Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Fees for New Logical Ports in Connection With a New Connectivity Offering on Its Equity Options Platform, 95294-95299 [2024-28112]
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95294
Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices
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–CboeEDGX–2024–078 and should be
submitted on or before December 23,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.75
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–28111 Filed 11–29–24; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–101742; File No. SR–
CboeBZX–2024–113]
November 25, 2024.
ddrumheller on DSK120RN23PROD with NOTICES1
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
12, 2024, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) proposes to
adopt fees for new logical ports in
connection with a new connectivity
offering on its equity options platform.
The text of the proposed rule change is
provided in Exhibit 5.
CFR 200.30–3(a)(12), (59).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Adopt Fees
for New Logical Ports in Connection
With a New Connectivity Offering on
Its Equity Options Platform
1 15
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
75 17
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/BZX/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
The Exchange proposes to amend its
fee schedule to adopt fees for Unitized
Logical Ports, a new connectivity
offering for its equity options platform
(‘‘BZX Options’’) and adopt new
Average Daily Quote and Average Daily
Order fees.3
Unitized Port Fees
By way of background, Exchange
Members may interface with the
Exchange’s Trading System by utilizing
either the Financial Information
Exchange (‘‘FIX’’) protocol or the Binary
Order Entry (‘‘BOE’’) protocol. The
Exchange further offers a variety of
logical ports,4 which provide users of
these ports with the ability within the
Exchange’s System to accomplish a
specific function through a connection,
such as order entry, data receipt or
access to information. For example,
such ports include Logical Ports,5 Purge
3 The Exchange initially submitted the proposed
rule change on August 30, 2024 and was effective
September 3, 2024 (SR–CboeBZX–2024–082). On
September 13, 2024, the Exchange withdrew that
filing and submitted SR–CboeBZX–2024–088. On
November 12, 2024, the Exchange withdrew that
filing and submitted this filing.
4 See Exchange Rule 21.1 (l)(2), definition of
‘‘logical port.’’ Logical ports include FIX and BOE
ports (used for order entry), drop logical port
(which grants users the ability to receive and/or
send drop copies) and ports that are used for receipt
of certain market data feeds.
5 The term ‘‘Logical Ports’’ used herein shall refer
to FIX and BOE ports (used for order entry). See
Cboe BZX Options Fee Schedule, Options Logical
Port Fees, ‘‘Logical Ports’’ (which exclude Purge
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Frm 00127
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Ports,6 and Ports with Bulk Quoting
Capabilities 7 (‘‘Bulk Ports’’). By way of
further background, each of these ports
corresponds to a single running order
handler. Each order handler processes
the messages it receives from these ports
from the connected Members. This
processing includes determining
whether the message contains the
required information to enter the
System, whether the message
parameters satisfy port-level (i.e., pretrade) risk controls, and where to send
that message within the System (i.e., to
which matching engine 8). Once an
order handler completes the processing
of a message, it sends that message to
the appropriate matching engine.
Historically, all order handlers
connect to all matching engines. That is,
under the BOEv2 and FIX protocols,
Members were able to access all
symbols from a single logical port since
each port corresponds to a single order
handler that conveniently connects to
all matching engines (‘‘convenience
layer’’). Although the Exchange
configures the software and hardware
for its order handlers in the same
manner, there can be a natural variance
in the amount of time it takes individual
order handlers to process messages of
the same type under this architecture.
Factors that contribute to this
differentiation in processing times
include the availability of shared
resources (such as memory), which is
impacted by (among other things) thencurrent message rates, the number of
active symbols (i.e., classes), and recent
messages for a symbol. This natural
differentiation in processing times
inherently may cause some messages to
Port, Multicast PITCH Spin Server Port or GRP
Port).
6 Purge Ports provide users the ability to cancel
a subset (or all) of open orders across Executing
Firm ID(s) (‘‘EFID(s)’’), Underlying symbol(s), or
CustomGroupID(s), across multiple logical ports/
sessions. See Securities Exchange Act Release
79956 (February 3, 2017), 82 FR 10102 (February 9,
2017) (SR–BatsBZX–2017–05). See also https://
cdn.cboe.com/resources/membership/US_Options_
BOE_Specification.pdf and https://cdn.cboe.com/
resources/membership/US_Options_FIX_
Specification.pdf.
7 See Exchange Rule 21.1 (l)(3), definition of
‘‘bulk port.’’ Bulk Ports provide users with the
ability to submit and update multiple quote bids
and offers in one message through logical ports
enabled for bulk-quoting.
8 A matching engine is a part of the Exchange’s
System that processes options quotes and trades on
a symbol-by-symbol basis. Some matching engines
will process option classes with multiple root
symbols, and other matching engines will be
dedicated to one single option root symbol (for
example, options on SPY will be processed by one
single matching engine that is dedicated only to
SPY). A particular root symbol may only be
assigned to a single designated matching engine. A
particular root symbol may not be assigned to
multiple matching engines.
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Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices
be sent from an order handler to a
matching engine ahead of other
messages that the Exchange’s System
may have received earlier on a different
order handler.
The Exchange recently implemented a
new architecture and protocol which
includes, among other things, a single
gateway per matching engine (‘‘unitized
layer’’), which renders the abovedescribed natural variance of order
handler processing irrelevant for
Members that connect to the unitized
order handler.9 More specifically,
effective August 19, 2024, the Exchange
implemented this new unitized access
architecture and a new version of its
Binary Order Entry (BOE) protocol 10
(‘‘BOEv3’’), which also resulted in the
adoption of new logical port types
(‘‘Unitized Logical Ports’’), for which
the Exchange is now seeking to establish
fees.11 Under the new unitized BOEv3
architecture, a single BOEv3 order
handler corresponds to a single
matching engine and all message traffic
(including FIX and current BOEv2 12
port traffic) pass through this unitized
BOEv3 order handler before reaching
that order handler’s corresponding
matching engine. If a Member desires to
access this optional unitized layer of the
BOEv3 architecture (which it is not
required to do), the Member would need
to obtain a Unitized Logical Port for
each unitized BOEv3 order handler and
corresponding matching engine(s) that
process the symbol(s) that Member
desires to trade.13 The three new port
types that have been adopted are: (1)
BOE unitized logical port ..........................................................................
Bulk Unitized Logical Port ........................................................................
Purge Unitized Logical Port ......................................................................
BOE Unitized Logical Port (Set) ...............................................................
Bulk Unitized Logical Port (Set) ...............................................................
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Purge Unitized Logical Port (Set) .............................................................
$350/port/month.
$550/port/month.
$400/port/month.
$2,500/month for
$3,000/month for
$3,500/month for
$5,500/month for
$6,000/month for
$6,500/month for
$2,500/month for
$3,000/month for
$3,500/month for
95295
BOE Unitized Logical Ports,14 (2) Bulk
Unitized Logical Ports,15 and (3) Purge
Unitized Logical Ports.16 As noted
above, use of Unitized Logical Ports is
completely voluntary, and no Member is
required, or under any regulatory
obligation, to utilize them.
The Exchange proposes to establish
fees for the new Unitized Logical Ports,
which can be purchased on an
individual basis (i.e., capable of
accessing a specified matching engine
(‘‘Matching Unit’’)) and/or as a set
(‘‘Unitized Logical Port Set’’) (i.e., will
include the total number of ports
needed to connect to each available
Matching Unit). The proposed fees for
Unitized Logical Ports purchased
individually and as sets are as follows:
1st and 2nd port set.
3rd–14th port set.
15th–20th port set.
1st and 2nd port set.
3rd–14th port set.
15th–20th port set.
1st and 2nd port set.
3rd–14th port set.
15th–20th port set.
