Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule, 19375-19379 [2024-05634]
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Federal Register / Vol. 89, No. 53 / Monday, March 18, 2024 / Notices
significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 9 and Rule 19b–4(f)(6)(iii) 10
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 11 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),12 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange states that the
proposed change will not adversely
impact investors and will permit the
Exchange to promptly correct a rule
reference in order to alleviate potential
investor or public confusion and add
clarity to its rules. According to the
Exchange, because the proposed rule
change does not raise any novel
regulatory issues, the Exchange believes
that waiver of the operative delay would
be consistent with the protection of
investors and the public interest. The
Commission finds that, because the
proposed rule change merely corrects a
rule reference in the Exchange’s
rulebook, 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.13
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
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii).
13 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).
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public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) of the Act 14 to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
NYSEAMER–2024–16 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–NYSEAMER–2024–16. 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–NYSEAMER–2024–16 and should
be submitted on or before April 8, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–05631 Filed 3–15–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99722; File No. SR–
CboeBYX–2024–007]
Self-Regulatory Organizations; Cboe
BYX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Fee Schedule
March 12, 2024.
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 March 1,
2024, Cboe BYX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(‘‘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 BYX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) 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/BYX/),
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
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
14 15
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U.S.C. 78s(b)(2)(B).
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Federal Register / Vol. 89, No. 53 / Monday, March 18, 2024 / 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.
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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 (‘‘BYX Equities’’) by:
(1) modifying the Remove Volume Tiers;
and (2) deleting the Step-Up Tier. The
Exchange proposes to implement these
changes effective March 1, 2024.
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,3 no single
registered equities exchange has more
than 16% 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
$0.00200 per share for orders that
remove liquidity and assesses a fee of
$0.00200 per share for orders that add
liquidity.4 For orders in securities
priced below $1.00, the Exchange does
not assess any fees for orders that add
liquidity, and provides a rebate in the
3 See Cboe Global Markets, U.S. Equities Market
Volume Summary, Month-to-Date (February 23,
2024), available at https://www.cboe.com/us/
equities/market_statistics/.
4 See BYX Equities Fee Schedule, Standard Rates.
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amount of 0.10% of the total dollar
value for orders that remove liquidity.5
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.
Remove Volume Tiers
Under footnote 1 of the Fee Schedule,
the Exchange currently offers various
Add/Remove Volume Tiers. In
particular, the Exchange offers three
Remove Volume Tiers that each provide
an enhanced rebate for Members’
qualifying orders yielding fee codes
BB,6 N 7 and W 8 where a Member
reaches certain add volume-based
criteria. The Exchange first proposes to
delete Remove Volume Tiers 7 and 8 as
the Exchange does not wish to, nor is
required to, maintain such tiers. More
specifically, the proposed change
removes these tiers as the Exchange
would rather redirect future resources
and funding into other programs and
tiers intended to incentivize increased
order flow.
Next, the Exchange proposes to
introduce a new Remove Volume Tier 6,
and re-number current Remove Volume
Tier 6 to Remove Volume Tier 7. In
addition, the Exchange proposes to
amend the criteria of current Remove
Volume Tier 6 (proposed Remove
Volume Tier 7). The criteria for
proposed Remove Volume Tier 6 is as
follows:
• Proposed Remove Volume Tier 6
provides a rebate of $0.0013 per share
in securities priced at or above $1.00 to
qualifying orders (i.e., orders yielding
fee codes BB, N, or W) where (1)
Member has a combined Auction ADV 9
and ADV 10 ≥0.08% of the TCV; 11 and
5 Id.
6 Fee code BB is appended to orders that remove
liquidity from BYX in Tape B securities.
7 Fee code N is appended to orders that remove
liquidity from BYX in Tape C securities.
8 Fee code W is appended to orders that remove
liquidity from BYX in Tape A securities.
9 ‘‘Auction ADV’’ means average daily auction
volume calculated as the number of shares executed
in an auction per day.
10 ‘‘ADV’’ means average daily volume calculated
as the number of shares added ore removed,
combined, per day. ADV is calculated on a monthly
basis.
