Cboe Global Markets, Inc., Et Al . v. Securities and Exchange Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 15, 2025 Decided October 14, 2025
No. 24-1350
CBOE GLOBAL M ARKETS, I NC., ET AL .,
PETITIONERS
v.
SECURITIES AND EXCHANGE COMMISSION ,
RESPONDENT
On Petition for Review of a Final Rule
of the Securities and Exchange Commission
Amir C. Tayrani argued the cause for petitioners. With
him on the briefs were Paul E. Greenwalt III, Michael K.
Molzberger, Alex Gesch, and Cameron J.E. Pritchett.
Kevin Carroll and Daniel J. Feith were on the brief for
amicus curiae Securities Industry and Financial Markets
Association (SIFMA) in support of petitioners.
Daniel E. Matro, Senior Appellate Counsel, U.S.
Securities and Exchange Commission, argued the cause for
respondent. With him on the brief were Tracey A. Hardin,

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Solicitor, and Brooke J. Wagner, Appellate Counsel. Dominick
V. Freda, Assistant General Counsel, entered an appearance.
Stephen W. Hall was on the brief for amicus curiae Better
Markets, Inc. in support of respondent.
William M. Jay was on the brief for amicus curiae Law
Professor J.W. Verret in support of respondent.
Keith Bradley, Kayla Marie Mendez, and Kathryn M.
Brown were on the brief for amici curiae We the Investors and
Urvin Finance, Inc. in support of respondent.
Thomas A. Burns was on the brief for amici curiae Healthy
Markets Association, et al. in support of respondent.
Before: S RINIVASAN , Chief Judge, M ILLETT and GARCIA,
Circuit Judges.
Opinion for the Court filed by Circuit Judge GARCIA.
GARCIA, Circuit Judge: In 2005, the Securities and
Exchange Commission capped the fees that national securities
exchanges could charge investors for accessing their services.
In 2024, the SEC lowered that cap. Several exchanges
petitioned for review, arguing that the SEC exceeded its
statutory authority and acted arbitrarily or capriciously. We
disagree and deny the petition for review.
I
The Securities Exchange Act of 1934 established the SEC
and charged it with overseeing and regulating the securities
industry. See Pub. L. No. 73–291, § 4, 48 Stat. 881, 885. In
1975, Congress amended the Act to expand the SEC’s
regulatory authority. See Pub. L. No. 94-29, 89 Stat. 97.
Among other things, the amendments tasked the SEC with

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establishing a “national market system for securities.” 15
U.S.C. § 78k-1(a)(2). Congress envisioned that new data-
processing and communications technologies would connect
securities markets nationwide, in ways that would boost
efficiency and competition. Id. § 78k-1(a)(1). It gave the
Commission “intentionally broad and clear power,” plus
“discretion,” to shape the development of that system.
Bradford Nat’l Clearing Corp. v. SEC, 590 F.2d 1085, 1095
(D.C. Cir. 1978) (cleaned up).
A few basics are in order about how the system works
today. Exchanges provide markets where investors can buy
securities from other investors. See All. for Fair Bd.
Recruitment v. SEC, 125 F.4th 159, 169 (5th Cir. 2024).
Investors submit orders to buy and sell stocks. Exchanges, in
turn, rank, display, and match those orders. Some investors
participate by posting bids to buy (or offers to sell) a security.
89 Fed. Reg. 81620, 81623 (Oct. 8, 2024). In doing so, these
investors create opportunities for trading—they “make”
liquidity in the market. Id. Other investors then “take”
liquidity by accepting these standing bids to buy (or offers to
sell). Id. Exchanges coordinate and regulate this activity.
Most exchanges charge liquidity takers a fee for executing
transactions. The exchanges then use most of the fee to pay a
rebate to liquidity makers, leaving the remainder (the “net
capture”) for the exchange to keep as revenue. Id. at 81645.1
In 2005, the SEC sought to “modernize and strengthen the
national market system” for securities. 70 Fed. Reg. 37496,
37496 (June 29, 2005). To that end, the Commission adopted
a series of initiatives called Regulation NMS (short for
National Market System). Three aspects of Regulation NMS
1 Some exchanges follow an inverted “taker-maker” model,
under which liquidity makers pay a fee while liquidity takers receive
a rebate. 89 Fed. Reg. 81620, 81645 n.368 (Oct. 8, 2024).

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are relevant here. One measure prevented exchanges from
executing orders at prices worse than those displayed at another
exchange (a phenomenon the Commission referred to as
“trade-throughs”). Id. at 37501; see 17 C.F.R. § 242.611.
Another measure required exchanges to display securities
prices in minimum pricing increments (or “tick sizes,” in
industry-speak). That requirement prevents investors from
outbidding each other by posting trivially higher prices (for
instance, by beating out a $2 bid to buy with a $2.000001 bid).
70 Fed. Reg. at 37503; see 17 C.F.R. § 242.612.
Most important for our purposes, a third rule limited the
fees that exchanges could charge investors for executing
orders. The rule capped fees at 30 mils ($0.003) per share for
stocks priced at or above $1. And it capped fees at 0.3% of the
quotation price for stocks priced below $1. Id. at 37502–03 &
n.36; see 17 C.F.R. § 242.610(c) (2005). These caps, the SEC
explained, would mitigate manipulative fee practices and
reduce the gap between a security’s “published” price and its
“true” price. 70 Fed. Reg. at 37545.2
In the ensuing years, modern pricing and fee practices
“attracted considerable attention and generated significant
debate.” 84 Fed. Reg. 5202, 5202–03 (Feb. 20, 2019). Some
commentators insisted that predominant fee arrangements had
harmfully distorted national securities markets. 83 Fed. Reg.
13008, 13010–11 (Mar. 26, 2018). Others maintained that
those fee models had “positive effects” on the national market
2 Technically, Regulation NMS applies to all “trading centers,”
which include not only exchanges but also entities such as
“alternative trading system[s].” 17 C.F.R. § 242.600(b)(106). In the
final rule at issue here, however, the SEC explains that “exchanges
are the only trading centers that have quotations that are subject to
the access fee caps” that petitioners challenge. 89 Fed. Reg. at 81623
n.40. Like the parties, we therefore refer to exchanges for simplicity.

