Notice2024-06072
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule
Primary source
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Published
March 22, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 57 (Friday, March 22, 2024)</title>
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[Federal Register Volume 89, Number 57 (Friday, March 22, 2024)]
[Notices]
[Pages 20509-20511]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06072]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99762; File No. SR-CBOE-2024-013]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fees Schedule
March 18, 2024.
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 March 7, 2024, Cboe Exchange, Inc. (``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. The
[[Page 20510]]
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 its 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 Exchange proposes to amend its Fees Schedule, effective March
7, 2024. Specifically, the Exchange proposes to make clarifying changes
to the ``Regulatory Fees'' section. Under the Exchange's Regulatory
Fees, the Exchange charges a fee to TPHs, including Designated Primary
Market-Makers \3\ (``DPMs''), that are subject to Rule 15c3-1 under the
Exchange Act (the ``Net Capital Rule'') \4\ and for which the Exchange
has been assigned as the Designated Examining Authority (``DEA''),
called the ``DPM's and Firm Designated Examining Authority Fee.'' The
Exchange currently charges TPHs subject to this fee $0.60 per $1,000 of
gross revenue as reported on quarterly FOCUS reports filed by such TPHs
(excluding commodity commission revenue). In addition, this fee is
subject to a monthly minimum fee of $1,500 per month for Clearing TPHs
and $400 for non-Clearing TPHs.
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\3\ See Exchange Rule 1.1, which defines a ``Designated Primary
Market-Maker.''
\4\ 17 CFR 240.15c3-1.
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The Exchange first proposes to remove ``DPM'' from the fee title,
as such fee is not assessed to TPHs because of their DPM capacity. As
stated above, the Firm DEA Fee is assessed to all TPHs that are subject
to the Net Capital Rule and for which the Exchange has been assigned as
the DEA. While this may include DPMs, it does not necessarily include
all DPMs; thus, the Exchange proposes to remove DPM from the fee title,
to avoid potential confusion and clarify the purpose and application of
the fee.
Further, the Exchange proposes to add clarifying language regarding
the calculation and billing of the Firm DEA Fee to add further
transparency to the Fees Schedule. The Firm DEA Fee is calculated by
the Exchange and assessed to TPHs, as applicable, on a quarterly basis.
The Exchange proposes to add language stating that if the Exchange is
the DEA for a TPH for less than all three months of the relevant
quarter, the Firm DEA Fee for the TPH for that quarter is prorated
based on the number of months in the quarter in which the Exchange
acted as DEA for the TPH.
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.\5\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \6\ 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) \7\ 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) of the Act,\8\ 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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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ Id.
\8\ 15 U.S.C. 78f(b)(4).
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In particular, the Exchange believes the proposed rule changes to
the Fees Schedule do not change any fees charged pursuant to the Firm
DEA Fee, but rather are clarifying in nature, and thus, the fee will
continue to be reasonable and equitable, and uniformly applied, as
applicable, to all TPHs that are subject to the Net Capital Rule and
for which the Exchange has been assigned as the DEA. The Exchange
believes the proposed rule changes remove impediments to and perfect
the mechanism of a free and open market and national market system as
they add clarity, mitigate any potential confusion in connection with
the application of these fees or billing in connection with these fees,
and facilitate better understanding of the Fees Schedule for all market
participants, which ultimately protects investors.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act. As indicated above, the
proposed changes to the Fees Schedule clarify language regarding the
Firm DEA Fee. As the Exchange is not changing the fee itself, but
merely clarifying who the fee is assessed to and how the fee is billed,
the Exchange believes the proposed clarifying rule amendments do not
substantively change the Firm DEA Fee or the manner in which it
currently applies to market participants, as applicable. The proposed
changes are not competitive in nature and are merely intended to clean
up the Fees Schedule in order to provide additional clarity and
facilitate better understanding of the Fees Schedule for all 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
Because the proposed rule change does not: (i) significantly affect
the
[[Page 20511]]
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and Rule
19b-4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest,
because it will allow the Exchange to make clarifying changes to its
Fee Schedule. Accordingly, the Commission designates the proposed rule
change to be operative upon filing.\13\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 under
Section 19(b)(2)(B) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\14\ 15 U.S.C. 78s(b)(2)(B).
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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#7301061f165e101c1e1e161d0700330016105d141c05"><span class="__cf_email__" data-cfemail="cebcbba2abe3ada1a3a3aba0babd8ebdabade0a9a1b8">[email protected]</span></a>. Please include
file number SR-CBOE-2024-013 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-2024-013. 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-CBOE-2024-013 and should be
submitted on or before April 12, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-06072 Filed 3-21-24; 8:45 am]
BILLING CODE 8011-01-P
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