Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 72581-72585 [2022-25667]

Download as PDF Federal Register / Vol. 87, No. 226 / Friday, November 25, 2022 / Notices does not believe its proposed fee change can impose any burden on intermarket competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 16 of the Act and subparagraph (f)(2) of Rule 19b–4 17 thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of such 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 shall institute proceedings under Section 19(b)(2)(B) 18 of the Act to determine whether the proposed rule 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: 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– NYSE–2022–53 on the subject line. khammond on DSKJM1Z7X2PROD with NOTICES 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–NYSE–2022–53. This file number should be included on the subject line if email is used. To help the Commission process and review your U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 18 15 U.S.C. 78s(b)(2)(B). 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–NYSE–2022–53 and should be submitted on or before December 16,2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2022–25671 Filed 11–23–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96356; File No. SR– CboeEDGX–2022–050] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule November 18, 2022. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 10, 2022, Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the 16 15 19 17 17 17 1 15 VerDate Sep<11>2014 18:43 Nov 23, 2022 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. Jkt 259001 PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 72581 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/), 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 Equities’’) as follows: (1) to amend the standard rebate for orders yielding fee codes DM,3 HA,4 MM,5 or RP; 6 (2) to introduce a new Growth Tier, a new Non-Displayed Step-Up Volume Tier, and a new Retail Growth Tier; (3) to modify the rebate under the NonDisplayed Add Volume Tier 2, and (4) to add clarifying language to the 3 Fee code DM is appended on orders adding liquidity using the midpoint discretionary order within discretionary range. 4 Fee code HA is appended to non-displayed orders adding liquidity. 5 Fee code MM is appended to non-displayed orders adding liquidity using the mid-point peg. 6 Fee code RP is appended to non-displayed orders adding liquidity using the supplemental peg. E:\FR\FM\25NON1.SGM 25NON1 khammond on DSKJM1Z7X2PROD with NOTICES 72582 Federal Register / Vol. 87, No. 226 / Friday, November 25, 2022 / Notices description of fee code X.7 The Exchange proposes to implement these changes effective November 1, 2022. 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 Securities Exchange Act of 1934 (the ‘‘Act’’), to which market participants may direct their order flow. Based on publicly available information,8 no single registered equities exchange has more than 15% 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. First, the Exchange proposes to reduce the rebate applied to certain nondisplayed orders. Specifically, the Exchange proposes to reduce the rebate of $0.0010 per share to $0.0008 per 7 Fee code X is appended to routed orders. Cboe Global Markets, U.S. Equities Market Volume Summary, Month-to-Date (October 24, 2022), available at https://www.cboe.com/us/ equities/market_statistics/. 8 See VerDate Sep<11>2014 18:43 Nov 23, 2022 Jkt 259001 share for orders yielding fee code DM, HA, MM, or RP. Second, the Exchange proposes to add two new tiers to the Add/Remove Volume Tiers provided under footnote 1 of the Fee Schedule and one new tier to the Retail Volume Tiers provided under footnote 2 of the Fee Schedule. Specifically, the Exchange proses to adopt the Growth Tier 5 and NonDisplayed Step-Up Volume Tier 3 under the footnote 1, and the Retail Growth Tier 2 under footnote 2. The Growth Tiers, Non-Displayed Step-Up Volume Tiers, and Retail Growth Tiers each provide an enhanced rebate for Members’ qualifying orders where a Member reaches certain add volumebased criteria, including ‘‘growing’’ its volume over a certain baseline month. The Growth Tiers are applicable to liquidity adding orders yielding fee B,9 V,10 Y,11 3,12 and 4,13 the NonDisplayed Step-Up Volume Tiers are applicable to non-displayed orders yielding DM, HA, MM and RP, and the Retail Growth Tiers are applicable to retail orders yielding fee codes ZA 14 and ZO.15 The proposed criteria for each of the proposed tiers is as follows: (1) Member adds a Step-Up ADAV 16 from October 2022 ≥0.15% of the TCV 17 or Member adds a Step-Up ADAV from October 2022 ≥15,000,000; and (2) Member has a total remove ADV ≥0.45% of TCV or Member has a total remove ADV ≥45,000,000. While the proposed criteria is the same for each of the proposed new tiers, the Exchange proposes the following rebates: $0.0034 per share to Members meeting Growth Tier 5, $0.0026 per share to Members meeting NonDisplayed Step-Up Volume Tier 3, and $0.0037 per share to Members meeting Retail Growth Tier 2. While the criteria 9 Fee code B is appended to orders adding liquidity to EDGX in Tape B securities. 