11 ‘‘TCV’’ means total consolidated volume
calculated as the volume reported by all exchanges
and trade reporting facilities to a consolidated
transaction reporting plan for the month for which
the fees apply.
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(2) Member has a combined Auction
ADV and ADAV 12 ≥5,000,000 shares.
The criteria for current Remove
Volume Tier 6 (proposed Remove
Volume Tier 7) is as follows:
• Remove Volume Tier 6 provides a
rebate of $0.0015 per share in securities
priced at or above $1.00 to qualifying
orders (i.e., orders yielding fee codes
BB, N, or W) where (1) Member has a
combined Auction ADV and ADV
≥0.08% of the TCV; and (2) Member has
a combined Auction ADV and ADAV
≥500,000 shares.
The proposed criteria for current
Remove Volume Tier 6 (proposed
Remove Volume Tier 7) is as follows:
• Proposed Remove Volume Tier 7
provides a rebate of $0.0015 per share
in securities priced at or above $1.00 to
qualifying orders (i.e., orders yielding
fee codes BB, N, or W) where (1)
Member has a combined Auction ADV
and ADV ≥0.10% of the TCV; and (2)
Member has a combined Auction ADV
and ADAV ≥7,000,000 shares.
The Exchange believes that the
proposed modification to current
Remove Volume Tier 6 (proposed
Remove Volume Tier 7) and the
introduction of proposed Remove
Volume Tier 6 will incentivize Members
to add volume to the Exchange, thereby
contributing to a deeper and more liquid
market, which benefits all market
participants and provides greater
execution opportunities on the
Exchange. While the proposed criteria
in current Remove Volume Tier 6
(proposed Remove Volume Tier 7) is
more difficult to achieve than the
current criteria, the revised criteria
continue to remain commensurate with
the rebate that will be received upon a
Member satisfying the proposed criteria.
Step-Up Tier
Under footnote 2 of the Fee Schedule,
the Exchange currently offers a Step-Up
Tier that assesses a reduced fee for
Members’ qualifying orders yielding fee
codes B,13 V,14 Y,15 and AD 16 where
certain add volume-based criteria is
met, including ‘‘growing’’ volume over
a certain baseline month. The Exchange
now proposes to delete the Step-Up Tier
as the Exchange does not wish to, nor
is required to, maintain such tier. More
12 ‘‘ADAV’’ means average daily added volume
calculated as the number of shares added per day.
ADAV is calculated on a monthly basis.
13 Fee code B is appended to displayed orders
that add liquidity to BYX in Tape B securities.
14 Fee code V is appended to displayed orders
that add liquidity to BYX in Tape A securities.
15 Fee code Y is appended to displayed orders
that add liquidity to BYX in Tape C securities.
16 Fee code AD is appended to displayed orders
executed in a Periodic Auction.
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specifically, the proposed change
removes this tier as the Exchange would
rather redirect future resources and
funding into other programs and tiers
intended to incentivize increased order
flow.
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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.17 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 18 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 19 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers as
well as Section 6(b)(4) 20 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 that its proposal to
modify current Remove Volume Tier 6
(proposed Remove Volume Tier 7) and
introduce proposed Remove Volume
Tier 6 reflects a competitive pricing
structure designed to incentivize market
participants to direct their order flow to
the Exchange, which the Exchange
believes would enhance market quality
to the benefit of all Members.
Additionally, the Exchange notes that
relative volume-based incentives and
discounts have been widely adopted by
17 15
18 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
21 See e.g., EDGA Equities Fee Schedule, Footnote
7, Add/Remove Volume Tiers.
22 See e.g., BYX Equities Fee Schedule, Footnote
1, Add/Remove Volume Tiers.
19 Id.
20 15
U.S.C. 78f(b)(4).
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17:07 Mar 15, 2024
exchanges,21 including the Exchange,22
and are reasonable, equitable and nondiscriminatory because they are open to
all Members on an equal basis and
provide additional benefits or discounts
that are reasonably related to (i) the
value to an exchange’s market quality
and (ii) associated higher levels of
market activity, such as higher levels of
liquidity provision and/or growth
patterns. Competing equity exchanges
offer similar tiered pricing structures,
including schedules or rebates and fees
that apply based upon members
achieving certain volume and/or growth
thresholds, as well as assess similar fees
or rebates for similar types of orders, to
that of the Exchange.
