Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 24839-24842 [2023-08523]

Download as PDF Federal Register / Vol. 88, No. 78 / Monday, April 24, 2023 / Notices 7000. Meeting information and updates may be found at www.nsf.gov/nsb. Christopher Blair, Executive Assistant to the National Science Board Office. [FR Doc. 2023–08643 Filed 4–20–23; 11:15 am] BILLING CODE 7555–01–P NEIGHBORHOOD REINVESTMENT CORPORATION Sunshine Act Meetings 2:00 p.m., Thursday, April 20, 2023. PLACE: 1255 Union Street NE, Fifth Floor, Washington, DC 20002. STATUS: Parts of this meeting will be open to the public. The rest of the meeting will be closed to the public. MATTERS TO BE CONSIDERED: Regular Board of Directors meeting. The General Counsel of the Corporation has certified that in his opinion, one or more of the exemptions set forth in the Government in the Sunshine Act, 5 U.S.C. 552b(c)(2) and (4) permit closure of the following portion(s) of this meeting: • Executive Session TIME AND DATE: ddrumheller on DSK120RN23PROD with NOTICES1 Agenda I. CALL TO ORDER II. Approval of Government in Sunshine Act Notice Waiver for a Meeting of the Board of Directors III. FY2022 External Audit Discussion with BDO Auditors IV. Sunshine Act Approval of Executive (Closed) Session V. Executive Session with BDO Auditors VI. Special Topic VII. Executive Session: Report from CEO VIII. Executive Session: Report from CFO IX. Executive Session: General Counsel Report X. Executive Session: NeighborWorks Compass Update XI. Action Item Approval of Meeting Minutes XII. Action Item Appointment of Adrianne Todman to Audit Committee XIII. Action Item CIGNA Special Delegation XIV. Action Item NW Compass: Strategy and Contracting Authority XV. Discussion Item March 16 Audit Committee Report XVI. Discussion Item Report from CIO XVII. Discussion Item IT Tech Support Contract—Request to Increase Contract Amount XVIII. Capital Corporation Update and Grant Request for June VerDate Sep<11>2014 18:50 Apr 21, 2023 Jkt 259001 XIX. Discussion Item Investment Policy Review XX. Discussion Item Expanded Spending Authority for Large Events XXI. Management Program Background and Updates XXII. Adjournment PORTIONS OPEN TO THE PUBLIC: Everything except the Executive Session. PORTIONS CLOSED TO THE PUBLIC: Executive Session. CONTACT PERSON FOR MORE INFORMATION: Lakeyia Thompson, Special Assistant, (202) 524–9940; Lthompson@nw.org. Lakeyia Thompson, Special Assistant. [FR Doc. 2023–08681 Filed 4–20–23; 11:15 am] BILLING CODE 7570–02–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97319; File No. SR– CboeBZX–2023–023] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule April 18, 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 April 3, 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 Options’’) 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. 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00089 Fmt 4703 Sfmt 4703 24839 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Fee Schedule, effective April 3, 2023. The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 16 options venues to which market participants may direct their order flow. Based on publicly available information, no single options exchange has more than 17% of the market share and currently the Exchange represents only approximately 5% of the market share.3 Thus, in such a low-concentrated and highly competitive market, no single options exchange, including the Exchange, possesses significant pricing power in the execution of option order flow. The Exchange believes that the ever-shifting market share among the exchanges from month to month demonstrates that market participants can shift order flow or discontinue to reduce use of certain categories of products, in response to fee changes. Accordingly, competitive forces constrain the Exchange’s transaction fees, and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. The Exchange’s Fee Schedule sets forth standard rebates and rates applied per contract. For example, the Exchange provides a rebate of $0.29 per contract for Market Maker orders that add liquidity in Penny Securities, yielding fee code PM. The Fee Codes and 3 See Cboe Global Markets U.S. Options Market Monthly Volume Summary (March 28, 2023), available at https://www.cboe.com/us/options/ market_statistics/. E:\FR\FM\24APN1.SGM 24APN1 24840 Federal Register / Vol. 88, No. 78 / Monday, April 24, 2023 / Notices Associated Fees section of the Fees Schedule also provide for certain fee codes associated with certain order types and market participants that provide for various other fees or rebates. Additionally, the Fee Schedule offers tiered pricing which provides Members 4 opportunities to qualify for higher rebates or reduced fees where certain volume criteria and thresholds Tier Tier Tier Tier Tier 1 2 3 4 Rebate per contract to add ........... ........... ........... ........... ($0.31) (0.38) (0.39) (0.40) Tier 5 ........... Tier 6 ........... (0.43) (0.44) Member has an ADAV 5 in Market Maker orders ≥0.15% of average OCV.6 Member has an ADAV in Market Maker orders ≥0.25% of average OCV. Member has an ADAV in Market Maker orders ≥0.40% of average OCV. (1) Member has an ADAV in Market Maker orders ≥0.45% of average OCV; and (2) Member has a Step-Up ADRV in Customer orders ≥0.05% of OCV from December 2022. Member has an ADAV in Market Maker orders ≥0.60% of average OCV. (1) Member has an ADAV in Market Maker orders ≥0.75% of average OCV; and (2) Member has an ADRV in Customer orders ≥0.50% of average OCV. ddrumheller on DSK120RN23PROD with NOTICES1 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.8 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 9 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. 4 See Exchange Rule 1.5(n). means average daily added volume calculated as the number of contracts added. 