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lotter on DSK11XQN23PROD with NOTICES1

Federal Register / Vol. 86, No. 208 / Monday, November 1, 2021 / Notices Distributors may only distribute the Exchanges market data to the recipients officers and employees and its affiliates.28 External Distributors may distribute the Exchanges market data to persons who are not officers, employees or affiliates of the External Distributor,29
and may charge their own fees for the distribution of such market data.
Accordingly, the Exchange believes it is fair, reasonable and not unfairly discriminatory to assess External Distributors a higher fee for the Exchanges market data products as External Distributors have greater usage rights to commercialize such market data. The Exchange also utilizes more resources to support External Distributors versus Internal Distributors, as External Distributors have reporting and monitoring obligations that Internal Distributors do not have, thus requiring additional time and effort of Exchange staff. The Exchange believes the proposed cToM fees are equitable and not unfairly discriminatory because the fee level results in a reasonable and equitable allocation of fees amongst subscribers for similar services, depending on whether the subscribers is an Internal or External Distributor.
Moreover, the decision as to whether or not to purchase market data is entirely optional to all market participants.
Potential purchasers are not required to purchase the market data, and the Exchange is not required to make the market data available. Purchasers may request the data at any time or may decline to purchase such data. The allocation of fees among users is fair and reasonable because, if market participants deem the proposed fees to be unfair or inequitable, firms can discontinue their use of the cToM data.
Further, the Exchange no longer believes it is necessary to provide cToM
data for free to attract market participants since the Exchanges Strategy Book is now established and the Exchange no longer needs to rely on such waivers to attract market participants to its Complex Order market or cToM subscribers. The Exchange believes that the proposal is equitable and not unfairly discriminatory because the proposed cToM fees will apply to all market participants of the Exchange on a uniform basis. The Exchange also notes that the proposed monthly cToM fees for Internal and External Distributors are the same prices that the Exchange charges for its ToM data product, and are generally lower than other options
exchanges data feed prices for their comparable data feed products.30
The Exchange believes the proposed change to delete certain text from Section 6a of the Fee Schedule promotes just and equitable principles of trade and removes impediments to and perfects the mechanism of a free and open market and a national market system because the proposed change is a non-substantive edit to the Fee Schedule to remove unnecessary text.
The Exchange believes that this proposed change will provide greater clarity to Members and the public regarding the Exchanges Fee Schedule and that it is in the public interest for the Fee Schedule to be accurate and concise so as to eliminate the potential for confusion.
B. Self-Regulatory Organizations Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Rather, the Exchange believes that the proposal will promote competition by permitting the Exchange to sell a data product similar to those offered by other competitor options exchanges.31 The Exchange made Complex Order functionality and cToM available in order to keep pace with changes in the U.S. options industry and evolving customer needs, and believes the data product will continue to contribute to robust competition among national securities exchanges. Other U.S. options exchanges offer complex order functionality and market data products that are substantially similar to that offered by the Exchange. As a result, the Exchange believes this proposed rule change permits fair competition among national securities exchanges.
Furthermore, the Exchange operates in a highly competitive environment, and its ability to price cToM is constrained by competition among exchanges that offer similar data products and complex order functionality to their customers. As discussed, there are currently a number of similar products available to market participants and investors. Other U.S.
options exchanges offer market data products that are substantially similar to cToM, which the Exchange must consider in its pricing discipline in order to compete for the market data.32
For example, proposing fees that are excessively higher than established fees See supra note 11.
Id.
32 Id.

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for similar data products would simply serve to reduce demand for the Exchanges data product, which as discussed, market participants are under no obligation to utilize. In this competitive environment, potential purchasers are free to choose which, if any, similar product to purchase to satisfy their need for market information. As a result, the Exchange believes this proposed rule change permits fair competition among national securities exchanges.
The Exchange also does not believe the proposed fees would cause any unnecessary or in appropriate sic burden on intermarket competition as other exchanges are free to introduce their own comparable data product and lower their prices to better compete with the Exchanges offering. The Exchange does not believe the proposed rule change would cause any unnecessary or inappropriate burden on intramarket competition. Particularly, the proposed product and fees apply uniformly to any purchaser, in that it does not differentiate between subscribers that purchase cToM. The proposed fees are set at a modest level that would allow any interested Member or non-Member to purchase such data based on their business needs.
The Exchange does not believe that the proposed rule change to make a minor, non-substantive edit to Section 6a of the Fee Schedule by deleting unnecessary text will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. This proposed rule change is not being made for competitive reasons, but rather is designed to remedy a minor nonsubstantive issue and will provide added clarity to the Fee Schedule. The Exchange believes that it is in the public interest for the Fee Schedule to be accurate and concise so as to eliminate the potential for confusion on the part of market participants. In addition, the Exchange does not believe the proposal will impose any burden on inter-market competition as the proposal does not address any competitive issues and is intended to protect investors by providing further transparency regarding the Exchanges Fee Schedule.
C. Self-Regulatory Organizations Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
30

See id.
29 See id.
28

VerDate Sep<11>2014

Written comments were neither solicited nor received.

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