Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule, 22919-22923 [2019-10350]

Download as PDF Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices 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–C2–2019–010 and should be submitted on or before June 10, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–10352 Filed 5–17–19; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–85852; File No. SR– CboeEDGX–2019–030] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule May 14, 2019. khammond on DSKBBV9HB2PROD with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 1, 2019, Cboe EDGX Exchange, Inc. (‘‘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 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. (the ‘‘Exchange’’ or ‘‘EDGX’’) is filing with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change to amend the fee schedule applicable to Members and CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Sep<11>2014 16:41 May 17, 2019 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 SECURITIES AND EXCHANGE COMMISSION 13 17 non-Members 3 of the Exchange pursuant to EDGX Rules 15.1(a) and (c). The text of the proposed rule change is attached [sic] 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. 1. Purpose The Exchange proposes to amend its fee schedule applicable to its equities trading platform (‘‘EDGX Equities’’), effective May 1, 2019. Transaction Fee Changes Orders That Remove Liquidity In securities priced at or above $1.00, the Exchange currently assesses a fee of $0.0030 per share for Displayed and Non-Displayed orders that remove liquidity (i.e., yields fee codes N, W, 6, BB, PR and ZR). All Displayed and NonDisplayed orders in securities priced below $1.00 that remove liquidity (i.e., yield fee codes N, W, 6, BB, PR and ZR) result in a fee of 0.30% of dollar value. The Exchange first proposes to reduce the current standard rate of $0.0030 per share to $0.00265 per share for Displayed and Non-Displayed orders that remove liquidity for securities priced at or above $1.00. All Displayed and Non-Displayed orders that remove liquidity in securities priced below $1.00 would continue to result in a fee of 0.30% of dollar value. Orders That Add Liquidity In securities priced at or above $1.00, the Exchange currently provides a 3A Member is defined as ‘‘any registered broker or dealer that has been admitted to membership in the Exchange.’’ See Exchange Rule 1.5(n). Jkt 247001 PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 22919 standard rebate of $0.0020 per share for Displayed orders that add liquidity (i.e., yield fee code B, V, Y, 3 and 4) and a rebate of $0.0015 for Non-Displayed orders that add liquidity (i.e., yield fee code DM, HA, MM, and RP).4 All Displayed and Non-Displayed orders in securities priced below $1.00 that add liquidity receive a rebate of $0.00003 per share. The Exchange now proposes to reduce rebates for Displayed and NonDisplayed orders that add liquidity to balance the revenue received for orders that remove liquidity (and as described above, the Exchange is reducing the rates assessed for orders that remove liquidity). With respect to Displayed orders priced at or above $1.00 that add liquidity (i.e., yields fee codes B, V, Y, 3 and 4), the Exchange proposes to reduce the per share rebate from $0.0020 to $0.0017. With respect to Non-Displayed orders priced at or above $1.00 that add liquidity (i.e., yields fee codes DM, HA, MM, and RP), the Exchange proposes to reduce the standard rebate from $0.0015 per share to $0.0010 per share. The Exchange also proposes to eliminate the current rebate pf $0.00003 per share for Non-Displayed orders in securities priced below $1.00 that add liquidity and provide that such executions shall be free. All Displayed orders that add liquidity in securities priced below $1.00 would continue to receive a rebate of $0.00003 per share. Add Volume Tiers—Amendments The Exchange next proposes to amend and restructure its Add Volume Tiers under footnote 1 of the fees schedule. Currently, the Exchange offers eight Add Volume Tiers under footnote 1, which provide an enhanced rebate of $0.0025 to $0.0033 per share for qualifying Displayed orders which yield fee codes B, V, Y, 3 and 4. The Exchange proposes to (i) eliminate the Super Tier, Ultra Tier and Mega Tiers 1 and 2, and adopt in their place new Tiers 1–4, (ii) amend the current Growth Tier and adopt an additional Growth Tier, (iii) amend the Cross-Asset Volume Tier, (iv) adopt a Market Quality Tier, and (v) eliminate the Investor Tier and Step-Up Tier. The Exchange believes the proposed changes result in an easier to follow tier structure and continues to provide Members a variety of opportunities to receive enhanced rebates for adding certain levels of 4 Does not include fee code HI, which is appended to Non-Displayed orders that receive price improvement and add liquidity. Such executions are free. E:\FR\FM\20MYN1.SGM 20MYN1 22920 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices khammond on DSKBBV9HB2PROD with NOTICES Displayed liquidity on the Exchange, as discussed below. Add Volume Tiers: Under footnote 1, the Exchange currently offers a Super Tier, Ultra Tier, Mega Tier 1 and Mega Tier 2, which provide enhanced rebates of $0.0028 to $0.0032 where a member adds an ADV 5 greater than or equal to a specified percentage of TCV. 6 Particularly, the Super Tier provides an enhanced rebate of $0.0028 per share where a Member adds an ADV greater than or equal to 0.15% of the TCV; the Ultra Tier provides an enhanced rebate of $0.0030 per share where a Member adds an ADV greater than or equal to 0.30% of the TCV; Mega Tier 1 provides an enhanced rebate of $0.0031 per share where a Member adds an ADV greater than or equal to 0.45% of the TCV; and Mega Tier 2 provides an enhanced rebate of $0.0032 per share where a Member adds an ADV greater than or equal to 0.75% of the TCV. The Exchange proposes to eliminate these tiers and in their place adopt similar tiers, named ‘‘Tier 1’’, ‘‘Tier 2’’, ‘‘Tier 3’’, and Tier 4’’. Tiers 1–4 will similarly provide enhanced rebates between $0.0023 to $0.0029 (reduced from the current rebates of $0.0028 to $0.0032) where a Member adds an ADV greater than or equal to specified percentages of TCV (slightly modified from the current percentages), as further described below. The Exchange notes that, similar to the current Add Volume Tiers, the proposed tiers provide an incremental incentive for Members to strive for the highest tier level, which provides increasingly higher enhanced rebates. The Exchange believes eliminating the current ‘‘names’’ of the Tiers and renaming the new tiers numerically (i.e., ‘‘Tiers 1–4’’) and placing them in ascending order makes the Add Volume Tiers easier to read and follow. First, the Exchange proposes to adopt Tier 1, which will provide Members an enhanced rebate of $0.0023 per share where the Member adds as ADV greater than or equal to 0.20% of the TCV. The Exchange next proposes to adopt Tier 2, which will provide Members an enhanced rebate of $0.0025 per share where the Member adds as ADV greater than or equal to 0.30% of the TCV. The Exchange also proposes to adopt Tier 3, which will provide Members an 5 ‘‘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. 