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Notice2021-27310

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule by Modifying Certain Auction Fee Codes

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Published
December 17, 2021

Issuing agencies

Securities and Exchange Commission

Full Text

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<title>Federal Register, Volume 86 Issue 240 (Friday, December 17, 2021)</title>
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[Federal Register Volume 86, Number 240 (Friday, December 17, 2021)]
[Notices]
[Pages 71690-71692]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-27310]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93754; File No. SR-CboeBZX-2021-080]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Fee Schedule by Modifying Certain Auction Fee Codes

December 13, 2021.
    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 30, 2021, 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.
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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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX'' or ``BZX 
Equities'') proposes to amend its Fee 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://markets.cboe.com/us/equities/regulation/rule_filings/bzx/">http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), at the Exchange's Office of the Secretary,

[[Page 71691]]

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 by modifying 
certain auction fee codes.\3\
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    \3\ The Exchange initially filed the proposed fee changes 
November 1, 2021 (SR-CboeBZX-2021-074). On November 12, 2021, the 
Exchange withdrew that filing and re-submitted the proposed fee 
changes (SR-CboeBZX-2021-077). On November 23, 2021, the Exchange 
withdrew that filing and re-submitted the proposed fee changes (SR-
CboeBZX-2021-079). On November 30, 2021, the Exchange withdrew that 
filing and submitted this filing.
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    The Exchange assesses fees for orders in BZX listed securities that 
execute in an Opening, Initial Public Offering (``IPO''), Halt, or 
Closing Auction. Now, the Exchange proposes to modify certain auction 
fees provided under the Fee Codes and Associated Fees section of the 
Fee Schedule. First, the Exchange proposes to increase the fee 
associated with fee code AL,\4\ which is currently free, to $0.0010 per 
share. Second, the Exchange proposes to increase the fee associated 
with fee code AN,\5\ which is also currently free, to $0.0006 per 
share. Third, the Exchange proposes to increase the fee associated with 
fee code AO,\6\ which is currently $0.0005 per share, to $0.00075 per 
share. Finally, the Exchange proposes to increase the fee associated 
with fee code AP,\7\ which is currently free, to $0.00075 per share.
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    \4\ Fee code AL is appended to orders executed in the Closing 
Auction and Late-Limit-On-Close orders in BZX listed securities.
    \5\ Fee code AN is appended to continuous book orders that are 
executed in the Opening or Closing Auction in BZX listed securities.
    \6\ Fee code AO is appended to order executed in an Opening, IPO 
or Halt Auction in BZX listed securities.
    \7\ Fee code AP is appended to orders executed in the Opening, 
IPO or Halt Auction in BZX listed securities as well as Late-Limit-
On-Open orders in BZX listed securities.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Securities Exchange Act of 1934 
(the ``Act''),\8\ in general, and furthers the objectives of Section 
6(b)(4) and 6(b)(5),\9\ in particular, as it is designed to provide for 
the equitable allocation of reasonable dues, fees and other charges 
among its Members, issuers and other persons using its facilities.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that its proposal to increase the fees 
applicable to fee codes AL, AN, AO, and AP are fair, equitable and 
reasonable because the proposed fees remain consistent with pricing 
offered by competitor exchanges. Specifically, NYSE Arca, Inc. 
(``Arca'') \10\ charges, in securities priced at or above $1.00, a fee 
of either $0.0012 per share or $0.0015 per share to executions 
resulting from ``auction orders''.\11\ In securities priced below 
$1.00, Arca charges 0.1% of the dollar value, which is applied to all 
orders executed in the early open auction, core open auction, trading 
halt auction or closing auction. Last, Arca charges a fee of $0.0006 
per share for executions in an auction, other than ``auction orders''. 
The Exchange also believes that its proposal to increase the fees 
applicable to fee codes AL, AN, AO, and AP are fair, equitable and 
reasonable because the proposed fees do not represent a significant 
departure from the Exchange's general pricing structure. Specifically, 
the proposed fees for Fee Code AL and AN are in-line or less than the 
fees currently assessed by the Exchange for orders routed to an away 
listing market for participation in the closing process (i.e., orders 
yielding fee code CL) and the proposed fees for Fee Codes AO and AP are 
less than the fees currently assessed by the Exchange for orders routed 
to an away listing market for participation in the opening or re-
opening cross (i.e., orders yielding fee code O). Therefore, the 
Exchange believes the proposed fees associated with fee codes AL, AN, 
AO and AP remain consistent with pricing offered by a competing 
exchange and does not represent a significant departure from the 
Exchange's general pricing structure.
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    \10\ See the Arca fee schedule at <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf</a>.
    \11\ The Arca fee schedule states that ``auction orders'' means 
market orders, market-on-close orders, limit-on-close orders and 
auction-only orders executed in an Arca auction. Id at Section I. 
Definitions.
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    Furthermore, the marketplace for listings is extremely competitive 
and there are several other national securities exchanges that offer 
Exchange-Traded Product (``ETP'') listings. Transfers between listing 
venues occur frequently and for numerous reasons, such as market 
quality, which includes executions in the opening and closing auctions. 
Accordingly, competitive forces constrain the Exchange's auction fees, 
and issuers can transfer listings to competing listing venues if they 
deem the listing fees or market quality at those other venues to be 
more favorable. The proposed rule changes reflect a competitive pricing 
structure, which, as noted above, is substantively similar to fees 
charged by Arca.
    The Exchange believes that the proposed rule change is equitable 
and not unfairly discriminatory because Members will continue to have 
the option to elect to submit their orders for participation in 
auctions for BZX listed securities in the same manner and will be 
automatically and uniformly assessed the applicable fees for such 
auction orders. Auction participation on the Exchange is optional, and 
the Exchange operates in a competitive environment where issuers can 
transfer listings to competing listing venues if they deem the listing 
fees or market quality at those other venues to be more favorable.

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

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that the proposed modifications represent a significant departure from 
previous pricing offered by the Exchange or pricing offered by the 
Exchange's competitors, as discussed above. Issuers may opt to disfavor 
the Exchange's pricing if they believe that alternatives offer them 
better value. Accordingly, the Exchange does not believe that the 
proposed change will impair the ability of ETP issuers or competing 
venues to maintain their competitive standing in the financial markets. 
The Exchange does not believe the proposed fees would burden 
intramarket competition as they would be assessed to all Members who 
participate in Exchange auctions uniformly.

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.

[[Page 71692]]

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:

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#f587809990d8969a9898909b8186b5869096db929a83"><span class="__cf_email__" data-cfemail="6a181f060f47090507070f041e192a190f09440d051c">[email&#160;protected]</span></a>. Please include 
File Number SR-CboeBZX-2021-080 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-CboeBZX-2021-080. 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-CboeBZX-2021-080 and should be submitted 
on or before January 7, 2022.

    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. 2021-27310 Filed 12-16-21; 8:45 am]
BILLING CODE 8011-01-P


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