Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fees for Nasdaq 100 Index Options in Options 7, Section 3, 60939-60941 [2024-16548]
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Federal Register / Vol. 89, No. 145 / Monday, July 29, 2024 / Notices
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Vanessa A. Countryman,
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[FR Doc. 2024–16733 Filed 7–25–24; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100577; File No. SR–
GEMX–2024–22]
Self-Regulatory Organizations; Nasdaq
GEMX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the Fees for
Nasdaq 100 Index Options in Options
7, Section 3
July 23, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 12,
ddrumheller on DSK120RN23PROD with NOTICES1
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
18:51 Jul 26, 2024
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
fees for Nasdaq 100 Index options in the
Exchange’s Pricing Schedule at Options
7, Section 3.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/gemx/rules, at the principal
office of the Exchange, 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 purpose of the proposed rule
change is to amend the fees for NDX 3
in Options 7, Section 3. The Exchange
initially filed the proposed pricing
changes on July 1, 2024 (SR–GEMX–
2024–18). On July 12, 2024, the
3 NDX represents A.M. settled options on the full
value of the Nasdaq 100 Index traded under the
symbol NDX.
1 15
VerDate Sep<11>2014
2024, Nasdaq GEMX, LLC (‘‘GEMX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘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.
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PO 00000
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60939
Exchange withdrew that filing and
submitted this filing.
Today, the Exchange assesses
transaction fees of $0.75 per contract for
all Non-Priority Customer 4 orders in
NDX and $0.25 per contract for all
Priority Customers 5 NDX orders. The
Exchange now proposes to assess a
surcharge of $0.25 per contract to all
market participants for executions in
NDX with a premium price of $25.00 or
greater.6 The fees for NDX executions
with a premium price of less than
$25.00 will remain unchanged under
this proposal. The Exchange notes that
charging different fees based on the
option premium is consistent with how
other options are priced at another
options exchange.7 The Exchange
further notes that the proposed
surcharge amount is within the range of
surcharges assessed for transactions in
other products at other options
exchanges.8
The Exchange notes that less than
50% of total NDX executed volume is in
NDX contracts with a premium of
$25.00 or greater, as shown in the chart
below.9
4 ‘‘Non-Priority Customers’’ include Market
Makers, Non-Nasdaq GEMX Market Makers
(FarMMs), Firm Proprietary/Broker-Dealers, and
Professional Customers.
5 A ‘‘Priority Customer’’ is a person or entity that
is not a broker/dealer in securities, and does not
place more than 390 orders in listed options per day
on average during a calendar month for its own
beneficial account(s), as defined in Nasdaq GEMX
Options 1, Section 1(a)(36).
6 See proposed note 14 (which is currently
reserved) of Options 7, Section 3.
7 For example, Cboe Options (‘‘Cboe’’) currently
assesses customers a $0.36 per contract fee (if
premium < $1.00) or $0.45 per contract fee (if
premium >= $1.00) for SPX and SPESG options.
Cboe also currently assesses market-makers a $0.05
per contract fee (if premium is $0.00–$0.10) or
$0.23 per contract (if premium >= $0.11) for VIX
options. See Cboe Fees Schedule.
8 For example, Cboe currently assesses customers
a $0.25 per contract exotic surcharge and a $0.21
per contract execution surcharge in SPX and SPESG
options. See Cboe Fees Schedule. In addition, the
Exchange’s affiliate, Nasdaq Phlx LLC (‘‘Phlx’’)
current assesses a $0.25 per contract complex
surcharge for executions in singly-listed U.S. dollarsettled foreign currency options. See Phlx Options
7, Section 5.D.
9 The chart includes A.M. and P.M. settled
options on the full value of the Nasdaq 100® Index
on Nasdaq ISE, LLC, Nasdaq GEMX, LLC, and
Nasdaq Phlx LLC.
E:\FR\FM\29JYN1.SGM
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60940
Federal Register / Vol. 89, No. 145 / Monday, July 29, 2024 / Notices
NDX Volume by Premium Over Time
Data through July 11, 2024
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Notably, the majority of NDX
contracts have a premium price of
below $25.00. The Exchange believes
that on the whole, while it is proposing
a $0.25 per contract surcharge on NDX
executions with a premium price of
$25.00 or greater, market participants
will continue to be incentivized to
transact in NDX, especially given that
the majority of such transactions would
occur below the threshold at which the
proposed surcharge would be assessed.
ddrumheller on DSK120RN23PROD with NOTICES1
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,11 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange believes that its
proposal to add a $0.25 per contract
surcharge to all market participants for
NDX executions with a premium price
of $25.00 or greater is reasonable
because the proposed pricing reflects
the proprietary nature of this product.
