Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.13 (Order Execution and Routing), as Well as its Fee Schedule, To Delete References to the INET and RDOX Routing Options, 13928-13930 [2021-05033]
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Federal Register / Vol. 86, No. 46 / Thursday, March 11, 2021 / Notices
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.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91273; File No. SR–
CboeBYX–2021–006]
Self-Regulatory Organizations; Cboe
BYX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule
11.13 (Order Execution and Routing),
as Well as its Fee Schedule, To Delete
References to the INET and RDOX
Routing Options
March 5, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 1,
2021, Cboe BYX Exchange, Inc.
(‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 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 ‘‘BYX’’) proposes to
amend Rule 11.13 (Order Execution and
Routing), as well as its Fee Schedule, to
delete references to the INET and RDOX
routing options. 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.
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
paragraphs (H), (J), and (L) under
Exchange Rule 11.13(b)(3) to delete all
references to the INET and RDOX
routing options. The Exchange also
proposes to delete all references to the
INET and RDOX routing options from
the BYX Fee Schedule, as provided [sic]
fee codes J and D, respectively, and
footnote 10. The Exchange intends to
implement the proposed rule changes
on March 1, 2021.
Exchange Rule 11.13(b)(3) provides
for various routing options available on
the Exchange. Specifically, Rule
11.13(b)(3)(J) provides for the INET
routing option, under which an order
checks the System 5 for available shares
and then is sent to Nasdaq. If shares
remain unexecuted after routing, they
are posted on the Nasdaq book, unless
otherwise instructed by the User.6
Similarly, Exchange Rule 11.13(b)(3)(L)
provides for the RDOX routing option,
[sic] which an order checks the System
for available shares and then is sent to
the NYSE and can be re-routed by the
NYSE. If shares remain unexecuted after
routing, they are posted on the NYSE
book, unless otherwise instructed by the
User.
The Exchange has determined
because few Users select the INET or
RDOX routing options, the current
demand does not warrant the
infrastructure and ongoing maintenance
expenses required to support the
product. Therefore, the Exchange now
proposes to delete INET and RDOX as
a routing option as provided by Rule
11.13(b)(3)(J) and (L), respectively.
Given the proposed changes described
above, the Exchange also proposes to
amend Rule 11.13(b)(3)(H) to eliminate
any reference to the INET and RDOX
routing strategies. Specifically, Rule
11.13(b)(3)(H) provides for the Post to
Away routing option, which routes the
5 The term ‘‘System’’ shall mean the electronic
communications and trading facility designated by
the Board through which securities orders of Users
are consolidated for ranking, execution and, when
applicable, routing away. See Exchange Rule
1.5(aa).
6 The term ‘‘User’’ shall mean any Member or
Sponsored Participant who is authorized to obtain
access to the System pursuant to Rule 11.3. See
Exchange Rule 1.5(cc).
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Frm 00055
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Sfmt 4703
remainder of a routed order to and posts
such order on the order book of a
destination on the System routing table 7
as specified by the User, and lists the
specific routing options for which the
Post to Away routing option may be
combined. Both INET and RDOX are
listed under Rule 11.13(b)(3)(H) as
routing options that may be combined
with the Post to Away routing option;
therefore, the Exchange is proposing to
eliminating [sic] all such references to
INET and RDOX in Rule 11.13(b)(3)(H).
As the Exchange is proposing to
eliminate the INET and RDOX routing
options from the BYX Rulebook, the
Exchange also proposes to eliminate any
such reference to those routing options
on the BYX Fee Schedule. Specifically,
the Exchange proposes to eliminate
RDOX from the description of Fee Code
D,8 and eliminate INET from the
description of Fee Code J.9 Additionally,
the Exchange proposes to delete
references to both RDOX and INET in
footnote 10 of the Fee Schedule.10
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.11 Specifically,
the Exchange believes the proposed rule
change is consistent with the 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.
Additionally, the Exchange believes the
proposed rule change is consistent with
7 The Exchange reserves the right to maintain a
different System routing table for different routing
options and to modify the System routing table at
any time without notice. See Exchange Rule
11.13(b)(3).
8 Orders that yield fee code D are routed to NYSE
using Destination Specific, RDOT or RDOX routing
strategy, and are charged a fee of $0.00280.
9 Orders that yield fee code J are routed to Nasdaq
using Destination Specific or INET routing strategy,
and are charged a fee of $0.00290.
