Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 12427-12431 [2023-03907]

Download as PDF Federal Register / Vol. 88, No. 38 / Monday, February 27, 2023 / Notices Conference Room, 11555 Rockville Pike, Rockville, Maryland. The public is invited to attend the Commission’s meeting in person or watch live via webcast at the Web address—https:// video.nrc.gov/. There are no meetings scheduled for the week of April 3, 2023. CONTACT PERSON FOR MORE INFORMATION: For more information or to verify the status of meetings, contact Wesley Held at 301–287–3591 or via email at Wesley.Held@nrc.gov. The NRC is holding the meetings under the authority of the Government in the Sunshine Act, 5 U.S.C. 552b. Dated: February 22, 2023. For the Nuclear Regulatory Commission. Wesley W. Held, Policy Coordinator, Office of the Secretary. [FR Doc. 2023–03996 Filed 2–22–23; 4:15 pm] BILLING CODE 7590–01–P POSTAL SERVICE International Product Change—Priority Mail Express International, Priority Mail International, First-Class Package International Service & Commercial ePacket Agreement ACTION: Postal ServiceTM. Notice. The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a Priority Mail Express International, Priority Mail International, First-Class Package International Service & Commercial ePacket contract to the list of Negotiated Service Agreements in the Competitive Product List in the Mail Classification Schedule. SUMMARY: DATES: Date of notice: February 27, 2023. FOR FURTHER INFORMATION CONTACT: Christopher C. Meyerson, (202) 268– 7820. The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on February 17, 2023, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express International, Priority Mail International, First-Class Package International Service & Commercial ePacket Contract 13 to Competitive Product List. Documents ddrumheller on DSK120RN23PROD with NOTICES SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 20:06 Feb 24, 2023 Jkt 259001 Sarah Sullivan, Attorney, Ethics & Legal Compliance. [FR Doc. 2023–03954 Filed 2–24–23; 8:45 am] Dated: February 23, 2023. Vanessa A. Countryman, Secretary. [FR Doc. 2023–04079 Filed 2–23–23; 11:15 am] BILLING CODE 8011–01–P BILLING CODE 7710–12–P Week of April 3, 2023—Tentative AGENCY: are available at www.prc.gov, Docket Nos. MC2023–112 and CP2023–115. 12427 SECURITIES AND EXCHANGE COMMISSION SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96954; File No. SR– CboeBZX–2023–011] Sunshine Act Meetings Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule 2:00 p.m. on Thursday, March 2, 2023. PLACE: The meeting will be held via remote means and/or at the Commission’s headquarters, 100 F Street NE, Washington, DC 20549. STATUS: This meeting will be closed to the public. MATTERS TO BE CONSIDERED: Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present. In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission’s website at https:// www.sec.gov. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting. The subject matter of the closed meeting will consist of the following topics: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; Resolution of litigation claims; and Other matters relating to examinations and enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters. CONTACT PERSON FOR MORE INFORMATION: For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551–5400. Authority: 5 U.S.C. 552b. TIME AND DATE: PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 February 21, 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 14, 2023, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ equities/regulation/rule_filings/bzx/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 2 15 U.S.C. 78s(b)(1). 17 CFR 240.19b–4. E:\FR\FM\27FEN1.SGM 27FEN1 12428 Federal Register / Vol. 88, No. 38 / Monday, February 27, 2023 / Notices 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 to: (i) add a Tape A Incentive Tier, (ii) modify Add/Remove Volume Tier 1, (iii) eliminate fee code ZA and replace it with new fee codes ZV, ZB, and ZY, and (iv) add the new fees code ZV, ZB and ZY to Lead Market Markers (‘‘LMMs’’) Add Tiers 2, 3, and 4, respectively.3 The Exchange first notes that it operates in a highly competitive market in which market participants, including issuers of securities, LMMs, and other liquidity providers, can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 16 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues that do not have similar self-regulatory responsibilities under the Exchange Act, to which market participants may direct their order flow. Based on publicly available information,4 no single registered equities exchange has more than 15% of the market share. Thus, in such a lowconcentrated 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. The Exchange proposes to amend its Fee Schedule, as described below. ddrumheller on DSK120RN23PROD with NOTICES Tape A Incentive Tier For order in securities priced at or above $1.00, the Exchange currently provides a standard rebate of $0.00160 per share for displayed orders that add liquidity in Tape A securities, which yield fee code V 5. The Exchange proposes to amend footnote 12 of the 3 The Exchange initially filed the proposed fee changes on February 1, 2023 (SR–CboeBZX–2023– 005). On February 7, 2023, the Exchange withdrew that filing and submitted SR–CboeBZX–2023–009. On February 14, 2023, the Exchange withdrew that filing and submitting this proposal. 4 See Cboe Global Markets, U.S. Equities Market Volume Summary, Month-to-Date (January 27, 2023), available at https://markets.cboe.com/us// market_statistics/. 5 Orders yielding Fee Code ‘‘V’’ are displayed orders adding liquidity to BZX (Tape A). VerDate Sep<11>2014 20:06 Feb 24, 2023 Jkt 259001 Fee Schedule to adopt a Tape A Incentive Tier, which would be available for qualifying orders that yield fee code V. Particularly, under the proposed Tape A Incentive Tier, Members may receive an additional $0.0002 per share rebate where they have a: Step-Up ADAV 6 from January 2023 greater than or equal to 5,000,000; a Tape A ADAV greater than or equal to 0.30% of the Tape A TCV; 7 and an ADV 8 greater than or equal to 0.50% of the TCV. The proposed changes are designed to encourage Members to increase their displayed liquidity in Tape A securities on the Exchange, thereby contributing to a deeper and more liquid market, which benefits all market participants and provides greater execution opportunities on the Exchange. Add/Remove Volume Tier 1 Under footnote 1 of the Fee Schedule, the Exchange currently offers various Add/Remove Volume Tiers. In particular, the Exchange offers six displayed add volume tiers that each provide an enhanced rebate for Members’ qualifying orders yielding fee codes B,9 V, or Y,10 where a Member reaches certain add volume-based criteria. Currently Tier 1 is as follows: • Tier 1 provides a rebate of $0.0020 per share to qualifying orders (i.e., orders yielding fee codes B, V, or Y) where the Member has an ADAV as a percentage of TCV equal to or greater than 0.15%, or the Member has an ADAV equal to or greater than 15,000,000. The Exchange proposes to amend the criteria of Tier 1. Specifically, the Exchange proposes to amend Tier 1 as follows: • Proposed Tier 1 will provide a rebate of $0.0020 per share to qualifying orders (i.e., orders yielding fee codes B, 6 ‘‘Step-Up ADAV’’ means ADAV in the relevant baseline month subtracted from current ADAV. ADAV means average daily added volume calculated as the numbers of share added per day and is calculated on a monthly basis. 