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. VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 enhanced rebate of $0.0027 per share where the Member adds as ADV greater than or equal to 0.40% of the TCV. Lastly, the Exchange proposes to adopt Tier 4, which will provide Members an enhanced rebate of $0.0029 per share where the Member adds as ADV greater than or equal to 0.70% of the TCV. The Exchange believes the proposed Add Volume Tier changes will encourage members to increase their liquidity on the Exchange. Growth Tiers: The Exchange currently offers a Growth Tier under footnote 1, which provides Members an enhanced rebate of $0.0025 per share where the Member adds as ADV greater than or equal to 0.08% of the TCV. The Exchange proposes to rename the tier ‘‘Growth Tier 1’’ and reduce the enhanced rebate from $0.0025 per share to $0.0020 per share. The Exchange also proposes to modify the threshold criteria to require an ADV greater than or equal to 0.10% of the TCV (instead of 0.08%). The Exchange also proposes to adopt an alternative criteria to satisfy Growth Tier 1 which would provide that a Member would also receive the enhanced rebate of $0.0020 per share where the Member has a Step-Up Add TCV from March 2019 greater than or equal to 0.05%. The Exchange proposes to adopt an additional Growth Tier (‘‘Growth Tier 2’’), which would provide Members an enhanced rebate of $0.0026 per share where the Member (i) has an ADV of greater than or equal to 0.20% of the TCV and (ii) has a StepUp Add TCV from March 2019 greater or equal to 0.10%. The Exchange notes that the proposed Growth Tiers provide Members additional ways to qualify for an enhanced rebate where they increase their relative liquidity each month over a predetermined baseline. Cross-Asset Volume Tier: The Exchange currently offers a Cross-Asset Volume Tier under footnote 1, which provides Members an enhanced rebate of $0.030 per share where the Member (i) adds as ADV greater than or equal to 0.20% of the TCV and (ii) has an ADV in Customer orders on EDGX Options greater than or equal to 0.10% of average OCV. The Exchange proposes to reduce the enhanced rebate available under the Cross-Asset Volume Tier from $0.0030 per share to $0.0027 per share. The Exchange also proposes reducing the ADV requirement in the second prong to 0.08% of average OCV (instead of 0.10%). The Exchange believes that decreasing the tier’s criteria, although modestly, will encourage those Members who could not achieve the tier previously to increase their order flow as a means to receive the tier’s enhanced rebate. PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 Market Quality Tier: The Exchange proposes to adopt a new tier under Footnote 1 that will also apply to Displayed orders that add liquidity (i.e., orders that yield fee codes B, V, Y, 3 and 4) called the Market Quality Tier. The Market Quality Tier would provide Members an enhanced rebate of $0.0028 per share where a Member (i) adds an ADV greater than or equal to 0.25% of the TCV and (ii) adds an ADV greater than or equal to 0.10% of the TCV as Non-Displayed orders that yield fee codes DM, HA, HI, MM or RP. The Exchange believes the proposed new tier will encourage Members to increase both their Displayed and Non-Displayed liquidity on the exchange. The Exchange further notes that other Exchanges have similar add volume tiers that are comprised of both Displayed and Non-Displayed threshold requirements.7 Step Up Tier and Investor Tier: The Exchange next proposes to eliminate the (1) Step-Up Tier, which provides a $0.0033 per share rebate where a Member has a Step-Up Add TCV from October 2018 greater than or equal to 0.35% and the (2) Investor Tier, which provides a $0.0032 rebate where a Member (i) adds an ADV greater than or equal to 0.20% of the TCV and (ii) has an ‘‘added liquidity’’ as a percentage of ‘‘added plus removed liquidity’’ greater than or equal to 85%. The Exchange notes that in light of its amendment to Growth Tier 1 and adoption of Growth Tier 2, both of which include criteria that require Members to increase their relative liquidity each month over a predetermined baseline, the current Step-Up Tier is no longer needed and the Exchange no longer desires to maintain it. Accordingly, the Exchange proposes to eliminate the Step-Up Tier from the Fees Schedule. The Exchange also no longer wishes to maintain the Investor Tier and therefore proposes to delete it. Non-Displayed Tiers The Exchange currently offers a NonDisplayed Add Volume Tier under footnote 1, which provides Members an enhanced rebate of $0.0026 per share where the Member adds an ADV greater than or equal to 0.08% of the TCV as Non-Displayed orders that yield fee codes DM, HA, HI, MM or RP. The Exchange proposes to amend the NonDisplayed Add Volume Tier and adopt two additional Non-Displayed Add Volume Tiers. First, the Exchange proposes to amend its current NonDisplayed Add Volume Tier by (i) 7 See e.g., Nasdaq Stock Market, LLC Pricing Schedule, Section 118(a)(1). E:\FR\FM\20MYN1.SGM 20MYN1 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices reducing the offered rebate from $0.0026 per share to $0.0025 per share and (ii) modifying the required criteria to provide that Members will receive the enhanced rebate where they add an ADV greater than or equal to 7,000,000 shares (instead of .0.08% of the TCV) as Non-Displayed orders that yield fee codes DM, HA, HI, MM or RP. The Exchange also proposes to rename the current tier to ‘‘Non-Displayed Add Volume Tier 3.’’ Next, the Exchange next proposes to adopt two new NonDisplayed Add Volume Tiers. As proposed, under Non-Displayed Volume Tier 1, a Member would receive a rebate of $0.0015 per share if that Member adds an ADV greater than or equal to 1,000,000 shares as Non-Displayed orders that yield DM, HA, MM and RP. The Exchange also proposes to adopt Non-Displayed Volume Tier 2, which would provide a Member a rebate of $0.0022 per share where the Member adds an ADV greater than or equal to 2,500,000 shares as Non-Displayed orders that yield fee codes DM, HA, HI, MM or PR [sic]. The Exchange believes the proposed changes to the current Non-Displayed Add Volume Tier, along with the proposed new tiers will encourage Members to increase their Non-Displayed liquidity on the exchange. The Exchange further notes that other Exchanges have similar nondisplayed add volume tiers.8 Tape B Volume Tier The Exchange next proposes to amend the Tape B Volume Tier, which provides a $0.0027 per share rebate where a Member adds an ADV greater than or equal to 0.03% of the TCV in Tape B securities. Particularly, the Exchange proposes to increase the ADV requirement to 0.10% of the TCV in Tape B securities (instead of 0.03%). The proposed increase is designed to encourage entry of additional orders to the Exchange. khammond on DSKBBV9HB2PROD with NOTICES Retail Volume Tier Deletion The Exchange proposes to eliminate the Retail