Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Fee Schedule Applicable to Its Equities Trading Platform (“EDGX Equities”) To Introduce a “Cross-Asset Volume Tier”, 4111-4113 [2019-02286]

Download as PDF Federal Register / Vol. 84, No. 31 / Thursday, February 14, 2019 / Notices designates the proposed rule change as operative upon filing.15 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 shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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– FINRA–2019–005 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–FINRA–2019–005. 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 15 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 17:54 Feb 13, 2019 Jkt 247001 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of FINRA. 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–FINRA– 2019–005 and should be submitted on or before March 7, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–02289 Filed 2–13–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85078; File No. SR– CboeEDGX–2019–002] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange’s Fee Schedule Applicable to Its Equities Trading Platform (‘‘EDGX Equities’’) To Introduce a ‘‘Cross-Asset Volume Tier’’ February 8, 2019. 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 January 29, 2019, Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) 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 from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe EDGX Exchange, Inc. (‘‘EDGX’’ or the ‘‘Exchange’’) is filing with the Securities and Exchange Commission (the ‘‘Commission’’) a proposed rule change to amend the Exchange’s fee schedule applicable to its equities trading platform (‘‘EDGX Equities’’) to introduce a ‘‘Cross-Asset Volume Tier.’’ 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 4111 The text of the proposed rule change is attached as Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ options/regulation/rule_filings/edgx/), at the Exchange’s Office of the Secretary, 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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend the EDGX Equities fee schedule to introduce a ‘‘Cross-Asset Volume Tier’’ under Footnote 1, effective February 1, 2019. Currently, with respect to the Exchange’s equities trading platform, the Exchange determines the liquidity adding rebate that it will provide to Members using the Exchange’s tiered pricing structure. The EDGX Equities fee schedule currently contains seven Add Volume Tiers that provide enhanced rebates, ranging from of $0.0025 to $0.0033 per share, for orders yielding fee codes B,3 V,4 Y,5 3 6 and 4.7 The Exchange proposes to adopt an eighth tier under Footnote 1 called the CrossAsset Volume Tier. Particularly, the Exchange proposes to create a crossasset tier which is designed to incentivize members to achieve certain levels of participation on both the Exchange’s equities and options platform (‘‘EDGX Options’’). As 3 ‘‘B’’ is associated with displayed orders that add liquidity on EDGX for Tape B. 4 ‘‘V’’ is associated with displayed orders that add liquidity on EDGX for Tape A. 5 ‘‘Y’’ is associated with displayed orders that add liquidity on EDGX for Tape C. 6 ‘‘3’’ is associated with displayed orders that add liquidity on EDGX for Tape A or C during the postmarket or pre-market trading sessions. 7 ‘‘4’’ is associated with displayed orders that add liquidity on EDGX for Tape B during the postmarket or pre-market trading sessions. E:\FR\FM\14FEN1.SGM 14FEN1 4112 Federal Register / Vol. 84, No. 31 / Thursday, February 14, 2019 / Notices proposed, under the Cross-Asset Volume Tier, a Member would receive a rebate of $0.0030 per share if that Member (i) adds an ADV 8 greater or equal to 0.20% of the TCV 9 and (ii) has an ADV in Customer orders on EDGX Options greater or equal to 0.10% of average OCV.10 The Exchange notes that another Exchange has similar cross-asset add volume tiers.11 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6 of the Act,12 in general, and furthers the requirements of Section 6(b)(4),13 in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its [sic] In particular, the Exchange notes that volume-based discounts such as those currently maintained on the Exchange have been widely adopted by options exchanges and are equitable because they are open to all Members on an equal basis and provide additional benefits or discounts that are reasonably related to (i) the value of an exchange’s market quality; (ii) associated with higher levels of market activity, such as higher levels of liquidity provision and/ or growth patterns; and (iii) introduction of higher volumes of orders into the price and volume discovery processes. The Exchange believes the proposal to add a new Cross-Asset Volume Tier under footnote 1 is reasonable because it provides Members an additional opportunity to receive an enhanced rate for orders that add liquidity and is a reasonable means to encourage Members to increase their liquidity on the Exchange in both equities and options. Deepening the Exchange’s liquidity pool benefits investors by encouraging more price competition and providing additional 8 ‘‘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. 9 ‘‘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. 10 ‘‘OCV’’ means, for purposes of equities pricing, the total equity and ETF options volume that clears in the Customer range at the Options Clearing Corporation (‘‘OCC’’) for the month for which the fees apply, excluding volume on any day that the Exchange experiences an Exchange System Disruption and on any day with a scheduled early market close, using the definition of Customer as provided under the Exchange’s fee schedule for EDGX Options. 11 See Cboe BZX U.S. Equities Exchange Fee Schedule, Footnote 1. 