Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend the Silexx Trading Platform Fees Schedule, 6705-6708 [2021-01285]
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Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.24
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
jbell on DSKJLSW7X2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BX–2021–001 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–BX–2021–001. 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–BX–2021–001 and should
be submitted on or before February 12,
2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–01403 Filed 1–21–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90929; File No. SR–CBOE–
2021–002]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend the
Silexx Trading Platform Fees Schedule
January 14, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January 4,
2021, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to amend
25 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
24 15
U.S.C. 78s(b)(3)(A)(ii).
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6705
the Silexx trading platform (‘‘Silexx’’ or
the ‘‘platform’’) Fees 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://www.cboe.com/
AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to adopt
‘‘drop copy’’ and order routing fees for
a recently adopted Silexx platform
(‘‘Cboe Silexx’’), effective January 4,
2021.
By way of background, the Silexx
platform consists of a ‘‘front-end’’ order
entry and management trading platform
(also referred to as the ‘‘Silexx
terminal’’) for listed stocks and options
that supports both simple and complex
orders,3 and a ‘‘back-end’’ platform
which provides a connection to the
infrastructure network. From the Silexx
platform (i.e., the collective front-end
and back-end platform), a Silexx user
has the capability to send option orders
to U.S. options exchanges, send stock
orders to U.S. stock exchanges (and
other trading centers), input parameters
to control the size, timing, and other
variables of their trades, and also
includes access to real-time options and
stock market data, as well as access to
certain historical data. The Silexx
platform is designed so that a user may
enter orders into the platform to send to
3 The platform also permits users to submit orders
for commodity futures, commodity options and
other non-security products to be sent to designated
contract markets, futures commission merchants,
introducing brokers or other applicable destinations
of the users’ choice.
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Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices
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an executing broker (including Trading
Permit Holders (‘‘TPHs’’)) of its choice
with connectivity to the platform, which
broker will then send the orders to Cboe
Options (if the broker is a TPH) or other
U.S. exchanges (and trading centers) in
accordance with the user’s instructions.
Historically, users could not directly
route orders through any of the thencurrent versions of Silexx to an
exchange or trading center nor was the
platform integrated into or directly
connected to Cboe Option’s System. In
2019, the Exchange made available an
additional version of the Silexx
platform, Silexx FLEX, which supports
the trading of FLEX Options and allows
authorized Users with direct access to
the Exchange.4 Most recently, the
Exchange made a new version of the
Silexx platform available, Cboe Silexx,
which supports the trading of non-FLEX
Options and allows authorized Users
with direct access to the Exchange.5 The
Silexx front-end and back-end platforms
are a software application that is
installed locally on a user’s desktop.
Silexx grants users licenses to use the
platform, and a firm or individual does
not need to be a TPH to license the
platform. Use of any version of the
Silexx platform is completely optional.
Currently, TPH or non-TPH market
participants may receive order fill
messages 6 (i.e., drop copies) from their
Silexx Brokers via the PULSe drop copy
network. However, on January 4, 2021,
the Exchange plans to migrate such
functionality to Cboe Silexx in
conjunction with the planned
decommission of the PULSe Trader
Workstation. At that time, TPH or nonTPH market participants may instead
receive drop copies via the Cboe Silexx
Platform. As a result, the Exchange
proposes to adopt certain drop copy fees
from the Cboe Options Fees Schedule to
the Silexx Fees Schedule with certain
modifications. Additionally, the
Exchange is proposing to adopt a fee for
order routing via Financial Information
eXchange (‘‘FIX’’) into Cboe Silexx, and
to replace the PULSe Routing Network
via Silexx fee with a Cboe Silexx
Routing Network fee.
The Exchange proposes to eliminate
the PULSe Routing Network via Silexx
fee from the Silexx Fees Schedule,
which sets forth a fee for trading firms
accessing the PULSe drop copy network
4 See Securities Exchange Act Release No. 87028
(September 19, 2019) 84 FR 50529 (September 25,
2019) (SR–CBOE–2019–061).
5 See Securities Exchange Act Release No. 88741
(April 24, 2020) 85 FR 24045 (April 30, 2020) (SR–
CBOE–2020–040).
6 These fill messages allow customers to update
positions, risk calculations, and streamline backoffice functions.