The proposed fees for Unitized
Logical Port Sets are progressive. For
example, if a User were to purchase 11
BOE Unitized Logical Port Sets, it will
be charged a total of $32,000 per month
($2,500 * 2 + $3,000 * 9). As is the case
today for existing logical ports, the
monthly fees are assessed and applied
in their entirety and are not prorated.
The Exchange notes the current
standard fees assessed for existing
logical ports will remain applicable and
unchanged.17 The proposed fees for
Unitized Logical Port Sets will be
assessed per set, per Port Type. As an
example, if a Member requests three
BOE Unitized Logical Port Sets, one
Bulk Unitized Logical Port Set, and one
Purge Unitized Logical Port Set, the firm
would be charged $8,000 ($2,500 +
$2,500 + $3,000) for the three BOE
Unitized Logical Port Sets, $5,500 for
the one Bulk Unitized Logical Port Set,
and $2,500 for the one Purge Unitized
Logical Port Set.18
Since the Exchange has a finite
amount of capacity, it also proposes to
prescribe a maximum limit on the
number of Unitized Logical Ports that
may be purchased and used on a per
firm, per Matching Unit basis. The
purpose of establishing these limits is to
manage the allotment of Unitized
Logical Ports in a fair and reasonable
manner while preventing the Exchange
from being required to expend large
amounts of resources in order to provide
an unlimited capacity to its matching
engines. Particularly, the Exchange
proposes to provide that the two
structures (i.e., individual unitized ports
or unitized port sets) can be combined
for up to a maximum of 20 Unitized
Logical Ports per Member, per Matching
Unit, per port type. As an example, a
Member may request 2 BOE Unitized
Logical Port Sets and 18 individual BOE
Unitized Logical Ports for Matching
Unit 1, providing a total max of 20 BOE
Unitized Logical Ports on Matching Unit
1 specifically. This would result in
having 20 BOE Unitized Logical Ports
on Matching Unit 1 and 2 BOE Unitized
Ports on all additional Matching Units
as part of the 2 BOE Unitized Logical
Port Sets requested. Additionally, a firm
may request 20 Bulk Unitized Logical
Port Sets and 20 Purge Unitized Logical
Port Sets as those would constitute
9 See Securities Exchange Act Release 100582
(July 23, 2024), 89 FR 60958 (July 29, 2024) (SR–
CboeBZX–2024–071).
10 The BOE protocol is a proprietary order entry
protocol used by Members to connect to the
Exchange. The current version is BOEv2.
11 See Securities Exchange Act Release No.
100582 (July 23, 2024) 89 FR 60958 (July 29, 2024)
(SR–CboeBZX–2024–071).
12 The Exchange anticipates decommissioning
BOEv2 in February 2025.
13 Members will be able to purchase Unitized
Logical Ports individually or may purchase a ‘‘set,’’
which will provide the total number of ports
needed to connect to each available matching
engine.
14 Similar to the Exchange’s preexisting Logical
Ports, the new Unitized Logical Ports allow
Members to submit orders and quotes.
15 Similar to the Exchange’s preexisting Bulk
Ports, the new Bulk Unitized Logical Ports allow
Members to submit and update multiple quote bids
and offers in one message and are particularly
useful for Members that provide quotations in many
different options.
16 Similar to the Exchange’s preexisting Purge
Ports, the new Purge Unitized Logical Ports are
dedicated logical ports that provide the ability to
cancel/purge all open orders, or a subset thereof,
across multiple logical ports through a single
cancel/purge message. They also solely process
purge messages and are designed to assist Members,
including Market Makers, in the management of,
and risk control over, their orders and quotes,
particularly if the Member is dealing with a large
number of options.
17 For example, the Exchange currently assesses
a monthly per port fee of $750 for Logical Ports and
Purge Ports. It also assesses $1,500 per port month
for the 1st and 2nd Bulk Ports and $2,500 for the
3rd or more Bulk Ports. See Cboe BZX Options Fee
Schedule, Options Logical Port Fees.
18 The Exchange proposes to include this
example in the Fee Schedule to provide further
clarity as to the application of the proposed fees.
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Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices
different port types.19 The Exchange
believes the proposed cap will be
sufficient for the vast majority of
Members.20 The Exchange notes that it
will monitor interest in Unitized Logical
Ports and system capacity availability
with the goal of increasing these limits
to meet Members needs if and when the
demand is there, and the Exchange is
able to accommodate it. Additionally,
Members will still be able to utilize the
existing logical port connectivity
offerings with no maximum limit in
addition to their Unitized Logical Port
allocation.
Average Daily Quotes and Average Daily
Order Fees
The Exchange also proposes to adopt
Average Daily Order (‘‘ADO’’) and
Average Daily Quote (‘‘ADQ’’) fees.
‘‘ADO’’ represents the total number of
orders for the month, divided by the
number of trading days. ‘‘ADQ’’
represents the total number of quotes for
the month, divided by the number of
trading days. When measuring a
Member’s ADO and ADQ, orders,
quotes, cancel/replace modify orders,
and quote updates which submit a bid
or offer and do not include cancels, are
included. Further ADO and ADQ will
include orders and quotes submitted by
a Member from all logical port types
(i.e., non-unitized logical ports and
Unitized Logical Ports). Each Member
may submit up to 2,000,000 average
daily orders or up to 250,000,000
average daily quotes per calendar month
without incurring any ADO or ADQ
fees. In the event that the average
number of quotes per trading day during
a calendar month submitted exceeds
250,000,000, each incremental usage of
up to 20,000 average daily quotes will
incur an additional fee as set forth in the
table below. Similarly, in the event that
the average number of orders per trading
day during a calendar month submitted
exceeds 2,000,000, each incremental
usage of up to 1,000 average daily orders
will incur an additional ADO fee as set
forth in the table below.21 A Member’s
ADO and ADQ will be aggregated
together with any affiliated Member
sharing at least 75% common
ownership.
Fee
Tier 1
ADQ Fee Rate per
20,000 ADQ ..........
Tier 2
Tier 3
<= 250,000,000
$0.00
>250,000,000
$0.05
>500,000,000
$0.075
>1,000,000,000
$0.10
>3,500,000,000
$0.20
<= 2,000,000
$0.00
>2,000,000
$1.00
>2,500,000
$1.50
>3,000,000
$2.00
>3,500,000
$2.50
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ADO Fee Rate per
1,000 ADO ...........
Tier 4
Tier 5
As an example, a Member that has
510,000,000 ADQ would subsequently
have 25,500 ‘‘ADQ increments’’
(510,000,000 ADQ/20,000 ADQ
increments). While 12,500 of the 25,500
ADQ increments are free within Tier 1,
12,500 of the ADQ increments would be
fee liable at $0.050 within Tier 2, while
the remaining 500 ADQ increments
would be fee liable at $.075 within Tier
3, resulting in a total ADQ fee of
$662.50 for that month.22
The Exchange notes that market
participants with incrementally higher
ADO or ADQ have the potential residual
effect of exhausting system resources,
bandwidth, and capacity. Higher ADO
or ADQ may therefore, in turn, create
latency and impact other Members’
ability to receive timely executions. The
proposed fee structure has multiple
thresholds, and the proposed fees are
incrementally greater at higher ADO and
ADQ rates because the potential impact
on exchange systems, bandwidth and
capacity becomes greater with increased
ADO and ADQ rates. As noted above,
the proposal contemplates that a
Member would have to exceed the high
ADO rate of 2,000,000 and a Market
Maker would have to exceed the high
ADQ rate of 250,000,000 before that
market participant would be charged a
fee under the proposed respective tiers.
The Exchange believes that it is in the
interests of all Members and market
participants who access the Exchange to
not allow other market participants to
exhaust System resources, but to
encourage efficient usage of network
capacity. The Exchange also believes
this proposal (and in particular the
proposed fee amounts associated with
higher ADO and ADQ) will reduce the
incentive for market participants to
engage in excessive order/quote and
trade activity that may require the
Exchange to otherwise increase its
storage capacity and will encourage
such activity to be submitted in good
faith for legitimate purposes.
