Notice2021-11796
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Silexx Trading Platform Fees Schedule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 7, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 107 (Monday, June 7, 2021)</title>
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[Federal Register Volume 86, Number 107 (Monday, June 7, 2021)]
[Notices]
[Pages 30342-30344]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-11796]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92078; File No. SR-CBOE-2021-035]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Silexx Trading Platform Fees Schedule
June 1, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 21, 2021, Cboe Exchange, Inc. (``Exchange'' or ``Cboe Options'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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 the Silexx trading platform (``Silexx'' or the ``platform'')
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 (<a href="http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx">http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx</a>), 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 purpose of this filing is to amend the Silexx Fees Schedule to
amend the ``CAT File'' fee.\3\
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\3\ The Exchange initially filed the proposed fee changes [sic]
May 1, 2021 (SR-CBOE-2021-032). On May 12, 2021, the Exchange
withdrew that filing and SR-CBOE-2021-033. On May 21, 2021, the
Exchange withdrew that filing and submitting [sic] this filing.
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By way of background, the Silexx platform consists of a ``front-
end'' order entry and management trading platform (also referred to as
the ``Silexx terminal'') for listed stocks and options that supports
both simple and complex orders,\4\ and a ``back-end'' platform which
provides a connection to the infrastructure network. From the Silexx
platform (i.e., the collective front-end and back-end platform), a
Silexx user has the capability to send option orders to U.S. options
exchanges, send stock orders to U.S. stock exchanges (and other trading
centers), input parameters to control the size, timing, and other
variables of their trades, and also includes access to real-time
options and stock market data, as well as access to certain historical
data. The Silexx platform is designed so that a user may enter orders
into the platform to send to an executing broker (including Trading
Permit Holders (``TPHs'')) of its choice with connectivity to the
platform, which broker will then send the orders to Cboe Options (if
the broker is a TPH) or other U.S. exchanges (and trading centers) in
accordance with the user's instructions. With the exception of Silexx
FLEX and Cboe Silexx, users cannot directly route orders through any of
the current versions of Silexx to an exchange or trading center nor is
the platform integrated into, or directly connected to, Cboe Options'
System. The Exchange has more recently made available additional
versions of the Silexx platform, Silexx FLEX and Cboe Silexx, which do
support the trading of FLEX and non-FLEX Options, respectively, and
allows authorized Users with direct access to the Exchange. The Silexx
front-end and back-end platforms are a software application that are
installed locally on a user's desktop. Silexx grants users licenses to
use the platform, and a firm or individual does not need to be
[[Page 30343]]
a TPH to license the platform. Use of Silexx is completely optional.
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\4\ The platform also permits users to submit orders for
commodity futures, commodity options and other non-security products
to be sent to designated contract markets, futures commission
merchants, introducing brokers or other applicable destinations of
the users' choice.
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The Exchange recently adopted a fee for CAT Files.\5\ Particularly,
Silexx makes Consolidated Audit Trail (``CAT'')-formatted files
available to Silexx users for orders processed by the user via Silexx
applications. Users may also elect to have Silexx, which is a CAT
Reporter Agent, submit these files to CAT on their behalf. The Exchange
assesses a monthly fee of $250 per CAT Industry Member ID
(``IMID''),\6\ payable by the trading firm, for CAT Files. The Exchange
however currently waives the CAT Files fee for Silexx FLEX and Cboe
Silexx. The Exchange now wishes to eliminate the current CAT Files fee
waiver and assess the monthly $250 fee to all Silexx users, including
Silexx FLEX and Cboe Silexx users. The Exchange proposes to also
provide that the CAT Files fee will be assessed per trading firm,
instead of per IMID.
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\5\ See Securities Exchange Release No. 89285 (July 10, 2020) 85
FR 43284 (July 16, 2020) (SR-CBOE-2020-062).
\6\ CAT uses the IMID to determine the firm for which data is
submitted and to facilitate event linkages within a firm and between
venues.
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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.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ 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
Section 6(b)(4) of the Act,\9\ which requires that Exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among its Trading Permit Holders and other persons using
its facilities.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78f(b)(4).
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In particular, the Exchange believes eliminating the current CAT
File fee waiver for Silexx FLEX and Cboe Silexx users is reasonable as
the Exchange believes the CAT File fee is substantially lower than the
cost assessed by third-party vendors for similar CAT files and is the
same rate for other similar reports (i.e., Equity Order Reports). The
Exchange notes it is not changing the amount of the CAT File fee, but
rather eliminating the current waiver for Silexx FLEX and Cboe Silexx
users. The Exchange believes the elimination of the waiver is
reasonable, equitable and not unfairly discriminatory because all users
who elect to receive CAT Files will now be subject to the same monthly
fee. Additionally, the Exchange originally adopted the CAT Files fee
waiver for Silexx FLEX and Cboe Silexx as such platforms at the time
were still relatively new and the Exchange wished to incentivize their
use to market participants.\10\ The Exchange notes that both platforms
have now been available to market participants for over a year and
therefore the Exchange no longer believes it's necessary to continue to
provide market participants this particular incentive. The Exchange
also believes it's reasonable, equitable and not unfairly
discriminatory to assess the CAT File fee per trading firm instead of
IMID. Particularly, the Exchange notes it's reasonable as trading firms
with more than one IMID would be subject to less fees for CAT
Files.\11\ Moreover, charging on a per trading firm basis is consistent
with how the Exchange assesses fees for other similar reports (i.e.,
Equity Order Reports). Additionally, the proposed change applies to all
users that elect to receive CAT Files. The proposal is equitable and
not unfairly discriminatory as it applies to all users of Silexx FLEX
and Cboe Silexx uniformly. Finally, the Exchange notes receipt of the
CAT Files is completely voluntary and not compulsory. Indeed, all users
of Silexx are able to extract the necessary data from Silexx to create
a CAT report themselves to comply with their reporting obligations even
if they choose not to purchase the optional CAT Files.
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\10\ See Securities Exchange Release No. 89285 (July 10, 2020)
85 FR 43284 (July 16, 2020) (SR-CBOE-2020-062).
\11\ For example, if a trading firm has 2 IMIDs, that trading
firm will only be assessed $250 per month, as proposed, as compared
to $500 per month under the current methodology (2 x $250).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Cboe Options 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 believes that
the proposed rule change will not impose any burden on intramarket
competition because the proposed rule changes apply to all similarly
situated users of Silexx uniformly. The Exchange notes that CAT Files
are available to all Silexx users, and users have discretion to
determine which, if any, types of reports to purchase.
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 change applies only to Cboe Options and to the ability to
receive certain reports from an Exchange system. To the extent that the
proposed changes make Cboe Options a more attractive marketplace for
market participants at other exchanges, such market participants are
welcome to become Cboe Options market participants.
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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5220273e377f313d3f3f373c2621122137317c353d24"><span class="__cf_email__" data-cfemail="b7c5c2dbd29ad4d8dadad2d9c3c4f7c4d2d499d0d8c1">[email protected]</span></a>. Please include
File Number SR-CBOE-2021-035 on the subject line.
Paper Comments
<bullet> 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-2021-035. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CBOE-2021-035 and should be submitted on
or before June 28, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11796 Filed 6-4-21; 8:45 am]
BILLING CODE 8011-01-P
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