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from a non-PULSe, non-Silexx
workstation for its customers’ drop
copies. Instead, the Exchange is
proposing to adopt a fee for accessing
the Silexx routing network to or from a
non-Cboe Silexx workstation for order
routing or drop copies. The proposed
fee is $500 per month payable by the
customer accessing the Silexx routing
network on a per connection basis, and
is similar to the existing PULSe Routing
Network via Silexx fee that the
Exchange is proposing to eliminate,
with the exception that the proposed fee
references the Silexx routing network
rather than the PULSe Drop Copy
Network and eliminates the reference to
a non-PULSe workstation for order
routing or drop copies. Further, the
proposed fee is equal to the existing
PULSe Routing Network via Silexx fee
(i.e., $500 per month per customer
connection).
Second, the Exchange proposes to
adopt a fee for drop copies received by
a TPH customer via Cboe Silexx. The
proposed fee is $425 per month payable
by the TPH customer receiving the drop
copies, unless otherwise directed by the
TPH broker. Specifically, for each Cboe
Silexx-using TPH broker that provides a
TPH customer drop copies, such
receiving TPH customer incurs a fee of
$425 per month. The proposed fee is
substantially similar to a fee charged to
a PULSe-using TPH broker that provides
a TPH customer drop copies via a
PULSe workstation. The only difference
between the proposed fee and the
existing fee pertaining to PULSe users is
that the TPH broker may direct that the
fee be assessed to itself rather than the
TPH customer receiving the drop
copies. However, the TPH customer will
be ultimately responsible for the fee.
Third, the Exchange proposes to
adopt a drop copy payable by the TPH
broker sending the drop copies to its
non-TPH customers, unless otherwise
directed by the TPH broker.
Specifically, for each non-TPH Cboe
Silexx-using customer for which a TPH
broker provides drop copies, the TPH
broker will incur a fee of $0.02/contract
with a fee cap of $400 per month for
each non-TPH customer to which the
TPH broker sends drop copies. The
proposed fee is substantially similar to
the fee applied to drop copies received
by a non-TPH customer via a PULSe
workstation with one difference. Like
the proposed fee for drop copies
received by a TPH customer, the TPH
broker may direct that the applicable fee
be assessed to its customer rather than
itself. However, the TPH broker will be
ultimately responsible for the fee.
Lastly, the Exchange proposes to
adopt a fee for orders routed via FIX
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into Cboe Silexx. Particularly, the
Exchange proposes to adopt a fee for
each TPH broker to whom a TPH
customer using a non-Cboe Silexx
workstation sends orders electronically
to a TPH broker’s Silexx workstation.
The proposed fee is $500 per month for
each TPH broker with a Silexx
workstation to which the TPH customer
sends orders. The proposed fee is
substantially similar to the existing
Non-PULSe-to-PULSe Routing (sent by
TPH customers) fee set forth in the Cboe
Fees Schedule with two differences.
First, like the proposed fees discussed
above, the TPH broker may direct the
applicable fee be assessed to its
customer rather than itself. However,
the TPH broker will be ultimately
responsible for the fee. Second, the
Exchange is not proposing to adopt the
provision that TPH customers who
request FIX order routing into Cboe
Silexx will also receive drop copies
from its TPH brokers and must pay the
monthly drop copy fee in addition to
the in-bound addition fee.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.7 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 8 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.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 9 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
Additionally, the Exchange also believes
the proposed rule change is consistent
with Section 6(b)(4) of the Act,10 which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
7 15
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 Id.
10 15
E:\FR\FM\22JAN1.SGM
U.S.C. 78f(b)(4).
22JAN1
Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices
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TPHs and other persons using its
facilities.
The Exchange believes that its
proposed fees are reasonable and
appropriate as they are substantially
similar with fees set forth in the Cboe
Exchange Fees Schedule applicable to
the PULSe workstation, which is a
substantially similar order entry and
management system to Silexx.11 Despite
certain differences in the proposed fees
from the existing fees applicable to
PULSe workstations, the Exchange
believes that the proposed fees are
reasonable for the following reasons.
