Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule, 54550-54552 [2024-14385]
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54550
Federal Register / Vol. 89, No. 126 / Monday, July 1, 2024 / Notices
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–
NASDAQ–2024–027 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.
ddrumheller on DSK120RN23PROD with NOTICES1
All submissions should refer to file
number SR–NASDAQ–2024–027. 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–NASDAQ–2024–027 and should be
submitted on or before July 22, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.47
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14377 Filed 6–28–24; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100426; File No. SR–
CBOE–2024–027]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fees
Schedule
June 25, 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 June 12,
2024, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) 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 Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) 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://www.cboe.com/
AboutCBOE/
CBOELegalRegulatoryHome.aspx), 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.
BILLING CODE 8011–01–P
1 15
47 17
CFR 200.30–3(a)(12).
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2 17
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CFR 240.19b–4.
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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
Fees Schedule, effective June 3, 2024.3
Specifically, the Exchange proposes to
adopt and amend certain fees related to
transactions in Mini-SPX Index (‘‘XSP’’)
options. Specifically, the proposed rule
change amends and adopts certain fees
for XSP in the Rate Table for All
Products Excluding Underlying Symbol
List A, as follows:
• Adopts fee code MP, appended to
all Market-Maker (capacity ‘‘M’’) orders
in XSP that are executed manually (i.e.,
open outcry) and assesses a fee of $0.15
per contract; and amends fee code MC,
currently appended to all Market-Maker
(capacity ‘‘M’’) orders in XSP that are
contra customer (executed manually
and electronically) and assesses a fee of
$0.15 per contract, to apply only to
Market-Maker (capacity ‘‘M’’) orders in
XSP that are contra customer and that
are executed electronically.
• Amends fee code MX, currently
appended to all Market-Maker (capacity
‘‘M’’) orders in XSP contra to noncustomers and assesses a fee of $0.09
per contract, to apply to all MarketMaker orders in XSP contra to noncustomers that add liquidity and that
are executed electronically.
• Adopts fee code MY, appended to
all Market-Maker (capacity ‘‘M’’) in XSP
contra to non-customers that remove
liquidity and that are executed
electronically and assesses a fee of $0.14
per contract.
• Amends fee code XF, appended to
all Clearing Trading Permit Holders
(‘‘TPHs’’) (capacity ‘‘F’’) and NonClearing TPH Affiliates (capacity ‘‘L’’)
orders in XSP and assesses a fee of
$0.13, to apply to all Clearing Trading
Permit Holders (‘‘TPHs’’) (capacity ‘‘F’’),
Non-Clearing TPH Affiliates (capacity
‘‘L’’), Broker-Dealer (capacity ‘‘B’’), Joint
Back-Office (capacity ‘‘J’’), Non-TPH
Market-Maker (capacity ‘‘N’’), and
Professional (capacity ‘‘U’’)
(collectively, ‘‘Non-Market Makers,
Non-Customers’’) orders in XSP contra
to a customer or contra to a noncustomer that add liquidity and to
assess a fee of $0.30 per contract.
• Amends fee code XB, appended to
all Broker-Dealer (capacity ‘‘B’’), Joint
Back-Office (capacity ‘‘J’’), Non-TPH
3 The Exchange initially filed the proposed fee
changes on June 3, 2024 (SR–CBOE–2024–024). On
June 11, 2024, the Exchange withdrew that filing
and submitted SR–CBOE–2024–026. On June 12,
2024, the Exchange withdrew that filing and
submitted this proposal.
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Federal Register / Vol. 89, No. 126 / Monday, July 1, 2024 / Notices
ddrumheller on DSK120RN23PROD with NOTICES1
Market-Maker (capacity ‘‘N’’), and
Professional (capacity ‘‘U’’) orders in
XSP and assesses a fee of $0.17 per
contract, to apply to all Non-Market
Maker, Non-Customer orders in XSP
contra to a non-customer that remove
liquidity and to assess a fee of $0.50 per
contract.
Adopts fee code XN, appended to all
Non-Market Maker, Non-Customer
orders in XSP that are executed
manually (i.e., open outcry) and
assesses a fee of $0.30 per contract.
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.4 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 5 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) 6 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange also believes the
proposed rule change is consistent with
Section 6(b)(4) of the Act,7 which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
Trading Permit Holders and other
persons using its facilities.
The Exchange believes that the
proposed fees for Market-Maker and
Non-Customer, Non-Market Maker
orders in XSP are reasonable, equitable
and not unfairly discriminatory.
The Exchange believes the proposed
changes to the fee structure for MarketMaker orders in XSP are reasonable. The
proposed fees, in general, align with
current fees for Market-Maker orders in
XSP, with minor distinctions based on
execution method, capacity of the
4 15
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
8 See EDGX Options Fees Schedule and BZX
Options Fees Schedule.