In particular, the Exchange believes
its proposal to modify current Remove
Volume Tier 6 (proposed Remove
Volume Tier 7) and introduce proposed
Remove Volume Tier 6 is reasonable
because the tiers will be available to all
Members and provide all Members with
an opportunity to receive a higher
enhanced rebate. The Exchange further
believes that modified Remove Volume
Tier 6 (proposed Remove Volume Tier
7) and proposed Remove Volume Tier 6
will provide a reasonable means to
encourage adding displayed orders in
Members’ order flow to the Exchange
and to incentivize Members to continue
to provide volume to the Exchange by
offering them an additional opportunity
to receive a higher enhanced rebate on
qualifying orders. An overall increase in
activity would deepen the Exchange’s
liquidity pool, offers additional cost
savings, support the quality of price
discovery, promote market transparency
and improve market quality, for all
investors.
The Exchange believes proposed
modified Remove Volume Tier 6
(proposed Remove Volume Tier 7) and
proposed Remove Volume Tier 6 are
reasonable as they do not represent a
significant departure from the criteria
currently offered in the Fee Schedule.
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 for the new
and revised tiers and have the
opportunity to meet the tiers’ criteria
and receive the corresponding reduced
fee if such criteria are met. Without
having a view of activity on other
markets and off-exchange venues, the
Exchange has no way of knowing
whether these proposed rule changes
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19377
would definitely result in any Members
qualifying for the new proposed tiers.
While the Exchange has no way of
predicting with certainty how the
proposed changes will impact Member
activity, based on the prior months
volume, the Exchange anticipates that at
least three Members will be able to
satisfy proposed Remove Volume Tier 6,
and at least four Members will be able
to satisfy proposed Remove Volume Tier
7. The Exchange also notes that the
proposed changes will not adversely
impact any Member’s ability to qualify
for reduced fees or enhanced rebates
offered under other tiers. Should a
Member not meet the proposed new
criteria, the Member will merely not
receive that corresponding enhanced
rebate.
The Exchange believes that its
proposal to eliminate current Remove
Volume Tiers 7–8 and the Step-Up Tier
is reasonable because the Exchange is
not required to maintain these tiers nor
is it required to provide Members an
opportunity to receive enhanced rebates
or reduced fees. The Exchange believes
its proposal to eliminate the tiers is also
equitable and not unfairly
discriminatory because it applies to all
Members (i.e., the tiers will not be
available for any Member). The
Exchange also notes that the proposed
rule change to remove these tiers merely
results in Members not receiving an
enhanced rebate or reduced fee, which,
as noted above, the Exchange is not
required to offer or maintain.
Furthermore, the proposed rule change
to eliminate the tiers enables the
Exchange to redirect resources and
funding into other programs and tiers
intended to incentivize increased order
flow.
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 change would
encourage the submission of additional
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.’’
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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. Particularly,
the proposed modified current Remove
Volume Tier 6 (proposed Remove
Volume Tier 7) and proposed Remove
Volume Tier 6 will apply to all
Members equally in that all Members
are eligible for the tiers and enhanced
rebates, have a reasonable opportunity
to meet the proposed tiers’ criteria and
will receive the enhanced rebate on
their qualifying orders if such criteria is
met. The Exchange does not believe the
proposed changes burden competition,
but rather, enhance competition as they
are intended to increase the
competitiveness of BYX by amending
existing pricing incentives in order to
attract order flow and incentivize
participants to increase their
participation on the Exchange,
providing for 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.
Additionally, the Exchange believes
the proposed elimination of current
Remove Volume Tiers 7–8 and the StepUp Tier does not impose any burden on
intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Specifically,
the proposed change to eliminate
current Remove Volume Tiers 7–8 and
the Step-Up Tier will not impose any
burden on intramarket competition
because the changes apply to all
Members uniformly, as in, the tiers will
no longer be available to any Member.
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 16% of the market share.23
Therefore, no exchange possesses
23 Supra
note 3.
