Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 62898-62901 [2022-22446]

Download as PDF 62898 Federal Register / Vol. 87, No. 199 / Monday, October 17, 2022 / Notices Filing Online system at https:// www.prc.gov. Those who cannot submit comments electronically should contact the person identified in the FOR FURTHER INFORMATION CONTACT section by telephone for advice on filing alternatives. FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202–789–6820. SUPPLEMENTARY INFORMATION: Table of Contents lotter on DSK11XQN23PROD with NOTICES1 I. Introduction II. Docketed Proceeding(s) I. Introduction The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list. Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request’s acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request. The public portions of the Postal Service’s request(s) can be accessed via the Commission’s website (https:// www.prc.gov). Non-public portions of the Postal Service’s request(s), if any, can be accessed through compliance with the requirements of 39 CFR 3011.301.1 The Commission invites comments on whether the Postal Service’s request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3030, and 39 CFR part 3040, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 1 See Docket No. RM2018–3, Order Adopting Final Rules Relating to Non-Public Information, June 27, 2018, Attachment A at 19–22 (Order No. 4679). VerDate Sep<11>2014 17:35 Oct 14, 2022 Jkt 259001 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3040, subpart B. Comment deadline(s) for each request appear in section II. II. Docketed Proceeding(s) 1. Docket No(s).: CP2020–178; Filing Title: Notice of the United States Postal Service of Filing Modification Two to Global Reseller Expedited Package 2 Negotiated Service Agreement; Filing Acceptance Date: October 7, 2022; Filing Authority: 39 CFR 3035.105; Public Representative: Jennaca D. Upperman; Comments Due: October 18, 2022. 2. Docket No(s).: MC2023–8 and CP2023–8; Filing Title: USPS Request to Add Priority Mail Express, Priority Mail, First-Class Package Service & Parcel Select Contract 62 to Competitive Product List and Notice of Filing Materials Under Seal; Filing Acceptance Date: October 7, 2022; Filing Authority: 39 U.S.C. 3642, 39 CFR 3040.130 through 3040.135, and 39 CFR 3035.105; Public Representative: Kenneth R. Moeller; Comments Due: October 18, 2022. 3. Docket No(s).: MC2023–9 and CP2023–9; Filing Title: USPS Request to Add Priority Mail Express, Priority Mail, First-Class Package Service & Parcel Select Contract 63 to Competitive Product List and Notice of Filing Materials Under Seal; Filing Acceptance Date: October 7, 2022; Filing Authority: 39 U.S.C. 3642, 39 CFR 3040.130 through 3040.135, and 39 CFR 3035.105; Public Representative: Kenneth R. Moeller; Comments Due: October 18, 2022. 4. Docket No(s).: MC2023–10 and CP2023–10; Filing Title: USPS Request to Add Priority Mail Express, Priority Mail, First-Class Package Service & Parcel Select Contract 64 to Competitive Product List and Notice of Filing Materials Under Seal; Filing Acceptance Date: October 7, 2022; Filing Authority: 39 U.S.C. 3642, 39 CFR 3040.130 through 3040.135, and 39 CFR 3035.105; Public Representative: Kenneth R. Moeller; Comments Due: October 18, 2022. 5. Docket No(s).: MC2023–11 and CP2023–11; Filing Title: USPS Request to Add Priority Mail Express International, Priority Mail International & First-Class Package International Service Contract 7 to Competitive Product List and Notice of Filing Materials Under Seal; Filing Acceptance Date: October 7, 2022; Filing Authority: 39 U.S.C. 3642, 39 CFR 3040.130 through 3040.135, and 39 CFR 3035.105; Public Representative: Kenneth R. Moeller; Comments Due: October 18, 2022. PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 This Notice will be published in the Federal Register. Erica A. Barker, Secretary. [FR Doc. 2022–22441 Filed 10–14–22; 8:45 am] BILLING CODE 7710–FW–P POSTAL SERVICE International Product Change—Priority Mail Express International, Priority Mail International & First-Class Package International Service Agreement Postal ServiceTM. Notice. AGENCY: ACTION: The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a Priority Mail Express