The Exchange also represents that the
proposed fees are not intended to raise
revenue; rather, as noted above, it is
intended to encourage efficient behavior
so that market participants do not
exhaust System resources. Moreover,
the Exchange intends to provide
Members with daily reports, free of
charge, which will detail their order and
trade activity in order for those firms to
be fully aware of all order and trade
activity they (and their affiliates) are
sending to the Exchange. This will
allow Members to monitor their
behavior and determine whether it is
approaching any of the ADO or ADQ
thresholds that trigger the proposed
fees.
The Exchange lastly notes that other
exchanges have adopted various fee
programs that assess incrementally
higher fees to Members that have
incrementally higher order and/or
19 The Exchange proposes to include this example
in its Fee Schedule to provide clarity as to how
Unitized Logical Port fees will be assessed.
20 The Exchange notes that one Member has
indicated that it may desire more than the current
maximum in the future.
21 The term ‘‘quote’’ refers to bids and offers
submitted in bulk messages. A bulk message means
a single electronic message a user submits with an
M (Market-Maker) capacity to the Exchange in
which the User may enter, modify, or cancel up to
an Exchange-specified number of bids and offers. A
User may submit a bulk message through a bulk
port as set forth in Exchange Rule 21.1(j)(3). See
Rule 16.1 (definition of bulk message).
22 The Exchange proposes to include this example
in the Fees Schedule to provide further clarity as
to the application of the proposed fees.
23 See, e.g., Securities Exchange Act Release No.
60102 (June 11, 2009), 74 FR 29251 (June 19, 2009)
(SR–NYSEArca–2009–50) (adopting fees applicable
to Members based on the number of orders entered
compared to the number of executions received in
a calendar month). It appears that Nasdaq similarly
assesses a penalty charge to its members that exceed
certain ‘‘weighted order-to-trade ratios’’. See Price
List—Trading Connectivity, NASDAQ, available at
https://www.nasdaqtrader.com/
trader.aspx?id=pricelisttrading2. See also Securities
Exchange Act Release No. 91406 (March 25, 2021),
86 FR 16795 (March 31, 2023) (SR–EMERALD–
2021–10) (adopting an ‘‘Excessive Quoting Fee’’ to
ensure that Market Makers do not over utilize the
exchange’s System by sending messages to the
MIAX Emerald, to the detriment of all other
Members of the exchange).
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quoting trading activity for similar
reasons.23
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.24 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 25 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) 26 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) 27 of the Act, which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
Members and other persons using its
facilities.
The Exchange believes the proposed
fees are reasonable because Unitized
Logical Ports provide an optional,
valuable service in that the ports are
intended to create a more consistent,
deterministic experience for messages
once received within the Exchange’s
System under the recently adopted
unitized BOEv3 architecture. As
discussed above, the new architecture
(and thereby the new Unitized Logical
Ports) was designed to create a more
consistent, deterministic experience for
messages once received within the
Exchange’s System, which the Exchange
believes improves the overall access
experience on the Exchange and will
enable future system enhancements. As
noted, the BOEv3 protocol and
architecture, along with the three new
corresponding Unitized Logical Ports,
are intended to reduce the natural
variance of order handler processing
24 15
25 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
26 Id.
27 15
U.S.C. 78f(b)(4).
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times for messages, and as a result
reduce the potential resulting
‘‘reordering’’ of messages when they are
sent from order handlers to matching
engines. The adoption of the unitized
BOEv3 structure (including the
corresponding new Unitized Ports) was
a technical solution that is intended to
reduce the potential of this reordering
and increase determinism.28 The
Exchange believes the proposed fees are
also reasonable to offset costs incurred
in order to build out an entirely new
unitized architecture.
The Exchange also emphasizes that
the use of the Unitized Logical Ports is
not necessary for trading on the
Exchange and, as noted above, is
entirely optional. Users can also
continue to access the Exchange through
existing logical port offerings at existing
rates. It is a Member’s specific business
needs that will drive its decision
whether to use Unitized Logical Ports in
lieu of, or in addition to, existing logical
ports (or, as emphasized, not use them
at all). If a User finds little benefit in
having these ports based on its business
model and trading strategies, or
determines the Unitized Logical ports
are not cost-efficient for its needs, or
does not provide sufficient value to the
firm, such User may continue
connecting to the Exchange in the
manner it does today, unchanged.
Indeed, the Exchange notes that since
the adoption of Unitized Logical Ports
on August 19, only approximately 27%
of logical ports, bulk ports and purge
ports being used are Unitized Logical
Ports and approximately 73% are the
preexisting Logical Ports, Bulk Ports and
Purge Ports. Moreover, the Exchange
believes that providing Members the
option of purchasing Unitized Logical
Ports individually or in sets provides
Members further flexibility and an
opportunity for cost savings for those
Members that wish to only trade a
subset of classes.
The Exchange also believes that the
proposed Unitized Logical Port fees are
equitable and not unfairly
discriminatory because they continue to
be assessed uniformly to similarly
situated users in that all Users who
choose to purchase Unitized Logical
Ports will be subject to the same
proposed tiered fee schedule. Moreover,
Members purchasing Unitized Logical
Ports will only do so if they find a
benefit and sufficient value in such
ports as, all Members can otherwise
continue to use the preexisting logical
connectivity options. As such, Members
can choose whether or not to purchase
Unitized Logical Ports based on their
respective business needs.
The proposed ascending tier structure
for Unitized Logical Port Sets is
reasonable, equitable and not unfairly
discriminatory as it’s designed to
encourage market participants to be
efficient with their respective Unitized
Logical Port usage. It also is designed so
that Members that use a higher
allotment of the Exchange’s system
resources pay higher rates, rather than
placing that burden on market
participants that have more modest
needs. The Exchange believes the
proposed ascending fee structure is
therefore another appropriate means, in
conjunction with an established
Unitized Logical Port limit, to manage
this finite resource (system capacity)
and ensure its apportioned fairly.
Furthermore, the Exchange already
assesses higher fees to those that
consume more Exchange resources for
the existing non-Unitized Bulk Ports.29
The proposed limit on Unitized Logical
Ports is also reasonable, equitable and
not unfairly discriminatory as the
Exchange believes that it is in the
interests of all Members and market
participants who access the Exchange to
not allow Members to exhaust System
resources, but to encourage efficient
usage of network capacity. The
Exchange also notes that the new BOEv3
unitized architecture is subject to
software limitations on the number of
sessions that can be created on any one
unitized process. Consideration was
given to this limitation as well as to the
amount of ports firms had indicated
they would need prior to the
implementation of Unitized Logical
Ports.
The Exchange believes the proposed
ADO and ADQ fees are reasonable as
Members that do not exceed the high
thresholds of 2,000,000 ADO and
250,000,000 ADQ will not be charged
any fee under the proposed tiers. The
Exchange notes that in establishing the
proposed thresholds, it evaluated
average ADO and ADQ rates over
several months and the thresholds were
designed to protect the Exchange’s
Matching Engines from being adversely
impacted from sustained and excessive
orders/quotes throughout the course of
a given month. The ADQ thresholds are
also designed to ensure Market Makers
quoting activity, which acts as
important source of liquidity, is not
28 See Securities Exchange Act Release 100582
(July 23, 2024), 89 FR 60958 (July 29, 2024) (SR–
CboeBZX–2024–071).
29 See Cboe U.S. Options Fees Schedule, BZX
Options, Options Logical Port Fees, Ports with Bulk
Quoting Capabilities.
