Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Company Listing Fees Under Exchange Rule 14.13, 57460-57463 [2024-15408]

Download as PDF 57460 Federal Register / Vol. 89, No. 135 / Monday, July 15, 2024 / Notices service providers that operate at the Carteret data center. Again, POD will offer its users no special advantages relative to users of the Exchange’s traditional colocation services. Though POD will allow customers to use Exchange-provided hardware to access the Exchange, POD does not otherwise fundamentally differ from current connectivity to the Exchange. The Exchange is not proposing to change the nature of the services provided today. Rather, POD will differ as to who provides the hardware. B. Self-Regulatory Organization’s Statement on Burden on Competition IV. Solicitation of Comments The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Nothing in the proposal imposes any burden on the ability of other exchanges to compete. The Exchange operates in a highly competitive market in which exchanges and other vendors offer colocation services to facilitate the trading and other market activities of those market participants who believe that colocation enhances the efficiency of their operations. Nothing in the Proposal burdens intra-market competition because POD will be available to any customer and customers that wish to co-locate via POD can do so on a non-discriminatory basis. Use of any colocation service is completely voluntary, and each market participant is able to determine whether to use colocation services, including POD, based on the requirements of its business operations. POD will offer its users no special advantages relative to users of the Exchange’s traditional colocation services. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. ddrumheller on DSK120RN23PROD with NOTICES1 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section VerDate Sep<11>2014 18:25 Jul 12, 2024 Jkt 262001 19(b)(3)(A)(iii) of the Act 13 and subparagraph (f)(6) of Rule 19b–4 thereunder.14 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 shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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–BX–2024–021 and should be submitted on or before August 5, 2024. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 J. Matthew DeLesDernier, Deputy Secretary. Electronic Comments BILLING CODE 8011–01–P • 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– BX–2024–021 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–BX–2024–021. 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 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 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 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. PO 00000 13 15 14 17 Frm 00077 Fmt 4703 Sfmt 4703 [FR Doc. 2024–15412 Filed 7–12–24; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100477; File No. SR– CboeBZX–2024–061] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Company Listing Fees Under Exchange Rule 14.13 July 9, 2024. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) and Rule 19b–4 thereunder,2 notice is hereby given that on June 26, 2024, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) 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 BZX Exchange, Inc. (‘‘BZX’’ or the ‘‘Exchange’’) is filing with the Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’) a proposed rule change to modify the Company Listing Fees under Exchange Rule 14.13. 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\15JYN1.SGM 15JYN1 Federal Register / Vol. 89, No. 135 / Monday, July 15, 2024 / Notices The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ equities/regulation/rule_filings/BZX/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose ddrumheller on DSK120RN23PROD with NOTICES1 The Exchange proposes a clean-up change to Rule 14.13(b) to correct a drafting error from a previous amendment to the Company Listings Fees that delineated the Application Fee from the Entry Fee in the Exchange’s rulebook.3 As a result, a particular exception to the Application Fee and Entry Fee was no longer applicable to both fee types, and other exceptions to the Application Fee and Entry Fee were unclearly listed under only one fee type in the Exchange’s Rules. Now, the Exchange proposes to amend its rules to provide that both the Application Fee and Entry Fee are part of the ‘‘Initial Listing Fees’’, and to make structural changes to existing Rule 14.13 to clearly provide any exceptions are applicable to the Initial Listing Fees.4 3 See Securities Exchange Act No. 98991 (November 20, 2023) 88 FR 82933 (November 27, 2023) (SR–CboeBZX–2023–092) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delineate the Application Fee From the Entry Fee, To Increase the Application Fee for Tier I and Tier II Securities Listed on the Exchange in Certain Circumstances, To Change the Assessment Date of the Entry Fee, and To Clarify That Both the Entry Fee and Application Fee Are Non-Refundable as Provided in Exchange Rule 14.13) (the ‘‘Previous Amendment’’). 