Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Transaction Fees, 2244-2246 [2018-00534]

Download as PDF 2244 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the existing collection of information provided for in Rule 9b–1, Options Disclosure Document (17 CFR 240.9b– 1), under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission plans to submit this existing collection of information to the Office of Management and Budget (‘‘OMB’’) for extension and approval. Rule 9b–1 (17 CFR 240.9b–1) sets forth the categories of information required to be disclosed in an options disclosure document (‘‘ODD’’) and requires the options markets to file an ODD with the Commission 60 days prior to the date it is distributed to investors. In addition, Rule 9b–1 provides that the ODD must be amended if the information in the document becomes materially inaccurate or incomplete and that amendments must be filed with the Commission 30 days prior to the distribution to customers. Finally, Rule 9b–1 requires a broker-dealer to furnish to each customer an ODD and any amendments, prior to accepting an order to purchase or sell an option on behalf of that customer. There are 15 options markets 1 that must comply with Rule 9b–1. These respondents work together to prepare a single ODD covering options traded on each market, as well as amendments to the ODD. These respondents file approximately 3 amendments per year. The staff calculates that the preparation and filing of amendments should take no more than eight hours per options market. Thus, the total time burden for options markets per year is 360 hours (15 options markets x 8 hours per amendment × 3 amendments). The estimated cost for an in-house attorney is $412 per hour,2 resulting in a total internal cost of compliance for these respondents of $148,320 per year (360 hours at $412 per hour). daltland on DSKBBV9HB2PROD with NOTICES 1 The fifteen options markets are as follows: The fifteen options markets are as follows: BOX Options Exchange LLC, Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., Miami International Securities Exchange LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX LLC, the Nasdaq Options Market (NOM), NYSE Arca, Inc., and NYSE American LLC. 2 SIFMA did its last annual survey in 2013 and will not resume the survey process. Accordingly, the $412 figure is based on the 2013 figure ($380) adjusted by the inflation rate calculated using the Bureau of Labor Statistics’ CPI Inflation Calculator. The $380 per hour figure for an Attorney is from SIFMA’s Management & Professional Earnings in the Securities Industry 2013, modified by Commission staff to account for an 1800-hour workyear and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead. VerDate Sep<11>2014 22:48 Jan 12, 2018 Jkt 244001 In addition, approximately 1,144 broker-dealers 3 must comply with Rule 9b–1. Each of these respondents will process an average of 3 new customers for options each week and, therefore, will have to furnish approximately 156 ODDs per year. The postal mailing or electronic delivery of the ODD takes respondents no more than 30 seconds to complete for an annual time burden for each of these respondents of 78 minutes or 1.3 hours. Thus, the total time burden per year for broker-dealers is 1,487 hours (1,144 broker-dealers × 1.3 hours). The estimated cost for a general clerk of a broker-dealer is $62 per hour,4 resulting in a total internal cost of compliance for these respondents of $92,194 per year (1,487 hours at $62 per hour). The total time burden for all respondents under this rule (both options markets and broker-dealers) is 1,847 hours per year (360 + 1,487), and the total internal cost of compliance is $240,514 ($148,320 + $92,194). Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’s estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. Please direct your written comments to: Pamela Dyson, Director/Chief 3 The estimate of 1,144 broker-dealers required to comply with Rule 9b–1 is derived from Item 12 of the Form BD (OMB Control No. 3235–0012). This estimate may be high as it includes broker-dealers that engage in only a proprietary business, and as a result are not required to deliver an ODD, as well as those broker-dealers subject to Rule 9b–1. 4 The $62 figure is based on the 2013 figure ($57) adjusted for inflation. See supra note 1. The $57 per hour figure for a General Clerk is from SIFMA’s Office Salaries in the Securities Industry 2013, modified by Commission staff to account for an 1800-hour work-year and multiplied by 2.93 to account for bonuses, firm size, employee benefits and overhead. The staff believes that the ODD would be mailed or electronically delivered to customers by a general clerk of the broker-dealer or some other equivalent position. PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 Information Officer, Securities and Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE, Washington, DC 20549, or send an email to: PRA_ Mailbox@sec.gov. Dated: January 9, 2018. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–00489 Filed 1–12–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–82477; File No. SR– CboeBYX–2017–005] Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Transaction Fees January 9, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 27, 2017, Cboe BYX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) 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 Exchange has designated the proposed rule change as one establishing or changing a member due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend the fee schedule applicable to Members 5 and non-Members of the Exchange pursuant to BYX Rules 15.1(a) and (c). The text of the proposed rule change is available at the Exchange’s website at www.markets.cboe.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 The term ‘‘Member’’ is defined as ‘‘any registered broker or dealer that has been admitted to membership in the Exchange.’’ See Exchange Rule 1.5(n). 2 17 E:\FR\FM\16JAN1.SGM 16JAN1 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose As further described below, the Exchange proposes to amend its fee schedule to: (i) Modify its standard rebate to remove liquidity yielding fee codes BB,6 N,7 and W; 8 (ii) modify its standard fee to add liquidity yielding fee codes B,9 V 10 and Y; 11 and (iii) adopt a new tier under footnote 1, Add/ Remove Volume Tiers. Standard Rebates to Remove Liquidity The Exchange currently provides a standard rebate of $0.0008 per share for orders that remove liquidity from the Exchange in securities priced at or above $1.00. The Exchange appends fee codes W, BB and N for orders removing liquidity in Tape A, Tape B, and Tape C securities, respectively. The Exchange proposes to reduce the standard rebate provided for orders yielding these fee codes to a rebate of $0.0005 per share. In connection with this change, the Exchange proposes to modify the Standard Rates chart contained on the fee schedule to reflect the new standard rebate of $0.0005 per share to remove liquidity. daltland on DSKBBV9HB2PROD with NOTICES Standard Fee To Add Liquidity The Exchange currently charges a standard fee of $0.0018 per share for orders that add liquidity to the 6 Fee code BB is appended to orders that remove liquidity from BYX (Tape B). See the Exchange’s fee schedule available at https://markets.cboe.com/us/ equities/membership/fee_schedule/byx/. 7 Fee code N is appended to orders that remove liquidity from BYX (Tape C). Id. 8 Fee code W is appended to orders that remove liquidity from BYX (Tape A). Id. 9 Fee code B is appended to displayed orders that add liquidity to BYX (Tape B). Id. 10 Fee code V is appended to displayed orders that add liquidity to BYX (Tape A). Id. 11 Fee code Y is appended to displayed orders that add liquidity to BYX (Tape C). Id. VerDate Sep<11>2014 22:48 Jan 12, 2018 Jkt 244001 Exchange in securities priced at or above $1.00. The Exchange appends fee codes V, B, and Y for orders adding liquidity in Tape A, Tape B, and Tape C securities, respectively. The Exchange proposes to increase the standard fee charged for orders yielding these fee codes to a fee of $0.0019 per share. In connection with this change, the Exchange proposes to modify the Standard Rates chart contained on the fee schedule to reflect the new standard fee of $0.0019 per share to add liquidity. New Remove Volume Tier The Exchange currently offers six [sic] tiers under footnote 1 that offer reduced fees for displayed orders that add liquidity yielding fee codes B, V and Y, and an enhanced rebate for orders that remove liquidity yielding fee codes BB, N and W, as described above. The Exchange proposes to add a new tier under footnote 1, to be known as Tier 9, under which a Member would receive an enhanced rebate of $0.0017 per share on orders that yield fee codes BB, N and W, where a Member has: (i) A Step-Up Remove TCV12 from December 2017 equal to or greater than 0.075%; and (ii) an ADAV 13 equal to or greater than 0.10% of the TCV.14 Implementation Date The Exchange proposes to implement the above changes to its fee schedule on January 2, 2018. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,15 in general, and furthers the objectives of Section 6(b)(4),16 in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities. The Exchange believes that proposed changes to fee codes BB, N, and W represent an equitable allocation of reasonable dues, fees, and other charges 12 ‘‘Step-Up Remove TCV’’ means remove ADV as a percentage of TCV in the relevant baseline month subtracted from current remove ADV as a percentage of TCV. See the Exchange’s fee schedule available at https://markets.cboe.com/us/equities/ membership/fee_schedule/byx/. 13 ‘‘ADAV’’ means average daily volume calculated as the number of shares added per day and ‘‘ADV’’ means average daily volume calculated as the number of shares added or removed, combined, per day. ADAV and ADV are calculated on a monthly basis. Id. 14 ‘‘TCV’’ means total consolidated volume calculated as the volume reported by all exchanges and trade reporting facilities to a consolidated transaction reporting plan for the month for which the fees apply. Id. 15 15 U.S.C. 78f. 16 15 U.S.C. 78f(b)(4). PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 2245 because the Exchange’s standard rebate for removing liquidity continues to be higher than that provided by other exchanges. For example, Nasdaq BX, Inc. (‘‘Nasdaq BX’’) provides a standard rebate of $0.0001 per share for orders that remove liquidity.17 The Exchange further believes that the standard rebate for fee codes