Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on Cboe EDGX Exchange, Inc., 23515-23517 [2018-10707]

Download as PDF Federal Register / Vol. 83, No. 98 / Monday, May 21, 2018 / Notices 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–CboeBZX–2018–035, and should be submitted on or before June 11, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–10712 Filed 5–18–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on Cboe EDGX Exchange, Inc. sradovich on DSK3GMQ082PROD with NOTICES 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 May 1, 2018, Cboe EDGX Exchange, Inc. (the 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 18:20 May 18, 2018 Jkt 244001 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 EDGX 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. 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 [Release No. 34–83240; File No. SR– CboeEDGX–2018–014] May 15, 2018. ‘‘Exchange’’ or ‘‘EDGX’’) 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. 1. Purpose The Exchange proposes to amend its fee schedule applicable to its equities trading platform (‘‘EDGX Equities’’) to (i) eliminate Mega Tier 2, (ii) eliminate the Step-Up Tier, (iii) modify Tape B Tier 1 and eliminate Tape B Tier 2 and (iv) increase the fee for orders that yield fee code D, effective May 1, 2018. 3 15 U.S.C. 78s(b)(3)(A)(ii). 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). 4 17 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 23515 The Exchange first proposes to eliminate Mega Tier 2. Mega Tier 2 currently provides Members a rebate of $0.0032 per share where a Member (i) adds or routes a combined ADV 6 greater than or equal to 4,000,000 shares prior to 9:30 a.m. or after 4:00 p.m. and (ii) adds an ADV greater than or equal to 0.65% of the TCV,7 including during both market hours and pre and posttrading hours. The Exchange no longer wishes to maintain this tier level. As such, the Exchange proposes to eliminate Mega Tier 2 and rename Mega Tier 3 accordingly. The Exchange next proposes to eliminate the Step-Up Tier, which provides a $0.0032 per share rebate where a Member (i) adds an ADV greater than or equal to 0.40% of the TCV and (ii) has a Step-Up Add TCV from January 2017 greater than or equal to 0.10%. The Exchange no longer wishes to maintain this tier level and therefore proposes to delete it. The Exchange also proposes to modify Tape B Tier 1. Currently, for orders that yield fee codes B and 4, the Exchange provides a rebate of $0.0020 per share for orders that add liquidity for securities at or above $1.00, and a rebate of $0.00003 per share for orders that add liquidity for securities below $1.00. Pursuant to Tape B Volume Tier 1, a Member will receive an enhanced rebate of $0.0027 where a Member adds an ADV greater than or equal to 0.02% of the TCV in Tape B Securities. The Exchange proposes to increase the ADV requirement to greater than or equal to 0.03% of the TCV in Tape B securities. The Exchange believes the proposed change to the Tape B Volume Tier 1 criteria will encourage the entry of additional orders to the Exchange. The Exchange also no longer desires to maintain Tape B Volume Tier 2 and therefore proposes to delete it. Lastly, the Exchange proposes to increase the fee for orders yielding fee code D, which results from an order routed to the New York Stock Exchange (‘‘NYSE’’) or routed using the RDOT routing strategy. Particularly, NYSE recently implemented certain pricing changes related to Tapes B and C securities, including adopting a per tape fee of $0.00280 per share to remove liquidity from the Exchange for member 6 ADV means average daily volume calculated as the number of shares added to, removed from, or routed by, the Exchange, or any combination or subset thereof, per day. ADV is calculated on a monthly basis. See Exchange’s fee schedule. 7 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. See Exchange’s fee schedule. E:\FR\FM\21MYN1.SGM 21MYN1 23516 Federal Register / Vol. 83, No. 98 / Monday, May 21, 2018 / Notices sradovich on DSK3GMQ082PROD with NOTICES organizations with an Adding ADV of at least 50,000 shares for that respective Tape.8 Based on the changes in pricing at NYSE, the Exchange is proposing to increase its fee for orders executed at NYSE that yield fee code D from $0.00275 to $0.00280. 2. Statutory Basis The Exchange believes that the proposed rule changes are consistent with the objectives of Section 6 of the Act,9 in general, and furthers the objectives of Section 6(b)(4),10 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 also notes that it operates in a highly-competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The proposed rule changes reflect a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange. The Exchange believes that the proposal to eliminate the Mega Tier 2, Step-Up Tier and Tape B Tier 2 is reasonable, fair, and equitable because the current tiers are not providing the desired result of incentivizing Members to increase their participation in EDGX Equities. Therefore, eliminating these tiers will have a negligible effect on order flow and market behavior. The Exchange believes the proposed changes are not unfairly discriminatory because they will apply equally to all Members. The Exchange next notes that volumebased discounts such as those currently maintained on the Exchange have been widely adopted by exchanges and are equitable and non-discriminatory because they are open to all Members on an equal basis and provide additional benefits or discounts that are reasonably related to the value of an exchange’s market quality associated with higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns, and introduction of higher volumes of orders into the price and volume discovery processes. While the proposed modification to the existing Tape B Volume Tier 1 makes such tier slightly more difficult to attain, it is intended to incentivize Members to send additional volume to the Exchange 8 See NYSE Trader Update, NYSE—Fees for Trading Tapes B and C securities, dated April 2, 2018, available at https://www.nyse.com/ publicdocs/nyse/markets/nyse/NYSE_Fee_Change_ BandC_April2018.pdf. 9 15 U.S.C. 78f. 10 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 18:20 May 18, 2018 Jkt 244001 in an effort to qualify or continue to qualify for the enhanced rebate made available by the tier. As such, the Exchange also believes that the proposed changes are reasonable. The Exchange notes that increased volume on the Exchange provides greater trading opportunities for all market participants. The Exchange lastly believes the proposed increase to orders yielding fee code D is reasonable because it reflects a pass-through of the pricing increase by NYSE noted above. The Exchange further believes the proposed fee change is equitable and non-discriminatory because it applies uniformly to all Members. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes the proposed amendments to its fee schedule would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed changes represent a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange’s competitors. 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 change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. 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 11 and paragraph (f) of Rule 19b–4 thereunder.12 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 11 15 12 17 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). Frm 00103 Fmt 4703 investors, or otherwise in furtherance of the purposes of the Act. 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 rule-comments@ sec.gov. Please include File Number SR– CboeEDGX–2018–014 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CboeEDGX–2018–014. 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–CboeEDGX–2018–014 and should be submitted on or before June 11, 2018. 13 17 Sfmt 4703 E:\FR\FM\21MYN1.SGM CFR 200.30–3(a)(12). 21MYN1 Federal Register / Vol. 83, No. 98 / Monday, May 21, 2018 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–10707 Filed 5–18–18; 8:45 am] BILLING CODE 8011–01–P A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83238; File No. SR–ISE– 2018–44] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material to Rule 706 To Harmonize Its Sponsored Access Rules With Those of Its Affiliates May 15, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 9, 2018, Nasdaq ISE, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. sradovich on DSK3GMQ082PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Supplementary Material to Rule 706 to harmonize its sponsored access rules with those of its affiliates, The Nasdaq Stock Market LLC (‘‘NQX’’), Nasdaq BX, Inc. (‘‘BX’’) and Nasdaq PHLX LLC (‘‘PHLX,’’ and together with NQX and BX, ‘‘Nasdaq Exchanges’’). The text of the proposed rule change is available on the Exchange’s website at https://ise.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 18:20 May 18, 2018 Jkt 244001 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 aspects of such statements. 1. Purpose The purpose of the proposed rule change is to amend Supplementary Material to Rule 706, which contains the Exchange’s sponsored access rules, to harmonize these rules with those of the Nasdaq Exchanges.3 On March 9, 2016, the Exchange and its affiliates, ISE Gemini, LLC (now, Nasdaq GEMX, LLC) (‘‘GEMX’’) and ISE Mercury, LLC (now, Nasdaq MRX, LLC) (‘‘MRX’’ and together with ISE and GEMX, ‘‘ISE Exchanges’’), were acquired by Nasdaq, Inc. (‘‘Acquisition’’).4 In the context of the Acquisition, the ISE Exchanges have been working to align certain of its rules and processes with those of the Nasdaq Exchanges in order to provide consistent standards across the six exchanges owned and operated by Nasdaq, Inc. (collectively, ‘‘Affiliated Exchanges’’). As part of this effort, the proposal set forth below harmonizes the Exchange’s sponsored access rules with the Nasdaq Sponsored Access Rules in order to provide uniform standards and requirements for users of the Affiliated Exchanges.5 In particular, the Exchange proposes to (1) define the term ‘‘Sponsored Access’’ and ‘‘Customer Agreement;’’ (2) specify the requirement to comply with Rule 15c3–5 under the Act (‘‘Market Access Rule’’); (3) remove the requirements that each Sponsored Customer and each Sponsoring Member enter into certain agreements with the Exchange; and (4) make a number of related, non-substantive changes. Each change is discussed in detail as follows. Defining Sponsored Access A Sponsored Customer is a nonmember of the Exchange, such as an institutional investor, that gains access to the Exchange 6 and trades under a 3 See NQX Rule 4615, BX Rule 4615 and PHLX Rule 1094 (collectively, ‘‘Nasdaq Sponsored Access Rules’’). 4 See Securities Exchange Act Release No. 78119 (June 21, 2016), 81 FR 41611 (June 27, 2016) (SR– ISE–2016–11; SR–ISEGemini-2016–05; SR– ISEMercury–2016–10). 5 GEMX and MRX will each file similar rule change proposals with the Commission to harmonize their sponsored access rules with the Nasdaq Sponsored Access Rules. 6 For example, a broker-dealer may allow its customer—whether an institution such as a hedge PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 23517 Sponsoring Member’s execution and clearing identity pursuant to a sponsorship arrangement between such non-member and Sponsoring Member, as set forth in Supplementary Material to Rule 706. The Exchange is proposing to define the term ‘‘Sponsored Access’’ to clarify the type of market access arrangement that is subject to this rule. Accordingly, the Exchange proposes to amend Supplementary Material .01(a) to Rule 706 to add the following definition: ‘‘Sponsored Access shall mean an arrangement whereby a Member permits its customers to enter orders into the System that bypass the Member’s trading system and are routed directly to the Exchange, including routing through a service bureau or other third party technology provider.’’ This definition mirrors the language set forth in the Nasdaq Sponsored Access Rules,7 and is derived from the Commission’s description of Sponsored Access used in the release approving the Market Access Rule.8 The Exchange believes that defining Sponsored Access in Supplementary Material .01(a) to Rule 706 will provide market participants with greater clarity regarding Sponsored Access and their obligations with respect to this type of access arrangement. Defining Customer Agreement The Exchange proposes to amend Supplementary Material .01(b)(1) to Rule 706 to define the agreement that Sponsored Customers must enter into and maintain with one or more Sponsoring Members to establish proper relationship(s) and account(s) through which the Sponsored Customer may trade on the Exchange, as a ‘‘Customer Agreement.’’ 9 Market Access Rule Pursuant to Supplementary Material .01(b)(2) to Rule 706, the Sponsoring Member is responsible for the activities fund, mutual fund, bank or insurance company, an individual, or another broker-dealer—to use the broker-dealer’s MPID, account or other mechanism or mnemonic used to identify a market participant for the purposes of electronically accessing the Exchange. 7 See NQX Rule 4615(a), BX Rule 4615(a) and PHLX Rule 1094(a). 8 The Market Access Rule, among other things, requires broker-dealers providing others with access to an exchange or alternative trading system to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory, and other risks of providing such access. See Securities Exchange Act Release No. 63241 (November 3, 2010), 75 FR 69792 (November 15, 2010). 9 The Nasdaq Sponsored Access Rules also similarly define ‘‘Customer Agreement.’’ See NQX Rule 4615(b)(i), BX Rule 4615(b)(i) and PHLX Rule 1094(b)(i). E:\FR\FM\21MYN1.SGM 21MYN1