10 Fee code V is appended to orders adding liquidity to EDGX in Tape A securities. 11 Fee code Y is appended to orders adding liquidity to EDGX in Tape C securities. 12 Fee code 3 is appended to orders adding liquidity to EDGX in the pre and post market in Tapes A or C securities. 13 Fee code 4 is appended to orders adding liquidity to EDGX in the pre and post market in Tape B securities. 14 Fee code ZA is appended liquidity adding retail orders. 15 Fee code ZO is appended to liquidity adding retail orders in the pre and post market. 16 ADAV means average daily added volume calculated as the number of shares added per day ADAV is calculated on a monthly basis. Step-Up ADAV means ADAV in the relevant baseline month subtracted from current ADAV. 17 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. PO 00000 Frm 00141 Fmt 4703 Sfmt 4703 of each of the proposed tiers is identical, the Exchange proposes different rebates for each of the tiers based on the type of order (i.e., liquidity adding displayed orders, liquidity adding non-displayed orders, and retail orders). The Exchange next proposes to modify the Non-Displayed Add Volume Tier 2 under footnote 1 of the Fee Schedule. Specifically, the Exchange proposes to reduce the rebate from $0.0022 per share to $0.0020 per share to orders meeting the required criteria. The Exchange proposes no modifications to the required criteria of the tier. Last, the Exchange proposes to clarify that fee code X is applicable to routed orders that add or remove liquidity. When certain fee codes were deleted from the Fee Schedule, the Exchange simultaneously proposed to update fee code X to make clear that it applies to all other routed orders that are not otherwise specified under other fee codes in the Fee Schedule.18 However, the Exchange did not make clear in the fee code table that fee code X is therefore also applicable to orders that both add and remove liquidity.19 Therefore, the Exchange is now proposing to add such language to the description of fee code X, as well as eliminate the reference to ‘‘Removing’’ liquidity in the Standard Rates header for the Routing Liquidity column (which is applicable to fee code X). 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.20 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 21 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 18 See Securities Exchange Act No. 91002 (January 27, 2021) 86 FR 7902 (February 2, 2021) (SR–CboeEDGX–2021–006). 19 Under the Transaction Fees section of the Fee Schedule, bullet four provides ‘‘[u]nless otherwise noted, all routing fees or rebates in the Fee Codes and Associated Fees table are for removing liquidity from the destination venue.’’ 20 15 U.S.C. 78f(b). 21 15 U.S.C. 78f(b)(5). E:\FR\FM\25NON1.SGM 25NON1 Federal Register / Vol. 87, No. 226 / Friday, November 25, 2022 / Notices khammond on DSKJM1Z7X2PROD with NOTICES 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) 22 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers as well as Section 6(b)(4) 23 as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities. 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 Exchange believes that its proposal to reduce the rebates applicable to fee codes DM, HA, MM, and RP is fair, equitable, and reasonable because the proposed rebate remains consistent with pricing offered by the Exchange’s affiliates and competitors and does not represent a significant departure from the Exchange’s general pricing structure. Specifically, the proposed rebate applicable to fee code DM, HA, MM, and RP are in-line with the rebates provided to similar non-displayed orders offered by the Nasdaq Stock Market LLC (‘‘Nasdaq’’), which provides rebates ranging from $0.0010 (Tape C securities) to $0.0014 (Tape A and B securities) for similar orders.24 Therefore, the Exchange believes the proposed rebates associated with fee codes DM, HA, MM, and RP remain consistent with pricing previously offered by the Exchange and other exchanges and does not represent a significant departure from such pricing. The proposal to adopt the Growth Tier 5, Non-Displayed Step-Up Volume Tier, and Retail Growth Tier 2 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. While the criteria of each of the proposed tiers is identical, the Exchange proposes different rebates for each of the tiers based on the type of order (i.e., liquidity adding displayed orders, liquidity adding non-displayed 22 Id. 23 15 U.S.C. 78f(b)(4). ‘‘Rebate to Add Non-Displayed Midpoint Liquidity (excluding buy (sell) orders with Midpoint pegging that receive an execution price that is lower (higher) than the midpoint of the NBBO’’ for firms that add less than 1 million shares of midpoint liquidity on the Nasdaq fee schedule at https://nasdaqtrader.com/Trader.aspx?id= PriceListTrading2. 