Justia Agencies And Commissions Securities And Exchange Commission Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule Applicable to Members and Non-Members of the Exchange Pursuant to BZX Rules 15.1(a) and (c) in Order To Adopt a New Tier Under Footnote 13 (Tape B Volume and Quoting) Specific to Single-Stock Exchange Traded Funds (“Single-Stock ETFs”), 87476-87480 [2023-27675]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule Applicable to Members and Non-Members of the Exchange Pursuant to BZX Rules 15.1(a) and (c) in Order To Adopt a New Tier Under Footnote 13 (Tape B Volume and Quoting) Specific to Single-Stock Exchange Traded Funds (“Single-Stock ETFs”), 87476-87480 [2023-27675]

Download as PDF 87476 Federal Register / Vol. 88, No. 241 / Monday, December 18, 2023 / Notices khammond on DSKJM1Z7X2PROD with NOTICES not impose an undue burden on competition because all Members will be eligible for the proposed rebates by sending more QCC and complex order flow to the Exchange. The Exchange is proposing to exclude Professional Customers from the QCC Rebate program in the manner described above and to apply the proposed rebates only where at least one party to the QCC transaction is neither a Priority Customer nor Professional Customer because the Exchange is simultaneously eliminating transaction fees for Professional Customer QCC Orders under this proposal. As such, the Exchange believes that Members will continue to be incentivized to send Professional Customer QCC Orders to the Exchange without the added incentive of the proposed rebates. In addition, to the extent the proposed QCC Rebate program encourages Members to send more QCC Order and complex order flow to ISE, all market participants will benefit from the resulting additional liquidity and trading opportunities. In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. In sum, if the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share as a result. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. 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 50 and Rule 19b–4(f)(2) 51 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: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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 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– ISE–2023–35 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–ISE–2023–35. 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 50 15 51 17 VerDate Sep<11>2014 17:41 Dec 15, 2023 Jkt 262001 PO 00000 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). Frm 00092 Fmt 4703 Sfmt 4703 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–ISE–2023–35 and should be submitted on or before January 8, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.52 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–27674 Filed 12–15–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–99147; File No. SR– CboeBZX–2023–099] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule Applicable to Members and Non-Members of the Exchange Pursuant to BZX Rules 15.1(a) and (c) in Order To Adopt a New Tier Under Footnote 13 (Tape B Volume and Quoting) Specific to Single-Stock Exchange Traded Funds (‘‘SingleStock ETFs’’) December 12, 2023. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 1, 2023, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The Commission is publishing this notice to 52 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 1 15 E:\FR\FM\18DEN1.SGM 18DEN1 Federal Register / Vol. 88, No. 241 / Monday, December 18, 2023 / Notices 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. (‘‘BZX’’ or the ‘‘Exchange’’) is filing with the Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’) a proposed rule change to amend the Fee Schedule applicable to Members and nonmembers of the Exchange pursuant to BZX Rules 15.1(a) and (c) in order to adopt a new Tier under footnote 13 (Tape B Volume and Quoting) specific to Single-Stock Exchange Traded Funds (‘‘Single-Stock ETFs’’). 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. khammond on DSKJM1Z7X2PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Fee Schedule applicable to its equities trading platform (‘‘BZX Equities’’) to adopt a new Tier under footnote 13 (Tape B Volume and Quoting) specific to Single-Stock ETFs.5 The Exchange proposes to implement these amendments to its fee schedule December 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 5 Single-Stock ETFs are investment products that pay positive or negative multiples of the market performance of the single underlying security. VerDate Sep<11>2014 17:41 Dec 15, 2023 Jkt 262001 incentives to be insufficient. More specifically, the Exchange is only one of 16 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues that do not have similar self-regulatory responsibilities under the Exchange Act, to which market participants may direct their order flow. Based on publicly available information,6 no single registered equities exchange has more than 17% of the market share. Thus, in such a low-concentrated and highly