Similar to other proprietary products,
the Exchange seeks to recoup the
10 15
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
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18:51 Jul 26, 2024
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operational costs of listing proprietary
products.12 Also, pricing by symbol is a
common practice on many U.S. options
exchanges as a means to incentivize
order flow to be sent to an exchange for
execution in particular products. Other
options exchanges price by symbol and
based on the option premium.13 Further,
the Exchange notes that market
participants are offered different ways to
gain exposure to the Nasdaq 100 Index,
whether through the Exchange’s
proprietary products like NDX options,
or separately through multi-listed
options overlying Invesco QQQ Trust
(‘‘QQQ’’).14 Offering such products
provides market participants with a
variety of choices in selecting the
product they desire to utilize in order to
gain exposure to the Nasdaq 100 Index.
When exchanges are able to recoup
costs associated with offering
proprietary products, it incentivizes
growth and competition for the
innovation of additional products. The
Exchange further believes that the
proposed surcharge described above is
reasonable because the new fee is in line
way of example, in analyzing an obvious
error, the Exchange would have additional data
points available in establishing a theoretical price
for a multiply listed option as compared to a
proprietary product, which requires additional
analysis and administrative time to comply with
Exchange rules to resolve an obvious error.
13 See supra note 7.
14 QQQ is an exchange-traded fund based on the
same Nasdaq 100 Index as NDX.
PO 00000
12 By
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with surcharges assessed on other index
products at other options exchanges.15
The Exchange believes that its
proposal is equitable and not unfairly
discriminatory because it will be
applied uniformly to all market
participants. Assessing a surcharge only
for executions in NDX whose premium
is $25.00 or greater is equitable and not
unfairly discriminatory for the reasons
that follow. As shown in the chart
above, the majority of NDX contracts
have a premium of less than $25.00, and
the Exchange is limiting the proposed
surcharge to higher-priced NDX
contracts (i.e., $25.00 or greater), while
maintaining lower costs on lower-priced
NDX contracts (i.e., below $25.00). As
such, the Exchange believes that its
proposal will continue to promote
liquidity in these products, to the
benefit of all market participants
because the majority of NDX contracts
would not incur the proposed $0.25
surcharge as they would fall below the
premium price threshold at which the
surcharge would be assessed.
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 not
necessary or appropriate in furtherance
of the purposes of the Act.
15 See
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supra note 8.
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ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 145 / Monday, July 29, 2024 / Notices
In terms of intra-market competition,
the Exchange will apply the proposed
surcharge uniformly to all market
participants. As discussed above, the
majority of NDX contracts have a
premium of less than $25.00 and these
contracts would not incur the proposed
$0.25 surcharge as they would fall
under the premium price threshold at
which the surcharge would be assessed.
By limiting the proposed surcharge to
higher-priced NDX contracts (i.e., with a
premium price of $25.00 or higher), the
Exchange believes that its proposal will
continue to promote liquidity in NDX
by maintaining lower costs for lowerpriced NDX contracts. Greater liquidity
benefits all market participants by
providing more trading opportunities,
tighter spreads, and added market
transparency and price discovery.
In terms of inter-market competition,
the Exchange notes that it operates in a
highly competitive market in which
market participants can readily favor
competing venues if they deem fee
levels at a particular venue to be
excessive, or rebate opportunities
available at other venues to be more
favorable. In such an environment, the
Exchange must continually adjust its
fees to remain competitive with other
options exchanges. Because competitors
are free to modify their own fees in
response, and because market
participants may readily adjust their
order routing practices, the Exchange
believes that the degree to which fee
changes in this market may impose any
burden on competition is extremely
limited. As noted above, market
participants are offered an opportunity
to transact in NDX, or separately
execute options overlying QQQ.
Offering these products provides market
participants with a variety of choices in
selecting the product they desire to use
to gain exposure to the Nasdaq 100
Index. Furthermore, the proposed
surcharge is in line with surcharges
assessed on other products at another
options exchange.16
In addition to the Exchange, market
participants have alternative options
exchanges that they may participate on
and direct their order flow, which list
proprietary products that compete with
NDX.17 In sum, if the changes proposed
herein are unattractive to market
participants, it is likely that the
Exchange will lose market share as a
result. Accordingly, the Exchange does
16 See
supra note 8.
e.g., pricing for Russell 2000 Index (‘‘RUT’’)
on Cboe’s Fees Schedule and Cboe C2 Exchange,
Inc.’s (‘‘C2’’) Fees Schedule. See also SPX pricing
on Cboe’s Fees Schedule. Both RUT and SPX are
proprietary products on the Cboe markets that are
broad-based index options, like NDX and NDXP.
17 See
VerDate Sep<11>2014
18:51 Jul 26, 2024
Jkt 262001
not believe that the proposed changes
will impair the ability of members or
competing options exchanges to
maintain their competitive standing in
the financial markets.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.18 At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is: (i)
necessary or appropriate in the public
interest; (ii) for the protection of
investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
GEMX–2024–22 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–GEMX–2024–22. 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
PO 00000
18 15
U.S.C. 78s(b)(3)(A)(ii).