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system. Id. at 13011. And still others urged the SEC to gather
more data to assess those market effects. Id.
In 2019, the SEC responded by adopting a pilot program
seeking to “gather data” on the effect that regulatory fee caps
and rebates have on “market quality and execution quality.” 84
Fed. Reg. at 5203. This initiative, the SEC hoped, would help
it decide “whether any changes in the current regulatory
framework [were] appropriate.” Id. The pilot would sort
stocks into three groups: (1) a control group subject to the
prevailing 30-mil cap, (2) a test group subject to a lower, 10-
mil cap, and (3) another test group subject to the prevailing 30-
mil cap and a ban on rebates paid by exchanges. Id. The
program would run for two years, covering stocks with average
daily trading volumes of at least 30,000 shares that were priced
at or above $2 per share and that did not close below $1 per
share. Id.
After several exchanges petitioned for review, in 2020, our
court set aside the pilot program. The SEC, we held, had no
authority to promulgate a “one-off” regulation “merely to
secure information that might indicate . . . whether there is a
problem worthy of regulation.” N.Y. Stock Exch. LLC v. SEC,
962 F.3d 541, 546 (D.C. Cir. 2020).
In 2022, the SEC undertook another rulemaking effort.
This time, instead of a pilot study, the Commission proposed
concrete changes to Regulation NMS. 87 Fed. Reg. 80266,
80266 (Dec. 29, 2022) Those changes included reductions to
both the minimum tick sizes and the access-fee caps.
After considering comments, in 2024, the SEC
unanimously adopted the proposed rules (with certain
modifications). The SEC reduced the minimum tick sizes,
anticipating that smaller ticks would improve price
competition. 89 Fed. Reg. at 81632. The Commission also
lowered the cap on access fees—from 30 mils to 10 mils for

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stocks priced at or above $1, and from 0.3% of the price
quotation to 0.1% for stocks priced below $1. The Commission
explained that this reduction went hand in hand with its
decision to reduce minimum tick sizes: “[A]n access fee that
is too high when compared to the tick size can create pricing
distortions.” Id. at 81624. The SEC also concluded that lower
fees would address various market problems “that have
developed under the access fee caps.” Id. at 81651.
Several exchanges petitioned our court to review the
access-fee amendment. See 15 U.S.C. § 78y(b). The SEC then
agreed to stay the amendment pending review. In re Mot. for
Stay of Effect of Amends. to Rules 610 & 612 of Regul. NMS,
Exchange Act Release No. 101899, 2024 WL 5094955, at *1–
2 (Dec. 12, 2024).
II
Petitioners seek to set aside the access-fee amendment as
beyond the SEC’s statutory authority and, alternatively, as
arbitrary and capricious. We disagree on both fronts.
A
We start with petitioners’ claim that the SEC exceeded its
legal authority in setting an across-the-board access-fee cap.
To assess whether the Commission “acted within its statutory
authority,” we must exercise our own “independent judgment,”
using every interpretive tool at our disposal “to determine the
best reading of the statute.” Loper Bright Enters. v. Raimondo,
603 U.S. 369, 373, 400, 412 (2024). “When the best reading
of a statute is that it delegates discretionary authority to an
agency,” our role is to ensure the agency has acted within “the
boundaries of the delegated authority.” Id. at 395 (cleaned up).
With that approach in mind, we conclude that the SEC acted
within its statutory authority.

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To support its new rule, the SEC relies on several statutory
provisions. Section 11A of the Act directs the Commission to
“facilitate the establishment of a national market system for
securities,” “in accordance with the findings and to carry out
the objectives set forth” in the statute. 15 U.S.C. § 78k-1(a)(2).
Those objectives include the “economically efficient execution
of securities transactions” and “fair competition” among
market actors. Id. § 78k-1(a)(1)(C). Section 11A also
authorizes the SEC to prescribe “rules and regulations” that
“assure” the “fairness and usefulness of the form and content”
of “information with respect to quotations for and transactions
in” securities. Id. § 78k-1(c)(1)(B). Section 23 of the Act then
gives the SEC the “power to make such rules and regulations
as may be necessary or appropriate to implement the
provisions” of the statute. Id. § 78w(a)(1).
Those grants of power confer “broad, discretionary”
authority to regulate the national market system. Nasdaq Stock
Mkt. LLC v. SEC, 38 F.4th 1126, 1131 (D.C. Cir. 2022)
(quoting S. Rep. 94-75, at 7 (1975)). Through the 1975
amendments, Congress “explicitly endeavored to leave the
Commission substantial flexibility of choice in boldly and
effectively accomplishing the herculean task of rapidly
restructuring an entire industry.” Bradford Nat’l, 590 F.2d at
1104 (cleaned up). In keeping with that mandate, the
amendments gave the SEC broad license to “flesh out the
contours of the NMS” and “ensure that exchanges have rules
designed to promote the NMS policy that SEC develops.” All.
for Fair Bd. Recruitment, 125 F.4th at 177.
This broad regulatory authority includes the power to set a
universal access-fee cap. The SEC determined that an access-
fee cap would promote the “fairness and usefulness” of price-
quotation “information.” Fee caps, the Commission reasoned,
help ensure that a security’s displayed price does not stray too
far from its true price. 70 Fed. Reg. at 37545. The Commission

