Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule Applicable to the BZX Equities Trading Platform as it Relates to Pricing for Orders Routed to Cboe EDGA Exchange, Inc. Using the ALLB, TRIM, or SLIM Routing Strategy, 63927-63929 [2019-24981]

Download as PDF Federal Register / Vol. 84, No. 223 / Tuesday, November 19, 2019 / Notices 2,066,441 hours (2,066,440.27 rounded up). In addition, the Commission estimates that the total cost for all of Regulation SBSR for all respondents is approximately $21,264,300 initially (which equates to approximately $7,088,100 per year when annualized over three years), with a total ongoing cost thereafter of approximately $80,331,371 per year. Thus, the aggregate annual cost for all respondents is approximately $87,419,472 ($87,419,471.30 rounded up). A detailed break-down of the burdens applicable to each type of entity is provided in the supporting statement. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. The public may view background documentation for this information collection at the following website: www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Lindsay.M.Abate@omb.eop.gov; and (ii) Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner,100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: November 8, 2019. Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–25001 Filed 11–18–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION khammond on DSKJM1Z7X2PROD with NOTICES [Release No. 34–87521; File No. SR– CboeBZX–2019–094] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule Applicable to the BZX Equities Trading Platform as it Relates to Pricing for Orders Routed to Cboe EDGA Exchange, Inc. Using the ALLB, TRIM, or SLIM Routing Strategy November 13, 2019. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the VerDate Sep<11>2014 16:47 Nov 18, 2019 Jkt 250001 ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 1, 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 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 BZX Exchange, Inc. (‘‘BZX’’ or the ‘‘Exchange’’) is filing with the Securities and Exchange Commission (the ‘‘Commission’’) a proposed rule change to amend the fee schedule applicable to the BZX equities trading platform (‘‘BZX Equities’’) as it relates to pricing for orders routed to Cboe EDGA Exchange, Inc. (‘‘EDGA’’) using the ALLB, TRIM, or SLIM routing strategy. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://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. 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 the BZX Equities fee schedule to change the pricing applicable to orders routed to EDGA using the ALLB, TRIM, or SLIM routing strategy, as a result of a recent pricing change by EDGA effective on November 1, 2019. The Exchange proposes to implement the proposed 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00091 Fmt 4703 change to its fee schedule on November 1, 2019. Currently, the Exchange provides a rebate of $0.0024 per share for orders routed to EDGA using the ALLB, TRIM, or SLIM routing strategy (yielding fee codes AA and BJ), which was a pass-through of the standard rebate EDGA had previously provided to orders that removed liquidity from EDGA. Effective November 1, 2019, EDGA reduced its standard rebate per share for orders that remove liquidity in securities priced at or above $1.00 from $0.0024 to $0.0018. As such, the Exchange proposes to similarly reduce the per share rebate for orders routed to EDGA (yielding fee codes AA and BJ) from $0.0024 to $0.0018 in order to reflect the reduction in the rebate available for orders removing liquidity on EDGA. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the requirements of Section 6(b) of the Act.3 Specifically, the Exchange believes the proposed rule change is consistent with Section 6(b)(4) of the Act,4 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 and does not unfairly discriminate between customers, issuers, brokers or dealers. The Exchange operates in a highlycompetitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. In particular, the Exchange believes that the proposed change is reasonable because it reflects a pass-through of a recent pricing change by EDGA for liquidity removing orders, as described above. The Exchange believes that the proposed change is reasonable because it will maintain proportionality with the standard corresponding rebate offered by EDGA while also maintaining Member interest in routing orders through the Exchange by passing on better pricing to Members that choose to enter such orders on the Exchange, thereby encouraging additional order flow to be entered on the BZX Book. The Exchange believes that additional order flow through the BZX Book will result in greater liquidity to the benefit of all market participants on the Exchange by providing more trading opportunities. 3 15 4 15 Sfmt 4703 63927 U.S.C. § 78f(b). U.S.C. 78f(b)(4). E:\FR\FM\19NON1.SGM 19NON1 63928 Federal Register / Vol. 84, No. 223 / Tuesday, November 19, 2019 / Notices khammond on DSKJM1Z7X2PROD with NOTICES The Exchange also believes that the proposed change constitutes an equitable allocation of reasonable fees that is not unfairly discriminatory because the proposed rebate is designed to continue to reflect the rebate offered (and recently updated) by EDGA to orders that remove liquidity and would apply equally to all Members that choose to use the Exchange to route liquidity removing orders to EDGA. Furthermore, the Exchange notes that routing through the Exchange is voluntary, and, because the Exchange operates in a highly competitive environment as discussed below, Members that do not favor the proposed pricing can readily direct order flow directly to EDGA or through competing venues or providers of routing services. 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. The Exchange believes the proposed routing fee change will not impose an undue burden on competition because the proposed rebate is merely intended to maintain consistency between the Exchange’s rebates for orders routed to EDGA with the rebates currently offered by EDGA for liquidity removing orders. The Exchange does not believe the proposed rebate will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As stated, the Exchange will uniformly assess the proposed routing fee on all Members who choose to route orders through the Exchange to EDGA. As noted above, the proposed rebate intends pass through the same rebates for liquidity removing orders from EDGA on to Members, thereby, adding order flow to the BZX Book which will result in more trading opportunities to the benefit of all market participants on the Exchange. The Exchange does not believe the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As noted above, the Exchange operates in a highly competitive market and routing through the Exchange is voluntary. Therefore, Members may opt to disfavor the Exchange’s pricing if they believe that alternatives, including 12 other equities exchanges and 32 alternative trading systems, offer them better value or if they disfavor the proposed change. Additionally, the Exchange represents a small percentage of the overall market. Based on publicly VerDate Sep<11>2014 16:47 Nov 18, 2019 Jkt 250001 available information, no single equities exchange has more than 17% of the market share.5 Therefore, no exchange possesses significant pricing power in the execution of equity order flow. Moreover, the Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation National Market System (‘‘NMS’’), the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 6 The fact that this market is competitive has also long been recognized by the courts. In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit stated as follows: ‘‘[n]o one disputes that competition for order flow is ‘fierce.’ . . . As the SEC explained, ‘[i]n the U.S. national market system, buyers and sellers of securities, and the brokerdealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution’; [and] ‘no exchange can afford to take its market share percentages for granted’ because ‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’. . . .’’.7 Regardless, the Exchange notes that the proposed change to the EDGA-related routing fee is merely meant to pass through the rebate associated with executing orders on that market, and is therefore not designed to have any significant impact on competition. Accordingly, the Exchange does not believe its proposed fee change imposes any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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. 5 See Cboe Global Markets U.S. Equities Market Volume Summary (October 28, 2019), available at https://markets.cboe.com/us/equities/market_share/. 6 See Securities Exchange Act Release No. 51808 (June 29, 2015) 70 FR 37495 (August 29, 2015). 7 NetCoalition v. Securities and Exchange Commission, 615 F.3d 525 (D.C. Cir. 2010). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 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) 8 of the Act and subparagraph (f)(2) of Rule 19b–4 9 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 the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 10 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: 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 No. SR– CboeBZX–2019–094 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 No. SR–CboeBZX–2019–094. 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 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 10 15 U.S.C. 78s(b)(2)(B). 9 17 E:\FR\FM\19NON1.SGM 19NON1 Federal Register / Vol. 84, No. 223 / Tuesday, November 19, 2019 / Notices 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 No. SR–CboeBZX–2019–094, and should be submitted on or before December 10, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–24981 Filed 11–18–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87514; File No. SR– NYSEArca–2019–78] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Relating to Listing and Trading of Shares of the Innovator PTAM Core Bond ETF Under NYSE Arca Rule 8.600–E khammond on DSKJM1Z7X2PROD with NOTICES November 13, 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 October 30, 2019, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) a proposed rule change, and on November 8, 2019, the Exchange filed Amendment No. 1 to the proposed rule change, which amended and replaced the proposed rule change in its entirety. The proposed rule change, as modified by Amendment No. 1, is described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is 11 17 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 16:47 Nov 18, 2019 Jkt 250001 publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade shares of the following under NYSE Arca Rule 8.600–E (‘‘Managed Fund Shares’’): Innovator PTAM Core Bond ETF. This Amendment No. 1 to SR–NYSEArca–2019–78 replaces SR– NYSEArca–2019–78 as originally filed and supersedes such filing in its entirety. The proposed change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to list and trade shares of the following under NYSE Arca Rule 8.600–E which governs the listing and trading of Managed Fund Shares on the Exchange: 4 Innovator PTAM Core Bond ETF (the ‘‘Fund’’). The Shares will be offered by Innovator ETFs Trust (the ‘‘Trust’’), which is registered with the Commission as an open-end 4 A Managed Fund Share is a security that represents an interest in an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as an open-end investment company or similar entity that invests in a portfolio of securities selected by its investment adviser consistent with its investment objectives and policies. In contrast, an open-end investment company that issues Investment Company Units, listed and traded on the Exchange under NYSE Arca Rule 5.2–E(j)(3), seeks to provide investment results that correspond generally to the price and yield performance of a specific foreign or domestic stock index, fixed income securities index or combination thereof. PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 63929 management investment company.5 The Fund is a series of the Trust. Innovator Capital Management, LLC will be the investment adviser (‘‘Innovator’’ or ‘‘Adviser’’) to the Fund. PT Asset Management, LLC (‘‘PTAM’’ or the ‘‘Sub-Adviser’’), will serve as the Fund’s investment sub-adviser. Foreside Fund Services, LLC will be the distributor (‘‘Distributor’’) for the Fund’s Shares. US Bancorp Fund Services LLC will act as the administrator and transfer agent for the Fund. U.S. Bank, N.A. will serve as the custodian (‘‘Custodian’’) for the Fund. Commentary .06 to Rule 8.600–E provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect and maintain a ‘‘fire wall’’ between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company portfolio.6 In addition, Commentary .06 further requires that personnel who make decisions on the open-end fund’s portfolio composition must be subject to procedures designed to prevent the use and dissemination of material nonpublic information 5 The Trust is registered under the 1940 Act. On July 5, 2019, the Trust filed with the Commission its registration statement on Form N–1A under the Securities Act of 1933 (15 U.S.C. 77a), and under the 1940 Act relating to the Fund (File Nos. 333– 146827 and 811–22135) (‘‘Registration Statement’’). The description of the operation of the Trust and the Fund herein is based, in part, on the Registration Statement. In addition, the Commission has issued an order upon which the Trust may rely, granting certain exemptive relief under the 1940 Act. See Investment Company Act Release No. 32854 (October 6, 2017) (File No. 812– 14781). 6 An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’). As a result, the Adviser and Sub-Adviser and their related personnel are subject to the provisions of Rule 204A–1 under the Advisers Act relating to codes of ethics. This Rule requires investment advisers to adopt a code of ethics that reflects the fiduciary nature of the relationship to clients as well as compliance with other applicable securities laws. Accordingly, procedures designed to prevent the communication and misuse of non-public information by an investment adviser must be consistent with Rule 204A–1 under the Advisers Act. In addition, Rule 206(4)–7 under the Advisers Act makes it unlawful for an investment adviser to provide investment advice to clients unless such investment adviser has (i) adopted and implemented written policies and procedures reasonably designed to prevent violation, by the investment adviser and its supervised persons, of the Advisers Act and the Commission rules adopted thereunder; (ii) implemented, at a minimum, an annual review regarding the adequacy of the policies and procedures established pursuant to subparagraph (i) above and the effectiveness of their implementation; and (iii) designated an individual (who is a supervised person) responsible for administering the policies and procedures adopted under subparagraph (i) above. E:\FR\FM\19NON1.SGM 19NON1