International, Priority Mail International & First-Class Package International Service contract to the list of Negotiated Service Agreements in the Competitive Product List in the Mail Classification Schedule. DATES: Date of notice: October 17, 2022. FOR FURTHER INFORMATION CONTACT: Christopher C. Meyerson, (202) 268– 7820. SUMMARY: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on October 3, 2022, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express International, Priority Mail International & First-Class Package International Service Contract 6 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2023–1 and CP2023–1. SUPPLEMENTARY INFORMATION: Ruth Stevenson, Chief Counsel, Ethics and Legal Compliance. [FR Doc. 2022–22440 Filed 10–14–22; 8:45 am] BILLING CODE 7710–12–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96018; File No. SRCboeEDGX–2022–045] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule October 11, 2022. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the E:\FR\FM\17OCN1.SGM 17OCN1 Federal Register / Vol. 87, No. 199 / Monday, October 17, 2022 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change specifically, the Exchange is only one of 16 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues that do not have similar self-regulatory responsibilities under the Exchange Act, to which market participants may direct their order flow. Based on publicly available information,4 no single registered equities exchange has more than 19% of the market share. Thus, in such a low-concentrated and highly competitive market, no single equities exchange possesses significant pricing power in the execution of order flow. The Exchange in particular operates a ‘‘Maker-Taker’’ model whereby it pays rebates to members that add liquidity and assesses fees to those that remove liquidity. The Exchange’s Fee Schedule sets forth the standard rebates and rates applied per share for orders that provide and remove liquidity, respectively. Currently, for orders in securities priced at or above $1.00, the Exchange provides a standard rebate of $0.00160 per share for orders that add liquidity and assesses a fee of $0.0030 per share for orders that remove liquidity. For orders in securities priced below $1.00, the Exchange provides a standard rebate of $0.00009 per share for orders that add liquidity and assesses a fee of 0.30% of the total dollar value for orders that remove liquidity. Additionally, in response to the competitive environment, the Exchange also offers tiered pricing which provides Members opportunities to qualify for higher rebates or reduced fees where certain volume criteria and thresholds are met. Tiered pricing provides an incremental incentive for Members to strive for higher tier levels, which provides increasingly higher benefits or discounts for satisfying increasingly more stringent criteria. 1. Purpose Modification to Growth Volume Tier 4 The Exchange proposes to amend its Fee Schedule applicable to its equities trading platform (‘‘EDGX Equity’’) to modify the criteria of Growth Tier 4.3 The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More Under footnote 1 of the Fee Schedule, the Exchange currently offers various Add/Remove Volume Tiers. For example, the Exchange offers four Growth Tiers that each provide an enhanced rebate for Members’ qualifying orders yielding fee codes B,5, ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on October 5, 2022, Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) 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 EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ options/regulation/rule_filings/edgx/) [sic], 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 lotter on DSK11XQN23PROD with NOTICES1 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. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The Exchange initially filed the proposed fee changes on October 3, 2022 (SR–CboeEDGX–2022– 042). On October 5, 2022, the Exchange withdrew that filing and submitted this filing. 2 17 VerDate Sep<11>2014 17:35 Oct 14, 2022 Jkt 259001 4 See Cboe Global Markets, U.S. Equities Market Volume Summary, Month-to-Date (September 23, 2022), available at https://www.cboe.com/us/ equities/market_statistics/. 