[Federal Register Volume 88, Number 53 (Monday, March 20, 2023)]
[Notices]
[Pages 16676-16681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05541]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97134; File No. SR-C2-2023-007]


Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
To Amend Its Fees Schedule

March 14, 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 28, 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, II, and III below, which 
Items have been prepared by the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe C2 Exchange, Inc. (the ``Exchange'' or ``C2'') 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://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.

[[Page 16677]]

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 Cboe Data Services, LLC 
(``CDS'') section of its Fees Schedule.\3\ Particularly, the Exchange 
proposes to (i) reformat the section of its Fees Schedule pertaining to 
market data fees, (ii) harmonize various market data related 
definitions to align with the definitions used by the Exchange's 
affiliates and (iii) modify its fees relating to the distribution of 
the BBO data feed.\4\
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    \3\ The Exchange initially filed the proposed fee changes on 
January 3, 2023 (SR-C2-2023-001). On February 28, 2023, the Exchange 
withdrew that filing and submitted this proposal.
    \4\ The BBO Data Feed is a real-time data feed that includes the 
following information: (i) outstanding quotes and standing orders at 
the best available price level on each side of the market; (ii) 
executed trades time, size, and price; (iii) totals of customer 
versus non-customer contracts at the best bid and offer (``BBO''); 
(iv) all-or-none contingency orders priced better than or equal to 
the BBO; (v) expected opening price and expected opening size; (vi) 
end-of-day summaries by product, including open, high, low, and 
closing price during the trading session; (vi) recap messages any 
time there is a change in the open, high, low or last sale price of 
a listed option; (vii) COB information; and (viii) product IDs and 
codes for all listed options contracts. The quote and last sale data 
contained in the BBO data feed is identical to the data sent to the 
Options Price Reporting Authority (``OPRA'') for redistribution to 
the public.
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Reformatting
    The Exchange first proposes to eliminate references to CDS and 
rename the section ``Market Data Fees'' to align with the heading of 
its affiliates, BZX Options and EDGX Options. The Exchange notes that 
no substantive changes are being made with the elimination of the 
references to CDS fees. Rather, the proposed change more accurately 
reflects the Exchange's role as it relates to its market data products 
as CDS is merely an affiliate that is the Cboe contracting entity for 
all U.S. equities and options market data products, but the data 
products themselves are made available by the Exchange. The Exchange 
also proposes to reformat the layout of the fees under the Cboe Data 
Services, LLC (``CDS'') section of the Fees Schedule to align with 
formatting of the corresponding section in the fees schedules of the 
Exchange's options exchanges, Cboe BZX Exchange, Inc. (``BZX Options'') 
and Cboe EDGX Exchange, Inc. (``EDGX Options''), including adding a new 
``Definitions'' section under the CDS Fees (or as proposed, the Market 
Data Fees) section.
Definitions
    In order to provide consistent rules and terminology amongst the 
Exchange and its affiliated options exchanges, Cboe Options Exchange, 
Inc. (``Cboe Options''), Cboe BZX Exchange, Inc. (``BZX Options'') and 
Cboe EDGX Exchange, Inc. (``EDGX Options'') (collectively, 
``Affiliates'') the Exchange is proposing to amend various definitions 
and product names to harmonize with such terms used by its affiliates 
BZX Options and EDGX Options, specifically.\5\ As such, the proposed 
rule change deletes a defined term, adds certain defined terms, and 
makes certain non-substantive changes to existing definitions, as 
further described in the table below. The proposed rule change makes 
these changes throughout the market data fee language to conform to the 
proposed defined terms and the Exchange uses the proposed updated terms 
herein.
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    \5\ Cboe Options will be submitting a similar filing to 
harmonize its definitions and products names to align with those of 
BZX Options and EDGX Options as well.

