Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on the Exchange's Equity Options Platform, 32170-32172 [2018-14849]
Download as PDF
32170
Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeEDGX–2018–022 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–2018–022. 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–2018–022 and
should be submitted on or before
August 1, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Eduardo A. Aleman,
Assistant Secretary.
daltland on DSKBBV9HB2PROD with NOTICES
[FR Doc. 2018–14848 Filed 7–10–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83600; File No. SR–
CboeEDGX–2018–024]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Related to Fees
for Use on the Exchange’s Equity
Options Platform
July 6, 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 June 29,
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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
implement proposed changes to its fee
schedule for its equity options platform
(‘‘EDGX Options’’) relating to logical
and physical connectivity fees, effective
July 2, 2018.
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
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).
2 17
11 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
16:26 Jul 10, 2018
Jkt 244001
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
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 implement
proposed changes to its fee schedule for
its equity options platform (‘‘EDGX
Options’’) relating to logical and
physical connectivity fees, effective July
2, 2018.
Logical Connectivity
The Exchange proposes to amend
certain logical connectivity fees.
Currently, EDGX Options market
participants may utilize a variety of
logical connectivity ports. A logical port
provides users with the ability within
the Exchange’s system to accomplish a
specific function through a connection,
such as order entry, data receipt, or
access to information. Currently, with
respect to logical port fees, the Exchange
only assesses a fee for Purge Ports.
Additionally, logical connectivity fees
are limited to logical ports in the
Exchange’s primary data center and no
logical port fees are assessed for
redundant secondary data center ports.
The Exchange first proposes to adopt
a $500 per month, per port fee for all
logical ports excluding Purge, Multicast
Pitch Spin Server, GRP and Bulk Ports.5
The Exchange notes that fees for these
excluded ports are explicitly set forth in
the Fees Schedule. The Exchange notes
that the proposed fee of $500 per port
is in line with the fee assessed for
similar ports on BZX Options and C2
Options.6
Next, the Exchange proposes to adopt
fees for Multicast PITCH/Spin Server
and GRP ports. Multicast PITCH Spin
Server Ports and GRP Ports are used to
request and receive a retransmission of
data from the Exchange’s Multicast
PITCH data feed. The Exchange’s
Multicast PITCH/Top data feed is
available from two primary feeds,
identified as the ‘‘A feed’’ and the ‘‘C
feed’’, which contain the same
information but differ only in the way
such feeds are received. The Exchange
also offers two redundant feeds,
5 The Exchange notes that even though Ports with
Bulk Quoting Capabilities (‘‘Bulk Ports’’) already
has its own line item in the logical connectivity fees
table, it’s not explicitly excluded from the general
‘‘Logical Ports’’ line item. The Exchange proposes
to add a reference relating to its exclusion to
maintain clarity in the Fees Schedule.
6 See Cboe BZX Options Exchange Fee Schedule,
Options Logical Port Fees and Cboe C2 Options
Exchange Fees Schedule, Logical Connectivity Fees.
E:\FR\FM\11JYN1.SGM
11JYN1
Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
identified as the ‘‘B feed’’ and the ‘‘D
feed.’’ The Exchange proposes to adopt
a $500 per month, per set fee. All
secondary feed Multicast PITCH Spin
Server and GRP Ports will be provided
for redundancy at no additional cost.
The Exchange notes that the proposed
fee is in line with the fee assessed for
the same ports on BZX Options and C2
Options.7
Lastly, the Exchange proposes to
amend fees for ports with bulk quoting
capabilities (‘‘Bulk Ports’’). A Bulk Port
is a logical port that provides users with
the ability to submit bulk messages to
enter, modify or cancel orders
designated as Post Only Orders,
provided such orders are entered with a
Time-in-Force of DAY or a Time-inForce of GTD with an expiration time on
that trading day. The Exchange does not
currently assess fees for Bulk Ports. The
Exchange now proposes to adopt a
monthly fee of $600 per port. The
Exchange notes that the proposed Bulk
Port fee is less than the fee assessed for
similar ports on BZX Options and C2
Options.8
daltland on DSKBBV9HB2PROD with NOTICES
Physical Port Clarification
The Exchange next proposes to add
clarifying language relating to its
Options Physical Connectivity Fees.
First, the Exchange proposes to clarify
that all Physical Connectivity Fees will
be prorated based on the remaining
trading days in the calendar month. The
Exchange notes that while this is
current practice, it is not currently
codified under the Options Physical
Connectivity Fees section (although
similar language is found under the
Options Logical Port Fees section). The
Exchange also proposes to clarify that
physical ports (other than Disaster
Recovery physical ports) may be used to
connect to C2 Options, Cboe BZX, Cboe
BYX and Cboe EDGA. Disaster Recovery
physical ports may be used to connect
to the Disaster Recovery Systems for C2
Options, Cboe BZX, Cboe BYX, Cboe
EDGA, Cboe Options and CFE.
