Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule, 64149-64153 [2019-25104]

Download as PDF Federal Register / Vol. 84, No. 224 / Wednesday, November 20, 2019 / Notices dissemination of transactions to the public, either real-time or on a delayed basis, as member firms report trade activity in U.S. Treasury Securities to TRACE for regulatory and other official sector purposes.10 There currently is limited and fragmented publicly available information on U.S. Treasury Security transaction volume. The Federal Reserve Bank of New York publishes average daily trading volume and end-of-the-week positions of primary dealers in U.S. Treasury Securities on a weekly basis.11 However, there is substantial trading volume with and among non-primary dealers. Currently there is not available, to the public or otherwise, a comprehensive source of aggregated volume data that reflects all major segments in the U.S. Treasury Securities market. Economic Impacts Dissemination of aggregate volume data and statistics for U.S. Treasury Securities would not impose any additional requirements on firms. Aggregate volume data would be derived from trade reports submitted to TRACE. In addition, because the data would be available free of charge, FINRA does not believe that there would be any direct costs associated with the proposal for firms, investors or data consumers. FINRA believes that publishing aggregate volume information would help market participants better understand the overall trading of U.S. Treasury Securities by providing information that could be utilized in assessing the level of liquidity over time within published categories. Thus, aggregated volume statistics should provide incremental and valuable insight into trading activity and supplement the information currently published by the Federal Reserve Bank of New York.12 Furthermore, since the reported volume would be grouped— e.g., by security subtype, remaining years to maturity, and market segment (e.g., ATS and dealer-to-dealer or dealerto-customer)—the data could provide a breakdown of trading activity 10 FINRA makes the data available to the official sector to assist them in monitoring and analyzing the U.S. Treasury Securities markets. The Treasury Department, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the Securities and Exchange Commission, and the U.S. Commodity Futures Trading Commission comprise the Inter-Agency Working Group for Treasury Market Surveillance (‘‘IAWG’’ or ‘‘official sector’’). 11 See https://www.newyorkfed.org/markets/ primarydealers for the definition of ‘‘primary dealers’’ and the weekly statistics. 12 Some primary dealers are FINRA members. VerDate Sep<11>2014 17:21 Nov 19, 2019 Jkt 250001 information at a level of granularity that has not been officially available before for U.S. Treasury Securities. FINRA also considered information leakage concerns, i.e., whether market participants’ proprietary trading strategies could be discerned from publishing aggregated data; however, FINRA believes aggregation mitigates information leakage concerns by limiting the granularity of the data within descriptive groupings with no accompanying security- or market participant-level data. Alternatives Considered No other alternatives were considered for the proposed dissemination framework. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– FINRA–2019–028 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–FINRA–2019–028. This file PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 64149 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 such filing also will be available for inspection and copying at the principal office of FINRA. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–FINRA– 2019–028 and should be submitted on or before December 11, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–25100 Filed 11–19–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87539; File No. SR– CboeBYX–2019–020] Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule November 14, 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 BYX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) filed with the 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\20NON1.SGM 20NON1 64150 Federal Register / Vol. 84, No. 224 / Wednesday, November 20, 2019 / Notices Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe BYX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) is filing with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change to amend the fee schedule. 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/byx/), 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its fee schedule in connection with its Add Volume Tiers. The Exchange first notes that it operates in a highly-competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 13 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues that do not have similar self-regulatory responsibilities under the Exchange Act, to which market participants may direct their order flow. Based on publicly VerDate Sep<11>2014 17:21 Nov 19, 2019 Jkt 250001 available information,3 no single registered equities exchange has more than 18% of the market share. Thus, in such a low-concentrated and highly competitive market, no single equities exchange possesses significant pricing power in the execution of order flow. The Exchange in particular operates a ‘‘Taker-Maker’’ model whereby it pays credits to members that remove liquidity and assesses fees to those that add liquidity. The Exchange’s Fees Schedule sets forth the standard rebates and rates applied