10 Footnote 10 of the Fee Schedule provides that
executions that add liquidity in securities priced
below $1.00 with an RDOT, RDOX, INET, and Post
to Away routing option are charged no fee and
given no rebate.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 86, No. 46 / Thursday, March 11, 2021 / Notices
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the Section 6(b)(5) 13 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
the proposed rule change to remove
references to the RDOX and INET
routing options will remove
impediments to the mechanism of a free
and open market, thereby protecting
investors and the public interest. As
stated, the Exchange has noted that few
Users elect the RDOX and INET routing
options and has determined that the
current demand does not warrant the
infrastructure and ongoing maintenance
expense required to support these
products. Therefore, the Exchange is
discontinuing these routing options.
The Exchange notes that routing
through the Exchange is voluntary and
alternative routing options offered by
the Exchange as well as other methods
remain available to Users that wish to
route to other trading centers. In
addition, neither the RDOX nor the
INET routing options are core product
offerings by the Exchange, nor is the
Exchange required by the Act to offer
such products. By removing references
to routing options that will no longer be
offered by the Exchange, the Exchange
believes the proposed rule change will
remove impediments to the mechanism
of a free and open market and protect
investors by providing investors with
rules that accurately reflect routing
options currently available on the
Exchange. The Exchange does not
believe that this proposal will permit
unfair discrimination among customers,
brokers, or dealers because the RDOX
and INET routing options will no longer
be available to all Users.
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 rule change to remove RDOX
and INET is not designed to address any
competitive issues but rather to delete
the RDOX and INET routing options that
are rarely used on the Exchange. As
stated, the Exchange has noted that few
Users elect the RDOX and INET routing
options and has determined that the
current demand does not warrant the
infrastructure and ongoing maintenance
expense required to support these
products. Therefore, the Exchange is
discontinuing these routing options.
The Exchange notes that routing
through the Exchange is voluntary and
13 Id.
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16:53 Mar 10, 2021
Jkt 253001
alternative routing options offered by
the Exchange as well as other methods
remain available to Users that wish to
route to other trading centers. In
addition, neither the RDOX nor the
INET routing options are core product
offerings by the Exchange, nor is the
Exchange required by the Act to offer
such products.
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 14 and Rule 19b–4(f)(6) 15
thereunder because the proposal does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) by its
terms, become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate if consistent with the
protection of investors and the public
interest.16
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 17 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 18
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange states that waiver
of the 30-day operative delay would
immediately eliminate rules and
references that account for services the
Exchange planned to discontinue on
March 1, 2021, thereby avoiding
potential investor confusion during the
operative delay period. Based on the
foregoing, the Commission believes the
waiver of the operative delay is
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
16 In addition, Rule 19b–4(f)(6)(iii) requires the
Exchange to give the Commission written notice of
the Exchange’s intent to file the proposed rule
change, along with a brief description and text of
the proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
17 17 CFR 240.19b–4(f)(6).
18 17 CFR 240.19b–4(f)(6)(iii).
15 17
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13929
consistent with the protection of
investors and the public interest.
Therefore, the Commission hereby
waives the operative delay and
designates the proposal operative upon
filing.19
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.20
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–2021–006 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–CboeBYX–2021–006. 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
19 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
20 15 U.S.C. 78s(b)(3)(C).
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Federal Register / Vol. 86, No. 46 / Thursday, March 11, 2021 / Notices
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–2021–006 and
should be submitted on or before April
1, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–05033 Filed 3–10–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91266; File No. SR–
NYSEArca–2020–104]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Approving a
Proposed Rule Change, as Modified by
Amendment No. 2, To List and Trade
Shares of the Stance Equity ESG Large
Cap Core ETF Under NYSE Arca Rule
8.601–E
khammond on DSKJM1Z7X2PROD with NOTICES
March 5, 2021.
I. Introduction
On November 30, 2020, NYSE Arca,
Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to list and trade shares
(‘‘Shares’’) of Stance Equity ESG Large
Cap Core ETF (‘‘Fund’’) under NYSE
Arca Rule 8.601–E (Active Proxy
Portfolio Shares). The proposed rule
change was published for comment in
the Federal Register on December 21,
2020.3
On January 22, 2021, pursuant to
Section 19(b)(2) of the Act,4 the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
21 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 90665
(Dec. 15, 2020), 85 FR 83129.
4 15 U.S.C. 78s(b)(2).
1 15
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16:53 Mar 10, 2021
Jkt 253001
determine whether to disapprove the
proposed rule change.5 On January 22,
2021, the Exchange filed Amendment
No. 1 to the proposed rule change,
which replaced and superseded the
proposed rule change as originally
filed.6 On March 4, 2021, the Exchange
filed Amendment No. 2 to the proposed
rule change, which replaced and
superseded the proposed rule change, as
modified by Amendment No. 1.7 The
Commission has received no comments
on the proposed rule change. This order
approves the proposed rule change, as
modified by Amendment No. 2.
