Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule, 65961-65964 [2024-17952]

Download as PDF Federal Register / Vol. 89, No. 156 / Tuesday, August 13, 2024 / Notices ETPs will be subject to Exchange rules that currently govern the listing and trading of options on ETFs, including permissible expirations, strike prices, minimum increments, position and exercise limits, and margin requirements. Moreover, options on Ether ETPs will be equally available to all market participants who wish to trade such options. Finally, and as stated above, the Exchange already lists options on other commodity ETFs structured as a trust. Intermarket Competition: The Exchange does not believe the proposal will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the extent that permitting options on Ether ETPs to trade on the Exchange may make the Exchange a more attractive marketplace to market participants, such market participants are free to elect to become market participants on the Exchange. Additionally, other options exchanges are free to amend their listing rules, as applicable, to permit them to list and trade options on Ether ETPs. The Exchange believes that the proposed rule change may relieve any burden on, or otherwise promote, competition as it is designed to increase competition for order flow on the Exchange in a manner that is beneficial to investors by providing them with a lower-cost option to hedge their investment portfolios. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues that offer similar products. Ultimately, the Exchange believes that offering options on Ether ETPs for trading on the Exchange will promote competition by providing investors with an additional, relatively low-cost means to hedge their portfolios and meet their investment needs in connection with spot ether prices and ether-related products and positions. lotter on DSK11XQN23PROD with NOTICES1 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its VerDate Sep<11>2014 17:55 Aug 12, 2024 Jkt 262001 reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– NYSEAMER–2024–45 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to file number SR–NYSEAMER–2024–45. 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 PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 65961 submissions should refer to file number SR–NYSEAMER–2024–45 and should be submitted on or before September 3, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.30 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–17949 Filed 8–12–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100667; File No. SR– CBOE–2024–033] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule August 7, 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 August 1, 2024, Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) 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. 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 30 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\13AUN1.SGM 13AUN1 65962 Federal Register / Vol. 89, No. 156 / Tuesday, August 13, 2024 / Notices the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. lotter on DSK11XQN23PROD with NOTICES1 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 August 1, 2024. The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 17 options venues to which market participants may direct their order flow. Based on publicly available information, no single options exchange has more than 12% of the market share.3 Thus, in such a low-concentrated and highly competitive market, no single options exchange possesses significant pricing power in the execution of option order flow. The Exchange believes that the ever-shifting market share among the exchanges from month to month demonstrates that market participants can shift order flow or discontinue to reduce use of certain categories of products in response to fee changes. Accordingly, competitive forces constrain the Exchange’s transaction fees, and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. The Fees Schedule currently lists fee codes and their corresponding transaction fee for routed Customer orders to other options exchanges specifically in Exchange Traded Funds (‘‘ETF’’) and equity options, and for non-Customer orders routed in Penny and Non-Penny options classes. The Exchange notes that its current approach to routing fees is to set forth in a simple manner certain subcategories of fees that approximate the cost of routing to other options exchanges based on the cost of transaction fees assessed by each venue as well as a flat $0.15 assessment that covers costs to the Exchange for routing 3 See Cboe Global Markets U.S. Options Monthly Market Volume Summary (July 30, 2024), available at https://markets.cboe.com/us/options/market_ statistics/. VerDate Sep<11>2014 17:55 Aug 12, 2024 Jkt 262001 (i.e., clearing fees, connectivity and other infrastructure costs, membership fees, etc.) (collectively, ‘‘Routing Costs’’). The Exchange then monitors the fees charged as compared to the costs of its routing services and adjusts its routing fees and/or sub-categories to ensure that the Exchange’s fees do indeed result in a rough approximation of overall Routing Costs, and are not significantly higher or lower in any area. The Exchange notes that another options exchange currently assesses routing fees in a similar manner as the Exchange’s current approach to assessing approximate routing fees.4 Currently, under the Routing Fees table of the Fees Schedule, fee code RD is appended to Customer orders in ETF/ Equity options routed to NYSE American (‘‘AMEX’’), BOX Options Exchange (‘‘BOX’’), Cboe EDGX Exchange, Inc. (‘‘EDGX’’), MIAX Options Exchange (‘‘MIAX’’) or Nasdaq PHLX LLC (‘‘PHLX’’) (excluding orders in SPY options), and assesses a charge of $0.25 per contract. The Exchange proposes to amend fee code RD to add applicable Customer orders routed to MIAX Sapphire, LLC (‘‘SPHR’’), in anticipation of the launch of the new options exchange. The charge assessed per contract for fee code RD remains the same under the proposed rule change. The proposed changes result in an assessment of fees that, in anticipation of the launch of another options exchange, is in line with the Exchange’s current approach to routing fees, that is, in a manner that approximates the cost of routing Customer orders in ETF/ Equity options to other away options exchanges, based on the general cost of transaction fees assessed by the subcategory of away options exchanges for such orders (as well as the Exchange’s Routing Costs). The Exchange notes that routing through the Exchange is optional and that Trading Permit Holders (‘‘TPHs’’) will continue to be able to choose where to route their Customer orders in ETF and equity options. 