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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
been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 24 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’. . . .’’.25 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 26 and paragraph (f) of Rule
19b–4 27 thereunder. At any time within
60 days of the filing of the proposed rule
24 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
25 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)).
26 15 U.S.C. 78s(b)(3)(A).
27 17 CFR 240.19b–4(f).
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change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBYX–2024–007 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–CboeBYX–2024–007. 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
E:\FR\FM\18MRN1.SGM
18MRN1
Federal Register / Vol. 89, No. 53 / Monday, March 18, 2024 / Notices
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CboeBYX–2024–007 and should be
submitted on or before April 8, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–05634 Filed 3–15–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99724; File No. SR–
CboeBZX–2024–022]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend the
Creation Basket Size of the VanEck
Bitcoin Trust
lotter on DSK11XQN23PROD with NOTICES1
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 March 4,
2024, Cboe BZX Exchange, Inc.
(‘‘Exchange’’) 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
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
(a) 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 VanEck
Bitcoin Trust (the ‘‘Trust’’), shares of
which are listed and traded on the
Exchange pursuant to BZX Rule
14.11(e)(4), to amend the creation basket
size.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
28 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
17:07 Mar 15, 2024
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
March 12, 2024.
VerDate Sep<11>2014
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
Jkt 262001
The Commission approved the listing
and trading of shares of the Trust (the
‘‘Shares’’) on the Exchange pursuant to
Exchange Rule 14.11(e)(4), CommodityBased Trust Shares, on January 10,
2024.5 Exchange Rule 14.11(e)(4)
governs the listing and trading of
Commodity-Based Trust Shares, which
means a security (a) that is issued by a
trust (‘‘Trust’’) that holds (1) a specified
commodity deposited with the Trust, or
(2) a specified commodity and, in
addition to such specified commodity,
cash; (b) that is issued by such Trust in
a specified aggregate minimum number
in return for a deposit of a quantity of
the underlying commodity and/or cash;
and (c) that, when aggregated in the
same specified minimum number, may
be redeemed at a holder’s request by
such Trust which will deliver to the
redeeming holder the quantity of the
underlying commodity and/or cash. The
Shares are issued by the Trust, a
Delaware statutory trust organized on
December 17, 2020.
The Exchange proposes to amend a
representation set forth in the
Exchange’s previous rule filing to list
5 See Securities Exchange Act Release No. 99306
(January 10, 2024) (File Nos. SR–NYSEARCA–
2021–90; SR–NYSEARCA–2023–44;
SRNYSEARCA–2023–58; SR–NASDAQ–2023–016;
SR–NASDAQ–2023–019; SR–CboeBZX–2023–028;
SRCboeBZX–2023–038; SR–CboeBZX–2023–040;
SR–CboeBZX–2023–042; SRCboeBZX–2023–044;
SR–CboeBZX–2023–072) (Order Granting
Accelerated Approval of Proposed Rule Changes, as
Modified by Amendments Thereto, to List and
Trade Bitcoin-Based Commodity-Based Trust
Shares and Trust Units) (the ‘‘Approval Order’’).
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
19379
and trade Shares of the Trust.6
Specifically, Amendment No. 2
represented that that when the Trust
sells or redeems its Shares, it will do so
in cash transactions in blocks of 50,000
Shares (a ‘‘Creation Basket’’) at the
Trust’s NAV. Now, the Exchange
proposes to reduce the Creation Basket
size from 50,000 Shares to 25,000
Shares. A decrease in the Creation
Basket size would provide additional
flexibility to the creation and
redemption of Shares, which may result
in tighter spreads and a more efficient
market, to the benefit of all market
participants. Furthermore, at least one
other issuer of spot bitcoin exchangetraded products (‘‘ETPs’’) has similarly
provided for Creation Basket sizes of
less than 25,000 Shares.7
Except for the above change, all other
representations in Amendment No. 2
and the Approval Order remain
unchanged and will continue to
constitute continuing listing
requirements. In addition, the Trust will
continue to comply with the terms of
the Approval Order and the
requirements of Rule 14.11(e)(4).
