
[Federal Register Volume 88, Number 164 (Friday, August 25, 2023)]
[Notices]
[Pages 58327-58329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18303]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98181; File No. SR-CboeBZX-2023-059]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Exchange Rule 11.22 (``Data Products'') To Eliminate the ETF Implied 
Liquidity Feed

August 21, 2023.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 8, 2023, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. The Exchange 
filed the proposal as a ``non-controversial'' proposed rule change 
pursuant to section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to

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solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to 
amend Exchange Rule 11.22 (``Data Products'') to eliminate one of the 
Exchange's data offerings. 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/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 11.22 (``Data Products'') to 
eliminate the data product listed under subparagraph (n), the ``ETF 
Implied Liquidity'' data feed,\5\ which the Exchange intends to 
decommission on August 8, 2023.
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    \5\ The ETF Implied Liquidity Feed was adopted in 2017. See 
Securities Exchange Act Release No. 80580 (May 3, 2017), 82 FR 21585 
(May 9, 2017) (SR-BatsBZX-2017-25) and Securities Exchange Act 
Release No. 80772 (May 25, 2017), 82 FR 25389 (June 1, 2017) (SR-
BatsBZX-2017-036).
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    By way of background, the ETF Implied Liquidity feed is an optional 
data feed that provides the Exchange's proprietary calculation of the 
implied liquidity and the aggregate best bid and offer (``BBO'') of all 
displayed orders on the Exchange and its affiliated exchanges \6\ for 
all standard, non-leveraged U.S. equity Exchange Traded Funds 
(``ETFs'') traded on the System.\7\ An ETF's implied liquidity 
disseminated via the feed consists of the ETF's implied BBO (including 
the implied size) calculated via a proprietary methodology based on the 
national best bid and offer (``NBBO''), the number of shares of 
securities underlying one creation unit of the ETF, and the estimated 
cash included in one creation unit of the ETF. The Exchange 
disseminates the aggregate BBO through the ETF Implied Liquidity feed 
no earlier than it provides its BBO to the processors under the CTA 
Plan or the Nasdaq/UTP Plan.
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    \6\ The Exchange's affiliates are Cboe EDGA Exchange, Inc., 
(``EDGA''), Cboe EDGX Exchange, Inc. (``EDGX''), and Cboe BYX 
Exchange, Inc. (``BYX'') (``collectively, the ``Bats Exchanges'').
    \7\ The securities underlying each of the U.S. equity ETFs 
included in the proposed feed must be considered NMS Securities as 
defined under Rule 600(b)(46) of Regulation NMS. 17 CFR 
242.600(b)(46).
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    Currently there are no market participants that are taking the ETF 
Implied Liquidity feed. As such, the Exchange no longer wishes to 
maintain or offer this product and therefore proposes to decommission 
the ETF Implied Liquidity feed and delete the corresponding reference 
to the product from its rulebook.\8\
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    \8\ The Exchange intends to also submit a corresponding rule 
filing to eliminate reference to this feed and corresponding fees in 
the Exchange's fee schedule. See SR-CboeBZX-2023-060.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of section 6(b) of the 
Act.\9\ Specifically, the Exchange believes the proposed rule change is 
consistent with the section 6(b)(5) \10\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the section 6(b)(5) \11\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ Id.
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    In particular, the Exchange believes that the proposal to 
decommission the ETF Implied Liquidity feed is appropriate given the 
non-usage of the product among market participants. Further, the ETF 
Implied Liquidity feed is optional, and its use is not a prerequisite 
for trading on the Exchange. The Exchange also notes that is not 
required to maintain or offer any one proprietary market data product, 
including the ETF Implied Liquidity feed. The Exchange also believes 
that the proposed rule change is fair and equitable and is not designed 
to permit unfair discrimination as it applies uniformly to all Members 
(i.e., the product will no longer be available for any Member). 
Eliminating reference to this feed in the Exchange's rulebook will 
promote clarity in the rules as to what data products may or may not be 
available.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The ETF Implied Liquidity 
feed is an optional data feed offered by the Exchange, it is not a 
prerequisite to trading on the Exchange, and the Exchange is not 
required to offer or maintain such feed.
    The Exchange believes that the proposed deletion does impose any 
intramarket competition as it applies to all Members (i.e. the product 
will no longer be available to any Member). The Exchange believes that 
the proposed rule change also does not impose any undue burden on 
intermarket competition. The ETF Implied Liquidity feed is an optional 
data product offered by the Exchange and market participants are not 
required to subscribe to it and the Exchange is not required to offer 
it. Moreover, the proposed change is not being submitted for 
competitive reasons, but rather to eliminate a data product that is not 
being actively used by market participants today.

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

    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

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operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest, it has become effective pursuant 
to section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) \13\ 
thereunder.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ 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 proposed 
rule change may become operative upon filing. The Exchange requested 
the waiver because it intended to decommission the ETF Implied 
Liquidity feed effective August 8, 2023, and eliminate such references 
from the Exchange's rulebook to alleviate potential confusion as to 
what data products the Exchange currently offers. Because the proposed 
rule change does not raise any novel legal or regulatory issues, the 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the 30-day operative delay and 
designates the proposal operative upon filing.\16\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. 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 shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2023-059 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-CboeBZX-2023-059. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2023-059 and should 
be submitted on or before September 15, 2023.
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    \17\ 17 CFR 200.30-3(a)(12), (59).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-18303 Filed 8-24-23; 8:45 am]
BILLING CODE 8011-01-P