4 The Exchange initially filed this proposed rule change on June 7, 2024 (SR–CboeBZX–2024–053). On June 17, 2024, the Exchange withdrew that filing and submitted SR–CboeBZX–2024–059. On June 26, 2024, the Exchange withdrew that filing and submitted this filing. VerDate Sep<11>2014 18:25 Jul 12, 2024 Jkt 262001 The Exchange proposes to adopt Rule 14.13(b)(1), which would be titled ‘‘Initial Listing Fees’’. Thereunder, proposed Rules 14.13(b)(1)(A) and (B) would provide for the Application Fee and Entry Fee, respectively, which are currently provided under Rule 14.13(b)(1) and (2). The Exchange proposes no substantive change to the Application Fees provided under proposed Rule 14.13(b)(1)(A)(i)–(iii), except to update cross references to Rule 14.13 in proposed Rule 14.13(b)(1)(A)(iii). Similarly, the Exchange proposes to re-letter Rules 14.13(b)(2)(A) through (E) to Rules 14.13(b)(1)(B)(i) through (v), including any corresponding re-numbering or relettering to subparagraphs thereunder. The Exchange proposes no substantive change to proposed Rules 14.13(b)(1)(B)(i) through (v) except to update cross-references to Rule 14.13 in Rule 14.13(b)(1)(B)(iii). Next, the Exchange proposes to delete existing Rule 14.13(b)(2)(G) which is currently reserved and contains no substantive text. The Exchange also proposes to re-letter existing Rules 14.13(b)(2)(F), (H), and (I) to proposed Rules 14.13(b)(1)(C), (D), and (E), respectively. By re-lettering these paragraphs, they will fall under the Initial Listing Fees section of the Rule and the Exchange believes such change will more clearly provide that those Rules are applicable to all Initial Listing Fees, regardless of whether they are an Application Fee or Entry Fee. Prior to the Previous Amendment, the Application Fee was a subset of the Entry Fee but the Previous Amendment created a delineation between the Application Fee and Entry Fee in order to make the Rule easier to read. The proposal, however, did not make a corresponding amendment to Rule 14.13(b)(2)(F) to provide that the Exchange Board (the ‘‘Board’’) or its designee may defer or waive any part of the Application Fee and/or Entry Fee. Now, the Exchange proposes to correct that oversight by updating proposed Rule 14.13(b)(1)(C) to provide that such discretion applies to the Initial Listing Fees, which includes both the Application Fee and Entry Fee. The Exchange is also proposing to delete cross-references to Rule 14.13(b)(2) from proposed Rules 14.13(b)(2)(D) and (E). While the Exchange updated proposed Rules 14.13(b)(1)(D) and (E) in the Previous Amendment to apply to both the Application Fee and Entry Fee, those provisions were provided for only under the Entry Fee portion of the Rule, which the Exchange believes may be unclear or cause confusion. Accordingly, the PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 57461 Exchange believes that the proposed relettering of those rules will clearly provide that the exceptions apply to the Initial Listing Fees (which include both the Application Fee and Entry Fee). In light of the structural changes proposed above, the Exchange proposes to re-number existing Rules 14.13(b)(3) and (4) to Rules 14.13(b)(2) and (3). The Exchange also proposes to update crossreferences to Rule 14.13 in proposed Rules 14.13(b)(2)(C), (H), (I), and (K). 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.5 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 6 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) 7 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) 8 as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities. The Exchange first notes that its corporate listing business operates in a highly-competitive market in which Companies can readily list on another national securities exchange if they deem fee levels or any other factor at a particular venue to be insufficient or excessive. Exchange Rule 14.13 reflects a competitive pricing structure designed to incentivize Companies to list new securities, which the Exchange believes will enhance competition both among Companies and listing venues, to the benefit of investors. The Exchange believes that the proposed changes will add clarity to the Exchange’s rulebook, to the benefit of all 5 15 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 7 Id. 8 15 E:\FR\FM\15JYN1.SGM U.S.C. 78f(b)(4). 