Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule, 62166-62168 [2022-22181]

Download as PDF 62166 Federal Register / Vol. 87, No. 197 / Thursday, October 13, 2022 / Notices 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: 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. [FR Doc. 2022–22175 Filed 10–12–22; 8:45 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–96003; File No. SR–CBOE– 2022–050] • 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– ISE–2022–20 on the subject line. Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. khammond on DSKJM1Z7X2PROD with NOTICES For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 J. Lynn Taylor, Assistant Secretary. All submissions should refer to File Number SR–ISE–2022–20. 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–ISE–2022–20, and should be submitted on or before November 3, 2022. VerDate Sep<11>2014 17:49 Oct 12, 2022 Jkt 259001 October 6, 2022. 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 September 26, 2022, 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 its 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 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 1. Purpose The Exchange proposes to amend its Fees Schedule to modify the fee for the SPX (and SPXW) Floor Market-Maker Tier Appointment Fee.3 By way of background, Exchange Rule 5.50(g)(2) provides that the Exchange may establish one or more types of tier appointments and Exchange Rule 5.50(g)(2)(B) provides such tier appointments are subject to such fees and charges the Exchange may establish. In 2010, the Exchange established the SPX Tier Appointment and adopted an initial fee of $3,000 per Market-Maker trading permit, per month.4 The SPX (and SPXW) Tier Appointment fee for Floor Market-Makers currently applies to any Market-Maker that executes any contracts in SPX and/or SPXW on the trading floor.5 The Exchange now seeks to increase the fee for the SPX/SPXW Floor Market-Maker Tier Appointment from $3,000 per Market-Maker Floor Trading Permit to $5,000 per MarketMaker Floor Trading Permit. In connection with the proposed change, the Exchange also proposes to update Footnote 24 in the Fees Schedule, as well as remove the reference to Footnote 24 in the MarketMaker Tier Appointment Fee Table. By way of background, in June 2020, the Exchange adopted Footnote 24 to describe pricing changes that would apply for the duration of time the Exchange trading floor was being operated in a modified manner in connection with the COVID–19 3 The Exchange initially filed the proposed fee change, among other changes, on June 1, 2022 (SR– CBOE–2022–026). On June 10, 2022, the Exchange withdrew that filing and submitted SR–CBOE– 2022–029. On August 5, 2022, the Exchange withdrew that filing and submitted SR–CBOE– 2022–042. On September 26, 2022, the Exchange withdrew that filing and submitted this filing to address the proposed fee change relating to the SPX/SPXW Floor Market-Maker Tier Appointment Fee. 4 See Securities Exchange Act Release No. 62386 (June 25, 2010), 75 FR 38566 (July 2, 2010) (SR– CBOE–2010–060). 5 The Exchange notes that the fee is not assessed to a Market-Maker Floor Permit Holder who only executes SPX (including SPXW) options transactions as part of multi-class broad-based index spread transactions. See Cboe Options Fees Schedule, Market-Maker Tier Appointment Fees, Notes. E:\FR\FM\13OCN1.SGM 13OCN1 Federal Register / Vol. 87, No. 197 / Thursday, October 13, 2022 / Notices pandemic.6 Among other changes, Footnote 24 provided that the monthly fee for the SPX/SPXW Floor MarketMaker Tier Appointment Fee was to be increased to $5,000 per Trading Permit from $3,000 per Trading Permit. As the Exchange now proposes to maintain the $5,000 rate on a permanent basis (i.e., regardless of whether the Exchange is operating in a modified state due to COVID–19 pandemic), the Exchange proposes to eliminate the reference to the SPX/SPXW Floor Market-Maker Tier Appointment Fee in Footnote 24.7 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.8 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 9 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) 10 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes its proposal to increase the SPX (and SPXW) Floor Market-Maker Tier Appointment fee is reasonable because the proposed amount is not significantly higher than was previously assessed (and is the same amount that has been assessed under Footnote 24 for the last two years). Additionally, the Exchange believes its proposal to increase the fee is reasonable as the fee amount has not been increased since it was adopted khammond on DSKJM1Z7X2PROD with NOTICES 6 See Securities Exchange Act Release No. 89189 (June 30, 2020), 85 FR 40344 (July 6, 2020) (SR– CBOE–2020–058). 