Frm 00087
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60941
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–GEMX–2024–22 and should be
submitted on or before August 19, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–16548 Filed 7–26–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100581; File No. SR–DTC–
2024–006]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
the DTC Corporate Actions
Distributions Service Guide
July 23, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 17,
2024, The Depository Trust Company
(‘‘DTC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below, which Items
have been prepared by the clearing
agency. DTC filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(4)
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
1 15
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29JYN1
]]>Agencies
[Federal Register Volume 89, Number 145 (Monday, July 29, 2024)]
[Notices]
[Pages 60939-60941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16548]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100577; File No. SR-GEMX-2024-22]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the Fees
for Nasdaq 100 Index Options in Options 7, Section 3
July 23, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 12, 2024, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``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
The Exchange proposes to amend the fees for Nasdaq 100 Index
options in the Exchange's Pricing Schedule at Options 7, Section 3.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/gemx/rules, at the
principal office of the Exchange, 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 purpose of the proposed rule change is to amend the fees for
NDX \3\ in Options 7, Section 3. The Exchange initially filed the
proposed pricing changes on July 1, 2024 (SR-GEMX-2024-18). On July 12,
2024, the Exchange withdrew that filing and submitted this filing.
---------------------------------------------------------------------------
\3\ NDX represents A.M. settled options on the full value of the
Nasdaq 100 Index traded under the symbol NDX.
---------------------------------------------------------------------------
Today, the Exchange assesses transaction fees of $0.75 per contract
for all Non-Priority Customer \4\ orders in NDX and $0.25 per contract
for all Priority Customers \5\ NDX orders. The Exchange now proposes to
assess a surcharge of $0.25 per contract to all market participants for
executions in NDX with a premium price of $25.00 or greater.\6\ The
fees for NDX executions with a premium price of less than $25.00 will
remain unchanged under this proposal. The Exchange notes that charging
different fees based on the option premium is consistent with how other
options are priced at another options exchange.\7\ The Exchange further
notes that the proposed surcharge amount is within the range of
surcharges assessed for transactions in other products at other options
exchanges.\8\
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\4\ ``Non-Priority Customers'' include Market Makers, Non-Nasdaq
GEMX Market Makers (FarMMs), Firm Proprietary/Broker-Dealers, and
Professional Customers.
\5\ A ``Priority Customer'' is a person or entity that is not a
broker/dealer in securities, and does not place more than 390 orders
in listed options per day on average during a calendar month for its
own beneficial account(s), as defined in Nasdaq GEMX Options 1,
Section 1(a)(36).
\6\ See proposed note 14 (which is currently reserved) of
Options 7, Section 3.
\7\ For example, Cboe Options (``Cboe'') currently assesses
customers a $0.36 per contract fee (if premium < $1.00) or $0.45 per
contract fee (if premium >= $1.00) for SPX and SPESG options. Cboe
also currently assesses market-makers a $0.05 per contract fee (if
premium is $0.00-$0.10) or $0.23 per contract (if premium >= $0.11)
for VIX options. See Cboe Fees Schedule.
\8\ For example, Cboe currently assesses customers a $0.25 per
contract exotic surcharge and a $0.21 per contract execution
surcharge in SPX and SPESG options. See Cboe Fees Schedule. In
addition, the Exchange's affiliate, Nasdaq Phlx LLC (``Phlx'')
current assesses a $0.25 per contract complex surcharge for
executions in singly-listed U.S. dollar-settled foreign currency
options. See Phlx Options 7, Section 5.D.
---------------------------------------------------------------------------
The Exchange notes that less than 50% of total NDX executed volume
is in NDX contracts with a premium of $25.00 or greater, as shown in
the chart below.\9\
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\9\ The chart includes A.M. and P.M. settled options on the full
value of the Nasdaq 100[supreg] Index on Nasdaq ISE, LLC, Nasdaq
GEMX, LLC, and Nasdaq Phlx LLC.
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[[Page 60940]]
[GRAPHIC] [TIFF OMITTED] TN29JY24.000
Notably, the majority of NDX contracts have a premium price of
below $25.00. The Exchange believes that on the whole, while it is
proposing a $0.25 per contract surcharge on NDX executions with a
premium price of $25.00 or greater, market participants will continue
to be incentivized to transact in NDX, especially given that the
majority of such transactions would occur below the threshold at which
the proposed surcharge would be assessed.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees, and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that its proposal to add a $0.25 per contract
surcharge to all market participants for NDX executions with a premium
price of $25.00 or greater is reasonable because the proposed pricing
reflects the proprietary nature of this product. Similar to other
proprietary products, the Exchange seeks to recoup the operational
costs of listing proprietary products.\12\ Also, pricing by symbol is a
common practice on many U.S. options exchanges as a means to
incentivize order flow to be sent to an exchange for execution in
particular products. Other options exchanges price by symbol and based
on the option premium.\13\ Further, the Exchange notes that market
participants are offered different ways to gain exposure to the Nasdaq
100 Index, whether through the Exchange's proprietary products like NDX
options, or separately through multi-listed options overlying Invesco
QQQ Trust (``QQQ'').\14\ Offering such products provides market
participants with a variety of choices in selecting the product they
desire to utilize in order to gain exposure to the Nasdaq 100 Index.
