On December 1, 2025, the Securities and Exchange Commission published a notice of a proposed rule change filed by Cboe BYX Exchange, Inc. on November 19, 2025. The filing introduces a Small Retail Broker Hosted Solutions Program for the Cboe One Summary Feed and BYX Top Data Feed, while updating eligibility criteria for the existing Small Retail Brokerage Distribution Program. This development seeks to lower costs for small retail brokers distributing market data, potentially increasing retail investor access to real-time U.S. equity information. By reducing fees and expanding user thresholds, the proposal addresses competitive pressures in the market data landscape, where exchanges vie with each other and securities information processors for subscribers.
Background and Purpose
The BYX Top Data Feed provides real-time top-of-book quotations and last sale information from orders on the Cboe BYX Exchange. The Cboe One Summary Feed aggregates best bid and offer data and last sale details from BYX and its affiliates: Cboe EDGA, Cboe BZX, and Cboe EDGX. These feeds compete with similar products from other exchanges, such as NYSE Arca BBO or Nasdaq Basic, and data from securities information processors.
The existing Small Retail Broker Distribution Program, established to support small brokers serving retail clients, offers discounted distribution fees of $250 per month for BYX Top and $3,500 for Cboe One Summary, plus a $350 data consolidation fee for the latter. Eligibility requires that the distributor be a broker-dealer serving non-professional users in a brokerage relationship, with at least 90% of subscribers being non-professional and no more than 5,000 such users.
The new proposal responds to feedback from small retail brokers seeking to offer data via hosted solutions, or 'white label' services, where one broker hosts platforms for others. Under current rules, both hosting and hosted brokers incur distribution fees, limiting accessibility for smaller firms lacking infrastructure.
Key Elements of the Proposed Changes
The Small Retail Broker Hosted Solutions Program targets hosting small retail brokers that provide data to external hosted subscribers via white label services. Eligible hosting brokers receive a waiver of their distribution fee—$250 for BYX Top and $3,500 for Cboe One Summary—provided they serve at least one external hosted subscriber. The external hosted subscriber also gets a distribution fee waiver and, for Cboe One Summary, a consolidation fee waiver of $350. Instead of per-user non-professional fees, hosted subscribers pay a fixed $100 monthly for BYX Top and $850 for Cboe One Summary, capped at 10,000 non-professional users. Professional user fees remain standard.
If a hosted subscriber exceeds 10,000 non-professional users, it must license directly from the exchange. The hosting broker remains eligible as long as it serves at least one qualifying hosted subscriber. The program defines an external hosted subscriber as a distributor receiving data through a hosted solution for display to users outside its entity.
Additionally, the proposal raises the non-professional user cap in the existing Small Retail Broker Distribution Program from 5,000 to 10,000 for both feeds, aligning with the new program's threshold to support broader participation amid growing retail investor markets.
Legal and Competitive Context
The filing invokes Section 6(b)(4) of the Securities Exchange Act of 1934, emphasizing equitable fee allocation, and Section 11(A), promoting fair competition and data availability. It aligns with Regulation NMS Rule 603, ensuring non-discriminatory terms. The exchange argues the changes broaden data access, consistent with the Commission's goals in Regulation NMS to foster innovation and competition.
Precedents include similar incentives from the New York Stock Exchange, which waives redistribution fees for NYSE Trades if data is provided to at least one recipient and offers reduced access fees for limited-use subscribers. NYSE's per-user access fee of $100 for certain feeds mirrors aspects of the proposed fixed costs here, totaling $850 for feeds comparable to Cboe One Summary when bundled.
Competitive forces drive the proposal, as 16 U.S. equities exchanges and securities information processors offer alternatives. The exchange notes that without these discounts, small brokers might opt for costlier options, constraining retail access. Perspectives differ: proponents see it as enhancing competition and investor access, while critics might argue it favors smaller firms, though the exchange counters that larger distributors already benefit from enterprise licenses and lower per-subscriber costs.
Implications and Perspectives
Short-term, the program could reduce barriers for small brokers, especially in regions like Asia Pacific, where demand for U.S. equities data is rising. By incentivizing hosted solutions, it may expand data dissemination to more retail investors without requiring significant infrastructure investments.
Long-term, this could intensify competition among exchanges, potentially lowering overall data costs and diversifying offerings. However, it raises questions about fee equity, as existing small brokers under the original program do not receive full waivers, though the exchange justifies this by noting their established infrastructure and different business models.
Different stakeholders offer varied views. Retail brokers may welcome cost savings and growth opportunities, while larger vendors might see it as tilting the field toward smaller players. Regulators, focused on protecting Main Street investors as per the Commission's 2018-2022 strategic plan, could view it as aligning with goals to improve retail experiences in public markets.
The proposal's voluntary nature and market-driven pricing underscore its aim to constrain fees through competition, without mandating participation.
In summary, this filing represents a targeted effort to make market data more accessible amid evolving investor demands. Potential next steps include public comments until December 26, 2025, followed by possible Commission approval or suspension within 60 days. Ongoing debates may center on balancing incentives for small firms with broader market equity, while challenges include monitoring compliance and adapting to global trading trends like extended hours. Future trajectories could involve similar programs from other exchanges or regulatory adjustments to address emerging competitive dynamics.
