
aggregate and summarize that data to create the Cboe One Options Feed. 
This is the same process a vendor would undergo should it create a 
market data product similar to the Cboe One Options Feed to distribute 
to its customers. In addition, the servers of most vendors could be 
located in the same facilities as the Exchange, and, therefore, should 
receive the individual data feed from each Cboe Options Exchange at the 
same time the Exchange would for it to create the Cboe One Options 
Feed.
    The Exchange has designed the Cboe One Options data feed so that it 
would not have a competitive advantage over a vendor with respect to 
the speed of access to those underlying data feeds. Likewise, the Cboe 
One Options data feed would not have a speed advantage vis-[agrave]-vis 
vendors located in the same data center as the Exchange with respect to 
access to their customers, whether those end users are also located in 
the same data center or not. Therefore, the Exchange believes that it 
will not incur any potential latency advantage that will result in any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
Cost
    With regard to cost, the Exchange will file a separate rule filing 
with the Commission to establish fees for Cboe One Options Feed that 
would be designed to ensure that vendors could compete with the 
Exchange by creating a similar product as the Cboe One Options Feed. 
The pricing the Exchange would charge clients 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 data 
feeds and offer a similar product on a competitive basis and with no 
greater latency than the Exchange. The Distribution and User 
(Professional and Non-Professional) fees that the Exchange proposes for 
the Cboe One Options Feed will be equal to the combined fees for 
subscribing to each individual data feed. Moreover, as discussed, the 
Exchange intends to propose a separate ``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 
believes 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.

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \26\ and Rule 19b-4(f)(6) \27\ thereunder. 
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) of the Act \28\ and Rule 19b-4(f)(6) \29\ 
thereunder.
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    \26\ 15 U.S.C. 78s(b)(3)(A).
    \27\ 17 CFR 240.19b-4(f)(6).
    \28\ 15 U.S.C. 78s(b)(3)(A).
    \29\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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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    A proposed rule change filed under Rule 19b-4(f)(6) \30\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\31\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the Exchange 
can launch the proposed Cboe One Options Feed on March 1, 2023, which 
is the date the original filing (SR-C2-2023-005) would have been 
operative. The Commission notes that Nasdaq in its comment letter 
believed that ``the Cboe One Feed Proposal should clearly explain the 
obligations of the OPRA Plan by specifically noting that any person who 
subscribes to the Cboe One Feed must have equivalent access to OPRA and 
remove the misleading language identified'' by Nasdaq.\32\ Nasdaq 
further requested that marketing

[[Page 14200]]

materials for the Cboe One Options Feed clearly indicate this 
requirement to ensure compliance with the OPRA Plan.\33\ The Commission 
believes that the Exchange has addressed the concerns raised by Nasdaq 
by removing the language Nasdaq found misleading and clarifying the 
obligations under the OPRA Plan. Specifically, the Exchange has 
represented that any person, including broker-dealers, who subscribe to 
the Cboe One Options Feed must also have equivalent access to 
consolidated Options Information 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.\34\ The Commission notes that no other substantive changes 
from the Exchange's original filing are being made with this filing. 
Therefore, the Commission believes that waving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest. Accordingly, the Commission designates the proposed rule 
change to be operative on March 1, 2023.\35\
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    \30\ 17 CFR 240.19b-4(f)(6).
    \31\ 17 CFR 240.19b-4(f)(6)(iii).
    \32\ See Letter from Greg Ferrari, Vice President, U.S. Options, 
Nasdaq, supra note 3, at 2. Nasdaq submitted a comment letter to 
CBOE-2023-009, which was the companion filing to C2-2023-005, 
adopting the Cboe One Options Feed.
    \33\ Id. at 2-3.
    \34\ See supra notes 20-21 and accompanying text. As discussed 
above, the Exchange has also represented that the requirement under 
the OPRA Plan is included in 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 has 
represented that its Data Order Form (used for requesting the 
Exchange's market data products) requires confirmation that the 
requesting market participant receives data from OPRA. See supra 
note 20.
    \35\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 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 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 [email protected]. Please include 
File Number SR-C2-2023-006 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-C2-2023-006. 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-C2-2023-006 and should be submitted on 
or before March 28, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\36\
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    \36\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-04572 Filed 3-6-23; 8:45 am]
BILLING CODE 8011-01-P