When exchanges are able to recoup costs associated with offering
proprietary products, it incentivizes growth and competition for the
innovation of additional products. The Exchange further believes that
the proposed surcharge described above is reasonable because the new
fee is in line with surcharges assessed on other index products at
other options exchanges.\15\
---------------------------------------------------------------------------
\12\ By way of example, in analyzing an obvious error, the
Exchange would have additional data points available in establishing
a theoretical price for a multiply listed option as compared to a
proprietary product, which requires additional analysis and
administrative time to comply with Exchange rules to resolve an
obvious error.
\13\ See supra note 7.
\14\ QQQ is an exchange-traded fund based on the same Nasdaq 100
Index as NDX.
\15\ See supra note 8.
---------------------------------------------------------------------------
The Exchange believes that its proposal is equitable and not
unfairly discriminatory because it will be applied uniformly to all
market participants. Assessing a surcharge only for executions in NDX
whose premium is $25.00 or greater is equitable and not unfairly
discriminatory for the reasons that follow. As shown in the chart
above, the majority of NDX contracts have a premium of less than
$25.00, and the Exchange is limiting the proposed surcharge to higher-
priced NDX contracts (i.e., $25.00 or greater), while maintaining lower
costs on lower-priced NDX contracts (i.e., below $25.00). As such, the
Exchange believes that its proposal will continue to promote liquidity
in these products, to the benefit of all market participants because
the majority of NDX contracts would not incur the proposed $0.25
surcharge as they would fall below the premium price threshold at which
the surcharge would be assessed.
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 not necessary or appropriate in
furtherance of the purposes of the Act.
[[Page 60941]]
In terms of intra-market competition, the Exchange will apply the
proposed surcharge uniformly to all market participants. As discussed
above, the majority of NDX contracts have a premium of less than $25.00
and these contracts would not incur the proposed $0.25 surcharge as
they would fall under the premium price threshold at which the
surcharge would be assessed. By limiting the proposed surcharge to
higher-priced NDX contracts (i.e., with a premium price of $25.00 or
higher), the Exchange believes that its proposal will continue to
promote liquidity in NDX by maintaining lower costs for lower-priced
NDX contracts. Greater liquidity benefits all market participants by
providing more trading opportunities, tighter spreads, and added market
transparency and price discovery.
In terms of inter-market competition, the Exchange notes that it
operates in a highly competitive market in which market participants
can readily favor competing venues if they deem fee levels at a
particular venue to be excessive, or rebate opportunities available at
other venues to be more favorable. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
options exchanges. Because competitors are free to modify their own
fees in response, and because market participants may readily adjust
their order routing practices, the Exchange believes that the degree to
which fee changes in this market may impose any burden on competition
is extremely limited. As noted above, market participants are offered
an opportunity to transact in NDX, or separately execute options
overlying QQQ. Offering these products provides market participants
with a variety of choices in selecting the product they desire to use
to gain exposure to the Nasdaq 100 Index. Furthermore, the proposed
surcharge is in line with surcharges assessed on other products at
another options exchange.\16\
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\16\ See supra note 8.
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In addition to the Exchange, market participants have alternative
options exchanges that they may participate on and direct their order
flow, which list proprietary products that compete with NDX.\17\ In
sum, if the changes proposed herein are unattractive to market
participants, it is likely that the Exchange will lose market share as
a result. Accordingly, the Exchange does not believe that the proposed
changes will impair the ability of members or competing options
exchanges to maintain their competitive standing in the financial
markets.
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\17\ See e.g., pricing for Russell 2000 Index (``RUT'') on
Cboe's Fees Schedule and Cboe C2 Exchange, Inc.'s (``C2'') Fees
Schedule. See also SPX pricing on Cboe's Fees Schedule. Both RUT and
SPX are proprietary products on the Cboe markets that are broad-
based index options, like NDX and NDXP.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\18\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is: (i) necessary or appropriate in the public
interest; (ii) for the protection of investors; or (iii) otherwise in
furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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\18\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-GEMX-2024-22 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-GEMX-2024-22. 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-GEMX-2024-22 and should be
submitted on or before August 19, 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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-16548 Filed 7-26-24; 8:45 am]
BILLING CODE 8011-01-P