Volume Tier, which provides a $0.0037 rebate where a Member adds a Retail Order ADV (i.e., yielding fee code ZA) greater than or equal to 0.35% of the TCV. The Exchange no longer wishes to maintain this tier and therefore proposes to delete it. 2. Statutory Basis The Exchange also believes the proposed rule change is consistent with Section 6(b)(4) of the Act, which requires that Exchange rules provide for 8 See e.g., Cboe BZX U.S. Equities Exchange Fee Schedule, Footnote 1. VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The Exchange believes its proposal to reduce rates for Non-Displayed and Displayed orders that remove liquidity is reasonable because Members will pay lower transaction fees for such orders. Additionally, the Exchange notes that the proposed fee is lower than transaction fees assessed on other Exchanges.9 The Exchange notes the proposed fee reduction applies uniformly to Members. The Exchange believes the proposed reduced rebates for Displayed and NonDisplayed orders that add liquidity is reasonable, equitable and not unfairly discriminatory because Members will still receive rebates for such orders, albeit at a lower amount. The Exchange also believes the proposed reduction of rebates for Displayed and NonDisplayed orders that add liquidity is reasonable because the Exchange must balance the revenue received for orders that remove liquidity (and as described above, the Exchange is reducing the rates assessed for orders that remove liquidity). Rebates for orders that add liquidity incentivize members to bring additional liquidity to the Exchange, thereby promoting price discovery and enhancing order execution opportunities for members. Similarly, the Exchange believes eliminating a rebate and providing free executions for Non-Displayed orders that add liquidity in securities below $1.00 is reasonable because Members still are not paying any fees for such executions. The Exchange believes the proposed changes are equitable and not unfairly discriminatory because they apply equally to all Members. Furthermore, the Exchange’s maketake fee structure would continue to incentivize liquidity providers to continue to provide liquidity since such orders remain eligible for better pricing than orders that remove liquidity and are charged a fee (notwithstanding the proposed reduced rebate and fee, respectively). The Exchange next notes generally that volume-based rebates such as those currently maintained on the Exchange and those being proposed have been widely adopted by 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) 9 See e.g., NYSE Arca Equities, Fees and Charges, NYSE Arca Marketplace: Trade Related Fees and Credits. PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 22921 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 proposed changes relating to its Add Volume Tiers provide Members a variety of opportunities to receive enhanced rebates for adding certain levels of liquidity to the Exchange. The Exchange believes the proposal to eliminate the Mega Tier 1, Mega Tier 2, Ultra Tier, and Super Tier and replace those tiers with Tiers 1–4 is reasonable because the proposed new tiers continue to provide Members a variety of opportunities to receive enhanced rebates, albeit at lower amounts, for adding certain levels of liquidity on the Exchange. The Exchange believes reducing the enhanced rebate amounts is reasonable in light of the Exchange’s proposal to also reduce the standard rebate for orders that add liquidity and reduce the standard rate for orders that remove liquidity. The Exchange notes that, similar to the current Add Volume Tiers that are being eliminated, the proposed tiers continue to provide an incremental incentive for Members to strive for the highest tier level, which provides increasingly higher enhanced rebates. Additionally, the Exchange believes the proposed changes result in an easier to follow tier structure. Moreover, the Exchange believes the proposed thresholds are commensurate with the proposed corresponding enhanced rebates and that it will encourage Members to add increased liquidity to EDGX each month. 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 believes the proposed changes are equitable and not unfairly discriminatory because they apply equally to all Members. The Exchange also believes the proposed changes to Growth Tier 1 and the adoption of Growth Tier 2 are reasonable. Particularly, the Exchange believes proposed Growth Tier 2 and the proposed amendment to Growth Tier 1 provide a reasonable means to encourage Members to increase their liquidity on the Exchange based on increasing their relative volume above a predetermined baseline. The proposed tiers create an additional opportunity for Members to receive an enhanced rebate for contributing increased liquidity as compared to the end of the E:\FR\FM\20MYN1.SGM 20MYN1 khammond on DSKBBV9HB2PROD with NOTICES 22922 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices previous month (March 2019). 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 proposed rebates under the Growth Tiers are reasonably based on the difficulty of satisfying the tier’s criteria, including using March 2019 as the predetermined baseline. Furthermore, the Exchange believes that the Growth Tiers are not unfairly discriminatory as it applies to all Members that meet the required criteria. The Exchange believes reducing the rebate under the Cross-Asset Volume Tier is reasonable because Members will still receive a rebate if they satisfy the threshold, just at a lesser amount. Additionally as noted above, the Exchange is also reducing the standard rebates for orders that add liquidity and reducing the rate for orders that remove liquidity and the Exchange must balance the revenue received. The Exchange believes lowering the ADV requirement for Customer orders on EDGX Options is reasonable because the Exchange believes it will ease the tier’s requirements and encourage those Members who could not achieve the tier previously to increase their order flow as a means to receive the tier’s enhanced rebate. The proposed changes are also equitable and not unfairly discriminatory because they apply uniformly to all Members. The Exchange believes its proposal to introduce a new Market Quality Tier is reasonable as it provides Members an additional opportunity to receive an enhanced rebate for providing liquidity. The Exchange believes the proposed rebate is reasonable based on the difficulty of satisfying the proposed criteria. The Exchange believes including a requirement for NonDisplayed liquidity in addition to the Displayed liquidity requirement, will encourage Members to increase both their Displayed and Non-Displayed liquidity on the exchange. NonDisplayed liquidity is important as it can improve market quality by, among other things, increasing market depth and providing price improvement opportunities. The Exchange further notes that other Exchanges have similar add volume tiers that are comprised of both Displayed and Non-Displayed threshold requirements.10 10 See e.g., Nasdaq Stock Market, LLC Pricing Schedule, Section 