Overview
Title
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Cboe Timestamping Service Which is a Market Data Service Comprised of Two Distinct Market Data Reports
Agencies
ELI5 AI
Cboe Exchange wants to start a new service that tells you exactly when things happen on their market, like when someone decides to buy or sell, or when they change their mind. People can choose to get this information in special reports, but the details about how much it will cost and why it might be useful aren't very clear yet.
Summary AI
The Cboe Exchange, Inc. submitted a proposal to the Securities and Exchange Commission to introduce the Cboe Timestamping Service, a market data service providing detailed timestamp information for orders, quotes, and cancellations. The service will consist of two reports: the Missed Liquidity Report and the Cancels Report, each optional for Cboe members. Members can choose to receive one or both reports and will be charged fees based on their selection. The SEC is inviting public comments on this proposed rule change until January 24, 2025.
Keywords AI
Sources
AnalysisAI
The document outlines a proposed rule change by the Cboe Exchange, Inc., submitted to the Securities and Exchange Commission (SEC). The proposal involves the introduction of the Cboe Timestamping Service, a market data service designed to offer detailed timestamp information concerning the lifecycle of orders, quotes, and cancellations within the exchange. The service includes two reports: the Missed Liquidity Report and the Cancels Report. Each report is optional for Cboe members, allowing them to select one or both based on their needs, with accompanying fees based on selection. The SEC has called for public comments on this proposed change until January 24, 2025.
General Summary
Cboe Exchange, Inc., aims to launch the Cboe Timestamping Service, which will offer market participants detailed timestamp data concerning their orders, quotes, and cancellations. This service is divided into two distinct reports: the Missed Liquidity Report, focusing on orders and quotes, and the Cancels Report, concentrating on cancellation messages. According to the proposed rule change, these reports are intended to be optional, with fees applicable based on which reports members opt to receive.
Significant Issues or Concerns
A primary issue with the document is the lack of clarity regarding the fees for the proposed service, which may lead to uncertainty or unfair competitive advantages. The document mentions that a separate filing will propose the fee structure, leaving current members and potential users without pertinent financial information. Additionally, the explanation of the immediate effectiveness process could be clearer, particularly concerning how the service automatically comes into effect under specific legal sections of the Securities Exchange Act of 1934.
Moreover, the terminology and details about the lifecycle stages represented by the timestamps could confuse some readers, especially those who may not be familiar with the intricate procedures of securities exchange systems. Another concern is the document's insufficient explanation of the necessity and anticipated benefits of the Cboe Timestamping Service, which could aid stakeholders in evaluating the service's value.
Broad Public Impact
The introduction of the Cboe Timestamping Service represents a step toward increased transparency and efficiency in the trading process. The public potentially benefits from more detailed data that enhances market integrity by ensuring that all participants have access to comprehensive timestamps of their trading activities. This may improve confidence in the trading system.
Impact on Specific Stakeholders
For Cboe members, the service could offer significant advantages by providing insights into their trading executions and cancellations. Members could utilize the Missed Liquidity and Cancels Reports to refine their trading strategies and understand better the market conditions affecting their transactions. However, without knowing the cost of these services, it is challenging to determine whether the services will be accessible to all members or primarily benefit larger firms with extensive resources.
The lack of infomation on fees could negatively affect smaller firms, as higher costs might limit their ability to leverage the new service, potentially widening the competitive gap with larger entities. On the administrative side, the additional data may present oversight challenges for the SEC, necessitating enhanced analytical tools to interpret and manage the increased volume of information.
Overall, this document presents a regulatory change with potential benefits and challenges for market participants. The Cboe Timestamping Service could lead to improved transparency and market understanding, yet requires clearer communication regarding its cost and benefits to ensure equity among stakeholders.
Issues
• The document does not provide detailed information about the fees associated with the Cboe Timestamping Service. This lack of clarity might be seen as a concern for market participants and could potentially lead to unfair advantage if the fee structure significantly favors certain market participants.
• The language describing the effectiveness process could be clearer, particularly the immediate effectiveness designation under Section 19(b)(3)(A) of the Act.
• The complexity in the language regarding the timestamps and what specific lifecycle stages they refer to might be challenging for some readers to comprehend fully.
• There is no detailed explanation of the necessity or benefits of the Cboe Timestamping Service, which might help in understanding its significance or implications for market operations.
• The document mentions that submissions should not include personal identifiable information and notes that some material may be redacted if it is obscene or subject to copyright. This part of the document could be expanded to clearly explain what types of information are considered personal or protected under copyright.