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                                                                                               Description of
           Defined term                        Provision                Current location           change
----------------------------------------------------------------------------------------------------------------
Customer..........................  A ``Customer'' is any person,    Section I of the Cboe  Deletes defined term
                                     company or other entity that,    Data Services, LLC     to align terms with
                                     pursuant to a market data        (``CDS'') Section of   BZX Options and
                                     agreement with CDS, is           the Fees Schedule.     EDGX Options. The
                                     entitled to receive data,                               concept of
                                     either directly from CDS or                             ``Customer'' is
                                     through an authorized                                   also better
                                     redistributor (i.e., a                                  captured through
                                     Customer or an extranet                                 the proposed new
                                     service provider), whether                              term
                                     that data is distributed                                ``Distributor''.
                                     externally or used internally.
                                     A third-party vendor of an
                                     Approved Third-Party Device,
                                     as defined in the CDS Fee
                                     Schedule, is not a Customer
                                     unless it has a market data
                                     agreement in place with CDS. A
                                     Floor Broker User, as defined
                                     in the CDS Fee Schedule, is
                                     not a Customer unless it has a
                                     market data agreement in place
                                     with CDS.
Distributor.......................  A Distributor of an Exchange     N/A..................  Codifies definition
                                     Market Data product is any                              of ``Distributor''
                                     entity that receives the                                under new
                                     Exchange Market Data product                            ``Definitions''
                                     directly from the Exchange or                           section of the C2
                                     indirectly through another                              Options Fees
                                     entity and then distributes it                          Schedule.
                                     internally or externally to a                           Definition is
                                     third party.                                            identical to the
                                                                                             definition used by
                                                                                             BZX Options and
                                                                                             EDGX Options and
                                                                                             substantially
                                                                                             similar to the
                                                                                             language in the
                                                                                             first sentence of
                                                                                             the definition of
                                                                                             ``Customer'' in the
                                                                                             Fees Schedule.
Internal Distributor..............  An Internal Distributor of an    N/A..................  Codifies definition
                                     Exchange Market Data product                            of `` Internal
                                     is a Distributor that receives                          Distributor under
                                     the Exchange Market Data                                new ``Definitions''
                                     product and then distributes                            section of the C2
                                     that data to one or more Users                          Options Fees
                                     within the Distributor's own                            Schedule.
                                     entity.                                                 Definition is
                                                                                             identical to the
                                                                                             definition used by
                                                                                             BZX Options and
                                                                                             EDGX Options.
External Distributor..............  An External Distributor of an    N/A..................  Codifies definition
                                     Exchange Market Data product                            of ``External
                                     is a Distributor that receives                          Distributor'' under
                                     the Exchange Market Data                                new ``Definitions''
                                     product and then distributes                            section of the C2
                                     that data to a third party or                           Options Fees
                                     one or more Users outside the                           Schedule.
                                     Distributor's own entity.                               Definition is
                                                                                             identical to the
                                                                                             definition used by
                                                                                             BZX Options and
                                                                                             EDGX Options.

[[Page 16678]]

 
User..............................  A User of an Exchange Market     N/A..................  Codifies definition
                                     Data product is a natural                               of ``User'' under
                                     person, a proprietorship,                               new ``Definitions''
                                     corporation, partnership, or                            section of the C2
                                     entity, or device (computer or                          Options Fees
                                     other automated service), that                          Schedule.
                                     is entitled to receive                                  Definition is
                                     Exchange data.                                          identical to one
                                                                                             used by BZX Options
                                                                                             and EDGX Options.
Non-Professional User.............  A ``Non-Professional User'' is   Sections I and III...  Relocates definition
                                     a natural person or qualifying                          under new
                                     trust that uses Data only for                           ``Definitions''
                                     personal purposes and not for                           section of the C2
                                     any commercial purpose and,                             Options Fees
                                     for a natural person who works                          Schedule and
                                     in the United States, is not:                           updates the rule
                                     (i) registered or qualified in                          reference to
                                     any capacity with the                                   ``Section 201(11)''
                                     Securities and Exchange                                 of the Investment
                                     Commission, the Commodities                             Advisors Act of
                                     Futures Trading Commission,                             1940 to ``Section
                                     any state securities agency,                            202(a)(11)''.
                                     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 201(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.
Professional User.................  A Professional User of an        Sections I and III...  Relocates definition
                                     Exchange Market Data product                            under new
                                     is any natural person                                   ``Definitions''
                                     recipient of an Exchange                                section of the C2
                                     Market Data product who is not                          Options Fees
                                     a Non-Professional User.                                Schedule
Display Only Service..............  A ``Display Only Service''       Section I............  Relocates definition
                                     allows a natural person end-                            under new
                                     user to view and manipulate                             ``Definitions''
                                     data using the Distributor's                            section of the C2
                                     computerized service, but not                           Options Fees
                                     to save, copy, export or                                Schedule
                                     transfer the data or any
                                     results of the manipulation to
                                     any other computer hardware,
                                     software or media, except for
                                     printing it to paper or other
                                     non-magnetic media.
Device............................  A ``Device'' means any           N/A..................  Adds new definition
                                     computer, workstation or other                          under new
                                     item of equipment, fixed or                             ``Definitions''
                                     portable, that receives,                                section of the C2
                                     accesses and/or displays data                           Options Fees
                                     in visual, audible or other                             Schedule.
                                     form.                                                   Definition is
                                                                                             identical to one
                                                                                             used by Cboe
                                                                                             Options.
----------------------------------------------------------------------------------------------------------------