II. Summary of the Exchange’s
Description of the Proposed Rule
Change, as Modified by Amendment
No. 2 8
NYSE Arca Rule 8.900–E(b)(1)
requires the Exchange to file separate
proposals under Section 19(b) of the Act
before listing and trading any series of
Active Proxy Portfolio Shares on the
Exchange; thus, the Exchange submitted
this proposal to list and trade the
5 See Securities Exchange Act Release No. 90974,
86 FR 7446 (Jan. 28, 2021). The Commission
designated March 21, 2021, as the date by which
the Commission shall approve or disapprove, or
institute proceedings to determine whether to
disapprove, the proposed rule change.
6 Amendment No. 1 is available on the
Commission’s website at https://www.sec.gov/
comments/sr-nysearca-2020-104/
srnysearca2020104-8276588-228099.pdf.
7 In Amendment No. 2, the Exchange: (1) Updated
the status of the application for exemptive relief
filed by the Issuer (as defined below); (2) changed
the distributor and principal underwriter of the
Fund; (3) stated that, in connection with the
creation and redemption of Active Proxy Portfolio
Shares, such creation or redemption may be
exchanged for a Proxy Portfolio (as defined below)
and/or cash; (4) represented that the Proxy Portfolio
will not include any asset that is ineligible to be in
the Actual Portfolio (as defined below) of the Fund;
(5) stated that the Fund’s holdings will conform to
the permissible investments as set forth in the
Exemptive Order (as defined below) and that the
holdings will be consistent with all requirements in
the Exemptive Order; (6) supplemented its
description of the Fund’s investment objective; (7)
revised the description of the availability of pricing
information; (8) described that a creation unit will
generally consist of 5,000 shares; (9) supplemented
its description of the disclosures about the Proxy
Portfolio that the Fund will publish on its website
each business day; (10) stated that the Exchange
will obtain a representation from the Issuer that the
net asset value per Share of the Fund will be
calculated daily and that the net asset value,
Portfolio Reference Basket (as defined below), and
the Actual Portfolio (as defined below) for the Fund
will be made available to all market participants at
the same time; and (11) made conforming and
technical changes. Because Amendment No. 2 does
not materially alter the substance of the proposed
rule change, Amendment No. 2 is not subject to
notice and comment. Amendment No. 2 is available
on the Commission’s website at https://
www.sec.gov/comments/sr-nysearca-2020-104/
srnysearca2020104.htm.
8 Additional information regarding the Fund, the
Issuer (as defined below), and the Shares can be
found in Amendment No. 2, supra note 7, and
Registration Statement, supra note 9.
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Frm 00057
Fmt 4703
Sfmt 4703
Shares.9 The Shares of the Fund will be
issued by The RBB Fund, Inc.
(‘‘Issuer’’), a corporation organized
under the laws of the State of Maryland
and registered with the Commission as
an open-end management investment
company.10 Red Gate Advisers, LLC
(‘‘Adviser’’) will be the investment
adviser to the Fund. Stance Capital, LLC
and Vident Investment Advisory, LLC
will be the sub-advisers (‘‘SubAdvisers’’) for the Fund. U.S. Bank,
N.A. will serve as the Fund’s custodian,
U.S. Bancorp Fund Services, LLC will
serve as the Fund’s transfer agent, and
Vigilant Distributors, LLC will act as the
distributor and principal underwriter
for the Fund.
9 As defined in Rule 8.601–E(c)(1), the term
‘‘Active Proxy Portfolio Share’’ means a security
that (a) is issued by an investment company
(‘‘Investment Company’’) registered under the
Investment Company Act of 1940 (‘‘1940 Act’’)
organized as an open-end management investment
company that invests in a portfolio of securities
selected by the Investment Company’s investment
adviser consistent with the Investment Company’s
investment objectives and policies; (b) is issued in
a specified minimum number of shares, or
multiples thereof, in return for a deposit by the
purchaser of the Proxy Portfolio and/or cash with
a value equal to the next determined net asset value
(‘‘NAV’’); (c) when aggregated in the same specified
minimum number of Active Proxy Portfolio Shares,
or multiples thereof, may be redeemed at a holder’s
request in return for the Proxy Portfolio and/or cash
to the holder by the issuer with a value equal to
the next determined NAV; and (d) the portfolio
holdings for which are disclosed within at least 60
days following the end of every fiscal quarter. Rule
8.601–E(c)(2) provides that the term ‘‘Actual
Portfolio’’ means the identities and quantities of the
securities and other assets held by the Investment
Company that shall form the basis for the
Investment Company’s calculation of NAV at the
end of the business day.’’ Rule 8.601–E(c)(3)
provides that the term ‘‘Proxy Portfolio’’ means a
specified portfolio of securities, other financial
instruments and/or cash designed to track closely
the daily performance of the Actual Portfolio of a
series of Active Proxy Portfolio Shares as provided
in the exemptive relief pursuant to the Investment
Company Act of 1940 applicable to such series.