BB, N, and W remains equitably allocated and not unreasonably discriminatory because such rebate is provided to all Members unless they qualify for enhanced rebates based on other factors. The Exchange believes that proposed changes to fee codes B, V, and Y represent an equitable allocation of reasonable dues, fees, and other charges because the Exchange’s standard fee for adding liquidity continues to be lower than that provided by other exchanges. For example, Nasdaq BX charges a standard fee of $0.0020 per share for orders that remove liquidity.18 The Exchange further believes that the standard fee for fee codes B, V, and Y remains equitably allocated and not unreasonably discriminatory because such fee is provided to all Members unless they qualify for reduced fees based on other factors. The Exchange believes that the proposed Tier 9 to be added to footnote 1 is equitably allocated and reasonable because it will reward a Member’s growth pattern on the Exchange and such increased volume will allow the Exchange to continue to provide and potentially expand its incentive programs. The Exchange further believes that the proposed tier is reasonable, fair and equitable because the liquidity from the proposed change would benefit all investors by deepening the Exchange’s liquidity pool, offering additional flexibility for all investors to enjoy cost savings, supporting the quality of price discovery, promoting market transparency and improving investor protection. The Exchange also believes the proposed rebate of $0.0017 per share for Tier 9 is reasonable in that it is equivalent to the top tier rebate to remove liquidity provided by Nasdaq BX.19 The proposed pricing structure is also not unfairly discriminatory in that it is available to all Members. In addition, volume-based fees such as that proposed herein have been widely adopted by exchanges and are equitable because they are open to all Members on an equal basis and provide 17 See the Nasdaq BX fee schedule available at https://www.nasdaqtrader.com/Trader.aspx?id=bx_ pricing. 18 Id. 19 Id. E:\FR\FM\16JAN1.SGM 16JAN1 2246 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices additional benefits or discounts that are reasonably related to: (i) The value to an exchange’s market quality; (ii) associated higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns; and (iii) the introduction of higher volumes of orders into the price and volume discovery processes. The Exchange believes that the proposed tier is a reasonable, fair and equitable, and not an unfairly discriminatory allocation of fees and rebates, because it will provide Members with an additional incentive to reach certain thresholds on the Exchange. (B) Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that this change represents a significant departure from previous pricing offered by the Exchange or from pricing offered by the Exchange’s competitors. The proposed rates would apply uniformly to all Members, and Members may opt to disfavor the Exchange’s pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. Further, excessive fees would serve to impair an exchange’s ability to compete for order flow and members rather than burdening competition. The Exchange believes that its proposal would not burden intramarket competition because the proposed rate would apply uniformly to all Members. daltland on DSKBBV9HB2PROD with NOTICES (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 20 and paragraph (f) of Rule 19b–4 thereunder.21 At any time within 20 15 21 17 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). VerDate Sep<11>2014 22:48 Jan 12, 2018 Jkt 244001 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. Number SR–CboeBYX–2017–005 and should be submitted on or before February 6, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Eduardo A. Aleman, Assistant Secretary. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: [FR Doc. 2018–00534 Filed 1–12–18; 8:45 am] Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CboeBYX–2017–005 on the subject line. Proposed Collection; Comment Request Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CboeBYX–2017–005. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–638, OMB Control No. 3235–0690] Upon Written Request Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 Extension: Form SF–3 Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. Form SF–3 (17 CFR 239.45) is a short form registration statement used for non-shelf issuers of asset-backed securities to register a public offering of their securities under the Securities Act of 1933 (15 U.S.C. 77a et seq.). Form SF–3 takes approximately 1,380 hours per response and is filed by approximately 71 issuers annually. The information collected is intended to ensure that the information required to be filed by the Commission permits verification of compliance with securities law requirements and assures the public availability of such information in the asset-backed securities market. We estimate that 25% of the 1,380 hours per response (345 hours) is prepared by the issuer for a total annual reporting burden of 24,495 hours (345 hours per response × 71 responses). Written comments are invited on: (a) Whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; 22 17 E:\FR\FM\16JAN1.SGM CFR 200.30–3(a)(12). 16JAN1