    The Exchange also proposes to rename the following market data 
products and fees and use the proposed names herein, in order to align 
with the naming convention used by the Exchange's affiliates, BZX 
Options, EDGX Options and Cboe Options, as applicable for similar data 
products and fees.\6\
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    \6\ See BZX Options Exchange Fees Schedule, Market Data Fees and 
EDGX Options Exchange Fees Schedule, Market Data Fees. See also Cboe 
Data Services, LLC Fees Schedule, Section V. System Fees.

------------------------------------------------------------------------
               Current name                         Proposed name
------------------------------------------------------------------------
BBO Data Feed.............................  C2 Options Top.
Book Depth Data Feed......................  C2 Options Depth.
Complex Order Book (COB) Data Feed........  C2 Complex Order Book (COB).
Port Fee..................................  Data Access Fee.
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    The Exchange believes the proposed changes to eliminate, modify and 
adopt the terms discussed above will add additionally transparency to 
the Fees Schedule and will protect investors, as the changes provide 
more clarity within the rule and more harmonized rule language across 
the Fees Schedules of the Cboe affiliated options exchanges. Further, 
the Exchange notes that the changes are non-substantive changes or 
provide additional detail in the rule regarding current market 
participants that purchase or use the Exchange's market data products. 
None of these differences impact the manner in which any of the terms 
and corresponding fees apply, including how the Exchange would have 
otherwise characterized a Distributor or User (Professional or Non-
Professional).
C2 Options Top Fee Changes
    The Exchange first proposes to modify its current User Fees. The 
Exchange currently charges a ``User Fee'' of $50 per month per Device 
or user ID for use of the data in the C2 Options Top Data Feed by 
``Display Only Service'' users. The current User fee is payable only 
for ``external'' Display Only Service users who receive C2 Options 
Top.\7\ Internal Distributors may currently distribute C2 Options Top 
Data to an unlimited number of internal users and Devices within the 
Distributor at no further cost. The Exchange proposes to eliminate the 
current C2 Options Top User fee and in its place adopt Professional and 
Non-Professional User fees for C2 Options Top that would apply to both 
Internal and External Distributors for all Professional and Non-
Professional Users. Particularly, the Exchange proposes to charge C2 
Options Top Distributors a monthly fee of $5.00 per Professional Users 
User and a monthly fee of $0.10 per Non-Professional User.\8\
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    \7\ Pursuant to the Cboe Global Markets North American Data 
Policies, Distributors must report the number of authorized external 
devices that receive C2 Options Top data during a calendar month 
within 15 days after such month in the manner and format specified 
by the Exchange from time to time to determine applicable fees.
    \8\ Distributors that receive C2 Options Top Data will be 
required to count every Professional User and Non-Professional User 
to which they provide the data feed.
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    The Exchange lastly proposes to establish a $10,000 per month 
Enterprise Fee that will permit a Distributor to purchase a monthly 
(and optional) Enterprise license to receive the C2 Options Top Data 
for distribution