Additionally, the Exchange proposes to
make clear that Members and nonMembers will only be assessed a single
fee for any physical port or Disaster
Recovery physical port that accesses the
identified exchanges, respectively. The
Exchange notes that similar language
appears in the Fees Schedule of C2
Options.9
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.10 Specifically,
the Exchange believes the proposed rule
change is consistent with Section 6(b)(4)
of the Act,11 which provides that
Exchange rules may provide for the
equitable allocation of reasonable dues,
fees, and other charges among its Permit
Holders and other persons using its
facilities. Additionally, the Exchange
believes the proposed rule change is
consistent with the Section 6(b)(5) 12
requirement that the rules of an
exchange not be designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes it’s reasonable
to assess the proposed fees for each of
the logical connectivity ports described
above as the proposed fees enable the
Exchange to continue to maintain and
improve its market technology and
services. Additionally, the Exchange
notes the proposed fees are in line with,
and indeed less than, the fees assessed
on certain of its affiliated exchanges for
similar connectivity.13 The proposed
logical connectivity fees are also
equitable and not unfairly
discriminatory because the Exchange
will apply the same fees to all market
participants that use the same respective
connectivity options.
The Exchange also believes it’s
reasonable, equitable and not unfairly
discriminatory to prorate physical
connectivity fees because it provides for
a more precise assessment of physical
connectivity fees based on when a user
obtains a new physical port or Disaster
Recovery physical port. The Exchange
believes it’s reasonable, equitable and
not unfairly discriminatory to assess a
physical port fee only once if it connects
with another affiliate exchange because
only one port is being used and the
Exchange does not wish to charge
multiple fees for the same port. The
Exchange believes listing the affiliate
exchanges that physical ports and
Disaster Recovery physical ports can
connect to adds clarity to the fee
schedule and avoids potential
confusion. The alleviation of confusion
removes impediments to and perfects
the mechanism of a free and open
market and a national market system.
10 15
7 Id.
8 Id.
9 See e.g., Cboe C2 Options Exchange Fees
Schedule, Physical Connectivity Fees.
VerDate Sep<11>2014
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
12 15 U.S.C. 78f(b)(5).
13 See Affiliated Exchange Fee Schedules, Logical
Port Fees.
11 15
16:26 Jul 10, 2018
Jkt 244001
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
32171
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposed change represents a significant
departure from pricing offered by the
Exchange’s affiliates. Additionally,
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. The Exchange believes that
fees for connectivity are constrained by
the robust competition for order flow
among exchanges and non-exchange
markets. Further, excessive fees for
connectivity, would serve to impair an
exchange’s ability to compete for order
flow rather than burdening competition.
The Exchange also does not believe the
proposed rule change would impact
intramarket competition as it would
apply to all members and non-members
equally.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
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 14 and paragraph (f) of Rule
19b–4 15 thereunder. 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. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
14 15
15 17
E:\FR\FM\11JYN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
11JYN1
32172
Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
[FR Doc. 2018–14849 Filed 7–10–18; 8:45 am]
• 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
SRb–4CboeEDGX–2018–024 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.
daltland on DSKBBV9HB2PROD with NOTICES
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
All submissions should refer to File
Number SRb–4CboeEDGX–2018–024.
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 SRb–4CboeEDGX–2018–024
and should be submitted on or before
August 1, 2018.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83601; File No. SR–NYSE–
2018–31]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change, as
Modified by Amendment No. 1, To
Require Certain Member Organizations
To Participate in Scheduled MarketWide Circuit Breaker Testing
July 6, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on June 26,
2018, the New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change. On July 5, 2018,
the Exchange filed Amendment No. 1 to
the proposed rule change, as described
in Items I, II, and III, below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to require
certain member organizations to
participate in scheduled Market-Wide
Circuit Breaker testing. Amendment
No.1 supersedes the original filing in its
entirety. The proposed rule change is
available on the Exchange’s website at
www.nyse.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
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
on the proposed rule change. The text
of those 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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
NYSE Rule 49 to require certain member
organizations to participate in
scheduled Market-Wide Circuit Breaker
(‘‘MWCB’’) testing.