118(a)(1). VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 The Exchange believes eliminating the Investor Tier and Step-Up Tier is reasonable because the Exchange is not required to maintain such tiers and Members still have a number of opportunities and a variety of ways to receive enhanced rebates, as discussed throughout this filing. Similarly, the Exchange believes the proposal to eliminate the Retail Volume Tier is reasonable because the Exchange no longer wishes to maintain such tier and Members will merely not receive an enhanced rebate for orders yielding fee code ZA. The Exchange believes the proposal to eliminate these tiers is also equitable and not unfairly discriminatory because it applies to all Members. The Exchange believes the proposal to reduce the rebate under the current Non-Displayed Add Volume Tier is reasonable for the same reasons discussed above with respect to other rebate reductions. Particularly, Members will still receive a rebate if they satisfy the threshold and the Exchange must balance the revenue it receives. The Exchange believes the proposed modification to the current NonDisplayed Add Tier, which modestly increases the ADV requirement and converts the requirements to shares instead of percentage of TCV, will encourage the additional entry of NonDisplayed orders. The Exchange also believes the amended rebate is still commensurate with the modified threshold. The Exchange believes the proposal to introduce two new NonDisplayed Add Volume Tiers under footnote 1 is reasonable because it provides Members additional opportunities to receive enhanced rebates for Non-Displayed orders that add liquidity and are a reasonable means to encourage Members to increase their liquidity on the Exchange. As noted above, Non-Displayed liquidity can improve market quality by increasing market depth and providing price improvement opportunities. 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 thresholds are commensurate with the proposed enhanced rebates and that it will encourage members to add increased liquidity to EDGX each month. Lastly, the Exchange believes that the proposed changes are not unfairly discriminatory as they apply uniformly to all Members. Lastly, the Exchange believes the proposal to increase the threshold requirement under Tape B Volume Tier is reasonable as the Exchange believes PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 the proposed change will encourage the additional entry of orders in Tape B Securities. The Exchange also notes that although the rebate is not changing, it believes the proposed modification to the required criteria is commensurate with the rebate offered. The proposed change also is not unfairly discriminatory because it applies uniformly to all Members. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Particularly, the proposed rates and rebates would apply uniformly to all members, and members may opt to disfavor the Exchange’s pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing venues to maintain their competitive standing in the financial markets. Further, excessive fees would serve to impair an exchange’s ability to compete for order flow and members rather than burdening competition. Moreover, the proposed fee changes are designed to incentivize liquidity, which the Exchange believes will benefit all market participants by encouraging a transparent and competitive market. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect this competitive environment. 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 11 and paragraph (f) of Rule 19b–4 12 thereunder. At any time within 60 days of the filing of the proposed rule 11 15 12 17 E:\FR\FM\20MYN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 20MYN1 Federal Register / Vol. 84, No. 97 / Monday, May 20, 2019 / Notices 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: khammond on DSKBBV9HB2PROD 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– CboeEDGX–2019–030 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–2019–030. 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 VerDate Sep<11>2014 16:41 May 17, 2019 Jkt 247001 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–2019–030 and should be submitted on or before June 10, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Eduardo A. Aleman, Deputy Secretary. 22923 (Catalog of Federal Domestic Assistance Number 59008) James Rivera, Associate Administrator for Disaster Assistance. [FR Doc. 2019–10409 Filed 5–17–19; 8:45 am] BILLING CODE 8025–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #15929 and #15930; Iowa Disaster Number IA–00087] [FR Doc. 2019–10350 Filed 5–17–19; 8:45 am] Presidential Declaration Amendment of a Major Disaster for Public Assistance Only for the State of Iowa BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #15898 and #15899; Iowa Disaster Number IA–00086] Presidential Declaration Amendment of a Major Disaster for the State of Iowa U.S. Small Business Administration. ACTION: Amendment 4. AGENCY: This is an amendment of the Presidential declaration of a major disaster for the State of Iowa (FEMA– 4421–DR), dated 03/23/2019. Incident: Severe Storms and Flooding. Incident Period: 03/12/2019 and continuing. SUMMARY: Issued on 05/10/2019. Physical Loan Application Deadline Date: 07/01/2019. Economic Injury (EIDL) Loan Application Deadline Date: 12/23/2019. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205–6734. SUPPLEMENTARY INFORMATION: The notice of the President’s major disaster declaration for the State of Iowa, dated 03/23/2019, is hereby amended to include the following areas as adversely affected by the disaster: Primary Counties (Physical Damage and Economic Injury Loans): Scott Contiguous Counties (Economic Injury Loans Only): Iowa: Cedar, Clinton All other information in the original declaration remains unchanged. DATES: U.S. Small Business Administration. ACTION: Amendment 2. AGENCY: This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Iowa (FEMA–4421–DR), dated 04/05/2019. Incident: Severe Storms and Flooding. Incident Period: 03/12/2019 and continuing. SUMMARY: Issued on 04/05/2019. Physical Loan Application Deadline Date: 06/04/2019. Economic Injury (EIDL) Loan Application Deadline Date: 01/06/2020. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing And Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205–6734. SUPPLEMENTARY INFORMATION: The notice of the President’s major disaster declaration for Private Non-Profit organizations in the State of Iowa, dated 04/05/2019, is hereby amended to include the following areas as adversely affected by the disaster. Primary Counties: Allamakee, Audubon, Bremer, Clay, Decatur, Hancock, Hardin, Howard, Humboldt, Iowa, Montgomery, Pocahontas, Sac All other information in the original declaration remains unchanged. DATES: (Catalog of Federal Domestic Assistance Number 59008) James Rivera, Associate Administrator for Disaster Assistance. [FR Doc. 2019–10332 Filed 5–17–19; 8:45 am] 13 17 PO 00000 CFR 200.30–3(a)(12). Frm 00118 Fmt 4703 Sfmt 4703 BILLING CODE 8025–01–P E:\FR\FM\20MYN1.SGM 20MYN1