15JYN1 57462 Federal Register / Vol. 89, No. 135 / Monday, July 15, 2024 / Notices investors. As proposed, both the Application Fee and Entry Fee will be considered part of the Initial Listings Fee. Further, any exceptions to such Initial Listings Fees will be clearly set forth thereunder. The Exchange also believes that the deletion of an unused Rule provision (i.e., Rule 14.13(b)(2)(G)) and updates to any cross-references within Rule 14.13 based on the proposed changes will provide for a clear and consistent rulebook, which will benefit all investors. The Exchange believes it is reasonable to allow the Board of Directors or its designee, in its discretion, to defer or waive all or any part of the Initial Listing Fees described in proposed Rule 14.13(b)(1). Prior to the Previous Amendment, the Application Fee was a subset of the Entry Fee but the Previous Amendment created a delineation between the Application Fee and Entry Fee in order to make the Rule easier to read, but the proposal did not make a corresponding amendment to Rule 14.13(b)(2)(F) to provide that the Board or its designee may defer or waive any part of the Application Fee and/or Entry Fee. The Exchange’s proposal would correct that drafting error by updating proposed Rule 14.13(b)(1)(C) to provide that such discretion applies to the Initial Listing Fees, which includes both the Application Fee and Entry Fee. The Exchange notes that another exchange’s rules have long provided similar authority to its board of directors or its designee to defer or waive all or any part of the entry fee, which includes the application fee. Specifically, the Nasdaq Stock Market LLC (‘‘Nasdaq’’) rules provide that the application fee falls under the entry fees of its rulebook,9 in a similar fashion to Exchange Rules prior to the Previous Amendment. Nasdaq Rules also provide that its board of directors or its designee may, in its discretion defer or waive all or any part of the entry fee prescribed in its company listing fees rules. Given the foregoing, the Exchange believes the proposed fee amendments are consistent with the Act. ddrumheller on DSK120RN23PROD with NOTICES1 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 market for listing services is extremely competitive and listed companies may freely choose alternative venues based on the aggregate fees assessed, and the value provided by each listing. change should be approved or disapproved. The proposed change is a clean-up change to Rule 14.13(b)(2)(F) to correct a drafting error from a previous amendment to the Company Listings Fees that delineated the Application Fee from the Entry Fee in the Exchange’s rulebook. As a result, a particular exception to the Application Fee and Entry Fee was no longer applicable to both fee types, and other exceptions to the Application Fee and Entry Fee were unclearly listed under only one fee type under the Rule. The proposed amendments would provide that both the Application Fee and Entry Fee are part of the ‘‘Initial Listing Fees’’ and would make structural changes to existing Rule 14.13 to clearly provide any exceptions applicable to the Initial Listing Fees. As the proposed amendments are designed to add clarity to the Exchange’s rulebook and to correct a drafting error, the Exchange does not believe the proposal will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. IV. Solicitation of Comments The Exchange believes that the proposed amendment does not encumber competition for listings with other listing venues, which are similarly free to set their fees. Rather, it reflects competition among listing venues and will further enhance competition. 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 10 and paragraph (f) of Rule 19b–4 11 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 10 15 9 See Nasdaq Rule 5920(a)(2). VerDate Sep<11>2014 18:25 Jul 12, 2024 11 17 Jkt 262001 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). Frm 00079 Fmt 4703 Sfmt 4703 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– CboeBZX–2024–061 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to file number SR–CboeBZX–2024–061. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–CboeBZX–2024–061 and should be submitted on or before August 5, 2024. E:\FR\FM\15JYN1.SGM 15JYN1 Federal Register / Vol. 89, No. 135 / Monday, July 15, 2024 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2024–15408 Filed 7–12–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100469; File No. SR– MEMX–2024–26] Self-Regulatory Organizations; MEMX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange’s Fee Schedule Concerning Transaction Pricing July 9, 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 28, 2024, MEMX LLC (‘‘MEMX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the 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 The Exchange is filing with the Commission a proposed rule change to amend the Exchange’s fee schedule applicable to Members 3 (the ‘‘Fee Schedule’’) pursuant to Exchange Rules 15.1(a) and (c). The Exchange proposes to implement the changes to the Fee Schedule pursuant to this proposal on July 1, 2024. The text of the proposed rule change is provided in Exhibit 5. ddrumheller on DSK120RN23PROD with NOTICES1 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 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Exchange Rule 1.5(p). 