per share for orders that provide and remove liquidity, respectively. Particularly, for securities at or above $1.00, the Exchange provides a standard rebate of $0.0005 per share for orders that remove liquidity and assesses a fee of $0.0019 per share for orders that add liquidity. The Exchange believes that the evershifting market share among the exchanges from month to month demonstrates that market participants can shift order flow, or discontinue to reduce use of certain categories of products, in response to fee changes. Accordingly, competitive forces constrain the Exchange’s transaction fees, and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. In response to the competitive environment, the Exchange also offers tiered pricing which provides Members opportunities to qualify for higher rebates or reduced fees where certain volume criteria and thresholds are met. Tiered pricing provides incremental incentives for Members to strive for higher or different tier levels by offering increasingly higher discounts or enhanced benefits for satisfying increasingly more stringent criteria or different criteria. For example, pursuant to footnote 1 of the Fees Schedule, the Exchange offers Add Volume Tiers that provide Members an opportunity to receive a discounted rate from the standard fee assessment for liquidity adding orders that yield fee codes ‘‘B’’,4 ‘‘V’’ 5 and ‘‘Y’’.6 The Add Volume Tiers currently offer five different tiers that vary in levels of criteria difficulty and incentive opportunities in which Members may qualify for discounted rates for such orders. The Exchange notes that these tiers are designed to encourage Members that provide displayed, liquidity adding orders on the Exchange to increase their order flow, thereby contributing to a deeper and more liquid market to the benefit of all market participants. Specifically, the Exchange proposes to amend Add Volume Tier 4, which currently provides Members an opportunity to qualify for a reduced fee of $0.0016 for orders yielding fee codes B, V, and Y where a Member has an ADAV 7 of greater than or equal to 0.25% of the TCV,8 and a Step-Up ADAV 9 of greater than or equal to 0.05% of the TCV from April 2017 baseline. The Exchange proposes to remove the requirement that a Member have a Step-Up ADAV of greater than or equal to 0.05% of the TCV from April 2017 baseline, and slightly decrease the fee reduction rate from the current $0.0016 to a proposed rate of $0.0017. The Exchange notes that the proposed change to this tier’s criteria is designed to make it easier to achieve by removing the Step-Up ADAV component. As a result, the proposed criteria would become the least difficult tier to achieve in comparison to current Add Volume Tiers 1 through 3. Therefore, to maintain the Add Volume Tiers in order of incremental difficulty and corresponding rates, the Exchange moves this proposed criteria and fee reduction rate to Tier 1 (and updates the subsequent Tier numbers). The Exchange notes that the proposed change to this tier is designed to make the tier criteria easier to reach by removing the Step-Up ADAV component of the criteria. The Exchange believes that by easing the tier criteria difficulty it will encourage those Members who could not previously achieve current Tier 4 to increase their order flow as a means to receive the tier’s proffered fee reduction. The Exchange also notes that the proposed decrease in the current fee reduction rate is commensurate with the proposed decrease in the tier’s criteria. The Exchange believes the proposed criteria modification for displayed, liquidity adding orders will incentivize increased overall order flow to the Book and gives liquidity providing Members on the Exchange an additional opportunity to receive a discounted rate. It is designed 3 See Cboe Global Markets, U.S. Equities Market Volume Summary (October 25, 2019), available at https://markets.cboe.com/us/equities/market_ statistics/. 4 Appended to displayed orders that add liquidity to BYX (Tape B), and assessed a fee of $0.0019. 5 Appended to displayed orders that add liquidity to BYX (Tape A), and assessed a fee of $0.0019. 6 Appended to displayed orders that add liquidity to BYX (Tape C), and assessed a fee of $0.0019. 7 ‘‘ADAV’’ means average daily volume calculated as the number of shares added per day. ADAV is calculated on a monthly basis. 8 ‘‘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. 9 ‘‘Step-Up ADAV’’ means ADAV in the relevant baseline month subtracted from current ADAV. PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 E:\FR\FM\20NON1.SGM 20NON1 Federal Register / Vol. 84, No. 224 / Wednesday, November 20, 2019 / Notices to provide Members that submit displayed liquidity on the Exchange a further incentive to contribute to a deeper, more liquid market, in turn, providing additional execution opportunities at transparent prices as a result of such increased, displayed liquidity. The Exchange believes that this benefits all Members by enhancing overall market quality and contributing towards a robust and well-balanced market ecosystem. The Exchange notes the proposed tier is available to all Members and is competitively achievable for all Members that submit displayed order flow, in that, all firms that submit the requisite displayed order flow could compete to meet the tier. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,10 in general, and furthers the objectives of Section 6(b)(4),11 in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and issuers and other persons using its facilities. The Exchange also believes that the proposed rule change is consistent with the objectives of Section 6(b)(5) 12 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest, and, particularly, is not designed to permit unfair discrimination 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. The proposed rule change reflects a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance market quality to the benefit of all Members. In particular, the Exchange believes the proposed tier is reasonable because 10 15 U.S.C. 78f. U.S.C. 78f(b)(4). 12 15 U.S.C. 78f.(b)(5). 11 15 VerDate Sep<11>2014 17:21 Nov 19, 2019 Jkt 250001 it restructures an opportunity for Members to receive a discounted rate by making it easier to reach the proposed threshold by means of liquidity adding displayed orders. The Exchange notes that relative volume-based incentives and discounts have been widely adopted by exchanges,13 including the Exchange,14 and are reasonable, equitable and non-discriminatory because they are open to all members on an equal basis and provide additional benefits or discounts that are reasonably related to (i) the value to an exchange’s market quality and (ii) associated higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns. Additionally, as noted above, the Exchange operates in highly competitive market. The Exchange is only one of several equity venues to which market participants may direct their order flow, and it represents a small percentage of the overall market. It is also only one of several taker-maker exchanges. Competing equity exchanges offer similar tiered pricing structures to that of the Exchange, including schedules of rebates and fees that apply based upon members achieving certain volume and/or growth thresholds. These competing pricing schedules, moreover, are presently comparable to those that the Exchange provides, including the pricing of comparable tiers.15 Moreover, the Exchange believes the proposed modification to remove the Step-Up component from current Add Volume Tier 4 (proposed Tier 1) is a reasonable means to further incentivize Members to increase their overall displayed order flow to the Exchange based on increasing their daily total added volume (ADAV) above a percentage of the total volume (TCV). Particularly, the Exchange believes that decreasing the tier’s criteria will encourage those Members who could not achieve the tier previously to increase their order flow as a means to receive the tier’s reduced rate. The 13 See e.g., The Nasdaq Stock Market LLC Rules, Equity 7, Sec. 118(a)(1), which generally provides credits to members for displayed, liquidity providing orders that reach certain thresholds of consolidated volume. 14 See e.g., Cboe BYX U.S. Equities Exchange Fee Schedule, Footnotes 1 and 2, Remove Volume and Non-Displayed Liquidity Incentive tiers provide similar incentives for volume removing orders and for volume adding, non-displayed orders, respectively. 15 See supra note 12. For example, Nasdaq offers a rebate of $0.00305 per share with shares of liquidity provided in all securities through one or more of its Nasdaq Market Center MPIDs that represent more than 1.25% of Consolidated Volume during the month. The Exchange notes that this rebate of $0.00305 is substantially similar to the proposed fee reduction of $0.0017 (which is essentially a ‘rebate’ of $0.002 from the $0.0019 standard fee assessed). PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 64151 Exchange believes that easing the current Tier 4 criteria will encourage displayed liquidity providing Members to provide for a deeper, more liquid market, and, as a result, increased priced transparency, execution opportunities, and overall order flow. The Exchange believes that these increases benefit all Members by enhancing market quality and contributing towards a robust and wellbalanced market ecosystem. Increased overall order flow benefits all investors by deepening the Exchange’s liquidity pool, providing greater execution incentives and opportunities, offering additional flexibility for all investors to enjoy cost savings, supporting the quality of price discovery, promoting market transparency and improving investor protection. In line with the proposed ease in criteria difficulty, the Exchange also believes that the proposed lesser fee reduction than offered currently is reasonable as it is commensurate with the proposed decreased criteria. Similarly, moving the proposed criteria and the adjusted corresponding fee reduction to Tier 1 is reasonable because it appropriately reflects the incremental difficulty in achieving the existing Add Volume Tiers and the incrementally higher reduction in fees that correspond to each. The Exchange believes that the proposal represents an equitable allocation of rebates and is not unfairly discriminatory because all Members are eligible for the proposed Add Volume Tier, and would have the opportunity to meet the tier’s criteria and would receive the proposed rebate if such criteria is met. Given previous months’ data, the Exchange notes that two of its Members reached current Tier 4 in the last month. Without having a view of activity on other markets and offexchange venues, the Exchange has no way of knowing whether this proposed rule change would definitely result in any Members qualifying for this tier. While the Exchange has no way of predicting with certainty how the proposed tier will impact Member activity, the Exchange anticipates that at least four Members will be able to compete for and reach the proposed