24 See VerDate Sep<11>2014 18:43 Nov 23, 2022 Jkt 259001 orders, and retail orders). Additionally, the Exchange notes that relative volumebased incentives and discounts have been widely adopted by exchanges,25 including the Exchange,26 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 of liquidity provision and/or growth patterns. Competing equity exchanges offer similar tiered pricing structures, including schedules of rebates and fees that apply based upon members achieving certain volume and/or growth thresholds, as well as assess similar fees or rebates for similar types of orders, to that of the Exchange. In particular, the Exchange believes the proposed new tiers and the proposed change to reduce the rebate for Non-Displayed Add Volume Tier 2 are reasonable because they will be available to all Members and provide all Members with an additional opportunity to receive an enhanced rebate. The Exchange further believes the proposed Growth Tier 5, NonDisplayed Step-Up Volume Tier, and Retail Growth Tier 2 as well as the existing Non-Displayed Add Volume Tier will provide a reasonable means to encourage liquidity adding displayed orders, liquidity adding non-displayed orders, and retail orders, respectively, in Members’ order flow to the Exchange and to incentivize Members to continue to provide liquidity adding volume to the Exchange by offering them an additional opportunity to receive an enhanced rebate on qualifying orders. An overall increase in activity would deepen the Exchange’s liquidity pool, offers additional cost savings, support the quality of price discovery, promote market transparency and improve market quality, for all investors. The Exchange believes that the proposed changes are reasonable as it does not represent a significant departure from the criteria currently offered in the Fee Schedule. Specifically, the proposed new tiers have criteria similar to the existing Growth Tier 4, albeit with more stringent criteria that applies at the Member level rather than the MPID level. Nonetheless, the Exchange believes that the enhanced rebates under the proposed new tiers and the 25 See, e.g., BZX Equities Fee Schedule, Footnote 1, Add/Remove Volume Tiers. 26 See, e.g., EDGX Equities Fee Schedule, Footnote 1, Add/Remove Volume Tiers. PO 00000 Frm 00142 Fmt 4703 Sfmt 4703 72583 Non-Displayed Add Volume Tier are commensurate with the criteria and the type of order flow associated with the applicable tier by allowing for Member level activity to become eligible for the rebate instead of only MPID level activity. The Exchange also believes that the proposal represents an equitable allocation of fees and rebates and is not unfairly discriminatory because all Members will be eligible for the proposed new tiers and have the opportunity to meet the tiers’ criteria and receive the corresponding enhanced 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 Members qualifying the new proposed tiers. While the Exchange has no way of predicting with certainty how the proposed changes will impact Member activity, based on the prior months volume, the Exchange anticipates that at least one Member will be able to satisfy the criteria proposed under each proposed new tier. The Exchange also notes that proposed changes will not adversely impact any Member’s ability to qualify for enhanced rebates offered under other tiers. Should a Member not meet the proposed new criteria, the Member will merely not receive that corresponding enhanced rebate. Finally, the Exchange believes the proposal to modify fee code X to explicitly provide that it is applicable to routed orders that add and remove liquidity on the destination exchange is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. Specifically, the proposal is intended only to make a clarifying change to the Fee Schedule and involves no substantive change. 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 changes 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 E:\FR\FM\25NON1.SGM 25NON1 khammond on DSKJM1Z7X2PROD with NOTICES 72584 Federal Register / Vol. 87, No. 226 / Friday, November 25, 2022 / Notices individual stocks for all types of orders, large and small.’’ The Exchange believes the proposed rule changes do 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 the NonDisplayed Add Volume Tier 2 and the proposed new Growth Tier 5, NonDisplayed Step-Up Volume Tier, and Retail Growth Tier 2 will apply to all Members equally in that all Members are eligible for each of the Tiers, have a reasonable opportunity to meet the Tiers’ criteria and will receive the enhanced rebate on their qualifying orders if such criteria is met. The Exchange does not believe the proposed changes burdens competition, but rather, enhances competition as it is intended to increase the competitiveness of EDGX by amending an existing pricing incentive and adopting pricing incentives 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. The Exchange does not believe the proposal to decrease the rebate associated with fee codes DM, HA, MM, or RP represent a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange’s competitors. Members may opt to disfavor the Exchange’s pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. Next, the Exchange believes the proposed rule changes 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. Based on publicly available information, VerDate Sep<11>2014 18:43 Nov 23, 2022 Jkt 259001 no single equities exchange has more than 15% of the market share.27 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.’’ 28 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’. . . .’’.29 Accordingly, the Exchange does not believe its proposed fee change imposes any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Finally, the Exchange believes its proposal to clarify that fee code X is applicable to liquidity adding and removing orders will have no impact on competition as it involves no substantive change to the existing Fee Schedule. 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. 27 Supra note 8. Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 29 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)). 28 See PO 00000 Frm 00143 Fmt 4703 Sfmt 4703 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 30 and paragraph (f) of Rule 19b–4 31 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CboeEDGX–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–CboeEDGX–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 30 15 31 17 E:\FR\FM\25NON1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 25NON1 Federal Register / Vol. 87, No. 226 / Friday, November 25, 2022 / Notices 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–CboeEDGX–2022–050 and should be submitted on or before December 16, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.32 Sherry R. Haywood, Assistant Secretary. BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice: 11925] Notice of Determinations; Culturally Significant Objects Being Imported for Exhibition—Determinations: ‘‘Picasso Landscapes: Out of Bounds’’ Exhibition Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to agreements with their foreign owners or custodians for temporary display in the American Federation of Arts’ exhibition ‘‘Picasso Landscapes: Out of Bounds’’ at The Mint Museum, Charlotte, North Carolina; the Cincinnati Art Museum, Cincinnati, Ohio; and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the Federal Register. FOR FURTHER INFORMATION CONTACT: Elliot Chiu, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202–632–6471; email: section2459@state.gov). The mailing address is U.S. Department of State, L/ PD, 2200 C Street NW (SA–5), Suite 5H03, Washington, DC 20522–0505. khammond on DSKJM1Z7X2PROD with NOTICES 32 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:43 Nov 23, 2022 Jkt 259001 Stacy E. White, Deputy Assistant Secretary for Professional and Cultural Exchanges, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. 2022–25723 Filed 11–23–22; 8:45 am] BILLING CODE 4710–05–P ACTION: Notice. The Federal Aviation Administration (FAA) announces the issuance and availability of a Finding of No Significant Impact/Record of Decision for the Final Environmental Assessment and Final General Conformity Determination for the Proposed Terminal Area Plan and Air Traffic Procedures for Chicago O’Hare International Airport, Chicago, Illinois. The Final Environmental Assessment analyzes and discloses the potential environmental impacts associated with the Proposed Terminal Area Plan and Air Traffic Procedures at Chicago O’Hare International Airport, pursuant to the National Environmental Policy Act. SUMMARY: Deb Bartell, Manager, Chicago Airports District Office (847) 294–7336. SUPPLEMENTARY INFORMATION: The Finding of No Significant Impact/ Record of