Agencies

[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)]
[Notices]
[Pages 2244-2246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00534]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82477; File No. SR-CboeBYX-2017-005]


Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Transaction Fees

January 9, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on December 27, 2017, Cboe BYX Exchange, Inc. (the ``Exchange'' or 
``BYX'') 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 
Exchange has designated the proposed rule change as one establishing or 
changing a member due, fee, or other charge imposed by the Exchange 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposed rule change effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend the fee schedule applicable 
to Members \5\ and non-Members of the Exchange pursuant to BYX Rules 
15.1(a) and (c).
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    \5\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange.'' See 
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's 
website at www.markets.cboe.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

[[Page 2245]]

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements.

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    As further described below, the Exchange proposes to amend its fee 
schedule to: (i) Modify its standard rebate to remove liquidity 
yielding fee codes BB,\6\ N,\7\ and W; \8\ (ii) modify its standard fee 
to add liquidity yielding fee codes B,\9\ V \10\ and Y; \11\ and (iii) 
adopt a new tier under footnote 1, Add/Remove Volume Tiers.
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    \6\ Fee code BB is appended to orders that remove liquidity from 
BYX (Tape B). See the Exchange's fee schedule available at https://markets.cboe.com/us/equities/membership/fee_schedule/byx/.
    \7\ Fee code N is appended to orders that remove liquidity from 
BYX (Tape C). Id.
    \8\ Fee code W is appended to orders that remove liquidity from 
BYX (Tape A). Id.
    \9\ Fee code B is appended to displayed orders that add 
liquidity to BYX (Tape B). Id.
    \10\ Fee code V is appended to displayed orders that add 
liquidity to BYX (Tape A). Id.
    \11\ Fee code Y is appended to displayed orders that add 
liquidity to BYX (Tape C). Id.
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Standard Rebates to Remove Liquidity
    The Exchange currently provides a standard rebate of $0.0008 per 
share for orders that remove liquidity from the Exchange in securities 
priced at or above $1.00. The Exchange appends fee codes W, BB and N 
for orders removing liquidity in Tape A, Tape B, and Tape C securities, 
respectively. The Exchange proposes to reduce the standard rebate 
provided for orders yielding these fee codes to a rebate of $0.0005 per 
share. In connection with this change, the Exchange proposes to modify 
the Standard Rates chart contained on the fee schedule to reflect the 
new standard rebate of $0.0005 per share to remove liquidity.
Standard Fee To Add Liquidity
    The Exchange currently charges a standard fee of $0.0018 per share 
for orders that add liquidity to the Exchange in securities priced at 
or above $1.00. The Exchange appends fee codes V, B, and Y for orders 
adding liquidity in Tape A, Tape B, and Tape C securities, 
respectively. The Exchange proposes to increase the standard fee 
charged for orders yielding these fee codes to a fee of $0.0019 per 
share. In connection with this change, the Exchange proposes to modify 
the Standard Rates chart contained on the fee schedule to reflect the 
new standard fee of $0.0019 per share to add liquidity.
New Remove Volume Tier
    The Exchange currently offers six [sic] tiers under footnote 1 that 
offer reduced fees for displayed orders that add liquidity yielding fee 
codes B, V and Y, and an enhanced rebate for orders that remove 
liquidity yielding fee codes BB, N and W, as described above. The 
Exchange proposes to add a new tier under footnote 1, to be known as 
Tier 9, under which a Member would receive an enhanced rebate of 
$0.0017 per share on orders that yield fee codes BB, N and W, where a 
Member has: (i) A Step-Up Remove TCV\12\ from December 2017 equal to or 
greater than 0.075%; and (ii) an ADAV \13\ equal to or greater than 
0.10% of the TCV.\14\
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    \12\ ``Step-Up Remove TCV'' means remove ADV as a percentage of 
TCV in the relevant baseline month subtracted from current remove 
ADV as a percentage of TCV. See the Exchange's fee schedule 
available at https://markets.cboe.com/us/equities/membership/fee_schedule/byx/.
    \13\ ``ADAV'' means average daily volume calculated as the 
number of shares added per day and ``ADV'' means average daily 
volume calculated as the number of shares added or removed, 
combined, per day. ADAV and ADV are calculated on a monthly basis. 
Id.
    \14\ ``TCV'' means total consolidated volume calculated as the 
volume reported by all exchanges and trade reporting facilities to a 
consolidated transaction reporting plan for the month for which the 
fees apply. Id.
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Implementation Date
    The Exchange proposes to implement the above changes to its fee 
schedule on January 2, 2018.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\15\ in general, and 
furthers the objectives of Section 6(b)(4),\16\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f.
    \16\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that proposed changes to fee codes BB, N, and 
W represent an equitable allocation of reasonable dues, fees, and other 
charges because the Exchange's standard rebate for removing liquidity 
continues to be higher than that provided by other exchanges. For 
example, Nasdaq BX, Inc. (``Nasdaq BX'') provides a standard rebate of 
$0.0001 per share for orders that remove liquidity.\17\ The Exchange 
further believes that the standard rebate for fee codes BB, N, and W 
remains equitably allocated and not unreasonably discriminatory because 
such rebate is provided to all Members unless they qualify for enhanced 
rebates based on other factors.
---------------------------------------------------------------------------

