Overview
Title
Self-Regulatory Organizations; Cboe C2 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
The Securities and Exchange Commission is letting people know about a new service from a company called Cboe C2 Exchange that will offer special reports to help understand trading activities, like why some orders didn't go through or why some were stopped. People can start using these reports soon and have until February 13, 2025, to tell the SEC what they think about it.
Summary AI
The Securities and Exchange Commission has announced a proposed rule change by Cboe C2 Exchange, Inc., which suggests the creation of the Cboe Timestamping Service. This new service is comprised of two optional market data reports: the Missed Liquidity Report for orders and quotes, and the Cancels Report for canceled orders. The proposed change, which does not impose significant burdens on competition or investors, was filed to immediately take effect, allowing these reports to be available from January 27, 2025. The public can offer comments on this proposal until February 13, 2025.
Keywords AI
Sources
AnalysisAI
The recent filing by the Securities and Exchange Commission (SEC) regarding a proposed rule change from Cboe C2 Exchange, Inc., introduces a new product called the Cboe Timestamping Service. This service splits into two market data reports: the Missed Liquidity Report and the Cancels Report. The exchange intends for these reports to become available to its members starting January 27, 2025. Members have the choice to opt for one, both, or neither of these reports.
Summary and Purpose
The proposed rule change outlines a service designed to enhance transparency around order processing within the exchange. Users will be able to access detailed timestamps for various stages of order and quote processing, as well as cancellations. The rule change was filed under provisions that allow for its immediate effect due to it not posing significant impacts on investor protection, the public interest, or competition.
Key Issues and Concerns
While the introduction of the Cboe Timestamping Service aims to provide added value to market participants, it raises several potential issues:
Lack of Cost Transparency: The document mentions that fees will be based on the number of reports chosen by members, yet it provides no specific cost or pricing structure. This lack of transparency could cause concern among potential users who are wary of the financial commitments involved.
Subjectivity in Impact Assessment: The assertion that the rule change does not significantly affect investor protection or public interest might be seen as subjective. Stakeholders and market participants may desire a more detailed analysis to ensure these claims are comprehensively validated.
Technical Language: The document contains specific legal and regulatory language, which may not be easily comprehensible to individuals unfamiliar with SEC filing processes. This could limit accessibility for interested parties who wish to engage with the proposal meaningfully.
Withdrawal of Prior Submission: The document refers to a previous filing that was withdrawn due to a need for clarity. However, details regarding this decision are scarce, which can be perceived as a lack of openness or transparency.
Impact on Market Efficiency and Competition: There is minimal discussion on how the new reports will influence market dynamics, competition, or capital formation. Understanding these broader impacts is crucial for users and regulators alike when considering such new initiatives.
Broader Public Impact
For the general public and market participants, the introduction of the Cboe Timestamping Service represents an opportunity for enhanced market data transparency. Such information can assist traders and investors in gaining a clearer understanding of market mechanics and improve strategic decision-making.
Stakeholder Implications
The proposed changes could primarily benefit active traders and institutional investors who rely on detailed market data to inform their strategies. However, the uncertainty surrounding cost and potential regulatory suspension might deter some smaller market participants or firms operating on tighter margins.
The document’s mention of a potential suspension within 60 days adds an element of unpredictability to the implementation of these services, which could complicate planning and integration efforts for those intending to utilize them.
In conclusion, while the Cboe Timestamping Service could offer significant advantages in terms of market data transparency, its introduction raises several valid concerns that stakeholders must consider. Addressing these issues proactively would likely facilitate more favorable acceptance and utilization of the services among the exchange's members.
Issues
• The document describes the introduction of a new market data service, the Cboe Timestamping Service, without providing specific details about the costs for users. It merely states that fees will be assessed based on the number of reports selected, which might be a concern for transparency and could potentially become costly for users.
• The document mentions that the proposed rule change does not significantly affect the protection of investors or the public interest, but this is a subjective assessment and might be questioned by stakeholders seeking more comprehensive analysis.
• The language used in the description of the rule change filing process is technical and may not be easily understood by individuals who are not familiar with SEC filing norms, such as references to specific sections of the U.S. Code and CFR.
• The document mentions a prior submission and withdrawal but does not provide specific details as to why the withdrawal occurred, beyond citing a need for clarity, which could be seen as lacking transparency.
• There is no information regarding how the new services (Missed Liquidity Report and Cancels Report) would impact the overall efficiency, competition, and capital formation within the market, aside from a brief mention as part of the justification for the waiver of the 30-day operative delay.
• The potential for the Commission to suspend the rule change within 60 days adds uncertainty to the implementation of these new services, which could be a concern for market participants planning to use them.