6 ‘‘OCC Customer Volume’’ or ‘‘OCV’’ means the total equity and ETF options volume that clears in the Customer range at the Options Clearing Corporation (‘‘OCC’’) for the month for which the 5 ‘‘ADAV’’ 18:50 Apr 21, 2023 for satisfying increasingly more stringent criteria. The Exchange proposes to update the Market Maker Penny Add Volume Tiers (i.e., applicable to orders yielding fee code PM) set forth in footnote 6 of the Fee Schedule. The Exchange currently provides opportunities for rebates per contract to add liquidity in Penny Securities as follows: Required criteria The Exchange proposes to amend these tiers to add new Tier 5 to provide a rebate of $0.41 per contract to add liquidity if a Member has (1) an ADAV in Market Maker orders greater than or equal to 0.50% of average OCV; and (2) a Step-Up ADAV in Market Maker orders in SPY greater than or equal to 0.05% of average OCV from December 2022.7 The Exchange also proposes a corresponding non-substantive amendment to update current Tiers 5 and 6 to Tiers 6 and 7, respectively. VerDate Sep<11>2014 are met. In response to the competitive environment, the Exchange also offers tiered pricing, which provides Members with opportunities to qualify for higher rebates or reduced fees where certain volume criteria and thresholds are met. Tiered pricing provides an incremental incentive for Members to strive for higher tier levels, which provides increasingly higher benefits or discounts Jkt 259001 Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 10 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,11 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. As described above, the Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The proposed rule change reflects a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance market quality to the benefit of all Members. Additionally, competing exchanges offer similar tiered pricing structures, including schedules of rebates and fees that apply based upon similarly situated 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. The Exchange believes adding new Tier 5 to the Market Maker Penny Add fees apply, excluding volume on any day that the Exchange experiences an Exchange System Disruption and on any day with a scheduled early market close. 7 The Exchange proposes to add this tier as described in the table in Footnote 6 and amend the amounts of the rebates in the Standard Rates table. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 Volume Tiers is reasonable as it is designed to encourage Market Makers to increase their order flow to the Exchange to achieve the proposed tier. More specifically, the Exchange believes that adopting a new tier may encourage Members to increase their ADAV in Market Makers orders, including in SPY, over a modestly higher percentage of average OCV, and that reducing the difficulty of achieving an existing tier offers alternative criteria to the Market Maker Penny Add Volume Tiers, as restructured, for Members to strive to achieve by submitting the requisite add volume order flow. An increase in Market Maker add volume, particularly, facilitates tighter spreads and an increase in overall liquidity provider activity, both of which signal additional corresponding increase in order flow from other market participants, contributing towards a robust, wellbalanced market ecosystem. Indeed, increased overall order flow benefits investors by continuing to deepen the Exchange’s liquidity pool, potentially providing even greater execution incentives and opportunities, offering additional flexibility for all investors to enjoy cost savings, supporting the quality of price discovery, promoting market transparency and improving investor protection. The Exchange also believes that the proposed criteria and rebate in new Tier 5 reasonably reflect the incremental difficulty in achieving the remaining 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 Id. 11 15 U.S.C. 78f(b)(4). 9 15 E:\FR\FM\24APN1.SGM 24APN1 Federal Register / Vol. 88, No. 78 / Monday, April 24, 2023 / Notices Market Maker Penny Add Volume Tiers, and are in line with the criteria and enhanced rebates offered under the remaining Market Maker Penny Add Volume Tiers. The Exchange believes the proposed change is also equitable and not unfairly discriminatory because it applies uniformly to all Members, who will have the opportunity to meet the new tier’s criteria and receive the corresponding rebate for the tier if such criteria is met. Without having a view of activity on other markets and offexchange venues, the Exchange has no way of knowing whether these proposed changes would definitely result in any Members qualifying for the proposed rebates. While the Exchange has no way of predicting with certainty how the proposed changes will impact Member activity, based on trading activity from the prior months, the Exchange anticipates that up to two Members will achieve new Tier 5. Additionally, all Members are able to increase their Market Maker order flow to attempt to achieve the new tier. Should a Member not meet the proposed new criteria, the Member will merely not receive that corresponding enhanced rebate. ddrumheller on DSK120RN23PROD with NOTICES1 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 believes the proposal to amend the Market Maker Penny Add Volume Tiers does not impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act, as they will apply to all Members and all Members will continue to have an opportunity to receive rebates through the program. All Market Maker Volume Add Tiers are generally designed to increase the competitiveness of BZX and incentivize participants to increase their order flow on the Exchange, providing for additional execution opportunities for market participants and improved price transparency. An