1 15 18:25 Jul 12, 2024 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend the Fee Schedule to: (1) adopt a new tier under the Liquidity Provision Tiers; (2) modify the required criteria under Liquidity Provision Tiers 2, 3, and 4; (3) modify NBBO Setter Tier 1 by modifying the required criteria under such tier; and (4) eliminate the DLI Additive Rebate, each as further described below. 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, to which market participants may direct their order flow. Based on publicly available information, no single registered equities exchange currently has more than approximately 16.1% of the total market share of executed volume of equities trading.4 Thus, in such a low-concentrated and highly competitive market, no single equities exchange possesses significant pricing power in the execution of order flow, and the Exchange currently represents approximately 2.1% of the overall market share.5 The Exchange in particular operates a ‘‘Maker-Taker’’ model whereby it provides rebates to Members that add liquidity to the Exchange and charges fees to Members that remove liquidity from the Exchange. The Fee Schedule sets forth the standard rebates and fees applied per share for orders that add and remove liquidity, respectively. Additionally, in response to the competitive environment, the Exchange also offers tiered pricing, which provides Members with opportunities to qualify for higher rebates or lower 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 4 Market share percentage calculated as of June 26, 2024. The Exchange receives and processes data made available through consolidated data feeds (i.e., CTS and UTDF). 5 Id. 12 17 VerDate Sep<11>2014 forth in sections A, B, and C below, of the most significant aspects of such statements. Jkt 262001 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 57463 for satisfying increasingly more stringent criteria. Adoption of New Liquidity Provision Tier The Exchange currently provides a standard rebate of $0.0015 per share for executions of orders in securities priced at or above $1.00 per share that add displayed liquidity to the Exchange (such orders, ‘‘Added Displayed Volume’’). The Exchange also currently offers Liquidity Provision Tiers 1–5, under which a Member may receive an enhanced rebate for executions of Added Displayed Volume by achieving the corresponding required volume criteria for each tier. The Exchange now proposes to adopt a new tier under the Liquidity Provision Tiers, which, as proposed, would be the new Liquidity Provision Tier 1, and the current Liquidity Provision Tiers 1, 2, 3, 4 and 5 would be renumbered as Liquidity Provision Tiers 2, 3, 4, 5 and 6 (hereinafter referred to as such). The applicable rebates and required criteria under Liquidity Provision Tiers 2, 3, 4, 5 and 6, would remain unchanged, except for the required criteria under Liquidity Provision Tiers 2, 3, and 4, which the Exchange is proposing to modify, as further described below. Under the proposed new Liquidity Provision Tier 1, the Exchange will provide an enhanced rebate of $0.0034 per share for executions of Added Displayed Volume for Members that qualify for such tier by achieving either: (1) an ADAV 6 (excluding Retail Orders) that is equal to or greater than 0.50% of the TCV,7 or (2) a Step-Up ADAV 8 June 6 As set forth on the Fee Schedule, ‘‘ADAV’’ means the average daily added volume calculated as the number of shares added per day, which is calculated on a monthly basis, and ‘‘Displayed ADAV’’ means ADAV with respect to displayed orders. 7 As set forth on the Fee Schedule, ‘‘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. The pricing for the proposed new Liquidity Provision Tier 1 is referred to by the Exchange on the Fee Schedule under the existing description ‘‘Added displayed volume, Liquidity Provision Tier 1’’ with a Fee Code of ‘‘B1’’, ‘‘D1’’, ‘‘J1’’, or ‘‘I1’’, as applicable, to be provided by the Exchange on the monthly invoices provided to Members. The Exchange also notes that the pricing for Liquidity Provision Tiers 2–5 will be referred to under the existing applicable descriptions and Fee Codes, and the pricing for Liquidity Provision Tier 6 will be referred to by the Exchange under the new description ‘‘Added displayed volume, Liquidity Provision Tier 6’’ with a Fee Code of ‘‘B6’’, ‘‘D6’’, ‘‘J6’’, or ‘‘I6’’ as applicable, to be provided by the Exchange on the monthly invoices provided to Members. 8 As set forth on the Fee Schedule, ‘‘Step-Up ADAV’’ means ADAV in the relevant baseline month subtracted from current ADAV. E:\FR\FM\15JYN1.SGM 15JYN1