Agencies

[Federal Register Volume 84, Number 97 (Monday, May 20, 2019)]
[Notices]
[Pages 22919-22923]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10350]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85852; File No. SR-CboeEDGX-2019-030]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the Fee Schedule

May 14, 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 May 1, 2019, Cboe EDGX Exchange, Inc. (``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 Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') is filing 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change to amend the fee schedule applicable to Members and non-
Members \3\ of the Exchange pursuant to EDGX Rules 15.1(a) and (c). The 
text of the proposed rule change is attached [sic] as Exhibit 5.
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    \3\ 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).
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    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 Exchange proposes to amend its fee schedule applicable to its 
equities trading platform (``EDGX Equities''), effective May 1, 2019.
Transaction Fee Changes
Orders That Remove Liquidity
    In securities priced at or above $1.00, the Exchange currently 
assesses a fee of $0.0030 per share for Displayed and Non-Displayed 
orders that remove liquidity (i.e., yields fee codes N, W, 6, BB, PR 
and ZR). All Displayed and Non-Displayed orders in securities priced 
below $1.00 that remove liquidity (i.e., yield fee codes N, W, 6, BB, 
PR and ZR) result in a fee of 0.30% of dollar value. The Exchange first 
proposes to reduce the current standard rate of $0.0030 per share to 
$0.00265 per share for Displayed and Non-Displayed orders that remove 
liquidity for securities priced at or above $1.00. All Displayed and 
Non-Displayed orders that remove liquidity in securities priced below 
$1.00 would continue to result in a fee of 0.30% of dollar value.
Orders That Add Liquidity
    In securities priced at or above $1.00, the Exchange currently 
provides a standard rebate of $0.0020 per share for Displayed orders 
that add liquidity (i.e., yield fee code B, V, Y, 3 and 4) and a rebate 
of $0.0015 for Non-Displayed orders that add liquidity (i.e., yield fee 
code DM, HA, MM, and RP).\4\ All Displayed and Non-Displayed orders in 
securities priced below $1.00 that add liquidity receive a rebate of 
$0.00003 per share.
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    \4\ Does not include fee code HI, which is appended to Non-
Displayed orders that receive price improvement and add liquidity. 
Such executions are free.
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    The Exchange now proposes to reduce rebates for Displayed and Non-
Displayed orders that add liquidity to balance the revenue received for 
orders that remove liquidity (and as described above, the Exchange is 
reducing the rates assessed for orders that remove liquidity). With 
respect to Displayed orders priced at or above $1.00 that add liquidity 
(i.e., yields fee codes B, V, Y, 3 and 4), the Exchange proposes to 
reduce the per share rebate from $0.0020 to $0.0017. With respect to 
Non-Displayed orders priced at or above $1.00 that add liquidity (i.e., 
yields fee codes DM, HA, MM, and RP), the Exchange proposes to reduce 
the standard rebate from $0.0015 per share to $0.0010 per share.
    The Exchange also proposes to eliminate the current rebate pf 
$0.00003 per share for Non-Displayed orders in securities priced below 
$1.00 that add liquidity and provide that such executions shall be 
free. All Displayed orders that add liquidity in securities priced 
below $1.00 would continue to receive a rebate of $0.00003 per share.
Add Volume Tiers--Amendments
    The Exchange next proposes to amend and restructure its Add Volume 
Tiers under footnote 1 of the fees schedule. Currently, the Exchange 
offers eight Add Volume Tiers under footnote 1, which provide an 
enhanced rebate of $0.0025 to $0.0033 per share for qualifying 
Displayed orders which yield fee codes B, V, Y, 3 and 4. The Exchange 
proposes to (i) eliminate the Super Tier, Ultra Tier and Mega Tiers 1 
and 2, and adopt in their place new Tiers 1-4, (ii) amend the current 
Growth Tier and adopt an additional Growth Tier, (iii) amend the Cross-
Asset Volume Tier, (iv) adopt a Market Quality Tier, and (v) eliminate 
the Investor Tier and Step-Up Tier. The Exchange believes the proposed 
changes result in an easier to follow tier structure and continues to 
provide Members a variety of opportunities to receive enhanced rebates 
for adding certain levels of

[[Page 22920]]