competitive market, no single equities exchange possesses significant pricing power in the execution of order flow. The Exchange in particular operates a ‘‘Maker-Taker’’ model whereby it pays credits to Members that add liquidity and assesses fees to those that remove liquidity. The Exchange’s fee schedule sets forth the standard rebates and rates applied per share for orders that provide and remove liquidity, respectively. Currently, for orders in securities priced at or above $1.00, the Exchange provides a standard rebate of $0.00160 per share for orders that add liquidity and assesses a fee of $0.0030 per share for orders that remove liquidity.7 For orders in securities priced below $1.00, the Exchange does not provide a rebate or assess a fee for orders that add liquidity and assesses a fee of 0.30% of total dollar value for orders that remove liquidity.8 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. Now, the Exchange proposes to adopt a new pricing Tier under footnote 13 of the Fee Schedule. Specifically, for orders yielding fee code B,9 the Exchange proposes to adopt LEP Tier 1 under footnote 13 of the Fee Schedule.10 The Exchange is proposing that a 6 See Cboe Global Markets, U.S. Equities Market Volume Summary, Month-to-Date (July 31, 2023), available at https://www.cboe.com/us/equities/ market_statistics/. 7 See BZX Equities Fee Schedule, Standard Rates. 8 Id. 9 Fee code B is appended to displayed orders that add liquidity to BZX in Tape B securities. 10 The existing tiers under footnote 13 were added in a fee filing adopting a similar structure related to LMP securities on the Exchange. See Securities Exchange Act No. 78338 (July 15, 2016) 81 FR 47458 (July 21, 2016) (SR–BatsBZX–2016–041) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of Bats BZX Exchange, Inc.). PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 87477 Member 11 will qualify for the LEP Tier 1 where the Member is enrolled in a minimum of five LEP Securities 12 for which it meets certain required criteria (the ‘‘Required Criteria’’). A Member must be enrolled in at least the minimum number of LEP Securities for which it meets the Required Criteria every day in a trading month in order to be eligible for the proposed rebate. As proposed, the Exchange would count an LEP Security toward the minimum number of LEP Securities requirement where the Member meets the Required Criteria for at least 75% of the trading days in a particular month. As noted above, these proposed requirements are very similar to the existing LMP Tiers under footnote 13. To qualify for proposed LEP Tier 1 a Member must be enrolled in at least five BZX-listed LEP Securities and meet the following Required Criteria,: (1) The Member has an NBBO Time 13 of equal or greater than 20%; (2) Member has bids and offers with a ‘‘Notional Depth’’ 14 of $75,000 on each side for at least 90% of the trading day; and (3) The difference in the NBBO spread of each LEP Security is less than 0.50% for at least 95% of the trading day. The Required Criteria for each LEP Security will each be evaluated separately, and the Member does not need to meet the Required Criteria for all applicable LEP Securities on the same 75% of trading days. For example, in a month with 22 trading days, a Member would be eligible for Tier 1 where the Member met the Required Criteria in five LEP Securities in the first 11 trading days of the month and met the Required Criteria for a different set of five LEP Securities in the second 11 trading days of the month. Members that meet proposed LEP Tier 1 would receive a rebate of $0.0025 per share. In the event that a Member would receive a higher rebate under a different Tier set forth in the Fee Schedule, the 11 See Exchange Rule 1.5(n). discussed further below, the Exchange proposes to adopt the term ‘‘LEP Securities’’, which means a list of Single-Stock ETFs, including options-based ETFs in a single underlying equity security, for which the Exchange wants to incentivize Members to provide enhanced market quality. The Exchange will not remove a security from the list of LEP Securities without 30 days prior notice. 13 ‘‘NBBO Time’’ means the average of the percentage of time during regular trading hours during which the Member maintains at least 100 shares at each of the NBB and NBO. 14 As discussed further below, the Exchange proposes to adopt a new definition for ‘‘Notional Depth’’ which means the notional value of bids of at least 100 shares that are within $0.05 of the BZX NBB and offers of at least 100 shares that are within $0.05 of the BZX NBO. 12 As E:\FR\FM\18DEN1.SGM 18DEN1 87478 Federal Register / Vol. 88, No. 241 / Monday, December 18, 2023 / Notices Member would be entitled to the higher of the two rebates. As noted above, the Exchange also proposes to adopt two new definitions to the Fee Schedule. First, the Exchange proposes to adopt the term Notional Depth which will mean the notional value of bids of at least 100 shares that are within $0.05 of the NBB or offers of at least 100 shares that are within $0.05 of the