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refers to this concept as “price transparency” and explained that
it promotes the “usefulness” of a security’s posted price. See
89 Fed. Reg. at 81646–49; see also id. at 81644. The SEC also
determined that an access-fee cap was a “necessary” and
“appropriate” means of maintaining an “efficient” and
“compet[itive]” national market system. 89 Fed. Reg. at
81644–45, 49. The Commission’s “trade-through protections,”
for instance, aim to promote efficiency and fair competition by
funneling investors to the exchanges displaying the best prices.
70 Fed. Reg. at 37584. A fee cap prevents those exchanges
from imposing “exorbitant fees” on investors who are
“required to access” their posted prices. 89 Fed. Reg. at 81656;
70 Fed. Reg. at 37503. Looking just at Sections 11A and 23,
then, imposing an access-fee cap seems to fall well within the
SEC’s regulatory authority.
Petitioners resist this conclusion in two main ways. They
argue that (1) the SEC cannot cap access fees at all and (2) to
the extent it can, the Commission must do so on an exchange-
by-exchange basis. Neither argument persuades.
Start with petitioners’ claim that the Act does not authorize
the SEC to cap access fees at all.
Taking Section 11A on its own terms, petitioners argue
that the provision permits only the regulation of quotation
“information,” 15 U.S.C. § 78k-1(c)(1)(B), not the regulation
of fees. But Section 11A is not so limited: The provision
empowers the SEC to “assure” the “fairness and usefulness” of
quotation “information.” Id. And as just described, the SEC
has discretion to determine that capping access fees is a
“necessary” or “appropriate” means of ensuring the “fairness
and usefulness” of quotation “information.”
Petitioners next insist that statutory context forecloses this
reading of the SEC’s regulatory authority. Congress,
petitioners emphasize, included the term “fees” in certain parts

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of the statute but omitted it from the provisions that the SEC
has invoked. For example, Section 6(b) directs the SEC to
ensure that each exchange’s rules “provide for the equitable
allocation of reasonable dues, fees, and other charges.” Id.
§ 78f(b)(4). And Section 6(e) permits the SEC to approve or
abrogate exchange rules “impos[ing] a schedule or fix[ing]
rates of commissions, allowances, discounts, or other fees to be
charged by its members for effecting transactions.” Id.
§ 78f(e). Yet Section 11A does not mention “fees” at all.
Petitioners argue that the SEC may regulate fees only in the
specific ways set out in Section 6, invoking the rule that
“‘[w]hen Congress includes particular language in one section
of a statute but omits it in another section of the same Act,’ we
generally take the choice to be deliberate.” Bartenwerfer v.
Buckley, 598 U.S. 69, 78 (2023) (quoting Badgerow v. Walters,
596 U.S. 1, 11 (2022)).
That rule, however, is “not absolute”—and here, we are
hesitant “to read much into” the Act’s selective use of the term
“fees.” Id. For one thing, the omission of “fees” is not the
“sole difference” between the provisions the SEC invoked and
the provisions petitioners cite. City of Columbus v. Ours
Garage & Wrecker Serv., Inc., 536 U.S. 424, 435–36 (2002).
The provisions “use different words,” speak to different
contexts, and “are not otherwise parallel.” Nat’l Postal Pol’y
Council v. Postal Regul. Comm’n, 17 F.4th 1184, 1191 (D.C.
Cir. 2021). Neither Section 6(b) nor Section 6(e), for instance,
refers to the SEC’s authority to “assure . . . the fairness and
usefulness” of “information with respect to quotations for and
transactions in” securities. 15 U.S.C. § 78k-1(c)(1)(B). Those
differences weaken the “presumption” that the presence of
“fees” in one part of the statute and its absence in another
“reveals Congress’ design.” Ours Garage, 536 U.S. at 436.
That presumption grows even weaker in statutes where
Congress presumably “left to reasonable agency discretion

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questions that it has not directly resolved,” especially through
“a broad grant of authority contained within the same statutory
scheme.” Adirondack Med. Ctr. v. Sebelius, 740 F.3d 692, 697
(D.C. Cir. 2014) (quoting Cheney R.R. Co. v. ICC, 902 F.2d 66,
68–69 (D.C. Cir. 1990)); see also Creekstone Farms Premium
Beef, L.L.C. v. Dep’t of Agric., 539 F.3d 492, 500 (D.C. Cir.
2008). Congress did just that here. The Act’s provisions, as
we have explained, give the SEC broad discretion to regulate
the national market system. And Section 23 in particular
confers especially broad regulatory authority, empowering the
SEC “to make such rules and regulations as may be necessary
or appropriate to implement” the statute’s provisions. 15
U.S.C. § 78w(a)(1).
Petitioners also briefly suggest that the SEC cannot claim
statutory powers “absent clear congressional authorization,”
citing Loper Bright Enterprises v. Raimondo, 603 U.S. 369
(2024). That is not what Loper Bright said. It instructed courts
to “exercise their independent judgment in deciding whether an
agency has acted within its statutory authority,” mindful that
Congress can and sometimes does “confer discretionary
authority on agencies.” Id. at 404, 412. That imperative does
not require agencies to point to “clear congressional
authorization” for all exercises of authority. Cf. West Virginia
v. EPA, 597 U.S. 697, 723 (2022) (requiring “clear
congressional authorization” for “extraordinary” assertions of
regulatory authority).
Next, petitioners argue that even if the SEC can cap
exchange fees, it cannot do so on an industry-wide basis.
Sections 19(b) and (c) of the Act, petitioners argue, set forth
special procedures for reviewing and overriding exchange rules
on an individualized basis. See 15 U.S.C. § 78s(b), (c). That
“specific” authority to regulate rules (including fees) on an
exchange-by-exchange basis, as petitioners see it, displaces
any “general” authority to regulate fees across the board.