7 The Exchange notes that since its transition to a new trading floor facility on June 6, 2022, it has not been operating in a modified manner. As such Footnote 24 (i.e., the modified fee changes it describes) does not currently apply. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). 10 Id. VerDate Sep<11>2014 17:49 Oct 12, 2022 Jkt 259001 over 12 years ago in July 2010.11 Since its adoption 12 years ago, there has been both inflation and increased costs of services, including relating to facility and technology upgrades associated with the new trading floor. Indeed, the Exchange notes that the trading pit for SPX in particular is the largest trading pit on the new trading floor and represents a significant amount of space on the new trading floor. Additionally, over the last decade the Exchange has made, and continues to make, further investments to encourage growth trends in SPX volume, including investments in marketing, sales teams, global coverage teams, and new product innovations (such as adding additional weekly expirations and LEAPS). The Exchange notes that the SPX (and SPXW) Tier Appointment fee helps fund these efforts. Moreover, although the SPX (and SPXW) Tier Appointment fee has not increased since 2010, SPX volume, including volume on the trading floor, has increased significantly since that time. The Exchange therefore believes the proposed fee increase is reasonable because it allows the Exchange to recoup fees associated with the costs of maintaining and growing SPX and SPXW, which products can help market participants achieve broad market protection. The proposed change is also equitable and not unfairly discriminatory as it applies to all Market-Makers that trade SPX on the trading floor uniformly. The Exchange believes it’s reasonable equitable and not unfairly discriminatory to increase the SPX/ SPXW floor Market-Maker Tier Appointment fee and not the SPX/ SPXW electronic Market-Maker Tier Appointment fee, as Floor MarketMakers are not subject to other costs that electronic Market-Makers are subject to. For example, while all Floor Market-Makers automatically have an appointment to trade open outcry in all classes traded on the Exchange and at no additional cost per appointment, electronic Market-Makers must select an appointment in a class (such as SPX) to make markets electronically and such appointments are subject to fees under the Market-Maker Electronic Appointments Sliding Scale.12 62167 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 Exchange does not believe that the proposed rule changes will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed changes would be applied in the same manner to all Floor Market-Makers that trade SPX (and/or SPXW). As noted above, the Exchange believes it’s reasonable to increase the SPX/SPWX Tier Appointment Fee for only Floor Market-Makers only as opposed to electronic Market-Makers, because electronic Market-Makers are subject to costs Floor Market-Makers are not, such as the fees under MarketMaker EAP [sic] Appointments Sliding Scale. The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed rule changes apply only to a fee relating to a product exclusively listed on the Exchange. Additionally, the Exchange notes it operates in a highly competitive market. In addition to Cboe Options, TPHs have numerous alternative venues that they may participate on (which list products that compete with SPX options) and direct their order flow, including 15 other options exchanges (four of which also maintain physical trading floors), as well as off-exchange venues, where competitive products are available for trading. Based on publicly available information, no single options exchange has more than 18% of the market share of executed volume of options trades.13 Therefore, no exchange possesses significant pricing power in the execution of option order flow. Moreover, the Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation 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.’’ 