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ddrumheller on DSK120RN23PROD with NOTICES1
impeded by the proposal.30 The
Exchange believes it’s reasonable,
equitable and not unfairly
discriminatory to assess higher fees
when a Member has higher ADO and
ADQ rates because the potential impact
on exchange systems, bandwidth and
capacity becomes greater with increased
ADO and ADQ rates. The Exchange
believes the proposed fee amounts are
reasonable as the Exchange believes
them to be commensurate with the
proposed thresholds. Particularly, the
proposed fee amounts that correspond
to higher ADO and ADQ rates are
designed to incentivize Members to
reduce excessive order and quoting
trade activity that the Exchange believes
can be detrimental to all market
participants at those levels and
encourage such activity to be made in
good faith and for legitimate purposes.
As noted above, the Exchange believes
that it is in the interests of all Members
and market participants who access the
Exchange to not allow Members to
exhaust System resources, but to
encourage efficient usage of network
capacity. The Exchange therefore also
believes that the proposed fees
appropriately reflect the benefits to
different firms of being able to send
orders and quotes into the Exchange’s
System and also believes the proposed
fees are one method of facilitating the
Commission’s goal of ensuring that
critical market infrastructure has ‘‘levels
of capacity, integrity, resiliency,
availability, and security adequate to
maintain their operational capability
and promote the maintenance of fair
and orderly markets.’’ 31
The Exchange believes adopting the
proposed ADO and ADQ fees are
reasonable as unfettered usage of
System capacity and network resource
consumption can have a detrimental
effect on all market participants who
access and use the Exchange. As
discussed above, high ADO and ADQ
rates may adversely impact system
resources, bandwidth, and capacity
which may, in turn, create latency and
impact other Members’ ability to receive
timely executions. The Exchange
believes the proposed fees are therefore
reasonable as they are designed to focus
on activity that is truly disproportionate
while fairly allocating costs.
30 Since the implementation of the proposal on
September 3, 2024, the Exchange notes that it has
not received any feedback from Market Maker
participants that the proposal has impeded their
ability to meet their quoting obligations.
31 See Securities Exchange Act Release No. 73639
(November 19, 2014), 79 FR 72251 (December 5,
2014) (File No. S7–01–13) (Regulation SCI Adopting
Release).
VerDate Sep<11>2014
18:25 Nov 29, 2024
Jkt 265001
Further, the Exchange believes that
the proposed ADO and ADQ fees are
equitable and not unfairly
discriminatory because they will be
assessed uniformly to similarly situated
users in that all Members that exceed
the thresholds in connection with ADO
and ADQ will be assessed the proposed
ADO and ADQ rates. Regarding ADO an
ADQ, no market participant is assessed
any fees unless it exceeds the proposed
thresholds. As noted above, the
Exchange believes the proposed ADO
and ADQ thresholds (i.e., 2,000,000
ADO and 250,000,000 ADQ) are
appropriately high rates respectively,
such that the Exchange expects the vast
majority of Members to not exceed
them. While the Exchange has no way
of predicting with certainty how the
proposed changes will impact Member
activity, based on trading activity from
the prior months the Exchange would
expect that, absent any changes to
Member behavior, all Members would
fall within proposed ADO Tier 1 (and
thus not be subject to any new fees) and
approximately 74% of Members would
fall within proposed ADQ Tier 1 (and
thus also not be subject to any new
fees). With respect to the remaining
Members (approximately 26%) that
would exceed the ADQ Tier 1 threshold
based on current activity, the Exchange
would anticipate, absent any change in
behavior, approximately 3 Members to
fall within Tier 2, approximately 6
Members to fall within Tier 3,
approximately 3 Members to fall within
Tier and no Members to fall within Tier
5. Notwithstanding this impact, the
Exchange believes that Market Makers
are able to continue providing important
liquidity to the Exchange and meet their
quoting obligations[sic].
The Exchange believes it’s equitable
and not unfairly discriminatory to
assess incrementally higher fees to
Members that have higher ADO and
ADQ rates because the potential impact
on exchange systems, bandwidth and
capacity becomes greater with increased
ADO and ADQ. The Exchange also
believes it’s equitable and not unfairly
discriminatory to aggregate Members
trading activity with any affiliated
Member sharing at least 75% common
ownership in order to prevent members
from shifting their order flow or quoting
activity to other affiliates in order to
circumvent the proposed fees.
The Exchange lastly believes that its
proposal is reasonable, equitably
allocated and not unfairly
discriminatory because it is not
intended to raise revenue for the
Exchange; rather, it is intended to
encourage efficient behavior so that
Members do not exhaust System
PO 00000
Frm 00131
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Sfmt 4703
resources. Moreover, as noted above,
competing options exchanges similarly
assess fees to deter Members from over
utilizing the exchange’s System by
having excessive order and/or quoting
trading activity.32
The Exchange finally 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. The
Exchange is only one of 18 options
exchanges which market participants
may direct their order flow and/or
participate on, and it represents a small
percentage of the overall market.33
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change to adopt fees
for Unitized Logical Ports will impose
any burden on intramarket competition
that is not necessary in furtherance of
the purposes of the Act because the
proposed fees for will apply equally to
all similarly situated Members. As
discussed above, Unitized Logical Ports
are optional and Members may choose
to utilize Unitized Logical Ports, or not,
based on their views of the additional
benefits and added value provided by
these ports. The Exchange believes the
proposed fees will be assessed
proportionately to the potential value or
benefit received by Members with a
greater number of Unitized Logical Ports
and notes that Members may determine
to cease using Unitized Logical Ports. As
discussed, Members can also continue
to access the Exchange through existing
Logical Ports, which fees are not
changing.
Similarly, the Exchange does not
believe that the proposed rule change to
adopt ADO and ADQ fees will impose
any burden on intramarket competition
that is not necessary in furtherance of
the purposes of the Act because such
fees will apply equally to all similarly
situated Members. Particularly, the
proposed fees apply uniformly to all
Members, in that any Member who
exceeds the ADO and/or ADQ Tier 1
thresholds will be subject to a fee under
the proposed corresponding tiers. The
Exchange believes that the proposed
change neither favors nor penalizes one
or more categories of market
participants in a manner that would
See supra note 20.
See Cboe Global Markets, U.S. Options Market
Volume Summary, Month-to-Date (August 27,
2024), available at https://www.cboe.com/us/
options/market_statistics/ which reflects the
Exchange representing only 3.3% of total market
share.
32
33
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Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices
impose an undue burden on
competition. Rather, the proposal seeks
to benefit all market participants by
encouraging the efficient utilization of
the Exchange’s network while taking
into account the important liquidity
provided by its Members. As discussed
above potential impact on exchange
systems, bandwidth and capacity
becomes greater with increased ADO
and ADQ rates. The Exchange also
anticipates that the vast majority of
Members on the Exchange will not be
subject to any fees under the proposed
tiers. Accordingly, the Exchange
believes that the proposed ADO and
ADQ fees do not favor certain categories
of market participants in a manner that
would impose a burden on competition.
Next, the Exchange believes the
proposed rule change does not 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,
including competition for exchange
memberships. Market Participants have
numerous alternative venues that they
may participate on, including 17 other
options exchanges (including 3 other
non-Cboe options exchanges), as well as
off-exchange venues, where competitive
products are available for trading.
Indeed, participants can readily choose
to submit their order flow 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.’’ 34 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
34 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
VerDate Sep<11>2014
18:25 Nov 29, 2024
Jkt 265001
market share percentages for granted’
because ‘no exchange possesses a
monopoly, regulatory or otherwise, in
the execution of order flow from broker
dealers’. . . .’’.35 Accordingly, the
Exchange does not believe its proposed
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 36 and paragraph (f) of Rule
19b–4 37 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:
95299
All submissions should refer to file
number SR–CboeBZX–2024–113. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CboeBZX–2024–113 and should be
submitted on or before December 23,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.38
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–28112 Filed 11–29–24; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBZX–2024–113 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.