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.5 Specifically, the Exchange believes the proposed rule change is consistent with the Section 4 See e.g., MIAX Options Exchange Fee Schedule, Section 1(c), ‘‘Fees for Customer Orders Routed to Another Options Exchange.’’ 5 15 U.S.C. 78f(b). PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 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. The Exchange also believes the proposed rule change is consistent with Section 6(b)(4) of the Act,8 which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its TPHs and other persons using its facilities. The Exchange believes the proposed rule change to amend fee code RD to account for SPHR’s expected assessment of fees for Customer orders is reasonable because it is reasonably designed to assess routing fees in line with the Exchange’s current approach to routing fees. That is, the proposed rule change is intended to include Customer orders in ETF and equity options routed to SPHR in the most appropriate subcategory of fees that approximates the cost of routing to a group of away options exchanges based on the cost of transaction fees assessed by each venue as well as Routing Costs to the Exchange. As noted above, the Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The Exchange notes that routing through the Exchange is optional and that TPHs will continue to be able to choose where to route their Customer orders in ETF and equity options in the same sub-category group of away exchanges as they currently may choose to route. The proposed rule change reflects a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange, which the Exchange believes would enhance market quality to the benefit of all TPHs. The Exchange further notes 6 15 U.S.C. 78f(b)(5). 7 Id. 8 15 E:\FR\FM\13AUN1.SGM U.S.C. 78f(b)(4). 13AUN1 Federal Register / Vol. 89, No. 156 / Tuesday, August 13, 2024 / Notices lotter on DSK11XQN23PROD with NOTICES1 that another options exchange currently approximates routing fees in a similar manner as the Exchange’s current approach.9 The Exchange believes that the proposed rule change is equitable and not unfairly discriminatory because all TPHs’ applicable Customer orders in ETF and equity options routed to SPHR will be automatically and uniformly assessed the applicable routing charge. 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. Particularly, the Exchange does not believe the proposed rule change to amend fee code RD will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. All TPHs’ applicable Customer orders in ETF and equity options routed to SPHR will automatically yield fee code RD and uniformly be assessed the corresponding fee. The Exchange notes that another options exchange approximates routing costs in a similar manner as the Exchange’s current approach.10 The Exchange also 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. As previously discussed, the Exchange operates in a highly competitive market. Members have numerous alternative venues that they may participate on and direct their order flow, including 16 other options exchanges and off-exchange venues. Additionally, the Exchange represents a small percentage of the overall market. Based on publicly available information, no single options exchange has more than 16% of the market share.11 Therefore, no exchange possesses significant pricing power in the execution of option order flow. Indeed, participants can readily choose to send their orders to other exchange and offexchange venues if they deem fee levels at those other venues to be more favorable. Moreover, the Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities 9 See e.g., MIAX Options Exchange Fee Schedule, Section 1(c), ‘‘Fees for Customer Orders Routed to Another Options Exchange.’’ 10 See e.g., MIAX Options Exchange Fee Schedule, Section 1(c), ‘‘Fees for Customer Orders Routed to Another Options Exchange.’’ 11 See supra note 3. VerDate Sep<11>2014 17:55 Aug 12, 2024 Jkt 262001 markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 12 The fact that this market is competitive has also long been recognized by the courts. In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit stated as follows: ‘‘[n]o one disputes that competition for order flow is ‘fierce.’ . . . As the SEC explained, ‘[i]n the U.S. national market system, buyers and sellers of securities, and the brokerdealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution’; [and] ‘no exchange can afford to take its market share percentages for granted’ because ‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’ . . . .’’.13 Accordingly, the Exchange does not believe its proposed fee change imposes any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 14 and paragraph (f) of Rule 19b–4 15 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 12 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 13 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782– 83 (December 9, 2008) (SR–NYSEArca–2006–21)). 14 15 U.S.C. 78s(b)(3)(A). 