Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule, 92235-92238 [2024-27215]

Download as PDF lotter on DSK11XQN23PROD with NOTICES1 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices previously required to be reported to SLATE], all other Data Elements reported to SLATE, except the amount of Reportable Securities loaned [and as otherwise provided for in paragraph (d) of this Rule]. (b) Delayed Dissemination For each Initial Covered Securities Loan and Loan Modification reported to SLATE, 20 business days after the date on which the Initial Covered Securities Loan was effected or the loan [amount] was modified, FINRA will make publicly available: (1) for an Initial Covered Securities Loan, the unique identifier assigned by FINRA to the Covered Securities Loan; (2) for a Loan Modification, the unique identifier assigned by FINRA to the Covered Securities Loan if reported to SLATE or otherwise identified by FINRA; (3)[(2)] the security identifier(s) specified in Rule 6530(a)(2)(A) or (B) that FINRA determines is appropriate to disseminate; and (4)[(3)] the amount of Reportable Securities loaned reported to SLATE. (c) Daily Loan Statistics (1) Aggregate Loan Transaction Activity For each Reportable Security for which an Initial Covered Securities Loan or Loan Modification is reported to SLATE on a given business day, no later than the morning of the next business day, FINRA will disseminate the security identifier specified in Rule 6530(a)(2)(A) or (B) that FINRA determines is appropriate to disseminate and the [aggregate loan activity in the Reportable Security, including the: (A) ]aggregate volume of securities [(both in total and by collateral type)] subject to an Initial Covered Securities Loan or modification to the amount of Reportable Securities loaned, reported on the prior business day.[;] [(B) aggregate volume of securities (both in total and by collateral type) subject to a rebate rate or fee modification, reported on the prior business day;] [(C) aggregate volume of securities subject to an Initial Covered Securities Loan or modification to the amount of Reportable Securities loaned with a specified term, and subject to an Initial Covered Securities Loan or modification to the amount of Reportable Securities loaned without a specified term, reported on the prior business day;] [(D) aggregate volume of securities subject to an Initial Covered Securities Loan or modification to the amount of Reportable Securities loaned to one or more borrower types specified in Rule 6530(a)(2)(N) reported on the prior business day; and] [(E) the total number of Initial Covered Securities Loans and terminated Covered Security Loans (both in total and by collateral type) reported on the prior business day.] (2) Loan Rate Distribution Data For each Reportable Security for which an Initial Covered Securities Loan or Loan Modification is reported to SLATE on a given business day, no later than the morning of the next business day, FINRA will disseminate the security identifier specified in Rule 6530(a)(2)(A) or (B) that FINRA determines is appropriate to identify the relevant Reportable Security and information pertaining to the distribution of loan rebate rates and lending fees or rates, as applicable, including: VerDate Sep<11>2014 18:02 Nov 20, 2024 Jkt 265001 (A) the highest rebate rate, lowest rebate rate, and volume weighted average of the rebate rates by U.S. currency and non-U.S. currency, as applicable, reported for Initial Covered Securities Loans collateralized by cash and for Loan Modifications collateralized by cash (where the Loan Modification involved a change to the rebate rate); and (B) the highest lending fee or rate, lowest lending fee or rate, and volume weighted average of the lending fees or rates reported for Initial Covered Securities Loans not collateralized by cash and for Loan Modifications not collateralized by cash (where the Loan Modification involved a change to the lending fee or rate). (d) Loan Transaction Information Not Disseminated FINRA will not disseminate[: (1)] any Confidential Data Elements reported to SLATE[; and (2) any modifier or indicator required by either the Rule 6500 Series or the SLATE Participant specification that FINRA determines shall not be publicly disseminated • • • Supplementary Material: ---------.01 De Minimis Loan Transaction Activity. Notwithstanding paragraph (c)(1) of this Rule, FINRA will not include [may omit from the aggregate loan activity] aggregate volume information for a Reportable Security[ies] [for] unless [which] there were reports submitted to SLATE on the prior business day for at least ten distinct Covered Securities Loans in the Reportable Security (represented by different FINRA-assigned unique loan identifiers) [there were three or fewer types of Initial Covered Securities Loan and Loan Modification events reported to SLATE in total on the prior business day]. .02 No Change. 