Decision and the Final Environmental Assessment, including the Final General Conformity Determination, located at Appendix E of the Final Environmental Assessment, are available online at: (https:// www.faa.gov/airports/great_lakes/ TAPandATEA/). FOR FURTHER INFORMATION CONTACT: SURFACE TRANSPORTATION BOARD Release of Waybill Data [FR Doc. 2022–25667 Filed 11–23–22; 8:45 am] SUMMARY: The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681, et seq.; 22 U.S.C. 6501 note, et seq.), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority No. 236–3 of August 28, 2000, and Delegation of Authority No. 523 of December 22, 2021. SUPPLEMENTARY INFORMATION: The Surface Transportation Board has received a request from Wesley W. Wilson and Frank A. Wolak (WB22–62– 11/3/22) for permission to use data from the Board’s 2017–2021 unmasked Carload Waybill Sample. A copy of this request may be obtained from the Board’s website under docket no. WB22–62. The waybill sample contains confidential railroad and shipper data; therefore, if any parties object to these requests, they should file their objections with the Director of the Board’s Office of Economics within 14 calendar days of the date of this notice. The rules for release of waybill data are codified at 49 CFR 1244.9. Contact: Alexander Dusenberry, (202) 245–0319. Issued in Des Plaines, IL. Dated: November 18, 2022. Debra L. Bartell, Manager, Chicago Airports District Office. [FR Doc. 2022–25677 Filed 11–23–22; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF THE TREASURY Office of Foreign Assets Control Notice of OFAC Sanctions Actions Eden Besera, Clearance Clerk. [FR Doc. 2022–25710 Filed 11–23–22; 8:45 am] BILLING CODE 4915–01–P Office of Foreign Assets Control, Treasury. ACTION: Notice. AGENCY: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List) based on OFAC’s determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. DATES: See SUPPLEMENTARY INFORMATION section for effective date(s). SUMMARY: DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Availability of the Finding of No Significant Impact/Record of Decision for the Final Environmental Assessment and Final General Conformity Determination for the Proposed Terminal Area Plan and Air Traffic Procedures at Chicago O’Hare International Airport Federal Aviation Administration, Department of Transportation (DOT). AGENCY: PO 00000 Frm 00144 Fmt 4703 72585 Sfmt 4703 E:\FR\FM\25NON1.SGM 25NON1

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[Federal Register Volume 87, Number 226 (Friday, November 25, 2022)]
[Notices]
[Pages 72581-72585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25667]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96356; File No. SR-CboeEDGX-2022-050]


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

November 18, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 10, 2022, Cboe EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') filed with the Securities and Exchange Commission 
(``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 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/), 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 Equities'') as follows: (1) to amend 
the standard rebate for orders yielding fee codes DM,\3\ HA,\4\ MM,\5\ 
or RP; \6\ (2) to introduce a new Growth Tier, a new Non-Displayed 
Step-Up Volume Tier, and a new Retail Growth Tier; (3) to modify the 
rebate under the Non-Displayed Add Volume Tier 2, and (4) to add 
clarifying language to the

[[Page 72582]]

description of fee code X.\7\ The Exchange proposes to implement these 
changes effective November 1, 2022.
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    \3\ Fee code DM is appended on orders adding liquidity using the 
midpoint discretionary order within discretionary range.
    \4\ Fee code HA is appended to non-displayed orders adding 
liquidity.
    \5\ Fee code MM is appended to non-displayed orders adding 
liquidity using the mid-point peg.
    \6\ Fee code RP is appended to non-displayed orders adding 
liquidity using the supplemental peg.
    \7\ Fee code X is appended to routed orders.
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    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 
Securities Exchange Act of 1934 (the ``Act''), to which market 
participants may direct their order flow. Based on publicly available 
information,\8\ no single registered equities exchange has more than 
15% 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.
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    \8\ See Cboe Global Markets, U.S. Equities Market Volume 
Summary, Month-to-Date (October 24, 2022), available at https://www.cboe.com/us/equities/market_statistics/.