15 17 CFR 240.19b–4(f). PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 65963 change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– CBOE–2024–033 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–2024–033. 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–2024–033, and should be submitted on or before September 3, 2024. 16 17 E:\FR\FM\13AUN1.SGM CFR 200.30–3(a)(12). 13AUN1 65964 Federal Register / Vol. 89, No. 156 / Tuesday, August 13, 2024 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–17952 Filed 8–12–24; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice 12481] 30-Day Notice of Proposed Information Collection: Four DDTC Information Collections Notice of request for public comment and submission to OMB of proposed collection of information. ACTION: The Department of State has submitted the information collection described below to the Office of Management and Budget (OMB) for approval. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this Notice is to allow 30 days for public comment. DATES: Submit comments up to September 12, 2024. ADDRESSES: Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to www.reginfo.gov/public/do/ PRAMain. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. FOR FURTHER INFORMATION CONTACT: Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Andrea Battista, SA–1, 12th Floor, Directorate of Defense Trade Controls, Bureau of Political Military Affairs, U.S. Department of State, Washington, DC 20522–0112, via phone at 202–992– 0973, or via email at battistaal@ state.gov. SUPPLEMENTARY INFORMATION: • Title of Information Collection: Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data. • OMB Control Number: 1405–0003. • Type of Request: Revision of a Currently Approved Collection. • Originating Office: Bureau of Political-Military Affairs, Directorate of Defense Trade Controls, PM/DDTC. lotter on DSK11XQN23PROD with NOTICES1 SUMMARY: VerDate Sep<11>2014 17:55 Aug 12, 2024 Jkt 262001 • Form Number: DSP–5. • Respondents: Business, Nonprofit Organizations, and Individuals. • Estimated Number of Respondents: 1,668. • Estimated Number of Responses: 16,845. • Average Time per Response: 1 hour. • Total Estimated Burden Time: 16,845 hours. • Frequency: On Occasion. • Obligation to Respond: Required to Obtain or Retain a Benefit. • Title of Information Collection: Application/License for Temporary Import of Unclassified Defense Articles. • OMB Control Number: 1405–0013. • Type of Request: Extension of Currently Approved Collection. • Originating Office: Bureau of Political-Military Affairs, Directorate of Defense Trade Controls, PM/DDTC. • Form Number: DSP–61. • Respondents: Business, Nonprofit Organizations, and Individuals. • Estimated Number of Respondents: 141. • Estimated Number of Responses: 572. • Average Time per Response: 30 minutes. • Total Estimated Burden Time: 286 hours. • Frequency: On Occasion. • Obligation to Respond: Required in Order to Obtain or Retain Benefits. • Title of Information Collection: Application/License for Temporary Export of Unclassified Defense Articles. • OMB Control Number: 1405–0023. • Type of Request: Extension of Currently Approved Collection. • Originating Office: Bureau of Political-Military Affairs, Directorate of Defense Trade Controls, PM/DDTC. • Form Number: DSP–73. • Respondents: Business and Nonprofit Organizations. • Estimated Number of Respondents: 340. • Estimated Number of Responses: 2,029. • Average Time per Response: 1 hour. • Total Estimated Burden Time: 2,029 hours. • Frequency: On Occasion. • Obligation to Respond: Required in Order to Obtain or Retain Benefits. • Title of Information Collection: Application for Amendment to License for Export or Import of Unclassified Defense Articles and Related Unclassified Technical Data. • OMB Control Number: 1405–0092. • Type of Request: Extension of Currently Approved Collection. • Originating Office: Bureau of Political-Military Affairs, Directorate of Defense Trade Controls, PM/DDTC. PO 00000 Frm 00129 Fmt 4703 Sfmt 4703 • Form Number: DSP–6; DSP–62; DSP–74. • Respondents: Business, Nonprofit Organizations, and Individuals. • Estimated Number of Respondents: 440. • Estimated Number of Responses: 1,742. • Average Time per Response: 30 minutes. • Total Estimated Burden Time: 871 hours. • Frequency: On Occasion. • Obligation to Respond: Required in Order to Obtain or Retain Benefits. We are soliciting public comments to permit the Department to: • Evaluate whether the proposed information collection is necessary for the proper functions of the Department. • Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used. • Enhance the quality, utility, and clarity of the information to be collected. • Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology. Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review. Abstract of Proposed Collection The export, temporary import, and brokering of defense articles, including technical data, and defense services are authorized by the Department of State, Bureau of Political-Military Affairs, Directorate of Defense Trade Controls (DDTC) in accordance with the International Traffic in Arms Regulations (‘‘ITAR,’’ 22 CFR parts 120– 130) and section 38 of the Arms Export Control Act (AECA). Any person who engages in the United States in the business of manufacturing, brokering, exporting, or temporarily importing defense articles, including technical data, or furnishing defense services must register with the Department of State. Manufacturers who do not engage in exporting must nevertheless register. Additionally, any person who intends to export or to import temporarily a defense article must obtain the approval from DDTC prior to the export or temporary import, unless the export or temporary import qualifies for an exemption. The applicant must be registered with DDTC prior to E:\FR\FM\13AUN1.SGM 13AUN1