7 ‘‘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. 8 ‘‘ADV’’ means average daily volume calculated as the number of shares added or removed, combined, per day. ADV is calculated on a monthly basis. 9 Orders yielding Fee Code ‘‘B’’ are displayed orders adding liquidity to BZX (Tape B). For order in securities priced at or above $1.00, orders yielding Fee Code B will receive a standard rebate of $0.00160 per share. 10 Orders yielding Fee Code ‘‘Y’’ are displayed orders adding liquidity to BZX (Tape C). For order in securities priced at or above $1.00, orders yielding Fee Code C will receive a standard rebate of $0.00160 per share. PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 V, or Y) where the Member has an ADAV as a percentage of TCV equal to or greater than 0.05%, or the Member has an ADAV equal to or greater than 5,000,000. Fee Codes ZV, ZB, ZY Currently, fee code ZA is appended to retail orders that add liquidity and receive a rebate of $0.00320 per share. The Exchange proposes to eliminate fee code ZA and replace it with fee codes ZV, ZB and ZY. Particularly, the Exchange proposes to separate fee code ZA into three separate fee codes, each representing a different Tape for retail orders that add liquidity. The Exchange proposes to adopt fee code ZV for Tape A retail orders that add liquidity; fee code ZB for Tape B retail orders that add liquidity; and fee code ZY for Tape C retail orders that add liquidity. Retail orders appended with ZV, ZB, and ZY will continue to receive a rebate of $0.00320 per share. The Exchange notes that it currently maintains separate fee codes based on Tapes for other types of orders as well.11 Finally, the Exchange proposes to include orders yielding fee codes ZV, ZB, and ZY as part of its LMM Program. Under the Exchange’s LMM Program, the Exchange offers daily incentives for LMMs in securities listed on the Exchange for which the LMM meets certain Minimum Performance Standards.12 Such daily incentives are determined based on the number of Cboe-listed securities for which the LMM meets such Minimum Performance Standards and the average auction volume across such securities. Generally, the more LMM Securities 13 for which the LMM meets the Minimum Performance Standards and the higher the auction volume across those securities, the greater the total daily payment to the LMM. Currently, the Exchange offers four LMM Add Volume Tiers under footnote 14(D) of the Fee 11 See e.g., Cboe BZX U.S. Equities Exchange Fee Schedule, Fee Codes HV, HB, and HY which fee codes represent non-displayed orders that add liquidity to BZX for Tapes A, B, and C respectively. 12 As defined in Rule 11.8(e)(1)(E), the term ‘‘Minimum Performance Standards’’ means a set of standards applicable to an LMM that may be determined from time to time by the Exchange. Such standards will vary between LMM Securities depending on the price, liquidity, and volatility of the LMM Security in which the LMM is registered. The performance measurements will include: (A) Percent of time at the NBBO; (B) percent of executions better than the NBBO; (C) average displayed size; and (D) average quoted spread. For additional detail, see Original LMM Filing. 13 As defined in Rule 11.8(e)(1)(D), the term ‘‘LMM Security’’ means a Listed Security that has an LMM. As defined in Rule 11.8(e)(1)(B), the term ‘‘Listed Security’’ means any ETP or any Primary Equity Security or Closed-End Fund listed on the Exchange pursuant to Rule 14.8 or 14.9. E:\FR\FM\27FEN1.SGM 27FEN1 Federal Register / Vol. 88, No. 38 / Monday, February 27, 2023 / Notices Schedule, which provides an additional rebate for applicable LMM orders. The Exchange proposes to update applicable fee codes for LMM Add Volume Tiers 2, 3, and 4, to include new fee codes ZV, ZB, and ZY, respectively. Specifically, the Exchange proposes to: amend LMM Add Volume Tier 2 (which provides an enhanced rebate for adding displayed liquidity in Tape A securities) to apply to orders yielding fee code ZV (in addition to fee codes V and HV 14); amend LMM Add Volume Tier 3 (which provides and enhanced rebate for adding displayed liquidity in Tape B securities) to apply to orders yielding fee code ZB (in addition to fee codes B and HB 15); and for LMM Add Volume Tier 4 (which provides and enhanced rebate for adding displayed liquidity in Tape C securities) to apply to orders yielding fee code ZY (in addition to fee codes Y and HY 16). ddrumheller on DSK120RN23PROD with NOTICES 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.17 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 18 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) 19 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. Additionally, the Exchange believes the proposed rule change is consistent with Section 6(b)(4) of the Act,20 which requires that Exchange rules provide for the equitable allocation of reasonable 14 Orders yielding Fee Code ‘‘HV’’ are nondisplayed orders adding liquidity to BZX (Tape A). 15 Orders yielding Fee Code ‘‘HB’’ are nondisplayed orders adding liquidity to BZX (Tape B). 16 Orders yielding Fee Code ‘‘HY’’ are nondisplayed orders adding liquidity to BZX (Tape C). 17 15 U.S.C. 78f(b). 18 15 U.S.C. 78f(b)(5). 