9 See EDGX Options Fees Schedule and BZX
Options Fees Schedule.
6 Id.
7 15
U.S.C. 78f(b)(4).
VerDate Sep<11>2014
20:36 Jun 28, 2024
contra-party, and orders that add
liquidity and those that remove
liquidity. The Exchange notes that it is
not novel to charge different fees based
on capacity of contra-party, and that
current fees for Market-Maker orders in
XSP contain such a distinction. Further,
other exchanges offer varying fees based
on whether an order adds or removes
liquidity.8
The Exchange believes it is reasonable
to assess lower fees for Market-Maker
orders in XSP that are contra to a noncustomer and add liquidity, and are
executed electronically, as such changes
are designed to incentivize an increase
in non-customer liquidity-adding
volume in XSP on the Exchange. The
Exchange believes that incentivizing
more non-customer orders in XSP will
create more trading opportunities,
which, in turn attracts Market-Makers.
A resulting increase in Market-Maker
activity facilitates tighter spreads, which
may lead to additional increase of order
flow in XSP from other market
participants, further contributing to a
deeper, more liquid market to the
benefit of all market participants by
creating a more robust and wellbalanced market ecosystem. Further, the
Exchange believes that the changes are
reasonable and that the fees, even as
amended, will continue to incentivize
TPHs to send additional Market-Maker
orders to the Exchange.
Additionally, the Exchange believes
that it is equitable and not unfairly
discriminatory to assess lower fees, in
general, to Market-Makers as compared
to other market participants other than
Customers because Market-Makers,
unlike other market participants, take
on a number of obligations, including
quoting obligations, that other market
participants do not have. Further, these
lower fees offered to Market-Makers are
intended to incent Market-Makers to
quote and trade more on the Exchange,
thereby providing more trading
opportunities for all market
participants.
The Exchange also believes the
proposed changes to the fee structure for
Non-Customer, Non-Market Maker
orders in XSP are reasonable. As noted
above, it is not novel to charge different
fees based on capacity of contra-party,
and other exchanges offer varying fees
based on whether an order adds or
removes liquidity.9 The Exchange
believes assessing higher fees in general
for Non-Customer, Non-Market Maker
orders is reasonable, equitable, and non-
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54551
discriminatory because, as noted above,
the obligations and circumstances
between market participants differ. The
Exchange believes assessing a higher fee
for Non-Customer, Non-Market Maker
XSP orders contra a non-customer that
remove liquidity and are executed
electronically is reasonable because it
provides an incentive to maintain noncustomer liquidity at the Exchange,
thereby promoting price discovery and
enhancing order execution
opportunities for all TPHs. Similarly,
the Exchange believes assessing a lower
fee for Non-Customer, Non-Market
Maker XSP orders contra to a customer
or contra to a non-customer that add
liquidity and are executed electronically
is reasonable because it provides an
incentive to add liquidity at the
Exchange, including in customer
volume, thereby promoting price
discovery and enhancing order
execution opportunities for all TPHs.
Finally, while the fees proposed apply
to an Exchange proprietary product,
which are traded exclusively on the
Exchange, the Exchange notes that the
proposed fees are generally in line with
the options trading fees of at least one
other exchange.10
The Exchange believes that the
proposed fees for Market-Maker and
Non-Customer, Non-Market Maker
orders in XSP are equitable and not
unfairly discriminatory because the
proposed fees will apply automatically
and uniformly to all Market-Maker and
Non-Customer, Non-Market Maker
orders in XSP, as applicable. The
Exchange notes that all fee amounts
applicable to Market-Makers will be
applied equally to all Market-Makers,
i.e., all Market Makers will be assessed
the same amount. Similarly, the
Exchange notes that the XSP fee
amounts for each separate type of other
market participant will be assessed
equally to all such market participants,
i.e., all Non-Customer and Non-MarketMaker orders will be assessed the same
amount.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposed rule change will impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because the XSP fee amounts for each
separate type of market participants will
10 See
E:\FR\FM\01JYN1.SGM
BOX Fees Schedule, Section IV(A).
01JYN1
54552
Federal Register / Vol. 89, No. 126 / Monday, July 1, 2024 / Notices
be assessed equally to all such market
participants. While different fees are
assessed to different market participants
in some circumstances, the obligations
and circumstances between these
market participants differ, as discussed
above. For example, Market-Makers
have quoting obligations that are not
applicable to other market participants.
Further, the proposed fees structure for
XSP is intended to encourage more
trading of XSP, which brings liquidity to
the Exchange and benefits all market
participants.