6550. Emergency Authority No Change. * * * * * III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended by Partial Amendment No. 1, 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– FINRA–2024–007 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–FINRA–2024–007. This file PO 00000 Frm 00150 Fmt 4703 Sfmt 4703 92235 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 FINRA. 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–FINRA–2024–007 and should be submitted on or before December 6, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.50 Stephanie J. Fouse, Assistant Secretary. [FR Doc. 2024–27223 Filed 11–20–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–101634; File No. SR– CBOE–2024–050] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule November 15, 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 November 1, 2024, Cboe Exchange, Inc. (the 50 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\21NON1.SGM 21NON1 92236 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices ‘‘Exchange’’ or ‘‘Cboe Options’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Cboe Options’’) proposes to amend its Fees Schedule. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://www.cboe.com/ AboutCBOE/CBOELegal RegulatoryHome.aspx), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change lotter on DSK11XQN23PROD with NOTICES1 1. Purpose The Exchange proposes to amend its Fees Schedule, effective November 1, 2024. The Exchange first proposes to amend a fee related to transactions in Mini-SPX Index (‘‘XSP’’) options, as set forth in the Rate Table for All Products Excluding Underlying Symbol List A. Specifically, the proposed rule change amends fee code MY, appended to all Market-Maker (capacity ‘‘M’’) in XSP contra to non-customers that remove liquidity and that are executed electronically and assesses a fee of $0.30 per contract, to assess a fee of $0.50 per contract. Next, the Exchange proposes clarifying changes to fees related to VerDate Sep<11>2014 18:02 Nov 20, 2024 Jkt 265001 certain orders and auction responses executed in S&P 500 Index (‘‘SPX’’), SPX Weekly (‘‘SPXW’’), S&P 500 ESG Index (‘‘SPESG’’) and Cboe Volatility Index (‘‘VIX’’) options in the Automated Improvement Mechanism (‘‘AIM’’) Auction. By way of background, AIM includes functionality in which a Trading Permit Holder (‘‘TPH’’) (an ‘‘Initiating TPH’’) may electronically submit for execution an order it represents as agent on behalf of a customer,3 broker dealer, or any other person or entity (‘‘Agency Order’’) against any other order it represents as agent, as well as against principal interest in AIM (an ‘‘Initiating Order’’), provided it submits the Agency Order for electronic execution into an AIM Auction.4 The Exchange may designate any class of options traded on Cboe Options as eligible for AIM. The Exchange notes that all Users, other than the Initiating TPH, may submit responses to an Auction (‘‘AIM Responses’’). AIM Auctions take into account AIM Responses to the applicable Auction as well as contra interest resting on the Cboe Options Book at the conclusion of the Auction (‘‘unrelated orders’’), regardless of whether such unrelated orders were already present on the Book when the Agency Order was received by the Exchange or were received after the Exchange commenced the applicable Auction. If contracts remain from one or more unrelated orders at the time the Auction ends, they are considered for participation in the AIM order allocation process. Certain AIM-related surcharges under the Rate Table for Underlying Symbol List A apply when the Exchange is operating in a hybrid environment (i.e., the trading floor is operable). Specifically, the SPX AIM Hybrid Surcharge of $0.50 per contract applies to all Joint Back-Office (capacity ‘‘J’’), Market-Maker (capacity ‘‘M’’), BrokerDealer (capacity ‘‘B’’), Non-TPH MarketMaker (capacity ‘‘N’’) and Professional (capacity ‘‘U’’) (collectively, ‘‘NonCustomers) orders in SPX/SPXW options executed in AIM, while the SPX AIM Hybrid Surcharge of $0.39 per contract applies to all Clearing TPHs (capacity ‘‘F’’) and for Non-Clearing TPH Affiliates (capacity ‘‘L’’) (collectively, ‘‘Firms’’) orders in SPX/ SPXW options executed in AIM. The SPX AIM Hybrid Originator Surcharge of $0.10 per contract applies to all SPX/ 3 The term ‘‘customer’’ means a Public Customer or a broker-dealer. The term ‘‘Public Customer’’ means a person that is not a broker-dealer. See Rule 1.1. 