14 The 11 See Securities Exchange Act Release No. 62386 (June 25, 2010), 75 FR 38566 (July 2, 2010) (SR– CBOE–2010–060). 12 See Cboe Options Rules 5.50(a) and (e). See also Cboe Options Fees Schedule, Market-Maker EAP [sic] Appointments Sliding Scale. 13 See Cboe Global Markets, U.S. Options Market Volume Summary by Month (September 26, 2022), available at https://markets.cboe.com/us/options/ market_share/. 14 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 E:\FR\FM\13OCN1.SGM 13OCN1 62168 Federal Register / Vol. 87, No. 197 / Thursday, October 13, 2022 / Notices fact that this market is competitive has also long been recognized by the courts. In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit stated as follows: ‘‘[n]o one disputes that competition for order flow is ‘fierce.’ . . . As the SEC explained, ‘[i]n the U.S. national market system, buyers and sellers of securities, and the brokerdealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution’; [and] ‘no exchange can afford to take its market share percentages for granted’ because ‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’. . . .’’.15 Accordingly, the Exchange does not believe its proposed changes to the incentive programs impose 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 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 16 and paragraph (f) of Rule 19b–4 17 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. khammond on DSKJM1Z7X2PROD with NOTICES 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: 15 NetCoalition v. SEC, 615 F.3d 525, 539 (DC Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782–83 (December 9, 2008) (SR–NYSEArca–2006–21)). 16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 240.19b–4(f). VerDate Sep<11>2014 17:49 Oct 12, 2022 Jkt 259001 Electronic Comments SMALL BUSINESS ADMINISTRATION • 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–2022–050 on the subject line. [Disaster Declaration #17649 and #17650; PUERTO RICO Disaster Number PR–00043] Paper Comments AGENCY: • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. ACTION: All submissions should refer to File Number SR–CBOE–2022–050. 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–CBOE–2022–050 and should be submitted on or before November 3, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 J. Lynn Taylor, Assistant Secretary. [FR Doc. 2022–22181 Filed 10–12–22; 8:45 am] Presidential Declaration Amendment of a Major Disaster for Public Assistance Only for the Commonwealth of Puerto Rico Small Business Administration. Amendment 2. This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the Commonwealth of Puerto Rico (FEMA–4671–DR), dated 09/29/2022. Incident: Hurricane Fiona. Incident Period: 09/17/2022 through 09/21/2022. DATES: Issued on 10/05/2022. Physical Loan Application Deadline Date: 11/28/2022. Economic Injury (EIDL) Loan Application Deadline Date: 06/29/2023. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205–6734. SUPPLEMENTARY INFORMATION: The notice of the President’s major disaster declaration for Private Non-Profit organizations in the Commonwealth of Puerto Rico, dated 09/29/2022, is hereby amended to establish the incident period for this disaster as beginning 09/ 17/2022 through 09/21/2022. All other information in the original declaration remains unchanged. SUMMARY: (Catalog of Federal Domestic Assistance Number 59008) Rafaela Monchek, Acting Associate Administrator for Disaster Assistance. [FR Doc. 2022–22252 Filed 10–12–22; 8:45 am] BILLING CODE 8026–09–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #17640 and #17641; PUERTO RICO Disaster Number PR–00042] Presidential Declaration Amendment of a Major Disaster for the Commonwealth of Puerto Rico Small Business Administration. Amendment 5. AGENCY: ACTION: BILLING CODE 8011–01–P This is an amendment of the Presidential declaration of a major SUMMARY: 18 17 PO 00000 CFR 200.30–3(a)(12). Frm 00103 Fmt 4703 Sfmt 4703 E:\FR\FM\13OCN1.SGM 13OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 87, Number 197 (Thursday, October 13, 2022)]
[Notices]
[Pages 62166-62168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22181]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96003; File No. SR-CBOE-2022-050]