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    First, the Exchange proposes to reduce the rebate applied to 
certain non-displayed orders. Specifically, the Exchange proposes to 
reduce the rebate of $0.0010 per share to $0.0008 per share for orders 
yielding fee code DM, HA, MM, or RP.
    Second, the Exchange proposes to add two new tiers to the Add/
Remove Volume Tiers provided under footnote 1 of the Fee Schedule and 
one new tier to the Retail Volume Tiers provided under footnote 2 of 
the Fee Schedule. Specifically, the Exchange proses to adopt the Growth 
Tier 5 and Non-Displayed Step-Up Volume Tier 3 under the footnote 1, 
and the Retail Growth Tier 2 under footnote 2. The Growth Tiers, Non-
Displayed Step-Up Volume Tiers, and Retail Growth Tiers each provide an 
enhanced rebate for Members' qualifying orders where a Member reaches 
certain add volume-based criteria, including ``growing'' its volume 
over a certain baseline month. The Growth Tiers are applicable to 
liquidity adding orders yielding fee B,\9\ V,\10\ Y,\11\ 3,\12\ and 
4,\13\ the Non-Displayed Step-Up Volume Tiers are applicable to non-
displayed orders yielding DM, HA, MM and RP, and the Retail Growth 
Tiers are applicable to retail orders yielding fee codes ZA \14\ and 
ZO.\15\ The proposed criteria for each of the proposed tiers is as 
follows:
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    \9\ Fee code B is appended to orders adding liquidity to EDGX in 
Tape B securities.
    \10\ Fee code V is appended to orders adding liquidity to EDGX 
in Tape A securities.
    \11\ Fee code Y is appended to orders adding liquidity to EDGX 
in Tape C securities.
    \12\ Fee code 3 is appended to orders adding liquidity to EDGX 
in the pre and post market in Tapes A or C securities.
    \13\ Fee code 4 is appended to orders adding liquidity to EDGX 
in the pre and post market in Tape B securities.
    \14\ Fee code ZA is appended liquidity adding retail orders.
    \15\ Fee code ZO is appended to liquidity adding retail orders 
in the pre and post market.
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    (1) Member adds a Step-Up ADAV \16\ from October 2022 >=0.15% of 
the TCV \17\ or Member adds a Step-Up ADAV from October 2022 
>=15,000,000; and
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    \16\ ADAV means average daily added volume calculated as the 
number of shares added per day ADAV is calculated on a monthly 
basis. Step-Up ADAV means ADAV in the relevant baseline month 
subtracted from current ADAV.
    \17\ 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.
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    (2) Member has a total remove ADV >=0.45% of TCV or Member has a 
total remove ADV >=45,000,000.
    While the proposed criteria is the same for each of the proposed 
new tiers, the Exchange proposes the following rebates: $0.0034 per 
share to Members meeting Growth Tier 5, $0.0026 per share to Members 
meeting Non-Displayed Step-Up Volume Tier 3, and $0.0037 per share to 
Members meeting Retail Growth Tier 2. While the criteria of each of the 
proposed tiers is identical, the Exchange proposes different rebates 
for each of the tiers based on the type of order (i.e., liquidity 
adding displayed orders, liquidity adding non-displayed orders, and 
retail orders).
    The Exchange next proposes to modify the Non-Displayed Add Volume 
Tier 2 under footnote 1 of the Fee Schedule. Specifically, the Exchange 
proposes to reduce the rebate from $0.0022 per share to $0.0020 per 
share to orders meeting the required criteria. The Exchange proposes no 
modifications to the required criteria of the tier.
    Last, the Exchange proposes to clarify that fee code X is 
applicable to routed orders that add or remove liquidity. When certain 
fee codes were deleted from the Fee Schedule, the Exchange 
simultaneously proposed to update fee code X to make clear that it 
applies to all other routed orders that are not otherwise specified 
under other fee codes in the Fee Schedule.\18\ However, the Exchange 
did not make clear in the fee code table that fee code X is therefore 
also applicable to orders that both add and remove liquidity.\19\ 
Therefore, the Exchange is now proposing to add such language to the 
description of fee code X, as well as eliminate the reference to 
``Removing'' liquidity in the Standard Rates header for the Routing 
Liquidity column (which is applicable to fee code X).
