Notice2023-16500
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Applicable to Securities Listed on the Exchange, Which Are Set Forth in BZX Rule 14.13, Company Listing Fees
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
August 3, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 148 (Thursday, August 3, 2023)</title>
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[Federal Register Volume 88, Number 148 (Thursday, August 3, 2023)]
[Notices]
[Pages 51371-51373]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-16500]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98015; File No. SR-CboeBZX-2023-055]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Fees Applicable to Securities Listed on the Exchange, Which Are Set
Forth in BZX Rule 14.13, Company Listing Fees
July 28, 2023.
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 July 27, 2023, 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 and II
below, which Items have been prepared by the self-regulatory
organization. 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. (``BZX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (``Commission'' or ``SEC'')
a proposed rule change to amend the fees applicable to securities
listed on the Exchange, which are set forth in BZX Rule 14.13, Company
Listing Fees. 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
On August 30, 2011, the Exchange received approval of rules
applicable to the qualification, listing and delisting of companies on
the Exchange,\3\ which it modified on February 8, 2012 in order to
adopt pricing for the listing of exchange-traded products (``ETPs'')
\4\ on the Exchange.\5\ On January 1, 2019, the Exchange amended Rule
14.13 in order to charge an entry fee for ETPs that are not
``Generically-Listed ETPs''.<SUP>6 7</SUP> Now, the Exchange proposes
to amend its listing fees to provide that the entry fee provided in
Rule 14.13(b)(1)(C)(i) will be charged for non-Generically Listed ETPs
for each proposed rule change pursuant to Section 19(b) of the Exchange
Act (``Exchange Rule Filing'').
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\3\ See Securities Exchange Act Release No. 65225 (August 30,
2011), 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018).
\4\ As defined in Rule 11.8(e)(1)(A), the term ``ETP'' means any
security listed pursuant to Exchange Rule 14.11.
\5\ See Securities Exchange Act Release No. 66422 (February 17,
2012), 77 FR 11179 (February 24, 2012) (SR-BATS-2012-010).
\6\ ``Generically-Listed ETPs'' refers to all ETPs, with the
exception of Index Fund Shares, Portfolio Depositary Receipts,
Managed Fund Shares, Linked Securities, Currency Trust Shares, and
Exchange-Traded Fund Shares that are listed on the Exchange pursuant
to Rule 19b-4(e) under the Exchange Act and for which a proposed
rule change pursuant to Section 19(b) of the Exchange Act is not
required to be filed with the Commission. See Exchange Rule
14.13(b)(1)(C)(i).
\7\ See Securities Exchange Act No. 83597 (July 5, 2018) 83 FR
32164 (July 11, 2018) (SR-CboeBZX-2018-046) (the ``Original Entry
Fee Filing'').
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Currently, Exchange Rule 14.13(b)(1)(C) provides that a Company
that submits an application to list any ETP shall be required to pay an
entry fee to the Exchange as follows:
(i) All ETPs, with the exception of Generically-Listed ETPs, shall
pay an entry fee of $7,500. Each issuer will be subject to an aggregate
maximum entry fee of $22,500 per calendar year.
(ii) There is no entry fee for Generically-Listed ETPs or ETPs that
transfer their listing from another national securities exchange to the
Exchange (a ``Transfer Listing'').
As such, a $7,500 fee applies to each ETP per application rather
than per Exchange Rule Filing. The Exchange now proposes to amend and
restructure Exchange Rule 14.13(b)(1)(C)(i) to provide that all ETPs
that are not Generically-Listed will be charged the fee for each
Exchange Rule Filing unless it is in furtherance of the same continuous
effort. Rule 14.13(b)(1)(C)(i) would be modified to define the term
``Exchange Rule Filing'' and clarify that the entry fee is applied on a
per ETP basis. Accordingly, proposed Rule 14.13(b)(1)(C)(i) would state
that all ETPs, with the exception of Index Fund Shares, Portfolio
Depositary Receipts, Managed Fund Shares, Linked Securities, Currency
Trust Shares, and Exchange-Traded Fund Shares that are listed on the
Exchange pursuant to Rule 19b-4(e) under the Exchange Act and for which
an Exchange Rule Filing is not required to be filed with the Commission
(collectively, ``Generically-
[[Page 51372]]
Listed ETPs''), shall pay an entry fee of $7,500 per ETP.
The Exchange notes that the amended entry fee would continue to be
subject to the maximum entry fee of $22,500 per calendar year per
issuer as currently provided in Rule 14.13(b)(1)(C)(i), however the
Exchange proposes to move such provision to proposed Rule
14.13(b)(1)(C)(i)(b). The Exchange also proposes to adopt new Rule
14.13(b)(1)(C)(i)(a), which would state that the Exchange will charge
for each Exchange Rule Filing per ETP unless it is in furtherance of
the same continuous effort. An Exchange Rule Filing is considered in
furtherance of the same continuous effort if: the Exchange Rule Filing
is required for ministerial purposes related to another previously
filed Exchange Rule Filing, or if the Exchange Rule Filing is withdrawn
and refiled within 30 calendar days.