[[Page 16679]]

to an unlimited number of Professional and Non-Professional Users. The 
Enterprise Fee is an alternative to Professional and Non-Professional 
User fees and will permit a Distributor to pay a flat fee to receive 
the data for an unlimited 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 Enterprise Fee may provide an opportunity to 
reduce fees. For example, if a Distributor has 10,000 Professional 
Users who each receive C2 Options Top at $5.00 per month (as proposed), 
then that Distributor will pay $50,000 per month in Professional Users 
fees. If the Distributor instead were to purchase the proposed 
Enterprise license, it would alternatively pay a flat fee of $10,000 
for an unlimited number of Professional and Non-Professional Users. A 
Distributor must pay a separate Enterprise Fee for each entity that 
controls the display of C2 Options Top if it wishes for such Users to 
be covered by an Enterprise Fee rather than by per User fees.\9\ A 
Distributor that pays the Enterprise Fee will not have to report its 
number of such Users on a monthly basis. Rather, every six months, the 
recipient firm must provide the Exchange with a count of the total 
number of Professional and Non-Professional Users users of C2 Options 
Top.\10\ 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 the license need not do so.
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    \9\ For example, if a Distributor that distributes C2 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.
    \10\ See Cboe Global Markets North American Data Policies.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\11\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \12\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. Additionally, 
the Exchange believes the proposed rule change is consistent with 
Section 6(b)(4) of the Act,\13\ which requires that Exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its Trading Permit Holders and other persons using 
its facilities.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ 15 U.S.C. 78f(b)(4).
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    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.\14\ 
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.\15\ 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 C2 
Options Top Feed. Further, the quote and last sale data contained in 
the C2 Options Data Feed is identical to the data sent to OPRA for 
redistribution to the public.\16\ Accordingly, Exchange top-of-book 
data is widely available today from a number of different sources.
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    \14\ See Cboe Global Markets U.S. Options Market Month-to-Date 
Volume Summary (February 24, 2023), available at https://markets.cboe.com/us/options/market_statistics/.
    \15\ 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.
    \16\ The Exchange notes that it makes available the BBO data and 
last sale data that is included in the C2 Options Top Data Feed no 
earlier than the time at which the Exchange sends that data to OPRA.
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    Moreover, the C2 Options Top Data Feed is 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 this data 
available. Accordingly, Distributors and Users can discontinue use at 
any time and for any reason, including due to an assessment of the 
reasonableness of fees charged. Additionally, only those Distributors 
that deem a product to be of sufficient overall value and usefulness 
would purchase them for distribution to Users. Further, Distributors 
are not required to distribute, and Users are not required to receive, 
any one particular data product and may choose to receive none, one, or 
several of the Exchange's market data products. Indeed less than 25% of 
the Exchange's market data subscriptions is for C2 Options Top. As 
described above, market participants have a wide variety of alternative 
market data products from which to choose, such as similar proprietary 
data products offered by other exchanges and consolidated data. 
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 \17\ 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.\18\ As such, all proprietary data feeds are optional.
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    \17\ ``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.
    \18\ Id.
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    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

[[Page 16680]]

