Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 63999-64002 [2023-20085]
Download as PDF
<![CDATA[
Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Notices
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–MIAX–2023–33 and should be
submitted on or before October 10,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20082 Filed 9–15–23; 8:45 am]
BILLING CODE 8011–01–P
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Sherry R. Haywood,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98366; File No. SR–
NASDAQ–2023–022]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Designation of a Longer Period for
Commission Action on a Proposed
Rule Change To Create a New, NonTrading Limited Membership Class and
Impose Related Requirements for
Principal Underwriting Activity
lotter on DSK11XQN23PROD with NOTICES1
On July 12, 2023, The Nasdaq Stock
Market LLC (‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
create a new, non-trading limited
membership class and impose related
requirements for principal underwriting
activity. The proposed rule change was
published for comment in the Federal
Register on July 31, 2023.3
Section 19(b)(2) of the Act 4 provides
that, within 45 days of the publication
of notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding, or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is September 14,
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 97985
(July 25, 2023), 88 FR 49508.
4 15 U.S.C. 78s(b)(2).
1 15
18:29 Sep 15, 2023
[FR Doc. 2023–20086 Filed 9–15–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, that the Securities and
Exchange Commission will hold an
Open Meeting on Wednesday,
September 20, 2023 at 10:00 a.m.
PLACE: The meeting will be held in
Auditorium LL–002 at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549 and
will be simultaneously webcast on the
Commission’s website at www.sec.gov.
STATUS: This meeting will begin at 10:00
a.m. (ET) and will be open to the public.
Seating will be on a first-come, firstserved basis. Visitors will be subject to
security checks. The meeting will be
webcast on the Commission’s website at
www.sec.gov.
MATTERS TO BE CONSIDERED:
1. The Commission will consider
whether to adopt amendments to the
rule under the Investment Company Act
of 1940 that addresses investment
company names that are likely to
mislead investors about an investment
company’s investments and risks. The
amendments the Commission will
consider also include enhanced
prospectus disclosure requirements for
terminology used in investment
company names, as well as public
reporting regarding compliance with the
new names-related requirements.
TIME AND DATE:
September 12, 2023.
VerDate Sep<11>2014
2023. The Commission is extending this
45-day time period.
The Commission finds that it is
appropriate to designate a longer period
within which to take action on the
proposed rule change so that it has
sufficient time to consider the proposed
rule change. Accordingly, the
Commission, pursuant to Section
19(b)(2) of the Act,5 designates October
29, 2023, as the date by which the
Commission shall either approve or
disapprove, or institute proceedings to
determine whether to disapprove, the
proposed rule change (File No. SR–
NASDAQ–2023–022).
Jkt 259001
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed, please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: September 13, 2023.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023–20181 Filed 9–14–23; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98365; File No. SR–
CboeEDGA–2023–014]
Self-Regulatory Organizations; Cboe
EDGA Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule
September 12, 2023.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on August
31, 2023, Cboe EDGA Exchange, Inc.
(the ‘‘Exchange’’ or ‘‘EDGA’’) 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 EDGA Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGA’’) 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/edga/),
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 the
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
5 Id.
6 17
PO 00000
2 15
CFR 200.30–3(a)(31).
Frm 00071
Fmt 4703
Sfmt 4703
63999
E:\FR\FM\18SEN1.SGM
18SEN1
64000
Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Notices
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.
lotter on DSK11XQN23PROD with NOTICES1
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
Fee Schedule applicable to its equities
trading platform (‘‘EDGA Equities’’) by
modifying the rates associated with
certain fee codes. The Exchange
proposes to implement these changes
effective September 1, 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 registered equities exchanges, as well
as a number of alternative trading
systems and other off-exchange venues
that do not have similar self-regulatory
responsibilities under the Securities
Exchange Act of 1934 (the ‘‘Act’’), to
which market participants may direct
their order flow. Based on publicly
available information,4 no single
registered equities exchange has more
than 14% 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
‘‘Taker-Maker’’ model whereby it pays
credits to members that remove
liquidity and assesses fees to those that
add liquidity. The Exchange’s Fee
Schedule sets forth the standard rebates
and rates applied per share for orders
that remove and provide liquidity,
respectively. Currently, for orders in
securities priced at or above $1.00, the
Exchange provides a standard rebate of
$0.00180 [sic] per share for orders that
remove liquidity and assesses a fee of
$0.0030 per share for orders that add
liquidity.5 For orders in securities
priced below $1.00, the Exchange does
not assess any fees or provide any
4 See Cboe Global Markets, U.S. Equities Market
Volume Summary, Month-to-Date (August 24,
2023), available at https://www.cboe.com/us/
equities/market_statistics/.