Agencies

[Federal Register Volume 83, Number 98 (Monday, May 21, 2018)]
[Notices]
[Pages 23515-23517]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10707]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83240; File No. SR-CboeEDGX-2018-014]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change Related 
to Fees for Use on Cboe EDGX Exchange, Inc.

May 15, 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 May 1, 2018, Cboe EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') 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.
---------------------------------------------------------------------------

    \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 EDGX Rules 
15.1(a) and (c).
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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.

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
    The Exchange proposes to amend its fee schedule applicable to its 
equities trading platform (``EDGX Equities'') to (i) eliminate Mega 
Tier 2, (ii) eliminate the Step-Up Tier, (iii) modify Tape B Tier 1 and 
eliminate Tape B Tier 2 and (iv) increase the fee for orders that yield 
fee code D, effective May 1, 2018.
    The Exchange first proposes to eliminate Mega Tier 2. Mega Tier 2 
currently provides Members a rebate of $0.0032 per share where a Member 
(i) adds or routes a combined ADV \6\ greater than or equal to 
4,000,000 shares prior to 9:30 a.m. or after 4:00 p.m. and (ii) adds an 
ADV greater than or equal to 0.65% of the TCV,\7\ including during both 
market hours and pre and post-trading hours. The Exchange no longer 
wishes to maintain this tier level. As such, the Exchange proposes to 
eliminate Mega Tier 2 and rename Mega Tier 3 accordingly.
---------------------------------------------------------------------------

    \6\ ADV means average daily volume calculated as the number of 
shares added to, removed from, or routed by, the Exchange, or any 
combination or subset thereof, per day. ADV is calculated on a 
monthly basis. See Exchange's fee schedule.
    \7\ 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. See Exchange's fee schedule.
---------------------------------------------------------------------------