35 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)).
36 15 U.S.C. 78s(b)(3)(A).
37 17 CFR 240.19b–4(f).
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SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–792; OMB Control No.
3235–0739]
Proposed Collection; Comment
Request; Extension: Order Granting a
Conditional Exemption Under the
Securities Exchange Act of 1934 From
the Confirmation Requirements of
Exchange Act Rule 10b–10(a) for
Certain Transactions in Money Market
Funds
Upon Written Request, Copies Available
From: U.S. Securities and Exchange
Commission, Office of FOIA Services,
38 17
E:\FR\FM\02DEN1.SGM
CFR 200.30–3(a)(12).
02DEN1
]]>Agencies
[Federal Register Volume 89, Number 231 (Monday, December 2, 2024)]
[Notices]
[Pages 95294-95299]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28112]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101742; File No. SR-CboeBZX-2024-113]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt
Fees for New Logical Ports in Connection With a New Connectivity
Offering on Its Equity Options Platform
November 25, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 12, 2024, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
adopt fees for new logical ports in connection with a new connectivity
offering on its equity options platform. The text of the proposed rule
change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/BZX/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its fee schedule to adopt fees for
Unitized Logical Ports, a new connectivity offering for its equity
options platform (``BZX Options'') and adopt new Average Daily Quote
and Average Daily Order fees.\3\
---------------------------------------------------------------------------
\3\ The Exchange initially submitted the proposed rule change on
August 30, 2024 and was effective September 3, 2024 (SR-CboeBZX-
2024-082). On September 13, 2024, the Exchange withdrew that filing
and submitted SR-CboeBZX-2024-088. On November 12, 2024, the
Exchange withdrew that filing and submitted this filing.
---------------------------------------------------------------------------
Unitized Port Fees
By way of background, Exchange Members may interface with the
Exchange's Trading System by utilizing either the Financial Information
Exchange (``FIX'') protocol or the Binary Order Entry (``BOE'')
protocol. The Exchange further offers a variety of logical ports,\4\
which provide users of these ports with the ability within the
Exchange's System to accomplish a specific function through a
connection, such as order entry, data receipt or access to information.
For example, such ports include Logical Ports,\5\ Purge Ports,\6\ and
Ports with Bulk Quoting Capabilities \7\ (``Bulk Ports''). By way of
further background, each of these ports corresponds to a single running
order handler. Each order handler processes the messages it receives
from these ports from the connected Members. This processing includes
determining whether the message contains the required information to
enter the System, whether the message parameters satisfy port-level
(i.e., pre-trade) risk controls, and where to send that message within
the System (i.e., to which matching engine \8\). Once an order handler
completes the processing of a message, it sends that message to the
appropriate matching engine.
---------------------------------------------------------------------------
\4\ See Exchange Rule 21.1 (l)(2), definition of ``logical
port.'' Logical ports include FIX and BOE ports (used for order
entry), drop logical port (which grants users the ability to receive
and/or send drop copies) and ports that are used for receipt of
certain market data feeds.
\5\ The term ``Logical Ports'' used herein shall refer to FIX
and BOE ports (used for order entry). See Cboe BZX Options Fee
Schedule, Options Logical Port Fees, ``Logical Ports'' (which
exclude Purge Port, Multicast PITCH Spin Server Port or GRP Port).
\6\ Purge Ports provide users the ability to cancel a subset (or
all) of open orders across Executing Firm ID(s) (``EFID(s)''),
Underlying symbol(s), or CustomGroupID(s), across multiple logical
ports/sessions. See Securities Exchange Act Release 79956 (February
3, 2017), 82 FR 10102 (February 9, 2017) (SR-BatsBZX-2017-05). See
also https://cdn.cboe.com/resources/membership/US_Options_BOE_Specification.pdf and https://cdn.cboe.com/resources/membership/US_Options_FIX_Specification.pdf.
\7\ See Exchange Rule 21.1 (l)(3), definition of ``bulk port.''
Bulk Ports provide users with the ability to submit and update
multiple quote bids and offers in one message through logical ports
enabled for bulk-quoting.
\8\ A matching engine is a part of the Exchange's System that
processes options quotes and trades on a symbol-by-symbol basis.
Some matching engines will process option classes with multiple root
symbols, and other matching engines will be dedicated to one single
option root symbol (for example, options on SPY will be processed by
one single matching engine that is dedicated only to SPY). A
particular root symbol may only be assigned to a single designated
matching engine. A particular root symbol may not be assigned to
multiple matching engines.
---------------------------------------------------------------------------
Historically, all order handlers connect to all matching engines.
That is, under the BOEv2 and FIX protocols, Members were able to access
all symbols from a single logical port since each port corresponds to a
single order handler that conveniently connects to all matching engines
(``convenience layer''). Although the Exchange configures the software
and hardware for its order handlers in the same manner, there can be a
natural variance in the amount of time it takes individual order
handlers to process messages of the same type under this architecture.
Factors that contribute to this differentiation in processing times
include the availability of shared resources (such as memory), which is
impacted by (among other things) then-current message rates, the number
of active symbols (i.e., classes), and recent messages for a symbol.
This natural differentiation in processing times inherently may cause
some messages to
[[Page 95295]]
be sent from an order handler to a matching engine ahead of other
messages that the Exchange's System may have received earlier on a
different order handler.
The Exchange recently implemented a new architecture and protocol
which includes, among other things, a single gateway per matching
engine (``unitized layer''), which renders the above-described natural
variance of order handler processing irrelevant for Members that
connect to the unitized order handler.\9\ More specifically, effective
August 19, 2024, the Exchange implemented this new unitized access
architecture and a new version of its Binary Order Entry (BOE) protocol
\10\ (``BOEv3''), which also resulted in the adoption of new logical
port types (``Unitized Logical Ports''), for which the Exchange is now
seeking to establish fees.\11\ Under the new unitized BOEv3
architecture, a single BOEv3 order handler corresponds to a single
matching engine and all message traffic (including FIX and current
BOEv2 \12\ port traffic) pass through this unitized BOEv3 order handler
before reaching that order handler's corresponding matching engine. If
a Member desires to access this optional unitized layer of the BOEv3
architecture (which it is not required to do), the Member would need to
obtain a Unitized Logical Port for each unitized BOEv3 order handler
and corresponding matching engine(s) that process the symbol(s) that
Member desires to trade.\13\ The three new port types that have been
adopted are: (1) BOE Unitized Logical Ports,\14\ (2) Bulk Unitized
Logical Ports,\15\ and (3) Purge Unitized Logical Ports.\16\ As noted
above, use of Unitized Logical Ports is completely voluntary, and no
Member is required, or under any regulatory obligation, to utilize
them.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release 100582 (July 23, 2024),
89 FR 60958 (July 29, 2024) (SR-CboeBZX-2024-071).
\10\ The BOE protocol is a proprietary order entry protocol used
by Members to connect to the Exchange. The current version is BOEv2.
\11\ See Securities Exchange Act Release No. 100582 (July 23,
2024) 89 FR 60958 (July 29, 2024) (SR-CboeBZX-2024-071).
\12\ The Exchange anticipates decommissioning BOEv2 in February
2025.
\13\ Members will be able to purchase Unitized Logical Ports
individually or may purchase a ``set,'' which will provide the total
number of ports needed to connect to each available matching engine.
\14\ Similar to the Exchange's preexisting Logical Ports, the
new Unitized Logical Ports allow Members to submit orders and
quotes.
\15\ Similar to the Exchange's preexisting Bulk Ports, the new
Bulk Unitized Logical Ports allow Members to submit and update
multiple quote bids and offers in one message and are particularly
useful for Members that provide quotations in many different
options.