First, the proposed Cboe Silexx Routing
Network fee would provide trading
firms the ability to access the Cboe
Silexx Routing Network to or from a
non-Cboe Silexx workstation for not
only drop copies, but also for order
routing. Further, the proposed fee is
equal to the existing PULSe Routing
Network via Silexx fee despite that it
provides order routing functionality in
addition to drop copies. Second, while
the proposed Drop Copy (received by
TPH customer from Cboe Silexx) and
Drop Copy (received by non-TPH
customer) from Cboe Silexx fees provide
that the TPH broker may direct the
applicable fee be payable by itself or its
customer, as applicable, the proposal
may simplify and streamline billing for
TPH brokers and their customers.
Lastly, the proposed FIX order routing
into Cboe Silexx fee differs from the
Non-PULSe-to-PULSe Routing (sent by
TPH customers) fee currently provided
in the Cboe Options Fee Schedule as it
does not provide that TPH customers
requesting such order routing
functionality will receive drop copies
from its TPH brokers and must pay the
monthly drop copy fee in addition to
the in-bound addition fee. The
Exchange believes it is reasonable not to
include such language as it is no longer
applicable.
Additionally, as discussed, use of
drop copy functionality and FIX order
routing into Cboe Silexx is discretionary
and not compulsory. Indeed, Users can
choose to route orders, including to
Cboe Options, and receive drop copies
without the use of the platform. The
Exchange is making the platform
available as a convenience to market
participants, who will continue to have
the option to use any order entry and
management system available in the
marketplace to send orders to the
11 See Cboe Options Fees Schedule, which
provides for a PULSe workstation drop copy
(received by TPH customer) fee of $425 per month,
a drop copy (received by non-TPH customer) fee of
$0.02 per contract capped at $400 per month, and
a Non-PULSe-to-PULSe Routing (sent by TPH
customers) fee of $500 per month.
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Exchange and other exchanges; the
platform is merely an alternative that
will be offered by the Exchange. The
Exchange believes the proposed fees are
equitable and not unfairly
discriminatory because they apply to all
market participants uniformly.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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 12 and paragraph (f) of Rule
19b–4 13 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.
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed change will not impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because it relates to optional services on
an optional platform. The proposed fees
will apply to similarly situated
participants uniformly. Also as
discussed, the use of the platform and
the drop copy services will be
completely voluntary and market
participants will continue to have the
flexibility to use any order entry and
management tool that is proprietary or
from third-party vendors, and/or market
participants may choose any executing
brokers to enter their orders and receive
drop copies. Cboe Silexx is not an
exclusive means of order routing or to
receive drop copies, and if market
participants believe that other products,
vendors, front-end builds, etc. available
in the marketplace are more beneficial
than the Cboe Silexx platform, they may
simply use those products instead. Use
of such functionality is completely
voluntary.
The Exchange does not believe that
the proposed rule changes will impose
any burden on intermarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed changes are
substantially similar to fees applicable
to the PULSe workstation, which is a
substantially similar order entry and
management system and which is
migrating to Cboe Silexx in conjunction
with the planned decommission of the
PULSe Trader Workstation on January 4,
2021. To the extent that the proposed
changes make Cboe Options a more
attractive marketplace for market
participants at other exchanges, such
market participants are welcome to
become Cboe Options market
participants.
PO 00000
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–
CBOE–2021–002 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2021–002. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
12 15
13 17
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E:\FR\FM\22JAN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
22JAN1
6708
Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
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–CBOE–2021–002 and
should be submitted on or before
February 12, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–01285 Filed 1–21–21; 8:45 am]
BILLING CODE 8011–01–P
01’’) of 17 CFR 210.01 et seq.
(‘‘Regulation S–X’’) 3 (collectively, the
‘‘Proposed Rules’’).4 The Proposed
Rules were published for comment in
the Federal Register on November 27,
2020.5 We received several comment
letters in response to the notice.6 This
order approves the Proposed Rules,
which we find to be consistent with the
requirements of the Sarbanes-Oxley Act
and the securities laws and necessary or
appropriate in the public interest or for
the protection of investors.
II. Description of the Proposed Rules
On November 19, 2020, the Board
adopted amendments to the PCAOB’s
interim independence standards and
PCAOB rules to align with amendments
by the SEC to Rule 2–01 of Regulation
S–X.7 The Proposed Rules are intended
to avoid differences and duplicative
requirements. To that end, the Board
adopted targeted amendments to its
interim independence standards
applicable to lending arrangements
between auditors and audit clients. In
addition, the Board adopted targeted
amendments to align certain terms
defined in PCAOB Rule 3501 with the
Commission’s recent amendments to its
definitions of those terms in 17 CFR
210.2–01(f) (‘‘Rule 2–01(f)’’).