4 See Rule 5.37 (AIM); Rule 5.38 (Complex AIM); and Rule 5.73 (FLEX AIM). PO 00000 Frm 00151 Fmt 4703 Sfmt 4703 SPXW Agency/Primary orders. Footnote 26 is appended to the aforementioned surcharges and provides that the SPX AIM Hybrid Surcharges, including the Originator Surcharge, apply only to SPX/SPXW orders executed in AIM and C–AIM during Regular Trading Hours (‘‘RTH’’) when the Exchange is operating in a hybrid environment (i.e., the trading floor is operable). Footnote 26 further provides the SPX AIM Hybrid Surcharge will apply to all SPX/SPXW AIM Agency/Primary, Contra and Response orders; and the SPX AIM Hybrid Originator Surcharge will apply to all SPX/SPXW Agency/Primary orders and such fee will be invoiced to the executing TPH.5 In contrast, the Exchange notes that the Rate Table for Underlying Symbol List A includes the following fees, which apply when the Exchange trading floor is inoperable: AIM Response Surcharge Fee (for SPX/SPXW and SPESG) of $0.05 per contract, AIM Contra Surcharge Fee (for SPX/SPXW and SPESG) of $0.10 per contract, and AIM Agency/Primary Surcharge Fee (for SPX/SPXW) of $0.10 per contract and (for VIX) of $0.04 per contract.6 Each of the aforementioned fees has appended to it Footnote 12, which governs pricing changes in the event the Exchange trading floor becomes inoperable. Particularly, in the event the trading floor becomes inoperable, the Exchange will continue to operate in a screen-based only environment using a floorless configuration of the System that is operational while the trading floor facility is inoperable. The Exchange will operate using that configuration only until the Exchange’s trading floor facility becomes operational. Open outcry trading will not be available in the event the trading floor becomes inoperable. The Exchange proposes to amend the titles of the AIM Response Surcharge Fee, the AIM Contra Surcharge Fee, and the AIM Agency/Primary Surcharge Fee to include ‘‘(Trading Floor Inoperable)’’, to further distinguish between when the 5 See Securities Exchange Act Release No. 91252 (March 3, 2021), 86 FR 13598 (March 9, 2021) (SR– CBOE–2021–021[sic]), wherein the Exchange adopted these surcharges. 6 See Securities Exchange Act Release No. 88883 (May 15, 2020), 85 FR 31012 (May 21, 2020) (SR– CBOE–2020–045), wherein the Exchange adopted the AIM Contra Surcharge and the AIM Response Surcharge. See also Securities Exchange Act Release No. 88426 (March 19, 2020), 85 FR 16978 (March 25, 2020) (SR–CBOE–2020–021), wherein the Exchange adopted the AIM Execution Surcharge for SPX/SPXW/VIX AIM Agency/Primary Orders (later re-named the AIM Agency/Primary Surcharge Fee). E:\FR\FM\21NON1.SGM 21NON1 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices lotter on DSK11XQN23PROD with NOTICES1 various surcharges would be applicable.7 The Exchange also proposes to amend Footnote 12, to provide clarity as to when such changes would apply. As noted above, in the event the trading floor becomes inoperable, the Exchange will continue to operate in a screenbased only environment using a floorless configuration of the System that is operational while the trading floor facility is inoperable. To avoid confusion, since the Exchange also operates a screen-based only environment during its Global Trading Hours (‘‘GTH’’) trading session, the Exchange propose to amended Footnote 12 to specify that the Exchange will apply the pricing changes in the event the Cboe Options trading floor becomes inoperable and the Exchange operates in a screen-based only environment during RTH, for the duration of the time the Exchange operates in a screen-based only environment during RTH (as well as for the Curb session immediately following a RTH trading session in which the Cboe Options trading floor is inoperable and the Exchange operates in a screen-based only environment). The Exchange also propose to add references throughout the footnote to note that such pricing