MWCBs are important, automatic
mechanisms that are invoked to
promote stability and investor
confidence during a period of
significant stress when securities
markets experience extreme broad-based
declines. MWCBs are designed to slow
the effects of extreme price movement
through coordinated trading halts across
securities markets when severe price
declines reach levels that may exhaust
market liquidity. All U.S. equity and
options exchanges have established
procedures that allow for trading to be
halted, or under extreme circumstances,
for markets to be closed before the
normal close of trading for a trading
day. MWCBs provide for trading halts in
all equities and options markets during
a severe market decline as measured by
a single-day decline in the S&P 500
Index.
Pursuant to NYSE Rule 80B (Trading
Halts Due to Extraordinary Market
Volatility), a market-wide trading halt
will be triggered if the S&P 500 Index
declines in price by specified
percentages from the prior day’s closing
price of that index. Currently, the
triggers are set at three circuit breaker
thresholds: 7% (Level 1), 13% (Level 2)
and 20% (Level 3). A market decline
that triggers a Level 1 or Level 2 circuit
breaker after 9:30 a.m. ET and before
3:25 p.m. ET would halt market-wide
trading for 15 minutes, while a similar
market decline at or after 3:25 p.m. ET
would not halt market-wide trading. A
market decline that triggers a Level 3
circuit breaker, at any time during the
trading day, would halt market-wide
trading for the remainder of the trading
day.
The Security [sic] Information
Processors (‘‘SIP’’) for the U.S. equity
markets have established a quarterly
MWCB testing schedule.4 On the
16 17
1 15
VerDate Sep<11>2014
16:26 Jul 10, 2018
Jkt 244001
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
4 See https://www.nyse.com/publicdocs/ctaplan/
notifications/trader-update/CTS_CQS%202018_
Failover%20Testing_Q1.pdf.
E:\FR\FM\11JYN1.SGM
11JYN1
Agencies
[Federal Register Volume 83, Number 133 (Wednesday, July 11, 2018)]
[Notices]
[Pages 32170-32172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14849]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83600; File No. SR-CboeEDGX-2018-024]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change Related
to Fees for Use on the Exchange's Equity Options Platform
July 6, 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 June 29, 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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to implement proposed changes to its
fee schedule for its equity options platform (``EDGX Options'')
relating to logical and physical connectivity fees, effective July 2,
2018.
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 implement proposed changes to its fee
schedule for its equity options platform (``EDGX Options'') relating to
logical and physical connectivity fees, effective July 2, 2018.
Logical Connectivity
The Exchange proposes to amend certain logical connectivity fees.
Currently, EDGX Options market participants may utilize a variety of
logical connectivity ports. A logical port provides users with the
ability within the Exchange's system to accomplish a specific function
through a connection, such as order entry, data receipt, or access to
information. Currently, with respect to logical port fees, the Exchange
only assesses a fee for Purge Ports. Additionally, logical connectivity
fees are limited to logical ports in the Exchange's primary data center
and no logical port fees are assessed for redundant secondary data
center ports.
The Exchange first proposes to adopt a $500 per month, per port fee
for all logical ports excluding Purge, Multicast Pitch Spin Server, GRP
and Bulk Ports.\5\ The Exchange notes that fees for these excluded
ports are explicitly set forth in the Fees Schedule. The Exchange notes
that the proposed fee of $500 per port is in line with the fee assessed
for similar ports on BZX Options and C2 Options.\6\
---------------------------------------------------------------------------
\5\ The Exchange notes that even though Ports with Bulk Quoting
Capabilities (``Bulk Ports'') already has its own line item in the
logical connectivity fees table, it's not explicitly excluded from
the general ``Logical Ports'' line item. The Exchange proposes to
add a reference relating to its exclusion to maintain clarity in the
Fees Schedule.
\6\ See Cboe BZX Options Exchange Fee Schedule, Options Logical
Port Fees and Cboe C2 Options Exchange Fees Schedule, Logical
Connectivity Fees.
---------------------------------------------------------------------------
Next, the Exchange proposes to adopt fees for Multicast PITCH/Spin
Server and GRP ports. Multicast PITCH Spin Server Ports and GRP Ports
are used to request and receive a retransmission of data from the
Exchange's Multicast PITCH data feed. The Exchange's Multicast PITCH/
Top data feed is available from two primary feeds, identified as the
``A feed'' and the ``C feed'', which contain the same information but
differ only in the way such feeds are received. The Exchange also
offers two redundant feeds,
[[Page 32171]]
identified as the ``B feed'' and the ``D feed.'' The Exchange proposes
to adopt a $500 per month, per set fee. All secondary feed Multicast
PITCH Spin Server and GRP Ports will be provided for redundancy at no
additional cost. The Exchange notes that the proposed fee is in line
with the fee assessed for the same ports on BZX Options and C2
Options.\7\
---------------------------------------------------------------------------
\7\ Id.
