FR 2025-03236

Cboe EDGX Exchange, Inc., a well-known financial exchange operator, has recently put forward a proposed change to its Fee Schedule, which pertains chiefly to its Market Data section. The modification introduces a new fee waiver specifically for what is termed as "Uncontrolled External Distributors." This proposal has been advanced to the Securities and Exchange Commission (SEC) and has been made effective immediately, bypassing the usual stages of public scrutiny prior to enforcement. The public has been invited to comment on the change until March 21, 2025. Comments can be submitted either through the SEC's website or via email, using a designated file number for reference.

Significant Issues and Concerns

A notable issue with the document is its complexity. The text includes a plethora of legal references and citations that could be rather daunting for individuals who lack specialized knowledge in securities law. This complexity might hinder meaningful public engagement as potential commentators could struggle to fully comprehend the specifics and implications of the proposal.

Another pressing concern is the proposal's immediate effectiveness. Ordinarily, proposed regulatory changes of this nature afford a period during which the public can offer input and thereby influence the final outcome. The abrupt implementation could be viewed as a circumvention of public oversight, fostering a perception that stakeholders' views are undervalued or unconsidered.

Moreover, the term "Uncontrolled External Distributors" is not adequately clarified within the document, leading to possible ambiguities regarding eligibility for the fee waiver. Without a clear definition, both current and potential market participants may find it challenging to determine whether they qualify for these waivers, potentially leading to confusion or misinterpretation.

Broad Impact on the Public

The change could have mixed repercussions for the general public. On one hand, the fee waiver might lower costs for certain distributors of market data, possibly encouraging broader dissemination of information. This could enhance market transparency, benefiting investors and traders who rely on data access.

On the other hand, the lack of clarity about who constitutes an "Uncontrolled External Distributor" means that some stakeholders might not fully capitalize on the fee waiver, which could create inconsistencies in market participation. Furthermore, a hasty implementation without public input minimizes accountability and could lead to unforeseen complications, potentially disempowering smaller market participants unable to voice concerns promptly.

Stakeholders' Specific Impacts

For stakeholders directly engaged with the Cboe EDGX Exchange, the waiver could present an avenue for decreased operational expenses, particularly for those who qualify for the while aforementioned "Uncontrolled External Distributors" category. Companies and individuals in this group could find themselves with reduced fees for market data, potentially increasing their competitiveness and ability to operate efficiently.

Conversely, stakeholders not fitting within the vague parameters for fee waiver eligibility might find themselves at a disadvantage. Additionally, stakeholders who value procedural transparency and extensive public review could view the rapid adoption of the rule change as a negative precedent, potentially affecting their confidence in the regulatory environment.

In conclusion, while the proposed fee waiver by the Cboe EDGX Exchange presents certain benefits, particularly in cost reduction, the procedure followed for its implementation and the opaque nature of its qualifying criteria raises significant issues. These aspects warrant close attention from market participants and regulators alike to ensure equitable and effective outcomes.