12 15 U.S.C. 78f. 13 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 17:54 Feb 13, 2019 Jkt 247001 opportunities to trade. The Exchange further believes the proposed threshold is commensurate with the proposed enhanced rebate and that it will encourage members to add increased liquidity to EDGX each month in both equities and options. Furthermore, the Exchange believes that the proposed Cross-Asset Volume Tier is not unfairly discriminatory as it applies uniformly to all Members. To the extent a Member participates on the Exchange but not on EDGX Options, the Exchange does believe that the proposal is still reasonable, equitably allocated and nondiscriminatory with respect to such Member based on the overall benefit to the Exchange resulting from the success of EDGX Options. Particularly, the Exchange believes such success allows the Exchange to continue to provide and potentially expand its existing incentive programs to the benefit of all participants on the Exchange, whether they participate on EDGX Options or not. The proposed pricing program is also fair and equitable in that membership in EDGX Options is available to all market participants which would provide them with access to the benefits on EDGX Options provided by the proposed change, even where a member of EDGX Options is not necessarily eligible for the proposed increased rebate on the Exchange. Further, the proposed change will result in Members receiving either the same or an increased rebate than they would currently receive. The Exchange also notes that another Exchange has similar cross-asset volume tiers.14 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Rather, the proposed change is designed to enhance competition by attracting additional liquidity and increasing the competitiveness of the Exchange. The proposed rebate tier would apply to all members uniformly based. The Exchange operates in a highlycompetitive 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. The proposed rule change reflects a competitive pricing structure designed to encourage market participants to direct their order flow to the Exchange. 14 See Cboe BZX U.S. Equities Exchange Fee Schedule, Footnote 1. PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. 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 15 and paragraph (f) of Rule 19b–4 16 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, 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–2019–002 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–2019–002. 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 15 15 16 17 E:\FR\FM\14FEN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 14FEN1 Federal Register / Vol. 84, No. 31 / Thursday, February 14, 2019 / Notices 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; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–Cboe– EDGX–2019–002 and should be submitted on or before March 7, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–02286 Filed 2–13–19; 8:45 am] BILLING CODE 8011–01–P The Exchange proposes to increase the Options Regulatory Fee (‘‘ORF’’) from $0.0028 per contract to $0.0045 per contract in order to help ensure that revenue collected from the ORF, in combination with other regulatory fees and fines, meets the Exchange’s total regulatory costs. The ORF is assessed by Cboe Options to each Trading Permit Holder (‘‘TPH’’) for options transactions cleared by the TPH that are cleared by the Options Clearing Corporation (‘‘OCC’’) in the customer range, regardless of the exchange on which the transaction occurs.3 In other words, the Exchange imposes the ORF on all customer-range transactions cleared by a TPH, even if the transactions do not take place on the Exchange. The ORF is collected by OCC on behalf of the Exchange from the Clearing Trading Permit Holder (‘‘CTPH’’) or non-CTPH that ultimately clears the transaction. With respect to linkage transactions, Cboe Options reimburses its routing broker providing Routing Services pursuant to Cboe Options Rule 6.14B for options regulatory fees it incurs in connection with the Routing Services it provides. Revenue generated from ORF, when combined with all of the Exchange’s other regulatory fees and fines, is designed to recover a material portion of the regulatory costs to the Exchange of the supervision and regulation of TPH customer options business. Regulatory costs include direct regulatory expenses and certain indirect expenses for work allocated in support of the regulatory function. The direct expenses include in-house and third party service provider costs to support the day to day regulatory work such as surveillances, investigations and examinations. The indirect expenses include support from such areas as human resources, legal, information technology and accounting. These indirect expenses are estimated to be approximately 8% of Cboe Options’ total regulatory costs for 2019. Thus, direct expenses are estimated to be approximately 92% of total regulatory costs for 2019. In addition, it is Cboe Options’ practice that revenue generated from ORF not exceed more than 75% of total annual regulatory costs. These expectations are estimated, preliminary and may change. There can be no assurance that our final costs for 2019 will not differ materially from these expectations and prior practice; however, the Exchange believes that revenue generated from the ORF, when combined with all of the Exchange’s other regulatory fees and fines, will cover a material portion, but not all, of the Exchange’s regulatory costs. The Exchange also notes that its regulatory responsibilities with respect to TPH compliance with options sales practice rules have largely been allocated to FINRA under a 17d–2 agreement.4 The ORF is not designed to cover the cost of that options sales practice regulation. The Exchange will continue to monitor the amount of revenue collected from the ORF to ensure that it, in combination with its other regulatory fees and fines, does not exceed the Exchange’s total regulatory costs. The Exchange monitors its regulatory costs and revenues at a minimum on a semiannual basis. If the Exchange determines regulatory revenues exceed or are insufficient to cover a material portion of its regulatory costs, the Exchange will adjust the ORF by submitting a fee change filing to the 3 The ORF also applies to customer-range transactions executed during Extended Trading Hours. 4 See Securities Exchange Act Release No. 76309 (October 29, 2015), 80 FR 68361 (November 4, 2015). I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) proposes to amend its Fees Schedule relating to the Options Regulatory Fee. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://www.cboe.com/ AboutCBOE/ CBOELegalRegulatoryHome.aspx), at the Exchange’s Office of the Secretary, 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 aspects of such statements. SECURITIES AND EXCHANGE COMMISSION A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [Release No. 34–85080; File No. SR–CBOE– 2019–004] 1. Purpose Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Options Regulatory Fee February 8, 2019. 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 January 29, 2019, Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) 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 from interested persons. 17 17 CFR 200.30–3(a)(12). 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 VerDate Sep<11>2014 17:54 Feb 13, 2019 Jkt 247001 4113 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\14FEN1.SGM 14FEN1

