Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule To Adopt Fees for Dedicated Cores, 24046-24049 [2024-07223]

Download as PDF 24046 Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices (ADAMS): You may obtain publicly available documents online in the ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/ adams.html. To begin the search, select ‘‘Begin Web-based ADAMS Search.’’ For problems with ADAMS, please contact the NRC’s Public Document Room (PDR) reference staff at 1–800–397–4209, at 301–415–4737, or by email to PDR.Resource@nrc.gov. NUREG–1437, Supplement 5a, Second Renewal, is available in ADAMS under Accession No. ML24087A061. • NRC’s PDR: The PDR, where you may examine and order copies of publicly available documents, is open by appointment. To make an appointment to visit the PDR, please send an email to PDR.Resource@nrc.gov or call 1–800–397–4209 or 301–415– 4737, between 8 a.m. and 4 p.m. eastern time (ET), Monday through Friday, except Federal holidays. • Public Library: NUREG–1437, Supplement 5a, Second Renewal, will be available for public inspection at the Naranja Branch Library, 14850 SW 280th Street, Homestead, Florida 33032. FOR FURTHER INFORMATION CONTACT: Lance J. Rakovan, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone: 301–415–2589; email: Lance.Rakovan@ nrc.gov. SUPPLEMENTARY INFORMATION: khammond on DSKJM1Z7X2PROD with NOTICES I. Background II. Discussion As discussed in Chapter 3 of NUREG– 1437, Supplement 5a, Second Renewal, the NRC staff’s recommendation is that the adverse environmental impacts of subsequent license renewal for Turkey Point for an additional 20 years beyond 16:44 Apr 04, 2024 Dated: April 1, 2024. For the Nuclear Regulatory Commission. John M. Moses, Deputy Director, Division of Rulemaking, Environmental, and Financial Support, Office of Nuclear Material Safety and Safeguards. [FR Doc. 2024–07152 Filed 4–4–24; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–99875; File No. SR– CboeEDGA–2024–009] Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule To Adopt Fees for Dedicated Cores April 1, 2024. In accordance with section 51.118 of title 10 of the Code of Federal Regulations (10 CFR), the NRC is making available for public inspection NUREG–1437, Supplement 5a, Second Renewal, regarding the subsequent renewal of Florida Power & Light Company’s (FPL) Renewed Facility Operating License Nos. DPR–31 and DPR–41 for an additional 20 years of operation for Turkey Point. A notice of availability of the draft of NUREG–1437, Supplement 5a, Second Renewal, was published in the Federal Register on September 8, 2023, by the NRC (88 FR 62110) and by the Environmental Protection Agency (88 FR 62078). The public comment period on the draft EIS ended on November 7, 2023, and the comments received are addressed in the final EIS. VerDate Sep<11>2014 the expiration dates of the initial renewed licenses are not so great that preserving the option of subsequent license renewal for energy-planning decisionmakers would be unreasonable. This recommendation is based on: (1) FPL’s environmental report, as supplemented; (2) the NRC staff’s consultations with Federal, State, Tribal, and local government agencies; (3) the NRC staff’s independent environmental review, which is documented in NUREG–1437, Supplement 5a, Second Renewal; and (4) the NRC staff’s consideration of public comments. Jkt 262001 Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 20, 2024, Cboe EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA Equities’’) proposes to amend its Fees 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/ 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00086 Fmt 4703 Sfmt 4703 equities/regulation/rule_filings/edga/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and 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 to adopt fees relating to the use of Dedicated Cores.3 The Exchange proposes to introduce a new connectivity offering relating to the use of Dedicated Cores. By way of background, all Central Processing Units (‘‘CPU Cores’’) have historically been shared by logical order entry ports (i.e., multiple logical ports from multiple firms may connect to a single CPU Core). Starting February 26, 2024, the Exchange began to allow Users 4 to assign a single BOE logical entry port to a single dedicated CPU Core (‘‘Dedicated Core’’).5 Use of Dedicated Cores can provide reduced latency, enhanced throughput, and improved performance since a firm using a Dedicated Core is utilizing the full processing power of a CPU Core instead of sharing that power with other firms. This offering is completely voluntary 3 On March 19, 2024, the Exchange filed a proposal to introduce Dedicated Cores (SR– CboeEDGA–2024–008). 4 A User may be either a Member or Sponsored Participant. The term ‘‘Member’’ shall mean any registered broker or dealer that has been admitted to membership in the Exchange. limited liability company or other organization which is a registered broker or dealer pursuant to Section 15 of the Act, and which has been approved by the Exchange. A Sponsored Participant may be a Member or nonMember of the Exchange whose direct electronic access to the Exchange is authorized by a Sponsoring Member subject to certain conditions. See Exchange Rule 11.3. 