Agencies

[Federal Register Volume 84, Number 223 (Tuesday, November 19, 2019)]
[Notices]
[Pages 63927-63929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24981]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87521; File No. SR-CboeBZX-2019-094]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Fee Schedule Applicable to the BZX Equities Trading Platform as it 
Relates to Pricing for Orders Routed to Cboe EDGA Exchange, Inc. Using 
the ALLB, TRIM, or SLIM Routing Strategy

November 13, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 1, 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 Exchange. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

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

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

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (the ``Commission'') a 
proposed rule change to amend the fee schedule applicable to the BZX 
equities trading platform (``BZX Equities'') as it relates to pricing 
for orders routed to Cboe EDGA Exchange, Inc. (``EDGA'') using the 
ALLB, TRIM, or SLIM routing strategy. The text of the proposed rule 
change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://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.

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 the BZX Equities fee schedule to 
change the pricing applicable to orders routed to EDGA using the ALLB, 
TRIM, or SLIM routing strategy, as a result of a recent pricing change 
by EDGA effective on November 1, 2019. The Exchange proposes to 
implement the proposed change to its fee schedule on November 1, 2019. 
Currently, the Exchange provides a rebate of $0.0024 per share for 
orders routed to EDGA using the ALLB, TRIM, or SLIM routing strategy 
(yielding fee codes AA and BJ), which was a pass-through of the 
standard rebate EDGA had previously provided to orders that removed 
liquidity from EDGA. Effective November 1, 2019, EDGA reduced its 
standard rebate per share for orders that remove liquidity in 
securities priced at or above $1.00 from $0.0024 to $0.0018. As such, 
the Exchange proposes to similarly reduce the per share rebate for 
orders routed to EDGA (yielding fee codes AA and BJ) from $0.0024 to 
$0.0018 in order to reflect the reduction in the rebate available for 
orders removing liquidity on EDGA.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements of Section 6(b) of the Act.\3\ Specifically, the 
Exchange believes the proposed rule change is consistent with Section 
6(b)(4) of the Act,\4\ 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 and does not 
unfairly discriminate between customers, issuers, brokers or dealers. 
The Exchange operates in a highly-competitive market in which market 
participants can readily direct order flow to competing venues if they 
deem fee levels at a particular venue to be excessive or incentives to 
be insufficient.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. Sec.  78f(b).
    \4\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    In particular, the Exchange believes that the proposed change is 
reasonable because it reflects a pass-through of a recent pricing 
change by EDGA for liquidity removing orders, as described above. The 
Exchange believes that the proposed change is reasonable because it 
will maintain proportionality with the standard corresponding rebate 
offered by EDGA while also maintaining Member interest in routing 
orders through the Exchange by passing on better pricing to Members 
that choose to enter such orders on the Exchange, thereby encouraging 
additional order flow to be entered on the BZX Book. The Exchange 
believes that additional order flow through the BZX Book will result in 
greater liquidity to the benefit of all market participants on the 
Exchange by providing more trading opportunities.