19 Id. 20 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 20:06 Feb 24, 2023 Jkt 259001 dues, fees, and other charges among its Members and other persons using its facilities. The Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The proposed rule changes reflect a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance market quality to the benefit of all Members. The Exchange notes that relative volumebased incentives and discounts have been widely adopted by exchanges, including the Exchange, 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. Additionally, as noted above, the Exchange operates in highly competitive market. The Exchange is only one of several equity venues to which market participants may direct their order flow, and it represents a small percentage of the overall market. It is also only one of several maker-taker exchanges. Competing equity exchanges offer similar 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. These competing pricing schedules, moreover, are presently comparable to those that the Exchange provides, including the pricing of comparable criteria and/or fees and rebates. The Exchange believes the proposed addition of the Tape A Incentive Tier, as well as the proposed modifications to Add/Remove Volume Tier 1, are reasonable, fair and equitable, and not unfairly discriminatory because the tiers provide additional opportunities for all Members to meet the tier criteria and receive the corresponding enhanced rebate for each tier if such criteria is met. Furthermore, the Exchange believes that the proposed new Tape A Incentive Tier and modified Add/ Remove Volume Tier 1 are reasonable as they serve to incentivize Members to increase their liquidity adding, displayed volume, which benefit all market participants by incentivizing continuous liquidity and thus, deeper, PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 12429 more liquid markets as well as increased execution opportunities. The Exchange notes that it is adding a new incentive tier applicable to Tape A securities but not other securities because it already has Tape B Incentive (and Quoting) Tiers to similarly incentive liquidity in Tape B securities. The Exchange has no obligation to have incentive tiers for any securities, and the Exchange believes other rebate programs currently and as proposed to be offered for adding liquidity to Tape C securities provides sufficient incentive to add liquidity in those securities. Particularly, the proposed incentives to provide displayed liquidity are designed to incentivize continuous displayed liquidity, which signals other market participants to take the additional execution opportunities provided by such liquidity. This overall increase in activity deepens the Exchange’s liquidity pool, offers additional cost savings, supports the quality of price discovery, promotes market transparency and improves market quality for all investors. In addition to this, the Exchange believes that the proposal represents an equitable allocation of rebates and is not unfairly discriminatory because all Members will continue to be eligible for the Add/Remove Volume Tier 1, as amended, as well as for the new Tape A Incentive Tier, and would receive the proposed rebate if such criteria is met. The Exchange notes the proposed criteria for Add/Remove Volume Tier 1 is less stringent than the current criteria, and thus will be easier for Members to meet. Without having a view of activity on other markets and off-exchange venues, the Exchange has no way of knowing whether these proposed changes would definitely result in any Members qualifying for the proposed Tape A Incentive Tier and modified Add/ Remove Volume Tier 1. While the Exchange has no way of predicting with certainty how the proposed changes will impact Member activity, the Exchange anticipates six Members will be able to satisfy the criteria proposed under the new Tape A Incentive Tier and up to eight Members will be able to satisfy the modified criteria proposed under Add/ Remove Volume Tier 1. The Exchange also notes that the proposed changes will not adversely impact any Member’s ability to qualify for reduced fees or 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 proposed amendment to eliminate fee E:\FR\FM\27FEN1.SGM 27FEN1 12430 Federal Register / Vol. 88, No. 38 / Monday, February 27, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES code ZA and replace it with new fee codes ZV, ZB and ZY is reasonable, as the Exchange is simply recategorizing retail orders that add liquidity and yield fee code ZA by distinguishing each order based on Tapes. The Exchange notes that it currently maintains separate fee codes based on Tapes for other types of orders as well.21 Further, the Exchange believe that adding the new fees code ZV, ZB and ZY to LMM Add Tiers 2, 3, and 4, respectively, is reasonable because such fee codes correspond to the criteria for each relevant LMM Add Tier. Specifically, LMM Add Tier 2 relates to orders adding liquidity in Tape A Securities, and proposed fee code ZV applies to retail orders adding liquidity in Tape A Securities; LMM Add Tier 3 relates to orders adding liquidity in Tape B Securities, and proposed fee code ZB applies to retail orders adding liquidity in Tape B Securities; and LMM Add Tier 4 relates to orders adding liquidity in Tape C Securities, and proposed fee code ZY applies to retail orders adding liquidity in Tape C Securities. Finally, the Exchange believes the proposal to recategorize retail orders adding liquidity and adding such fee codes to LMM Add Tiers is also equitable and not unfairly discriminatory because it applies to all Members. 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. Particularly, the proposed Tape A Incentive Tier and modified Add/Remove Volume Tier 1 do not impose a burden on intramarket competition that is not in furtherance of the Act in that each tier will be eligible to all Members equally, as all Members have the opportunity to submit orders in an attempt to satisfy the proposed criteria and receive the enhanced rebates associated with each tier. Furthermore, the Exchange believes that the criteria under proposed Tape A Incentive Tier and modified Add/ Remove Volume Tier 1 will continue to incentivize Members to submit additional liquidity to the Exchange and to increase their order flow on the Exchange generally, thereby contributing to a deeper and more liquid market. A deeper and more liquid market may promote price discovery and market quality on the Exchange to the benefit of all market participants and enhance the attractiveness of the Exchange as a trading venue, which the 21 Supra note 10. VerDate Sep<11>2014 20:06 Feb 24, 2023 Exchange believes, in turn, would continue to encourage market participants to direct additional order flow to the Exchange. Greater liquidity benefits all Members by providing more trading opportunities and encourages Members to send additional orders to the Exchange, thereby