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

October 6, 2022.
    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 September 26, 2022, 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.
---------------------------------------------------------------------------

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

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

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend its 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 amend its Fees Schedule to modify the fee 
for the SPX (and SPXW) Floor Market-Maker Tier Appointment Fee.\3\
---------------------------------------------------------------------------

    \3\ The Exchange initially filed the proposed fee change, among 
other changes, on June 1, 2022 (SR-CBOE-2022-026). On June 10, 2022, 
the Exchange withdrew that filing and submitted SR-CBOE-2022-029. On 
August 5, 2022, the Exchange withdrew that filing and submitted SR-
CBOE-2022-042. On September 26, 2022, the Exchange withdrew that 
filing and submitted this filing to address the proposed fee change 
relating to the SPX/SPXW Floor Market-Maker Tier Appointment Fee.
---------------------------------------------------------------------------

    By way of background, Exchange Rule 5.50(g)(2) provides that the 
Exchange may establish one or more types of tier appointments and 
Exchange Rule 5.50(g)(2)(B) provides such tier appointments are subject 
to such fees and charges the Exchange may establish. In 2010, the 
Exchange established the SPX Tier Appointment and adopted an initial 
fee of $3,000 per Market-Maker trading permit, per month.\4\ The SPX 
(and SPXW) Tier Appointment fee for Floor Market-Makers currently 
applies to any Market-Maker that executes any contracts in SPX and/or 
SPXW on the trading floor.\5\ The Exchange now seeks to increase the 
fee for the SPX/SPXW Floor Market-Maker Tier Appointment from $3,000 
per Market-Maker Floor Trading Permit to $5,000 per Market-Maker Floor 
Trading Permit.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 62386 (June 25, 
2010), 75 FR 38566 (July 2, 2010) (SR-CBOE-2010-060).
    \5\ The Exchange notes that the fee is not assessed to a Market-
Maker Floor Permit Holder who only executes SPX (including SPXW) 
options transactions as part of multi-class broad-based index spread 
transactions. See Cboe Options Fees Schedule, Market-Maker Tier 
Appointment Fees, Notes.
---------------------------------------------------------------------------

    In connection with the proposed change, the Exchange also proposes 
to update Footnote 24 in the Fees Schedule, as well as remove the 
reference to Footnote 24 in the Market-Maker Tier Appointment Fee 
Table. By way of background, in June 2020, the Exchange adopted 
Footnote 24 to describe pricing changes that would apply for the 
duration of time the Exchange trading floor was being operated in a 
modified manner in connection with the COVID-19

[[Page 62167]]

pandemic.\6\ Among other changes, Footnote 24 provided that the monthly 
fee for the SPX/SPXW Floor Market-Maker Tier Appointment Fee was to be 
increased to $5,000 per Trading Permit from $3,000 per Trading Permit. 
As the Exchange now proposes to maintain the $5,000 rate on a permanent 
basis (i.e., regardless of whether the Exchange is operating in a 
modified state due to COVID-19 pandemic), the Exchange proposes to 
eliminate the reference to the SPX/SPXW Floor Market-Maker Tier 
Appointment Fee in Footnote 24.\7\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 89189 (June 30, 
2020), 85 FR 40344 (July 6, 2020) (SR-CBOE-2020-058).
    \7\ The Exchange notes that since its transition to a new 
trading floor facility on June 6, 2022, it has not been operating in 
a modified manner. As such Footnote 24 (i.e., the modified fee 
changes it describes) does not currently apply.
---------------------------------------------------------------------------

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.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ 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) \10\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
---------------------------------------------------------------------------

    The Exchange believes its proposal to increase the SPX (and SPXW) 
Floor Market-Maker Tier Appointment fee is reasonable because the 
proposed amount is not significantly higher than was previously 
assessed (and is the same amount that has been assessed under Footnote 
24 for the last two years). Additionally, the Exchange believes its 
proposal to increase the fee is reasonable as the fee amount has not 
been increased since it was adopted over 12 years ago in July 2010.\11\ 
Since its adoption 12 years ago, there has been both inflation and 
increased costs of services, including relating to facility and 
technology upgrades associated with the new trading floor. Indeed, the 
Exchange notes that the trading pit for SPX in particular is the 
largest trading pit on the new trading floor and represents a 
significant amount of space on the new trading floor. Additionally, 
over the last decade the Exchange has made, and continues to make, 
further investments to encourage growth trends in SPX volume, including 
investments in marketing, sales teams, global coverage teams, and new 
product innovations (such as adding additional weekly expirations and 
LEAPS). The Exchange notes that the SPX (and SPXW) Tier Appointment fee 
helps fund these efforts. Moreover, although the SPX (and SPXW) Tier 
Appointment fee has not increased since 2010, SPX volume, including 
volume on the trading floor, has increased significantly since that 
time. The Exchange therefore believes the proposed fee increase is 
reasonable because it allows the Exchange to recoup fees associated 
with the costs of maintaining and growing SPX and SPXW, which products 
can help market participants achieve broad market protection.
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 62386 (June 25, 
2010), 75 FR 38566 (July 2, 2010) (SR-CBOE-2010-060).
---------------------------------------------------------------------------