Displayed liquidity on the Exchange, as discussed below.
    Add Volume Tiers: Under footnote 1, the Exchange currently offers a 
Super Tier, Ultra Tier, Mega Tier 1 and Mega Tier 2, which provide 
enhanced rebates of $0.0028 to $0.0032 where a member adds an ADV \5\ 
greater than or equal to a specified percentage of TCV. \6\ 
Particularly, the Super Tier provides an enhanced rebate of $0.0028 per 
share where a Member adds an ADV greater than or equal to 0.15% of the 
TCV; the Ultra Tier provides an enhanced rebate of $0.0030 per share 
where a Member adds an ADV greater than or equal to 0.30% of the TCV; 
Mega Tier 1 provides an enhanced rebate of $0.0031 per share where a 
Member adds an ADV greater than or equal to 0.45% of the TCV; and Mega 
Tier 2 provides an enhanced rebate of $0.0032 per share where a Member 
adds an ADV greater than or equal to 0.75% of the TCV. The Exchange 
proposes to eliminate these tiers and in their place adopt similar 
tiers, named ``Tier 1'', ``Tier 2'', ``Tier 3'', and Tier 4''. Tiers 1-
4 will similarly provide enhanced rebates between $0.0023 to $0.0029 
(reduced from the current rebates of $0.0028 to $0.0032) where a Member 
adds an ADV greater than or equal to specified percentages of TCV 
(slightly modified from the current percentages), as further described 
below. The Exchange notes that, similar to the current Add Volume 
Tiers, the proposed tiers provide an incremental incentive for Members 
to strive for the highest tier level, which provides increasingly 
higher enhanced rebates. The Exchange believes eliminating the current 
``names'' of the Tiers and renaming the new tiers numerically (i.e., 
``Tiers 1-4'') and placing them in ascending order makes the Add Volume 
Tiers easier to read and follow.
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    \5\ ``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.
    \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.
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    First, the Exchange proposes to adopt Tier 1, which will provide 
Members an enhanced rebate of $0.0023 per share where the Member adds 
as ADV greater than or equal to 0.20% of the TCV. The Exchange next 
proposes to adopt Tier 2, which will provide Members an enhanced rebate 
of $0.0025 per share where the Member adds as ADV greater than or equal 
to 0.30% of the TCV. The Exchange also proposes to adopt Tier 3, which 
will provide Members an enhanced rebate of $0.0027 per share where the 
Member adds as ADV greater than or equal to 0.40% of the TCV. Lastly, 
the Exchange proposes to adopt Tier 4, which will provide Members an 
enhanced rebate of $0.0029 per share where the Member adds as ADV 
greater than or equal to 0.70% of the TCV. The Exchange believes the 
proposed Add Volume Tier changes will encourage members to increase 
their liquidity on the Exchange.
    Growth Tiers: The Exchange currently offers a Growth Tier under 
footnote 1, which provides Members an enhanced rebate of $0.0025 per 
share where the Member adds as ADV greater than or equal to 0.08% of 
the TCV. The Exchange proposes to rename the tier ``Growth Tier 1'' and 
reduce the enhanced rebate from $0.0025 per share to $0.0020 per share. 
The Exchange also proposes to modify the threshold criteria to require 
an ADV greater than or equal to 0.10% of the TCV (instead of 0.08%). 
The Exchange also proposes to adopt an alternative criteria to satisfy 
Growth Tier 1 which would provide that a Member would also receive the 
enhanced rebate of $0.0020 per share where the Member has a Step-Up Add 
TCV from March 2019 greater than or equal to 0.05%. The Exchange 
proposes to adopt an additional Growth Tier (``Growth Tier 2''), which 
would provide Members an enhanced rebate of $0.0026 per share where the 
Member (i) has an ADV of greater than or equal to 0.20% of the TCV and 
(ii) has a Step-Up Add TCV from March 2019 greater or equal to 0.10%. 
The Exchange notes that the proposed Growth Tiers provide Members 
additional ways to qualify for an enhanced rebate where they increase 
their relative liquidity each month over a predetermined baseline.
    Cross-Asset Volume Tier: The Exchange currently offers a Cross-
Asset Volume Tier under footnote 1, which provides Members an enhanced 
rebate of $0.030 per share where the Member (i) adds as ADV greater 
than or equal to 0.20% of the TCV and (ii) has an ADV in Customer 
orders on EDGX Options greater than or equal to 0.10% of average OCV. 
The Exchange proposes to reduce the enhanced rebate available under the 
Cross-Asset Volume Tier from $0.0030 per share to $0.0027 per share. 
The Exchange also proposes reducing the ADV requirement in the second 
prong to 0.08% of average OCV (instead of 0.10%). The Exchange believes 
that decreasing the tier's criteria, although modestly, will encourage 
those Members who could not achieve the tier previously to increase 
their order flow as a means to receive the tier's enhanced rebate.
    Market Quality Tier: The Exchange proposes to adopt a new tier 
under Footnote 1 that will also apply to Displayed orders that add 
liquidity (i.e., orders that yield fee codes B, V, Y, 3 and 4) called 
the Market Quality Tier. The Market Quality Tier would provide Members 
an enhanced rebate of $0.0028 per share where a Member (i) adds an ADV 
greater than or equal to 0.25% of the TCV and (ii) adds an ADV greater 
than or equal to 0.10% of the TCV as Non-Displayed orders that yield 
fee codes DM, HA, HI, MM or RP. The Exchange believes the proposed new 
tier will encourage Members to increase both their Displayed and Non-
Displayed liquidity on the exchange. The Exchange further notes that 
other Exchanges have similar add volume tiers that are comprised of 
both Displayed and Non-Displayed threshold requirements.\7\
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    \7\ See e.g., Nasdaq Stock Market, LLC Pricing Schedule, Section 
118(a)(1).
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    Step Up Tier and Investor Tier: The Exchange next proposes to 
eliminate the (1) Step-Up Tier, which provides a $0.0033 per share 
rebate where a Member has a Step-Up Add TCV from October 2018 greater 
than or equal to 0.35% and the (2) Investor Tier, which provides a 
$0.0032 rebate where a Member (i) adds an ADV greater than or equal to 
0.20% of the TCV and (ii) has an ``added liquidity'' as a percentage of 
``added plus removed liquidity'' greater than or equal to 85%. The 
Exchange notes that in light of its amendment to Growth Tier 1 and 
adoption of Growth Tier 2, both of which include criteria that require 
Members to increase their relative liquidity each month over a 
predetermined baseline, the current Step-Up Tier is no longer needed 
and the Exchange no longer desires to maintain it. Accordingly, the 
Exchange proposes to eliminate the Step-Up Tier from the Fees Schedule. 
The Exchange also no longer wishes to maintain the Investor Tier and 
therefore proposes to delete it.
Non-Displayed Tiers
    The Exchange currently offers a Non-Displayed Add Volume Tier under 
footnote 1, which provides Members an enhanced rebate of $0.0026 per 
share where the Member adds an ADV greater than or equal to 0.08% of 
the TCV as Non-Displayed orders that yield fee codes DM, HA, HI, MM or 
RP. The Exchange proposes to amend the Non-Displayed Add Volume Tier 
and adopt two additional Non-Displayed Add Volume Tiers. First, the 
Exchange proposes to amend its current Non-Displayed Add Volume Tier by 
(i)