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Neither provision, however, limits the SEC’s authority in
the way petitioners urge. Section 19(b) allows the SEC to
review “any proposed rule change” submitted by individual
self-regulatory organizations (or SROs, a category that
includes exchanges). Id. § 78s(b). It also describes the special
procedures that the SEC must follow when conducting such
review. See id. That case-by-case assessment of SRO-specific
rule changes co-exists comfortably with the SEC’s authority to
set generally applicable default rules or regulatory boundaries.
There is, in other words, no conflict for us to resolve between
a provision that empowers the SEC to (reactively) review
proposals by a specific exchange and one that empowers the
SEC to (proactively) set regulatory policy for all exchanges.
Cf. Am. Hosp. Ass’n v. NLRB, 499 U.S. 606, 612 (1991)
(“[E]ven if a statutory scheme requires individualized
determinations, the decisionmaker has the authority to rely on
rulemaking to resolve certain issues of general applicability
unless Congress clearly expresses an intent to withhold that
authority.”).
Section 19(c) does not help petitioners either. True,
Section 19(c) specifically provides that the SEC may
“abrogate, add to, and delete from” the rules of an SRO. 15
U.S.C. § 78s(c). True also, that provision outlines a special
notice-and-comment process by which the Commission must
amend SRO rules. See id. Yet at the same time that it describes
one way the SEC may regulate the industry, Section 19(c)
explicitly states that it should not be interpreted to affect other
regulatory authorities. That provision contains a savings clause
clarifying that “[n]othing in this subsection shall be construed
to impair or limit the Commission’s power to make . . . rules
and regulations pursuant to any other authority under this
chapter.” Id. § 78s(c)(4)(B). Lest there be any doubt, the
clause adds that Section 19(c) does not “modify or alter the
procedures the Commission may follow” in making rules under
these other sources of authority. Id.

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Petitioners’ exchange-by-exchange theory of regulation
also proves too much. It would compel the SEC to accomplish
through multiple, separate rulemakings what it could do in one,
forcing “the agency continually to relitigate issues that may be
established fairly and efficiently in a single rulemaking
proceeding.” Heckler v. Campbell, 461 U.S. 458, 467 (1983).
And it would require the SEC to do so for a wide range of
regulatory matters. Section 19 governs SEC supervision over
any SRO rules, not just rules pertaining to fees. See 15 U.S.C.
§ 78s. So, if Section 19 compelled the SEC to proceed on a
case-by-case basis anytime it seeks to regulate fees, then
Section 19 would also compel the SEC to proceed on a case-
by-case basis anytime it wished to implement any policy that
could conflict with an exchange’s own rules. Given the broad
text of Sections 11A and 23, we doubt that Congress intended
to so severely constrain the SEC’s rulemaking powers.
B
Next, petitioners argue that the access-fee amendment is
arbitrary and capricious. We assess that claim by asking
whether the SEC “reasonably considered the relevant issues
and reasonably explained the decision.” FCC v. Prometheus
Radio Project, 592 U.S. 414, 423 (2021). Our review under
this standard is generally “deferential.” Id. It is “particularly
deferential” in a case like this, which “implicate[s] competing
policy choices, technical expertise, and predictive market
judgments.” AD HOC Telecomms. Users Comm. v. FCC, 572
F.3d 903, 908 (D.C. Cir. 2009).
Petitioners claim that the SEC acted arbitrarily and
capriciously in two main ways. First, they argue that the SEC
changed its position on the market effects of fees without
adequate explanation. In petitioners’ view, the Commission
was unwilling to assess those effects in the 2019 pilot, but it
was willing to do so in the new rule yet failed to explain this

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purported change. Second, petitioners argue that the SEC
failed to reasonably explain its decision to lower the access-fee
cap to 10 mils for stocks priced at or above $1 per share. We
reject both challenges.
1
The SEC did not change its position between the pilot and
this rule without adequate explanation.
Agencies may change their positions “as long as they
provide a reasoned explanation for the change.” Encino
Motorcars, LLC v. Navarro, 579 U.S. 211, 221 (2016). In
explaining the change, the agency need not show “to a court’s
satisfaction that the reasons for [its new position] are better
than the reasons for the old one.” FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 515 (2009). It “suffices” that
“there are good reasons” for the new position and that “the
agency believes” the new position to be “better.” Id.
At the same time, the agency must still consider all
“relevant data.” Id. at 513 (quoting Motor Vehicles Mfrs. Ass’n
of United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983)). It cannot “disregard contrary or
inconvenient factual determinations that it made in the past,
any more than it can ignore inconvenient facts when it writes
on a blank slate.” Mozilla Corp. v. FCC, 940 F.3d 1, 55 (D.C.
Cir. 2019) (cleaned up). Nor can an agency ignore “serious
reliance interests” that its prior position has engendered.
Encino, 579 U.S. at 222 (cleaned up).
Petitioners argue that the SEC violated these principles. In
the 2019 pilot, the SEC expressed uncertainty about the market
effects of access fees. The SEC acknowledged the
“fundamental disagreement” among commentators over the
issue. 84 Fed. Reg. at 5238. But it concluded that it lacked the
“data” necessary to “evaluate” their “competing claims.” Id.