contributing to robust levels of liquidity, which benefits all market participants. The Exchange believes its proposal to eliminate fee code ZA and separate it into three fee codes (ZV, ZB, and ZY) will have no impact on competition, as it merely is a recategorization of a current fee code under the existing Fee Schedule. Further, the proposal to add such fee codes ZV, ZB, and ZY to LMM Add Tiers 2, 3, and 4, respectively, applies to all Members. Particularly, the proposed changes apply to all Members equally in that all Members continue to be eligible for the LMM Add Volume Tiers (and have the same opportunity to become an LMM Member), have a reasonable opportunity to meet the tiers’ criteria and will all receive the corresponding additional rebates if such criteria are met. The Exchange believes the proposed Tape A Incentive Tier, modified Add/ Remove Volume Tier 1, and fee code changes do not impose a burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed changes represent a significant departure from pricing currently offered by the Exchange or pricing offered by other equities exchanges. 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 changes will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. 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.22 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 22 Supra Jkt 259001 PO 00000 note 3. Frm 00124 Fmt 4703 Sfmt 4703 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.’’ 23 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’. . .’’.24 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 25 and paragraph (f) of Rule 19b–4 26 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 23 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 24 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782– 83 (December 9, 2008) (SR–NYSEArca–2006–21)). 25 15 U.S.C. 78s(b)(3)(A). 26 17 CFR 240.19b–4(f). E:\FR\FM\27FEN1.SGM 27FEN1 Federal Register / Vol. 88, No. 38 / Monday, February 27, 2023 / Notices change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: 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– CboeBZX–2023–011 on the subject line. Paper Comments ddrumheller on DSK120RN23PROD with NOTICES • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CboeBZX–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 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 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CboeBZX–2023–011 and should be submitted on or before March 20, 2023. VerDate Sep<11>2014 20:06 Feb 24, 2023 Jkt 259001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–03907 Filed 2–24–23; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION SBA Council on Underserved Communities Meeting U.S. Small Business Administration (SBA). ACTION: Notice of Federal advisory committee meeting. AGENCY: The SBA is issuing this notice to announce the location, date, time, and agenda for the fourth meeting of the SBA Council on Underserved Communities. The meeting will be in person for Council members and streamed live to the public. DATES: The meeting will be held on Tuesday, March 7th, 2023, from 10 a.m. to 1 p.m. Eastern Time. ADDRESSES: The Council on Underserved Communities will meet at SBA Headquarters at 409 3rd St. SW, Washington, DC 20024 and will be live streamed on Zoom for the public. Registration Link Here: https:// www.zoomgov.com/webinar/register/ WN_O1IyptJyTwmH5b9w2bDbgw. FOR FURTHER INFORMATION CONTACT: The meeting will be live streamed to the public, and anyone wishing to submit questions to the SBA Council on Underserved Communities can do so by submitting them via email to underservedcouncil@sba.gov, Additionally, if you need accommodations because of a disability or require additional information, please contact Tomas Kloosterman, SBA, Office of the Administrator, 409 Third Street SW, Washington, DC 20416, 202– 843–0475 or Tomas.Kloosterman@ sba.gov. SUPPLEMENTARY INFORMATION: Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C., appendix 2), SBA announces the meeting of the SBA Council on Underserved Communities (the ‘‘Council’’). The Council is tasked with providing advice, ideas and opinions on SBA programs and services and issues of interest to small businesses in underserved communities. For more information, please visit https:// www.sba.gov/cuc. The purpose of the meeting is to provide the Council with information SUMMARY: 27 17 PO 00000 CFR 200.30–3(a)(12). Frm 00125 Fmt 4703 Sfmt 4703 12431 on SBA’s efforts to support small businesses in underserved communities, as well as provide an opportunity for the Council to discuss its goals for the coming months. The Council will provide insights based on information they have heard from their communities and discuss areas of interest for further research and recommendation development. Dated: February 21, 2023. Andrienne Johnson, SBA Committee Management Officer. [FR Doc. 2023–03962 Filed 2–24–23; 8:45 am] BILLING CODE 8026–09–P DEPARTMENT OF TRANSPORTATION Federal Railroad Administration [Docket Number FRA–2017–0084] Petition for Extension of Waiver of Compliance Under part 211 of title 49 Code of Federal Regulations (CFR), this document provides the public notice that by letter dated December 28, 2022, Norfolk Southern Corporation (NS) petitioned the Federal Railroad Administration (FRA) for an extension of a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 214 (Railroad Workplace Safety). The relevant FRA Docket Number is FRA– 2017–0084. Specifically, NS requests to extend its relief from § 214.336(c), On-track safety procedures for certain roadway work groups and adjacent tracks, as it pertains to procedures for adjacent controlled track movements at 25 miles per hour (mph) or less. NS indicates this request is specific to a unique working group, the R–3 Dual Rail Gang (R–3 Gang), and the relief would only apply to this group. This group is a system-level production gang comprised of 78 employees and 40 roadway maintenance machines with the capability to remove both rails while simultaneously installing both new rails. NS seeks relief from the requirement of using the gauge position of the rail as the point for the plane that is not to be broken on the occupied track. Instead, NS seeks to use the removed rails of the occupied track as an envelope for on-ground work performed exclusively between these rails for the employees working in the R–3 Gang. NS asserts the R–3 Gang’s work can be performed safely. Additionally, NS seeks relief from the requirement that on-ground work be performed exclusively between the rails E:\FR\FM\27FEN1.SGM 27FEN1