5 Orders yielding Fee Code ‘‘B’’ are orders adding liquidity to EDGX (Tape B). PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 62899 V,6 Y,7 3 8 or 4,9 where a Member reaches certain add volume-based criteria, including ‘‘growing’’ its volume over a certain baseline month. Currently, Growth Tier 4 provides an enhanced rebate of $0.0034 per share to MPIDs that (1) add a Step-Up ADAV 10 from October 2021 equal to or greater than 0.10% of the TCV 11 or MPIDs that add a Step-Up ADAV from October 2021 equal to or greater than 16 million shares; and (2) MPIDs that add an ADV 12 equal to or greater than 0.30% of TCV or MPIDs that add an ADV equal to or greater than 35 million shares. The Exchange now proposes to amend the criteria of Growth Tier 4. Particularly, the Exchange proposes to provide that under prong 1 of Growth Tier 4, MPIDs must add a Step-Up ADAV from October 2021 equal to or greater than 0.12% of the TCV (instead of 0.10% of the TCV) or add a Step-Up ADAV from October 2021 equal to or greater than 16 million shares. The Exchange is not proposing to change the criteria under prong 2 of Growth Tier 4. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the objectives of section 6 of the Securities and Exchange Act of 1933 (the ‘‘Act’’),13 in general, and furthers the objectives of section 6(b)(4),14 in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and issuers and other persons using its facilities. The Exchange also believes that the proposed rule change is consistent with the objectives of section 6(b)(5) 15 requirements that the rules of an exchange be designed to prevent 6 Orders yielding Fee Code ‘‘V’’ are orders adding liquidity to EDGX (Tape A). 7 Orders yielding Fee Code ‘‘Y’’ are orders adding liquidity to EDGX (Tape C). 8 Orders yielding Fee Code ‘‘3’’ are orders adding liquidity to EXGX in the pre and post market (Tapes A or C). 9 Orders yielding Fee Code ‘‘4’’ are orders adding liquidity to EDGX in the pre and post market (Tape B). 10 ‘‘Step-Up ADAV’’ means ADAV in the relevant baseline month subtracted from current ADAV. ‘‘ADAV’’ means average daily volume calculated as the number of shares added per day. ADAV is calculated on a monthly basis. 11 ‘‘TCV’’ means total consolidated volume calculated as the volume reported by all exchanges and trade reporting facilities to a consolidated transaction reporting plan for the month for which the fees apply. 12 ‘‘ADV’’ means average daily volume calculated as the number of shares added to, removed from, or routed by, the Exchange, or any combination or subset thereof, per day. ADV is calculated on a monthly basis. 13 15 U.S.C. 78f. 14 15 U.S.C. 78f(b)(4). 15 15 U.S.C. 78f(b)(5). E:\FR\FM\17OCN1.SGM 17OCN1 lotter on DSK11XQN23PROD with NOTICES1 62900 Federal Register / Vol. 87, No. 199 / Monday, October 17, 2022 / Notices fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest, and, particularly, is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. As described above, the Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The proposed rule change reflects a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance market quality to the benefit of all Members. The Exchange believes that its proposed change to Growth Tier 4 is reasonable, equitable and not unfairly discriminatory. The Exchange’s proposal to amend Growth Tier 4 is reasonable because the tier will continue to be available to all MPIDs and will continue to provide MPIDs an opportunity to receive an enhanced rebate. The Exchange notes that relative volume-based incentives and discounts have been widely adopted by exchanges,16 including the Exchange,17 and are reasonable, equitable and nondiscriminatory because they are open to all Members on an equal basis and provide additional benefits or discounts that are reasonably related to (i) the value to an exchange’s market quality and (ii) associated higher levels of market activity, such as higher levels or liquidity provision and/or growth thresholds, as well as assess similar fees or rebates for similar types of orders, to that of the Exchange. The Exchange also believes that the existing rebate under Growth Tier 4 continues to be commensurate with the existing and proposed criteria. That is, the rebate reasonably reflects the difficulty in achieving the corresponding criteria as amended. The Exchange believes that the change to Growth Tier 4 will benefit all market participants by incentivizing 16 See BZX Equities Fee Schedule, Footnote 1, Add/Remove Volume Tiers. 