A. Changes to PCAOB Standards
The Proposed Rules will make the
following changes:
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90930; File No. PCAOB–
2020–01]
Public Company Accounting Oversight
Board; Order Granting Approval of
Amendments to PCAOB Interim
Independence Standards and PCAOB
Rules to Align with Amendments to
Rule 2–01 of Regulation S–X
jbell on DSKJLSW7X2PROD with NOTICES
January 14, 2021.
I. Introduction
On November 20, 2020, the Public
Company Accounting Oversight Board
(the ‘‘Board’’ or the ‘‘PCAOB’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’),
pursuant to Section 107(b) 1 of the
Sarbanes-Oxley Act of 2002 (the
‘‘Sarbanes-Oxley Act’’) and Section
19(b) 2 of the Securities Exchange Act of
1934 (the ‘‘Exchange Act’’), a proposal
to adopt amendments to the PCAOB’s
interim independence standards and
PCAOB rules to align with the
Commission’s recent adoption of
amendments 17 CFR 210.2–01 (‘‘Rule 2–
14 17
CFR 200.30–3(a)(12).
U.S.C. 7217(b).
2 15 U.S.C. 78s(b).
1 15
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3 See Qualifications of Accountants, Release No.
33–10876 (Oct. 16, 2020) (‘‘2020 Adopting
Release’’).
4 See Amendments to PCAOB Interim
Independence Standards and Board Rules to Align
with Amendments to Rule 2–01of Regulation S–X,
PCAOB Release No. 2020–03 (Nov. 19, 2020)
(‘‘PCAOB Adopting Release’’), available at https://
pcaobus.org/Rulemaking/Docket047/2020-003Independence-final-rule.pdf.
5 See Public Company Accounting Oversight
Board; Notice of Filing of Proposed Rules on
Amendments to PCAOB Interim Independence
Standards and PCAOB Rules to Align with
Amendments to Rule 2–01 of Regulation S–X,
Release No. 34–90473 (Nov. 20, 2020) [85 FR 76131
(Nov. 27, 2020)].
6 See, e.g., comment letters from the Council of
Institutional Investors, December 3, 2020 (‘‘CII
Letter’’); Right Advisory LLC, December 7, 2020
(‘‘RA Letter’’); Deloitte LLP, December 11, 2020
(‘‘Deloitte Letter’’); PricewaterhouseCoopers LLP,
December 16, 2020 (‘‘PwC Letter’’); Colorado PERA,
December 16, 2020 (‘‘COPERA’’); International
Corporate Governance Network, December 16, 2020
(‘‘ICGN Letter’’); Consumer Federation of America
and Certain Other Groups and Individuals,
December 17, 2020 (‘‘CFA, et al. Letter’’); Ernst &
Young LLP, December 18, 2020 (‘‘EY Letter’’); and
the California Public Employees’ Retirement
System, December 18, 2020 (‘‘CalPERS Letter’’).
Copies of the comment letters received on the
Commission order noticing the Proposed Rules are
available on the Commission’s website at https://
www.sec.gov/comments/pcaob-2020-01/
pcaob202001.htm.
7 See supra note 4.
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• Amend ET § 101.02 of the American
Institute of Certified Public Accountants
(‘‘AICPA’’) Code of Professional
Conduct, Interpretation of Rule 101, as
in existence on April 16, 2003 and
incorporated in the Board’s auditing and
related professional practice.
• Delete ET § 101.07 of the AICPA’s
Code of Professional Conduct, Loans
from financial institution clients and
related terminology, as in existence on
April 16, 2003 and incorporated in the
Board’s auditing and related
professional practice standards by
PCAOB Rule 3500T.
• Delete ET §§ 191.150–.151, ET
§§ 191.182–.183, ET §§ 191.196–.197,
and ET §§ 191.220–.222, of the AICPA’s
Code of Professional Conduct, as in
existence on April 16, 2003 and
incorporated in the Board’s auditing and
related professional practice standards
by PCAOB Rule 3500T, which are four
Ethics Rulings under Rule 101 that also
address lending arrangements and are
part of the Board’s interim
independence standards.