tier. Accordingly, the Exchange believes the proposed criteria modification is reasonably designed as an incentive to any and all Members interested in meeting the tier criteria to submit additional displayed order flow to achieve the proposed discount. The Exchange anticipates that these will include multiple Member types, liquidity providers (e.g., wholesale firms E:\FR\FM\20NON1.SGM 20NON1 64152 Federal Register / Vol. 84, No. 224 / Wednesday, November 20, 2019 / Notices that mainly are market makers for retail orders) and broker-dealers (e.g., bulge bracket firms that conduct trading on behalf of customers), each providing distinct types of order flow to the Exchange to the benefit of all market participants. For example, broker-dealer customer order flow provides more trading opportunities, which attracts Market Makers. Increased Market Maker activity facilitates tighter spreads which potentially increases order flow from other market participants. The Exchange also notes that the proposed tier will not adversely impact any Member’s pricing or their ability to qualify for other rebate tiers. Rather, should a Member not meet the proposed criteria, the Member will merely not receive an enhanced rebate. Furthermore, the proposed rate would uniformly apply to all Members that meet the required criteria under the modified tier. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on intramarket or intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Rather, as discussed above, the Exchange believes that the proposed change would encourage the submission of additional order flow to a public exchange, thereby promoting market depth, execution incentives and enhanced execution opportunities, as well as price discovery and transparency for all Members. As a result, the Exchange believes that the proposed change furthers the Commission’s goal in adopting Regulation NMS of fostering competition among orders, which promotes ‘‘more efficient pricing of individual stocks for all types of orders, large and small.’’ 16 The Exchange believes the proposed rule change does not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Particularly, the proposed change applies to all Members equally in that all Members are eligible for the proposed tier, have a reasonable opportunity to meet the tier’s criteria and will all receive the proposed fee rate if such criteria is met. Additionally the proposed change is designed to attract additional order flow to the Exchange. The Exchange believes that the modified tier criteria would incentivize market participants to direct displayed liquidity and, as a result, 16 Securities Exchange Act Release No. 51808, 70 FR 37495, 37498–99 (June 29, 2005) (S7–10–04) (Final Rule). VerDate Sep<11>2014 17:21 Nov 19, 2019 Jkt 250001 executable order flow and improved price transparency, to the Exchange. Greater overall order flow and pricing transparency benefits all market participants on the Exchange by providing more trading opportunities, enhancing market quality, and continuing to encourage Members to send orders, thereby contributing towards a robust and well-balanced market ecosystem, which benefits all market participants. Next, the Exchange believes the proposed rule change does not impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As previously discussed, the Exchange operates in a highly competitive market. Members have numerous alternative venues that they may participate on and direct their order flow, including 12 other equities exchanges and offexchange venues and alternative trading systems. Additionally, the Exchange represents a small percentage of the overall market. Based on publicly available information, no single equities exchange has more than 18% of the market share.17 Therefore, no exchange possesses significant pricing power in the execution of order flow. Indeed, participants can readily choose to send their orders to other exchange and offexchange venues if they deem fee levels at those other venues to be more favorable. 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 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.’’ 18 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’ 17 See supra note 3. Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 18 See PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 because ‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’. . . .’’.19 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 The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 20 and paragraph (f) of Rule 19b–4 21 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CboeBYX–2019–020 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange 19 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782– 83 (December 9, 2008) (SR–NYSEArca–2006–21)). 20 15 U.S.C. 78s(b)(3)(A). 21 17 CFR 240.19b–4(f). E:\FR\FM\20NON1.SGM 20NON1 Federal Register / Vol. 84, No. 224 / Wednesday, November 20, 2019 / Notices Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CboeBYX–2019–020. 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–CboeBYX–2019–020 and should be submitted on or before December 11, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–25104 Filed 11–19–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33684; 812–14870] Natixis ETF Trust II, et al.; Notice of Application November 14, 2019. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application for exemptive relief. AGENCY: 22 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:21 Nov 19, 2019 Jkt 250001 Applicants request an order under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c–1 under the Act, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under section 12(d)(1)(J) of the Act for an exemption from sections 12(d)(1)(A) and 12(d)(1)(B) of the Act. If granted, the requested order would permit registered open-end investment companies that are exchange-traded funds (‘‘ETFs’’) and are actively managed to operate without being subject to a daily portfolio transparency condition. APPLICANTS: Natixis Advisors, L.P. (‘‘Natixis’’); Natixis ETF Trust II (the ‘‘Trust’’) and NYSE Group, Inc. (‘‘NYSE’’). FILING DATES: The application was filed on January 22, 2018, and amended on June 15, 2018, November 9, 2018, May 1, 2019, July 3, 2019, July 26, 2019, August 26, 2019, and October 21, 2019. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving Applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on December 9, 2019, and should be accompanied by proof of service on Applicants, in the form of an affidavit, or for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090; Applicants: Natixis Advisors, L.P. and Natixis ETF Trust II, 888 Boylston Street, Boston, Massachusetts 02199; and NYSE Group, Inc., 11 Wall Street, New York, NY 10005. FOR FURTHER INFORMATION CONTACT: KayMario Vobis, Senior Counsel; Andrea Ottomanelli Magovern, Branch Chief, at (202) 551–6821 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s website by searching for the file SUMMARY OF APPLICATION: PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 64153 number, or for an applicant using the Company name box, at https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. I. Introduction 1. Applicants seek to introduce a novel type of actively-managed ETF that would not be required to disclose its portfolio holdings on a daily basis (each, a ‘‘Fund’’). Due to their characteristics, ETFs (including those proposed by Applicants) are only permitted to operate in reliance on Commission exemptive relief from certain provisions of the Act and rules thereunder.1 Accordingly, Applicants seek an order: under section 6(c) of the Act for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c–1 thereunder; under sections 6(c) and 17(b) of the Act granting an exemption from sections 17(a)(1) and 17(a)(2) of the Act; and under section 12(d)(1)(J) for an exemption from sections 12(d)(1)(A) and (B) of the Act. The requested order would permit: (a) The Funds to issue shares (‘‘Shares’’) redeemable in large aggregations only (‘‘creation units’’); (b) secondary market transactions in Shares to occur at negotiated market prices rather than at net asset value (‘‘NAV’’); (c) certain Funds to pay redemption proceeds, under certain circumstances, more than seven days after the tender of Shares for redemption; (d) certain affiliated persons of a Fund to deposit securities into, and receive securities from, the Fund in connection with the purchase and redemption of creation units; and (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the Funds (‘‘Investing Funds’’) to acquire Shares of the Funds. 2. Section 6(c) allows the Commission to exempt any person, security, or transaction, or any class thereof, only ‘‘if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of [the Act].’’ As discussed below, the Commission believes that the 1 The Commission first granted exemptive relief to operate ETFs in the early 1990s when the first index-based ETFs were developed. See SPDR Trust Series I, Investment Company Act Release Nos. 18959 (Sept. 17, 1992) (notice) and 19055 (Oct. 26, 1992) (order). See generally Exchange Traded Funds, Investment Company Act Release No. 33646 (Sept. 25, 2019) (‘‘ETF Rule Adopting Release’’), at section I. The Commission has also granted ETFs exemptive relief from Sections 12(d)(1)(A) and (B) of the Act. See generally Fund of Funds Arrangements, Investment Company Act Release No. 33329 (Dec. 19, 2018). 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Agencies

[Federal Register Volume 84, Number 224 (Wednesday, November 20, 2019)]
[Notices]
[Pages 64149-64153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25104]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87539; File No. SR-CboeBYX-2019-020]


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

November 14, 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 BYX Exchange, Inc. (the ``Exchange'' or 
``BYX'') filed with the

[[Page 64150]]

Securities and Exchange Commission (the ``Commission'') the proposed 
rule change as described in Items I, II, and III below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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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 BYX Exchange, Inc. (the ``Exchange'' or ``BZX'') is filing 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change to amend the fee schedule. 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/byx/), 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its fee schedule in connection with 
its Add Volume Tiers.
    The Exchange first notes that it operates in a highly-competitive 
market in which market participants can readily direct order flow to 
competing venues if they deem fee levels at a particular venue to be 
excessive or incentives to be insufficient. More specifically, the 
Exchange is only one of 13 registered equities exchanges, as well as a 
number of alternative trading systems and other off-exchange venues 
that do not have similar self-regulatory responsibilities under the 
Exchange Act, to which market participants may direct their order flow. 