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As a result, the SEC explained, it could not “predict whether
investors will face higher or lower transaction costs” because
of the pilot. Id. at 5277. Nor was it “clear,” the Commission
added, how the program would affect trading volume on
exchanges. Id. at 5283. Then, in the rulemaking under review
here, the SEC seemed to take a different view, reaching
definitive conclusions about the new rule’s market effects. The
Commission predicted, for instance, that reducing access fees
would not increase transaction costs at all. See, e.g., 89 Fed.
Reg at 81656–57, 81736–37, 81767. And the SEC claimed that
“liquidity providers would not be deterred from quoting on
exchange.” Id. at 81657. Petitioners contend that, under the
change-in-position doctrine, the Commission needed, but
failed, to adequately explain this shift in its thinking.
We disagree. At the outset, we have serious doubts that
the change-in-position doctrine applies at all here.
For one thing, the SEC’s progression from the pilot to the
new rule reflects more continuity than inconsistency. In the
pilot, the SEC claimed that it needed to gather more
information before it could properly assess the market effects
of access fees. But even after the pilot program fell through,
the SEC proceeded to collect relevant information. Between
2019 and 2024, commentators continued to study the market
effects of fee-and-rebate pricing models, and the SEC solicited
their views as part of its new rulemaking effort. See, e.g., id.
at 81737; see also Tr. of Oral Arg. at 20–21, 28–29. The
Commission then incorporated this new data into its analysis
of the new rule, using it as part of its definitive assessment of
the rule’s effects on various market dynamics. See, e.g., 89
Fed. Reg. at 81698–99, 81737.
We are skeptical that the change-in-position doctrine
speaks to “change” of this sort—when an agency approaches a
policy problem by expressing interest in gathering more

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information, solicits and obtains new information, and only
then takes a definitive view on the matter. That sequence of
events seems to describe a single, natural course of rational
agency decision-making. It does not reflect any
“inconsistency” in an agency’s thinking. FDA v. Wages &
White Lion Invs., L.L.C., 604 U.S. 542, 581 (2025) (cleaned
up). Nor does it raise any of the traditional concerns implicated
by the change-in-position doctrine—such as the risk that the
agency has “misle[d] regulated entities,” id. at 567, or the
possibility that the agency has ignored “serious reliance
interests” in its decision-making process, Fox, 556 U.S. at 515.
Another fundamental difference between the situations the
SEC confronted in 2019 and 2024 also gives us pause about
applying the change-in-position doctrine. In 2019, the SEC felt
no compulsion to change the access-fee caps—that was why
the Commission felt free to proceed with a pilot program in the
first place. But circumstances changed in 2024. As part of its
new rulemaking effort, recall, the SEC also reduced the
minimum tick sizes for certain stocks. This policy decision, all
agree, required a corresponding reduction in the access-fee
cap. See 89 Fed. Reg. at 81651. Reducing the initial tick sizes
without also lowering the initial fee caps would create serious
pricing distortions. Id. at 81651, 81733. So once the SEC
decided to reduce the minimum tick size, the Commission
could no longer afford to take a wait-and-study approach to the
fee caps; it needed to adjust those caps based on the information
it possessed at the time. The SEC was (repeatedly) explicit on
this point: The fee caps were lowered to “accommodate the
change in tick sizes.” Id. at 81621; see also, e.g., id. at 81624,
81732. And as part of that effort, the SEC took another hard
look at the market effects of fees—this time with the added
benefit of new data—and made its decision. That context, too,
explains the SEC’s initial tentativeness in 2019 and its choice
to take a more definitive stance in 2024. The SEC did not
“change” its position on the same issue—whether and how

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access-fee caps should be adjusted—so much as it resolved a
different issue—how access-fee caps should be adjusted given
a change in the tick sizes. We doubt that the change-in-position
doctrine required the SEC to formally acknowledge these
obvious differences in context and further explain why it took
action in the final rule.
But even setting those doubts aside and assuming that the
SEC did “change” its position in the relevant sense, the SEC
did not violate the change-in-position doctrine. The
Commission offered “good reasons” for its current views of
fees’ market effects. Fox, 556 U.S. at 515. And through it all,
the SEC did not “ignore” any contrary factual premises that
may have motivated its initial uncertainty. Id.
To illustrate the point, consider the three specific market
effects that, in petitioners’ view, exemplify the SEC’s shifting
views: (1) the effect of access fees on transaction costs, (2) the
effect of fees on order flow, and (3) the effect of fees on broker
incentives.
Transaction costs. In the new rule, the SEC considered
whether lowering access fees would increase the overall cost
of accessing liquidity. The Commission offered “good
reasons” to think that lowering fees would not increase the
transaction costs that investors face. Id. at 515. It
acknowledged that lowering fees would raise the sticker price
of liquidity for some securities. As the SEC explained:
Exchanges use the fees they charge to fund the rebates they pay
out to liquidity makers. So lowering fees would likely reduce
rebates. 89 Fed. Reg. at 81736. To compensate for those rebate
reductions, liquidity makers would in turn raise the price of
liquidity—by, for example, raising the posted price at which
they would offer to sell a security. At the same time, however,
liquidity takers would also pay less in the form of lower fees.
Id. at 81687, 81736–37, 81767. Those effects—higher market