5 See EDGA Equities Fee Schedule, Standard
Rates.
VerDate Sep<11>2014
18:29 Sep 15, 2023
Jkt 259001
rebates for orders that add or remove
liquidity.6 Additionally, in response to
the competitive environment, the
Exchange also offers tiered pricing
which provides Members opportunities
to qualify for higher rebates or reduced
fees where certain volume criteria and
thresholds are met. Tiered pricing
provides an incremental incentive for
Members to strive for higher tier levels,
which provides increasingly higher
benefits or discounts for satisfying
increasingly more stringent criteria.
The Exchange currently offers various
fee codes for orders routed away from
the Exchange. The Exchange is
proposing to modify the routing fees
associated with fee codes I,7 P,8 BY,9
RR,10 AX,11 AY,12 RY,13 and RZ 14 to
match the base add or remove rate for
the associated market center to which
the order is routed. The fees associated
with fee codes I, RR, and AX will be
revised to $0.0030 per share in
securities priced above $1.00.15 The fee
associated with fee code RY will be
revised to $0.0020 per share in
securities priced above $1.00.16 The
rebates associated with fee codes P and
RZ will be revised to $0.00160 per share
in securities priced above $1.00.17 The
rebates associated with fee codes BY
and AY will be revised to $0.00020 per
share in securities priced above $1.00.18
There are no changes to the fees or
rebates associated with securities priced
below $1.00.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
6 Id.
7 Fee code I is appended to orders routed to
EDGX.
8 Fee code P is appended to orders routed to
EDGX, including pre and post market, that add
liquidity.
9 Fee code BY is appended to orders routed to
BYX using Destination Specific (‘‘DIRC’’), ROUC,
ROBB or ROCO routing strategy.
10 Fee code RR is appended to orders routed to
EDGX using DIRC routing strategy.
11 Fee code AX is appended to orders routed to
EDGX using ALLB routing strategy.
12 Fee code AY is appended to orders routed to
BYX using ALLB routing strategy.
13 Fee code RY is appended to orders routed to
BYX that add liquidity.
14 Fee code RZ is appended to orders routed to
BZX that add liquidity.
15 See EDGX Equities Fee Schedule, Standard
Rates.
16 See BYX Equities Fee Schedule, Standard
Rates.
17 See EDGX Equities Fee Schedule, Standard
Rates; BZX Equities Fee Schedule, Standard Rates.
18 See BYX Equities Fee Schedule, Standard
Rates.
PO 00000
Frm 00072
Fmt 4703
Sfmt 4703
Section 6(b) of the Act.19 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 20 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) 21 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers as
well as Section 6(b)(4) 22 as it is
designed to provide for the equitable
allocation of reasonable dues, fees and
other charges among its Members and
other persons using its facilities.
As described above, the Exchange
operates in a highly competitive market
in which market participants can
readily direct order flow to competing
venues if they deem fee levels at a
particular venue to be excessive or
incentives to be insufficient. The
Exchange believes its proposed changes
to the routing fee codes are reasonable
as these changes do not represent a
significant departure from the
Exchange’s general pricing structure.
Specifically, the proposed changes to
fee codes I, P, BY, RR, AX, AY, RY, and
RZ are intended to match the base add
or remove rates on the Exchange’s
affiliates.23 The Exchange also believes
that the proposal represents an equitable
allocation of fees and rebates and is not
unfairly discriminatory because all
Members will be eligible to receive the
revised fees or rebates associated with
fee codes I, P, BY, RR, AX, AY, RY, and
RZ.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Rather, as
discussed above, the Exchange believes
that the proposed changes would
encourage the submission of additional
19 15
20 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
21 Id.
22 15
U.S.C. 78f(b)(4)
notes 15–18.
23 Supra
E:\FR\FM\18SEN1.SGM
18SEN1
lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Notices
order flow to a public exchange, thereby
promoting market depth, execution
incentives and enhanced execution
opportunities, as well as price discovery
and transparency for all Members. As a
result, the Exchange believes that the
proposed changes further the
Commission’s goal in adopting
Regulation NMS of fostering
competition among orders, which
promotes ‘‘more efficient pricing of
individual stocks for all types of orders,
large and small.’’