[[Page 22921]]

reducing the offered rebate from $0.0026 per share to $0.0025 per share 
and (ii) modifying the required criteria to provide that Members will 
receive the enhanced rebate where they add an ADV greater than or equal 
to 7,000,000 shares (instead of .0.08% of the TCV) as Non-Displayed 
orders that yield fee codes DM, HA, HI, MM or RP. The Exchange also 
proposes to rename the current tier to ``Non-Displayed Add Volume Tier 
3.'' Next, the Exchange next proposes to adopt two new Non-Displayed 
Add Volume Tiers. As proposed, under Non-Displayed Volume Tier 1, a 
Member would receive a rebate of $0.0015 per share if that Member adds 
an ADV greater than or equal to 1,000,000 shares as Non-Displayed 
orders that yield DM, HA, MM and RP. The Exchange also proposes to 
adopt Non-Displayed Volume Tier 2, which would provide a Member a 
rebate of $0.0022 per share where the Member adds an ADV greater than 
or equal to 2,500,000 shares as Non-Displayed orders that yield fee 
codes DM, HA, HI, MM or PR [sic]. The Exchange believes the proposed 
changes to the current Non-Displayed Add Volume Tier, along with the 
proposed new tiers will encourage Members to increase their Non-
Displayed liquidity on the exchange. The Exchange further notes that 
other Exchanges have similar non-displayed add volume tiers.\8\
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    \8\ See e.g., Cboe BZX U.S. Equities Exchange Fee Schedule, 
Footnote 1.
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Tape B Volume Tier
    The Exchange next proposes to amend the Tape B Volume Tier, which 
provides a $0.0027 per share rebate where a Member adds an ADV greater 
than or equal to 0.03% of the TCV in Tape B securities. Particularly, 
the Exchange proposes to increase the ADV requirement to 0.10% of the 
TCV in Tape B securities (instead of 0.03%). The proposed increase is 
designed to encourage entry of additional orders to the Exchange.
Retail Volume Tier Deletion
    The Exchange proposes to eliminate the Retail Volume Tier, which 
provides a $0.0037 rebate where a Member adds a Retail Order ADV (i.e., 
yielding fee code ZA) greater than or equal to 0.35% of the TCV. The 
Exchange no longer wishes to maintain this tier and therefore proposes 
to delete it.
2. Statutory Basis
    The Exchange also believes the proposed rule change is consistent 
with Section 6(b)(4) of the Act, which requires that Exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and other persons using its facilities.
    The Exchange believes its proposal to reduce rates for Non-
Displayed and Displayed orders that remove liquidity is reasonable 
because Members will pay lower transaction fees for such orders. 
Additionally, the Exchange notes that the proposed fee is lower than 
transaction fees assessed on other Exchanges.\9\ The Exchange notes the 
proposed fee reduction applies uniformly to Members.
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    \9\ See e.g., NYSE Arca Equities, Fees and Charges, NYSE Arca 
Marketplace: Trade Related Fees and Credits.
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    The Exchange believes the proposed reduced rebates for Displayed 
and Non-Displayed orders that add liquidity is reasonable, equitable 
and not unfairly discriminatory because Members will still receive 
rebates for such orders, albeit at a lower amount. The Exchange also 
believes the proposed reduction of rebates for Displayed and Non-
Displayed orders that add liquidity is reasonable because the Exchange 
must balance the revenue received for orders that remove liquidity (and 
as described above, the Exchange is reducing the rates assessed for 
orders that remove liquidity). Rebates for orders that add liquidity 
incentivize members to bring additional liquidity to the Exchange, 
thereby promoting price discovery and enhancing order execution 
opportunities for members. Similarly, the Exchange believes eliminating 
a rebate and providing free executions for Non-Displayed orders that 
add liquidity in securities below $1.00 is reasonable because Members 
still are not paying any fees for such executions. The Exchange 
believes the proposed changes are equitable and not unfairly 
discriminatory because they apply equally to all Members.
    Furthermore, the Exchange's make-take fee structure would continue 
to incentivize liquidity providers to continue to provide liquidity 
since such orders remain eligible for better pricing than orders that 
remove liquidity and are charged a fee (notwithstanding the proposed 
reduced rebate and fee, respectively).
    The Exchange next notes generally that volume-based rebates such as 
those currently maintained on the Exchange and those being proposed 
have been widely adopted by 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 proposed changes relating to its Add Volume Tiers provide Members a 
variety of opportunities to receive enhanced rebates for adding certain 
levels of liquidity to the Exchange.
    The Exchange believes the proposal to eliminate the Mega Tier 1, 
Mega Tier 2, Ultra Tier, and Super Tier and replace those tiers with 
Tiers 1-4 is reasonable because the proposed new tiers continue to 
provide Members a variety of opportunities to receive enhanced rebates, 
albeit at lower amounts, for adding certain levels of liquidity on the 
Exchange. The Exchange believes reducing the enhanced rebate amounts is 
reasonable in light of the Exchange's proposal to also reduce the 
standard rebate for orders that add liquidity and reduce the standard 
rate for orders that remove liquidity. The Exchange notes that, similar 
to the current Add Volume Tiers that are being eliminated, the proposed 
tiers continue to provide an incremental incentive for Members to 
strive for the highest tier level, which provides increasingly higher 
enhanced rebates. Additionally, the Exchange believes the proposed 
changes result in an easier to follow tier structure. Moreover, the 
Exchange believes the proposed thresholds are commensurate with the 
proposed corresponding enhanced rebates and that it will encourage 
Members to add increased liquidity to EDGX each month. 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 believes 
the proposed changes are equitable and not unfairly discriminatory 
because they apply equally to all Members.
    The Exchange also believes the proposed changes to Growth Tier 1 
and the adoption of Growth Tier 2 are reasonable. Particularly, the 
Exchange believes proposed Growth Tier 2 and the proposed amendment to 
Growth Tier 1 provide a reasonable means to encourage Members to 
increase their liquidity on the Exchange based on increasing their 
relative volume above a predetermined baseline. The proposed tiers 
create an additional opportunity for Members to receive an enhanced 
rebate for contributing increased liquidity as compared to the end of 
the