changes apply when the Exchange operates in a screen-based only environment during RTH. The Exchange also proposes to amend Footnote 26 to specify that the SPX AIM Hybrid Surcharges, including the Originator Surcharge, apply only to SPX/SPXW Orders executed in AIM (and C–AIM) during RTH and Curb when the Exchange is operating in a hybrid environment (i.e., the trading floor is operable). Finally, the Exchange also proposes to rename certain fees under the Clearing Trading Permit Holder Fee Cap section of the Fees Schedule. Specifically, the Exchange proposes to rename ‘‘AIM Facilitation Contra Order’’ to ‘‘AIM Contra Order’’ and to rename ‘‘AIM Solicitation Contra Order’’ to ‘‘SAM Contra Order’’, to more accurately reflect terminology used by the Exchange throughout the Fees Schedule and within the Rulebook. 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 7 As part of the proposed rule change, the Exchange proposes to move the AIM-related surcharges applicable when the Exchange trading floor is inoperable to be listed below the AIMrelated surcharges applicable when the Exchange is operating in its normal hybrid environment. VerDate Sep<11>2014 18:02 Nov 20, 2024 Jkt 265001 and, in particular, the requirements of Section 6(b) of the Act.8 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 9 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) 10 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,11 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 that the proposed fee change for Market-Maker orders in XSP that are contra to noncustomers that remove liquidity and that are executed electronically is reasonable, equitable and not unfairly discriminatory. Specifically, the Exchange believes the proposed change to the fee for Market-Maker orders in XSP contra to non-customers that remove liquidity and that are executed electronically is reasonable. The proposed fee, in general, aligns with current fees for other types of orders in XSP, namely Clearing Trading Permit Holder Proprietary XSP orders contra to non-customers that remove liquidity and are executed electronically (which yield fee code XB). The Exchange believes that the changes are reasonable and that the fee, even as amended, will continue to incentivize TPHs to send additional Market-Maker orders to the Exchange. The Exchange believes that the proposed fee change to the fee for Market-Maker orders in XSP contra to non-customers that remove liquidity and that are executed electronically is equitable and not unfairly discriminatory because the proposed fee will apply automatically and uniformly 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 Id. 11 15 U.S.C. 78f(b)(4). 9 15 PO 00000 Frm 00152 Fmt 4703 Sfmt 4703 92237 to all applicable Market-Maker orders in XSP which yield fee code MY. Additionally, the Exchange believes the clarifying changes to the Fees Schedule will remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, will protect investors and the public interest. Specifically, by amending the names of fees related to certain orders and auction responses executed in SPX/ SPXW, SPESG and VIX via AIM to better describe when such fees are applicable, the proposed change is designed to add clarity within the Fees Schedule. Similarly, by renaming certain fees under the Clearing Trading Permit Holder Fee Cap section of the Fees Schedule to more accurately reflect terminology used by the Exchange throughout the Fees Schedule and within the Rulebook, the proposed change is designed to mitigate any potential confusion resulting from outdated terminology. Overall, the changes are intended to add clarity to the Fees Schedule, thereby mitigating any potential confusing, to the benefit of investors. The Exchange notes that the proposed clarifying changes do not change the fees (or applicability of such fees). B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change related to XSP fee code MY will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed fees will apply automatically and uniformly to all applicable MarketMaker orders in XSP which yield fee code MY. The Exchange does not believe the proposed clarifying rule changes will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act, as the changes will not result in any practical changes to the fees, but rather are being added to eliminate potential confusion. The Exchange does not believe that the proposed rule changes will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed rule change related to a XSP fee code applies to Exchange proprietary products, which are traded exclusively on the Exchange. To the extent that the proposed changes E:\FR\FM\21NON1.SGM 21NON1 92238 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices make Cboe Options a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become Cboe Options market participants. The clarifying rule changes are not intended to have any impact on competition, as they make no substantive change to the Fees Schedule and will have no impact on trading on the Exchange. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and paragraph (f) of Rule 19b–4 13 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: lotter on DSK11XQN23PROD with NOTICES1 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–2024–050 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–2024–050. 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–2024–050 and should be submitted on or before December 12, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Stephanie J. Fouse, Assistant Secretary. [FR Doc. 2024–27215 Filed 11–20–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–101640; File No. 4–443] Joint Industry Plan; Notice of Filing of Proposed Amendment To Add Paragraph (c) to Section 6 of the Plan for the Purpose of Developing and Implementing Procedures Designed To Facilitate the Listing and Trading of Standardized Options Authorizing the OLPP Sponsors To Act Jointly To Discuss Quote Mitigation Issues and Potential Solutions November 15, 2024. Pursuant to Section 11A of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 608 thereunder,2 14 17 CFR 200.30–3(a)(12). U.S.C. 78k–1. 2 17 CFR 242.608. 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b–4(f). VerDate Sep<11>2014 18:02 Nov 20, 2024 1 15 Jkt 265001 PO 00000 Frm 00153 Fmt 4703 Sfmt 4703 notice is hereby given that on October 31, 2024, Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe EDGX Exchange, Inc., and Cboe Exchange, Inc., on behalf of the Sponsors 3 of the Plan for the Purpose of Developing and Implementing Procedures Designed to Facilitate the Listing and Trading of Standardized Options Submitted Pursuant to Section 11A(a)(3)(B) of the Securities Exchange Act of 1934 (‘‘Options Listing Procedures Plan,’’ ‘‘Plan,’’ or ‘‘OLPP’’),4 filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed amendment to the OLPP. The amendment proposes to add a provision to the OLPP authorizing the OLPP Sponsors to act jointly to discuss both quote mitigation issues and potential solutions to address any issues identified, including, but not limited to, discussing potential new options strike listing methodologies and rules, in order to determine whether the Sponsors might propose one or more amendments to the Plan for Commission approval or whether the individual Sponsors might seek to amend their own rules. The Commission is publishing this notice to solicit comments from interested persons on the proposed amendment. Set forth below in Section I, which is being published substantially as filed by the Sponsors, is the statement of the purpose and summary of the amendment, along with information pursuant to Rule 608(a) under the Act. I. Requirements Pursuant to Rule 608(a) 1. Text of Amendment This [a]mendment proposes to add paragraph (c) to Section 6 of the OLPP. The text of the proposed amendment is in Exhibit I, which is set forth in Section II, below. 2. Purpose of Amendment For many years, as the options industry has expanded and become more complex, industry participants have raised so-called ‘‘quote mitigation’’ 3 The Sponsors of the OLPP are: BOX Exchange LLC; Cboe BZX Exchange, Inc.; Cboe C2 Exchange, Inc.; Cboe EDGX Exchange, Inc.; Cboe Exchange, Inc.; MEMX LLC; Miami International Securities Exchange LLC; MIAX Emerald, LLC; MIAX Pearl, LLC; MIAX Sapphire LLC; Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; Nasdaq PHLX LLC; The Nasdaq Stock Market LLC; NYSE American LLC; NYSE Arca, Inc.; and The Options Clearing Corporations. 4 OLPP is a national market system plan approved by the Commission pursuant to Section 11A of the Act and Rule 608 thereunder. See Securities Exchange Act Release No. 44521 (July 6, 2001), 66 FR 36809 (July 13, 2001). The full text of the OLPP is available at https://www.theocc.com/getmedia/ 198bfc93-5d51-443c-9e5b-fd575a0a7d0f/options_ listing_procedures_plan.pdf. E:\FR\FM\21NON1.SGM 21NON1

