Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend the Fee Schedule Applicable to Members and Non-Members of the Exchange Pursuant to BZX Rules 15.1(a) and (c), 16062-16064 [2019-07705]
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Federal Register / Vol. 84, No. 74 / Wednesday, April 17, 2019 / Notices
that would permit the Funds to register
as open-end management investment
companies and issue shares that are
redeemable in Creation Units only.
5. Applicants also request an
exemption from section 22(d) of the Act
and rule 22c–1 under the Act as
secondary market trading in shares will
take place at negotiated prices, not at a
current offering price described in a
Fund’s prospectus, and not at a price
based on NAV. Applicants state that (a)
secondary market trading in shares does
not involve a Fund as a party and will
not result in dilution of an investment
in shares, and (b) to the extent different
prices exist during a given trading day,
or from day to day, such variances occur
as a result of third-party market forces,
such as supply and demand. Therefore,
applicants assert that secondary market
transactions in shares will not lead to
discrimination or preferential treatment
among purchasers. Finally, applicants
represent that share market prices will
be disciplined by arbitrage
opportunities, which should prevent
shares from trading at a material
discount or premium from NAV.
6. With respect to Funds that effect
creations and redemptions of Creation
Units in kind and that are based on
certain Underlying Indexes that include
foreign securities, applicants request
relief from the requirement imposed by
section 22(e) in order to allow such
Funds to pay redemption proceeds
within fifteen calendar days following
the tender of Creation Units for
redemption. Applicants assert that the
requested relief would not be
inconsistent with the spirit and intent of
section 22(e) to prevent unreasonable,
undisclosed or unforeseen delays in the
actual payment of redemption proceeds.
7. Applicants request an exemption to
permit Funds of Funds to acquire Fund
shares beyond the limits of section
12(d)(1)(A) of the Act; and the Funds,
and any principal underwriter for the
Funds, and/or any broker or dealer
registered under the Exchange Act, to
sell shares to Funds of Funds beyond
the limits of section 12(d)(1)(B) of the
Act. The application’s terms and
conditions are designed to, among other
things, help prevent any potential (i)
undue influence over a Fund through
control or voting power, or in
connection with certain services,
transactions, and underwritings, (ii)
excessive layering of fees, and (iii)
overly complex fund structures, which
are the concerns underlying the limits
in sections 12(d)(1)(A) and (B) of the
Act.
8. Applicants request an exemption
from sections 17(a)(1) and 17(a)(2) of the
Act to permit persons that are Affiliated
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Persons, or Second-Tier Affiliates, of the
Funds, solely by virtue of certain
ownership interests, to effectuate
purchases and redemptions in-kind. The
deposit procedures for in-kind
purchases of Creation Units and the
redemption procedures for in-kind
redemptions of Creation Units will be
the same for all purchases and
redemptions and Deposit Instruments
and Redemption Instruments will be
valued in the same manner as those
investment positions currently held by
the Funds. Applicants also seek relief
from the prohibitions on affiliated
transactions in section 17(a) to permit a
Fund to sell its shares to and redeem its
shares from a Fund of Funds, and to
engage in the accompanying in-kind
transactions with the Fund of Funds.3
The purchase of Creation Units by a
Fund of Funds directly from a Fund will
be accomplished in accordance with the
policies of the Fund of Funds and will
be based on the NAVs of the Funds.
9. Section 6(c) of the Act permits the
Commission to exempt any persons or
transactions from any provision of the
Act if such exemption is necessary or
appropriate in the public interest and
consistent with the protection of
investors and the purposes fairly
intended by the policy and provisions of
the Act. Section 12(d)(1)(J) of the Act
provides that the Commission may
exempt any person, security, or
transaction, or any class or classes of
persons, securities, or transactions, from
any provision of section 12(d)(1) if the
exemption is consistent with the public
interest and the protection of investors.
Section 17(b) of the Act authorizes the
Commission to grant an order
permitting a transaction otherwise
prohibited by section 17(a) if it finds
that (a) the terms of the proposed
transaction are fair and reasonable and
do not involve overreaching on the part
of any person concerned; (b) the
proposed transaction is consistent with
the policies of each registered
investment company involved; and (c)
the proposed transaction is consistent
with the general purposes of the Act.
