Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Select Customer Options Reduction Program, 9938-9940 [2023-03161]

Download as PDF 9938 Federal Register / Vol. 88, No. 31 / Wednesday, February 15, 2023 / Notices aggregate total of approximately 428 hours to comply with this rule. Each respondent makes an estimated 1 annual response. Each response takes approximately 1 hour to complete. Thus, the total hour burden per year is approximately 428 hours. The total estimated internal cost of compliance for the respondents is approximately $34,668 per year, resulting in an estimated internal cost of compliance per response of approximately $81 (i.e., $34,668/428 responses). Written comments are invited on: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’s estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted by April 17, 2023. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. Please direct your written comments to: David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street, NE, Washington, DC 20549, or send an email to: PRA_ Mailbox@sec.gov. Dated: February 10, 2023. Sherry R. Haywood, Assistant Secretary. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION ddrumheller on DSK120RN23PROD with NOTICES [Release No. 34–96856; File No. SR–CBOE– 2023–011] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Select Customer Options Reduction Program Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 21:16 Feb 14, 2023 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) proposes to amend the Select Customer Options Reduction program. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://www.cboe.com/ AboutCBOE/CBOELegalRegulatory Home.aspx), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2023–03232 Filed 2–14–23; 8:45 am] February 9, 2023. notice is hereby given that on February 1, 2023, Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1. Purpose The Exchange proposes to amend the Select Customer Options Reduction program (‘‘SCORe’’), effective February 1, 2023. By way of background, SCORe is a discount program for Retail, Non-FLEX Customer (‘‘C’’ origin code) volume in the following options classes: SPX (including SPXW), VIX, RUT, MXEA, MXEF & XSP (‘‘Qualifying Classes’’). The SCORe program is available to any Trading Permit Holder (‘‘TPH’’) Originating Clearing Firm or non-TPH Originating Clearing Firm that sign up for the program.3 3 For this program, an ‘‘Originating Clearing Firm’’ is defined as either (a) the executing clearing Jkt 259001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 Currently, SCORe currently utilizes two measures for participation and discounts: (1) the Qualifying Tiers, which determine whether a firm qualifies for the discounts in either Tier A or Tier B and (2) the Discount Tiers, which determine the Originating Firm’s applicable discount tiers and corresponding discounts. Under the current program, to determine an Originating Firm’s Qualifying Tier, the Originating Firm’s total Retail volume in the Qualifying Classes will be divided by the Originating Firm’s total Customer volume, Retail and non-Retail, in the Qualifying Classes. Based on the percentage result, an Originating Firm qualifies for Tier A or Tier B discounts. To determine the Discount Tier, an Originating Firm’s Retail volume in the Qualifying Classes will be divided by total Retail volume in the Qualifying Classes executed on the Exchange. The program then provides a discount per retail contract, based on the determined Qualifying Tier and Discount Tier thereunder. Currently, the program sets forth three discount tiers for Qualifying Tier A, with applicable discounts ranging from $0 to $0.08 per retail contract, and five discount tiers for Qualifying Tier B, with applicable discounts ranging from $0 to $0.25 per retail contract. The Exchange proposes to streamline the program by eliminating the Qualifying Tiers construct. As amended, SCORe would utilize only one measure for participation and discount (i.e., the Discount Tiers). All Originating Firms would be subject to the same discount tier structure, which determines the corresponding applicable discounts. The Exchange next proposes to amend the discount tier structure for the Discount Tiers. Specifically, the Exchange proposes to consolidate the program into four discount tiers based on qualifying volume, i.e., Discount Tiers 1–4, with corresponding discounts, as set forth below. 1 2 3 4 Tier Retail volume percentage in qualifying classes Discount per retail contract ............ ............ ............ ............ 