Based on publicly available information,\3\ no single registered 
equities exchange has more than 18% of the market share. Thus, in such 
a low-concentrated and highly competitive market, no single equities 
exchange possesses significant pricing power in the execution of order 
flow. The Exchange in particular operates a ``Taker-Maker'' model 
whereby it pays credits to members that remove liquidity and assesses 
fees to those that add liquidity. The Exchange's Fees Schedule sets 
forth the standard rebates and rates applied per share for orders that 
provide and remove liquidity, respectively. Particularly, for 
securities at or above $1.00, the Exchange provides a standard rebate 
of $0.0005 per share for orders that remove liquidity and assesses a 
fee of $0.0019 per share for orders that add liquidity. The Exchange 
believes that the ever-shifting market share among the exchanges from 
month to month demonstrates that market participants can shift order 
flow, or discontinue to reduce use of certain categories of products, 
in response to fee changes. Accordingly, competitive forces constrain 
the Exchange's transaction fees, and market participants can readily 
trade on competing venues if they deem pricing levels at those other 
venues to be more favorable. In response to the competitive 
environment, the Exchange also offers tiered pricing which provides 
Members opportunities to qualify for higher rebates or reduced fees 
where certain volume criteria and thresholds are met. Tiered pricing 
provides incremental incentives for Members to strive for higher or 
different tier levels by offering increasingly higher discounts or 
enhanced benefits for satisfying increasingly more stringent criteria 
or different criteria.
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    \3\ See Cboe Global Markets, U.S. Equities Market Volume Summary 
(October 25, 2019), available at https://markets.cboe.com/us/equities/market_statistics/.
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    For example, pursuant to footnote 1 of the Fees Schedule, the 
Exchange offers Add Volume Tiers that provide Members an opportunity to 
receive a discounted rate from the standard fee assessment for 
liquidity adding orders that yield fee codes ``B'',\4\ ``V'' \5\ and 
``Y''.\6\ The Add Volume Tiers currently offer five different tiers 
that vary in levels of criteria difficulty and incentive opportunities 
in which Members may qualify for discounted rates for such orders. The 
Exchange notes that these tiers are designed to encourage Members that 
provide displayed, liquidity adding orders on the Exchange to increase 
their order flow, thereby contributing to a deeper and more liquid 
market to the benefit of all market participants.
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    \4\ Appended to displayed orders that add liquidity to BYX (Tape 
B), and assessed a fee of $0.0019.
    \5\ Appended to displayed orders that add liquidity to BYX (Tape 
A), and assessed a fee of $0.0019.
    \6\ Appended to displayed orders that add liquidity to BYX (Tape 
C), and assessed a fee of $0.0019.
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    Specifically, the Exchange proposes to amend Add Volume Tier 4, 
which currently provides Members an opportunity to qualify for a 
reduced fee of $0.0016 for orders yielding fee codes B, V, and Y where 
a Member has an ADAV \7\ of greater than or equal to 0.25% of the 
TCV,\8\ and a Step-Up ADAV \9\ of greater than or equal to 0.05% of the 
TCV from April 2017 baseline. The Exchange proposes to remove the 
requirement that a Member have a Step-Up ADAV of greater than or equal 
to 0.05% of the TCV from April 2017 baseline, and slightly decrease the 
fee reduction rate from the current $0.0016 to a proposed rate of 
$0.0017. The Exchange notes that the proposed change to this tier's 
criteria is designed to make it easier to achieve by removing the Step-
Up ADAV component. As a result, the proposed criteria would become the 
least difficult tier to achieve in comparison to current Add Volume 
Tiers 1 through 3. Therefore, to maintain the Add Volume Tiers in order 
of incremental difficulty and corresponding rates, the Exchange moves 
this proposed criteria and fee reduction rate to Tier 1 (and updates 
the subsequent Tier numbers).
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    \7\ ``ADAV'' means average daily volume calculated as the number 
of shares added per day. ADAV is calculated on a monthly basis.
    \8\ ``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.
    \9\ ``Step-Up ADAV'' means ADAV in the relevant baseline month 
subtracted from current ADAV.
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    The Exchange notes that the proposed change to this tier is 
designed to make the tier criteria easier to reach by removing the 
Step-Up ADAV component of the criteria. The Exchange believes that by 
easing the tier criteria difficulty it will encourage those Members who 
could not previously achieve current Tier 4 to increase their order 
flow as a means to receive the tier's proffered fee reduction. The 
Exchange also notes that the proposed decrease in the current fee 
reduction rate is commensurate with the proposed decrease in the tier's 
criteria. The Exchange believes the proposed criteria modification for 
displayed, liquidity adding orders will incentivize increased overall 
order flow to the Book and gives liquidity providing Members on the 
Exchange an additional opportunity to receive a discounted rate. It is 
designed

[[Page 64151]]

to provide Members that submit displayed liquidity on the Exchange a 
further incentive to contribute to a deeper, more liquid market, in 
turn, providing additional execution opportunities at transparent 
prices as a result of such increased, displayed liquidity. The Exchange 
believes that this benefits all Members by enhancing overall market 
quality and contributing towards a robust and well-balanced market 
ecosystem. The Exchange notes the proposed tier is available to all 
Members and is competitively achievable for all Members that submit 
displayed order flow, in that, all firms that submit the requisite 
displayed order flow could compete to meet the tier.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\10\ in general, and 
furthers the objectives of Section 6(b)(4),\11\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and issuers and other persons 
using its facilities. The Exchange also believes that the proposed rule 
change is consistent with the objectives of Section 6(b)(5) \12\ 
requirements that the rules of an exchange be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest, and, particularly, is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78f.(b)(5).