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.'' \19\ 
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 C2 Options Top 
Data.
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    \19\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    The Exchange believes the proposed changes to adopt new 
Professional and Non-Professional User fees are reasonable as the User 
fees continue to be to be in line with User fees assessed by other 
exchanges for similar data.\20\ Moreover, External users will now be 
subject to lower fees as the Exchange proposes to significantly reduce 
the monthly User fees from $50 per External User to $5.00 per 
Professional User or $0.10 per Non-Professional User. Although External 
Distributors are currently only subject to fees for external users, the 
fee for external users (which are likely to be Non-Professional Users) 
are significantly lower (i.e., $0.10 per Non-Professional User) than 
the current $50 fee for external users. 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.\21\ The Exchange 
also believes offering C2 Options Top 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. The Exchange believes that the proposed fees are equitable and 
not unfairly discriminatory because they will be charged uniformly to 
Distributors for their Professional and Non-professional Users.
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    \20\ See e.g., Nasdaq PHLX Options 7 Pricing Schedule, Section 
10 (Proprietary Data Feed Fees), which provides for a fee of $40 per 
month to professional users and $1.00 per month to non-professional 
users to cover the usage of PHLX Options (TOPO) Data, TOPO Plus 
Orders, PHLX Orders and PHLX Depth Data feeds. See also NYSE 
American Options Proprietary Market Data Fees schedule, which 
provides for a fee of $50 per month to professional users and $1.00 
per month to non-professional users of American Options Top Data, 
American Options Deep and American Options Complex products. By 
comparison, the total Professional User fee for C2 Options Top and 
C2 Options COB is in line, and in fact lower than the above 
Professional User fee at $30 per Professional User (i.e., $5 per 
Professional Users of C2 Options Top, as proposed, and $25 per 
Professional User of C2 Options COB). The Exchange's combined Non-
Professional User Fee at $0.10 per Non-Professional User (i.e., 
$0.30 per Non-Professional User of C2 Options Top, as proposed, and 
$0 per Non-Professional User of C2 Options COB) is lower than PHLX's 
and NYSE American's aforementioned Non-Professional User fees. C2 
Options Depth does not charge users based on Professional or Non-
Professional classification and market participants have always been 
subject to separate User fees across C2 Options market data 
products.
    \21\ 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).
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    The proposed Enterprise Fee for C2 Options Top Feed is equitable 
and reasonable as the proposed fee could result in a fee reduction for 
Distributors with a large number of Professional and Non-Professional 
Users. If a Distributor has a smaller number of Professional Users of 
C2 Options Top Data, then it may continue using the per User structure 
and benefit from the proposed per C2 Options Top User Fee reductions. 
By reducing prices for recipient firms with a large number of 
Professional and Non-Professional Users, the Exchange believes that 
more firms may choose to receive and to distribute C2 Options Top Data, 
thereby expanding the distribution of this market data for the benefit 
of investors.
    The Exchange further believes that the proposed Enterprise Fee is 
reasonable because it will simplify reporting for certain recipients 
that have large numbers of Professional and Non-Professional Users. 
Firms that pay the proposed Enterprise Fee will not have to report the 
number of Users on a monthly basis as they currently do, but rather 
will only have to count Professional and Non-Professional users every 
six months, which is a significant reduction in administrative burden. 
Finally, as described above the Enterprise Fee is entirely optional. A 
firm that does not have a sufficient number of Users to benefit from 
purchase of the license need not do so.
    The Exchange lastly believes the proposed changes relating to the 
defined terms and terminology will provide additional specificity and 
clarity, while also harmonizing the various definition with that of its 
affiliates. Doing so would ensure consistent terms amongst the Exchange 
and its affiliates, thereby reducing the potential for confusion 
amongst market data subscribers of the Exchange's and its affiliates' 
market data products. Additionally, the proposed new terms are 
identical to the terms already used by the Exchange's affiliates BZX 
Options and EDGX Options. Similarly, the Exchange believes the proposal 
to reformate the fees will provide for a more streamlined fees 
schedule, thereby reducing potential confusion. Accordingly, the 
Exchange believes the proposed changes remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, protect investors and the public interest.

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. There are therefore a number of alternative products available to 
market participants and investors, including products offered by 
certain competing exchanges, as well as OPRA. In this competitive 
environment potential Distributors are free to choose which competing 
product to purchase to satisfy their need for market information. 
Often, the choice comes down to price, as market data customers 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 put any market 
participants at a relative disadvantage compared to other market 
participants.

[[Page 16681]]

As discussed, the proposed fees would apply to all similarly situated 
recipient firms of C2 Options Top on an equal and non-discriminatory 
basis. The Exchange believes the differentiated fees for Professional 
and Non-Professional Users of C2 Options Top is appropriate given 
Professional Users are categorized as such based on their employment 
and participation in financial markets, and thus, are compensated to 
participate in the markets. Non-Professional Users too can receive 
significant financial benefits through their participation in the 
markets, however the Exchange believes it is reasonable to charge more 
to those Users who are more directly engaged in the markets. The 
Exchange therefore believes that the proposed fee neither favors nor 
penalizes one or more categories of market participants in a manner 
that would impose an undue burden on competition.
    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 C2 Options Top Data, or any 
of the Exchange's data feeds, as described above. As noted, the quote 
and last sale data contained in the Exchange's C2 Option 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.
    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.

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 \22\ and paragraph (f) of Rule 19b-4 \23\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \22\ 15 U.S.C. 78s(b)(3)(A).
    \23\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-C2-2023-007 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-C2-2023-007. 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-C2-2023-007 and should be submitted on 
or before April 10, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-05541 Filed 3-17-23; 8:45 am]
BILLING CODE 8011-01-P