0.00%–5.00% ...................... Above 5.00%–21.00% ......... Above 21.00%–31.00% ....... Above 31.00%–100.00% ..... $0.00 0.04 0.05 0.14 The discount tier structure for the Discount Tiers will continue to be based on the same calculation, i.e., to determine the Discount Tier, an Options Clearing Corporation (‘‘OCC’’) number on any transaction which does not also include a Clearing Member Trading Agreement (‘‘CMTA’’) OCC clearing number or (b) the CMTA in the case of any transaction which does include a CMTA OCC clearing number. E:\FR\FM\15FEN1.SGM 15FEN1 Federal Register / Vol. 88, No. 31 / Wednesday, February 15, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES Originating Firm’s Retail volume in the Qualifying Classes will be divided by total Retail volume in the Qualifying Classes executed on the Exchange. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.4 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 5 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 6 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange also believes the proposed rule change is consistent with Section 6(b)(4) of the Act,7 which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders and other persons using its facilities. First, the Exchange believes the proposal to eliminate the utilization of Qualifying Tiers as a measure for its SCORe program is reasonable because it no longer wishes to consider this metric as part of the program’s participation and discounts, and it is not required to do so. The Exchange also notes that the Qualifying Tier measure was only one part of SCORe and believes the intention of the program will continue to be achieved through utilization of the Discount Tiers measure. The Exchange believes the proposed changes to eliminate the utilization of Qualifying Tiers as a measure for its SCORe program and to consolidate the discount tier structure into four Discount Tiers are reasonable because it eliminates potential program complexity and provides for a simpler calculation in 4 15 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 6 Id. 7 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 21:16 Feb 14, 2023 Jkt 259001 determining qualifying thresholds and applicable discounts. Further, the Exchange believes the amended discount tier structure, including qualifying thresholds for the proposed four Discount Tiers and corresponding applicable discounts, remain equitable and reasonable by adequately considering the elimination of the Qualifying Tier and not materially changing the program. The Exchange believes SCORe, currently and as amended, continues to provide an incremental incentive for Originating Firms to strive for the highest tier level, which provides increasingly higher discounts. As such, the changes are designed to encourage increased Retail volume in the Qualifying Classes, which provides increased volume and greater trading opportunities for all market participants. The Exchange believes the proposed change is equitable and not unfairly discriminatory because the qualifying volume thresholds apply to all registered Originating Firms uniformly. Additionally, while the Exchange has no way of predicting with certainty how many and which Originating Firms will qualify for which Discount Tier, the Exchange anticipates at least two Originating Firms will qualify for Tier 2, one Originating Firm will qualify for Tier 3, and one Originating Firm will qualify for Tier 4, to receive the applicable discounts for each Tier. The Exchange does not believe the proposed discount will adversely impact any Originating Firm’s pricing. Rather, should an Originating Firm not meet the proposed criteria, the Originating Firm will merely not receive the proposed discount. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed changes to the SCORe program will impose any burden on intramarket competition because the proposed changes apply to all registered Originating Firms uniformly, in that all Originating Firms will be subject to the same qualifying thresholds for the proposed four Discount Tiers and corresponding applicable discounts. The Exchange does not believe that the proposed rule changes will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the Qualifying Classes are products that only trade on the PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 9939 Exchange. To the extent that the proposed changes make the Exchange a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become Cboe Options market participants. 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 8 and paragraph (f) of Rule 19b–4 9 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– CBOE–2023–011 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2023–011. 