10 The Issuer is registered under the 1940 Act. On
November 23, 2020, the Issuer filed a registration
statement on Form N–1A under the Securities Act
of 1933 (15 U.S.C. 77a), and under the 1940 Act
relating to the Fund (File Nos. 033–20827 and 811–
05518) (‘‘Registration Statement’’). The Issuer filed
an Application for an Order under Section 6(c) of
the 1940 Act for exemptions from various
provisions of the 1940 Act and rules thereunder
(File No. 812–15165), dated September 28, 2020
(‘‘Application’’). The Issuer filed an amended
Application on December 10, 2020, and a second
amended Application on January 15, 2021. On
February 26, 2021, the Commission issued an order
(‘‘Exemptive Order’’) under the 1940 Act granting
the exemptions requested in the Application
(Investment Company Act Release No. 34215,
February 26, 2021). The Exchange states that
investments made by the Fund will comply with
the conditions set forth in the Application and the
Exemptive Order. According to the Exchange, the
description of the operation of the Fund in the
proposal is based, in part, on the Registration
Statement and the Application.
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]]>Agencies
[Federal Register Volume 86, Number 46 (Thursday, March 11, 2021)]
[Notices]
[Pages 13928-13930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05033]
[[Page 13928]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91273; File No. SR-CboeBYX-2021-006]
Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 11.13 (Order Execution and Routing), as Well as its Fee Schedule,
To Delete References to the INET and RDOX Routing Options
March 5, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 1, 2021, Cboe BYX Exchange, Inc. (``Exchange'' or ``BYX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposal as
a ``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BYX Exchange, Inc. (the ``Exchange'' or ``BYX'') proposes to
amend Rule 11.13 (Order Execution and Routing), as well as its Fee
Schedule, to delete references to the INET and RDOX routing options.
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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend paragraphs (H), (J), and (L) under
Exchange Rule 11.13(b)(3) to delete all references to the INET and RDOX
routing options. The Exchange also proposes to delete all references to
the INET and RDOX routing options from the BYX Fee Schedule, as
provided [sic] fee codes J and D, respectively, and footnote 10. The
Exchange intends to implement the proposed rule changes on March 1,
2021.
Exchange Rule 11.13(b)(3) provides for various routing options
available on the Exchange. Specifically, Rule 11.13(b)(3)(J) provides
for the INET routing option, under which an order checks the System \5\
for available shares and then is sent to Nasdaq. If shares remain
unexecuted after routing, they are posted on the Nasdaq book, unless
otherwise instructed by the User.\6\ Similarly, Exchange Rule
11.13(b)(3)(L) provides for the RDOX routing option, [sic] which an
order checks the System for available shares and then is sent to the
NYSE and can be re-routed by the NYSE. If shares remain unexecuted
after routing, they are posted on the NYSE book, unless otherwise
instructed by the User.
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\5\ The term ``System'' shall mean the electronic communications
and trading facility designated by the Board through which
securities orders of Users are consolidated for ranking, execution
and, when applicable, routing away. See Exchange Rule 1.5(aa).
\6\ The term ``User'' shall mean any Member or Sponsored
Participant who is authorized to obtain access to the System
pursuant to Rule 11.3. See Exchange Rule 1.5(cc).
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The Exchange has determined because few Users select the INET or
RDOX routing options, the current demand does not warrant the
infrastructure and ongoing maintenance expenses required to support the
product. Therefore, the Exchange now proposes to delete INET and RDOX
as a routing option as provided by Rule 11.13(b)(3)(J) and (L),
respectively.
Given the proposed changes described above, the Exchange also
proposes to amend Rule 11.13(b)(3)(H) to eliminate any reference to the
INET and RDOX routing strategies. Specifically, Rule 11.13(b)(3)(H)
provides for the Post to Away routing option, which routes the
remainder of a routed order to and posts such order on the order book
of a destination on the System routing table \7\ as specified by the
User, and lists the specific routing options for which the Post to Away
routing option may be combined. Both INET and RDOX are listed under
Rule 11.13(b)(3)(H) as routing options that may be combined with the
Post to Away routing option; therefore, the Exchange is proposing to
eliminating [sic] all such references to INET and RDOX in Rule
11.13(b)(3)(H).