The Exchange believes the proposed
rule changes do not impose any burden
on intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed fees and rebates associated
with fee codes I, P, BY, RR, AX, AY, RY,
and RZ will apply to all Members
equally in that all Members would be
subject to the same base fee or rebate
when routing an order away from the
Exchange to the venues identified by the
relevant fee code. All fee codes are
available to all Members on an equal
and non-discriminatory basis. As a
result, any Member can decide to use (or
not use) the Exchange’s routing
functionality as part of their decision to
submit order flow to the Exchange.
Next, the Exchange believes the
proposed rule changes does not impose
any burden on intermarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
As previously discussed, the Exchange
operates in a highly competitive market.
Members have numerous alternative
venues that they may participate on and
direct their order flow, including other
equities exchanges, off-exchange
venues, and alternative trading systems.
Additionally, the Exchange represents a
small percentage of the overall market.
Based on publicly available information,
no single equities exchange has more
than 14% of the market share.24
Therefore, no exchange possesses
significant pricing power in the
execution of order flow. Indeed,
participants can readily choose to send
their orders to other exchange and offexchange venues if they deem fee levels
at those other venues to be more
favorable. Moreover, the Commission
has repeatedly expressed its preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. Specifically, in Regulation
NMS, the Commission highlighted the
importance of market forces in
determining prices and SRO revenues
and, also, recognized that current
regulation of the market system ‘‘has
24 Supra
note 4.
VerDate Sep<11>2014
18:29 Sep 15, 2023
Jkt 259001
been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 25 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’ . . .’’.26 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)
of the Act 27 and paragraph (f) of Rule
19b–4 28 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
25 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
26 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)).
27 15 U.S.C. 78s(b)(3)(A).
28 17 CFR 240.19b–4(f).
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
64001
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–
CboeEDGA–2023–014 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–CboeEDGA–2023–014. 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 the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CboeEDGA–2023–014 and should
be submitted on or before October 10,
2023.
E:\FR\FM\18SEN1.SGM
18SEN1
64002
Federal Register / Vol. 88, No. 179 / Monday, September 18, 2023 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20085 Filed 9–15–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98363; File No. SR–
PEARL–2023–43]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fee
Schedule
September 12, 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
September 6, 2023, MIAX PEARL, LLC
(‘‘MIAX Pearl’’ or ‘‘Exchange’’) 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 selfregulatory organization. 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
The Exchange is filing a proposal to
amend the MIAX Pearl Options Fee
Schedule (‘‘Fee Schedule’’).
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxglobal.com/markets/
us-options/pearl-options/rule-filings at
MIAX Pearl’s principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
exchange grouping of options exchanges
within the routing fee table in Section
1)b) of the Fee Schedule, Fees for
Customer Orders Routed to Another
Options Exchange, to add applicable
Member 3 orders routed to MEMX LLC
(‘‘MEMX’’), in anticipation of the launch
of MEMX Options, the new options
trading facility of MEMX.4 The
Exchange originally filed this proposal
on August 31, 2023 (SR–PEARL–2023–
40). On September 6, 2023, the
Exchange withdrew SR–PEARL–2023–
40 and refiled this proposal. The
proposed changes are immediately
effective.
Currently, the Exchange assesses
routing fees based upon (i) the origin
type of the order; (ii) whether or not it
is an order for standard option classes
in the Penny Interval Program 5 (‘‘Penny
classes’’) or an order for standard option
classes which are not in the Penny
Interval Program (‘‘Non-Penny classes’’)
(or other explicitly identified classes);
and (iii) to which away market it is
being routed. This assessment practice
is identical to the routing fees
assessment practice currently utilized
by the Exchange’s affiliates, Miami
International Securities Exchange, LLC
(‘‘MIAX Options’’) and MIAX Emerald,
LLC (‘‘MIAX Emerald’’). This is also
similar to the methodology utilized by
the Cboe BZX Exchange, Inc. (‘‘Cboe
BZX Options’’), a competing options
exchange, in assessing routing fees.
Cboe BZX Options has exchange
groupings in its fee schedule, similar to
those of the Exchange, whereby several
exchanges are grouped into the same
category, dependent upon the order’s
origin type and whether it is a Penny or
Non-Penny class.6
As a result of the anticipated launch
of the options trading facility of MEMX
in the third quarter of 2023, the
Exchange has determined to amend the
exchange groupings of options
exchanges within the routing fee table to
include MEMX and the anticipated
associated costs of routing customer
orders to MEMX for execution.
The impact of this proposed change
will be increased routing options for
Members. The Exchange notes that
routing through the Exchange is
optional and that Members will
continue to be able to choose where to
route applicable Member orders. Under
this proposed change, the Exchange will
not amend the fees associated with the
exchange groupings. This proposal
merely seeks to add MEMX to the
exchange groupings as described in the
routing fee table below.