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 8 15 9 17 E:\FR\FM\15FEN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 15FEN1 9940 Federal Register / Vol. 88, No. 31 / Wednesday, February 15, 2023 / Notices post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2023–011 and should be submitted on or before March 8, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–03161 Filed 2–14–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96861; File No. SR– CboeBZX–2022–038] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 1, To Amend Rule 11.28(a) To Extend the MOC Cut-Off Time for Cboe Market Close February 9, 2023. ddrumheller on DSK120RN23PROD with NOTICES I. Introduction On August 5, 2022, Cboe BZX Exchange, Inc. (‘‘BZX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 10 17 1 15 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). VerDate Sep<11>2014 21:16 Feb 14, 2023 Jkt 259001 19b–4 thereunder,2 a proposed rule change to amend BZX Rule 11.28(a) to extend the cut-off time for accepting Market-on-Close orders entered for participation in the Cboe Market Close. The proposed rule change was published for comment in the Federal Register on August 24, 2022.3 On October 4, 2022, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 On November 11, 2022, the Exchange submitted Amendment No. 1 to the proposed rule change.6 Amendment No. 1 was published for comment in the Federal Register and, under Section 19(b)(2)(B) of the Act,7 the Commission instituted proceedings to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 1.8 The Commission has received no comments on the proposed rule change. This order approves the proposed rule change, as modified by Amendment No. 1. II. Description of the Proposal, as Modified by Amendment No. 1 Cboe Market Close (‘‘CMC’’) provides the Exchange’s Members 9 an optional closing match process for non-BZXlisted securities. Currently, pursuant to BZX Rule 11.28(a), Members may enter, cancel, or replace Market-on-Close (‘‘MOC’’) orders designated for participation in CMC beginning at 6:00 a.m.10 up to 3:35 p.m. (‘‘MOC Cut-Off Time’’).11 The Exchange states that the CMC closing match process—the matching of all buy and sell MOC orders entered into the BZX system by time priority at the MOC Cut-Off Time, the 2 17 CFR 240.19b–4. Securities Exchange Act Release No. 95529 (August 17, 2022), 87 FR 52092. 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 95967, 87 FR 61425 (October 11, 2022). 6 Amendment No. 1 amended and superseded the proposed rule change as originally filed. Amendment No. 1 is available on the Commission’s website at: https://www.sec.gov/comments/srcboebzx-2022-038/srcboebzx2022038.htm. 7 15 U.S.C. 78s(b)(2)(B). 8 See Securities Exchange Act Release No. 96359 (November 18, 2022), 87 FR 72527 (November 25, 2022) (‘‘Order Instituting Proceedings’’). 9 The term ‘‘Member’’ means any registered broker or dealer that has been admitted to membership in the Exchange. See BZX Rule 1.5(n), definition of ‘‘Member.’’ 10 All times referenced in this order are Eastern Time. 11 See Order Instituting Proceedings, 87 FR at 72528. 3 See PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 electronic notification to Members of any unmatched MOC orders, and the dissemination by the Exchange in the Cboe Auction Feed of the total size of all buy and sell orders matched via CMC—generally occurs within microseconds.12 The Exchange now proposes to move the MOC Cut-Off Time from 3:35 p.m. to 3:49 p.m. The Exchange states that its Members have requested an MOC CutOff Time that is closer to the end of its regular trading hours (4:00 p.m.) so that they may retain control of their trading for a longer period and better manage their trading at the close.13 The Exchange also states that its Members have indicated that extending the MOC Cut-Off Time to 3:49 p.m. will help make CMC a more comparable alternative to the New York Stock Exchange (‘‘NYSE’’) and Nasdaq,14 which have extended the MOC cut-off times for their closing auctions closer to 4:00 p.m. (to 3:50 p.m. and 3:55 p.m., respectively).15 The Exchange further states that closing price match services offered by off-exchange venues, including alternative trading systems, have grown in popularity, and that such venues offer an MOC cut-off time as close as 30 seconds before the primary exchanges’ cut-off times.16 III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder.17 In particular, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Act,18 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative 12 See id. at 72530 n.34. The Exchange states that, while the duration may vary, the total matching process typically takes a fraction of a second—about 948 microseconds—with the maximum being around one second. See id. at 72531 n.41. 13 See id. at 72529. The Exchange posits that market participants may prefer to trade as close to 4:00 p.m. as possible because doing so can provide them with more time to seek better priced liquidity for their orders, as well as give them more time to determine the size of their outstanding orders that they may decide to commit to CMC, the primary exchanges’ closing auctions, or services offered by off-exchange venues. See id. at 72529–31. 14 See id. at 72529. 15 See id. at 72528 and n.25. 16 See id. at 72528–59 and n.27. 17 In approving this proposed rule change, as modified by Amendment No. 1, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 18 15 U.S.C. 78f(b)(5). E:\FR\FM\15FEN1.SGM 15FEN1