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prices but lower fees—would roughly offset one another:
Rebates would fall by however much fees fell. And market
prices would rise by however much rebates fell. Id. at 81738.
As part of its analysis, the SEC grappled with the
reasoning that motivated its initial uncertainty in 2019. In the
pilot, petitioners note, the SEC tentatively acknowledged that
reducing fees might increase transaction costs (for at least some
stocks) by discouraging liquidity makers from posting
liquidity, prompting “a reduction in quoted depth.” 84 Fed.
Reg. at 5277. The SEC explicitly addressed that possibility in
the new rule. It predicted that lower fees would not discourage
liquidity makers from posting liquidity on exchanges in the
first place—liquidity makers could maintain their current
revenues simply by raising the sticker price of liquidity. See
89 Fed. Reg. at 81685, 81737, 81765. And in the aggregate,
the SEC concluded, the total quantity of liquidity supplied
would not change. Id. at 81686–87. To support its position,
the SEC relied on basic supply-and-demand principles. Id.
And to reinforce the point, the SEC pointed to recent empirical
data that was “directionally consistent” with its economic
model. Id. at 81737.
Petitioners suggest that the SEC needed to, at a minimum,
expressly “acknowledge” that it indicated uncertainty on this
subject in the 2019 pilot. It is true that “the requirement that
an agency provide reasoned explanation for its action would
ordinarily demand that it display awareness that it is changing
position.” Fox, 556 U.S. at 515. But this “ordinarily”
applicable requirement does not apply robotically in every
circumstance. An agency that changes position need show only
that “there are good reasons” for its new position and that “the
agency believes” the new position to be better. Id. An explicit
and “conscious change of course” is one way of signaling that
belief. Id. But it is not the only way. An explanation that
considers and rejects an alternative position, even without

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expressly acknowledging that the position was once the
agency’s own, can likewise express the agency’s belief that its
current position is “better.”
We see no reason to require a formal display of awareness
in the unique circumstances of this case. The SEC has already
acknowledged the disagreement among commenters over
transaction costs. See 89 Fed. Reg. at 81685 n.1010. It has
already reasonably explained why it favors one side of the
debate over the other. And it has already reasonably explained
why it disagrees with any contrary premises that it might have
embraced in the pilot. In doing so, the SEC has examined all
the “relevant data” and articulated a “satisfactory explanation”
for its action. Fox, 556 U.S. at 513 (quoting State Farm, 463
U.S. at 43). The APA does not impose some “magic words”
acknowledgment requirement where, as here, the agency
grappled directly and comprehensively with the contrary point
of view in a reasoned way and there is doubt about whether the
agency even broke from a past position in the ordinary sense.
In these unusual circumstances, the agency’s analysis is
reasonable and sufficient even without a more explicit
acknowledgment that the agency once held that contrary view.
Cf. Physicians for Soc. Resp. v. Wheeler, 956 F.3d 634, 646
(D.C. Cir. 2020) (emphasizing that “the rule that an agency
must display awareness that it is changing position is simply a
species of the more general requirement—present in all APA
cases—that an agency provide a reasoned explanation for its
action” (cleaned up)).3
3 Of course, an agency must consider any “serious reliance
interests” its prior policy may have engendered. Encino, 579 U.S. at
222 (cleaned up). And it would presumably be difficult (if not
impossible) for an agency to consider such reliance interests without
also acknowledging that it previously adopted a different policy.
Here, however, petitioners have not argued that the SEC’s initial
uncertainty engendered any reliance interests (which is unsurprising,

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Reinforcing the point, our decisions remanding agency
action because of “unexplained inconsistencies” across
proceedings typically involve situations where the agency said
nothing at all about contrary points it raised before. See, e.g.,
id. at 647; U.S. Sugar Corp. v. EPA, 830 F.3d 579, 651 (D.C.
Cir. 2016) (per curiam); Dist. Hosp. Partners, L.P. v. Burwell,
786 F.3d 46, 59 (D.C. Cir. 2015). This case is different. The
SEC left no mystery as to how it might respond to any
“contrary or inconvenient factual determinations that it made
in the past.” Mozilla, 940 F.3d at 55.
Order flow. The same goes for the SEC’s views on the
effect of access fees on order flow—that is, the amount of
trading activity that occurs on exchanges relative to non-
exchange venues.
The SEC provided good reasons to conclude that lower
fees would not drive trading activity off exchanges, drawing on
the same analysis outlined above. The Commission also
grappled with the reasons that had prompted its initial
uncertainty in 2019. In the pilot, petitioners note, the SEC
stated that the program’s effects on venue competition were
“unclear.” 84 Fed. Reg. at 5282. Those effects, the SEC
concluded, would depend on whether the pilot discourages
liquidity makers from providing liquidity on exchanges. Id.
But, as we have already discussed, the SEC explicitly
addressed that issue in the new rule, thoroughly explaining why
it did not think the new rule would decrease the quantity of
liquidity provided on exchanges. See, e.g., 89 Fed. Reg. at
81738.
as the SEC statements petitioners focus on were embedded in a rule
that simply proposed an information-gathering pilot program). In
these unique circumstances, the Commission was able to offer a
coherent explanation of its current views without explicitly
acknowledging its prior uncertainty.

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Petitioners argue that the SEC failed to offer even good
reasons for its current view. They claim that the Commission
“minimized empirical evidence” showing that lower access
fees would harm exchanges competitively. But petitioners
have failed to identify which specific pieces of evidence the
SEC discounted. Their brief also refers to “fundamental
differences” and “regulatory disparities between exchanges
and off-exchange venues.” Petitioners’ Brief 39–40. The SEC
addressed those concerns head-on, explaining why the
amendment would not alter that competitive landscape. The
net costs of trading on an exchange, the SEC concluded, would
generally remain unchanged. See 89 Fed. Reg. at 81657,
81738. So market participants would continue to face “the
same” “underlying economic tradeoff” in choosing where to
transact. Id. at 81738.
Petitioners also insist that the SEC acted unreasonably by
resting its order-flow predictions on “conjecture” and
“theoretical supply-and-demand analysis” instead of “concrete
data.” Petitioners’ Brief 39. But “it is perfectly legitimate for
the Commission to base its findings on basic economic theory,”
including by relying on “generic factual predictions, as long as
the agency explains and applies the relevant economic
principles in a reasonable manner.” Xcel Energy Servs. Inc. v.
FERC, 41 F.4th 548, 560–61 (D.C. Cir. 2022) (cleaned up).
The SEC did so here.
Broker incentives. That leaves the SEC’s views on the
effects of access fees (and rebates) on broker incentives—
specifically, the possibility that brokers will route orders to
chase higher rebates or avoid higher fees, even if those routing
decisions come at the expense of their clients. A broker might,
for instance, choose to route an order to a venue offering
market-high rebates, even though a different venue provided
higher trade-execution rates and lower transaction costs.