    \17\ See the Nasdaq BX fee schedule available at https://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing.
---------------------------------------------------------------------------

    The Exchange believes that proposed changes to fee codes B, V, and 
Y represent an equitable allocation of reasonable dues, fees, and other 
charges because the Exchange's standard fee for adding liquidity 
continues to be lower than that provided by other exchanges. For 
example, Nasdaq BX charges a standard fee of $0.0020 per share for 
orders that remove liquidity.\18\ The Exchange further believes that 
the standard fee for fee codes B, V, and Y remains equitably allocated 
and not unreasonably discriminatory because such fee is provided to all 
Members unless they qualify for reduced fees based on other factors.
---------------------------------------------------------------------------

    \18\ Id.
---------------------------------------------------------------------------

    The Exchange believes that the proposed Tier 9 to be added to 
footnote 1 is equitably allocated and reasonable because it will reward 
a Member's growth pattern on the Exchange and such increased volume 
will allow the Exchange to continue to provide and potentially expand 
its incentive programs. The Exchange further believes that the proposed 
tier is reasonable, fair and equitable because the liquidity from the 
proposed change would benefit all investors by deepening the Exchange's 
liquidity pool, offering additional flexibility for all investors to 
enjoy cost savings, supporting the quality of price discovery, 
promoting market transparency and improving investor protection. The 
Exchange also believes the proposed rebate of $0.0017 per share for 
Tier 9 is reasonable in that it is equivalent to the top tier rebate to 
remove liquidity provided by Nasdaq BX.\19\ The proposed pricing 
structure is also not unfairly discriminatory in that it is available 
to all Members.
---------------------------------------------------------------------------

    \19\ Id.
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    In addition, volume-based fees such as that proposed herein have 
been widely adopted by exchanges and are equitable because they are 
open to all Members on an equal basis and provide

[[Page 2246]]

additional benefits or discounts that are reasonably related to: (i) 
The value to an exchange's market quality; (ii) associated higher 
levels of market activity, such as higher levels of liquidity provision 
and/or growth patterns; and (iii) the introduction of higher volumes of 
orders into the price and volume discovery processes. The Exchange 
believes that the proposed tier is a reasonable, fair and equitable, 
and not an unfairly discriminatory allocation of fees and rebates, 
because it will provide Members with an additional incentive to reach 
certain thresholds on the Exchange.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that this change represents a significant departure from previous 
pricing offered by the Exchange or from pricing offered by the 
Exchange's competitors. The proposed rates would apply uniformly to all 
Members, and Members may opt to disfavor the Exchange's pricing if they 
believe that alternatives offer them better value. Accordingly, the 
Exchange does not believe that the proposed changes will impair the 
ability of Members or competing venues to maintain their competitive 
standing in the financial markets. Further, excessive fees would serve 
to impair an exchange's ability to compete for order flow and members 
rather than burdening competition. The Exchange believes that its 
proposal would not burden intramarket competition because the proposed 
rate would apply uniformly to all Members.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from Members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \20\ and paragraph (f) of Rule 19b-4 
thereunder.\21\ At any time within 60 days of the filing of the 
proposed rule change, the Commission summarily may temporarily suspend 
such rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeBYX-2017-005 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeBYX-2017-005. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-CboeBYX-2017-005 and should be submitted 
on or before February 6, 2018.
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    \22\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00534 Filed 1-12-18; 8:45 am]
 BILLING CODE 8011-01-P
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