Agencies

[Federal Register Volume 88, Number 31 (Wednesday, February 15, 2023)]
[Notices]
[Pages 9938-9940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03161]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96856; File No. SR-CBOE-2023-011]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Select Customer Options Reduction Program

February 9, 2023.
    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 February 1, 2023, Cboe Exchange, Inc. (the ``Exchange'' or 
``Cboe Options'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend the Select Customer Options Reduction program. The text of the 
proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Select Customer Options 
Reduction program (``SCORe''), effective February 1, 2023.
    By way of background, SCORe is a discount program for Retail, Non-
FLEX Customer (``C'' origin code) volume in the following options 
classes: SPX (including SPXW), VIX, RUT, MXEA, MXEF & XSP (``Qualifying 
Classes''). The SCORe program is available to any Trading Permit Holder 
(``TPH'') Originating Clearing Firm or non-TPH Originating Clearing 
Firm that sign up for the program.\3\
---------------------------------------------------------------------------

    \3\ For this program, an ``Originating Clearing Firm'' is 
defined as either (a) the executing clearing Options Clearing 
Corporation (``OCC'') number on any transaction which does not also 
include a Clearing Member Trading Agreement (``CMTA'') OCC clearing 
number or (b) the CMTA in the case of any transaction which does 
include a CMTA OCC clearing number.
---------------------------------------------------------------------------

    Currently, SCORe currently utilizes two measures for participation 
and discounts: (1) the Qualifying Tiers, which determine whether a firm 
qualifies for the discounts in either Tier A or Tier B and (2) the 
Discount Tiers, which determine the Originating Firm's applicable 
discount tiers and corresponding discounts. Under the current program, 
to determine an Originating Firm's Qualifying Tier, the Originating 
Firm's total Retail volume in the Qualifying Classes will be divided by 
the Originating Firm's total Customer volume, Retail and non-Retail, in 
the Qualifying Classes. Based on the percentage result, an Originating 
Firm qualifies for Tier A or Tier B discounts. To determine the 
Discount Tier, an Originating Firm's Retail volume in the Qualifying 
Classes will be divided by total Retail volume in the Qualifying 
Classes executed on the Exchange. The program then provides a discount 
per retail contract, based on the determined Qualifying Tier and 
Discount Tier thereunder. Currently, the program sets forth three 
discount tiers for Qualifying Tier A, with applicable discounts ranging 
from $0 to $0.08 per retail contract, and five discount tiers for 
Qualifying Tier B, with applicable discounts ranging from $0 to $0.25 
per retail contract.
    The Exchange proposes to streamline the program by eliminating the 
Qualifying Tiers construct. As amended, SCORe would utilize only one 
measure for participation and discount (i.e., the Discount Tiers). All 
Originating Firms would be subject to the same discount tier structure, 
which determines the corresponding applicable discounts.
    The Exchange next proposes to amend the discount tier structure for 
the Discount Tiers. Specifically, the Exchange proposes to consolidate 
the program into four discount tiers based on qualifying volume, i.e., 
Discount Tiers 1-4, with corresponding discounts, as set forth below.