• Amend PCAOB Rules 3501(a)(ii),
(a)(iii), and (i)(ii).
B. Applicability and Effective Date
The Proposed Rules will be effective
June 9, 2021, 180 days after the date of
the publication of the Commission’s
October 16, 2020 amendments to Rule
2–01 in the Federal Register. The June
9, 2021 effective date is aligned with the
effective date of the Commission’s
amendments to Rule 2–01.8 Auditors
may elect to comply before the effective
date at any point after SEC approval of
the Board’s amendments, provided that
the final amendments are applied in
their entirety. The PCAOB has
recommended that the Proposed Rules
to apply to audits of emerging growth
companies (‘‘EGCs’’),9 as discussed in
Section IV below, and audits of brokers
and dealers under 17 CFR 240.17a–5
(‘‘Exchange Act Rule 17a–5’’).
III. Comment Letters
The comment period on the Proposed
Rules ended on December 18, 2020. We
received several comment letters
representing investor organizations,
advisory firms, accounting firms, trade
organizations, and other interested
parties. Some commenters were
supportive 10 of the Proposed Rules
8 See
2020 Adopting Release at 81.
term ‘‘emerging growth company’’ is
defined in Section 3(a)(80) of the Exchange Act (15
U.S.C. 78c(a)(80)). See also Release No. 33–10332
Inflation Adjustments and Other Technical
Amendments Under Titles I and III of the JOBS Act
(Mar. 31, 2017), 82 FR 17545 (Apr. 12, 2017).
10 See RA Letter; Deloitte Letter; PwC Letter; and
EY Letter.
9 The
E:\FR\FM\22JAN1.SGM
22JAN1
]]>Agencies
[Federal Register Volume 86, Number 13 (Friday, January 22, 2021)]
[Notices]
[Pages 6705-6708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01285]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-90929; File No. SR-CBOE-2021-002]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Amend the Silexx Trading Platform Fees Schedule
January 14, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 4, 2021, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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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 Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend the Silexx trading platform (``Silexx'' or the ``platform'')
Fees 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://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to adopt ``drop copy'' and order routing fees
for a recently adopted Silexx platform (``Cboe Silexx''), effective
January 4, 2021.
By way of background, the Silexx platform consists of a ``front-
end'' order entry and management trading platform (also referred to as
the ``Silexx terminal'') for listed stocks and options that supports
both simple and complex orders,\3\ and a ``back-end'' platform which
provides a connection to the infrastructure network. From the Silexx
platform (i.e., the collective front-end and back-end platform), a
Silexx user has the capability to send option orders to U.S. options
exchanges, send stock orders to U.S. stock exchanges (and other trading
centers), input parameters to control the size, timing, and other
variables of their trades, and also includes access to real-time
options and stock market data, as well as access to certain historical
data. The Silexx platform is designed so that a user may enter orders
into the platform to send to
[[Page 6706]]
an executing broker (including Trading Permit Holders (``TPHs'')) of
its choice with connectivity to the platform, which broker will then
send the orders to Cboe Options (if the broker is a TPH) or other U.S.
exchanges (and trading centers) in accordance with the user's
instructions. Historically, users could not directly route orders
through any of the then-current versions of Silexx to an exchange or
trading center nor was the platform integrated into or directly
connected to Cboe Option's System. In 2019, the Exchange made available
an additional version of the Silexx platform, Silexx FLEX, which
supports the trading of FLEX Options and allows authorized Users with
direct access to the Exchange.\4\ Most recently, the Exchange made a
new version of the Silexx platform available, Cboe Silexx, which
supports the trading of non-FLEX Options and allows authorized Users
with direct access to the Exchange.\5\ The Silexx front-end and back-
end platforms are a software application that is installed locally on a
user's desktop. Silexx grants users licenses to use the platform, and a
firm or individual does not need to be a TPH to license the platform.
Use of any version of the Silexx platform is completely optional.
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\3\ The platform also permits users to submit orders for
commodity futures, commodity options and other non-security products
to be sent to designated contract markets, futures commission
merchants, introducing brokers or other applicable destinations of
the users' choice.
\4\ See Securities Exchange Act Release No. 87028 (September 19,
2019) 84 FR 50529 (September 25, 2019) (SR-CBOE-2019-061).