3 The requested relief would apply to direct sales
of shares in Creation Units by a Fund to a Fund of
Funds and redemptions of those shares. Applicants
are not seeking relief from section 17(a) for, and the
requested relief will not apply to, transactions
where a Fund could be deemed an Affiliated
Person, or a Second-Tier Affiliate, of a Fund of
Funds because an Adviser or an entity controlling,
controlled by or under common control with an
Adviser provides investment advisory services to
that Fund of Funds.
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For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–07718 Filed 4–16–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85636; File No. SR–
CboeBZX–2019–021]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Relating To
Amend the Fee Schedule Applicable to
Members and Non-Members of the
Exchange Pursuant to BZX Rules
15.1(a) and (c)
April 12, 2019.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March
29, 2019, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II,
below, which Items have been prepared
by the self-regulatory organization. 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
BZX Exchange, Inc. (the ‘‘Exchange’’
or ‘‘BZX’’) is filing with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
to amend the fee schedule applicable to
Members and non-Members 4 of the
Exchange pursuant to BZX Rules 15.1(a)
and (c). The text of the proposed rule
change is attached as Exhibit 5 [sic].
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 A Member is defined as ‘‘any registered broker
or dealer that has been admitted to membership in
the Exchange.’’ See Exchange Rule 1.5(n).
2 15
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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
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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
fee schedule applicable to its equities
trading platform (‘‘BZX Equities’’) to
add a Non-Displayed Add Volume Tier,
effective April 1, 2019.
The Exchange currently offers three
Non-Displayed Add Volume Tiers under
footnote 1, which provide an enhanced
rebate between $0.0018 to $0.0025 per
share for qualifying Tape A, B, and C
non-displayed orders that add liquidity
(i.e., yield fee codes HV, HB, and HY,
respectively). The Exchange now
proposes to add a fourth Non-Displayed
Add Volume Tier. Under the proposed
Non-Displayed Add Volume Tier 4, a
Member may receive an enhanced
rebate of $0.0029 per share where they
add an ADV 5 greater than or equal to
0.38% of the TCV 6 as Non-Displayed
orders that yield fee codes HB, HI,7 HV
or HY. The Exchange believes the
proposed new tier will encourage
Members to increase their liquidity on
the exchange.
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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,8 in general, and furthers the
objectives of Section 6(b)(4),9 in
particular, as it is designed to provide
5 ‘‘ADV’’ means average daily volume calculated
as the number of shares added or removed,
combined, per day. ADAV and ADV are calculated
on a monthly basis. See Exchange Fee Schedule.
6 ‘‘TCV’’ means total consolidated volume
calculated as the volume reported by all exchanges
and trade reporting facilities to a consolidated
transaction reporting plan for the month for which
the fees apply. Id.
7 Fee code HI is appended to non-displayed
orders that receive price improvement and add
liquidity. Id.
8 15 U.S.C. 78f.
9 15 U.S.C. 78f(b)(4).
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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.
In particular, the Exchange notes that
volume-based rebates such as that
proposed herein have been widely
adopted by exchanges, including the
Exchange, 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 to an exchange’s
market quality; (ii) associated higher
levels of market activity, such as higher
levels of liquidity provision and/or
growth patterns; and (iii) introduction of
higher volumes of orders into the price
and volume discovery processes. The
Exchange believes that the proposed tier
is a reasonable, fair and equitable, and
not unfairly discriminatory allocation of
fees and rebates because it will provide
Members with an incentive to reach
certain thresholds on the Exchange.
More specifically, the Exchange
believes the proposed Non-Displayed
Add Volume Tier 4 is a reasonable
means to encourage Members to
increase their liquidity on the Exchange.
The Exchange further believes that the
proposed tier represents an equitable
allocation of reasonable dues, fees, and
other charges because the threshold
necessary to achieve the tier encourages
Members to add increased liquidity on
BZX each month. The increased
liquidity benefits all investors by
deepening the Exchange’s liquidity
pool, offering additional flexibility for
all investors to enjoy cost savings,
supporting the quality of price
discovery, promoting market
transparency and improving investor
protection. The Exchange also believes
that the proposed rebate is reasonable
based on the difficulty of satisfying the
tier’s criteria as compared to the existing
Non-Displayed Add Volume tiers,
which provide lower rebates and
similar, but less stringent, criteria.
Furthermore, the Exchange believes that
the proposed tier is not unfairly
discriminatory as it applies to all
members that meet the required criteria.