Agencies

[Federal Register Volume 88, Number 38 (Monday, February 27, 2023)]
[Notices]
[Pages 12427-12431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03907]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96954; File No. SR-CboeBZX-2023-011]


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

February 21, 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 14, 2023, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to 
amend its Fee Schedule. The text of the proposed rule change is 
provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

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

[[Page 12428]]

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 to: (i) add a Tape 
A Incentive Tier, (ii) modify Add/Remove Volume Tier 1, (iii) eliminate 
fee code ZA and replace it with new fee codes ZV, ZB, and ZY, and (iv) 
add the new fees code ZV, ZB and ZY to Lead Market Markers (``LMMs'') 
Add Tiers 2, 3, and 4, respectively.\3\
---------------------------------------------------------------------------

    \3\ The Exchange initially filed the proposed fee changes on 
February 1, 2023 (SR-CboeBZX-2023-005). On February 7, 2023, the 
Exchange withdrew that filing and submitted SR-CboeBZX-2023-009. On 
February 14, 2023, the Exchange withdrew that filing and submitting 
this proposal.
---------------------------------------------------------------------------

    The Exchange first notes that it operates in a highly competitive 
market in which market participants, including issuers of securities, 
LMMs, and other liquidity providers, can readily direct order flow to 
competing venues if they deem fee levels at a particular venue to be 
excessive or incentives to be insufficient. More specifically, the 
Exchange is only one of 16 registered equities exchanges, as well as a 
number of alternative trading systems and other off-exchange venues 
that do not have similar self-regulatory responsibilities under the 
Exchange Act, to which market participants may direct their order flow. 
Based on publicly available information,\4\ no single registered 
equities exchange has more than 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. The Exchange proposes to 
amend its Fee Schedule, as described below.
---------------------------------------------------------------------------

    \4\ See Cboe Global Markets, U.S. Equities Market Volume 
Summary, Month-to-Date (January 27, 2023), available at https://markets.cboe.com/us//market_statistics/.
---------------------------------------------------------------------------