5 The Exchange notes that firms will not have physical access to their Dedicated Core and thus cannot make any modifications to the Dedicated Core or server. All Dedicated Cores (including servers used for this service) are owned and operated by the Exchange. E:\FR\FM\05APN1.SGM 05APN1 Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices khammond on DSKJM1Z7X2PROD with NOTICES and is available to all Users that wish to purchase Dedicated Cores. Users will also continue to have the option to utilize BOE logical order entry ports on shared CPU Cores as they do today, either in lieu of, or in addition to, their use of Dedicated Core(s). As such, Users will be able to operate across a mix of shared and dedicated CPU Cores which the Exchange believes provides additional risk and capacity management. Further, Dedicated Cores are not required nor necessary to participate on the Exchange and as such Users may opt not to use Dedicated Cores at all. The Exchange is proposing to assess the following monthly fees for those Users that wish to use Dedicated Cores: $650 per Dedicated Core for the first 3 Dedicated Cores; $1,050 per Dedicated Core for the 4th–6th Dedicated Cores; and $1,450 per Dedicated Core for 7 or more Dedicated Cores. The proposed fees are progressive, and the Exchange proposes to include the following example in the Fees Schedule to provide clarity as to how the fees will be applied. In particular, if a firm chooses to purchase 5 Dedicated Cores, that firm will be assessed a total monthly fee of $4,050 for use of those Dedicated Cores (i.e., $650 × 3 Dedicated Cores and $1,050 × 2 Dedicated Cores). The Exchange also proposes to make clear in the Fees Schedule that the monthly fees are assessed and applied in their entirety and are not prorated. The monthly Dedicated Core fees are in addition to the standard per port fee assessed to Users for the BOE Logical Port(s) ports assigned to the Dedicated Core(s). The Exchange notes the current standard fees assessed for BOE Logical Ports, whether used with Dedicated or shared CPU cores, will remain applicable and unchanged.6 Since the Exchange currently has finite amount of space in its data centers in which its servers (and therefore corresponding CPU Cores) are located, the Exchange also proposes to prescribe a maximum limit on the number of Dedicated Cores that Users may purchase each month. Particularly, the Exchange proposes to provide that Members will be limited to a maximum number of 10 Dedicated Cores 7 and Sponsoring Members will be limited to 6 See Cboe U.S. Equities Fees Schedules, EDGA Equities, Logical Port Fees. 7 Members will be limited to 10 Dedicated Cores, regardless of whether they purchase the Dedicated Cores directly and/or through a Service Bureau. In a Service Bureau relationship, a customer allows its MPID to be used on the ports of a technology provider, or Service Bureau. One MPID may be allowed on several different Service Bureaus. VerDate Sep<11>2014 16:44 Apr 04, 2024 Jkt 262001 a maximum number of 4 Dedicated Cores for each of their Sponsored Access relationships.8 The purpose of establishing these limits is to manage the allotment of Dedicated Cores in a fair manner and to prevent the Exchange from being required to expend large amounts of resources in order to provide an unlimited number of Dedicated Cores. 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.9 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 10 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) 11 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange also believes the proposed rule change is consistent with Section 6(b)(4) 12 of the Act, which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Members and other persons using its facilities. The Exchange believes the proposed fees are reasonable because Dedicated Cores provide a valuable service in that it may provide reduced latency, enhanced throughput, and improved performance compared to use of a shared CPU Core since a firm using a Dedicated Core is utilizing the full processing power of a CPU Core. The Exchange also emphasizes however, that the use of Dedicated Cores is not 8 The Exchange announced the initial limit via Exchange Notice which was issued on January 29, 2024. https://cdn.cboe.com/resources/release_ notes/2024/Cboe-Global-Markets-to-IntroduceCboe-Dedicated-Cores-for-EDGA-Equities.pdf. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 11 Id. 12 15 U.S.C. 78f(b)(4). PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 24047 necessary for trading and as noted above, is entirely optional. Indeed, Users can continue to access the Exchange through shared CPU Cores at no additional cost. Depending on a firm’s specific business needs, the proposal enables Users to choose to use Dedicated Cores in lieu of, or in addition to, shared CPU Cores (or as noted, not use Dedicated Cores at all). The Exchange believes the proposal to operate across a mix of shared and dedicated CPU Cores may further provide additional risk and capacity management. If a User finds little benefit in having Dedicated Cores, or determines Dedicated Cores are not cost-efficient for its needs or does not provide sufficient value to the firm, such User may continue its use of the shared CPU Cores, unchanged. Indeed, the Exchange has no plans to eliminate shared CPU Cores nor to require Users to purchase Dedicated Cores. The Exchange also believes that the proposed Dedicated Core fees are equitable and not unfairly