According, with the proposed change,
the routing fee table will be as follows:
Description
Fees
lotter on DSK11XQN23PROD with NOTICES1
Routed, Priority Customer, Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, MIAX, Nasdaq PHLX (except SPY) .........................................................................................................................................................................................
Routed, Priority Customer, Penny Program, to: Nasdaq MRX ...........................................................................................................
Routed, Priority Customer, Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, Nasdaq ISE,
NOM, Nasdaq PHLX (SPY only), MIAX Emerald, Nasdaq BX Options, MEMX ............................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE American, BOX, Cboe, Cboe EDGX Options, Nasdaq ISE, MIAX,
Nasdaq PHLX ..................................................................................................................................................................................
Routed, Priority Customer, Non-Penny Program, to: Nasdaq MRX ...................................................................................................
Routed, Priority Customer, Non-Penny Program, to: NYSE Arca Options, Cboe BZX Options, Cboe C2, Nasdaq GEMX, NOM,
MIAX Emerald, Nasdaq BX Options, MEMX ...................................................................................................................................
29 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
3 The term ‘‘Member’’ means an individual or
organization approved to exercise the trading rights
associated with a Trading Permit. Members are
1 15
VerDate Sep<11>2014
18:29 Sep 15, 2023
Jkt 259001
deemed ‘‘members’’ under the Exchange Act. See
Exchange Rule 100.
4 See Securities Exchange Act Release No. 95445
(August 8, 2022), 87 FR 49894 (August 12, 2022)
(SR–MEMX–2022–10) (Notice of Filing of
Amendment No. 1 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified
by Amendment No. 1, to Adopt Rules to Govern the
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
$0.15
0.30
0.65
0.15
0.50
1.00
Trading of Options on the Exchange for a New
Facility Called MEMX Options).
5 See Exchange Rule 510(c).
6 See Cboe U.S. Options Fee Schedules, BZX
Options, ‘‘Fee Codes and Associated Fees,’’ at
https://www.cboe.com/us/options/membership/fee_
schedule/bzx/(last visited September 6, 2023).
E:\FR\FM\18SEN1.SGM
18SEN1
]]>Agencies
[Federal Register Volume 88, Number 179 (Monday, September 18, 2023)]
[Notices]
[Pages 63999-64002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20085]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98365; File No. SR-CboeEDGA-2023-014]
Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule
September 12, 2023.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on August 31, 2023, Cboe EDGA Exchange, Inc. (the
``Exchange'' or ``EDGA'') 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') 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/edga/), 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 the
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for
[[Page 64000]]
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Fee Schedule applicable to its
equities trading platform (``EDGA Equities'') by modifying the rates
associated with certain fee codes. The Exchange proposes to implement
these changes effective September 1, 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 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues
that do not have similar self-regulatory responsibilities under the
Securities Exchange Act of 1934 (the ``Act''), to which market
participants may direct their order flow. Based on publicly available
information,\4\ no single registered equities exchange has more than
14% 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 ``Taker-Maker'' model whereby it pays credits to
members that remove liquidity and assesses fees to those that add
liquidity. The Exchange's Fee Schedule sets forth the standard rebates
and rates applied per share for orders that remove and provide
liquidity, respectively. Currently, for orders in securities priced at
or above $1.00, the Exchange provides a standard rebate of $0.00180
[sic] per share for orders that remove liquidity and assesses a fee of
$0.0030 per share for orders that add liquidity.\5\ For orders in
securities priced below $1.00, the Exchange does not assess any fees or
provide any rebates for orders that add or remove liquidity.\6\
Additionally, in response to the competitive environment, the Exchange
also offers tiered pricing which provides Members opportunities to
qualify for higher rebates or reduced fees where certain volume
criteria and thresholds are met. Tiered pricing provides an incremental
incentive for Members to strive for higher tier levels, which provides
increasingly higher benefits or discounts for satisfying increasingly
more stringent criteria.
---------------------------------------------------------------------------
\4\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (August 24, 2023), available at https://www.cboe.com/us/equities/market_statistics/.
\5\ See EDGA Equities Fee Schedule, Standard Rates.
\6\ Id.