The Exchange does not believe that
the proposed rule changes will impose
any burden on intermarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed fees assessed
apply to an Exchange proprietary
product, which are traded exclusively
on the Exchange.
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.
ddrumheller on DSK120RN23PROD with NOTICES1
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 11 and paragraph (f) of Rule
19b–4 12 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:
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CBOE–2024–027 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–100427; File No. SR–C2–
2024–012]
• 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–CBOE–2024–027. 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–CBOE–2024–027 and should be
submitted on or before July 22, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14385 Filed 6–28–24; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
11 15
12 17
20:36 Jun 28, 2024
June 25, 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 June 13,
2024, Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) 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 C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2 Options’’) proposes
to amend its Fee Schedule. The text of
the proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/ctwo/),
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.
1 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
VerDate Sep<11>2014
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fee
Schedule To Provide a Temporary
Pricing Incentive Program on
Historical Open-Close Data
13 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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]]>Agencies
[Federal Register Volume 89, Number 126 (Monday, July 1, 2024)]
[Notices]
[Pages 54550-54552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14385]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100426; File No. SR-CBOE-2024-027]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fees Schedule
June 25, 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 June 12, 2024, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') 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 Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') 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://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 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 Fees Schedule, effective June 3,
2024.\3\ Specifically, the Exchange proposes to adopt and amend certain
fees related to transactions in Mini-SPX Index (``XSP'') options.
Specifically, the proposed rule change amends and adopts certain fees
for XSP in the Rate Table for All Products Excluding Underlying Symbol
List A, as follows:
---------------------------------------------------------------------------
\3\ The Exchange initially filed the proposed fee changes on
June 3, 2024 (SR-CBOE-2024-024). On June 11, 2024, the Exchange
withdrew that filing and submitted SR-CBOE-2024-026. On June 12,
2024, the Exchange withdrew that filing and submitted this proposal.
---------------------------------------------------------------------------
Adopts fee code MP, appended to all Market-Maker (capacity
``M'') orders in XSP that are executed manually (i.e., open outcry) and
assesses a fee of $0.15 per contract; and amends fee code MC, currently
appended to all Market-Maker (capacity ``M'') orders in XSP that are
contra customer (executed manually and electronically) and assesses a
fee of $0.15 per contract, to apply only to Market-Maker (capacity
``M'') orders in XSP that are contra customer and that are executed
electronically.
Amends fee code MX, currently appended to all Market-Maker
(capacity ``M'') orders in XSP contra to non-customers and assesses a
fee of $0.09 per contract, to apply to all Market-Maker orders in XSP
contra to non-customers that add liquidity and that are executed
electronically.
Adopts fee code MY, appended to all Market-Maker (capacity
``M'') in XSP contra to non-customers that remove liquidity and that
are executed electronically and assesses a fee of $0.14 per contract.
Amends fee code XF, appended to all Clearing Trading
Permit Holders (``TPHs'') (capacity ``F'') and Non-Clearing TPH
Affiliates (capacity ``L'') orders in XSP and assesses a fee of $0.13,
to apply to all Clearing Trading Permit Holders (``TPHs'') (capacity
``F''), Non-Clearing TPH Affiliates (capacity ``L''), Broker-Dealer
(capacity ``B''), Joint Back-Office (capacity ``J''), Non-TPH Market-
Maker (capacity ``N''), and Professional (capacity ``U'')
(collectively, ``Non-Market Makers, Non-Customers'') orders in XSP
contra to a customer or contra to a non-customer that add liquidity and
to assess a fee of $0.30 per contract.
Amends fee code XB, appended to all Broker-Dealer
(capacity ``B''), Joint Back-Office (capacity ``J''), Non-TPH
[[Page 54551]]
Market-Maker (capacity ``N''), and Professional (capacity ``U'') orders
in XSP and assesses a fee of $0.17 per contract, to apply to all Non-
Market Maker, Non-Customer orders in XSP contra to a non-customer that
remove liquidity and to assess a fee of $0.50 per contract.
Adopts fee code XN, appended to all Non-Market Maker, Non-Customer
orders in XSP that are executed manually (i.e., open outcry) and
assesses a fee of $0.30 per contract.
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.\4\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \5\ 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) \6\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The Exchange also believes the proposed rule
change is consistent with Section 6(b)(4) of the Act,\7\ which requires
that Exchange rules provide for the equitable allocation of reasonable
dues, fees, and other charges among its Trading Permit Holders and
other persons using its facilities.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
\6\ Id.
\7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that the proposed fees for Market-Maker and
Non-Customer, Non-Market Maker orders in XSP are reasonable, equitable
and not unfairly discriminatory.
The Exchange believes the proposed changes to the fee structure for
Market-Maker orders in XSP are reasonable. The proposed fees, in
general, align with current fees for Market-Maker orders in XSP, with
minor distinctions based on execution method, capacity of the contra-
party, and orders that add liquidity and those that remove liquidity.