NBO. Second, the Exchange proposes to adopt the term ‘‘LEP Securities’’ which will a list of Single-Stock ETFs, including options-based ETFs in a single underlying equity security, for which the Exchange wants to incentivize Members to provide enhanced market quality. All Members will be eligible to enroll in LEP Securities, there will be no limit to the number of LEP Securities in which a Member may enroll, and there will be no limit to the number of Members that can enroll in each LEP Security.15 All Members enrolled in LMP Securities will be eligible for the rebate where the Member meets the Tape B Quoting LMP Tier 1 requirements. Such LEP Securities will include all Cboe-listed Single-Stock ETFs for which the Exchange wants to incentivize Members to provide enhanced market quality. The Exchange will not remove a security from the list of LEP Securities without 30 days prior notice. The Exchange also proposes to make a conforming change to the existing Tiers under footnote 13 of the Fee Schedule. Specifically, the Exchange proposes to rename existing Tiers 1 and 2 under footnote 13 ‘‘LMP Tier 1’’ and ‘‘LMP Tier 2’’, respectively. khammond on DSKJM1Z7X2PROD with NOTICES 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.16 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 17 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 15 The Exchange anticipates that the initial list of LMP Securities will include at least nine ETPs. A current list of LEP Securities will be available on www.cboe.com, which will be updated as new securities are added to the list of LEP Securities. All Cboe-listed LEP Securities will be enrolled in the program immediately upon listing on the Exchange. 16 15 U.S.C. 78f(b). 17 15 U.S.C. 78f(b)(5). VerDate Sep<11>2014 17:41 Dec 15, 2023 Jkt 262001 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) 18 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) 19 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. The proposed rule reflects a competitive pricing structure designed to incent market participants to direct their order flow to the Exchange and enhance market quality in LEP Securities and Tape B securities. The Exchange 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. The Exchange believes that the proposed LEP Tier represents an equitable allocation of rebates and are not unfairly discriminatory because all Members are eligible for such LEP Tier and would have the opportunity to meet the LEP Tier’s criteria and would receive the proposed rebate if such criteria is met. Further, the proposed rebates are commensurate with the proposed criteria. That is, the rebates reasonably reflect the difficulty in achieving the applicable criteria as proposed. Without having a view of activity on other markets and offexchange venues, the Exchange has no way of knowing whether this proposed rule change would definitely result in any Members qualifying for the proposed LEP Tier. While the Exchange has no way of predicting with certainty how the proposed LEP Tier will impact Member activity, the Exchange reasonably expects four Members to compete for and reach the proposed LEP Tier. The Exchange also notes that proposed Tier/rebate will not adversely impact any Member’s ability to qualify for other reduced fee or enhanced rebate Tiers. Should a Member not meet the proposed criteria under the proposed LEP Tier, the Member will merely not receive that corresponding rebate. The Exchange believes that the proposed new LEP Tier is reasonable in that they will enhance market quality on 18 Id. 19 15 PO 00000 U.S.C. 78f(b)(4). Frm 00094 Fmt 4703 Sfmt 4703 the Exchange in two ways: (i) by incentivizing Members to meet certain quoting standards in LEP Securities designed to narrow spreads, increase size at the inside, and increase liquidity depth; and (ii) providing a rebate for all of a qualifying Member’s orders that add liquidity in LEP Securities will incentivize Members to increase their participation on the Exchange in LEP Securities. Furthermore, the Exchange believes it is appropriate to incentivize Members to meet the Required Criteria in LEP Securities as such securities poses an enhanced risk to Members providing liquidity in those securities. Therefore, the proposal offers an incentive to Members providing liquidity in LEP Securities. The Exchange believes that such incentives will promote price discovery and market quality in such securities and, further, that the tightened spreads and increased liquidity from the proposal will benefit all investors by deepening the Exchange’s liquidity pool, offering additional flexibility for all investors to enjoy cost savings, supporting the quality of price discovery, enhancing quoting competition across exchanges, promoting market transparency, and improving investor protection. Accordingly, the Exchange believes that the proposal is reasonable, equitably allocated, and non-discriminatory because it would apply uniformly to all Members and is consistent with the overall goals of enhancing market quality. The Exchange