As discussed in the Original Entry Fee Filing, ETPs that require an
Exchange Rule Filing require significant additional time and extensive
legal and business resources by Exchange staff to prepare and review
such filings and to communicate with issuers and the Commission
regarding such filings. The proposed fee would be used to address such
costs for each Exchange Rule Filing. Therefore, the Exchange is only
proposing to assess the entry fee for additional Exchange Rule Filings
that are not filed in furtherance of the same continuous effort. For
example, the Exchange would not assess an additional entry fee to an
ETP in the event that an Exchange Rule Filing was submitted to the
Commission and shortly thereafter withdrawn and resubmitted. Similarly,
the Exchange would not assess an additional entry fee to an ETP in the
event that an Exchange Rule Filing was submitted to the Commission,
rejected by the Commission, and shortly thereafter resubmitted.
Instances where Exchange Rule Filings are either rejected or withdrawn
and refiled shortly thereafter often involve minor or ministerial
errors that are in furtherance of the same continuous effort.
Further, the Exchange would not charge an entry fee to an ETP with
an Exchange Rule Filing that is withdrawn and shortly thereafter
refiled in order to restart the regulatory review period. Specifically,
if an Exchange Rule Filing is nearing the end of its regulatory review
period but has not met the regulatory burden to be approved by the
Commission, the Exchange may withdraw and resubmit the Exchange Rule
Filing, which would restart the regulatory review period, rather than
receive a disapproval. As the Exchange would withdraw and refile the
Exchange Rule Filing within 30 calendar days, the Exchange would
consider the subsequent filing to be submitted in furtherance of the
same continuous effort.
The Exchange would assess an entry fee to an ETP with an Exchange
Rule Filing in all other circumstances. For example, the refiling of an
Exchange Rule Filing that has previously been disapproved by the
Commission requires updated analysis to address the Commission's basis
for disapproval. The Exchange would not consider this new analysis in
furtherance of the same continuous effort, and therefore would apply
the entry fee to such Exchange Rule Filing. Another example would be
the refiling of an Exchange Rule Filing that has been withdrawn, but
not refiled within 30 calendar days. The Exchange would not consider
such refiling in furtherance of the same continuous effort due to the
time lapse and necessary updates required before refiling the Exchange
Rule Filing.
2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with the objectives of Section 6 of 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 issuers, and it
does not unfairly discriminate between customers, issuers, brokers or
dealers.
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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 proposed Rule 14.13(b)(1)(C)(i), which
provides that that all ETPs that are not Generically-Listed will be
charged the entry fee for each Exchange Rule Filing, is a reasonable,
fair and equitable, and not unfairly discriminatory allocation of fees
and other charges because it would apply equally to all firms. The
Exchange believes that charging such an entry fee for each Exchange
Rule Filing unless it is in furtherance of the same continuous effort
is reasonable given the additional resources required by the Exchange
in preparing each Exchange Rule Filing for an ETP. Specifically, each
Exchange Rule Filing requires significant additional time and extensive
legal and business resources by Exchange staff to prepare and review
such filings and to communicate with issuers and the Commission
regarding such filings.
The Exchange believes that an Exchange Rule Filing that is
withdrawn and refiled within 30 calendar days can be assumed to be in
furtherance of the same continuous effort. Specifically, if an Exchange
Rule Filing is nearing the end of its regulatory review period but has
not met the regulatory burden to be approved by the Commission, the
Exchange may withdraw and resubmit the Exchange Rule Filing, which
would restart the regulatory review period, rather than receive a
disapproval. As the Exchange would withdraw and refile the Exchange
Rule Filing within 30 calendar days, the Exchange would consider the
subsequent filing to be submitted in furtherance of the same continuous
effort because such a submission would generally not require the same
significant additional time and extensive legal and business resources
associated with other Exchange Rule Filings.
Furthermore, the marketplace for listings is extremely competitive
and there are several other national securities exchanges that offer
ETP listings. Transfers between listing venues occur frequently for
numerous reasons, including listing fees. The proposed rule change
reflects a competitive pricing structure, which the Exchange believes
will enhance competition both among ETP issuers and listing venues, to
the benefit of investors.
Based on the foregoing, the Exchange believes that the proposed
rule changes are consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
that the proposed fee will burden competition, but instead, enhance
competition, as it is intended to address the costs associated with
preparing each Exchange Rule Filing. As such, the proposal is a
competitive proposal designed to enhance pricing competition among
listing venues and implement pricing that better reflects expenses
associated with listing ETPs on the Exchange. The Exchange does not
believe the proposed amendment would burden intramarket competition as
the proposed fee would be assessed to all issuers uniformly for each
Exchange Rule Filing.
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 51373]]
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)(ii) of the Act,\10\ and Rule 19b-4(f)(2) \11\ 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 shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
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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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#493b3c252c642a2624242c273d3a093a2c2a672e263f"><span class="__cf_email__" data-cfemail="483a3d242d652b2725252d263c3b083b2d2b662f273e">[email protected]</span></a>. Please include
file number SR-CboeBZX-2023-055 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-2023-055. 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="https://www.sec.gov/rules/sro.shtml">https://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
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-2023-055 and should
be submitted on or before August 24, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16500 Filed 8-2-23; 8:45 am]
BILLING CODE 8011-01-P
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