17 See EDGX Equities Fee Schedule, Footnote 1, Add/Remove Volume Tiers. VerDate Sep<11>2014 17:35 Oct 14, 2022 Jkt 259001 continuous liquidity and, thus, deeper more liquid markets as well as increased execution opportunities. Particularly, the proposal is designed to incentivize liquidity, which further contributes to a deeper, more liquid market and provide even more execution opportunities for active market participants at improved prices. This overall increase in activity deepens the Exchange’s liquidity pool, offers additional cost savings, supports the quality of price discovery, promotes market transparency and improves market quality, for all investors. The Exchange also believes that the proposed amendment to Growth Tier 4 represents an equitable allocation of rebates and is not unfairly discriminatory because all MPIDs are eligible for the tier and would have the opportunity to meet the tier’s criteria and would receive the proposed rebate if such criteria is met. Without having a view of activity on other markets and off-exchange venues, the Exchange has no way of knowing whether this proposed rule change would definitely result in any MPIDs qualifying for the proposed tiers. While the Exchange has no way of predicting with certainty how the proposed tier will impact MPID activity, the Exchange anticipates that at least one MPID will be able to compete for and reach the proposed criteria in Growth Tier 4. The Exchange also notes all MPIDs are eligible to satisfy the revised criteria of Growth Tier 4 and further believes the proposed change will provide a reasonable means to encourage future overall growth in Members’ order flow to the Exchange by offering an enhanced rebate on qualifying orders. Moreover, the proposed criteria will not adversely impact any MPID or Member’s ability to qualify for other reduced fee or enhanced rebate tiers. Should any MPID not meet the proposed criteria under Growth Tier 4, the MPID will merely not receive the corresponding enhanced rebate. As noted above, the Exchange operates in a highly competitive market. The Exchange in only one of 16 equity venues to which market participants may direct their order flow, and it represents a small percentage of the overall market. It is also only one of several maker-taker exchanges. Competing equity exchanges offer similar rates and tiered pricing structures to that of the Exchange, including schedules of rebates and fees that apply based upon members achieving certain volume thresholds. PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 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. Rather, as discussed above, the Exchange believes that the proposed change would encourage the submission of additional order flow to a public exchange, thereby promoting market depth, execution incentives and enhanced execution opportunities, as well as price discovery and transparency for all Members. As a result, the Exchange believes that the proposed changes further the Commission’s goal in adopting Regulation NMS of fostering competition among orders, which promotes ‘‘more efficient pricing of individual stocks for all types of orders, large and small.’’ The Exchange believes the proposed rule change does not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Particularly, the proposed change to Growth Tier 4 will apply to all Members equally in that all Members are eligible for the tier, have a reasonable opportunity to meet the tier’s criteria and will receive the enhanced rebate on their qualifying orders if such criteria is met. The Exchange does not believe the proposed changes burden competition, but rather, enhances competition as it is intended to increase the competitiveness of EDGX by amending an existing pricing incentive in order to attract order flow and incentivize participants to increase their participation on the Exchange, providing for additional execution opportunities for market participants and improved price transparency. Greater