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\7\ The Exchange reserves the right to maintain a different
System routing table for different routing options and to modify the
System routing table at any time without notice. See Exchange Rule
11.13(b)(3).
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As the Exchange is proposing to eliminate the INET and RDOX routing
options from the BYX Rulebook, the Exchange also proposes to eliminate
any such reference to those routing options on the BYX Fee Schedule.
Specifically, the Exchange proposes to eliminate RDOX from the
description of Fee Code D,\8\ and eliminate INET from the description
of Fee Code J.\9\ Additionally, the Exchange proposes to delete
references to both RDOX and INET in footnote 10 of the Fee
Schedule.\10\
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\8\ Orders that yield fee code D are routed to NYSE using
Destination Specific, RDOT or RDOX routing strategy, and are charged
a fee of $0.00280.
\9\ Orders that yield fee code J are routed to Nasdaq using
Destination Specific or INET routing strategy, and are charged a fee
of $0.00290.
\10\ Footnote 10 of the Fee Schedule provides that executions
that add liquidity in securities priced below $1.00 with an RDOT,
RDOX, INET, and Post to Away routing option are charged no fee and
given no rebate.
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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.\11\ Specifically, the
Exchange believes the proposed rule change is consistent with the
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. Additionally,
the Exchange believes the proposed rule change is consistent with
[[Page 13929]]
the Section 6(b)(5) \13\ requirement that the rules of an exchange not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ Id.
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In particular, the Exchange believes the proposed rule change to
remove references to the RDOX and INET routing options will remove
impediments to the mechanism of a free and open market, thereby
protecting investors and the public interest. As stated, the Exchange
has noted that few Users elect the RDOX and INET routing options and
has determined that the current demand does not warrant the
infrastructure and ongoing maintenance expense required to support
these products. Therefore, the Exchange is discontinuing these routing
options. The Exchange notes that routing through the Exchange is
voluntary and alternative routing options offered by the Exchange as
well as other methods remain available to Users that wish to route to
other trading centers. In addition, neither the RDOX nor the INET
routing options are core product offerings by the Exchange, nor is the
Exchange required by the Act to offer such products. By removing
references to routing options that will no longer be offered by the
Exchange, the Exchange believes the proposed rule change will remove
impediments to the mechanism of a free and open market and protect
investors by providing investors with rules that accurately reflect
routing options currently available on the Exchange. The Exchange does
not believe that this proposal will permit unfair discrimination among
customers, brokers, or dealers because the RDOX and INET routing
options will no longer be available to all Users.
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 rule change to
remove RDOX and INET is not designed to address any competitive issues
but rather to delete the RDOX and INET routing options that are rarely
used on the Exchange. As stated, the Exchange has noted that few Users
elect the RDOX and INET routing options and has determined that the
current demand does not warrant the infrastructure and ongoing
maintenance expense required to support these products. Therefore, the
Exchange is discontinuing these routing options. The Exchange notes
that routing through the Exchange is voluntary and alternative routing
options offered by the Exchange as well as other methods remain
available to Users that wish to route to other trading centers. In
addition, neither the RDOX nor the INET routing options are core
product offerings by the Exchange, nor is the Exchange required by the
Act to offer such products.
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 \14\ and Rule 19b-4(f)(6) \15\ thereunder
because the proposal does not: (i) Significantly affect the protection
of investors or the public interest; (ii) impose any significant burden
on competition; and (iii) by its terms, become operative for 30 days
from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest.\16\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
\16\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to
give the Commission written notice of the Exchange's intent to file
the proposed rule change, along with a brief description and text of
the proposed rule change, at least five business days prior to the
date of filing of the proposed rule change, or such shorter time as
designated by the Commission. The Exchange has satisfied this
requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \17\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \18\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
states that waiver of the 30-day operative delay would immediately
eliminate rules and references that account for services the Exchange
planned to discontinue on March 1, 2021, thereby avoiding potential
investor confusion during the operative delay period. Based on the
foregoing, the Commission believes the waiver of the operative delay is
consistent with the protection of investors and the public interest.
Therefore, the Commission hereby waives the operative delay and
designates the proposal operative upon filing.\19\
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\17\ 17 CFR 240.19b-4(f)(6).
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.\20\
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\20\ 15 U.S.C. 78s(b)(3)(C).
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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-2021-006 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-CboeBYX-2021-006. 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
[[Page 13930]]
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-2021-006 and should be submitted on or before April 1, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-05033 Filed 3-10-21; 8:45 am]
BILLING CODE 8011-01-P