------------------------------------------------------------------------
                                                                Discount
                                Retail volume percentage in       per
            Tier                    qualifying classes           retail
                                                                contract
------------------------------------------------------------------------
1..........................  0.00%-5.00%.....................      $0.00
2..........................  Above 5.00%-21.00%..............       0.04
3..........................  Above 21.00%-31.00%.............       0.05
4..........................  Above 31.00%-100.00%............       0.14
------------------------------------------------------------------------

    The discount tier structure for the Discount Tiers will continue to 
be based on the same calculation, i.e., to determine the Discount Tier, 
an

[[Page 9939]]

Originating Firm's Retail volume in the Qualifying Classes will be 
divided by total Retail volume in the Qualifying Classes executed on 
the Exchange.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\4\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \5\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \6\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. The Exchange also believes the proposed rule 
change is consistent with Section 6(b)(4) of the Act,\7\ which requires 
that Exchange rules provide for the equitable allocation of reasonable 
dues, fees, and other charges among its Trading Permit Holders and 
other persons using its facilities.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ Id.
    \7\ 15 U.S.C. 78f(b)(4).
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    First, the Exchange believes the proposal to eliminate the 
utilization of Qualifying Tiers as a measure for its SCORe program is 
reasonable because it no longer wishes to consider this metric as part 
of the program's participation and discounts, and it is not required to 
do so. The Exchange also notes that the Qualifying Tier measure was 
only one part of SCORe and believes the intention of the program will 
continue to be achieved through utilization of the Discount Tiers 
measure. The Exchange believes the proposed changes to eliminate the 
utilization of Qualifying Tiers as a measure for its SCORe program and 
to consolidate the discount tier structure into four Discount Tiers are 
reasonable because it eliminates potential program complexity and 
provides for a simpler calculation in determining qualifying thresholds 
and applicable discounts. Further, the Exchange believes the amended 
discount tier structure, including qualifying thresholds for the 
proposed four Discount Tiers and corresponding applicable discounts, 
remain equitable and reasonable by adequately considering the 
elimination of the Qualifying Tier and not materially changing the 
program.
    The Exchange believes SCORe, currently and as amended, continues to 
provide an incremental incentive for Originating Firms to strive for 
the highest tier level, which provides increasingly higher discounts. 
As such, the changes are designed to encourage increased Retail volume 
in the Qualifying Classes, which provides increased volume and greater 
trading opportunities for all market participants. The Exchange 
believes the proposed change is equitable and not unfairly 
discriminatory because the qualifying volume thresholds apply to all 
registered Originating Firms uniformly. Additionally, while the 
Exchange has no way of predicting with certainty how many and which 
Originating Firms will qualify for which Discount Tier, the Exchange 
anticipates at least two Originating Firms will qualify for Tier 2, one 
Originating Firm will qualify for Tier 3, and one Originating Firm will 
qualify for Tier 4, to receive the applicable discounts for each Tier. 
The Exchange does not believe the proposed discount will adversely 
impact any Originating Firm's pricing. Rather, should an Originating 
Firm not meet the proposed criteria, the Originating Firm will merely 
not receive the proposed discount.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe that the proposed changes to the SCORe program will impose any 
burden on intramarket competition because the proposed changes apply to 
all registered Originating Firms uniformly, in that all Originating 
Firms will be subject to the same qualifying thresholds for the 
proposed four Discount Tiers and corresponding applicable discounts. 
The Exchange does not believe that the proposed rule changes will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
Qualifying Classes are products that only trade on the Exchange. To the 
extent that the proposed changes make the Exchange a more attractive 
marketplace for market participants at other exchanges, such market 
participants are welcome to become Cboe Options market participants.

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 \8\ and paragraph (f) of Rule 19b-4 \9\ 
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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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-CBOE-2023-011 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2023-011. 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

[[Page 9940]]

post all comments on the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent 
amendments, all written statements with respect to the proposed rule 
change that are filed with the Commission, and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change.
    Persons submitting comments are cautioned that we do not redact or 
edit personal identifying information from comment submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-CBOE-2023-011 
and should be submitted on or before March 8, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-03161 Filed 2-14-23; 8:45 am]
BILLING CODE 8011-01-P
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