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    \18\ See Securities Exchange Act No. 91002 (January 27, 2021) 86 
FR 7902 (February 2, 2021) (SR-CboeEDGX-2021-006).
    \19\ Under the Transaction Fees section of the Fee Schedule, 
bullet four provides ``[u]nless otherwise noted, all routing fees or 
rebates in the Fee Codes and Associated Fees table are for removing 
liquidity from the destination venue.''
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\20\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \21\ 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

[[Page 72583]]

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) \22\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers as well as Section 6(b)(4) \23\ 
as it is designed to provide for the equitable allocation of reasonable 
dues, fees and other charges among its Members and other persons using 
its facilities.
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    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(5).
    \22\ Id.
    \23\ 15 U.S.C. 78f(b)(4).
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    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 Exchange believes that 
its proposal to reduce the rebates applicable to fee codes DM, HA, MM, 
and RP is fair, equitable, and reasonable because the proposed rebate 
remains consistent with pricing offered by the Exchange's affiliates 
and competitors and does not represent a significant departure from the 
Exchange's general pricing structure. Specifically, the proposed rebate 
applicable to fee code DM, HA, MM, and RP are in-line with the rebates 
provided to similar non-displayed orders offered by the Nasdaq Stock 
Market LLC (``Nasdaq''), which provides rebates ranging from $0.0010 
(Tape C securities) to $0.0014 (Tape A and B securities) for similar 
orders.\24\ Therefore, the Exchange believes the proposed rebates 
associated with fee codes DM, HA, MM, and RP remain consistent with 
pricing previously offered by the Exchange and other exchanges and does 
not represent a significant departure from such pricing.
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    \24\ See ``Rebate to Add Non-Displayed Midpoint Liquidity 
(excluding buy (sell) orders with Midpoint pegging that receive an 
execution price that is lower (higher) than the midpoint of the 
NBBO'' for firms that add less than 1 million shares of midpoint 
liquidity on the Nasdaq fee schedule at https://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2.
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    The proposal to adopt the Growth Tier 5, Non-Displayed Step-Up 
Volume Tier, and Retail Growth Tier 2 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. While the criteria of 
each of the proposed tiers is identical, the Exchange proposes 
different rebates for each of the tiers based on the type of order 
(i.e., liquidity adding displayed orders, liquidity adding non-
displayed orders, and retail orders). Additionally, the Exchange notes 
that relative volume-based incentives and discounts have been widely 
adopted by exchanges,\25\ including the Exchange,\26\ 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 of liquidity provision and/or growth patterns. 
Competing equity exchanges offer similar tiered pricing structures, 
including schedules of rebates and fees that apply based upon members 
achieving certain volume and/or growth thresholds, as well as assess 
similar fees or rebates for similar types of orders, to that of the 
Exchange.
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    \25\ See, e.g., BZX Equities Fee Schedule, Footnote 1, Add/
Remove Volume Tiers.
    \26\ See, e.g., EDGX Equities Fee Schedule, Footnote 1, Add/
Remove Volume Tiers.
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    In particular, the Exchange believes the proposed new tiers and the 
proposed change to reduce the rebate for Non-Displayed Add Volume Tier 
2 are reasonable because they will be available to all Members and 
provide all Members with an additional opportunity to receive an 
enhanced rebate. The Exchange further believes the proposed Growth Tier 
5, Non-Displayed Step-Up Volume Tier, and Retail Growth Tier 2 as well 
as the existing Non-Displayed Add Volume Tier will provide a reasonable 
means to encourage liquidity adding displayed orders, liquidity adding 
non-displayed orders, and retail orders, respectively, in Members' 
order flow to the Exchange and to incentivize Members to continue to 
provide liquidity adding volume to the Exchange by offering them an 
additional opportunity to receive an enhanced rebate on qualifying 
orders. An overall increase in activity would deepen the Exchange's 
liquidity pool, offers additional cost savings, support the quality of 
price discovery, promote market transparency and improve market 
quality, for all investors.