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The SEC did not change its position at all on this issue: In
the pilot, the SEC acknowledged the “theoretical” possibility
that transaction-based fee models could create “potential
conflicts of interest” between brokers and their clients. 84 Fed.
Reg. at 5247 (emphasis added). It likewise acknowledged that
lowering fees could mitigate these potential conflicts. Id. at
5277–78. Still, the SEC concluded that theory could take it
only so far. The Commission could not “determine from
existing empirical evidence the impact, if any, of exchange
transaction fee models on order routing decisions by broker-
dealers or on market and execution quality.” Id. at 5244; see
also, e.g., id. at 5253, 5277–78. In this rulemaking, the SEC
reiterated those same points. The Commission (again)
acknowledged that existing fee-and-rebate arrangements might
create “potential conflict[s] of interest between broker-dealers
and their customers with respect to broker-dealer order
routing.” 89 Fed. Reg. at 81624 (emphasis added); see also,
e.g., id. at 81646, 81682, 81741–42, 81761. And it (again)
noted that lower fees could “alleviate” these “potential
conflicts of interest.” Id. at 81647 (emphasis added).
Nevertheless, the SEC (again) concluded that “there is
uncertainty regarding to what degree those potential conflicts
of interest are being acted upon.” Id. at 81742; see also, e.g.,
id. at 81682 n.986, 81761, 81768. We see no shift in the SEC’s
thinking on this issue.
Petitioners also challenge two other aspects of the SEC’s
discussion of broker incentives. First, petitioners assert that the
SEC acted unreasonably by failing to identify “any real-world
examples” of broker-dealers acting on potential conflicts of
interest. But, again, an agency “need not—indeed cannot—
base its every action upon empirical data.” Nasdaq, 38 F.4th
at 1142; see also Am. Great Lakes Ports Ass’n v. Schultz, 962
F.3d 510, 516 (D.C. Cir. 2020) (concluding that the APA
“imposes no general obligation on agencies to produce
empirical evidence”). The SEC was “entitled to conduct a

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general analysis based on informed conjecture.” Nasdaq, 38
F.4th at 1142 (cleaned up). It “highlighted a plausible conflict
of interest” based on “its experience” and “industry
comments.” Id.
Second, petitioners argue that the SEC acted arbitrarily by
failing to consider other regulatory measures that could
mitigate potential conflicts of interest. This rule, however,
addresses different aspects of the access-fee cap issue:
accommodating the change in minimum tick size, price
transparency, and so on. The policy measures that petitioners
highlight do not plausibly tackle these issues. The SEC did not
need to consider a host of policy alternatives that target a
different and unproven potential problem. See Nat’l Shooting
Sports Found., Inc. v. Jones, 716 F.3d 200, 215 (D.C. Cir.
2013) (requiring agencies to “consider only ‘significant and
viable’ and ‘obvious’” policy alternatives (collecting cases)).
2
Petitioners next challenge the SEC’s decision to set the
new access-fee cap at 10 mils for stocks priced at or above $1
per share. We disagree with their arguments on this point too.
The SEC settled on a 10-mil cap after “consider[ing] and
balanc[ing] many factors.” 89 Fed. Reg. at 81660. Three key
considerations framed the Commission’s analysis: It sought to
(1) “mitigate the market distortions” that had developed under
the preexisting caps, (2) “accommodate the new minimum
pricing increments” set by the tick-size amendment, and (3)
“preserv[e] the viability of the agency market business model.”
Id. Those aims set the following constraints: The cap would
need to stay below 25 mils (50% of the new minimum pricing
increment) to “preserve price coherence.” Id. at 81768. And
the cap would need to stay above 2 mils (the current net capture
rate) to avoid “creat[ing] strain on exchange business models.”
Id. at 81767. The lower the cap, moreover, the more the

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amendment would reduce market distortions. See, e.g., id. at
81759 n.1730. Weighing these factors, the SEC concluded that
setting the cap at 10 mils “strikes an appropriate balance.” Id.
at 81659. That figure, the Commission also noted, fell within
the range of rates charged by alternative trading systems (or
ATSs) for trade execution services. Id. at 81659 & n.612; see
also id. at 81661, 81698, 81735.
The SEC “considered the relevant issues” and “reasonably
explained” its decision-making. Prometheus, 592 U.S. at 423.
We have no basis to second-guess the Commission’s choice,
especially given agencies’ “wide discretion” in making “line-
drawing” decisions. Nat’l Shooting Sports, 716 F.3d at 214.
Petitioners raise a host of challenges to the SEC’s analysis.
Preliminarily, petitioners insist that we owe no deference
to the SEC’s line-drawing determinations after Loper Bright.
Loper Bright, however, recognized that Congress can and does
“confer discretionary authority on agencies,” 603 U.S. at 404,
including the authority to draw lines when lines must be drawn.
Indeed, the Supreme Court recently reiterated that courts
should defer to an agency’s reasonably explained line-drawing
choices that “involve[] primarily issues of fact”—matters that
an agency “is better equipped to assess . . . than a court is.”
Seven Cnty. Infrastructure Coal. v. Eagle County, 145 S. Ct.
1497, 1512 (2025); see also Loper Bright, 603 U.S. at 392
(“[The APA] does mandate that judicial review of agency
policymaking and factfinding be deferential.”). The question
whether to cap access fees at 10 mils or 15 or some other
number certainly fits that description.
Petitioners also insist that the SEC was required to identify
empirical evidence to support its line-drawing conclusions
about the 10-mil cap. No case or principle requires such
evidence. Agency leeway in this context flows from the reality
that Congress vested agencies—not courts—with the authority