Tape A Incentive Tier
    For order in securities priced at or above $1.00, the Exchange 
currently provides a standard rebate of $0.00160 per share for 
displayed orders that add liquidity in Tape A securities, which yield 
fee code V \5\. The Exchange proposes to amend footnote 12 of the Fee 
Schedule to adopt a Tape A Incentive Tier, which would be available for 
qualifying orders that yield fee code V. Particularly, under the 
proposed Tape A Incentive Tier, Members may receive an additional 
$0.0002 per share rebate where they have a: Step-Up ADAV \6\ from 
January 2023 greater than or equal to 5,000,000; a Tape A ADAV greater 
than or equal to 0.30% of the Tape A TCV; \7\ and an ADV \8\ greater 
than or equal to 0.50% of the TCV. The proposed changes are designed to 
encourage Members to increase their displayed liquidity in Tape A 
securities on the Exchange, thereby contributing to a deeper and more 
liquid market, which benefits all market participants and provides 
greater execution opportunities on the Exchange.
---------------------------------------------------------------------------

    \5\ Orders yielding Fee Code ``V'' are displayed orders adding 
liquidity to BZX (Tape A).
    \6\ ``Step-Up ADAV'' means ADAV in the relevant baseline month 
subtracted from current ADAV. ADAV means average daily added volume 
calculated as the numbers of share added per day and is calculated 
on a monthly basis.
    \7\ ``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.
    \8\ ``ADV'' means average daily volume calculated as the number 
of shares added or removed, combined, per day. ADV is calculated on 
a monthly basis.
---------------------------------------------------------------------------

Add/Remove Volume Tier 1
    Under footnote 1 of the Fee Schedule, the Exchange currently offers 
various Add/Remove Volume Tiers. In particular, the Exchange offers six 
displayed add volume tiers that each provide an enhanced rebate for 
Members' qualifying orders yielding fee codes B,\9\ V, or Y,\10\ where 
a Member reaches certain add volume-based criteria. Currently Tier 1 is 
as follows:
---------------------------------------------------------------------------

    \9\ Orders yielding Fee Code ``B'' are displayed orders adding 
liquidity to BZX (Tape B). For order in securities priced at or 
above $1.00, orders yielding Fee Code B will receive a standard 
rebate of $0.00160 per share.
    \10\ Orders yielding Fee Code ``Y'' are displayed orders adding 
liquidity to BZX (Tape C). For order in securities priced at or 
above $1.00, orders yielding Fee Code C will receive a standard 
rebate of $0.00160 per share.
---------------------------------------------------------------------------

     Tier 1 provides a rebate of $0.0020 per share to 
qualifying orders (i.e., orders yielding fee codes B, V, or Y) where 
the Member has an ADAV as a percentage of TCV equal to or greater than 
0.15%, or the Member has an ADAV equal to or greater than 15,000,000.
    The Exchange proposes to amend the criteria of Tier 1. 
Specifically, the Exchange proposes to amend Tier 1 as follows:
     Proposed Tier 1 will provide a rebate of $0.0020 per share 
to qualifying orders (i.e., orders yielding fee codes B, V, or Y) where 
the Member has an ADAV as a percentage of TCV equal to or greater than 
0.05%, or the Member has an ADAV equal to or greater than 5,000,000.
Fee Codes ZV, ZB, ZY
    Currently, fee code ZA is appended to retail orders that add 
liquidity and receive a rebate of $0.00320 per share. The Exchange 
proposes to eliminate fee code ZA and replace it with fee codes ZV, ZB 
and ZY. Particularly, the Exchange proposes to separate fee code ZA 
into three separate fee codes, each representing a different Tape for 
retail orders that add liquidity. The Exchange proposes to adopt fee 
code ZV for Tape A retail orders that add liquidity; fee code ZB for 
Tape B retail orders that add liquidity; and fee code ZY for Tape C 
retail orders that add liquidity. Retail orders appended with ZV, ZB, 
and ZY will continue to receive a rebate of $0.00320 per share. The 
Exchange notes that it currently maintains separate fee codes based on 
Tapes for other types of orders as well.\11\
---------------------------------------------------------------------------

    \11\ See e.g., Cboe BZX U.S. Equities Exchange Fee Schedule, Fee 
Codes HV, HB, and HY which fee codes represent non-displayed orders 
that add liquidity to BZX for Tapes A, B, and C respectively.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to include orders yielding fee codes 
ZV, ZB, and ZY as part of its LMM Program. Under the Exchange's LMM 
Program, the Exchange offers daily incentives for LMMs in securities 
listed on the Exchange for which the LMM meets certain Minimum 
Performance Standards.\12\ Such daily incentives are determined based 
on the number of Cboe-listed securities for which the LMM meets such 
Minimum Performance Standards and the average auction volume across 
such securities. Generally, the more LMM Securities \13\ for which the 
LMM meets the Minimum Performance Standards and the higher the auction 
volume across those securities, the greater the total daily payment to 
the LMM. Currently, the Exchange offers four LMM Add Volume Tiers under 
footnote 14(D) of the Fee

[[Page 12429]]