notes that the proposed pricing structure is not dissimilar from volume-based rebates and fees (‘‘Volume Tiers’’) that have been widely adopted by exchanges, including the Exchange, and are equitable and not unfairly discriminatory because they are open to all Members on an equal basis and provide higher rebates and lower fees that are reasonably related to the value to an exchange’s market quality. Much like Volume Tiers are generally designed to incentivize higher levels of liquidity provision and/or growth patterns on the Exchange, the proposal is designed to incentivize enhanced market quality on the Exchange through tighter spreads, greater size at the inside, and greater quoting depth in LEP Securities by offering a rebate in LEP Securities. Such rebates will simultaneously incentivize higher levels of liquidity provision in all LEP Securities. Accordingly, the Exchange believes that the proposal will act to enhance liquidity and competition across exchanges in LEP Securities on the Exchange by providing a rebate reasonably related to such enhanced E:\FR\FM\18DEN1.SGM 18DEN1 Federal Register / Vol. 88, No. 241 / Monday, December 18, 2023 / Notices khammond on DSKJM1Z7X2PROD with NOTICES market quality to the benefit of all investors, thereby promoting the principles discussed in Section 6(b)(5) of the Act.20 The Exchange also believes that the proposed definitions and name changes to existing Tiers under footnote 13 are reasonable, fair and equitable and nondiscriminatory because it is designed to make sure that the fee schedule is as clear and easily understandable as possible. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Particularly, the proposed LEP Tier is available to all Members equally in that all Members are eligible for the proposed LEP Tier, have a reasonable opportunity to meet the LEP Tier’s criteria and will receive the corresponding rebate if such criteria is met. Additionally, the proposed LEP Tier is designed to attract additional order flow to the Exchange. The Exchange believes that the proposed LEP Tier criteria would incentivize market participants to direct liquidity adding displayed order flow to the Exchange, bringing with it additional execution opportunities for market participants and improved price transparency. Greater overall order flow, trading opportunities, and pricing transparency benefits all market participants on the Exchange by enhancing market quality and continuing to encourage Members to send orders, thereby contributing towards a robust and well-balanced market ecosystem. Next, the Exchange 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 that they may participate on and direct their order flow, including 15 other equities exchanges and 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 17% 21 of the market share. Therefore, no exchange possesses significant pricing power in the execution of order flow. Indeed, participants can readily choose to send 20 15 U.S.C. 78f(b)(5). note 6. 21 Supra VerDate Sep<11>2014 17:41 Dec 15, 2023 Jkt 262001 their orders to other exchange and offexchange venues if they deem fee levels at those other venues to be more favorable. Moreover, the Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 22 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’. . . .’’.23 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 Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 24 and Rule 19b–4(f)(6) 25 thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 26 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),27 the Commission may designate a shorter time of such action is consistent with the protection of investor and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposed rule change may become operative upon filing. The Exchange states that waiving the operative delay would allow market participants to realize the benefits of the proposal immediately and that such waiver is consistent with the protection of investors and the public interest because it would promote enhanced market quality and serve as an additional safeguard against extreme price dislocation. Based on the foregoing, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposal operative upon filing.28 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or 24 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 26 17 CFR 240.19b–4(f)(6). 27 17 CFR 240.19b–4(f)(6)(iii). 28 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 25 17 22 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 23 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)). PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 87479 E:\FR\FM\18DEN1.SGM 18DEN1 87480 Federal Register / Vol. 88, No. 241 / Monday, December 18, 2023 / Notices • Send an email to rule-comments@ sec.gov. Please include file number SR– CboeBZX–2023–099 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–2023–099. 