Agencies

[Federal Register Volume 89, Number 135 (Monday, July 15, 2024)]
[Notices]
[Pages 57460-57463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15408]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100477; File No. SR-CboeBZX-2024-061]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Modify 
the Company Listing Fees Under Exchange Rule 14.13

July 9, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 26, 2024, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') 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 BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to modify the Company Listing Fees under 
Exchange Rule 14.13.

[[Page 57461]]

The text of the proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/BZX/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes a clean-up change to Rule 14.13(b) to correct 
a drafting error from a previous amendment to the Company Listings Fees 
that delineated the Application Fee from the Entry Fee in the 
Exchange's rulebook.\3\ As a result, a particular exception to the 
Application Fee and Entry Fee was no longer applicable to both fee 
types, and other exceptions to the Application Fee and Entry Fee were 
unclearly listed under only one fee type in the Exchange's Rules. Now, 
the Exchange proposes to amend its rules to provide that both the 
Application Fee and Entry Fee are part of the ``Initial Listing Fees'', 
and to make structural changes to existing Rule 14.13 to clearly 
provide any exceptions are applicable to the Initial Listing Fees.\4\
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    \3\ See Securities Exchange Act No. 98991 (November 20, 2023) 88 
FR 82933 (November 27, 2023) (SR-CboeBZX-2023-092) (Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Delineate 
the Application Fee From the Entry Fee, To Increase the Application 
Fee for Tier I and Tier II Securities Listed on the Exchange in 
Certain Circumstances, To Change the Assessment Date of the Entry 
Fee, and To Clarify That Both the Entry Fee and Application Fee Are 
Non-Refundable as Provided in Exchange Rule 14.13) (the ``Previous 
Amendment'').
    \4\ The Exchange initially filed this proposed rule change on 
June 7, 2024 (SR-CboeBZX-2024-053). On June 17, 2024, the Exchange 
withdrew that filing and submitted SR-CboeBZX-2024-059. On June 26, 
2024, the Exchange withdrew that filing and submitted this filing.
---------------------------------------------------------------------------

    The Exchange proposes to adopt Rule 14.13(b)(1), which would be 
titled ``Initial Listing Fees''. Thereunder, proposed Rules 
14.13(b)(1)(A) and (B) would provide for the Application Fee and Entry 
Fee, respectively, which are currently provided under Rule 14.13(b)(1) 
and (2). The Exchange proposes no substantive change to the Application 
Fees provided under proposed Rule 14.13(b)(1)(A)(i)-(iii), except to 
update cross references to Rule 14.13 in proposed Rule 
14.13(b)(1)(A)(iii). Similarly, the Exchange proposes to re-letter 
Rules 14.13(b)(2)(A) through (E) to Rules 14.13(b)(1)(B)(i) through 
(v), including any corresponding re-numbering or re-lettering to 
subparagraphs thereunder. The Exchange proposes no substantive change 
to proposed Rules 14.13(b)(1)(B)(i) through (v) except to update cross-
references to Rule 14.13 in Rule 14.13(b)(1)(B)(iii).
    Next, the Exchange proposes to delete existing Rule 14.13(b)(2)(G) 
which is currently reserved and contains no substantive text. The 
Exchange also proposes to re-letter existing Rules 14.13(b)(2)(F), (H), 
and (I) to proposed Rules 14.13(b)(1)(C), (D), and (E), respectively. 
By re-lettering these paragraphs, they will fall under the Initial 
Listing Fees section of the Rule and the Exchange believes such change 
will more clearly provide that those Rules are applicable to all 
Initial Listing Fees, regardless of whether they are an Application Fee 
or Entry Fee.
    Prior to the Previous Amendment, the Application Fee was a subset 
of the Entry Fee but the Previous Amendment created a delineation 
between the Application Fee and Entry Fee in order to make the Rule 
easier to read. The proposal, however, did not make a corresponding 
amendment to Rule 14.13(b)(2)(F) to provide that the Exchange Board 
(the ``Board'') or its designee may defer or waive any part of the 
Application Fee and/or Entry Fee. Now, the Exchange proposes to correct 
that oversight by updating proposed Rule 14.13(b)(1)(C) to provide that 
such discretion applies to the Initial Listing Fees, which includes 
both the Application Fee and Entry Fee.
    The Exchange is also proposing to delete cross-references to Rule 
14.13(b)(2) from proposed Rules 14.13(b)(2)(D) and (E). While the 
Exchange updated proposed Rules 14.13(b)(1)(D) and (E) in the Previous 
Amendment to apply to both the Application Fee and Entry Fee, those 
provisions were provided for only under the Entry Fee portion of the 
Rule, which the Exchange believes may be unclear or cause confusion. 
Accordingly, the Exchange believes that the proposed re-lettering of 
those rules will clearly provide that the exceptions apply to the 
Initial Listing Fees (which include both the Application Fee and Entry 
Fee).
    In light of the structural changes proposed above, the Exchange 
proposes to re-number existing Rules 14.13(b)(3) and (4) to Rules 
14.13(b)(2) and (3). The Exchange also proposes to update cross-
references to Rule 14.13 in proposed Rules 14.13(b)(2)(C), (H), (I), 
and (K).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act the rules and regulations thereunder applicable to the Exchange 
and, in particular, the requirements of Section 6(b) of the Act.\5\ 
Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \6\ 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) \7\ 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) \8\ 
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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ Id.
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange first notes that its corporate listing business 
operates in a highly-competitive market in which Companies can readily 
list on another national securities exchange if they deem fee levels or 
any other factor at a particular venue to be insufficient or excessive. 
Exchange Rule 14.13 reflects a competitive pricing structure designed 
to incentivize Companies to list new securities, which the Exchange 
believes will enhance competition both among Companies and listing 
venues, to the benefit of investors.
    The Exchange believes that the proposed changes will add clarity to 
the Exchange's rulebook, to the benefit of all

