Statement Summary
Cboe BZX Exchange, Inc. has filed a proposed rule change to increase the monthly fee for 10 Gb physical ports from $7,500 to $8,500, effective May 9, 2025. This change aims to reflect inflation and the rising costs of service while maintaining competitive pricing compared to other exchanges. The exchange asserts that despite the increase, the new fee remains lower than comparable offerings from competitors like Nasdaq and NYSE, which charge significantly more.
The Exchange highlights the enhancements in technology and services since the last fee adjustment in 2018, noting improvements in performance, infrastructure, and capacity at new data centers. The proposal is intended to facilitate ongoing investments and innovations while supporting continued service quality and competitive access in the market, gathering public comments on the proposal is encouraged.
Proposed Rule Change
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103082; File No. SR-CboeBZX-2025-067]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Increase the Monthly Fee for 10 Gb Physical Ports
May 20, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, notice is hereby given that on May 9, 2025, Cboe BZX Exchange, Inc. (“Exchange” or “BZX”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
Terms of Proposed Rule Change
The Exchange proposes to increase the monthly fee for 10 Gb physical ports. The text of the proposed rule change is provided in Exhibit 5 and is also available on the Exchange’s website, at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room.
Purpose and Statutory Basis
The Exchange proposes to amend its fee schedule relating to physical connectivity fees. A physical port is utilized by a Member or non-Member to connect to the Exchange at the data centers where the Exchange’s servers are located. The current fees are:
- $2,500 per physical port for a 1 gigabit (“Gb”) circuit
- $7,500 per physical port for a 10 Gb circuit
The Exchange proposes to increase the monthly fee for 10 Gb physical ports from $7,500 to $8,500 per port. This adjustment is intended to support ongoing investments and improvements in market technology and services.
Market Competitiveness
The proposed fee change aims to ensure that even with the increase, it remains competitive; for instance:
- Nasdaq charges $16,500 for each 10 Gb Ultra fiber connection.
- NYSE charges $22,000 per month per port for similar services.
Thus, despite the increase, the Cboe BZX’s fees will still be lower than many of its competitors.
Impact of Inflation and Investment
The Exchange asserts that the fee increase reflects necessary adjustments due to inflation, as the current fees have remained unchanged since 2018. Statistics indicate a relevant increase in the Data Processing Price Index (PPI) over this period, supporting this need for a fee adjustment:
- The Data PPI increased by 16% from 2018 to early 2025.
- The Exchange’s current fee structure does not accurately reflect the quality of service, as inflation has eroded the real value of its fee income since the last adjustment.
Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the proposed rule change. Comments may be submitted electronically or by paper as detailed in the preceding sections, and all submissions should refer to file number SR-CboeBZX-2025-067.