\5\ See Securities Exchange Act Release No. 88741 (April 24,
2020) 85 FR 24045 (April 30, 2020) (SR-CBOE-2020-040).
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Currently, TPH or non-TPH market participants may receive order
fill messages \6\ (i.e., drop copies) from their Silexx Brokers via the
PULSe drop copy network. However, on January 4, 2021, the Exchange
plans to migrate such functionality to Cboe Silexx in conjunction with
the planned decommission of the PULSe Trader Workstation. At that time,
TPH or non-TPH market participants may instead receive drop copies via
the Cboe Silexx Platform. As a result, the Exchange proposes to adopt
certain drop copy fees from the Cboe Options Fees Schedule to the
Silexx Fees Schedule with certain modifications. Additionally, the
Exchange is proposing to adopt a fee for order routing via Financial
Information eXchange (``FIX'') into Cboe Silexx, and to replace the
PULSe Routing Network via Silexx fee with a Cboe Silexx Routing Network
fee.
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\6\ These fill messages allow customers to update positions,
risk calculations, and streamline back-office functions.
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The Exchange proposes to eliminate the PULSe Routing Network via
Silexx fee from the Silexx Fees Schedule, which sets forth a fee for
trading firms accessing the PULSe drop copy network from a non-PULSe,
non-Silexx workstation for its customers' drop copies. Instead, the
Exchange is proposing to adopt a fee for accessing the Silexx routing
network to or from a non-Cboe Silexx workstation for order routing or
drop copies. The proposed fee is $500 per month payable by the customer
accessing the Silexx routing network on a per connection basis, and is
similar to the existing PULSe Routing Network via Silexx fee that the
Exchange is proposing to eliminate, with the exception that the
proposed fee references the Silexx routing network rather than the
PULSe Drop Copy Network and eliminates the reference to a non-PULSe
workstation for order routing or drop copies. Further, the proposed fee
is equal to the existing PULSe Routing Network via Silexx fee (i.e.,
$500 per month per customer connection).
Second, the Exchange proposes to adopt a fee for drop copies
received by a TPH customer via Cboe Silexx. The proposed fee is $425
per month payable by the TPH customer receiving the drop copies, unless
otherwise directed by the TPH broker. Specifically, for each Cboe
Silexx-using TPH broker that provides a TPH customer drop copies, such
receiving TPH customer incurs a fee of $425 per month. The proposed fee
is substantially similar to a fee charged to a PULSe-using TPH broker
that provides a TPH customer drop copies via a PULSe workstation. The
only difference between the proposed fee and the existing fee
pertaining to PULSe users is that the TPH broker may direct that the
fee be assessed to itself rather than the TPH customer receiving the
drop copies. However, the TPH customer will be ultimately responsible
for the fee.
Third, the Exchange proposes to adopt a drop copy payable by the
TPH broker sending the drop copies to its non-TPH customers, unless
otherwise directed by the TPH broker. Specifically, for each non-TPH
Cboe Silexx-using customer for which a TPH broker provides drop copies,
the TPH broker will incur a fee of $0.02/contract with a fee cap of
$400 per month for each non-TPH customer to which the TPH broker sends
drop copies. The proposed fee is substantially similar to the fee
applied to drop copies received by a non-TPH customer via a PULSe
workstation with one difference. Like the proposed fee for drop copies
received by a TPH customer, the TPH broker may direct that the
applicable fee be assessed to its customer rather than itself. However,
the TPH broker will be ultimately responsible for the fee.