\16\ Similar to the Exchange's preexisting Purge Ports, the new
Purge Unitized Logical Ports are dedicated logical ports that
provide the ability to cancel/purge all open orders, or a subset
thereof, across multiple logical ports through a single cancel/purge
message. They also solely process purge messages and are designed to
assist Members, including Market Makers, in the management of, and
risk control over, their orders and quotes, particularly if the
Member is dealing with a large number of options.
---------------------------------------------------------------------------
The Exchange proposes to establish fees for the new Unitized
Logical Ports, which can be purchased on an individual basis (i.e.,
capable of accessing a specified matching engine (``Matching Unit''))
and/or as a set (``Unitized Logical Port Set'') (i.e., will include the
total number of ports needed to connect to each available Matching
Unit). The proposed fees for Unitized Logical Ports purchased
individually and as sets are as follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
BOE unitized logical port.............. $350/port/month.
Bulk Unitized Logical Port............. $550/port/month.
Purge Unitized Logical Port............ $400/port/month.
BOE Unitized Logical Port (Set)........ $2,500/month for 1st and 2nd
port set.
$3,000/month for 3rd-14th port
set.
$3,500/month for 15th-20th port
set.
Bulk Unitized Logical Port (Set)....... $5,500/month for 1st and 2nd
port set.
$6,000/month for 3rd-14th port
set.
$6,500/month for 15th-20th port
set.
Purge Unitized Logical Port (Set)...... $2,500/month for 1st and 2nd
port set.
$3,000/month for 3rd-14th port
set.
$3,500/month for 15th-20th port
set.
------------------------------------------------------------------------
The proposed fees for Unitized Logical Port Sets are progressive.
For example, if a User were to purchase 11 BOE Unitized Logical Port
Sets, it will be charged a total of $32,000 per month ($2,500 * 2 +
$3,000 * 9). As is the case today for existing logical ports, the
monthly fees are assessed and applied in their entirety and are not
prorated. The Exchange notes the current standard fees assessed for
existing logical ports will remain applicable and unchanged.\17\ The
proposed fees for Unitized Logical Port Sets will be assessed per set,
per Port Type. As an example, if a Member requests three BOE Unitized
Logical Port Sets, one Bulk Unitized Logical Port Set, and one Purge
Unitized Logical Port Set, the firm would be charged $8,000 ($2,500 +
$2,500 + $3,000) for the three BOE Unitized Logical Port Sets, $5,500
for the one Bulk Unitized Logical Port Set, and $2,500 for the one
Purge Unitized Logical Port Set.\18\
---------------------------------------------------------------------------
\17\ For example, the Exchange currently assesses a monthly per
port fee of $750 for Logical Ports and Purge Ports. It also assesses
$1,500 per port month for the 1st and 2nd Bulk Ports and $2,500 for
the 3rd or more Bulk Ports. See Cboe BZX Options Fee Schedule,
Options Logical Port Fees.
\18\ The Exchange proposes to include this example in the Fee
Schedule to provide further clarity as to the application of the
proposed fees.
---------------------------------------------------------------------------
Since the Exchange has a finite amount of capacity, it also
proposes to prescribe a maximum limit on the number of Unitized Logical
Ports that may be purchased and used on a per firm, per Matching Unit
basis. The purpose of establishing these limits is to manage the
allotment of Unitized Logical Ports in a fair and reasonable manner
while preventing the Exchange from being required to expend large
amounts of resources in order to provide an unlimited capacity to its
matching engines. Particularly, the Exchange proposes to provide that
the two structures (i.e., individual unitized ports or unitized port
sets) can be combined for up to a maximum of 20 Unitized Logical Ports
per Member, per Matching Unit, per port type. As an example, a Member
may request 2 BOE Unitized Logical Port Sets and 18 individual BOE
Unitized Logical Ports for Matching Unit 1, providing a total max of 20
BOE Unitized Logical Ports on Matching Unit 1 specifically. This would
result in having 20 BOE Unitized Logical Ports on Matching Unit 1 and 2
BOE Unitized Ports on all additional Matching Units as part of the 2
BOE Unitized Logical Port Sets requested. Additionally, a firm may
request 20 Bulk Unitized Logical Port Sets and 20 Purge Unitized
Logical Port Sets as those would constitute
[[Page 95296]]
different port types.\19\ The Exchange believes the proposed cap will
be sufficient for the vast majority of Members.\20\ The Exchange notes
that it will monitor interest in Unitized Logical Ports and system
capacity availability with the goal of increasing these limits to meet
Members needs if and when the demand is there, and the Exchange is able
to accommodate it. Additionally, Members will still be able to utilize
the existing logical port connectivity offerings with no maximum limit
in addition to their Unitized Logical Port allocation.
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\19\ The Exchange proposes to include this example in its Fee
Schedule to provide clarity as to how Unitized Logical Port fees
will be assessed.
\20\ The Exchange notes that one Member has indicated that it
may desire more than the current maximum in the future.
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Average Daily Quotes and Average Daily Order Fees
The Exchange also proposes to adopt Average Daily Order (``ADO'')
and Average Daily Quote (``ADQ'') fees. ``ADO'' represents the total
number of orders for the month, divided by the number of trading days.
``ADQ'' represents the total number of quotes for the month, divided by
the number of trading days. When measuring a Member's ADO and ADQ,
orders, quotes, cancel/replace modify orders, and quote updates which
submit a bid or offer and do not include cancels, are included. Further
ADO and ADQ will include orders and quotes submitted by a Member from
all logical port types (i.e., non-unitized logical ports and Unitized
Logical Ports). Each Member may submit up to 2,000,000 average daily
orders or up to 250,000,000 average daily quotes per calendar month
without incurring any ADO or ADQ fees. In the event that the average
number of quotes per trading day during a calendar month submitted
exceeds 250,000,000, each incremental usage of up to 20,000 average
daily quotes will incur an additional fee as set forth in the table
below. Similarly, in the event that the average number of orders per
trading day during a calendar month submitted exceeds 2,000,000, each
incremental usage of up to 1,000 average daily orders will incur an
additional ADO fee as set forth in the table below.\21\ A Member's ADO
and ADQ will be aggregated together with any affiliated Member sharing
at least 75% common ownership.
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\21\ The term ``quote'' refers to bids and offers submitted in
bulk messages. A bulk message means a single electronic message a
user submits with an M (Market-Maker) capacity to the Exchange in
which the User may enter, modify, or cancel up to an Exchange-
specified number of bids and offers. A User may submit a bulk
message through a bulk port as set forth in Exchange Rule
21.1(j)(3). See Rule 16.1 (definition of bulk message).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fee
-------------------------------------------------------------------------------------------------------------
Tier 1 Tier 2 Tier 3 Tier 4 Tier 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
ADQ Fee Rate per 20,000 ADQ............... <= 250,000,000 >250,000,000 >500,000,000 >1,000,000,000 >3,500,000,000
$0.00 $0.05 $0.075 $0.10 $0.20
ADO Fee Rate per 1,000 ADO................ <= 2,000,000 >2,000,000 >2,500,000 >3,000,000 >3,500,000
$0.00 $1.00 $1.50 $2.00 $2.50
--------------------------------------------------------------------------------------------------------------------------------------------------------
As an example, a Member that has 510,000,000 ADQ would subsequently
have 25,500 ``ADQ increments'' (510,000,000 ADQ/20,000 ADQ increments).
While 12,500 of the 25,500 ADQ increments are free within Tier 1,
12,500 of the ADQ increments would be fee liable at $0.050 within Tier
2, while the remaining 500 ADQ increments would be fee liable at $.075
within Tier 3, resulting in a total ADQ fee of $662.50 for that
month.\22\
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\22\ The Exchange proposes to include this example in the Fees
Schedule to provide further clarity as to the application of the
proposed fees.