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    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. The proposed rule change reflects a 
competitive pricing structure designed to incentivize market 
participants to direct their order flow to the Exchange, which the 
Exchange believes would enhance market quality to the benefit of all 
Members.
    In particular, the Exchange believes the proposed tier is 
reasonable because it restructures an opportunity for Members to 
receive a discounted rate by making it easier to reach the proposed 
threshold by means of liquidity adding displayed orders. The Exchange 
notes that relative volume-based incentives and discounts have been 
widely adopted by exchanges,\13\ including the Exchange,\14\ and are 
reasonable, equitable and non-discriminatory because they are open to 
all members on an equal basis and provide additional benefits or 
discounts that are reasonably related to (i) the value to an exchange's 
market quality and (ii) associated higher levels of market activity, 
such as higher levels of liquidity provision and/or growth patterns. 
Additionally, as noted above, the Exchange operates in highly 
competitive market. The Exchange is only one of several equity venues 
to which market participants may direct their order flow, and it 
represents a small percentage of the overall market. It is also only 
one of several taker-maker exchanges. Competing equity exchanges offer 
similar tiered pricing structures to that of the Exchange, including 
schedules of rebates and fees that apply based upon members achieving 
certain volume and/or growth thresholds. These competing pricing 
schedules, moreover, are presently comparable to those that the 
Exchange provides, including the pricing of comparable tiers.\15\
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    \13\ See e.g., The Nasdaq Stock Market LLC Rules, Equity 7, Sec. 
118(a)(1), which generally provides credits to members for 
displayed, liquidity providing orders that reach certain thresholds 
of consolidated volume.
    \14\ See e.g., Cboe BYX U.S. Equities Exchange Fee Schedule, 
Footnotes 1 and 2, Remove Volume and Non-Displayed Liquidity 
Incentive tiers provide similar incentives for volume removing 
orders and for volume adding, non-displayed orders, respectively.
    \15\ See supra note 12. For example, Nasdaq offers a rebate of 
$0.00305 per share with shares of liquidity provided in all 
securities through one or more of its Nasdaq Market Center MPIDs 
that represent more than 1.25% of Consolidated Volume during the 
month. The Exchange notes that this rebate of $0.00305 is 
substantially similar to the proposed fee reduction of $0.0017 
(which is essentially a `rebate' of $0.002 from the $0.0019 standard 
fee assessed).
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    Moreover, the Exchange believes the proposed modification to remove 
the Step-Up component from current Add Volume Tier 4 (proposed Tier 1) 
is a reasonable means to further incentivize Members to increase their 
overall displayed order flow to the Exchange based on increasing their 
daily total added volume (ADAV) above a percentage of the total volume 
(TCV). Particularly, the Exchange believes that decreasing the tier's 
criteria will encourage those Members who could not achieve the tier 
previously to increase their order flow as a means to receive the 
tier's reduced rate. The Exchange believes that easing the current Tier 
4 criteria will encourage displayed liquidity providing Members to 
provide for a deeper, more liquid market, and, as a result, increased 
priced transparency, execution opportunities, and overall order flow. 
The Exchange believes that these increases benefit all Members by 
enhancing market quality and contributing towards a robust and well-
balanced market ecosystem. Increased overall order flow benefits all 
investors by deepening the Exchange's liquidity pool, providing greater 
execution incentives and opportunities, offering additional flexibility 
for all investors to enjoy cost savings, supporting the quality of 
price discovery, promoting market transparency and improving investor 
protection. In line with the proposed ease in criteria difficulty, the 
Exchange also believes that the proposed lesser fee reduction than 
offered currently is reasonable as it is commensurate with the proposed 
decreased criteria. Similarly, moving the proposed criteria and the 
adjusted corresponding fee reduction to Tier 1 is reasonable because it 
appropriately reflects the incremental difficulty in achieving the 
existing Add Volume Tiers and the incrementally higher reduction in 
fees that correspond to each.