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to make discretionary policy judgments. See id. at 1512–13.
That discretion does not turn on the agency’s ability to procure
specific types of data in a given case. Cf. Am. Great Lakes
Ports Ass’n, 962 F.3d at 516.
Next, petitioners attack one of the many factors the SEC
considered in reaching its conclusion, namely the SEC’s
observation that a 10-mil cap “would be consistent with the
access fees charged by ATSs.” 89 Fed. Reg. at 81661.
Petitioners claim that exchanges need to be able to charge
higher fees (and promise higher rebates) than ATSs do, to
offset inherent competitive disparities between exchanges and
ATSs. But, as noted above, the SEC explained why it believed
that exchanges did not need to rely on rebates to attract trading
activity. See, e.g., id. at 81656. And the SEC had no obligation
to set a fee cap guaranteed to mitigate ATSs’ competitive
advantages, especially given the agency’s countervailing
policy objectives. See id. at 81662 (explaining that the level of
ATS rates was “not the only factor” in the SEC’s “balancing”
analysis). We may not substitute petitioners’ preferred “policy
judgment for that of the agency.” Prometheus, 592 U.S. at 423;
see also AD HOC Telecomms., 572 F.3d at 908 (emphasizing
our “particularly deferential” review in cases that “implicate
competing policy choices”).
Petitioners also argue that the 10-mil figure does not
accurately reflect the fees that ATSs actually charge. The SEC
reasonably explained otherwise, relying on the submissions of
several commenters. 89 Fed. Reg. at 81661 & n.651.
Petitioners counter that one commenter failed to cite his
sources and that another commenter misinterpreted an
underlying source. But petitioners omit the many other sources
that commenters relied on, including disclosures from several
ATSs, feedback from various exchange members, and reports
from a leading brokerage firm, all of which support the SEC’s
conclusion that the 10-mil figure accurately reflects ATSs’

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fees. See J.A. 563; see also 89 Fed. Reg. at 81698. Petitioners
insist that the SEC could have acted on even better data by
directly obtaining this information from ATSs. The APA,
however, “imposes no general obligation on agencies to
conduct or commission their own empirical or statistical
studies.” Prometheus, 592 U.S. at 427.
Petitioners also doubt that a 10-mil cap will permit
exchanges to maintain the same “net capture rates,” arguing
that current net capture rates are both hard to assess and likely
to change once exchanges adjust to the lower caps. The SEC
reasonably addressed both points.
The SEC acknowledged the uncertainty in measuring net
capture rates. Still, the Commission concluded, based on
several comments and “staff conversations with industry
members,” that the current figure was “likely close to 2 mils on
most exchanges.” 89 Fed. Reg. at 81696 & n.1103. It was not
arbitrary for the SEC to “make tough choices about which of
the competing estimates is most plausible” or to at least “hazard
a guess as to which is correct.” Bus. Roundtable v. SEC, 647
F.3d 1144, 1150 (D.C. Cir. 2011).
The SEC likewise acknowledged “uncertainty” over
whether this capture rate would “persist” post-amendment. 89
Fed. Reg. at 81733. The Commission reasonably concluded
that it would. A 2-mil capture rate, it explained, would “remain
possible under the adopted amendments.” Id.; see also id. at
81656, 81658. A 10-mil fee gives exchanges enough room to
pay out a rebate and keep 2 mils for themselves. That
assumption, moreover, comports with the SEC’s general view
that lowering access fees would not drastically alter the
competitive landscape. Petitioners offer no basis to second-
guess the SEC’s predictive judgment. See Sorenson
Commc’ns, LLC v. FCC, 897 F.3d 214, 230 (D.C. Cir. 2018).

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Next, petitioners dispute the SEC’s occasional assertions
that the fee-cap amendment would preserve the ability of
exchanges to “innovate.” The SEC reasonably explained this
point too. The SEC anticipated that lowering the fee cap for
stocks priced at or above $1 would have no effect on
transaction revenue; exchanges could continue to retain a 2-mil
net capture rate going forward. 89 Fed. Reg. at 81661, 81767.
At the same time, the Commission acknowledged that lowering
the fee cap for stocks priced below $1 would reduce transaction
revenue. For those stocks, exchanges “typically” do not pay
out rebates, so the entire fee comprises the exchange’s “net
capture.” Id. at 81734. Further, the SEC acknowledged that
this drop in revenue—totaling around $55 million per year,
id.—“could impact exchange investment in new technologies,”
id. at 81740. Contrary to petitioners’ assertion, those
statements are not inconsistent; the SEC identified one
dynamic that may reduce exchange revenue, but predicted that
securing the same net capture rate for stocks priced at or above
$1 would allow for continued investment and innovation.
Further, the SEC noted that other parts of the rule could
“offset[]” any negative revenue effects by, for instance,
boosting trading volume on exchanges. Id.
Finally, petitioners insist that the SEC did not
meaningfully explore alternative fee arrangements—
specifically, a multi-tiered fee model that would apply a 15-mil
cap to half-penny-tick stocks priced at or above $1. But the
Commission considered that very proposal (and others), raising
concerns that a higher fee would increase transaction costs and
worsen price transparency. Id. at 81766–68. We have no
reason to second-guess that exercise of judgment.
III
The petition for review is denied.
So ordered.

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