Agencies

[Federal Register Volume 89, Number 225 (Thursday, November 21, 2024)]
[Notices]
[Pages 92235-92238]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27215]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101634; File No. SR-CBOE-2024-050]


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

November 15, 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 November 1, 2024, Cboe Exchange, Inc. (the

[[Page 92236]]

``Exchange'' or ``Cboe Options'') filed with the Securities and 
Exchange Commission (the ``Commission'') the proposed rule change as 
described in Items I, II, and III, below, which Items have been 
prepared by the Exchange. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend its Fees Schedule. The text of the proposed rule change is 
provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its Fees Schedule, effective 
November 1, 2024.
    The Exchange first proposes to amend a fee related to transactions 
in Mini-SPX Index (``XSP'') options, as set forth in the Rate Table for 
All Products Excluding Underlying Symbol List A. Specifically, the 
proposed rule change amends fee code MY, appended to all Market-Maker 
(capacity ``M'') in XSP contra to non-customers that remove liquidity 
and that are executed electronically and assesses a fee of $0.30 per 
contract, to assess a fee of $0.50 per contract.
    Next, the Exchange proposes clarifying changes to fees related to 
certain orders and auction responses executed in S&P 500 Index 
(``SPX''), SPX Weekly (``SPXW''), S&P 500 ESG Index (``SPESG'') and 
Cboe Volatility Index (``VIX'') options in the Automated Improvement 
Mechanism (``AIM'') Auction.
    By way of background, AIM includes functionality in which a Trading 
Permit Holder (``TPH'') (an ``Initiating TPH'') may electronically 
submit for execution an order it represents as agent on behalf of a 
customer,\3\ broker dealer, or any other person or entity (``Agency 
Order'') against any other order it represents as agent, as well as 
against principal interest in AIM (an ``Initiating Order''), provided 
it submits the Agency Order for electronic execution into an AIM 
Auction.\4\ The Exchange may designate any class of options traded on 
Cboe Options as eligible for AIM. The Exchange notes that all Users, 
other than the Initiating TPH, may submit responses to an Auction 
(``AIM Responses''). AIM Auctions take into account AIM Responses to 
the applicable Auction as well as contra interest resting on the Cboe 
Options Book at the conclusion of the Auction (``unrelated orders''), 
regardless of whether such unrelated orders were already present on the 
Book when the Agency Order was received by the Exchange or were 
received after the Exchange commenced the applicable Auction. If 
contracts remain from one or more unrelated orders at the time the 
Auction ends, they are considered for participation in the AIM order 
allocation process.
---------------------------------------------------------------------------

    \3\ The term ``customer'' means a Public Customer or a broker-
dealer. The term ``Public Customer'' means a person that is not a 
broker-dealer. See Rule 1.1.
    \4\ See Rule 5.37 (AIM); Rule 5.38 (Complex AIM); and Rule 5.73 
(FLEX AIM).
---------------------------------------------------------------------------

    Certain AIM-related surcharges under the Rate Table for Underlying 
Symbol List A apply when the Exchange is operating in a hybrid 
environment (i.e., the trading floor is operable). Specifically, the 
SPX AIM Hybrid Surcharge of $0.50 per contract applies to all Joint 
Back-Office (capacity ``J''), Market-Maker (capacity ``M''), Broker-
Dealer (capacity ``B''), Non-TPH Market-Maker (capacity ``N'') and 
Professional (capacity ``U'') (collectively, ``Non-Customers) orders in 
SPX/SPXW options executed in AIM, while the SPX AIM Hybrid Surcharge of 
$0.39 per contract applies to all Clearing TPHs (capacity ``F'') and 
for Non-Clearing TPH Affiliates (capacity ``L'') (collectively, 
``Firms'') orders in SPX/SPXW options executed in AIM. The SPX AIM 
Hybrid Originator Surcharge of $0.10 per contract applies to all SPX/
SPXW Agency/Primary orders. Footnote 26 is appended to the 
aforementioned surcharges and provides that the SPX AIM Hybrid 
Surcharges, including the Originator Surcharge, apply only to SPX/SPXW 
orders executed in AIM and C-AIM during Regular Trading Hours (``RTH'') 
when the Exchange is operating in a hybrid environment (i.e., the 
trading floor is operable). Footnote 26 further provides the SPX AIM 
Hybrid Surcharge will apply to all SPX/SPXW AIM Agency/Primary, Contra 
and Response orders; and the SPX AIM Hybrid Originator Surcharge will 
apply to all SPX/SPXW Agency/Primary orders and such fee will be 
invoiced to the executing TPH.\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 91252 (March 3, 
2021), 86 FR 13598 (March 9, 2021) (SR-CBOE-2021-021[sic]), wherein 
the Exchange adopted these surcharges.
---------------------------------------------------------------------------