    The Exchange believes that the proposal represents an equitable 
allocation of rebates and is not unfairly discriminatory because all 
Members are eligible for the proposed Add Volume Tier, and would have 
the opportunity to meet the tier's criteria and would receive the 
proposed rebate if such criteria is met. Given previous months' data, 
the Exchange notes that two of its Members reached current Tier 4 in 
the last month. Without having a view of activity on other markets and 
off-exchange venues, the Exchange has no way of knowing whether this 
proposed rule change would definitely result in any Members qualifying 
for this tier. While the Exchange has no way of predicting with 
certainty how the proposed tier will impact Member activity, the 
Exchange anticipates that at least four Members will be able to compete 
for and reach the proposed tier. Accordingly, the Exchange believes the 
proposed criteria modification is reasonably designed as an incentive 
to any and all Members interested in meeting the tier criteria to 
submit additional displayed order flow to achieve the proposed 
discount. The Exchange anticipates that these will include multiple 
Member types, liquidity providers (e.g., wholesale firms

[[Page 64152]]

that mainly are market makers for retail orders) and broker-dealers 
(e.g., bulge bracket firms that conduct trading on behalf of 
customers), each providing distinct types of order flow to the Exchange 
to the benefit of all market participants. For example, broker-dealer 
customer order flow provides more trading opportunities, which attracts 
Market Makers. Increased Market Maker activity facilitates tighter 
spreads which potentially increases order flow from other market 
participants. The Exchange also notes that the proposed tier will not 
adversely impact any Member's pricing or their ability to qualify for 
other rebate tiers. Rather, should a Member not meet the proposed 
criteria, the Member will merely not receive an enhanced rebate. 
Furthermore, the proposed rate would uniformly apply to all Members 
that meet the required criteria under the modified tier.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on intramarket or intermarket competition that is not 
necessary or appropriate in furtherance of the purposes of the Act. 
Rather, as discussed above, the Exchange believes that the proposed 
change would encourage the submission of additional order flow to a 
public exchange, thereby promoting market depth, execution incentives 
and enhanced execution opportunities, as well as price discovery and 
transparency for all Members. As a result, the Exchange believes that 
the proposed change furthers the Commission's goal in adopting 
Regulation NMS of fostering competition among orders, which promotes 
``more efficient pricing of individual stocks for all types of orders, 
large and small.'' \16\
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    \16\ Securities Exchange Act Release No. 51808, 70 FR 37495, 
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
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    The Exchange believes the proposed rule change does not impose any 
burden on intramarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Particularly, the proposed 
change applies to all Members equally in that all Members are eligible 
for the proposed tier, have a reasonable opportunity to meet the tier's 
criteria and will all receive the proposed fee rate if such criteria is 
met. Additionally the proposed change is designed to attract additional 
order flow to the Exchange. The Exchange believes that the modified 
tier criteria would incentivize market participants to direct displayed 
liquidity and, as a result, executable order flow and improved price 
transparency, to the Exchange. Greater overall order flow and pricing 
transparency benefits all market participants on the Exchange by 
providing more trading opportunities, enhancing market quality, and 
continuing to encourage Members to send orders, thereby contributing 
towards a robust and well-balanced market ecosystem, which benefits all 
market participants.
    Next, the Exchange believes the proposed rule change does not 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. As previously 
discussed, the Exchange operates in a highly competitive market. 
Members have numerous alternative venues that they may participate on 
and direct their order flow, including 12 other equities exchanges and 
off-exchange venues and alternative trading systems. Additionally, the 
Exchange represents a small percentage of the overall market. Based on 
publicly available information, no single equities exchange has more 
than 18% of the market share.\17\ Therefore, no exchange possesses 
significant pricing power in the execution of order flow. Indeed, 
participants can readily choose to send their orders to other exchange 
and off-exchange venues if they deem fee levels at those other venues 
to be more favorable. 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 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.'' \18\ 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'. . . .''.\19\ 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.
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    \17\ See supra note 3.
    \18\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \19\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from Members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \20\ and paragraph (f) of Rule 19b-4 \21\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 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-CboeBYX-2019-020 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange

[[Page 64153]]

Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeBYX-2019-020. 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-CboeBYX-2019-020 and should be submitted 
on or before December 11, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25104 Filed 11-19-19; 8:45 am]
 BILLING CODE 8011-01-P
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