Schedule, which provides an additional rebate for applicable LMM 
orders. The Exchange proposes to update applicable fee codes for LMM 
Add Volume Tiers 2, 3, and 4, to include new fee codes ZV, ZB, and ZY, 
respectively. Specifically, the Exchange proposes to: amend LMM Add 
Volume Tier 2 (which provides an enhanced rebate for adding displayed 
liquidity in Tape A securities) to apply to orders yielding fee code ZV 
(in addition to fee codes V and HV \14\); amend LMM Add Volume Tier 3 
(which provides and enhanced rebate for adding displayed liquidity in 
Tape B securities) to apply to orders yielding fee code ZB (in addition 
to fee codes B and HB \15\); and for LMM Add Volume Tier 4 (which 
provides and enhanced rebate for adding displayed liquidity in Tape C 
securities) to apply to orders yielding fee code ZY (in addition to fee 
codes Y and HY \16\).
---------------------------------------------------------------------------

    \12\ As defined in Rule 11.8(e)(1)(E), the term ``Minimum 
Performance Standards'' means a set of standards applicable to an 
LMM that may be determined from time to time by the Exchange. Such 
standards will vary between LMM Securities depending on the price, 
liquidity, and volatility of the LMM Security in which the LMM is 
registered. The performance measurements will include: (A) Percent 
of time at the NBBO; (B) percent of executions better than the NBBO; 
(C) average displayed size; and (D) average quoted spread. For 
additional detail, see Original LMM Filing.
    \13\ As defined in Rule 11.8(e)(1)(D), the term ``LMM Security'' 
means a Listed Security that has an LMM. As defined in Rule 
11.8(e)(1)(B), the term ``Listed Security'' means any ETP or any 
Primary Equity Security or Closed-End Fund listed on the Exchange 
pursuant to Rule 14.8 or 14.9.
    \14\ Orders yielding Fee Code ``HV'' are non-displayed orders 
adding liquidity to BZX (Tape A).
    \15\ Orders yielding Fee Code ``HB'' are non-displayed orders 
adding liquidity to BZX (Tape B).
    \16\ Orders yielding Fee Code ``HY'' are non-displayed orders 
adding liquidity to BZX (Tape C).
---------------------------------------------------------------------------

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.\17\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \18\ 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) \19\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. Additionally, the Exchange believes the proposed 
rule change is consistent with Section 6(b)(4) of the Act,\20\ which 
requires that Exchange rules provide for the equitable allocation of 
reasonable dues, fees, and other charges among its Members and other 
persons using its facilities.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
    \19\ Id.
    \20\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange operates in a highly competitive market in which 
market participants can readily direct order flow to competing venues 
if they deem fee levels at a particular venue to be excessive or 
incentives to be insufficient. The proposed rule changes reflect a 
competitive pricing structure designed to incentivize market 
participants to direct their order flow to the Exchange, which the 
Exchange believes would enhance market quality to the benefit of all 
Members. The Exchange notes that relative volume-based incentives and 
discounts have been widely adopted by exchanges, including the 
Exchange, 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. Additionally, as noted above, the Exchange operates in 
highly competitive market. The Exchange is only one of several equity 
venues to which market participants may direct their order flow, and it 
represents a small percentage of the overall market. It is also only 
one of several maker-taker exchanges. Competing equity exchanges offer 
similar 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. These competing 
pricing schedules, moreover, are presently comparable to those that the 
Exchange provides, including the pricing of comparable criteria and/or 
fees and rebates.
    The Exchange believes the proposed addition of the Tape A Incentive 
Tier, as well as the proposed modifications to Add/Remove Volume Tier 
1, are reasonable, fair and equitable, and not unfairly discriminatory 
because the tiers provide additional opportunities for all Members to 
meet the tier criteria and receive the corresponding enhanced rebate 
for each tier if such criteria is met. Furthermore, the Exchange 
believes that the proposed new Tape A Incentive Tier and modified Add/
Remove Volume Tier 1 are reasonable as they serve to incentivize 
Members to increase their liquidity adding, displayed volume, which 
benefit all market participants by incentivizing continuous liquidity 
and thus, deeper, more liquid markets as well as increased execution 
opportunities. The Exchange notes that it is adding a new incentive 
tier applicable to Tape A securities but not other securities because 
it already has Tape B Incentive (and Quoting) Tiers to similarly 
incentive liquidity in Tape B securities. The Exchange has no 
obligation to have incentive tiers for any securities, and the Exchange 
believes other rebate programs currently and as proposed to be offered 
for adding liquidity to Tape C securities provides sufficient incentive 
to add liquidity in those securities. Particularly, the proposed 
incentives to provide displayed liquidity are designed to incentivize 
continuous displayed liquidity, which signals other market participants 
to take the additional execution opportunities provided by such 
liquidity. This overall increase in activity deepens the Exchange's 
liquidity pool, offers additional cost savings, supports the quality of 
price discovery, promotes market transparency and improves market 
quality for all investors.
    In addition to this, the Exchange believes that the proposal 
represents an equitable allocation of rebates and is not unfairly 
discriminatory because all Members will continue to be eligible for the 
Add/Remove Volume Tier 1, as amended, as well as for the new Tape A 
Incentive Tier, and would receive the proposed rebate if such criteria 
is met. The Exchange notes the proposed criteria for Add/Remove Volume 
Tier 1 is less stringent than the current criteria, and thus will be 
easier for Members to meet.
    Without having a view of activity on other markets and off-exchange 
venues, the Exchange has no way of knowing whether these proposed 
changes would definitely result in any Members qualifying for the 
proposed Tape A Incentive Tier and modified Add/Remove Volume Tier 1. 
While the Exchange has no way of predicting with certainty how the 
proposed changes will impact Member activity, the Exchange anticipates 
six Members will be able to satisfy the criteria proposed under the new 
Tape A Incentive Tier and up to eight Members will be able to satisfy 
the modified criteria proposed under Add/Remove Volume Tier 1. The 
Exchange also notes that the proposed changes will not adversely impact 
any Member's ability to qualify for reduced fees or 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 proposed amendment to eliminate 
fee