Agencies

[Federal Register Volume 89, Number 156 (Tuesday, August 13, 2024)]
[Notices]
[Pages 65961-65964]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17952]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100667; File No. SR-CBOE-2024-033]


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

August 7, 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 August 1, 2024, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe 
Options'') 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

    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

[[Page 65962]]

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 August 
1, 2024.
    The Exchange first notes that it operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues if they deem fee levels at a particular venue to be 
excessive or incentives to be insufficient. More specifically, the 
Exchange is only one of 17 options venues to which market participants 
may direct their order flow. Based on publicly available information, 
no single options exchange has more than 12% of the market share.\3\ 
Thus, in such a low-concentrated and highly competitive market, no 
single options exchange possesses significant pricing power in the 
execution of option order flow. The Exchange believes that the ever-
shifting market share among the exchanges from month to month 
demonstrates that market participants can shift order flow or 
discontinue to reduce use of certain categories of products in response 
to fee changes. Accordingly, competitive forces constrain the 
Exchange's transaction fees, and market participants can readily trade 
on competing venues if they deem pricing levels at those other venues 
to be more favorable.
---------------------------------------------------------------------------

    \3\ See Cboe Global Markets U.S. Options Monthly Market Volume 
Summary (July 30, 2024), available at https://markets.cboe.com/us/options/market_statistics/.
---------------------------------------------------------------------------

    The Fees Schedule currently lists fee codes and their corresponding 
transaction fee for routed Customer orders to other options exchanges 
specifically in Exchange Traded Funds (``ETF'') and equity options, and 
for non-Customer orders routed in Penny and Non-Penny options classes. 
The Exchange notes that its current approach to routing fees is to set 
forth in a simple manner certain sub-categories of fees that 
approximate the cost of routing to other options exchanges based on the 
cost of transaction fees assessed by each venue as well as a flat $0.15 
assessment that covers costs to the Exchange for routing (i.e., 
clearing fees, connectivity and other infrastructure costs, membership 
fees, etc.) (collectively, ``Routing Costs''). The Exchange then 
monitors the fees charged as compared to the costs of its routing 
services and adjusts its routing fees and/or sub-categories to ensure 
that the Exchange's fees do indeed result in a rough approximation of 
overall Routing Costs, and are not significantly higher or lower in any 
area. The Exchange notes that another options exchange currently 
assesses routing fees in a similar manner as the Exchange's current 
approach to assessing approximate routing fees.\4\
---------------------------------------------------------------------------

    \4\ See e.g., MIAX Options Exchange Fee Schedule, Section 1(c), 
``Fees for Customer Orders Routed to Another Options Exchange.''
---------------------------------------------------------------------------