overall order flow, trading opportunities, and pricing transparency benefits all market participants on the Exchange by enhancing market quality and continuing to encourage Members to send orders, thereby contributing towards a robust and well-balanced market ecosystem. Next, the Exchange believes the proposed rule change does not impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As previously discussed, the Exchange operates in a highly competitive market. Members have numerous alternative venues that they may participate on and direct their order flow, including other equities exchanges, off-exchange venues, and alternative trading systems. Additionally, the Exchange represents a small percentage of the overall market. E:\FR\FM\17OCN1.SGM 17OCN1 Federal Register / Vol. 87, No. 199 / Monday, October 17, 2022 / Notices Based on publicly available information, no single equities exchange has more than 19% of the market share.18 Therefore, no exchange possesses significant pricing power in the execution of order flow. Indeed, participants can readily choose to send their orders to other exchange and offexchange venues if they deem fee levels at those other venues to be more favorable. Moreover, the Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 19 The fact that this market is competitive has also long been recognized by the courts. In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit stated as follows: ‘‘[n]o one disputes that competition for order flow is ‘fierce.’ . . . As the SEC explained, ‘[i]n the U.S. national market system, buyers and sellers of securities, and the brokerdealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution’; [and] ‘no exchange can afford to take its market share percentages for granted’ because ‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’ . . .’’.20 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. lotter on DSK11XQN23PROD with NOTICES1 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 21 and paragraph (f) of Rule 19b–4 22 thereunder. At any time within 60 days of the filing of the proposed rule 18 See supra note 3. Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 20 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782– 83 (December 9, 2008) (SR–NYSEArca–2006–21)). 21 15 U.S.C. 78s(b)(3)(A). 22 17 CFR 240.19b–4(f). 19 See VerDate Sep<11>2014 17:35 Oct 14, 2022 Jkt 259001 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. 62901 submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SRCboeEDGX–2022–045, and should be submitted on or before November 7, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 J. Matthew DeLesDernier, Deputy Secretary. 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: [FR Doc. 2022–22446 Filed 10–14–22; 8:45 am] 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– CboeEDGX–2022–045 on the subject line. Main Street Capital Corporation, et al. 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–CboeEDGX–2022–045. 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 34726; File No. 812–15362] October 11, 2022. Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’). ACTION: Notice. AGENCY: Notice of application for an order (‘‘Order’’) under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the ‘‘Act’’) and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d–1 under the Act. SUMMARY OF APPLICATION: Applicants request an order to amend a previous order granted by the Commission that permits certain business development companies (‘‘BDCs’’) and closed-end management investment companies to co-invest in portfolio companies with each other and with certain affiliated investment entities. APPLICANTS: MAIN STREET CAPITAL CORPORATION, MSC INCOME FUND, INC., MSC ADVISER I, LLC, MAIN STREET CA LENDING, LLC, MAIN STREET EQUITY INTERESTS, INC., MS INTERNATIONAL HOLDINGS, INC., MAIN STREET CAPITAL III, LP, MAIN STREET MEZZANINE FUND LP, HMS FUNDING I LLC, MSC CALIFORNIA HOLDINGS LP, MSC EQUITY HOLDING, LLC, MSC EQUITY HOLDING II, INC., MSIF FUNDING, LLC AND MS PRIVATE LOAN FUND I, LP. FILING DATES: The application was filed on June 29, 2022, and amended on August 17, 2022. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may 23 17 E:\FR\FM\17OCN1.SGM CFR 200.30–3(a)(12). 17OCN1