    In contrast, the Exchange notes that the Rate Table for Underlying 
Symbol List A includes the following fees, which apply when the 
Exchange trading floor is inoperable: AIM Response Surcharge Fee (for 
SPX/SPXW and SPESG) of $0.05 per contract, AIM Contra Surcharge Fee 
(for SPX/SPXW and SPESG) of $0.10 per contract, and AIM Agency/Primary 
Surcharge Fee (for SPX/SPXW) of $0.10 per contract and (for VIX) of 
$0.04 per contract.\6\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 88883 (May 15, 
2020), 85 FR 31012 (May 21, 2020) (SR-CBOE-2020-045), wherein the 
Exchange adopted the AIM Contra Surcharge and the AIM Response 
Surcharge. See also Securities Exchange Act Release No. 88426 (March 
19, 2020), 85 FR 16978 (March 25, 2020) (SR-CBOE-2020-021), wherein 
the Exchange adopted the AIM Execution Surcharge for SPX/SPXW/VIX 
AIM Agency/Primary Orders (later re-named the AIM Agency/Primary 
Surcharge Fee).
---------------------------------------------------------------------------

    Each of the aforementioned fees has appended to it Footnote 12, 
which governs pricing changes in the event the Exchange trading floor 
becomes inoperable. Particularly, in the event the trading floor 
becomes inoperable, the Exchange will continue to operate in a screen-
based only environment using a floorless configuration of the System 
that is operational while the trading floor facility is inoperable. The 
Exchange will operate using that configuration only until the 
Exchange's trading floor facility becomes operational. Open outcry 
trading will not be available in the event the trading floor becomes 
inoperable.
    The Exchange proposes to amend the titles of the AIM Response 
Surcharge Fee, the AIM Contra Surcharge Fee, and the AIM Agency/Primary 
Surcharge Fee to include ``(Trading Floor Inoperable)'', to further 
distinguish between when the

[[Page 92237]]

various surcharges would be applicable.\7\
---------------------------------------------------------------------------

    \7\ As part of the proposed rule change, the Exchange proposes 
to move the AIM-related surcharges applicable when the Exchange 
trading floor is inoperable to be listed below the AIM-related 
surcharges applicable when the Exchange is operating in its normal 
hybrid environment.
---------------------------------------------------------------------------