overall increase in add activity may provide for deeper, more liquid markets and execution opportunities at improved prices. Furthermore, greater overall order flow, trading opportunities, and pricing transparency benefit all market participants on the Exchange by enhancing market quality and continuing to encourage Members to send orders, thereby contributing towards a robust and well-balanced market ecosystem. VerDate Sep<11>2014 18:50 Apr 21, 2023 Jkt 259001 The Exchange also believes the proposed rule change does not impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As previously discussed, the Exchange operates in a highly competitive market. Members have numerous alternative venues they may participate on and direct their order flow, including 15 other options exchanges. Additionally, the Exchange represents a small percentage of the overall market. Based on publicly available information, no single options exchange has more than 17% of the market share. Therefore, no exchange possesses significant pricing power in the execution of order flow. Indeed, participants can readily choose to send their orders to other exchanges 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.’’ 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’. . . .’’. Accordingly, the Exchange does not believe its proposed fee change imposes any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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. PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 24841 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)(ii) of the Act 12 and Rule 19b–4(f)(2) 13 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 shall 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– CboeBZX–2023–023 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–2023–023. 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 12 15 13 17 E:\FR\FM\24APN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 24APN1 24842 Federal Register / Vol. 88, No. 78 / Monday, April 24, 2023 / Notices printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CboeBZX–2023–023 and should be submitted on or before May 15, 2023. 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Sherry R. Haywood, Assistant Secretary. Dated: April 20, 2023. Vanessa A. Countryman, Secretary. [FR Doc. 2023–08523 Filed 4–21–23; 8:45 am] [FR Doc. 2023–08706 Filed 4–20–23; 4:15 pm] BILLING CODE 8011–01–P BILLING CODE 8011–01–P DEPARTMENT OF STATE SECURITIES AND EXCHANGE COMMISSION [Public Notice: 12056] Sunshine Act Meetings TIME AND DATE: 2:00 p.m. on Thursday, April 27, 2023. 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: ddrumheller on DSK120RN23PROD with NOTICES1 PLACE: Review of the Designations as a Foreign Terrorist Organizations of Islamic Jihad Union and Islamic Movement of Uzbekistan (and Other Aliases) Based on a review of the Administrative Records assembled pursuant to Section 219(a)(4)(C) of the Immigration and Nationality Act, amended (8 U.S.C. 1189(a)(4)(C))(‘‘INA’’), and in consultation with the Attorney General and the Secretary of the Treasury, I conclude that the circumstances that were the bases for the designations of the aforementioned organizations as a Foreign Terrorist Organizations have not changed in such a manner as to warrant revocation of the designations and that the national security of the United States does not warrant a revocation of the designations. Therefore, I hereby determine that the designations of the aforementioned organizations as Foreign Terrorist Organizations, pursuant to section 219 of the INA (8 U.S.C. 1189), shall be maintained. This determination shall be published in the Federal Register. Dated: April 11, 2023. Antony J. Blinken, Secretary of State. [FR Doc. 2023–08613 Filed 4–21–23; 8:45 am] 14 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:50 Apr 21, 2023 BILLING CODE 4710–AD–P Jkt 259001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Docket No. FAA–2023–1016] Agency Information Collection Activities: Requests for Comments; Clearance of a Renewed Approval of Information Collection: Extended Operations (ETOPS) of Multi-Engine Airplanes Federal Aviation Administration (FAA), DOT. ACTION: Notice and request for comments. AGENCY: In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The collection involves practices that permitted certificated air carriers to operate two-engine airplanes over long range routes. The FAA uses this information collection to ensure that aircraft for long range flights are equipped to minimize diversions, to preclude and prevent diversions in remote areas, and to ensure that all personnel are trained to minimize any adverse impacts of a diversion. DATES: Written comments should be submitted by June 23, 2023. ADDRESSES: Please send written comments: By Electronic Docket: www.regulations.gov (Enter docket number into search field). By mail: Sandra Ray, Federal Aviation Administration, AFS–260, 1187 Thorn Run Road, Suite 200, Coraopolis, PA 15108. By fax: 412–239–3063. FOR FURTHER INFORMATION CONTACT: Sandra L. Ray by email at: Sandra.ray@ faa.gov; phone: 412–329–3088. SUPPLEMENTARY INFORMATION: Public Comments Invited: You are asked to comment on any aspect of this information collection, including (a) Whether the proposed collection of information is necessary for FAA’s performance; (b) the accuracy of the estimated burden; (c) ways for FAA to enhance the quality, utility and clarity of the information collection; and (d) ways that the burden could be minimized without reducing the quality of the collected information. The agency will summarize and/or include your comments in the request for OMB’s clearance of this information collection. OMB Control Number: 2120–0718. Title: Extended Operations (ETOPS) of Multi-Engine Airplanes. SUMMARY: E:\FR\FM\24APN1.SGM 24APN1