discriminatory because they would be assessed uniformly to similarly situated users in that all Users who choose to purchase Dedicated Cores will be subject to the same proposed tiered fee schedule. The Exchange believes the proposed ascending fee structure is also reasonable, equitable and not unfairly discriminatory as it is designed so that firms that use a higher allotment of the Exchange’s finite number of Dedicated Cores pay higher rates, rather than placing that burden on market participants that have more modest needs who will have the flexibility of obtaining Dedicated Cores at lower price points in the lower tiers. As such, the proposed fees do not favor certain categories of market participants in a manner that would impose a burden on competition; rather, the ascending fee structure reflects the resources consumed by the various needs of market participants—that is, the lowest Dedicated Core consuming Users pay the least, and highest Dedicated Core consuming Users pay the most. Other exchanges similarly assess higher fees to those that consume more Exchange resources.13 It’s also designed to encourage firms to manage their needs in a fair manner and to prevent the Exchange from being required to expend large amounts of resources in order to provide an additional number of Dedicated Cores. 13 See e.g., MIAX Pearl Equities Exchange Fees Schedule, Section 2(d) Port Fees. See also Cboe U.S. Options Fees Schedule, BZX Options, Options Logical Port Fees, Ports with Bulk Quoting Capabilities. E:\FR\FM\05APN1.SGM 05APN1 24048 Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices khammond on DSKJM1Z7X2PROD with NOTICES The Exchange believes it is reasonable to limit the number of Dedicated Cores Users can purchase because the Exchange has a finite amount of space in its data centers and availability of cores. The Exchange will continually monitor market participant demand and resource availability and endeavor to adjust the limit if and when the Exchange is able to accommodate additional CPU Cores (including Dedicated Cores). The Exchange monitors its capacity and data center space and thus is in the best place to determine these limits and modify them as appropriate in response to changes to this capacity and space. The proposed limits also apply uniformly to similarly situated market participants (i.e. all Members are subject to the same limit and all Sponsored Participants are subject to the same limit, respectively). The Exchange believes it’s not unfairly discriminatory to provide for different limits for different types of users. For example, the Exchange believe it’s not unfairly discriminatory to provide for an initial lower limit to be allocated for Sponsored Participants because unlike Members, Sponsored Participants are able to access the Exchange without paying a Membership Fee. Members also have more regulatory obligations and risk that Sponsored Participants do not. For example, while Sponsored Participants must agree to comply with the Rules of the Exchange, it is the Sponsoring Member of that Sponsored Participant that remains ultimately responsible for all orders entered on or through the Exchange by that Sponsored Participant. The industry also has a history of applying fees differently to Members as compared to Sponsored Participants.14 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 intramarket competition that is not necessary in furtherance of the purposes of the Act because the proposed tiered fee structure will apply equally to all similarly situated Users that choose to use Dedicated Cores. As discussed above, Dedicated Cores are optional and Users may choose to utilize Dedicated Cores, or not, based on their view of the additional benefits and added value provided by utilizing a Dedicated Core. The Exchange believes the proposed fee will be assessed proportionately to the potential value or 14 See e.g., Securities Exchange Act Release No. 68342 (December 3, 2012) 77 FR 73096 (December 7, 2012) (SR–CBOE–2012–114) and Securities Exchange Act Release No. 66082 (January 3, 2012) 77 FR 1101 (January 9, 2012) (SR–C2–2011–041). VerDate Sep<11>2014 16:44 Apr 04, 2024 Jkt 262001 benefit received by Users with a greater number of Dedicated Cores and notes that Users may determine at any time to cease using Dedicated Cores. As discussed, Users can also continue to access the Exchange through shared CPU Cores at no additional cost. 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, including competition for exchange memberships. Market Participants have numerous alternative venues that they may participate on, including 15 other equities exchanges, as well as offexchange venues, where competitive products are available for trading. Indeed, participants can readily choose to submit their order flow 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.’’ 15 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’. . . .’’.16 Accordingly, the Exchange does not believe its proposed change imposes any burden on competition that is not necessary or 15 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 16 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 00088 Fmt 4703 Sfmt 4703 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 17 and paragraph (f) of Rule 19–b4 18 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– CboeEDGA–2024–009 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to file number SR–CboeEDGA–2024–009. 