---------------------------------------------------------------------------
Lastly, the Exchange proposes to amend fees for ports with bulk
quoting capabilities (``Bulk Ports''). A Bulk Port is a logical port
that provides users with the ability to submit bulk messages to enter,
modify or cancel orders designated as Post Only Orders, provided such
orders are entered with a Time-in-Force of DAY or a Time-in-Force of
GTD with an expiration time on that trading day. The Exchange does not
currently assess fees for Bulk Ports. The Exchange now proposes to
adopt a monthly fee of $600 per port. The Exchange notes that the
proposed Bulk Port fee is less than the fee assessed for similar ports
on BZX Options and C2 Options.\8\
---------------------------------------------------------------------------
\8\ Id.
---------------------------------------------------------------------------
Physical Port Clarification
The Exchange next proposes to add clarifying language relating to
its Options Physical Connectivity Fees. First, the Exchange proposes to
clarify that all Physical Connectivity Fees will be prorated based on
the remaining trading days in the calendar month. The Exchange notes
that while this is current practice, it is not currently codified under
the Options Physical Connectivity Fees section (although similar
language is found under the Options Logical Port Fees section). The
Exchange also proposes to clarify that physical ports (other than
Disaster Recovery physical ports) may be used to connect to C2 Options,
Cboe BZX, Cboe BYX and Cboe EDGA. Disaster Recovery physical ports may
be used to connect to the Disaster Recovery Systems for C2 Options,
Cboe BZX, Cboe BYX, Cboe EDGA, Cboe Options and CFE. Additionally, the
Exchange proposes to make clear that Members and non-Members will only
be assessed a single fee for any physical port or Disaster Recovery
physical port that accesses the identified exchanges, respectively. The
Exchange notes that similar language appears in the Fees Schedule of C2
Options.\9\
---------------------------------------------------------------------------
\9\ See e.g., Cboe C2 Options Exchange Fees Schedule, Physical
Connectivity Fees.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\10\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act,\11\ which provides that Exchange rules may provide
for the equitable allocation of reasonable dues, fees, and other
charges among its Permit Holders and other persons using its
facilities. Additionally, the Exchange believes the proposed rule
change is consistent with the Section 6(b)(5) \12\ requirement that the
rules of an exchange not be designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes it's reasonable to assess the proposed fees
for each of the logical connectivity ports described above as the
proposed fees enable the Exchange to continue to maintain and improve
its market technology and services. Additionally, the Exchange notes
the proposed fees are in line with, and indeed less than, the fees
assessed on certain of its affiliated exchanges for similar
connectivity.\13\ The proposed logical connectivity fees are also
equitable and not unfairly discriminatory because the Exchange will
apply the same fees to all market participants that use the same
respective connectivity options.
---------------------------------------------------------------------------
\13\ See Affiliated Exchange Fee Schedules, Logical Port Fees.
---------------------------------------------------------------------------
The Exchange also believes it's reasonable, equitable and not
unfairly discriminatory to prorate physical connectivity fees because
it provides for a more precise assessment of physical connectivity fees
based on when a user obtains a new physical port or Disaster Recovery
physical port. The Exchange believes it's reasonable, equitable and not
unfairly discriminatory to assess a physical port fee only once if it
connects with another affiliate exchange because only one port is being
used and the Exchange does not wish to charge multiple fees for the
same port. The Exchange believes listing the affiliate exchanges that
physical ports and Disaster Recovery physical ports can connect to adds
clarity to the fee schedule and avoids potential confusion. The
alleviation of confusion removes impediments to and perfects the
mechanism of a free and open market and a national market system.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed change represents a significant departure
from pricing offered by the Exchange's affiliates. Additionally,
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. The Exchange believes that fees for connectivity are
constrained by the robust competition for order flow among exchanges
and non-exchange markets. Further, excessive fees for connectivity,
would serve to impair an exchange's ability to compete for order flow
rather than burdening competition. The Exchange also does not believe
the proposed rule change would impact intramarket competition as it
would apply to all members and non-members equally.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
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 \14\ and paragraph (f) of Rule 19b-4 \15\
thereunder. 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. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing,
[[Page 32172]]
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 SRb-4CboeEDGX-2018-024 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 SRb-4CboeEDGX-2018-024.
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 SRb-4CboeEDGX-2018-024 and
should be submitted on or before August 1, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14849 Filed 7-10-18; 8:45 am]
BILLING CODE 8011-01-P