Agencies

[Federal Register Volume 88, Number 78 (Monday, April 24, 2023)]
[Notices]
[Pages 24839-24842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08523]


=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97319; File No. SR-CboeBZX-2023-023]


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

April 18, 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 April 3, 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 Options'') 
proposes to amend its fee schedule. The text of the proposed rule 
change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its Fee Schedule, effective April 3, 
2023.
    The Exchange first notes that it operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues if they deem fee levels at a particular venue to be 
excessive or incentives to be insufficient. More specifically, the 
Exchange is only one of 16 options venues to which market participants 
may direct their order flow. Based on publicly available information, 
no single options exchange has more than 17% of the market share and 
currently the Exchange represents only approximately 5% of the market 
share.\3\ Thus, in such a low-concentrated and highly competitive 
market, no single options exchange, including the Exchange, possesses 
significant pricing power in the execution of option order flow. The 
Exchange believes that the ever-shifting market share among the 
exchanges from month to month demonstrates that market participants can 
shift order flow or discontinue to reduce use of certain categories of 
products, in response to fee changes. Accordingly, competitive forces 
constrain the Exchange's transaction fees, and market participants can 
readily trade on competing venues if they deem pricing levels at those 
other venues to be more favorable.
---------------------------------------------------------------------------

    \3\ See Cboe Global Markets U.S. Options Market Monthly Volume 
Summary (March 28, 2023), available at https://www.cboe.com/us/options/market_statistics/.
---------------------------------------------------------------------------