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–CboeBZX–2023–099 and should be submitted on or before January 8, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29 Christina Z. Milnor, Assistant Secretary. [FR Doc. 2023–27675 Filed 12–15–23; 8:45 am] BILLING CODE 8011–01–P The Small Business Administration (SBA) intends to request approval, from the Office of Management and Budget (OMB) for the collection of information described below. The Paperwork Reduction Act (PRA) of 1995 requires federal agencies to publish a notice in the Federal Register concerning each proposed collection of information before submission to OMB, and to allow 60 days for public comment in response to the notice. This notice complies with that requirement. SUMMARY: Submit comments on or before February 13, 2024. DATES: Send all comments to Pamela Beavers, Area Director, Government Contracting Area IV, Office of Government Contracting, Small Business Administration, Washington, DC 20416. ADDRESSES: FOR FURTHER INFORMATION CONTACT: Pamela Beavers, Area Director, Government Contracting IV, Office of Government Contracting 312–353–7381, pamela.beavers@sba.gov, or Curtis B. Rich, A, 202–205–7030, Agency Clearance Officer curtis.rich@sba.gov. A small business determined to be nonresponsible for award of a specific prime Government contract by a Government contracting office has the right to appeal that decision through the Small Business Administration (SBA). The information contained on this form, as well as, other information developed by SBA, is used in determining whether the decision by the Contracting Officer should be overturned. SUPPLEMENTARY INFORMATION: Solicitation of Public Comments SBA is requesting comments on (a) Whether the collection of information is necessary for the agency to properly perform its functions; (b) whether the burden estimates are accurate; (c) whether there are ways to minimize the burden, including through the use of automated techniques or other forms of information technology; and (d) whether there are ways to enhance the quality, utility, and clarity of the information. Summary of Information Collection khammond on DSKJM1Z7X2PROD with NOTICES SMALL BUSINESS ADMINISTRATION Data Collection Available for Public Comments 60-Day notice and request for comments. ACTION: 29 17 CFR 200.30–3(a)(12), (59). VerDate Sep<11>2014 17:41 Dec 15, 2023 Jkt 262001 OMB Control Number: 3245–0225. (1) Title: Small Business Administration Application for Certificate of Competency. Description of Respondents: Small Businesses. Form Number: SBA Form 1531. Total Estimated Annual Responses: 300. PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 Total Estimated Annual Hour Burden: 2,400. Curtis Rich, Agency Clearance Officer. [FR Doc. 2023–27668 Filed 12–15–23; 8:45 am] BILLING CODE 8026–09–P SMALL BUSINESS ADMINISTRATION Reporting and Recordkeeping Requirements Under OMB Review Small Business Administration. 30-Day notice. AGENCY: ACTION: The Small Business Administration (SBA) is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act and OMB procedures, SBA is publishing this notice to allow all interested member of the public an additional 30 days to provide comments on the proposed collection of information. DATES: Submit comments on or before January 17, 2024. ADDRESSES: Written comments and recommendations for this information collection request should be sent within 30 days of publication of this notice to www.reginfo.gov/public/do/PRAMain. Find this particular information collection request by selecting ‘‘Small Business Administration’’; ‘‘Currently Under Review,’’ then select the ‘‘Only Show ICR for Public Comment’’ checkbox. This information collection can be identified by title and/or OMB Control Number. FOR FURTHER INFORMATION CONTACT: You may obtain a copy of the information collection and supporting documents from the Agency Clearance Office at Curtis.Rich@sba.gov; (202) 205–7030, or from www.reginfo.gov/public/do/ PRAMain. SUPPLEMENTARY INFORMATION: The recipients of SBA counseling and training grant awards are required by the terms of their Notice of Award and as outlined in each Program Announcement, to collect the information on SBA Form 641 (Counseling Information Form) from each small business or prospective small business that receives one-on-one counseling or advising, and to collect the information on SBA Form 888 (Management Training Report) for each group training session. SBA’s Resource Partners submit this information to SBA via the Nexus system. The information is pertinent to management’s analysis of each OED program or activity funded by SUMMARY: E:\FR\FM\18DEN1.SGM 18DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 88, Number 241 (Monday, December 18, 2023)]
[Notices]
[Pages 87476-87480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27675]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99147; File No. SR-CboeBZX-2023-099]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Fee Schedule Applicable to Members and Non-Members of the Exchange 
Pursuant to BZX Rules 15.1(a) and (c) in Order To Adopt a New Tier 
Under Footnote 13 (Tape B Volume and Quoting) Specific to Single-Stock 
Exchange Traded Funds (``Single-Stock ETFs'')