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 17 15 18 17 E:\FR\FM\05APN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 05APN1 Federal Register / Vol. 89, No. 67 / Friday, April 5, 2024 / Notices amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–CboeEDGA–2024–009 and should be submitted on or before April 26, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2024–07223 Filed 4–4–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Rules 7.4E, 64, 236, and 257, as Well as Sections 510, 512, and 521 of the NYSE American LLC Company Guide khammond on DSKJM1Z7X2PROD with NOTICES April 1, 2024. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 25, 2024, NYSE American LLC (‘‘NYSE American’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is 19 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 16:44 Apr 04, 2024 • Section 512 of the NYSE American LLC Company Guide (Ex-Dividend Procedure) I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rules 7.4E, 64, 236, and 257, as well as Sections 510, 512, and 521 of the NYSE American LLC Company Guide, to conform to amendments to Rule 15c6– 1(a) of the Act to shorten the standard settlement cycle for most broker-dealer transactions from two business days after the trade date (‘‘T+2’’) to one business day after the trade date (‘‘T+1’’). The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. Proposed Rule Change The Exchange proposes the following changes to reflect a T+1 settlement cycle. • Rule 7.4E currently provides that transactions in stocks traded regular way are generally ‘‘ex-dividend’’ or ‘‘exrights’’ on the business day preceding the record date or the date of the closing of transfer books, or else on the second preceding business day when the record date or closing of transfer books occurs on a non-business day. To reflect settlement on T+1 rather than T+2, the Exchange proposes to amend this rule to provide that transactions would be exdividend or ex-rights on the record date or date of the closing of transfer books, or on the preceding business day when the record date or closing of transfer books occurs on a non-business day. • Current Rule 64(a)(i) defines regular way delivery as occurring on the second business day following the day of the contract. To conform with the transition to a T+1 settlement cycle, the Exchange proposes to amend Rule 64(a)(i) to delete the word ‘‘second,’’ such that the rule would provide that regular way delivery occurs on the business day following the day of the contract.4 • Current Rule 236 5 provides that exwarrant trading will begin on the business day preceding the date of expiration of the warrants, except that when expiration occurs on a nonbusiness day, it will begin on the second business day preceding expiration. To conform with a T+1 settlement cycle, the Exchange proposes to delete the phrase ‘‘the business day preceding,’’ such that the rule would provide that these transactions would be ex-warrants on the date of expiration, and the word ‘‘second,’’ such that the rule would provide for expiration on the business day preceding expiration when 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 self-regulatory organization 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 those 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 parts of such statements. 1. Purpose On March 6, 2023, the Commission adopted amendments to Rule 15c6–1(a) of the Act to shorten the standard settlement cycle for most broker-dealer transactions from T+2 to T+1.3 Accordingly, the Exchange proposes to amend the rules identified below to conform with the amendments to Rule 15c6–1(a) and reflect a standard settlement cycle of T+1: • Rule 7.4E (Ex-Dividend or Ex-Rights Dates) • Rule 64 (Equities. Bonds, Rights and 100-Share-Unit Stocks) • Rule 236 (Equities.Ex-Warrants) • Rule 257 (Equities. Deliveries After ‘Ex’ Date) • Section 510 of the NYSE American LLC Company Guide (Two Day Delivery Plan) 3 See Securities Exchange Act Release No. 96930, 88 FR 13872 (March 6, 2023) (‘‘T+1 Adopting Release’’). 1 15 VerDate Sep<11>2014 publishing this notice to solicit comments on the proposed rule change from interested persons. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [Release No. 34–99872; File No. SR– NYSEAMER–2024–23] Jkt 262001 24049 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 4 The Exchange also proposes to delete the obsolete parenthetical reference to Rule 14 in current Rule 64(a)(i), as Rule 14 is not applicable to trading on the Pillar platform. See Securities Exchange Act Release No. 82212 (December 4, 2017), 82 FR 58036 (December 8, 2017) (SR– NYSEAMER–2017–34) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Exchange Rules To Delete Obsolete Cash Equities Rules That Are Not Applicable to Trading on the Pillar Trading Platform and To Delete Other Obsolete Rules). The Exchange further proposes to delete Rules 64(a)(ii), 64(b), and 64(c), as the nonregular way settlement options described in such rules are no longer available on the Exchange. See id. The Exchange also proposes non-substantive conforming changes in Rule 64(a) to reflect the deletion of Rules 64(a)(ii), 64(b), and 64(c). 5 The Exchange also proposes to amend the section header above Rule 236 to conform it with the current title and substance of Rule 236. E:\FR\FM\05APN1.SGM 05APN1