---------------------------------------------------------------------------
The Exchange currently offers various fee codes for orders routed
away from the Exchange. The Exchange is proposing to modify the routing
fees associated with fee codes I,\7\ P,\8\ BY,\9\ RR,\10\ AX,\11\
AY,\12\ RY,\13\ and RZ \14\ to match the base add or remove rate for
the associated market center to which the order is routed. The fees
associated with fee codes I, RR, and AX will be revised to $0.0030 per
share in securities priced above $1.00.\15\ The fee associated with fee
code RY will be revised to $0.0020 per share in securities priced above
$1.00.\16\ The rebates associated with fee codes P and RZ will be
revised to $0.00160 per share in securities priced above $1.00.\17\ The
rebates associated with fee codes BY and AY will be revised to $0.00020
per share in securities priced above $1.00.\18\ There are no changes to
the fees or rebates associated with securities priced below $1.00.
---------------------------------------------------------------------------
\7\ Fee code I is appended to orders routed to EDGX.
\8\ Fee code P is appended to orders routed to EDGX, including
pre and post market, that add liquidity.
\9\ Fee code BY is appended to orders routed to BYX using
Destination Specific (``DIRC''), ROUC, ROBB or ROCO routing
strategy.
\10\ Fee code RR is appended to orders routed to EDGX using DIRC
routing strategy.
\11\ Fee code AX is appended to orders routed to EDGX using ALLB
routing strategy.
\12\ Fee code AY is appended to orders routed to BYX using ALLB
routing strategy.
\13\ Fee code RY is appended to orders routed to BYX that add
liquidity.
\14\ Fee code RZ is appended to orders routed to BZX that add
liquidity.
\15\ See EDGX Equities Fee Schedule, Standard Rates.
\16\ See BYX Equities Fee Schedule, Standard Rates.
\17\ See EDGX Equities Fee Schedule, Standard Rates; BZX
Equities Fee Schedule, Standard Rates.
\18\ See BYX Equities Fee Schedule, Standard Rates.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\19\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \20\ 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) \21\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers as well as Section 6(b)(4) \22\
as it is designed to provide for the equitable allocation of reasonable
dues, fees and other charges among its Members and other persons using
its facilities.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
\21\ Id.
\22\ 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 Exchange believes its
proposed changes to the routing fee codes are reasonable as these
changes do not represent a significant departure from the Exchange's
general pricing structure. Specifically, the proposed changes to fee
codes I, P, BY, RR, AX, AY, RY, and RZ are intended to match the base
add or remove rates on the Exchange's affiliates.\23\ The Exchange also
believes that the proposal represents an equitable allocation of fees
and rebates and is not unfairly discriminatory because all Members will
be eligible to receive the revised fees or rebates associated with fee
codes I, P, BY, RR, AX, AY, RY, and RZ.
---------------------------------------------------------------------------
\23\ Supra notes 15-18.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Rather, as discussed above,
the Exchange believes that the proposed changes would encourage the
submission of additional
[[Page 64001]]
order flow to a public exchange, thereby promoting market depth,
execution incentives and enhanced execution opportunities, as well as
price discovery and transparency for all Members. As a result, the
Exchange believes that the proposed changes further the Commission's
goal in adopting Regulation NMS of fostering competition among orders,
which promotes ``more efficient pricing of individual stocks for all
types of orders, large and small.''
The Exchange believes the proposed rule changes do not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed fees and
rebates associated with fee codes I, P, BY, RR, AX, AY, RY, and RZ will
apply to all Members equally in that all Members would be subject to
the same base fee or rebate when routing an order away from the
Exchange to the venues identified by the relevant fee code. All fee
codes are available to all Members on an equal and non-discriminatory
basis. As a result, any Member can decide to use (or not use) the
Exchange's routing functionality as part of their decision to submit
order flow to the Exchange.
Next, the Exchange believes the proposed rule changes does not
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues that they may participate on
and direct their order flow, including other equities exchanges, off-
exchange venues, and alternative trading systems. Additionally, the
Exchange represents a small percentage of the overall market. Based on
publicly available information, no single equities exchange has more
than 14% of the market share.\24\ 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.'' \25\ 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' . . .''.\26\ 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.
---------------------------------------------------------------------------
\24\ Supra note 4.
\25\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\26\ 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 \27\ and paragraph (f) of Rule 19b-4 \28\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
---------------------------------------------------------------------------
\27\ 15 U.S.C. 78s(b)(3)(A).
\28\ 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-CboeEDGA-2023-014 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-CboeEDGA-2023-014. 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 the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-CboeEDGA-2023-014 and should
be submitted on or before October 10, 2023.
[[Page 64002]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
---------------------------------------------------------------------------
\29\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-20085 Filed 9-15-23; 8:45 am]
BILLING CODE 8011-01-P