\23\ See, e.g., Securities Exchange Act Release No. 60102 (June
11, 2009), 74 FR 29251 (June 19, 2009) (SR-NYSEArca-2009-50)
(adopting fees applicable to Members based on the number of orders
entered compared to the number of executions received in a calendar
month). It appears that Nasdaq similarly assesses a penalty charge
to its members that exceed certain ``weighted order-to-trade
ratios''. See Price List--Trading Connectivity, NASDAQ, available at
https://www.nasdaqtrader.com/trader.aspx?id=pricelisttrading2. See
also Securities Exchange Act Release No. 91406 (March 25, 2021), 86
FR 16795 (March 31, 2023) (SR-EMERALD-2021-10) (adopting an
``Excessive Quoting Fee'' to ensure that Market Makers do not over
utilize the exchange's System by sending messages to the MIAX
Emerald, to the detriment of all other Members of the exchange).
---------------------------------------------------------------------------
The Exchange notes that market participants with incrementally
higher ADO or ADQ have the potential residual effect of exhausting
system resources, bandwidth, and capacity. Higher ADO or ADQ may
therefore, in turn, create latency and impact other Members' ability to
receive timely executions. The proposed fee structure has multiple
thresholds, and the proposed fees are incrementally greater at higher
ADO and ADQ rates because the potential impact on exchange systems,
bandwidth and capacity becomes greater with increased ADO and ADQ
rates. As noted above, the proposal contemplates that a Member would
have to exceed the high ADO rate of 2,000,000 and a Market Maker would
have to exceed the high ADQ rate of 250,000,000 before that market
participant would be charged a fee under the proposed respective tiers.
The Exchange believes that it is in the interests of all Members and
market participants who access the Exchange to not allow other market
participants to exhaust System resources, but to encourage efficient
usage of network capacity. The Exchange also believes this proposal
(and in particular the proposed fee amounts associated with higher ADO
and ADQ) will reduce the incentive for market participants to engage in
excessive order/quote and trade activity that may require the Exchange
to otherwise increase its storage capacity and will encourage such
activity to be submitted in good faith for legitimate purposes.
The Exchange also represents that the proposed fees are not
intended to raise revenue; rather, as noted above, it is intended to
encourage efficient behavior so that market participants do not exhaust
System resources. Moreover, the Exchange intends to provide Members
with daily reports, free of charge, which will detail their order and
trade activity in order for those firms to be fully aware of all order
and trade activity they (and their affiliates) are sending to the
Exchange. This will allow Members to monitor their behavior and
determine whether it is approaching any of the ADO or ADQ thresholds
that trigger the proposed fees.
The Exchange lastly notes that other exchanges have adopted various
fee programs that assess incrementally higher fees to Members that have
incrementally higher order and/or
[[Page 95297]]
quoting trading activity for similar reasons.\23\
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.\24\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \25\ 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) \26\ 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) \27\ of the Act, which
requires that Exchange rules provide for the equitable allocation of
reasonable dues, fees, and other charges among its Members and other
persons using its facilities.
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\24\ 15 U.S.C. 78f(b).
\25\ 15 U.S.C. 78f(b)(5).
\26\ Id.
\27\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes the proposed fees are reasonable because
Unitized Logical Ports provide an optional, valuable service in that
the ports are intended to create a more consistent, deterministic
experience for messages once received within the Exchange's System
under the recently adopted unitized BOEv3 architecture. As discussed
above, the new architecture (and thereby the new Unitized Logical
Ports) was designed to create a more consistent, deterministic
experience for messages once received within the Exchange's System,
which the Exchange believes improves the overall access experience on
the Exchange and will enable future system enhancements. As noted, the
BOEv3 protocol and architecture, along with the three new corresponding
Unitized Logical Ports, are intended to reduce the natural variance of
order handler processing times for messages, and as a result reduce the
potential resulting ``reordering'' of messages when they are sent from
order handlers to matching engines. The adoption of the unitized BOEv3
structure (including the corresponding new Unitized Ports) was a
technical solution that is intended to reduce the potential of this
reordering and increase determinism.\28\ The Exchange believes the
proposed fees are also reasonable to offset costs incurred in order to
build out an entirely new unitized architecture.
---------------------------------------------------------------------------
\28\ See Securities Exchange Act Release 100582 (July 23, 2024),
89 FR 60958 (July 29, 2024) (SR-CboeBZX-2024-071).
---------------------------------------------------------------------------
The Exchange also emphasizes that the use of the Unitized Logical
Ports is not necessary for trading on the Exchange and, as noted above,
is entirely optional. Users can also continue to access the Exchange
through existing logical port offerings at existing rates. It is a
Member's specific business needs that will drive its decision whether
to use Unitized Logical Ports in lieu of, or in addition to, existing
logical ports (or, as emphasized, not use them at all). If a User finds
little benefit in having these ports based on its business model and
trading strategies, or determines the Unitized Logical ports are not
cost-efficient for its needs, or does not provide sufficient value to
the firm, such User may continue connecting to the Exchange in the
manner it does today, unchanged. Indeed, the Exchange notes that since
the adoption of Unitized Logical Ports on August 19, only approximately
27% of logical ports, bulk ports and purge ports being used are
Unitized Logical Ports and approximately 73% are the preexisting
Logical Ports, Bulk Ports and Purge Ports. Moreover, the Exchange
believes that providing Members the option of purchasing Unitized
Logical Ports individually or in sets provides Members further
flexibility and an opportunity for cost savings for those Members that
wish to only trade a subset of classes.
The Exchange also believes that the proposed Unitized Logical Port
fees are equitable and not unfairly discriminatory because they
continue to be assessed uniformly to similarly situated users in that
all Users who choose to purchase Unitized Logical Ports will be subject
to the same proposed tiered fee schedule. Moreover, Members purchasing
Unitized Logical Ports will only do so if they find a benefit and
sufficient value in such ports as, all Members can otherwise continue
to use the preexisting logical connectivity options. As such, Members
can choose whether or not to purchase Unitized Logical Ports based on
their respective business needs.
The proposed ascending tier structure for Unitized Logical Port
Sets is reasonable, equitable and not unfairly discriminatory as it's
designed to encourage market participants to be efficient with their
respective Unitized Logical Port usage. It also is designed so that
Members that use a higher allotment of the Exchange's system resources
pay higher rates, rather than placing that burden on market
participants that have more modest needs. The Exchange believes the
proposed ascending fee structure is therefore another appropriate
means, in conjunction with an established Unitized Logical Port limit,
to manage this finite resource (system capacity) and ensure its
apportioned fairly. Furthermore, the Exchange already assesses higher
fees to those that consume more Exchange resources for the existing
non-Unitized Bulk Ports.\29\ The proposed limit on Unitized Logical
Ports is also reasonable, equitable and not unfairly discriminatory as
the Exchange believes that it is in the interests of all Members and
market participants who access the Exchange to not allow Members to
exhaust System resources, but to encourage efficient usage of network
capacity. The Exchange also notes that the new BOEv3 unitized
architecture is subject to software limitations on the number of
sessions that can be created on any one unitized process. Consideration
was given to this limitation as well as to the amount of ports firms
had indicated they would need prior to the implementation of Unitized
Logical Ports.
---------------------------------------------------------------------------
\29\ See Cboe U.S. Options Fees Schedule, BZX Options, Options
Logical Port Fees, Ports with Bulk Quoting Capabilities.
---------------------------------------------------------------------------
The Exchange believes the proposed ADO and ADQ fees are reasonable
as Members that do not exceed the high thresholds of 2,000,000 ADO and
250,000,000 ADQ will not be charged any fee under the proposed tiers.