    The Exchange's Fee Schedule sets forth standard rebates and rates 
applied per contract. For example, the Exchange provides a rebate of 
$0.29 per contract for Market Maker orders that add liquidity in Penny 
Securities, yielding fee code PM. The Fee Codes and

[[Page 24840]]

Associated Fees section of the Fees Schedule also provide for certain 
fee codes associated with certain order types and market participants 
that provide for various other fees or rebates. Additionally, the Fee 
Schedule offers tiered pricing which provides Members \4\ opportunities 
to qualify for higher rebates or reduced fees where certain volume 
criteria and thresholds are met. In response to the competitive 
environment, the Exchange also offers tiered pricing, which provides 
Members with opportunities to qualify for higher rebates or reduced 
fees where certain volume criteria and thresholds are met. Tiered 
pricing provides an incremental incentive for Members to strive for 
higher tier levels, which provides increasingly higher benefits or 
discounts for satisfying increasingly more stringent criteria.
---------------------------------------------------------------------------

    \4\ See Exchange Rule 1.5(n).
---------------------------------------------------------------------------

    The Exchange proposes to update the Market Maker Penny Add Volume 
Tiers (i.e., applicable to orders yielding fee code PM) set forth in 
footnote 6 of the Fee Schedule. The Exchange currently provides 
opportunities for rebates per contract to add liquidity in Penny 
Securities as follows:
---------------------------------------------------------------------------

    \5\ ``ADAV'' means average daily added volume calculated as the 
number of contracts added.
    \6\ ``OCC Customer Volume'' or ``OCV'' means the total equity 
and ETF options volume that clears in the Customer range at the 
Options Clearing Corporation (``OCC'') for the month for which the 
fees apply, excluding volume on any day that the Exchange 
experiences an Exchange System Disruption and on any day with a 
scheduled early market close.

------------------------------------------------------------------------
                              Rebate per
          Tier             contract to add        Required criteria
------------------------------------------------------------------------
Tier 1..................            ($0.31)  Member has an ADAV \5\ in
                                              Market Maker orders
                                              >=0.15% of average OCV.\6\
Tier 2..................             (0.38)  Member has an ADAV in
                                              Market Maker orders
                                              >=0.25% of average OCV.
Tier 3..................             (0.39)  Member has an ADAV in
                                              Market Maker orders
                                              >=0.40% of average OCV.
Tier 4..................             (0.40)  (1) Member has an ADAV in
                                              Market Maker orders
                                              >=0.45% of average OCV;
                                              and
                                             (2) Member has a Step-Up
                                              ADRV in Customer orders
                                              >=0.05% of OCV from
                                              December 2022.
Tier 5..................             (0.43)  Member has an ADAV in
                                              Market Maker orders
                                              >=0.60% of average OCV.
Tier 6..................             (0.44)  (1) Member has an ADAV in
                                              Market Maker orders
                                              >=0.75% of average OCV;
                                              and
                                             (2) Member has an ADRV in
                                              Customer orders >=0.50% of
                                              average OCV.
------------------------------------------------------------------------

    The Exchange proposes to amend these tiers to add new Tier 5 to 
provide a rebate of $0.41 per contract to add liquidity if a Member has 
(1) an ADAV in Market Maker orders greater than or equal to 0.50% of 
average OCV; and (2) a Step-Up ADAV in Market Maker orders in SPY 
greater than or equal to 0.05% of average OCV from December 2022.\7\ 
The Exchange also proposes a corresponding non-substantive amendment to 
update current Tiers 5 and 6 to Tiers 6 and 7, respectively.
---------------------------------------------------------------------------

    \7\ The Exchange proposes to add this tier as described in the 
table in Footnote 6 and amend the amounts of the rebates in the 
Standard Rates table.
---------------------------------------------------------------------------