    Currently, under the Routing Fees table of the Fees Schedule, fee 
code RD is appended to Customer orders in ETF/Equity options routed to 
NYSE American (``AMEX''), BOX Options Exchange (``BOX''), Cboe EDGX 
Exchange, Inc. (``EDGX''), MIAX Options Exchange (``MIAX'') or Nasdaq 
PHLX LLC (``PHLX'') (excluding orders in SPY options), and assesses a 
charge of $0.25 per contract. The Exchange proposes to amend fee code 
RD to add applicable Customer orders routed to MIAX Sapphire, LLC 
(``SPHR''), in anticipation of the launch of the new options exchange. 
The charge assessed per contract for fee code RD remains the same under 
the proposed rule change.
    The proposed changes result in an assessment of fees that, in 
anticipation of the launch of another options exchange, is in line with 
the Exchange's current approach to routing fees, that is, in a manner 
that approximates the cost of routing Customer orders in ETF/Equity 
options to other away options exchanges, based on the general cost of 
transaction fees assessed by the sub-category of away options exchanges 
for such orders (as well as the Exchange's Routing Costs). The Exchange 
notes that routing through the Exchange is optional and that Trading 
Permit Holders (``TPHs'') will continue to be able to choose where to 
route their Customer orders in ETF and equity options.
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.\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. The Exchange also believes the proposed rule 
change is consistent with Section 6(b)(4) of the Act,\8\ which requires 
that Exchange rules provide for the equitable allocation of reasonable 
dues, fees, and other charges among its TPHs 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).
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    The Exchange believes the proposed rule change to amend fee code RD 
to account for SPHR's expected assessment of fees for Customer orders 
is reasonable because it is reasonably designed to assess routing fees 
in line with the Exchange's current approach to routing fees. That is, 
the proposed rule change is intended to include Customer orders in ETF 
and equity options routed to SPHR in the most appropriate sub-category 
of fees that approximates the cost of routing to a group of away 
options exchanges based on the cost of transaction fees assessed by 
each venue as well as Routing Costs to the Exchange. As noted above, 
the Exchange operates in a highly competitive market in which market 
participants can readily direct order flow to competing venues if they 
deem fee levels at a particular venue to be excessive or incentives to 
be insufficient. The Exchange notes that routing through the Exchange 
is optional and that TPHs will continue to be able to choose where to 
route their Customer orders in ETF and equity options in the same sub-
category group of away exchanges as they currently may choose to route. 
The proposed rule change reflects a competitive pricing structure 
designed to incentivize market participants to direct their order flow 
to the Exchange, which the Exchange believes would enhance market 
quality to the benefit of all TPHs. The Exchange further notes

[[Page 65963]]

that another options exchange currently approximates routing fees in a 
similar manner as the Exchange's current approach.\9\ The Exchange 
believes that the proposed rule change is equitable and not unfairly 
discriminatory because all TPHs' applicable Customer orders in ETF and 
equity options routed to SPHR will be automatically and uniformly 
assessed the applicable routing charge.
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    \9\ See e.g., MIAX Options Exchange Fee Schedule, Section 1(c), 
``Fees for Customer Orders Routed to Another Options Exchange.''
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Particularly, the Exchange 
does not believe the proposed rule change to amend fee code RD will 
impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. All TPHs' 
applicable Customer orders in ETF and equity options routed to SPHR 
will automatically yield fee code RD and uniformly be assessed the 
corresponding fee. The Exchange notes that another options exchange 
approximates routing costs in a similar manner as the Exchange's 
current approach.\10\
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    \10\ See e.g., MIAX Options Exchange Fee Schedule, Section 1(c), 
``Fees for Customer Orders Routed to Another Options Exchange.''
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    The Exchange also 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. As previously 
discussed, the Exchange operates in a highly competitive market. 
Members have numerous alternative venues that they may participate on 
and direct their order flow, including 16 other options exchanges and 
off-exchange venues. Additionally, the Exchange represents a small 
percentage of the overall market. Based on publicly available 
information, no single options exchange has more than 16% of the market 
share.\11\ Therefore, no exchange possesses significant pricing power 
in the execution of option order flow. Indeed, participants can readily 
choose to send their orders to other exchange and off-exchange venues 
if they deem fee levels at those other venues to be more favorable. 
Moreover, the Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. Specifically, in 
Regulation NMS, the Commission highlighted the importance of market 
forces in determining prices and SRO revenues and, also, recognized 
that current regulation of the market system ``has been remarkably 
successful in promoting market competition in its broader forms that 
are most important to investors and listed companies.'' \12\ The fact 
that this market is competitive has also long been recognized by the 
courts. In NetCoalition v. Securities and Exchange Commission, the D.C. 
Circuit stated as follows: ``[n]o one disputes that competition for 
order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. 
national market system, buyers and sellers of securities, and the 
broker-dealers that act as their order-routing agents, have a wide 
range of choices of where to route orders for execution'; [and] `no 
exchange can afford to take its market share percentages for granted' 
because `no exchange possesses a monopoly, regulatory or otherwise, in 
the execution of order flow from broker dealers' . . . .''.\13\ 
Accordingly, the Exchange does not believe its proposed fee change 
imposes any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.
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    \11\ See supra note 3.
    \12\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \13\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \14\ and paragraph (f) of Rule 19b-4 \15\ 
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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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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-2024-033 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-2024-033. 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-2024-033, and should be 
submitted on or before September 3, 2024.
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    \16\ 17 CFR 200.30-3(a)(12).


[[Page 65964]]


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17952 Filed 8-12-24; 8:45 am]
BILLING CODE 8011-01-P
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