Agencies

[Federal Register Volume 89, Number 67 (Friday, April 5, 2024)]
[Notices]
[Pages 24046-24049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07223]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99875; File No. SR-CboeEDGA-2024-009]


Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Its Fees Schedule To Adopt Fees for Dedicated Cores

April 1, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on March 20, 2024, Cboe EDGA Exchange, Inc. (the ``Exchange'' or 
``EDGA'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

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

II. Self-Regulatory Organization's Statement of the Purpose of, and 
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 to adopt fees 
relating to the use of Dedicated Cores.\3\
---------------------------------------------------------------------------

    \3\ On March 19, 2024, the Exchange filed a proposal to 
introduce Dedicated Cores (SR-CboeEDGA-2024-008).
---------------------------------------------------------------------------

    The Exchange proposes to introduce a new connectivity offering 
relating to the use of Dedicated Cores. By way of background, all 
Central Processing Units (``CPU Cores'') have historically been shared 
by logical order entry ports (i.e., multiple logical ports from 
multiple firms may connect to a single CPU Core). Starting February 26, 
2024, the Exchange began to allow Users \4\ to assign a single BOE 
logical entry port to a single dedicated CPU Core (``Dedicated 
Core'').\5\ Use of Dedicated Cores can provide reduced latency, 
enhanced throughput, and improved performance since a firm using a 
Dedicated Core is utilizing the full processing power of a CPU Core 
instead of sharing that power with other firms. This offering is 
completely voluntary

[[Page 24047]]

and is available to all Users that wish to purchase Dedicated Cores. 
Users will also continue to have the option to utilize BOE logical 
order entry ports on shared CPU Cores as they do today, either in lieu 
of, or in addition to, their use of Dedicated Core(s). As such, Users 
will be able to operate across a mix of shared and dedicated CPU Cores 
which the Exchange believes provides additional risk and capacity 
management. Further, Dedicated Cores are not required nor necessary to 
participate on the Exchange and as such Users may opt not to use 
Dedicated Cores at all.
---------------------------------------------------------------------------

