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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
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 that its proposal to adopt fees for the Report is consistent with Section 6b of the Act 22 in general, and furthers the objectives of Section 6b4 of the Act 23 in particular, in that it is an equitable allocation of dues, fees and other charges among its Members and other recipients of Exchange data.
In adopting Regulation NMS, the Commission granted self-regulatory organizations SROs and brokerdealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the Report further broadens the availability of U.S. option market data to investors consistent with the principles of Regulation NMS. The Report also promotes increased transparency through the dissemination of the Report.
Particularly, the Report will benefit investors by facilitating their prompt access to the value added information that is included in the Report. The Report will allow Members to access information regarding their trading activity that they may utilize to evaluate their own trading behavior and order interactions.
The Exchange 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 15% of the market share and currently the Exchange represents only approximately 6.08% of the market share.24 The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Particularly, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO
revenues and, also, recognized that current regulation of the market system has been remarkably successful in promoting market competition in its 22 15

U.S.C. 78fb.
U.S.C. 78fb4.
24 See Cboe Global Markets U.S. Options Market Month-to-Date Volume Summary April 28, 2021, available at https markets.cboe.com/us/options/
market_statistics/.
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broader forms that are most important to investors and listed companies. 25
Making similar data products available to market participants fosters competition in the marketplace, and constrains the ability of exchanges to charge supra-competitive fees. In the event that a market participant views one exchanges data product as more attractive than the competition, that market participant can, and often does, switch between similar products. The proposed fees are a result of the competitive environment of the U.S.
options industry as the Exchange seeks to adopt fees to attract purchasers of the recently introduced Report.
The Exchange believes the proposed fees are reasonable as the proposed fees are both modest and similar to fees assessed by other exchanges that provide similar data products.26 Indeed, if the Exchange proposed fees that market participants viewed as excessively high, then the proposed fees would simply serve to reduce demand for the Exchanges data product, which as noted, is entirely optional. Other options exchanges are also free to introduce their own comparable data products with lower prices to better compete with the Exchanges offering.
As such, the Exchange believes that the proposed fees are reasonable and set at a level to compete with other options exchanges that may choose to offer similar reports. Moreover, if a market participant views another exchanges potential report as more attractive, then such market participant can merely choose not to purchase the Exchanges Report and instead purchase another exchanges similar data product, which may offer similar data points, albeit based on that other markets trading activity.
The Exchange also believes providing an annual subscription for an overall lower fee than a monthly subscription is equitable and reasonable because it would enable the Exchange to gauge 25 See Securities Exchange Act Release No. 51808
June 9, 2005, 70 FR 37496, 37499 June 29, 2005
Regulation NMS Adopting Release.
26 The NASDAQ Stock Market LLC NASDAQ
charges fees ranging from $1,500 to $3,500 per month for a similar report for equity securities called the Missed OpportunityLatency report as part of its NASDAQ Trader Insights offering. See NASDAQ Equity Section 7, Rule 146a2. See also the CME Group, Inc.s Time and Sale report. https
www.cmegroup.com/trading/about-timesales.html::text=CME%20Globex%20Options-, CME%20Groups%20Time %20%26%20Sales%20report %20provides%20the%20price %20and%20time,calendar%20date %20of%20the%20transaction.&
text=A%20zero%20volume%20represents%20an %20indicative%20price.,-The%20Indicator %20column.

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long-term interest in the Report. A lower annual subscription fee would also incentivize Members to subscribe to the Report on a long-term basis, thereby improving the efficiency by which the Exchange may deliver the Report by doing so on a regular basis over a prolonged and set period of time. The Exchange notes that other exchanges provide annual subscriptions for reports concerning their data product offerings.27
The Exchange also believes the proposed fees are reasonable as they would support the introduction of a new market data product to Members that are interested in gaining insight into latency in connection with orders that failed to execute against an order resting on the Exchanges Book. The Report accomplishes this by providing those Members data to analyze by how much time their order may have missed an execution against a contra-side order resting on the Book. Members may use this data to optimize their models and trading patterns in an effort to yield better execution results by calculating by how much time their order may have missed an execution.
Selling market data, such as the Report, is also a means by which exchanges compete to attract business.
To the extent that the Exchange is successful in attracting subscribers for the Report, it may earn trading revenues and further enhance the value of its data products. If the market deems the proposed fees to be unfair or inequitable, firms can diminish or discontinue their use of the data and/or avail themselves of similar products offered by other exchanges.28 The Exchange therefore believes that the proposed fees for the Report reflect the competitive environment and would be properly assessed on Member users. The Exchange also believes the proposed fees are equitable and not unfairly discriminatory as the fees would apply equally to all users who choose to purchase such data. It is a business decision of each Member that chooses to purchase the Report. The Exchanges proposed fees would not differentiate between subscribers that purchase the Report and are set at a modest level that would allow any interested Member to purchase such data based on their business needs.
The Exchange reiterates that the decision as to whether or not to purchase the Report is entirely optional 27 Cboe Exchange, Inc. Cboe assesses a $24,000 annual fee for an intra-day subscription to Open-Close Data. See https datashop.cboe.com/
options-summary-subscription.
28 See supra note 26.

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