Agencies

[Federal Register Volume 87, Number 199 (Monday, October 17, 2022)]
[Notices]
[Pages 62898-62901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22446]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96018; File No. SR-CboeEDGX-2022-045]


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

October 11, 2022.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the

[[Page 62899]]

``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 5, 2022, Cboe EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') 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 EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to 
amend its Fee Schedule. The text of the proposed rule change is 
provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://markets.cboe.com/us/options/regulation/rule_filings/edgx/) [sic], 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 Fee Schedule applicable to its 
equities trading platform (``EDGX Equity'') to modify the criteria of 
Growth Tier 4.\3\
---------------------------------------------------------------------------

    \3\ The Exchange initially filed the proposed fee changes on 
October 3, 2022 (SR-CboeEDGX-2022-042). On October 5, 2022, the 
Exchange withdrew that filing and submitted this filing.
---------------------------------------------------------------------------

    The Exchange first notes that it operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues if they deem fee levels at a particular venue to be 
excessive or incentives to be insufficient. More specifically, the 
Exchange is only one of 16 registered equities exchanges, as well as a 
number of alternative trading systems and other off-exchange venues 
that do not have similar self-regulatory responsibilities under the 
Exchange Act, to which market participants may direct their order flow. 
Based on publicly available information,\4\ no single registered 
equities exchange has more than 19% of the market share. Thus, in such 
a low-concentrated and highly competitive market, no single equities 
exchange possesses significant pricing power in the execution of order 
flow. The Exchange in particular operates a ``Maker-Taker'' model 
whereby it pays rebates to members that add liquidity and assesses fees 
to those that remove liquidity. The Exchange's Fee Schedule sets forth 
the standard rebates and rates applied per share for orders that 
provide and remove liquidity, respectively. Currently, for orders in 
securities priced at or above $1.00, the Exchange provides a standard 
rebate of $0.00160 per share for orders that add liquidity and assesses 
a fee of $0.0030 per share for orders that remove liquidity. For orders 
in securities priced below $1.00, the Exchange provides a standard 
rebate of $0.00009 per share for orders that add liquidity and assesses 
a fee of 0.30% of the total dollar value for orders that remove 
liquidity. Additionally, in response to the competitive environment, 
the Exchange also offers tiered pricing which provides Members 
opportunities to qualify for higher rebates or reduced fees where 
certain volume criteria and thresholds are met. Tiered pricing provides 
an incremental incentive for Members to strive for higher tier levels, 
which provides increasingly higher benefits or discounts for satisfying 
increasingly more stringent criteria.
---------------------------------------------------------------------------

    \4\ See Cboe Global Markets, U.S. Equities Market Volume 
Summary, Month-to-Date (September 23, 2022), available at https://www.cboe.com/us/equities/market_statistics/.
---------------------------------------------------------------------------

Modification to Growth Volume Tier 4
    Under footnote 1 of the Fee Schedule, the Exchange currently offers 
various Add/Remove Volume Tiers. For example, the Exchange offers four 
Growth Tiers that each provide an enhanced rebate for Members' 
qualifying orders yielding fee codes B,\5\, V,\6\ Y,\7\ 3 \8\ or 4,\9\ 
where a Member reaches certain add volume-based criteria, including 
``growing'' its volume over a certain baseline month. Currently, Growth 
Tier 4 provides an enhanced rebate of $0.0034 per share to MPIDs that 
(1) add a Step-Up ADAV \10\ from October 2021 equal to or greater than 
0.10% of the TCV \11\ or MPIDs that add a Step-Up ADAV from October 
2021 equal to or greater than 16 million shares; and (2) MPIDs that add 
an ADV \12\ equal to or greater than 0.30% of TCV or MPIDs that add an 
ADV equal to or greater than 35 million shares. The Exchange now 
proposes to amend the criteria of Growth Tier 4. Particularly, the 
Exchange proposes to provide that under prong 1 of Growth Tier 4, MPIDs 
must add a Step-Up ADAV from October 2021 equal to or greater than 
0.12% of the TCV (instead of 0.10% of the TCV) or add a Step-Up ADAV 
from October 2021 equal to or greater than 16 million shares. The 
Exchange is not proposing to change the criteria under prong 2 of 
Growth Tier 4.
---------------------------------------------------------------------------

    \5\ Orders yielding Fee Code ``B'' are orders adding liquidity 
to EDGX (Tape B).
    \6\ Orders yielding Fee Code ``V'' are orders adding liquidity 
to EDGX (Tape A).
    \7\ Orders yielding Fee Code ``Y'' are orders adding liquidity 
to EDGX (Tape C).
    \8\ Orders yielding Fee Code ``3'' are orders adding liquidity 
to EXGX in the pre and post market (Tapes A or C).
    \9\ Orders yielding Fee Code ``4'' are orders adding liquidity 
to EDGX in the pre and post market (Tape B).
    \10\ ``Step-Up ADAV'' means ADAV in the relevant baseline month 
subtracted from current ADAV. ``ADAV'' means average daily volume 
calculated as the number of shares added per day. ADAV is calculated 
on a monthly basis.
    \11\ ``TCV'' means total consolidated volume calculated as the 
volume reported by all exchanges and trade reporting facilities to a 
consolidated transaction reporting plan for the month for which the 
fees apply.
    \12\ ``ADV'' means average daily volume calculated as the number 
of shares added to, removed from, or routed by, the Exchange, or any 
combination or subset thereof, per day. ADV is calculated on a 
monthly basis.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the objectives of section 6 of the Securities and Exchange Act of 1933 
(the ``Act''),\13\ in general, and furthers the objectives of section 
6(b)(4),\14\ in particular, as it is designed to provide for the 
equitable allocation of reasonable dues, fees and other charges among 
its Members and issuers and other persons using its facilities. The 
Exchange also believes that the proposed rule change is consistent with 
the objectives of section 6(b)(5) \15\ requirements that the rules of 
an exchange be designed to prevent