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.8 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 9 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
6 See supra note 5 and see also Securities
Exchange Act Release No. 99289 (January 8, 2024)
(SR–CboeBZX–2023–040) (Notice of Filing of
Amendment No. 2 to a Proposed Rule Change to
List and Trade Shares of VanEck Bitcoin Trust
Under BZX Rule 14.11(e)(4), Commodity-Based
Trust Shares)) (‘‘Amendment No. 2’’).
7 For example, the proposal to list and trade
shares of the ARK 21Shares Bitcoin ETF provided
for a Creation Basket size of 5,000 shares. See
Securities Exchange Act No. 9928 (January 8, 2024)
(SR–CboeBZX–2023–028) (Notice of Filing of
Amendment No. 5 to a Proposed Rule Change to
List and Trade Shares of the ARK 21Shares Bitcoin
ETF under BZX Rule 14.11(e)(4), Commodity-Based
Trust Shares). See also the Approval Order.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
E:\FR\FM\18MRN1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 53 (Monday, March 18, 2024)]
[Notices]
[Pages 19375-19379]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05634]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99722; File No. SR-CboeBYX-2024-007]
Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
March 12, 2024.
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 March 1, 2024, Cboe BYX Exchange, Inc. (the ``Exchange'' or ``BYX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BYX Exchange, Inc. (the ``Exchange'' or ``BYX'') 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/BYX/), 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
[[Page 19376]]
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 (``BYX Equities'') by: (1) modifying the
Remove Volume Tiers; and (2) deleting the Step-Up Tier. The Exchange
proposes to implement these changes effective March 1, 2024.
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,\3\ no single registered equities exchange has more than
16% 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 $0.00200 per
share for orders that remove liquidity and assesses a fee of $0.00200
per share for orders that add liquidity.\4\ For orders in securities
priced below $1.00, the Exchange does not assess any fees for orders
that add liquidity, and provides a rebate in the amount of 0.10% of the
total dollar value for orders that remove liquidity.\5\ 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.
---------------------------------------------------------------------------
\3\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (February 23, 2024), available at https://www.cboe.com/us/equities/market_statistics/.
\4\ See BYX Equities Fee Schedule, Standard Rates.
\5\ Id.
---------------------------------------------------------------------------
Remove Volume Tiers
Under footnote 1 of the Fee Schedule, the Exchange currently offers
various Add/Remove Volume Tiers. In particular, the Exchange offers
three Remove Volume Tiers that each provide an enhanced rebate for
Members' qualifying orders yielding fee codes BB,\6\ N \7\ and W \8\
where a Member reaches certain add volume-based criteria. The Exchange
first proposes to delete Remove Volume Tiers 7 and 8 as the Exchange
does not wish to, nor is required to, maintain such tiers. More
specifically, the proposed change removes these tiers as the Exchange
would rather redirect future resources and funding into other programs
and tiers intended to incentivize increased order flow.
---------------------------------------------------------------------------
\6\ Fee code BB is appended to orders that remove liquidity from
BYX in Tape B securities.
\7\ Fee code N is appended to orders that remove liquidity from
BYX in Tape C securities.
\8\ Fee code W is appended to orders that remove liquidity from
BYX in Tape A securities.
---------------------------------------------------------------------------
Next, the Exchange proposes to introduce a new Remove Volume Tier
6, and re-number current Remove Volume Tier 6 to Remove Volume Tier 7.
In addition, the Exchange proposes to amend the criteria of current
Remove Volume Tier 6 (proposed Remove Volume Tier 7). The criteria for
proposed Remove Volume Tier 6 is as follows:
Proposed Remove Volume Tier 6 provides a rebate of $0.0013
per share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes BB, N, or W) where (1) Member has a
combined Auction ADV \9\ and ADV \10\ >=0.08% of the TCV; \11\ and (2)
Member has a combined Auction ADV and ADAV \12\ >=5,000,000 shares.
---------------------------------------------------------------------------
\9\ ``Auction ADV'' means average daily auction volume
calculated as the number of shares executed in an auction per day.
\10\ ``ADV'' means average daily volume calculated as the number
of shares added ore removed, combined, per day. ADV is calculated on
a monthly basis.
\11\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan for the month for which the
fees apply.
\12\ ``ADAV'' means average daily added volume calculated as the
number of shares added per day. ADAV is calculated on a monthly
basis.