The Exchange notes that it is not novel to charge different fees based
on capacity of contra-party, and that current fees for Market-Maker
orders in XSP contain such a distinction. Further, other exchanges
offer varying fees based on whether an order adds or removes
liquidity.\8\
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\8\ See EDGX Options Fees Schedule and BZX Options Fees
Schedule.
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The Exchange believes it is reasonable to assess lower fees for
Market-Maker orders in XSP that are contra to a non-customer and add
liquidity, and are executed electronically, as such changes are
designed to incentivize an increase in non-customer liquidity-adding
volume in XSP on the Exchange. The Exchange believes that incentivizing
more non-customer orders in XSP will create more trading opportunities,
which, in turn attracts Market-Makers. A resulting increase in Market-
Maker activity facilitates tighter spreads, which may lead to
additional increase of order flow in XSP from other market
participants, further contributing to a deeper, more liquid market to
the benefit of all market participants by creating a more robust and
well-balanced market ecosystem. Further, the Exchange believes that the
changes are reasonable and that the fees, even as amended, will
continue to incentivize TPHs to send additional Market-Maker orders to
the Exchange.
Additionally, the Exchange believes that it is equitable and not
unfairly discriminatory to assess lower fees, in general, to Market-
Makers as compared to other market participants other than Customers
because Market-Makers, unlike other market participants, take on a
number of obligations, including quoting obligations, that other market
participants do not have. Further, these lower fees offered to Market-
Makers are intended to incent Market-Makers to quote and trade more on
the Exchange, thereby providing more trading opportunities for all
market participants.
The Exchange also believes the proposed changes to the fee
structure for Non-Customer, Non-Market Maker orders in XSP are
reasonable. As noted above, it is not novel to charge different fees
based on capacity of contra-party, and other exchanges offer varying
fees based on whether an order adds or removes liquidity.\9\ The
Exchange believes assessing higher fees in general for Non-Customer,
Non-Market Maker orders is reasonable, equitable, and non-
discriminatory because, as noted above, the obligations and
circumstances between market participants differ. The Exchange believes
assessing a higher fee for Non-Customer, Non-Market Maker XSP orders
contra a non-customer that remove liquidity and are executed
electronically is reasonable because it provides an incentive to
maintain non-customer liquidity at the Exchange, thereby promoting
price discovery and enhancing order execution opportunities for all
TPHs. Similarly, the Exchange believes assessing a lower fee for Non-
Customer, Non-Market Maker XSP orders contra to a customer or contra to
a non-customer that add liquidity and are executed electronically is
reasonable because it provides an incentive to add liquidity at the
Exchange, including in customer volume, thereby promoting price
discovery and enhancing order execution opportunities for all TPHs.
Finally, while the fees proposed apply to an Exchange proprietary
product, which are traded exclusively on the Exchange, the Exchange
notes that the proposed fees are generally in line with the options
trading fees of at least one other exchange.\10\
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\9\ See EDGX Options Fees Schedule and BZX Options Fees
Schedule.
\10\ See BOX Fees Schedule, Section IV(A).
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The Exchange believes that the proposed fees for Market-Maker and
Non-Customer, Non-Market Maker orders in XSP are equitable and not
unfairly discriminatory because the proposed fees will apply
automatically and uniformly to all Market-Maker and Non-Customer, Non-
Market Maker orders in XSP, as applicable. The Exchange notes that all
fee amounts applicable to Market-Makers will be applied equally to all
Market-Makers, i.e., all Market Makers will be assessed the same
amount. Similarly, the Exchange notes that the XSP fee amounts for each
separate type of other market participant will be assessed equally to
all such market participants, i.e., all Non-Customer and Non-Market-
Maker orders will be assessed the same amount.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the XSP fee amounts for
each separate type of market participants will
[[Page 54552]]
be assessed equally to all such market participants. While different
fees are assessed to different market participants in some
circumstances, the obligations and circumstances between these market
participants differ, as discussed above. For example, Market-Makers
have quoting obligations that are not applicable to other market
participants. Further, the proposed fees structure for XSP is intended
to encourage more trading of XSP, which brings liquidity to the
Exchange and benefits all market participants.
The Exchange does not believe that the proposed rule changes will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed fees assessed apply to an Exchange proprietary product, which
are traded exclusively on the Exchange.
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 \11\ and paragraph (f) of Rule 19b-4 \12\
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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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
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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-CBOE-2024-027 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-CBOE-2024-027. 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-CBOE-2024-027 and should be
submitted on or before July 22, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-14385 Filed 6-28-24; 8:45 am]
BILLING CODE 8011-01-P