Lastly, the Exchange proposes to adopt a fee for orders routed via
FIX into Cboe Silexx. Particularly, the Exchange proposes to adopt a
fee for each TPH broker to whom a TPH customer using a non-Cboe Silexx
workstation sends orders electronically to a TPH broker's Silexx
workstation. The proposed fee is $500 per month for each TPH broker
with a Silexx workstation to which the TPH customer sends orders. The
proposed fee is substantially similar to the existing Non-PULSe-to-
PULSe Routing (sent by TPH customers) fee set forth in the Cboe Fees
Schedule with two differences. First, like the proposed fees discussed
above, the TPH broker may direct the applicable fee be assessed to its
customer rather than itself. However, the TPH broker will be ultimately
responsible for the fee. Second, the Exchange is not proposing to adopt
the provision that TPH customers who request FIX order routing into
Cboe Silexx will also receive drop copies from its TPH brokers and must
pay the monthly drop copy fee in addition to the in-bound addition fee.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ 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. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \9\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. Additionally, the Exchange also believes the
proposed rule change is consistent with Section 6(b)(4) of the Act,\10\
which requires that Exchange rules provide for the equitable allocation
of reasonable dues, fees, and other charges among its
[[Page 6707]]
TPHs and other persons using its facilities.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
\10\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that its proposed fees are reasonable and
appropriate as they are substantially similar with fees set forth in
the Cboe Exchange Fees Schedule applicable to the PULSe workstation,
which is a substantially similar order entry and management system to
Silexx.\11\ Despite certain differences in the proposed fees from the
existing fees applicable to PULSe workstations, the Exchange believes
that the proposed fees are reasonable for the following reasons. First,
the proposed Cboe Silexx Routing Network fee would provide trading
firms the ability to access the Cboe Silexx Routing Network to or from
a non-Cboe Silexx workstation for not only drop copies, but also for
order routing. Further, the proposed fee is equal to the existing PULSe
Routing Network via Silexx fee despite that it provides order routing
functionality in addition to drop copies. Second, while the proposed
Drop Copy (received by TPH customer from Cboe Silexx) and Drop Copy
(received by non-TPH customer) from Cboe Silexx fees provide that the
TPH broker may direct the applicable fee be payable by itself or its
customer, as applicable, the proposal may simplify and streamline
billing for TPH brokers and their customers. Lastly, the proposed FIX
order routing into Cboe Silexx fee differs from the Non-PULSe-to-PULSe
Routing (sent by TPH customers) fee currently provided in the Cboe
Options Fee Schedule as it does not provide that TPH customers
requesting such order routing functionality will receive drop copies
from its TPH brokers and must pay the monthly drop copy fee in addition
to the in-bound addition fee. The Exchange believes it is reasonable
not to include such language as it is no longer applicable.
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\11\ See Cboe Options Fees Schedule, which provides for a PULSe
workstation drop copy (received by TPH customer) fee of $425 per
month, a drop copy (received by non-TPH customer) fee of $0.02 per
contract capped at $400 per month, and a Non-PULSe-to-PULSe Routing
(sent by TPH customers) fee of $500 per month.
---------------------------------------------------------------------------
Additionally, as discussed, use of drop copy functionality and FIX
order routing into Cboe Silexx is discretionary and not compulsory.
Indeed, Users can choose to route orders, including to Cboe Options,
and receive drop copies without the use of the platform. The Exchange
is making the platform available as a convenience to market
participants, who will continue to have the option to use any order
entry and management system available in the marketplace to send orders
to the Exchange and other exchanges; the platform is merely an
alternative that will be offered by the Exchange. The Exchange believes
the proposed fees are equitable and not unfairly discriminatory because
they apply to all market participants uniformly.
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 competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change will not
impose any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because it
relates to optional services on an optional platform. The proposed fees
will apply to similarly situated participants uniformly. Also as
discussed, the use of the platform and the drop copy services will be
completely voluntary and market participants will continue to have the
flexibility to use any order entry and management tool that is
proprietary or from third-party vendors, and/or market participants may
choose any executing brokers to enter their orders and receive drop
copies. Cboe Silexx is not an exclusive means of order routing or to
receive drop copies, and if market participants believe that other
products, vendors, front-end builds, etc. available in the marketplace
are more beneficial than the Cboe Silexx platform, they may simply use
those products instead. Use of such functionality is completely
voluntary.
The Exchange does not believe that the proposed rule changes will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed changes are substantially similar to fees applicable to the
PULSe workstation, which is a substantially similar order entry and
management system and which is migrating to Cboe Silexx in conjunction
with the planned decommission of the PULSe Trader Workstation on
January 4, 2021. To the extent that the proposed changes make Cboe
Options a more attractive marketplace for market participants at other
exchanges, such market participants are welcome to become Cboe Options
market participants.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
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 \12\ and paragraph (f) of Rule 19b-4 \13\
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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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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-CBOE-2021-002 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2021-002. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written
[[Page 6708]]
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-
CBOE-2021-002 and should be submitted on or before February 12, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-01285 Filed 1-21-21; 8:45 am]
BILLING CODE 8011-01-P