[[Page 22922]]

previous month (March 2019). 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 proposed rebates 
under the Growth Tiers are reasonably based on the difficulty of 
satisfying the tier's criteria, including using March 2019 as the 
predetermined baseline. Furthermore, the Exchange believes that the 
Growth Tiers are not unfairly discriminatory as it applies to all 
Members that meet the required criteria.
    The Exchange believes reducing the rebate under the Cross-Asset 
Volume Tier is reasonable because Members will still receive a rebate 
if they satisfy the threshold, just at a lesser amount. Additionally as 
noted above, the Exchange is also reducing the standard rebates for 
orders that add liquidity and reducing the rate for orders that remove 
liquidity and the Exchange must balance the revenue received. The 
Exchange believes lowering the ADV requirement for Customer orders on 
EDGX Options is reasonable because the Exchange believes it will ease 
the tier's requirements and encourage those Members who could not 
achieve the tier previously to increase their order flow as a means to 
receive the tier's enhanced rebate. The proposed changes are also 
equitable and not unfairly discriminatory because they apply uniformly 
to all Members.
    The Exchange believes its proposal to introduce a new Market 
Quality Tier is reasonable as it provides Members an additional 
opportunity to receive an enhanced rebate for providing liquidity. The 
Exchange believes the proposed rebate is reasonable based on the 
difficulty of satisfying the proposed criteria. The Exchange believes 
including a requirement for Non-Displayed liquidity in addition to the 
Displayed liquidity requirement, will encourage Members to increase 
both their Displayed and Non-Displayed liquidity on the exchange. Non-
Displayed liquidity is important as it can improve market quality by, 
among other things, increasing market depth and providing price 
improvement opportunities. The Exchange further notes that other 
Exchanges have similar add volume tiers that are comprised of both 
Displayed and Non-Displayed threshold requirements.\10\
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    \10\ See e.g., Nasdaq Stock Market, LLC Pricing Schedule, 
Section 118(a)(1).
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    The Exchange believes eliminating the Investor Tier and Step-Up 
Tier is reasonable because the Exchange is not required to maintain 
such tiers and Members still have a number of opportunities and a 
variety of ways to receive enhanced rebates, as discussed throughout 
this filing. Similarly, the Exchange believes the proposal to eliminate 
the Retail Volume Tier is reasonable because the Exchange no longer 
wishes to maintain such tier and Members will merely not receive an 
enhanced rebate for orders yielding fee code ZA. The Exchange believes 
the proposal to eliminate these tiers is also equitable and not 
unfairly discriminatory because it applies to all Members.
    The Exchange believes the proposal to reduce the rebate under the 
current Non-Displayed Add Volume Tier is reasonable for the same 
reasons discussed above with respect to other rebate reductions. 
Particularly, Members will still receive a rebate if they satisfy the 
threshold and the Exchange must balance the revenue it receives. The 
Exchange believes the proposed modification to the current Non-
Displayed Add Tier, which modestly increases the ADV requirement and 
converts the requirements to shares instead of percentage of TCV, will 
encourage the additional entry of Non-Displayed orders. The Exchange 
also believes the amended rebate is still commensurate with the 
modified threshold. The Exchange believes the proposal to introduce two 
new Non-Displayed Add Volume Tiers under footnote 1 is reasonable 
because it provides Members additional opportunities to receive 
enhanced rebates for Non-Displayed orders that add liquidity and are a 
reasonable means to encourage Members to increase their liquidity on 
the Exchange. As noted above, Non-Displayed liquidity can improve 
market quality by increasing market depth and providing price 
improvement opportunities. 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 thresholds are commensurate with the proposed enhanced rebates 
and that it will encourage members to add increased liquidity to EDGX 
each month. Lastly, the Exchange believes that the proposed changes are 
not unfairly discriminatory as they apply uniformly to all Members.
    Lastly, the Exchange believes the proposal to increase the 
threshold requirement under Tape B Volume Tier is reasonable as the 
Exchange believes the proposed change will encourage the additional 
entry of orders in Tape B Securities. The Exchange also notes that 
although the rebate is not changing, it believes the proposed 
modification to the required criteria is commensurate with the rebate 
offered. The proposed change also is not unfairly discriminatory 
because it applies uniformly to all Members.

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. 
Particularly, the proposed rates and rebates would apply uniformly to 
all members, and members may opt to disfavor the Exchange's pricing if 
they believe that alternatives offer them better value. Accordingly, 
the Exchange does not believe that the proposed changes will impair the 
ability of members or competing venues to maintain their competitive 
standing in the financial markets. Further, excessive fees would serve 
to impair an exchange's ability to compete for order flow and members 
rather than burdening competition. Moreover, the proposed fee changes 
are designed to incentivize liquidity, which the Exchange believes will 
benefit all market participants by encouraging a transparent and 
competitive market. The Exchange operates in a highly competitive 
market in which market participants can readily direct their order flow 
to competing venues. In such an environment, the Exchange must 
continually review, and consider adjusting, its fees and rebates to 
remain competitive with other exchanges. For the reasons described 
above, the Exchange believes that the proposed fee changes reflect this 
competitive environment.

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 \11\ and paragraph (f) of Rule 19b-4 \12\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule

[[Page 22923]]

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

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeEDGX-2019-030 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-2019-030. 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-2019-030 and should be 
submitted on or before June 10, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10350 Filed 5-17-19; 8:45 am]
BILLING CODE 8011-01-P
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