Notice2022-23479
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee 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
October 28, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 208 (Friday, October 28, 2022)</title>
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[Federal Register Volume 87, Number 208 (Friday, October 28, 2022)]
[Notices]
[Pages 65266-65267]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-23479]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96130; File No. SR-CboeBZX-2022-051]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
October 24, 2022.
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 October 11, 2022, 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'') 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, 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 update its Fee Schedule for its equity
options platform (``BZX Options'') to correct inadvertent marking
errors in the Standard Rates table in the Fee Schedule made in
connection with previous rule changes.
First, the Exchange proposes to update the Add rebates for
Customer, Non-Penny Program Securities transactions (fee code ``NY'')
in the Standard Rates table. Initially, the Exchange submitted a rule
filing in August 2021 (``August Filing''), which among other things,
amended the enhanced rebates provided under the Customer Non-Penny Add
Volume Tiers under Footnote 12 to range from between $0.92 and $1.06
per contract across 5 tiers, to between $0.90 and $1.05 per contract
across eight tiers.\3\ On January 4, 2022, the Exchange submitted a
cleanup rule filing (``January Filing''),\4\ to amend the Fee Schedule
to reflect the new volume tier enhanced rebates that were proposed in
the August Filing under the Customer Non-Penny Add Volume Tiers under
Footnote 12, but inadvertently not added to the corresponding Standard
Rates table for Customer, Non-Penny Program Securities Add
transactions. In the January Filing however, the Exchange also
inadvertently removed the standard rebate for Customer, Non-Penny
Program Securities Add transactions (which was, and still is, $0.85) in
its entirety. The Exchange now proposes to add the standard rebate of
$0.85 back in the Standard Rates table under the Non-Penny Program
Securities for Add transactions for corresponding fee code ``NY.''
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\3\ See Securities Exchange Act Release No. 92635 (August 11,
2021), 86 FR 46028 (August 17, 2021) (SR-CboeBZX-2021-055).
\4\ See Securities Exchange Act Release No. 93974 (January 13,
2022), 87 FR 3160 (January 20, 2022) (SR-CboeBZX-2022-002).
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Next, the Exchange proposes to add a reference to fee code ``PD''
in the Standard Rates table for Firm, Broker Dealer and Joint Back
Office orders in Penny Program Securities, which are subject to a
standard rate of $0.50 per contract. On May 3, 2021, the Exchange
submitted a filing (``May Filing''), which among other things, adopted
new fee code ``PD''.\5\ Particularly, prior to the May Filing, fee code
``PP'' was appended to all Non-Customer (i.e., Firm, Broker Dealer,
Joint Back Office, Market Maker, Away Market Maker and Professional
capacities) orders that removed liquidity in Penny securities and which
were assessed a fee of $0.50 per contract. In the May Filing, the
Exchange proposed to create a remove Penny liquidity fee code specific
to Firm, Broker Dealer and Joint Back Office orders (i.e., fee code
``PD''), which would continue to yield the same standard rate of $0.50
per contract. The Exchange however inadvertently omitted adding new fee
code ``PD'' to the Standard Rates table applicable to Firm Broker
Dealer and Joint Back Office orders that remove volume in Penny Program
Securities. The Exchange now proposes to add in the fee code ``PD'' in
the Standard Rates table.
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\5\ See Securities Exchange Act Release No. 91831 (May 10,
2021), 86 FR 26577 (May 14, 2021) (SR-CboeBZX-2021-038).
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Next, the Exchange proposes to update the Remove fees listed for
Market Maker, Away Market Maker, and Professional transactions in Penny
Program Securities in the Standard Rates table. Specifically, in the
previously mentioned August Filing, the Exchange also amended the
reduced fees offered under Tiers 1-3 of the Market Maker, Away Market
Maker, and Professional Penny Take Volume Tiers under Footnote 3 from
$0.45, $0.45 [sic] and $0.47 [sic] to $0.47 [sic], $0.48 and $0.49
[sic] across the three tiers.\6\ The Exchange however at that time
inadvertently omitted to also update the corresponding rates listed in
the Standard Rates table of the Fees Schedule applicable to Market
Maker, Away Market Maker, and Professional orders that remove volume in
Penny Program Securities (i.e., the current Standard Rates table still
only reflects
[[Page 65267]]
reduced fees of $0.45 and $0.47, instead of $0.47, $0.48, and $0.49, in
addition to the standard fee of $0.50). The Exchange now proposes to
update the rates listed in the Standard Rates table under fee code
``PP'' for Market Maker, Away Market Maker, and Professional orders
that remove volume in Penny Program Securities to reflect the rates
proposed in the August Filing applicable to such orders.\7\
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\6\ See Securities Exchange Act Release No. 92635 (August 11,
2021), 86 FR 46028 (August 17, 2021) (SR-CboeBZX-2021-055).
\7\ The Exchange notes that as a result of adding fee code
``PD'' to the Fees Schedule, Penny Program Securities Remove rates
for Market Makers and Away Market Makers are now separate from rates
for Professionals (notwithstanding all such orders yielding fee code
``PP''). As such, the Exchange proposes to replicate and add Fee
Code PP and the corresponding fees under the Market Maker and Away
Market rows.
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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 Act,\8\ in general, and
furthers the objectives of section 6(b)(4),\9\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and issuers and other persons
using its facilities. The Exchange also believes that the proposed rule
change is consistent with the objectives of section 6(b)(5) \10\
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, and, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
\10\ 15 U.S.C. 78f.(b)(5).
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The Exchange believes that the proposed changes are reasonable,
equitable and not unfairly discriminatory as it does not change the
fees or rebates currently assessed by the Exchange, but rather updates
the Standard Rates table to reflect previously filed fee changes which
inadvertently were not carried over into the Standard Rates table at
the time the original filings were submitted. Indeed, the proposed rule
changes are merely corrective changes made to the Fee Schedule designed
to accurately reflect the current rates for the respective orders,
which increases transparency in the Fees Schedule and reduces potential
confusion regarding the appropriate rates for such orders.
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 intramarket or intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because the proposed rule change merely corrects inadvertent marking
errors in the Fee Schedule, which is designed to accurately reflect the
current rates for the corresponding applicable orders, thereby
increasing transparency in the Fee Schedule and reducing potential
confusion regarding the appropriate rates applicable to such orders
without having any impact on competition.
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 \11\ and paragraph (f) of Rule 19b-4 \12\
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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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 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#c9bbbca5ace4aaa6a4a4aca7bdba89baacaae7aea6bf"><span class="__cf_email__" data-cfemail="fa888f969fd7999597979f948e89ba899f99d49d958c">[email protected]</span></a>. Please include
File Number SR-CboeBZX-2022-051 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-2022-051. 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-2022-051 and should be submitted
on or before November 18, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-23479 Filed 10-27-22; 8:45 am]
BILLING CODE 8011-01-P
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