Agencies

[Federal Register Volume 84, Number 31 (Thursday, February 14, 2019)]
[Notices]
[Pages 4111-4113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02286]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85078; File No. SR-CboeEDGX-2019-002]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the Exchange's Fee Schedule Applicable to Its Equities Trading 
Platform (``EDGX Equities'') To Introduce a ``Cross-Asset Volume Tier''

February 8, 2019.
    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 January 29, 2019, Cboe EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') filed with the Securities and Exchange Commission (the 
``Commission'') 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 from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (``EDGX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (the ``Commission'') a 
proposed rule change to amend the Exchange's fee schedule applicable to 
its equities trading platform (``EDGX Equities'') to introduce a 
``Cross-Asset Volume Tier.'' The text of the proposed rule change is 
attached as Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, 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 aspects of such 
statements.

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

1. Purpose
    The purpose of the proposed rule change is to amend the EDGX 
Equities fee schedule to introduce a ``Cross-Asset Volume Tier'' under 
Footnote 1, effective February 1, 2019.
    Currently, with respect to the Exchange's equities trading 
platform, the Exchange determines the liquidity adding rebate that it 
will provide to Members using the Exchange's tiered pricing structure. 
The EDGX Equities fee schedule currently contains seven Add Volume 
Tiers that provide enhanced rebates, ranging from of $0.0025 to $0.0033 
per share, for orders yielding fee codes B,\3\ V,\4\ Y,\5\ 3 \6\ and 
4.\7\ The Exchange proposes to adopt an eighth tier under Footnote 1 
called the Cross-Asset Volume Tier. Particularly, the Exchange proposes 
to create a cross-asset tier which is designed to incentivize members 
to achieve certain levels of participation on both the Exchange's 
equities and options platform (``EDGX Options''). As

[[Page 4112]]

proposed, under the Cross-Asset Volume Tier, a Member would receive a 
rebate of $0.0030 per share if that Member (i) adds an ADV \8\ greater 
or equal to 0.20% of the TCV \9\ and (ii) has an ADV in Customer orders 
on EDGX Options greater or equal to 0.10% of average OCV.\10\ The 
Exchange notes that another Exchange has similar cross-asset add volume 
tiers.\11\
---------------------------------------------------------------------------