---------------------------------------------------------------------------
The criteria for current Remove Volume Tier 6 (proposed Remove
Volume Tier 7) is as follows:
Remove Volume Tier 6 provides a rebate of $0.0015 per
share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes BB, N, or W) where (1) Member has a
combined Auction ADV and ADV >=0.08% of the TCV; and (2) Member has a
combined Auction ADV and ADAV >=500,000 shares.
The proposed criteria for current Remove Volume Tier 6 (proposed
Remove Volume Tier 7) is as follows:
Proposed Remove Volume Tier 7 provides a rebate of $0.0015
per share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes BB, N, or W) where (1) Member has a
combined Auction ADV and ADV >=0.10% of the TCV; and (2) Member has a
combined Auction ADV and ADAV >=7,000,000 shares.
The Exchange believes that the proposed modification to current
Remove Volume Tier 6 (proposed Remove Volume Tier 7) and the
introduction of proposed Remove Volume Tier 6 will incentivize Members
to add volume to the Exchange, thereby contributing to a deeper and
more liquid market, which benefits all market participants and provides
greater execution opportunities on the Exchange. While the proposed
criteria in current Remove Volume Tier 6 (proposed Remove Volume Tier
7) is more difficult to achieve than the current criteria, the revised
criteria continue to remain commensurate with the rebate that will be
received upon a Member satisfying the proposed criteria.
Step-Up Tier
Under footnote 2 of the Fee Schedule, the Exchange currently offers
a Step-Up Tier that assesses a reduced fee for Members' qualifying
orders yielding fee codes B,\13\ V,\14\ Y,\15\ and AD \16\ where
certain add volume-based criteria is met, including ``growing'' volume
over a certain baseline month. The Exchange now proposes to delete the
Step-Up Tier as the Exchange does not wish to, nor is required to,
maintain such tier. More
[[Page 19377]]
specifically, the proposed change removes this tier as the Exchange
would rather redirect future resources and funding into other programs
and tiers intended to incentivize increased order flow.
---------------------------------------------------------------------------
\13\ Fee code B is appended to displayed orders that add
liquidity to BYX in Tape B securities.
\14\ Fee code V is appended to displayed orders that add
liquidity to BYX in Tape A securities.
\15\ Fee code Y is appended to displayed orders that add
liquidity to BYX in Tape C securities.
\16\ Fee code AD is appended to displayed orders executed in a
Periodic Auction.
---------------------------------------------------------------------------
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.\17\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \18\ requirements that the rules
of an exchange be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \19\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers as well as Section 6(b)(4) \20\
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.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(5).
\19\ Id.
\20\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
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 that
its proposal to modify current Remove Volume Tier 6 (proposed Remove
Volume Tier 7) and introduce proposed Remove Volume Tier 6 reflects a
competitive pricing structure designed to incentivize market
participants to direct their order flow to the Exchange, which the
Exchange believes would enhance market quality to the benefit of all
Members. Additionally, the Exchange notes that relative volume-based
incentives and discounts have been widely adopted by exchanges,\21\
including the Exchange,\22\ and are reasonable, equitable and non-
discriminatory because they are open to all Members on an equal basis
and provide additional benefits or discounts that are reasonably
related to (i) the value to an exchange's market quality and (ii)
associated higher levels of market activity, such as higher levels of
liquidity provision and/or growth patterns. Competing equity exchanges
offer similar tiered pricing structures, including schedules or rebates
and fees that apply based upon members achieving certain volume and/or
growth thresholds, as well as assess similar fees or rebates for
similar types of orders, to that of the Exchange.
---------------------------------------------------------------------------
\21\ See e.g., EDGA Equities Fee Schedule, Footnote 7, Add/
Remove Volume Tiers.
\22\ See e.g., BYX Equities Fee Schedule, Footnote 1, Add/Remove
Volume Tiers.