December 12, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 1, 2023, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
filed the proposal as a ``non-controversial'' proposed rule change 
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to

[[Page 87477]]

solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to amend the Fee Schedule applicable to Members 
and non-members of the Exchange pursuant to BZX Rules 15.1(a) and (c) 
in order to adopt a new Tier under footnote 13 (Tape B Volume and 
Quoting) specific to Single-Stock Exchange Traded Funds (``Single-Stock 
ETFs''). 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 applicable to its 
equities trading platform (``BZX Equities'') to adopt a new Tier under 
footnote 13 (Tape B Volume and Quoting) specific to Single-Stock 
ETFs.\5\ The Exchange proposes to implement these amendments to its fee 
schedule December 1, 2023.
---------------------------------------------------------------------------

    \5\ Single-Stock ETFs are investment products that pay positive 
or negative multiples of the market performance of the single 
underlying security.
---------------------------------------------------------------------------

    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 
Exchange Act, to which market participants may direct their order flow. 
Based on publicly available information,\6\ no single registered 
equities exchange has more than 17% of the market share. Thus, in such 
a low-concentrated and highly competitive market, no single equities 
exchange possesses significant pricing power in the execution of order 
flow. The Exchange in particular operates a ``Maker-Taker'' model 
whereby it pays credits to Members that add liquidity and assesses fees 
to those that remove liquidity. The Exchange's fee schedule sets forth 
the standard rebates and rates applied per share for orders that 
provide and remove liquidity, respectively. Currently, for orders in 
securities priced at or above $1.00, the Exchange provides a standard 
rebate of $0.00160 per share for orders that add liquidity and assesses 
a fee of $0.0030 per share for orders that remove liquidity.\7\ For 
orders in securities priced below $1.00, the Exchange does not provide 
a rebate or assess a fee for orders that add liquidity and assesses a 
fee of 0.30% of total dollar value for orders that remove liquidity.\8\ 
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.
---------------------------------------------------------------------------

    \6\ See Cboe Global Markets, U.S. Equities Market Volume 
Summary, Month-to-Date (July 31, 2023), available at https://www.cboe.com/us/equities/market_statistics/.
    \7\ See BZX Equities Fee Schedule, Standard Rates.
    \8\ Id.
---------------------------------------------------------------------------

    Now, the Exchange proposes to adopt a new pricing Tier under 
footnote 13 of the Fee Schedule. Specifically, for orders yielding fee 
code B,\9\ the Exchange proposes to adopt LEP Tier 1 under footnote 13 
of the Fee Schedule.\10\ The Exchange is proposing that a Member \11\ 
will qualify for the LEP Tier 1 where the Member is enrolled in a 
minimum of five LEP Securities \12\ for which it meets certain required 
criteria (the ``Required Criteria''). A Member must be enrolled in at 
least the minimum number of LEP Securities for which it meets the 
Required Criteria every day in a trading month in order to be eligible 
for the proposed rebate. As proposed, the Exchange would count an LEP 
Security toward the minimum number of LEP Securities requirement where 
the Member meets the Required Criteria for at least 75% of the trading 
days in a particular month. As noted above, these proposed requirements 
are very similar to the existing LMP Tiers under footnote 13.
---------------------------------------------------------------------------

    \9\ Fee code B is appended to displayed orders that add 
liquidity to BZX in Tape B securities.
    \10\ The existing tiers under footnote 13 were added in a fee 
filing adopting a similar structure related to LMP securities on the 
Exchange. See Securities Exchange Act No. 78338 (July 15, 2016) 81 
FR 47458 (July 21, 2016) (SR-BatsBZX-2016-041) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change Related to Fees 
for Use of Bats BZX Exchange, Inc.).
    \11\ See Exchange Rule 1.5(n).
    \12\ As discussed further below, the Exchange proposes to adopt 
the term ``LEP Securities'', which means a list of Single-Stock 
ETFs, including options-based ETFs in a single underlying equity 
security, for which the Exchange wants to incentivize Members to 
provide enhanced market quality. The Exchange will not remove a 
security from the list of LEP Securities without 30 days prior 
notice.
---------------------------------------------------------------------------

    To qualify for proposed LEP Tier 1 a Member must be enrolled in at 
least five BZX-listed LEP Securities and meet the following Required 
Criteria,:
    (1) The Member has an NBBO Time \13\ of equal or greater than 20%;
---------------------------------------------------------------------------

    \13\ ``NBBO Time'' means the average of the percentage of time 
during regular trading hours during which the Member maintains at 
least 100 shares at each of the NBB and NBO.
---------------------------------------------------------------------------

    (2) Member has bids and offers with a ``Notional Depth'' \14\ of 
$75,000 on each side for at least 90% of the trading day; and
---------------------------------------------------------------------------

    \14\ As discussed further below, the Exchange proposes to adopt 
a new definition for ``Notional Depth'' which means the notional 
value of bids of at least 100 shares that are within $0.05 of the 
BZX NBB and offers of at least 100 shares that are within $0.05 of 
the BZX NBO.
---------------------------------------------------------------------------