    The Exchange next proposes to eliminate the Step-Up Tier, which 
provides a $0.0032 per share rebate where a Member (i) adds an ADV 
greater than or equal to 0.40% of the TCV and (ii) has a Step-Up Add 
TCV from January 2017 greater than or equal to 0.10%. The Exchange no 
longer wishes to maintain this tier level and therefore proposes to 
delete it.
    The Exchange also proposes to modify Tape B Tier 1. Currently, for 
orders that yield fee codes B and 4, the Exchange provides a rebate of 
$0.0020 per share for orders that add liquidity for securities at or 
above $1.00, and a rebate of $0.00003 per share for orders that add 
liquidity for securities below $1.00. Pursuant to Tape B Volume Tier 1, 
a Member will receive an enhanced rebate of $0.0027 where a Member adds 
an ADV greater than or equal to 0.02% of the TCV in Tape B Securities. 
The Exchange proposes to increase the ADV requirement to greater than 
or equal to 0.03% of the TCV in Tape B securities. The Exchange 
believes the proposed change to the Tape B Volume Tier 1 criteria will 
encourage the entry of additional orders to the Exchange. The Exchange 
also no longer desires to maintain Tape B Volume Tier 2 and therefore 
proposes to delete it.
    Lastly, the Exchange proposes to increase the fee for orders 
yielding fee code D, which results from an order routed to the New York 
Stock Exchange (``NYSE'') or routed using the RDOT routing strategy. 
Particularly, NYSE recently implemented certain pricing changes related 
to Tapes B and C securities, including adopting a per tape fee of 
$0.00280 per share to remove liquidity from the Exchange for member

[[Page 23516]]

organizations with an Adding ADV of at least 50,000 shares for that 
respective Tape.\8\ Based on the changes in pricing at NYSE, the 
Exchange is proposing to increase its fee for orders executed at NYSE 
that yield fee code D from $0.00275 to $0.00280.
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    \8\ See NYSE Trader Update, NYSE--Fees for Trading Tapes B and C 
securities, dated April 2, 2018, available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Fee_Change_BandC_April2018.pdf.
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2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with the objectives of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(4),\10\ 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 also notes that it operates in a highly-
competitive market in which market participants can readily direct 
order flow to competing venues if they deem fee levels at a particular 
venue to be excessive or incentives to be insufficient. The proposed 
rule changes reflect a competitive pricing structure designed to 
incentivize market participants to direct their order flow to the 
Exchange.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the proposal to eliminate the Mega Tier 
2, Step-Up Tier and Tape B Tier 2 is reasonable, fair, and equitable 
because the current tiers are not providing the desired result of 
incentivizing Members to increase their participation in EDGX Equities. 
Therefore, eliminating these tiers will have a negligible effect on 
order flow and market behavior. The Exchange believes the proposed 
changes are not unfairly discriminatory because they will apply equally 
to all Members.
    The Exchange next notes that volume-based discounts such as those 
currently maintained on the Exchange have been widely adopted by 
exchanges and are equitable and non-discriminatory because they are 
open to all Members on an equal basis and provide additional benefits 
or discounts that are reasonably related to the value of an exchange's 
market quality associated with higher levels of market activity, such 
as higher levels of liquidity provision and/or growth patterns, and 
introduction of higher volumes of orders into the price and volume 
discovery processes. While the proposed modification to the existing 
Tape B Volume Tier 1 makes such tier slightly more difficult to attain, 
it is intended to incentivize Members to send additional volume to the 
Exchange in an effort to qualify or continue to qualify for the 
enhanced rebate made available by the tier. As such, the Exchange also 
believes that the proposed changes are reasonable. The Exchange notes 
that increased volume on the Exchange provides greater trading 
opportunities for all market participants.
    The Exchange lastly believes the proposed increase to orders 
yielding fee code D is reasonable because it reflects a pass-through of 
the pricing increase by NYSE noted above. The Exchange further believes 
the proposed fee change is equitable and non-discriminatory because it 
applies uniformly to all Members.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposed amendments to its fee schedule 
would not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
does not believe that the proposed changes represent a significant 
departure from previous pricing offered by the Exchange or pricing 
offered by the Exchange's competitors. 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 
change will impair the ability of Members or competing venues to 
maintain their competitive standing in the financial markets.

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 \11\ and paragraph (f) of Rule 19b-4 
thereunder.\12\ 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-CboeEDGX-2018-014 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CboeEDGX-2018-014. 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-CboeEDGX-2018-014 and should be 
submitted on or before June 11, 2018.
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    \13\ 17 CFR 200.30-3(a)(12).


[[Page 23517]]


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10707 Filed 5-18-18; 8:45 am]
 BILLING CODE 8011-01-P
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