[[Page 62900]]

fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest, and, particularly, is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. As described above, the Exchange operates in a 
highly competitive market in which market participants can readily 
direct order flow to competing venues if they deem fee levels at a 
particular venue to be excessive or incentives to be insufficient. The 
proposed rule change reflects a competitive pricing structure designed 
to incentivize market participants to direct their order flow to the 
Exchange, which the Exchange believes would enhance market quality to 
the benefit of all Members.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4).
    \15\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that its proposed change to Growth Tier 4 is 
reasonable, equitable and not unfairly discriminatory. The Exchange's 
proposal to amend Growth Tier 4 is reasonable because the tier will 
continue to be available to all MPIDs and will continue to provide 
MPIDs an opportunity to receive an enhanced rebate. The Exchange notes 
that relative volume-based incentives and discounts have been widely 
adopted by exchanges,\16\ including the Exchange,\17\ and are 
reasonable, equitable and non-discriminatory because they are open to 
all Members on an equal basis and provide additional benefits or 
discounts that are reasonably related to (i) the value to an exchange's 
market quality and (ii) associated higher levels of market activity, 
such as higher levels or liquidity provision and/or growth thresholds, 
as well as assess similar fees or rebates for similar types of orders, 
to that of the Exchange. The Exchange also believes that the existing 
rebate under Growth Tier 4 continues to be commensurate with the 
existing and proposed criteria. That is, the rebate reasonably reflects 
the difficulty in achieving the corresponding criteria as amended.
---------------------------------------------------------------------------

    \16\ See BZX Equities Fee Schedule, Footnote 1, Add/Remove 
Volume Tiers.
    \17\ See EDGX Equities Fee Schedule, Footnote 1, Add/Remove 
Volume Tiers.
---------------------------------------------------------------------------

    The Exchange believes that the change to Growth Tier 4 will benefit 
all market participants by incentivizing continuous liquidity and, 
thus, deeper more liquid markets as well as increased execution 
opportunities. Particularly, the proposal is designed to incentivize 
liquidity, which further contributes to a deeper, more liquid market 
and provide even more execution opportunities for active market 
participants at improved prices. This overall increase in activity 
deepens the Exchange's liquidity pool, offers additional cost savings, 
supports the quality of price discovery, promotes market transparency 
and improves market quality, for all investors.
    The Exchange also believes that the proposed amendment to Growth 
Tier 4 represents an equitable allocation of rebates and is not 
unfairly discriminatory because all MPIDs are eligible for the tier and 
would have the opportunity to meet the tier's criteria and would 
receive the proposed rebate if such criteria is met. Without having a 
view of activity on other markets and off-exchange venues, the Exchange 
has no way of knowing whether this proposed rule change would 
definitely result in any MPIDs qualifying for the proposed tiers. While 
the Exchange has no way of predicting with certainty how the proposed 
tier will impact MPID activity, the Exchange anticipates that at least 
one MPID will be able to compete for and reach the proposed criteria in 
Growth Tier 4. The Exchange also notes all MPIDs are eligible to 
satisfy the revised criteria of Growth Tier 4 and further believes the 
proposed change will provide a reasonable means to encourage future 
overall growth in Members' order flow to the Exchange by offering an 
enhanced rebate on qualifying orders. Moreover, the proposed criteria 
will not adversely impact any MPID or Member's ability to qualify for 
other reduced fee or enhanced rebate tiers. Should any MPID not meet 
the proposed criteria under Growth Tier 4, the MPID will merely not 
receive the corresponding enhanced rebate.
    As noted above, the Exchange operates in a highly competitive 
market. The Exchange in only one of 16 equity venues to which market 
participants may direct their order flow, and it represents a small 
percentage of the overall market. It is also only one of several maker-
taker exchanges. Competing equity exchanges offer similar rates and 
tiered pricing structures to that of the Exchange, including schedules 
of rebates and fees that apply based upon members achieving certain 
volume thresholds.