---------------------------------------------------------------------------
In particular, the Exchange believes its proposal to modify current
Remove Volume Tier 6 (proposed Remove Volume Tier 7) and introduce
proposed Remove Volume Tier 6 is reasonable because the tiers will be
available to all Members and provide all Members with an opportunity to
receive a higher enhanced rebate. The Exchange further believes that
modified Remove Volume Tier 6 (proposed Remove Volume Tier 7) and
proposed Remove Volume Tier 6 will provide a reasonable means to
encourage adding displayed orders in Members' order flow to the
Exchange and to incentivize Members to continue to provide volume to
the Exchange by offering them an additional opportunity to receive a
higher enhanced rebate on qualifying orders. An overall increase in
activity would deepen the Exchange's liquidity pool, offers additional
cost savings, support the quality of price discovery, promote market
transparency and improve market quality, for all investors.
The Exchange believes proposed modified Remove Volume Tier 6
(proposed Remove Volume Tier 7) and proposed Remove Volume Tier 6 are
reasonable as they do not represent a significant departure from the
criteria currently offered in the Fee Schedule. 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 for the new and revised tiers and have the opportunity to
meet the tiers' criteria and receive the corresponding reduced fee if
such criteria are met. Without having a view of activity on other
markets and off-exchange venues, the Exchange has no way of knowing
whether these proposed rule changes would definitely result in any
Members qualifying for the new proposed tiers. While the Exchange has
no way of predicting with certainty how the proposed changes will
impact Member activity, based on the prior months volume, the Exchange
anticipates that at least three Members will be able to satisfy
proposed Remove Volume Tier 6, and at least four Members will be able
to satisfy proposed Remove Volume Tier 7. The Exchange also notes that
the proposed changes will not adversely impact any Member's ability to
qualify for reduced fees or enhanced rebates offered under other tiers.
Should a Member not meet the proposed new criteria, the Member will
merely not receive that corresponding enhanced rebate.
The Exchange believes that its proposal to eliminate current Remove
Volume Tiers 7-8 and the Step-Up Tier is reasonable because the
Exchange is not required to maintain these tiers nor is it required to
provide Members an opportunity to receive enhanced rebates or reduced
fees. The Exchange believes its proposal to eliminate the tiers is also
equitable and not unfairly discriminatory because it applies to all
Members (i.e., the tiers will not be available for any Member). The
Exchange also notes that the proposed rule change to remove these tiers
merely results in Members not receiving an enhanced rebate or reduced
fee, which, as noted above, the Exchange is not required to offer or
maintain. Furthermore, the proposed rule change to eliminate the tiers
enables the Exchange to redirect resources and funding into other
programs and tiers intended to incentivize increased order flow.
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 change would encourage the
submission of additional 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.''
[[Page 19378]]
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. Particularly, the proposed
modified current Remove Volume Tier 6 (proposed Remove Volume Tier 7)
and proposed Remove Volume Tier 6 will apply to all Members equally in
that all Members are eligible for the tiers and enhanced rebates, have
a reasonable opportunity to meet the proposed tiers' criteria and will
receive the enhanced rebate on their qualifying orders if such criteria
is met. The Exchange does not believe the proposed changes burden
competition, but rather, enhance competition as they are intended to
increase the competitiveness of BYX by amending existing pricing
incentives in order to attract order flow and incentivize participants
to increase their participation on the Exchange, providing for
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.
Additionally, the Exchange believes the proposed elimination of
current Remove Volume Tiers 7-8 and the Step-Up Tier does not impose
any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Specifically,
the proposed change to eliminate current Remove Volume Tiers 7-8 and
the Step-Up Tier will not impose any burden on intramarket competition
because the changes apply to all Members uniformly, as in, the tiers
will no longer be available to any Member.
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 16% of the market share.\23\ 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.'' \24\ 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'. . . .''.\25\ 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.
---------------------------------------------------------------------------
\23\ Supra note 3.
\24\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\25\ 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 \26\ and paragraph (f) of Rule 19b-4 \27\
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.
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78s(b)(3)(A).
\27\ 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-CboeBYX-2024-007 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-CboeBYX-2024-007. 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
[[Page 19379]]
withhold entirely from publication submitted material that is obscene
or subject to copyright protection. All submissions should refer to
file number SR-CboeBYX-2024-007 and should be submitted on or before
April 8, 2024.
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\28\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-05634 Filed 3-15-24; 8:45 am]
BILLING CODE 8011-01-P