The Exchange notes that in establishing the proposed thresholds, it
evaluated average ADO and ADQ rates over several months and the
thresholds were designed to protect the Exchange's Matching Engines
from being adversely impacted from sustained and excessive orders/
quotes throughout the course of a given month. The ADQ thresholds are
also designed to ensure Market Makers quoting activity, which acts as
important source of liquidity, is not
[[Page 95298]]
impeded by the proposal.\30\ The Exchange believes it's reasonable,
equitable and not unfairly discriminatory to assess higher fees when a
Member has higher ADO and ADQ rates because the potential impact on
exchange systems, bandwidth and capacity becomes greater with increased
ADO and ADQ rates. The Exchange believes the proposed fee amounts are
reasonable as the Exchange believes them to be commensurate with the
proposed thresholds. Particularly, the proposed fee amounts that
correspond to higher ADO and ADQ rates are designed to incentivize
Members to reduce excessive order and quoting trade activity that the
Exchange believes can be detrimental to all market participants at
those levels and encourage such activity to be made in good faith and
for legitimate purposes. As noted above, the Exchange believes that it
is in the interests of all Members and market participants who access
the Exchange to not allow Members to exhaust System resources, but to
encourage efficient usage of network capacity. The Exchange therefore
also believes that the proposed fees appropriately reflect the benefits
to different firms of being able to send orders and quotes into the
Exchange's System and also believes the proposed fees are one method of
facilitating the Commission's goal of ensuring that critical market
infrastructure has ``levels of capacity, integrity, resiliency,
availability, and security adequate to maintain their operational
capability and promote the maintenance of fair and orderly markets.''
\31\
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\30\ Since the implementation of the proposal on September 3,
2024, the Exchange notes that it has not received any feedback from
Market Maker participants that the proposal has impeded their
ability to meet their quoting obligations.
\31\ See Securities Exchange Act Release No. 73639 (November 19,
2014), 79 FR 72251 (December 5, 2014) (File No. S7-01-13)
(Regulation SCI Adopting Release).
---------------------------------------------------------------------------
The Exchange believes adopting the proposed ADO and ADQ fees are
reasonable as unfettered usage of System capacity and network resource
consumption can have a detrimental effect on all market participants
who access and use the Exchange. As discussed above, high ADO and ADQ
rates may adversely impact system resources, bandwidth, and capacity
which may, in turn, create latency and impact other Members' ability to
receive timely executions. The Exchange believes the proposed fees are
therefore reasonable as they are designed to focus on activity that is
truly disproportionate while fairly allocating costs.
Further, the Exchange believes that the proposed ADO and ADQ fees
are equitable and not unfairly discriminatory because they will be
assessed uniformly to similarly situated users in that all Members that
exceed the thresholds in connection with ADO and ADQ will be assessed
the proposed ADO and ADQ rates. Regarding ADO an ADQ, no market
participant is assessed any fees unless it exceeds the proposed
thresholds. As noted above, the Exchange believes the proposed ADO and
ADQ thresholds (i.e., 2,000,000 ADO and 250,000,000 ADQ) are
appropriately high rates respectively, such that the Exchange expects
the vast majority of Members to not exceed them. While the Exchange has
no way of predicting with certainty how the proposed changes will
impact Member activity, based on trading activity from the prior months
the Exchange would expect that, absent any changes to Member behavior,
all Members would fall within proposed ADO Tier 1 (and thus not be
subject to any new fees) and approximately 74% of Members would fall
within proposed ADQ Tier 1 (and thus also not be subject to any new
fees). With respect to the remaining Members (approximately 26%) that
would exceed the ADQ Tier 1 threshold based on current activity, the
Exchange would anticipate, absent any change in behavior, approximately
3 Members to fall within Tier 2, approximately 6 Members to fall within
Tier 3, approximately 3 Members to fall within Tier and no Members to
fall within Tier 5. Notwithstanding this impact, the Exchange believes
that Market Makers are able to continue providing important liquidity
to the Exchange and meet their quoting obligations[sic].
The Exchange believes it's equitable and not unfairly
discriminatory to assess incrementally higher fees to Members that have
higher ADO and ADQ rates because the potential impact on exchange
systems, bandwidth and capacity becomes greater with increased ADO and
ADQ. The Exchange also believes it's equitable and not unfairly
discriminatory to aggregate Members trading activity with any
affiliated Member sharing at least 75% common ownership in order to
prevent members from shifting their order flow or quoting activity to
other affiliates in order to circumvent the proposed fees.
The Exchange lastly believes that its proposal is reasonable,
equitably allocated and not unfairly discriminatory because it is not
intended to raise revenue for the Exchange; rather, it is intended to
encourage efficient behavior so that Members do not exhaust System
resources. Moreover, as noted above, competing options exchanges
similarly assess fees to deter Members from over utilizing the
exchange's System by having excessive order and/or quoting trading
activity.\32\
---------------------------------------------------------------------------
\32\ See supra note 20.
---------------------------------------------------------------------------
The Exchange finally 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. The Exchange is only one of
18 options exchanges which market participants may direct their order
flow and/or participate on, and it represents a small percentage of the
overall market.\33\
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\33\ See Cboe Global Markets, U.S. Options Market Volume
Summary, Month-to-Date (August 27, 2024), available at https://www.cboe.com/us/options/market_statistics/ which reflects the
Exchange representing only 3.3% of total market share.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change to
adopt fees for Unitized Logical Ports will impose any burden on
intramarket competition that is not necessary in furtherance of the
purposes of the Act because the proposed fees for will apply equally to
all similarly situated Members. As discussed above, Unitized Logical
Ports are optional and Members may choose to utilize Unitized Logical
Ports, or not, based on their views of the additional benefits and
added value provided by these ports. The Exchange believes the proposed
fees will be assessed proportionately to the potential value or benefit
received by Members with a greater number of Unitized Logical Ports and
notes that Members may determine to cease using Unitized Logical Ports.
As discussed, Members can also continue to access the Exchange through
existing Logical Ports, which fees are not changing.
Similarly, the Exchange does not believe that the proposed rule
change to adopt ADO and ADQ fees will impose any burden on intramarket
competition that is not necessary in furtherance of the purposes of the
Act because such fees will apply equally to all similarly situated
Members. Particularly, the proposed fees apply uniformly to all
Members, in that any Member who exceeds the ADO and/or ADQ Tier 1
thresholds will be subject to a fee under the proposed corresponding
tiers. The Exchange believes that the proposed change neither favors
nor penalizes one or more categories of market participants in a manner
that would
[[Page 95299]]
impose an undue burden on competition. Rather, the proposal seeks to
benefit all market participants by encouraging the efficient
utilization of the Exchange's network while taking into account the
important liquidity provided by its Members. As discussed above
potential impact on exchange systems, bandwidth and capacity becomes
greater with increased ADO and ADQ rates. The Exchange also anticipates
that the vast majority of Members on the Exchange will not be subject
to any fees under the proposed tiers. Accordingly, the Exchange
believes that the proposed ADO and ADQ fees do not favor certain
categories of market participants in a manner that would impose a
burden on competition.
Next, the Exchange believes the proposed rule change does not
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,
including competition for exchange memberships. Market Participants
have numerous alternative venues that they may participate on,
including 17 other options exchanges (including 3 other non-Cboe
options exchanges), as well as off-exchange venues, where competitive
products are available for trading. Indeed, participants can readily
choose to submit their order flow 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.'' \34\ 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'. . . .''.\35\
Accordingly, the Exchange does not believe its proposed change imposes
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
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\34\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\35\ 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 \36\ and paragraph (f) of Rule 19b-4 \37\
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.
---------------------------------------------------------------------------
\36\ 15 U.S.C. 78s(b)(3)(A).
\37\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-CboeBZX-2024-113 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CboeBZX-2024-113. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-CboeBZX-2024-113 and should
be submitted on or before December 23, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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\38\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-28112 Filed 11-29-24; 8:45 am]
BILLING CODE 8011-01-P