    \4\ A User may be either a Member or Sponsored Participant. The 
term ``Member'' shall mean any registered broker or dealer that has 
been admitted to membership in the Exchange. limited liability 
company or other organization which is a registered broker or dealer 
pursuant to Section 15 of the Act, and which has been approved by 
the Exchange. A Sponsored Participant may be a Member or non-Member 
of the Exchange whose direct electronic access to the Exchange is 
authorized by a Sponsoring Member subject to certain conditions. See 
Exchange Rule 11.3.
    \5\ The Exchange notes that firms will not have physical access 
to their Dedicated Core and thus cannot make any modifications to 
the Dedicated Core or server. All Dedicated Cores (including servers 
used for this service) are owned and operated by the Exchange.
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    The Exchange is proposing to assess the following monthly fees for 
those Users that wish to use Dedicated Cores: $650 per Dedicated Core 
for the first 3 Dedicated Cores; $1,050 per Dedicated Core for the 4th-
6th Dedicated Cores; and $1,450 per Dedicated Core for 7 or more 
Dedicated Cores. The proposed fees are progressive, and the Exchange 
proposes to include the following example in the Fees Schedule to 
provide clarity as to how the fees will be applied. In particular, if a 
firm chooses to purchase 5 Dedicated Cores, that firm will be assessed 
a total monthly fee of $4,050 for use of those Dedicated Cores (i.e., 
$650 x 3 Dedicated Cores and $1,050 x 2 Dedicated Cores). The Exchange 
also proposes to make clear in the Fees Schedule that the monthly fees 
are assessed and applied in their entirety and are not prorated. The 
monthly Dedicated Core fees are in addition to the standard per port 
fee assessed to Users for the BOE Logical Port(s) ports assigned to the 
Dedicated Core(s). The Exchange notes the current standard fees 
assessed for BOE Logical Ports, whether used with Dedicated or shared 
CPU cores, will remain applicable and unchanged.\6\
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    \6\ See Cboe U.S. Equities Fees Schedules, EDGA Equities, 
Logical Port Fees.
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    Since the Exchange currently has finite amount of space in its data 
centers in which its servers (and therefore corresponding CPU Cores) 
are located, the Exchange also proposes to prescribe a maximum limit on 
the number of Dedicated Cores that Users may purchase each month. 
Particularly, the Exchange proposes to provide that Members will be 
limited to a maximum number of 10 Dedicated Cores \7\ and Sponsoring 
Members will be limited to a maximum number of 4 Dedicated Cores for 
each of their Sponsored Access relationships.\8\ The purpose of 
establishing these limits is to manage the allotment of Dedicated Cores 
in a fair manner and to prevent the Exchange from being required to 
expend large amounts of resources in order to provide an unlimited 
number of Dedicated Cores.
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    \7\ Members will be limited to 10 Dedicated Cores, regardless of 
whether they purchase the Dedicated Cores directly and/or through a 
Service Bureau. In a Service Bureau relationship, a customer allows 
its MPID to be used on the ports of a technology provider, or 
Service Bureau. One MPID may be allowed on several different Service 
Bureaus.
    \8\ The Exchange announced the initial limit via Exchange Notice 
which was issued on January 29, 2024. https://cdn.cboe.com/resources/release_notes/2024/Cboe-Global-Markets-to-Introduce-Cboe-Dedicated-Cores-for-EDGA-Equities.pdf.
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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.\9\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \10\ 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) \11\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. The Exchange also believes the proposed rule 
change is consistent with Section 6(b)(4) \12\ of the Act, which 
requires that Exchange rules provide for the equitable allocation of 
reasonable dues, fees, and other charges among its Members and other 
persons using its facilities.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ Id.
    \12\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes the proposed fees are reasonable because 
Dedicated Cores provide a valuable service in that it may provide 
reduced latency, enhanced throughput, and improved performance compared 
to use of a shared CPU Core since a firm using a Dedicated Core is 
utilizing the full processing power of a CPU Core. The Exchange also 
emphasizes however, that the use of Dedicated Cores is not necessary 
for trading and as noted above, is entirely optional. Indeed, Users can 
continue to access the Exchange through shared CPU Cores at no 
additional cost. Depending on a firm's specific business needs, the 
proposal enables Users to choose to use Dedicated Cores in lieu of, or 
in addition to, shared CPU Cores (or as noted, not use Dedicated Cores 
at all). The Exchange believes the proposal to operate across a mix of 
shared and dedicated CPU Cores may further provide additional risk and 
capacity management. If a User finds little benefit in having Dedicated 
Cores, or determines Dedicated Cores are not cost-efficient for its 
needs or does not provide sufficient value to the firm, such User may 
continue its use of the shared CPU Cores, unchanged. Indeed, the 
Exchange has no plans to eliminate shared CPU Cores nor to require 
Users to purchase Dedicated Cores.
    The Exchange also believes that the proposed Dedicated Core fees 
are equitable and not unfairly discriminatory because they would be 
assessed uniformly to similarly situated users in that all Users who 
choose to purchase Dedicated Cores will be subject to the same proposed 
tiered fee schedule. The Exchange believes the proposed ascending fee 
structure is also reasonable, equitable and not unfairly discriminatory 
as it is designed so that firms that use a higher allotment of the 
Exchange's finite number of Dedicated Cores pay higher rates, rather 
than placing that burden on market participants that have more modest 
needs who will have the flexibility of obtaining Dedicated Cores at 
lower price points in the lower tiers. As such, the proposed fees do 
not favor certain categories of market participants in a manner that 
would impose a burden on competition; rather, the ascending fee 
structure reflects the resources consumed by the various needs of 
market participants--that is, the lowest Dedicated Core consuming Users 
pay the least, and highest Dedicated Core consuming Users pay the most. 
Other exchanges similarly assess higher fees to those that consume more 
Exchange resources.\13\ It's also designed to encourage firms to manage 
their needs in a fair manner and to prevent the Exchange from being 
required to expend large amounts of resources in order to provide an 
additional number of Dedicated Cores.
---------------------------------------------------------------------------