    The Exchange believes that the proposed changes are reasonable as 
it does not represent a significant departure from the criteria 
currently offered in the Fee Schedule. Specifically, the proposed new 
tiers have criteria similar to the existing Growth Tier 4, albeit with 
more stringent criteria that applies at the Member level rather than 
the MPID level. Nonetheless, the Exchange believes that the enhanced 
rebates under the proposed new tiers and the Non-Displayed Add Volume 
Tier are commensurate with the criteria and the type of order flow 
associated with the applicable tier by allowing for Member level 
activity to become eligible for the rebate instead of only MPID level 
activity. The Exchange also believes that the proposal represents an 
equitable allocation of fees and rebates and is not unfairly 
discriminatory because all Members will be eligible for the proposed 
new tiers and have the opportunity to meet the tiers' criteria and 
receive the corresponding enhanced 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 Members qualifying the new 
proposed tiers. While the Exchange has no way of predicting with 
certainty how the proposed changes will impact Member activity, based 
on the prior months volume, the Exchange anticipates that at least one 
Member will be able to satisfy the criteria proposed under each 
proposed new tier. The Exchange also notes that proposed changes will 
not adversely impact any Member's ability to qualify for enhanced 
rebates offered under other tiers. Should a Member not meet the 
proposed new criteria, the Member will merely not receive that 
corresponding enhanced rebate.
    Finally, the Exchange believes the proposal to modify fee code X to 
explicitly provide that it is applicable to routed orders that add and 
remove liquidity on the destination exchange is not designed to permit 
unfair discrimination between customers, issuers, brokers, or dealers. 
Specifically, the proposal is intended only to make a clarifying change 
to the Fee Schedule and involves no substantive change.

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 changes 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

[[Page 72584]]

individual stocks for all types of orders, large and small.''
    The Exchange believes the proposed rule changes do 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 the Non-Displayed Add Volume Tier 2 and the proposed new 
Growth Tier 5, Non-Displayed Step-Up Volume Tier, and Retail Growth 
Tier 2 will apply to all Members equally in that all Members are 
eligible for each of the Tiers, have a reasonable opportunity to meet 
the Tiers' criteria and will receive the enhanced rebate on their 
qualifying orders if such criteria is met. The Exchange does not 
believe the proposed changes burdens competition, but rather, enhances 
competition as it is intended to increase the competitiveness of EDGX 
by amending an existing pricing incentive and adopting pricing 
incentives 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.
    The Exchange does not believe the proposal to decrease the rebate 
associated with fee codes DM, HA, MM, or RP represent a significant 
departure from previous pricing offered by the Exchange or pricing 
offered by the Exchange's competitors. Members may opt to disfavor the 
Exchange's pricing if they believe that alternatives offer them better 
value. Accordingly, the Exchange does not believe that the proposed 
change will impair the ability of Members or competing venues to 
maintain their competitive standing in the financial markets.
    Next, the Exchange believes the proposed rule changes 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. Based on 
publicly available information, no single equities exchange has more 
than 15% of the market share.\27\ 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.'' \28\ 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'. . . .''.\29\ Accordingly, the Exchange does not believe its 
proposed fee change imposes any burden on competition that is not 
necessary or appropriate in furtherance of the purposes of the Act.
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    \27\ Supra note 8.
    \28\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \29\ 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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    Finally, the Exchange believes its proposal to clarify that fee 
code X is applicable to liquidity adding and removing orders will have 
no impact on competition as it involves no substantive change to the 
existing Fee Schedule.

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 \30\ and paragraph (f) of Rule 19b-4 \31\ 
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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    \30\ 15 U.S.C. 78s(b)(3)(A).
    \31\ 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-CboeEDGX-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-CboeEDGX-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

[[Page 72585]]

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-CboeEDGX-2022-050 and should 
be submitted on or before December 16, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
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    \32\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-25667 Filed 11-23-22; 8:45 am]
BILLING CODE 8011-01-P
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