    \3\ ``B'' is associated with displayed orders that add liquidity 
on EDGX for Tape B.
    \4\ ``V'' is associated with displayed orders that add liquidity 
on EDGX for Tape A.
    \5\ ``Y'' is associated with displayed orders that add liquidity 
on EDGX for Tape C.
    \6\ ``3'' is associated with displayed orders that add liquidity 
on EDGX for Tape A or C during the post-market or pre-market trading 
sessions.
    \7\ ``4'' is associated with displayed orders that add liquidity 
on EDGX for Tape B during the post-market or pre-market trading 
sessions.
    \8\ ``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.
    \9\ ``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.
    \10\ ``OCV'' means, for purposes of equities pricing, the total 
equity and ETF options volume that clears in the Customer range at 
the Options Clearing Corporation (``OCC'') for the month for which 
the fees apply, excluding volume on any day that the Exchange 
experiences an Exchange System Disruption and on any day with a 
scheduled early market close, using the definition of Customer as 
provided under the Exchange's fee schedule for EDGX Options.
    \11\ See Cboe BZX U.S. Equities Exchange Fee Schedule, Footnote 
1.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act,\12\ in general, and furthers the 
requirements of Section 6(b)(4),\13\ in particular, as it is designed 
to provide for the equitable allocation of reasonable dues, fees and 
other charges among its [sic]
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    In particular, the Exchange notes that volume-based discounts such 
as those currently maintained on the Exchange have been widely adopted 
by options exchanges and are equitable because they are open to all 
Members on an equal basis and provide additional benefits or discounts 
that are reasonably related to (i) the value of an exchange's market 
quality; (ii) associated with higher levels of market activity, such as 
higher levels of liquidity provision and/or growth patterns; and (iii) 
introduction of higher volumes of orders into the price and volume 
discovery processes. The Exchange believes the proposal to add a new 
Cross-Asset Volume Tier under footnote 1 is reasonable because it 
provides Members an additional opportunity to receive an enhanced rate 
for orders that add liquidity and is a reasonable means to encourage 
Members to increase their liquidity on the Exchange in both equities 
and options. Deepening the Exchange's liquidity pool benefits investors 
by encouraging more price competition and providing additional 
opportunities to trade. The Exchange further believes the proposed 
threshold is commensurate with the proposed enhanced rebate and that it 
will encourage members to add increased liquidity to EDGX each month in 
both equities and options. Furthermore, the Exchange believes that the 
proposed Cross-Asset Volume Tier is not unfairly discriminatory as it 
applies uniformly to all Members.
    To the extent a Member participates on the Exchange but not on EDGX 
Options, the Exchange does believe that the proposal is still 
reasonable, equitably allocated and non-discriminatory with respect to 
such Member based on the overall benefit to the Exchange resulting from 
the success of EDGX Options. Particularly, the Exchange believes such 
success allows the Exchange to continue to provide and potentially 
expand its existing incentive programs to the benefit of all 
participants on the Exchange, whether they participate on EDGX Options 
or not. The proposed pricing program is also fair and equitable in that 
membership in EDGX Options is available to all market participants 
which would provide them with access to the benefits on EDGX Options 
provided by the proposed change, even where a member of EDGX Options is 
not necessarily eligible for the proposed increased rebate on the 
Exchange. Further, the proposed change will result in Members receiving 
either the same or an increased rebate than they would currently 
receive. The Exchange also notes that another Exchange has similar 
cross-asset volume tiers.\14\
---------------------------------------------------------------------------

    \14\ See Cboe BZX U.S. Equities Exchange Fee Schedule, Footnote 
1.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change would 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. Rather, the 
proposed change is designed to enhance competition by attracting 
additional liquidity and increasing the competitiveness of the 
Exchange. The proposed rebate tier would apply to all members uniformly 
based. The Exchange 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. The 
proposed rule change reflects a competitive pricing structure designed 
to encourage market participants to direct their order flow to the 
Exchange.

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

    No written comments were either solicited or received.

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 \15\ and paragraph (f) of Rule 19b-4 \16\ 
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.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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 rule-comments@sec.gov. Please include 
File Number SR-CboeEDGX-2019-002 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-2019-002. 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

[[Page 4113]]

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; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-Cboe-EDGX-2019-002 and should be submitted on or before 
March 7, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-02286 Filed 2-13-19; 8:45 am]
 BILLING CODE 8011-01-P
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