    \13\ See e.g., MIAX Pearl Equities Exchange Fees Schedule, 
Section 2(d) Port Fees. See also Cboe U.S. Options Fees Schedule, 
BZX Options, Options Logical Port Fees, Ports with Bulk Quoting 
Capabilities.

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[[Page 24048]]

    The Exchange believes it is reasonable to limit the number of 
Dedicated Cores Users can purchase because the Exchange has a finite 
amount of space in its data centers and availability of cores. The 
Exchange will continually monitor market participant demand and 
resource availability and endeavor to adjust the limit if and when the 
Exchange is able to accommodate additional CPU Cores (including 
Dedicated Cores). The Exchange monitors its capacity and data center 
space and thus is in the best place to determine these limits and 
modify them as appropriate in response to changes to this capacity and 
space. The proposed limits also apply uniformly to similarly situated 
market participants (i.e. all Members are subject to the same limit and 
all Sponsored Participants are subject to the same limit, 
respectively). The Exchange believes it's not unfairly discriminatory 
to provide for different limits for different types of users. For 
example, the Exchange believe it's not unfairly discriminatory to 
provide for an initial lower limit to be allocated for Sponsored 
Participants because unlike Members, Sponsored Participants are able to 
access the Exchange without paying a Membership Fee. Members also have 
more regulatory obligations and risk that Sponsored Participants do 
not. For example, while Sponsored Participants must agree to comply 
with the Rules of the Exchange, it is the Sponsoring Member of that 
Sponsored Participant that remains ultimately responsible for all 
orders entered on or through the Exchange by that Sponsored 
Participant. The industry also has a history of applying fees 
differently to Members as compared to Sponsored Participants.\14\
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    \14\ See e.g., Securities Exchange Act Release No. 68342 
(December 3, 2012) 77 FR 73096 (December 7, 2012) (SR-CBOE-2012-114) 
and Securities Exchange Act Release No. 66082 (January 3, 2012) 77 
FR 1101 (January 9, 2012) (SR-C2-2011-041).
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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 intramarket competition that is not necessary in 
furtherance of the purposes of the Act because the proposed tiered fee 
structure will apply equally to all similarly situated Users that 
choose to use Dedicated Cores. As discussed above, Dedicated Cores are 
optional and Users may choose to utilize Dedicated Cores, or not, based 
on their view of the additional benefits and added value provided by 
utilizing a Dedicated Core. The Exchange believes the proposed fee will 
be assessed proportionately to the potential value or benefit received 
by Users with a greater number of Dedicated Cores and notes that Users 
may determine at any time to cease using Dedicated Cores. As discussed, 
Users can also continue to access the Exchange through shared CPU Cores 
at no additional cost.
    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, 
including competition for exchange memberships. Market Participants 
have numerous alternative venues that they may participate on, 
including 15 other equities exchanges, as well as off-exchange venues, 
where competitive products are available for trading. Indeed, 
participants can readily choose to submit their order flow 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.'' \15\ 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'. . . .''.\16\ Accordingly, the Exchange does not believe its 
proposed change imposes any burden on competition that is not necessary 
or appropriate in furtherance of the purposes of the Act.
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    \15\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \16\ 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)).
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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 \17\ and paragraph (f) of Rule 19-b4 \18\ 
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.
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeEDGA-2024-009 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-CboeEDGA-2024-009. 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

[[Page 24049]]

amendments, all written statements with respect to the proposed rule 
change that are filed with the Commission, and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the Exchange. Do not include personal identifiable 
information in submissions; you should submit only information that you 
wish to make available publicly. We may redact in part or withhold 
entirely from publication submitted material that is obscene or subject 
to copyright protection. All submissions should refer to file number 
SR-CboeEDGA-2024-009 and should be submitted on or before April 26, 
2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-07223 Filed 4-4-24; 8:45 am]
BILLING CODE 8011-01-P
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