    The proposed change is also equitable and not unfairly 
discriminatory as it applies to all Market-Makers that trade SPX on the 
trading floor uniformly. The Exchange believes it's reasonable 
equitable and not unfairly discriminatory to increase the SPX/SPXW 
floor Market-Maker Tier Appointment fee and not the SPX/SPXW electronic 
Market-Maker Tier Appointment fee, as Floor Market-Makers are not 
subject to other costs that electronic Market-Makers are subject to. 
For example, while all Floor Market-Makers automatically have an 
appointment to trade open outcry in all classes traded on the Exchange 
and at no additional cost per appointment, electronic Market-Makers 
must select an appointment in a class (such as SPX) to make markets 
electronically and such appointments are subject to fees under the 
Market-Maker Electronic Appointments Sliding Scale.\12\
---------------------------------------------------------------------------

    \12\ See Cboe Options Rules 5.50(a) and (e). See also Cboe 
Options Fees Schedule, Market-Maker EAP [sic] Appointments Sliding 
Scale.
---------------------------------------------------------------------------

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 Exchange does not 
believe that the proposed rule changes will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the proposed changes 
would be applied in the same manner to all Floor Market-Makers that 
trade SPX (and/or SPXW). As noted above, the Exchange believes it's 
reasonable to increase the SPX/SPWX Tier Appointment Fee for only Floor 
Market-Makers only as opposed to electronic Market-Makers, because 
electronic Market-Makers are subject to costs Floor Market-Makers are 
not, such as the fees under Market-Maker EAP [sic] Appointments Sliding 
Scale.
    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed rule changes apply only to a fee relating to a product 
exclusively listed on the Exchange. Additionally, the Exchange notes it 
operates in a highly competitive market. In addition to Cboe Options, 
TPHs have numerous alternative venues that they may participate on 
(which list products that compete with SPX options) and direct their 
order flow, including 15 other options exchanges (four of which also 
maintain physical trading floors), as well as off-exchange venues, 
where competitive products are available for trading. Based on publicly 
available information, no single options exchange has more than 18% of 
the market share of executed volume of options trades.\13\ Therefore, 
no exchange possesses significant pricing power in the execution of 
option order flow. Moreover, the Commission has repeatedly expressed 
its preference for competition over regulatory intervention in 
determining prices, products, and services in the securities markets. 
Specifically, in Regulation 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.'' \14\ The

[[Page 62168]]

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'. . . .''.\15\ 
Accordingly, the Exchange does not believe its proposed changes to the 
incentive programs impose any burden on competition that is not 
necessary or appropriate in furtherance of the purposes of the Act.
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    \13\ See Cboe Global Markets, U.S. Options Market Volume Summary 
by Month (September 26, 2022), available at https://markets.cboe.com/us/options/market_share/.
    \14\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \15\ NetCoalition v. SEC, 615 F.3d 525, 539 (DC 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 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 \16\ and paragraph (f) of Rule 19b-4 \17\ 
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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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 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-2022-050 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-2022-050. 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-CBOE-2022-050 and should be submitted on 
or before November 3, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 2022-22181 Filed 10-12-22; 8:45 am]
BILLING CODE 8011-01-P

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