PO 00000
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Sfmt 4703
16063
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule changes will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe the proposed
change burdens competition, but rather,
enhances competition as it is intended
to increase the competitiveness of BZX
by adopting an additional pricing
incentive in order to attract order flow
and incentivize participants to increase
their participation on the Exchange. The
Exchange 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 structures to be unreasonable
or excessive. 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
also notes that the proposed change is
intended to enhance the rebate for
liquidity added to the Exchange, which
is intended to draw additional liquidity
to the Exchange to the benefit of all
market participants. The Exchange does
not believe the proposed amendment
would burden intramarket competition
as it would be available to all Members
uniformly.
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 is effective
upon filing pursuant to Section
19(b)(3)(A)(ii) of the Act,10 and
subparagraph (f)(2) of Rule 19b–4 11
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such 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
10 15
11 17
E:\FR\FM\17APN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
17APN1
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Federal Register / Vol. 84, No. 74 / Wednesday, April 17, 2019 / Notices
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 12 of the Act 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:
amozie on DSK9F9SC42PROD with NOTICES
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–
CboeBZX–2019–021 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–CboeBZX–2019–021. 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–CboeBZX–2019–021 and
should be submitted on or before May
8, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–07705 Filed 4–16–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85603; File No. SR–
NASDAQ–2019–028]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the
Current Pilot Program Related to
Clearly Erroneous Transactions
April 11, 2019.
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 April 9,
2019, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
current pilot program related to Nasdaq
Rule 11890, Clearly Erroneous
Transactions, to the close of business on
October 18, 2019.
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaq.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
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
12 15
U.S.C. 78s(b)(2)(B).
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18:23 Apr 16, 2019
Jkt 247001
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
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 extend the current pilot
program related to Rule 11890, Clearly
Erroneous Transactions, to the close of
business on October 18, 2019. This
change is being proposed in connection
with proposed amendments to the Plan
to Address Extraordinary Market
Volatility (the ‘‘Limit Up-Limit Down
Plan’’ or the ‘‘Plan’’) that would allow
the Plan to continue to operate on a
permanent basis.3
On September 10, 2010, the
Commission approved, on a pilot basis,
changes to Rule 11890 that, among other
things: (i) Provided for uniform
treatment of clearly erroneous execution
reviews in multi-stock events involving
twenty or more securities; and (ii)
reduced the ability of the Exchange to
deviate from the objective standards set
forth in the rule.4 In 2013, the Exchange
adopted a provision designed to address
the operation of the Plan.5 Finally, in
2014, the Exchange adopted two
additional provisions providing that: (i)
A series of transactions in a particular
security on one or more trading days
may be viewed as one event if all such
transactions were effected based on the
same fundamentally incorrect or grossly
misinterpreted issuance information
resulting in a severe valuation error for
all such transactions; and (ii) in the
event of any disruption or malfunction
in the operation of the electronic
communications and trading facilities of
an Exchange, another SRO, or
responsible single plan processor in
connection with the transmittal or
receipt of a trading halt, an Officer,
acting on his or her own motion, shall
nullify any transaction that occurs after
a trading halt has been declared by the
primary listing market for a security and
before such trading halt has officially
ended according to the primary listing
3 See Securities Exchange Act Release No. 84843
(December 18, 2018), 83 FR 66464 (December 26,
2018) (File No. 4–631) (‘‘Eighteenth Amendment’’).
4 See Securities Exchange Act Release No. 62886
(September 10, 2010), 75 FR 56613 (September 16,
2010) (SR–NASDAQ–2010–076).
5 See Securities Exchange Act Release No. 68819
(February 1, 2013), 78 FR 9438 (February 8, 2013)
(SR–NASDAQ–2013–022).
E:\FR\FM\17APN1.SGM
17APN1
]]>Agencies
[Federal Register Volume 84, Number 74 (Wednesday, April 17, 2019)]
[Notices]
[Pages 16062-16064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07705]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85636; File No. SR-CboeBZX-2019-021]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Amend the Fee Schedule Applicable to Members and Non-Members of the
Exchange Pursuant to BZX Rules 15.1(a) and (c)
April 12, 2019.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on March 29, 2019, Cboe BZX Exchange, Inc. (the
``Exchange'' or ``BZX'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II, below, which Items have been prepared by the self-
regulatory organization. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') is filing with the
Securities and Exchange Commission (``Commission'') a proposed rule
change to amend the fee schedule applicable to Members and non-Members
\4\ of the Exchange pursuant to BZX Rules 15.1(a) and (c). The text of
the proposed rule change is attached as Exhibit 5 [sic].