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.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ 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) \10\ 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,\11\ 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    As described above, the Exchange operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues if they deem fee levels at a particular venue to be 
excessive or incentives to be insufficient. The proposed rule change 
reflects a competitive pricing structure designed to incentivize market 
participants to direct their order flow to the Exchange, which the 
Exchange believes would enhance market quality to the benefit of all 
Members. Additionally, competing exchanges offer similar tiered pricing 
structures, including schedules of rebates and fees that apply based 
upon similarly situated 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.
    The Exchange believes adding new Tier 5 to the Market Maker Penny 
Add Volume Tiers is reasonable as it is designed to encourage Market 
Makers to increase their order flow to the Exchange to achieve the 
proposed tier. More specifically, the Exchange believes that adopting a 
new tier may encourage Members to increase their ADAV in Market Makers 
orders, including in SPY, over a modestly higher percentage of average 
OCV, and that reducing the difficulty of achieving an existing tier 
offers alternative criteria to the Market Maker Penny Add Volume Tiers, 
as restructured, for Members to strive to achieve by submitting the 
requisite add volume order flow. An increase in Market Maker add 
volume, particularly, facilitates tighter spreads and an increase in 
overall liquidity provider activity, both of which signal additional 
corresponding increase in order flow from other market participants, 
contributing towards a robust, well-balanced market ecosystem. Indeed, 
increased overall order flow benefits investors by continuing to deepen 
the Exchange's liquidity pool, potentially providing even greater 
execution incentives and opportunities, offering additional flexibility 
for all investors to enjoy cost savings, supporting the quality of 
price discovery, promoting market transparency and improving investor 
protection.
    The Exchange also believes that the proposed criteria and rebate in 
new Tier 5 reasonably reflect the incremental difficulty in achieving 
the remaining

[[Page 24841]]

Market Maker Penny Add Volume Tiers, and are in line with the criteria 
and enhanced rebates offered under the remaining Market Maker Penny Add 
Volume Tiers.
    The Exchange believes the proposed change is also equitable and not 
unfairly discriminatory because it applies uniformly to all Members, 
who will have the opportunity to meet the new tier's criteria and 
receive the corresponding rebate for the tier if such criteria is met. 
Without having a view of activity on other markets and off-exchange 
venues, the Exchange has no way of knowing whether these proposed 
changes would definitely result in any Members qualifying for the 
proposed rebates. While the Exchange has no way of predicting with 
certainty how the proposed changes will impact Member activity, based 
on trading activity from the prior months, the Exchange anticipates 
that up to two Members will achieve new Tier 5. Additionally, all 
Members are able to increase their Market Maker order flow to attempt 
to achieve the new tier. Should a Member not meet the proposed new 
criteria, the Member will merely not receive that corresponding 
enhanced rebate.

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 believes the 
proposal to amend the Market Maker Penny Add Volume Tiers does not 
impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as they will 
apply to all Members and all Members will continue to have an 
opportunity to receive rebates through the program. All Market Maker 
Volume Add Tiers are generally designed to increase the competitiveness 
of BZX and incentivize participants to increase their order flow on the 
Exchange, providing for additional execution opportunities for market 
participants and improved price transparency. An overall increase in 
add activity may provide for deeper, more liquid markets and execution 
opportunities at improved prices. Furthermore, greater overall order 
flow, trading opportunities, and pricing transparency benefit all 
market participants on the Exchange by enhancing market quality and 
continuing to encourage Members to send orders, thereby contributing 
towards a robust and well-balanced market ecosystem.
    The Exchange also believes the proposed rule change does not impose 
any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. As previously 
discussed, the Exchange operates in a highly competitive market. 
Members have numerous alternative venues they may participate on and 
direct their order flow, including 15 other options exchanges. 
Additionally, the Exchange represents a small percentage of the overall 
market. Based on publicly available information, no single options 
exchange has more than 17% of the market share. Therefore, no exchange 
possesses significant pricing power in the execution of order flow. 
Indeed, participants can readily choose to send their orders to other 
exchanges 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.'' 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'. . . .''. Accordingly, the Exchange 
does not believe its proposed fee change imposes any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.

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)(ii) of the Act \12\ and Rule 19b-4(f)(2) \13\ thereunder.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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 shall 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 [email protected]. Please include 
File Number SR-CboeBZX-2023-023 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-2023-023. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and

[[Page 24842]]

printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CboeBZX-2023-023 and should 
be submitted on or before May 15, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-08523 Filed 4-21-23; 8:45 am]
BILLING CODE 8011-01-P
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