Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 65266-65267 [2022-23479]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 87, Number 208 (Friday, October 28, 2022)]
[Notices]
[Pages 65266-65267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23479]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96130; File No. SR-CboeBZX-2022-051]


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

October 24, 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 October 11, 2022, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') 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/equities/regulation/rule_filings/bzx/), 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 update its Fee Schedule for its equity 
options platform (``BZX Options'') to correct inadvertent marking 
errors in the Standard Rates table in the Fee Schedule made in 
connection with previous rule changes.
    First, the Exchange proposes to update the Add rebates for 
Customer, Non-Penny Program Securities transactions (fee code ``NY'') 
in the Standard Rates table. Initially, the Exchange submitted a rule 
filing in August 2021 (``August Filing''), which among other things, 
amended the enhanced rebates provided under the Customer Non-Penny Add 
Volume Tiers under Footnote 12 to range from between $0.92 and $1.06 
per contract across 5 tiers, to between $0.90 and $1.05 per contract 
across eight tiers.\3\ On January 4, 2022, the Exchange submitted a 
cleanup rule filing (``January Filing''),\4\ to amend the Fee Schedule 
to reflect the new volume tier enhanced rebates that were proposed in 
the August Filing under the Customer Non-Penny Add Volume Tiers under 
Footnote 12, but inadvertently not added to the corresponding Standard 
Rates table for Customer, Non-Penny Program Securities Add 
transactions. In the January Filing however, the Exchange also 
inadvertently removed the standard rebate for Customer, Non-Penny 
Program Securities Add transactions (which was, and still is, $0.85) in 
its entirety. The Exchange now proposes to add the standard rebate of 
$0.85 back in the Standard Rates table under the Non-Penny Program 
Securities for Add transactions for corresponding fee code ``NY.''
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    \3\ See Securities Exchange Act Release No. 92635 (August 11, 
2021), 86 FR 46028 (August 17, 2021) (SR-CboeBZX-2021-055).
    \4\ See Securities Exchange Act Release No. 93974 (January 13, 
2022), 87 FR 3160 (January 20, 2022) (SR-CboeBZX-2022-002).
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    Next, the Exchange proposes to add a reference to fee code ``PD'' 
in the Standard Rates table for Firm, Broker Dealer and Joint Back 
Office orders in Penny Program Securities, which are subject to a 
standard rate of $0.50 per contract. On May 3, 2021, the Exchange 
submitted a filing (``May Filing''), which among other things, adopted 
new fee code ``PD''.\5\ Particularly, prior to the May Filing, fee code 
``PP'' was appended to all Non-Customer (i.e., Firm, Broker Dealer, 
Joint Back Office, Market Maker, Away Market Maker and Professional 
capacities) orders that removed liquidity in Penny securities and which 
were assessed a fee of $0.50 per contract. In the May Filing, the 
Exchange proposed to create a remove Penny liquidity fee code specific 
to Firm, Broker Dealer and Joint Back Office orders (i.e., fee code 
``PD''), which would continue to yield the same standard rate of $0.50 
per contract. The Exchange however inadvertently omitted adding new fee 
code ``PD'' to the Standard Rates table applicable to Firm Broker 
Dealer and Joint Back Office orders that remove volume in Penny Program 
Securities. The Exchange now proposes to add in the fee code ``PD'' in 
the Standard Rates table.
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    \5\ See Securities Exchange Act Release No. 91831 (May 10, 
2021), 86 FR 26577 (May 14, 2021) (SR-CboeBZX-2021-038).
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    Next, the Exchange proposes to update the Remove fees listed for 
Market Maker, Away Market Maker, and Professional transactions in Penny 
Program Securities in the Standard Rates table. Specifically, in the 
previously mentioned August Filing, the Exchange also amended the 
reduced fees offered under Tiers 1-3 of the Market Maker, Away Market 
Maker, and Professional Penny Take Volume Tiers under Footnote 3 from 
$0.45, $0.45 [sic] and $0.47 [sic] to $0.47 [sic], $0.48 and $0.49 
[sic] across the three tiers.\6\ The Exchange however at that time 
inadvertently omitted to also update the corresponding rates listed in 
the Standard Rates table of the Fees Schedule applicable to Market 
Maker, Away Market Maker, and Professional orders that remove volume in 
Penny Program Securities (i.e., the current Standard Rates table still 
only reflects

[[Page 65267]]

reduced fees of $0.45 and $0.47, instead of $0.47, $0.48, and $0.49, in 
addition to the standard fee of $0.50). The Exchange now proposes to 
update the rates listed in the Standard Rates table under fee code 
``PP'' for Market Maker, Away Market Maker, and Professional orders 
that remove volume in Penny Program Securities to reflect the rates 
proposed in the August Filing applicable to such orders.\7\
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    \6\ See Securities Exchange Act Release No. 92635 (August 11, 
2021), 86 FR 46028 (August 17, 2021) (SR-CboeBZX-2021-055).
    \7\ The Exchange notes that as a result of adding fee code 
``PD'' to the Fees Schedule, Penny Program Securities Remove rates 
for Market Makers and Away Market Makers are now separate from rates 
for Professionals (notwithstanding all such orders yielding fee code 
``PP''). As such, the Exchange proposes to replicate and add Fee 
Code PP and the corresponding fees under the Market Maker and Away 
Market rows.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of section 6 of the Act,\8\ in general, and 
furthers the objectives of section 6(b)(4),\9\ 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) \10\ 
requirements that the rules of an exchange be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest, and, particularly, is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78f.(b)(5).
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    The Exchange believes that the proposed changes are reasonable, 
equitable and not unfairly discriminatory as it does not change the 
fees or rebates currently assessed by the Exchange, but rather updates 
the Standard Rates table to reflect previously filed fee changes which 
inadvertently were not carried over into the Standard Rates table at 
the time the original filings were submitted. Indeed, the proposed rule 
changes are merely corrective changes made to the Fee Schedule designed 
to accurately reflect the current rates for the respective orders, 
which increases transparency in the Fees Schedule and reduces potential 
confusion regarding the appropriate rates for such orders.

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

    The Exchange does not believe that the proposed rule changes will 
impose any burden on intramarket or intermarket competition that is not 
necessary or appropriate in furtherance of the purposes of the Act 
because the proposed rule change merely corrects inadvertent marking 
errors in the Fee Schedule, which is designed to accurately reflect the 
current rates for the corresponding applicable orders, thereby 
increasing transparency in the Fee Schedule and reducing potential 
confusion regarding the appropriate rates applicable to such orders 
without having any impact on competition.

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 \11\ and paragraph (f) of Rule 19b-4 \12\ 
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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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-CboeBZX-2022-051 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-CboeBZX-2022-051. 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-CboeBZX-2022-051 and should be submitted 
on or before November 18, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-23479 Filed 10-27-22; 8:45 am]
BILLING CODE 8011-01-P