---------------------------------------------------------------------------
\4\ A 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 also available on the
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
[[Page 16063]]
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 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its fee schedule applicable to its
equities trading platform (``BZX Equities'') to add a Non-Displayed Add
Volume Tier, effective April 1, 2019.
The Exchange currently offers three Non-Displayed Add Volume Tiers
under footnote 1, which provide an enhanced rebate between $0.0018 to
$0.0025 per share for qualifying Tape A, B, and C non-displayed orders
that add liquidity (i.e., yield fee codes HV, HB, and HY,
respectively). The Exchange now proposes to add a fourth Non-Displayed
Add Volume Tier. Under the proposed Non-Displayed Add Volume Tier 4, a
Member may receive an enhanced rebate of $0.0029 per share where they
add an ADV \5\ greater than or equal to 0.38% of the TCV \6\ as Non-
Displayed orders that yield fee codes HB, HI,\7\ HV or HY. The Exchange
believes the proposed new tier will encourage Members to increase their
liquidity on the exchange.
---------------------------------------------------------------------------
\5\ ``ADV'' means average daily volume calculated as the number
of shares added or removed, combined, per day. ADAV and ADV are
calculated on a monthly basis. See Exchange Fee Schedule.
\6\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan for the month for which the
fees apply. Id.
\7\ Fee code HI is appended to non-displayed orders that receive
price improvement and add liquidity. Id.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with the objectives of Section 6 of the Act,\8\ in general, and
furthers the objectives of Section 6(b)(4),\9\ 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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
In particular, the Exchange notes that volume-based rebates such as
that proposed herein have been widely adopted by exchanges, including
the Exchange, 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 to an exchange's market quality;
(ii) associated higher levels of market activity, such as higher levels
of liquidity provision and/or growth patterns; and (iii) introduction
of higher volumes of orders into the price and volume discovery
processes. The Exchange believes that the proposed tier is a
reasonable, fair and equitable, and not unfairly discriminatory
allocation of fees and rebates because it will provide Members with an
incentive to reach certain thresholds on the Exchange.
More specifically, the Exchange believes the proposed Non-Displayed
Add Volume Tier 4 is a reasonable means to encourage Members to
increase their liquidity on the Exchange. The Exchange further believes
that the proposed tier represents an equitable allocation of reasonable
dues, fees, and other charges because the threshold necessary to
achieve the tier encourages Members to add increased liquidity on BZX
each month. The increased liquidity benefits all investors by deepening
the Exchange's liquidity pool, offering additional flexibility for all
investors to enjoy cost savings, supporting the quality of price
discovery, promoting market transparency and improving investor
protection. The Exchange also believes that the proposed rebate is
reasonable based on the difficulty of satisfying the tier's criteria as
compared to the existing Non-Displayed Add Volume tiers, which provide
lower rebates and similar, but less stringent, criteria. Furthermore,
the Exchange believes that the proposed tier is not unfairly
discriminatory as it applies to all members that meet the required
criteria.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
the proposed change burdens competition, but rather, enhances
competition as it is intended to increase the competitiveness of BZX by
adopting an additional pricing incentive in order to attract order flow
and incentivize participants to increase their participation on the
Exchange. The Exchange 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 structures to be unreasonable or
excessive. 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 also notes that the proposed change is intended to enhance the
rebate for liquidity added to the Exchange, which is intended to draw
additional liquidity to the Exchange to the benefit of all market
participants. The Exchange does not believe the proposed amendment
would burden intramarket competition as it would be available to all
Members uniformly.
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 is effective upon filing pursuant to
Section 19(b)(3)(A)(ii) of the Act,\10\ and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such 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
[[Page 16064]]
the purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings under Section 19(b)(2)(B) \12\
of the Act to determine whether the proposed rule change should be
approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CboeBZX-2019-021 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-CboeBZX-2019-021. 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-CboeBZX-2019-021 and should be submitted
on or before May 8, 2019.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-07705 Filed 4-16-19; 8:45 am]
BILLING CODE 8011-01-P