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. Rather, as discussed above, 
the Exchange believes that the proposed change would encourage the 
submission of additional order flow to a public exchange, thereby 
promoting market depth, execution incentives and enhanced execution 
opportunities, as well as price discovery and transparency for all 
Members. As a result, the Exchange believes that the proposed changes 
further the Commission's goal in adopting Regulation NMS of fostering 
competition among orders, which promotes ``more efficient pricing of 
individual stocks for all types of orders, large and small.''
    The Exchange believes the proposed rule change does not impose any 
burden on intramarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Particularly, the proposed 
change to Growth Tier 4 will apply to all Members equally in that all 
Members are eligible for the tier, have a reasonable opportunity to 
meet the tier's criteria and will receive the enhanced rebate on their 
qualifying orders if such criteria is met. The Exchange does not 
believe the proposed changes burden competition, but rather, enhances 
competition as it is intended to increase the competitiveness of EDGX 
by amending an existing pricing incentive in order to attract order 
flow and incentivize participants to increase their participation on 
the Exchange, providing for additional execution opportunities for 
market participants and improved price transparency. Greater overall 
order flow, trading opportunities, and pricing transparency benefits 
all market participants on the Exchange by enhancing market quality and 
continuing to encourage Members to send orders, thereby contributing 
towards a robust and well-balanced market ecosystem.
    Next, the Exchange believes the proposed rule change does not 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. As previously 
discussed, the Exchange operates in a highly competitive market. 
Members have numerous alternative venues that they may participate on 
and direct their order flow, including other equities exchanges, off-
exchange venues, and alternative trading systems. Additionally, the 
Exchange represents a small percentage of the overall market.

[[Page 62901]]

Based on publicly available information, no single equities exchange 
has more than 19% of the market share.\18\ Therefore, no exchange 
possesses significant pricing power in the execution of order flow. 
Indeed, participants can readily choose to send their orders to other 
exchange and off-exchange venues if they deem fee levels at those other 
venues to be more favorable. Moreover, the Commission has repeatedly 
expressed its preference for competition over regulatory intervention 
in determining prices, products, and services in the securities 
markets. Specifically, in Regulation NMS, the Commission highlighted 
the importance of market forces in determining prices and SRO revenues 
and, also, recognized that current regulation of the market system 
``has been remarkably successful in promoting market competition in its 
broader forms that are most important to investors and listed 
companies.'' \19\ The fact that this market is competitive has also 
long been recognized by the courts. In NetCoalition v. Securities and 
Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one 
disputes that competition for order flow is `fierce.' . . . As the SEC 
explained, `[i]n the U.S. national market system, buyers and sellers of 
securities, and the broker-dealers that act as their order-routing 
agents, have a wide range of choices of where to route orders for 
execution'; [and] `no exchange can afford to take its market share 
percentages for granted' because `no exchange possesses a monopoly, 
regulatory or otherwise, in the execution of order flow from broker 
dealers' . . .''.\20\
---------------------------------------------------------------------------

    \18\ See supra note 3.
    \19\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \20\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

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 \21\ and paragraph (f) of Rule 19b-4 \22\ 
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.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-CboeEDGX-2022-045 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-CboeEDGX-2022-045. 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. 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-CboeEDGX-2022-045, and 
should be submitted on or before November 7, 2022.
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-22446 Filed 10-14-22; 8:45 am]
BILLING CODE 8011-01-P
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