[[Page 12430]]

code ZA and replace it with new fee codes ZV, ZB and ZY is reasonable, 
as the Exchange is simply recategorizing retail orders that add 
liquidity and yield fee code ZA by distinguishing each order based on 
Tapes. The Exchange notes that it currently maintains separate fee 
codes based on Tapes for other types of orders as well.\21\ Further, 
the Exchange believe that adding the new fees code ZV, ZB and ZY to LMM 
Add Tiers 2, 3, and 4, respectively, is reasonable because such fee 
codes correspond to the criteria for each relevant LMM Add Tier. 
Specifically, LMM Add Tier 2 relates to orders adding liquidity in Tape 
A Securities, and proposed fee code ZV applies to retail orders adding 
liquidity in Tape A Securities; LMM Add Tier 3 relates to orders adding 
liquidity in Tape B Securities, and proposed fee code ZB applies to 
retail orders adding liquidity in Tape B Securities; and LMM Add Tier 4 
relates to orders adding liquidity in Tape C Securities, and proposed 
fee code ZY applies to retail orders adding liquidity in Tape C 
Securities. Finally, the Exchange believes the proposal to recategorize 
retail orders adding liquidity and adding such fee codes to LMM Add 
Tiers is also equitable and not unfairly discriminatory because it 
applies to all Members.
---------------------------------------------------------------------------

    \21\ Supra note 10.
---------------------------------------------------------------------------

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. Particularly, the proposed 
Tape A Incentive Tier and modified Add/Remove Volume Tier 1 do not 
impose a burden on intramarket competition that is not in furtherance 
of the Act in that each tier will be eligible to all Members equally, 
as all Members have the opportunity to submit orders in an attempt to 
satisfy the proposed criteria and receive the enhanced rebates 
associated with each tier. Furthermore, the Exchange believes that the 
criteria under proposed Tape A Incentive Tier and modified Add/Remove 
Volume Tier 1 will continue to incentivize Members to submit additional 
liquidity to the Exchange and to increase their order flow on the 
Exchange generally, thereby contributing to a deeper and more liquid 
market. A deeper and more liquid market may promote price discovery and 
market quality on the Exchange to the benefit of all market 
participants and enhance the attractiveness of the Exchange as a 
trading venue, which the Exchange believes, in turn, would continue to 
encourage market participants to direct additional order flow to the 
Exchange. Greater liquidity benefits all Members by providing more 
trading opportunities and encourages Members to send additional orders 
to the Exchange, thereby contributing to robust levels of liquidity, 
which benefits all market participants.
    The Exchange believes its proposal to eliminate fee code ZA and 
separate it into three fee codes (ZV, ZB, and ZY) will have no impact 
on competition, as it merely is a recategorization of a current fee 
code under the existing Fee Schedule. Further, the proposal to add such 
fee codes ZV, ZB, and ZY to LMM Add Tiers 2, 3, and 4, respectively, 
applies to all Members. Particularly, the proposed changes apply to all 
Members equally in that all Members continue to be eligible for the LMM 
Add Volume Tiers (and have the same opportunity to become an LMM 
Member), have a reasonable opportunity to meet the tiers' criteria and 
will all receive the corresponding additional rebates if such criteria 
are met.
    The Exchange believes the proposed Tape A Incentive Tier, modified 
Add/Remove Volume Tier 1, and fee code changes do not impose a burden 
on intermarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that the proposed changes represent a significant departure from 
pricing currently offered by the Exchange or pricing offered by other 
equities exchanges. 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 changes will impair the 
ability of Members or competing venues to maintain their competitive 
standing in the financial markets. 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.\22\ 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.'' \23\ 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'. . .''.\24\
---------------------------------------------------------------------------

    \22\ Supra note 3.
    \23\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \24\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \25\ and paragraph (f) of Rule 19b-4 \26\ 
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

[[Page 12431]]

change should be approved or disapproved.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 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-CboeBZX-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-CboeBZX-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 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 a.m. and 3 
p.m. Copies of such filing also will be available for inspection and 
copying at the principal office of the Exchange.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CboeBZX-2023-011 and should 
be submitted on or before March 20, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
---------------------------------------------------------------------------

    \27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-03907 Filed 2-24-23; 8:45 am]
BILLING CODE 8011-01-P
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