[[Page 57462]]

investors. As proposed, both the Application Fee and Entry Fee will be 
considered part of the Initial Listings Fee. Further, any exceptions to 
such Initial Listings Fees will be clearly set forth thereunder. The 
Exchange also believes that the deletion of an unused Rule provision 
(i.e., Rule 14.13(b)(2)(G)) and updates to any cross-references within 
Rule 14.13 based on the proposed changes will provide for a clear and 
consistent rulebook, which will benefit all investors.
    The Exchange believes it is reasonable to allow the Board of 
Directors or its designee, in its discretion, to defer or waive all or 
any part of the Initial Listing Fees described in proposed Rule 
14.13(b)(1). Prior to the Previous Amendment, the Application Fee was a 
subset of the Entry Fee but the Previous Amendment created a 
delineation between the Application Fee and Entry Fee in order to make 
the Rule easier to read, but the proposal did not make a corresponding 
amendment to Rule 14.13(b)(2)(F) to provide that the Board or its 
designee may defer or waive any part of the Application Fee and/or 
Entry Fee. The Exchange's proposal would correct that drafting error by 
updating proposed Rule 14.13(b)(1)(C) to provide that such discretion 
applies to the Initial Listing Fees, which includes both the 
Application Fee and Entry Fee. The Exchange notes that another 
exchange's rules have long provided similar authority to its board of 
directors or its designee to defer or waive all or any part of the 
entry fee, which includes the application fee. Specifically, the Nasdaq 
Stock Market LLC (``Nasdaq'') rules provide that the application fee 
falls under the entry fees of its rulebook,\9\ in a similar fashion to 
Exchange Rules prior to the Previous Amendment. Nasdaq Rules also 
provide that its board of directors or its designee may, in its 
discretion defer or waive all or any part of the entry fee prescribed 
in its company listing fees rules.
---------------------------------------------------------------------------

    \9\ See Nasdaq Rule 5920(a)(2).
---------------------------------------------------------------------------

    Given the foregoing, the Exchange believes the proposed fee 
amendments are consistent with the Act.

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 market for listing 
services is extremely competitive and listed companies may freely 
choose alternative venues based on the aggregate fees assessed, and the 
value provided by each listing.
    The proposed change is a clean-up change to Rule 14.13(b)(2)(F) to 
correct a drafting error from a previous amendment to the Company 
Listings Fees that delineated the Application Fee from the Entry Fee in 
the Exchange's rulebook. As a result, a particular exception to the 
Application Fee and Entry Fee was no longer applicable to both fee 
types, and other exceptions to the Application Fee and Entry Fee were 
unclearly listed under only one fee type under the Rule. The proposed 
amendments would provide that both the Application Fee and Entry Fee 
are part of the ``Initial Listing Fees'' and would make structural 
changes to existing Rule 14.13 to clearly provide any exceptions 
applicable to the Initial Listing Fees. As the proposed amendments are 
designed to add clarity to the Exchange's rulebook and to correct a 
drafting error, the Exchange does not believe the proposal will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
    The Exchange believes that the proposed amendment does not encumber 
competition for listings with other listing venues, which are similarly 
free to set their fees. Rather, it reflects competition among listing 
venues and will further enhance competition.

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 \10\ and paragraph (f) of Rule 19b-4 \11\ 
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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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-CboeBZX-2024-061 on the subject line.

Paper Comments

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

All submissions should refer to file number SR-CboeBZX-2024-061. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2024-061 and should 
be submitted on or before August 5, 2024.


[[Page 57463]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-15408 Filed 7-12-24; 8:45 am]
BILLING CODE 8011-01-P
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