    The Exchange also proposes to amend Footnote 12, to provide clarity 
as to when such changes would apply. As noted above, in the event the 
trading floor becomes inoperable, the Exchange will continue to operate 
in a screen-based only environment using a floorless configuration of 
the System that is operational while the trading floor facility is 
inoperable. To avoid confusion, since the Exchange also operates a 
screen-based only environment during its Global Trading Hours (``GTH'') 
trading session, the Exchange propose to amended Footnote 12 to specify 
that the Exchange will apply the pricing changes in the event the Cboe 
Options trading floor becomes inoperable and the Exchange operates in a 
screen-based only environment during RTH, for the duration of the time 
the Exchange operates in a screen-based only environment during RTH (as 
well as for the Curb session immediately following a RTH trading 
session in which the Cboe Options trading floor is inoperable and the 
Exchange operates in a screen-based only environment). The Exchange 
also propose to add references throughout the footnote to note that 
such pricing changes apply when the Exchange operates in a screen-based 
only environment during RTH.
    The Exchange also proposes to amend Footnote 26 to specify that the 
SPX AIM Hybrid Surcharges, including the Originator Surcharge, apply 
only to SPX/SPXW Orders executed in AIM (and C-AIM) during RTH and Curb 
when the Exchange is operating in a hybrid environment (i.e., the 
trading floor is operable).
    Finally, the Exchange also proposes to rename certain fees under 
the Clearing Trading Permit Holder Fee Cap section of the Fees 
Schedule. Specifically, the Exchange proposes to rename ``AIM 
Facilitation Contra Order'' to ``AIM Contra Order'' and to rename ``AIM 
Solicitation Contra Order'' to ``SAM Contra Order'', to more accurately 
reflect terminology used by the Exchange throughout the Fees Schedule 
and within the Rulebook.
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.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ 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) \10\ 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,\11\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the proposed fee change for Market-Maker 
orders in XSP that are contra to non-customers that remove liquidity 
and that are executed electronically is reasonable, equitable and not 
unfairly discriminatory. Specifically, the Exchange believes the 
proposed change to the fee for Market-Maker orders in XSP contra to 
non-customers that remove liquidity and that are executed 
electronically is reasonable. The proposed fee, in general, aligns with 
current fees for other types of orders in XSP, namely Clearing Trading 
Permit Holder Proprietary XSP orders contra to non-customers that 
remove liquidity and are executed electronically (which yield fee code 
XB). The Exchange believes that the changes are reasonable and that the 
fee, even as amended, will continue to incentivize TPHs to send 
additional Market-Maker orders to the Exchange.
    The Exchange believes that the proposed fee change to the fee for 
Market-Maker orders in XSP contra to non-customers that remove 
liquidity and that are executed electronically is equitable and not 
unfairly discriminatory because the proposed fee will apply 
automatically and uniformly to all applicable Market-Maker orders in 
XSP which yield fee code MY.
    Additionally, the Exchange believes the clarifying changes to the 
Fees Schedule will remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, 
will protect investors and the public interest. Specifically, by 
amending the names of fees related to certain orders and auction 
responses executed in SPX/SPXW, SPESG and VIX via AIM to better 
describe when such fees are applicable, the proposed change is designed 
to add clarity within the Fees Schedule. Similarly, by renaming certain 
fees under the Clearing Trading Permit Holder Fee Cap section of the 
Fees Schedule to more accurately reflect terminology used by the 
Exchange throughout the Fees Schedule and within the Rulebook, the 
proposed change is designed to mitigate any potential confusion 
resulting from outdated terminology. Overall, the changes are intended 
to add clarity to the Fees Schedule, thereby mitigating any potential 
confusing, to the benefit of investors. The Exchange notes that the 
proposed clarifying changes do not change the fees (or applicability of 
such fees).

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe that the proposed rule change related to XSP fee code MY will 
impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed fees will apply automatically and uniformly to all applicable 
Market-Maker orders in XSP which yield fee code MY. The Exchange does 
not believe the proposed clarifying rule changes will impose any burden 
on intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as the changes will not result 
in any practical changes to the fees, but rather are being added to 
eliminate potential confusion.
    The Exchange does not believe that the proposed rule changes will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed rule change related to a XSP fee code applies to Exchange 
proprietary products, which are traded exclusively on the Exchange. To 
the extent that the proposed changes

[[Page 92238]]

make Cboe Options a more attractive marketplace for market participants 
at other exchanges, such market participants are welcome to become Cboe 
Options market participants. The clarifying rule changes are not 
intended to have any impact on competition, as they make no substantive 
change to the Fees Schedule and will have no impact on trading on the 
Exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

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

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4 \13\ 
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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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-CBOE-2024-050 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-2024-050. 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-2024-050 and should be 
submitted on or before December 12, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2024-27215 Filed 11-20-24; 8:45 am]
BILLING CODE 8011-01-P


This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.