    (3) The difference in the NBBO spread of each LEP Security is less 
than 0.50% for at least 95% of the trading day.
    The Required Criteria for each LEP Security will each be evaluated 
separately, and the Member does not need to meet the Required Criteria 
for all applicable LEP Securities on the same 75% of trading days. For 
example, in a month with 22 trading days, a Member would be eligible 
for Tier 1 where the Member met the Required Criteria in five LEP 
Securities in the first 11 trading days of the month and met the 
Required Criteria for a different set of five LEP Securities in the 
second 11 trading days of the month.
    Members that meet proposed LEP Tier 1 would receive a rebate of 
$0.0025 per share. In the event that a Member would receive a higher 
rebate under a different Tier set forth in the Fee Schedule, the

[[Page 87478]]

Member would be entitled to the higher of the two rebates. As noted 
above, the Exchange also proposes to adopt two new definitions to the 
Fee Schedule. First, the Exchange proposes to adopt the term Notional 
Depth which will mean the notional value of bids of at least 100 shares 
that are within $0.05 of the NBB or offers of at least 100 shares that 
are within $0.05 of the NBO. Second, the Exchange proposes to adopt the 
term ``LEP Securities'' which will a list of Single-Stock ETFs, 
including options-based ETFs in a single underlying equity security, 
for which the Exchange wants to incentivize Members to provide enhanced 
market quality.
    All Members will be eligible to enroll in LEP Securities, there 
will be no limit to the number of LEP Securities in which a Member may 
enroll, and there will be no limit to the number of Members that can 
enroll in each LEP Security.\15\ All Members enrolled in LMP Securities 
will be eligible for the rebate where the Member meets the Tape B 
Quoting LMP Tier 1 requirements. Such LEP Securities will include all 
Cboe-listed Single-Stock ETFs for which the Exchange wants to 
incentivize Members to provide enhanced market quality. The Exchange 
will not remove a security from the list of LEP Securities without 30 
days prior notice.
---------------------------------------------------------------------------

    \15\ The Exchange anticipates that the initial list of LMP 
Securities will include at least nine ETPs. A current list of LEP 
Securities will be available on www.cboe.com, which will be updated 
as new securities are added to the list of LEP Securities. All Cboe-
listed LEP Securities will be enrolled in the program immediately 
upon listing on the Exchange.
---------------------------------------------------------------------------

    The Exchange also proposes to make a conforming change to the 
existing Tiers under footnote 13 of the Fee Schedule. Specifically, the 
Exchange proposes to rename existing Tiers 1 and 2 under footnote 13 
``LMP Tier 1'' and ``LMP Tier 2'', respectively.
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.\16\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \17\ 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) \18\ 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) \19\ 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.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ Id.
    \19\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The proposed rule reflects a competitive pricing structure designed 
to incent market participants to direct their order flow to the 
Exchange and enhance market quality in LEP Securities and Tape B 
securities. The Exchange 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. The Exchange believes that the proposed LEP Tier represents 
an equitable allocation of rebates and are not unfairly discriminatory 
because all Members are eligible for such LEP Tier and would have the 
opportunity to meet the LEP Tier's criteria and would receive the 
proposed rebate if such criteria is met. Further, the proposed rebates 
are commensurate with the proposed criteria. That is, the rebates 
reasonably reflect the difficulty in achieving the applicable criteria 
as proposed. Without having a view of activity on other markets and 
off-exchange venues, the Exchange has no way of knowing whether this 
proposed rule change would definitely result in any Members qualifying 
for the proposed LEP Tier. While the Exchange has no way of predicting 
with certainty how the proposed LEP Tier will impact Member activity, 
the Exchange reasonably expects four Members to compete for and reach 
the proposed LEP Tier. The Exchange also notes that proposed Tier/
rebate will not adversely impact any Member's ability to qualify for 
other reduced fee or enhanced rebate Tiers. Should a Member not meet 
the proposed criteria under the proposed LEP Tier, the Member will 
merely not receive that corresponding rebate.
    The Exchange believes that the proposed new LEP Tier is reasonable 
in that they will enhance market quality on the Exchange in two ways: 
(i) by incentivizing Members to meet certain quoting standards in LEP 
Securities designed to narrow spreads, increase size at the inside, and 
increase liquidity depth; and (ii) providing a rebate for all of a 
qualifying Member's orders that add liquidity in LEP Securities will 
incentivize Members to increase their participation on the Exchange in 
LEP Securities. Furthermore, the Exchange believes it is appropriate to 
incentivize Members to meet the Required Criteria in LEP Securities as 
such securities poses an enhanced risk to Members providing liquidity 
in those securities. Therefore, the proposal offers an incentive to 
Members providing liquidity in LEP Securities.
    The Exchange believes that such incentives will promote price 
discovery and market quality in such securities and, further, that the 
tightened spreads and increased liquidity from the proposal will 
benefit all investors by deepening the Exchange's liquidity pool, 
offering additional flexibility for all investors to enjoy cost 
savings, supporting the quality of price discovery, enhancing quoting 
competition across exchanges, promoting market transparency, and 
improving investor protection. Accordingly, the Exchange believes that 
the proposal is reasonable, equitably allocated, and non-discriminatory 
because it would apply uniformly to all Members and is consistent with 
the overall goals of enhancing market quality.
    The Exchange notes that the proposed pricing structure is not 
dissimilar from volume-based rebates and fees (``Volume Tiers'') that 
have been widely adopted by exchanges, including the Exchange, and are 
equitable and not unfairly discriminatory because they are open to all 
Members on an equal basis and provide higher rebates and lower fees 
that are reasonably related to the value to an exchange's market 
quality. Much like Volume Tiers are generally designed to incentivize 
higher levels of liquidity provision and/or growth patterns on the 
Exchange, the proposal is designed to incentivize enhanced market 
quality on the Exchange through tighter spreads, greater size at the 
inside, and greater quoting depth in LEP Securities by offering a 
rebate in LEP Securities. Such rebates will simultaneously incentivize 
higher levels of liquidity provision in all LEP Securities. 
Accordingly, the Exchange believes that the proposal will act to 
enhance liquidity and competition across exchanges in LEP Securities on 
the Exchange by providing a rebate reasonably related to such enhanced