[[Page 63928]]

    The Exchange also believes that the proposed change constitutes an 
equitable allocation of reasonable fees that is not unfairly 
discriminatory because the proposed rebate is designed to continue to 
reflect the rebate offered (and recently updated) by EDGA to orders 
that remove liquidity and would apply equally to all Members that 
choose to use the Exchange to route liquidity removing orders to EDGA. 
Furthermore, the Exchange notes that routing through the Exchange is 
voluntary, and, because the Exchange operates in a highly competitive 
environment as discussed below, Members that do not favor the proposed 
pricing can readily direct order flow directly to EDGA or through 
competing venues or providers of routing services.

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. The 
Exchange believes the proposed routing fee change will not impose an 
undue burden on competition because the proposed rebate is merely 
intended to maintain consistency between the Exchange's rebates for 
orders routed to EDGA with the rebates currently offered by EDGA for 
liquidity removing orders.
    The Exchange does not believe the proposed rebate will impose any 
burden on intramarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. As stated, the Exchange will 
uniformly assess the proposed routing fee on all Members who choose to 
route orders through the Exchange to EDGA. As noted above, the proposed 
rebate intends pass through the same rebates for liquidity removing 
orders from EDGA on to Members, thereby, adding order flow to the BZX 
Book which will result in more trading opportunities to the benefit of 
all market participants on the Exchange.
    The Exchange does not believe the proposed rule change will impose 
any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. As noted above, 
the Exchange operates in a highly competitive market and routing 
through the Exchange is voluntary. Therefore, Members may opt to 
disfavor the Exchange's pricing if they believe that alternatives, 
including 12 other equities exchanges and 32 alternative trading 
systems, offer them better value or if they disfavor the proposed 
change. Additionally, the Exchange represents a small percentage of the 
overall market. Based on publicly available information, no single 
equities exchange has more than 17% of the market share.\5\ Therefore, 
no exchange possesses significant pricing power in the execution of 
equity order flow. Moreover, the Commission has repeatedly expressed 
its preference for competition over regulatory intervention in 
determining prices, products, and services in the securities markets. 
Specifically, in Regulation National Market System (``NMS''), the 
Commission highlighted the importance of market forces in determining 
prices and SRO revenues and, also, recognized that current regulation 
of the market system ``has been remarkably successful in promoting 
market competition in its broader forms that are most important to 
investors and listed companies.'' \6\ The fact that this market is 
competitive has also long been recognized by the courts. In 
NetCoalition v. Securities and Exchange Commission, the D.C. Circuit 
stated as follows: ``[n]o one disputes that competition for order flow 
is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market 
system, buyers and sellers of securities, and the broker-dealers that 
act as their order-routing agents, have a wide range of choices of 
where to route orders for execution'; [and] `no exchange can afford to 
take its market share percentages for granted' because `no exchange 
possesses a monopoly, regulatory or otherwise, in the execution of 
order flow from broker dealers'. . . .''.\7\ Regardless, the Exchange 
notes that the proposed change to the EDGA-related routing fee is 
merely meant to pass through the rebate associated with executing 
orders on that market, and is therefore not designed to have any 
significant impact on competition. Accordingly, the Exchange does not 
believe its proposed fee change imposes any burden on competition that 
is not necessary or appropriate in furtherance of the purposes of the 
Act.
---------------------------------------------------------------------------

    \5\ See Cboe Global Markets U.S. Equities Market Volume Summary 
(October 28, 2019), available at https://markets.cboe.com/us/equities/market_share/.
    \6\ See Securities Exchange Act Release No. 51808 (June 29, 
2015) 70 FR 37495 (August 29, 2015).
    \7\ NetCoalition v. Securities and Exchange Commission, 615 F.3d 
525 (D.C. Cir. 2010).
---------------------------------------------------------------------------

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 is effective upon filing pursuant to 
Section 19(b)(3)(A) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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 the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \10\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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 No. SR-CboeBZX-2019-094 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 No. SR-CboeBZX-2019-094. 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

[[Page 63929]]

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 No. SR-
CboeBZX-2019-094, and should be submitted on or before December 10, 
2019.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-24981 Filed 11-18-19; 8:45 am]
 BILLING CODE 8011-01-P
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