[[Page 87479]]

market quality to the benefit of all investors, thereby promoting the 
principles discussed in Section 6(b)(5) of the Act.\20\
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange also believes that the proposed definitions and name 
changes to existing Tiers under footnote 13 are reasonable, fair and 
equitable and non-discriminatory because it is designed to make sure 
that the fee schedule is as clear and easily understandable as 
possible.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Particularly, the proposed 
LEP Tier is available to all Members equally in that all Members are 
eligible for the proposed LEP Tier, have a reasonable opportunity to 
meet the LEP Tier's criteria and will receive the corresponding rebate 
if such criteria is met. Additionally, the proposed LEP Tier is 
designed to attract additional order flow to the Exchange. The Exchange 
believes that the proposed LEP Tier criteria would incentivize market 
participants to direct liquidity adding displayed order flow to the 
Exchange, bringing with it additional execution opportunities for 
market participants and improved price transparency. Greater overall 
order flow, trading opportunities, and pricing transparency benefits 
all market participants on the Exchange by enhancing market quality and 
continuing to encourage Members to send orders, thereby contributing 
towards a robust and well-balanced market ecosystem.
    Next, the Exchange 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 that they may participate on 
and direct their order flow, including 15 other equities exchanges and 
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 17% \21\ 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 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.'' \22\ 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'. . . .''.\23\ 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.
---------------------------------------------------------------------------

    \21\ Supra note 6.
    \22\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \23\ 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

    Because the foregoing proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, the proposed rule 
change has become effective pursuant to Section 19(b)(3)(A) of the Act 
\24\ and Rule 19b-4(f)(6) \25\ thereunder.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \26\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\27\ the Commission 
may designate a shorter time of such action is consistent with the 
protection of investor and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative upon filing. The Exchange states that 
waiving the operative delay would allow market participants to realize 
the benefits of the proposal immediately and that such waiver is 
consistent with the protection of investors and the public interest 
because it would promote enhanced market quality and serve as an 
additional safeguard against extreme price dislocation. Based on the 
foregoing, the Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest. Therefore, the Commission hereby waives the operative delay 
and designates the proposal operative upon filing.\28\
---------------------------------------------------------------------------

    \26\ 17 CFR 240.19b-4(f)(6).
    \27\ 17 CFR 240.19b-4(f)(6)(iii).
    \28\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or

[[Page 87480]]

     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2023-099 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-2023-099. 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-CboeBZX-2023-099 and should 
be submitted on or before January 8, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------

Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023-27675 Filed 12-15-23; 8:45 am]
BILLING CODE 8011-01-P

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